The instrument was prepared and Stanley's signature was witnessed by Mr E S Greening of Pollack, Greening & Hampshire, solicitors, of Grafton. After execution the document was held by them in safe custody.
15 By deed poll of 5 May 1967 Stephen changed his surname from Edwards to Strang.
16 By letter of about 10 November 1967 to the Land Board, Stanley advised:
"The improvements to date are a two storey dwelling, ground floor in brick to height of eight feet, upper storey timber frame with roof and flooring. Lock up stage should be reached before the end of the year."
17 On 24 November 1967 the plaintiff and Stephen were married.
18 In about January 1968 Stanley advised the Land Board that the dwelling was erected to lock up stage with a value of $3,000. He requested an extension of time to December 1968 to complete construction.
19 On about 12 February 1969 Stanley advised the Land Board that water and sewerage were being installed, and the improvements had a value of $4,000. He requested an extension of time to 10 February 1970 to complete construction.
20 On 18 March 1970 the Land Board certified compliance with conditions of the grant, and that a dwelling had been erected to lock up stage.
21 On 2 April 1971 Stanley made a will under which he left all his estate to Jean provided that should she predecease him or die within one month of his death it was left to Stephen.
22 On 31 March 1977 the trust deed was registered as book 3269 no. 673. The instrument was released by the solicitors, Pollack, Greening & Hampshire, for this purpose.
23 On about 15 June 1977 Stanley applied for the grant of a perpetual lease of the property. On 5 October 1977 the perpetual lease was granted to him and comprised in Crown Grant Volume 13450 Folio 105.
24 In late 1977 Stanley and Jean moved to the dwelling on the property and continued to live there for the rest of their lives.
25 On 26 May 1990 Jean died. By her will made on 24 February 1967 she left her estate to Stephen.
26 On 26 January 2000 Stephen died. By his will made on 14 January 2000 he left his estate to the plaintiff.
27 By letter of 6 June 2000 to Stanley, the plaintiff's solicitors requested information concerning Jean's estate including details of a trust in favour of the plaintiff or her children, and of the location of the title deed to the property.
28 On 11 September 2000 Stanley made a will under which he left all his estate to the defendant provided that should she predecease him it was left to her children.
29 By letter of 17 October 2000 to Pollack, Greening & Hampshire, the plaintiff's solicitors enquired as to the title to the property.
30 With their letter of 19 October 2000 to the plaintiff's solicitors, Pollack, Greening & Hampshire sent documents which included the original of Jean's will, and the original of the trust deed, and provided advice on the transfer of the title to the property to Stephen's estate.
31 On 4 September 2004 the plaintiff caused the lodgement of a Registrar General's caveat on the title to the property to prohibit dealings not in accordance with the trust deed.
32 On 29 May 2006 Stanley applied to the Department of Lands to convert the lease to freehold. On the same day he made a will by which he left his estate to the defendant.
33 By letter of 25 July 2006 to Pollack, Greening & Hampshire, Stanley's solicitor, Mr Gordon Abbott (Mr Abbott) of G L Abbott & Co, solicitors, of Woolgoolga sent Stanley's authority to forward documents to them, described as follows:
"… all and any papers held by you on my behalf and in particular the original and any copies of a Declaration of Trust between myself as Trustee and Stephen John Strang as Beneficiary and dated 1st day of February 1977 Registered Number 673 Book 3269 together with any papers relating to or surrounding the preparation of an existence of this deed."
34 By letter of 28 July 2006 Pollack, Greening & Hampshire informed G L Abbott & Co that they were unable to locate the documents requested.
35 With his letter of 30 August 2006 to the defendant, Mr Abbott enclosed copies of documents including the trust deed, crown grant, and a handwritten statement of Stanley. It also said:
"As discussed with you, we have written to the widow of Stan's step son to ask for a copy of the original deed of trust. As soon as we receive it, the writer will see Stan again and seek an explanation of how the document came into existence and whether there could be any fraud involved."
36 With his letter of 13 September 2006 to the defendant, Mr Abbott enclosed copies of documents including the caveat and the trust deed. He advised that he proposed to see Stanley as soon as possible regarding the trust deed and his signature on it. It appears there was no reply from the defendant.
37 On 19 July 2007 certificate of title 3/111964 was issued to Stanley as the registered proprietor of the property.
38 On 14 November 2007 Stanley died.
39 By letter of 24 December 2007 to the defendant, the plaintiff's solicitors claimed entitlement to the property under Stephen's estate. A number of documents were enclosed, including a copy of the registered deed of trust. There was no reply to this letter.
40 By letter of 16 January 2008 to the defendant, the plaintiff's solicitors advised that absent a response within 14 days, proceedings would be taken for orders for the transfer of the property to her, pursuant to the trust.
41 By letters of 21 January 2008 and 31 January 2008 the defendant's solicitors replied to the effect that the defendant intended to apply for probate of Stanley's will, and were awaiting advice in respect of the plaintiff's claim.
42 On 4 February 2008 the plaintiff filed the statement of claim.
The evidence
43 I set out below a summary of what I found to be the relevant evidence of the several witnesses. In my assessment, each of the witnesses who gave evidence endeavoured to give it truthfully, and to the extent that recollection allowed.
44 The plaintiff said she married Stephen, an electrician, on 24 November 1967 when she was about 19 years old. They spent the week after their marriage clearing the property of overgrowth in preparation for the building of the house on it. Thereafter, it was their practice about every second weekend to drive from their home in Sydney on Friday night to work on the property, returning home on Sunday night. This they continued to do until the building reached lock up stage several years later. She said that from time to time they were assisted by various friends. Stephen purchased materials and supplies for the building, and sometimes paid the assistants for their work. Stephen did the electrical work, built the frame, laid the floor, and dug trenches for the septic tank. During this time she and Stephen were in regular employment in Sydney; his earnings paid for the building of the house, and hers paid for their living expenses.
45 At about the time of their marriage, Stephen told her, in effect, that he was aware that Stanley held the property in trust for him. She said that Stephen's postal address was his parents' house at Dobie Street, Grafton until they moved to the property. Thereafter until Stephen's death his mail went to the property and was forwarded on by Stanley.
46 The plaintiff said Stanley did not assist them with the work, and did not contribute to the cost of materials. She said that in about 1978 Stanley and Jean sold their home at Dobie Street, Grafton and came to live at the property. After Jean's death on 26 May 1990 it was decided not to ask Stanley to leave the property. After receiving the declaration on 19 October 2000 she decided not to ask Stanley to move out of the property as Stephen would not have wanted that to happen. She caused the lodgement of the Registrar General's caveat on 4 September 2004 to protect her interest.
47 Under cross-examination, the plaintiff confirmed that, by the date of their marriage, Stephen had told her the property was held on his behalf. She also conceded that Stanley assisted in working on the house and land from time to time. Although I am satisfied that she endeavoured to give her evidence truthfully, the cross-examination of the plaintiff demonstrated that her memory for details such as the year in which an event happened, or as to the state of the property or the stage of construction at a particular time, was often imperfect. She accepted as much. It is unsurprising, as much of her evidence was of events which occurred about 35 years ago. However, taken overall, I accept her evidence which shows, and I find, that for several years from about the time of their marriage she and Stephen regularly visited the property on many occasions and carried out substantial work for the construction of the building, and Stephen paid for some materials. Her evidence also shows, and I find, that they were assisted from time to time by their friends. Her evidence also supports the finding, which I make, that Stanley and Stephen enjoyed a friendly relationship although their personal contact was infrequent.
48 The evidence of Sarah Michelle Strang was contained in her affidavit of 21 July 2008. She was not required for cross-examination. Her evidence was uncontradicted. She is the daughter of the plaintiff and Stephen. During their school holidays in the 1980s, she and her sister regularly stayed with their grandparents, Stanley and Jean, at the property. After Jean's death she visited the property with Stephen. The last time Stephen went to the property was in February 1999.
49 The evidence of Peter Richard Brennan was contained in his affidavit of 26 May 2008. He is a partner in the firm Pollack, Greening & Hampshire. He identified the signature of the witness to Stanley's signature on the trust deed as that of Eric Sutherland Greening, then a solicitor of the firm. He was not required for cross-examination, and his evidence was uncontradicted.
50 The defendant gave evidence of discussions with Stanley about the property and the trust deed. On an occasion in 2000 he showed her the letter from the plaintiff's solicitors of 6 June 2000 which requested information concerning Jean's estate, and details of a trust involving their client. He told her, in effect, that he did not know anything, and there was no need to reply to the letter. On occasions in 2006 Stanley told the defendant that he built the house at weekends and paid for the materials as he went. He also said he was assisted by Mr Hans Siewert and other tradesmen, but she was unable to locate them, or to find financial records relating to the building work except for work in 1993 in the total sum of $1,054. (Unsuccessful attempts to find Mr Siewert were described in the unchallenged affidavit of Kerri Lea Murdoch-Moore of 9 July 2008.)
51 The defendant said that on 25 May 2006 she learnt of the caveat when she submitted Stanley's application for conversion of the perpetual lease to freehold title. On 29 May 2006 she accompanied Stanley to see Mr Abbott, his solicitor, for advice about the caveat, and in relation to the application. She said that some time in September 2006, when she showed Stanley a copy of the trust deed, he denied that it bore his signature. He also denied that Stephen lent him any money for the house. She said that on occasions in 2006 when she questioned him about the trust deed he replied to the effect (affidavit 8 July 2008, par 73):
"I do not know how it came into existence. I do not have any knowledge as to why it was written in 1967 and sent to be registered 10 years later."
52 In cross-examination the defendant said that Stanley claimed the trust deed was a fraud, but she did not recommend to him to take up the matter with either the police, the Law Society of New South Wales or Pollack, Greening & Hampshire.
53 The defendant said that on about 13 March 2007 Stanley paid the sum of $14,332.04 to the Department of Lands to complete the purchase of the property, and on 19 July 2007 the certificate of title was issued in his name. She made an estimate of the rates payable to the Coffs Harbour City Council for the property between 1978 and 1988, which was necessary because the Council records had been destroyed.
54 The defendant also gave evidence in support of the cross-claim, to which I refer when dealing with that issue.
55 Mr John Gabb, a retired teacher, said that during the period 1963 to 1970 he regularly stayed during school holidays with his parents on their land at Arrawarra which was situated opposite the property in these proceedings. He observed Stanley, and sometimes Jean, working on the property at weekends over a number of years. He did not recall seeing anybody else at the property other than Stanley and Jean, and nobody other than Stanley carrying out building work or activities which he described in cross-examination as "… pottering around with the house on and off" (T p 91). He was unshaken in cross-examination, and I accept his evidence.
56 Mr Abbott's evidence was that he was instructed by the defendant and Stanley on about 29 May 2006 to prepare a will for Stanley, and to proceed with the conversion application for the property. His search of the title revealed the Registrar General's caveat. On 25 July 2006 he attended Stanley at the property, who gave him a handwritten document addressed to Pollack, Greening & Hampshire authorising them to forward to Mr Abbott all papers held on his behalf including the trust deed and any papers relating to its preparation. Mr Abbott also prepared a handwritten statement as instructed, and signed, by Stanley in which, relevantly, he denied that Stephen helped build the house, except on about two occasions, and denied Stephen paid him any money, or paid for any part of the building. He stated that the house reached live-in stage in 1977. He denied knowledge of the trust deed, said it was a fraud, denied signing it, and attending the office of Pollack, Greening & Hampshire at the time. Mr Abbott said that he received no reply to this letters to the defendant of 30 August 2006 and 13 September 2006, and no further instructions in relation to the trust deed. I accept his evidence.
57 The evidence of Janine Maree McCann was contained in her affidavit of 8 July 2008 which was read without objection. She was not required for cross-examination. She has been employed by Pollack, Greening & Hampshire almost continuously since 1976 as a clerk in charge of the firm's estate files and security packet records. She identified a file card in the name of "STRANG, S.R." which recorded a "Declaration of Trust: 21.2.67" and "Sale to S.C. & C.M Wood. 28.2.78".
58 Ms McCann said it was the practice, before a file was archived, to remove any original documents and place them in a safe custody packet to be held in the safe. A security packet index card was created which recorded the documents held for the client. She identified such a card in the name of "STRANG S.R. & S.J" which recorded "Declaration of Trust: 21.2.67". It was her belief that the safe custody packet was held for Stephen until 2000. (No ground for this belief was stated.)
59 Ms McCann said that she was unaware of the date on which the trust deed was stamped. With reference to the registration of the trust deed on 31 March 1977, the records did not indicate from whom the instructions to register came, although she said it has been the firm's policy only to release documents or take instructions from the person for whom the documents are held. Following contact from the plaintiff's solicitors on 7 September 2000, Ms McCann found that the firm was holding Jean's will of 29 March 1967, and the trust deed. Those documents were sent to the plaintiff's solicitors on 19 October 2000.
The plaintiff's claim
60 The plaintiff claims that Stephen became beneficially entitled to the property upon the making of the declaration on 21 February 1967. She seeks an order under s 71 of the Act vesting the property in her. Relevantly the Act provides:
"71 Vesting orders
(1) The Court may make an order in this Act called a vesting order, which shall have effect as provided in section 78.
(2) A vesting order may be made in any of the following cases, namely:
…
(i) where a trustee neglects or refuses to convey any property, or to receive the dividends or income of any property, or to sue for or recover any property according to the direction of the person absolutely entitled to the same for twenty-eight days next after a request in writing has been made to the trustee by the person so entitled,
…
(n) where the Court might have made a vesting order if this Act had not been passed,
(o) where property is vested in a trustee, whether by way of mortgage or otherwise, either solely or jointly with any other person, and it appears to the Court to be expedient to make a vesting order.
…
78 Effect of vesting order
…
(2) In every other case the vesting order shall have the same effect as if the trustee or other person or description or class of persons to whose rights, or supposed rights, the provisions of this Part respectively relate, had been an ascertained and existing person of full capacity, and had executed a conveyance or release to the effect intended by the order.
(3) In the case of land subject to the provisions of the Real Property Act 1900 , the land shall not vest until the appropriate entries are made in accordance with the provisions of that Act, and in the case of any other land, the land shall not vest before the order is registered in the office of the Registrar-General as prescribed by regulation under the Conveyancing Act 1919 .
(4) In the case of property subject to the provisions of the Closer Settlement Acts, the Crown Lands Act 1989 , the Mining Act 1992 or the Offshore Minerals Act 1999 , or any other Act relating to Crown lands, the proper officer is hereby authorised, upon the vesting order being registered as provided in subsection (3), to make all such entries as may be necessary to give effect thereto."
61 In Re Purkiss [1999] VSC 386; (1999) 3 VR 223 Warren J observed (p 228):
"The underlying purpose of the vesting provisions must be to ensure that a trust can achieve the purpose for which it was created and that those persons entitled to an interest pursuant to or as a result of a trust can receive the benefit or interest to which they are so entitled."
62 The plaintiff's case was that, as the defendant had declined her request made in the letters of 24 December 2007 and 16 January 2008 to transfer the property to her, a vesting order was necessary to give effect to Stephen's equitable right to the property under the declaration. Her claim, in effect, was that under the rule in Saunders v Vautier (1841) 4 Beav 115; 49 ER 282 Stephen had an absolute, vested, and indefeasible interest in the property, and the right at any time to require its transfer to him, and to wind up the trust (CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) [2005] HCA 53; (2005) 224 CLR 98, p 119).
63 The defendant denied the existence of any trust principally on the ground that Stanley did not have the requisite intention. She did not allege that the declaration was a sham.
64 At the outset, the plaintiff stated that her case rested entirely on the declaration to establish the existence of the trust for Stephen. She contended that it was effective according to its terms as a declaration of trust which unambiguously evidenced Stanley's intention to create an immediate and absolute trust in favour of Stephen, then and there. The defendant accepted that the document provided some evidence of intention, but it was undermined by Stanley's subsequent conduct which demonstrated, in fact, that he had no genuine intention to establish a trust under which he held the property for Stephen.
65 The defendant accepted (T p 165) that if the declaration was effective, a bare trust was created, and Stephen was the beneficial owner of the property with rights to immediate possession and to call for a transfer. However, as indicated earlier, she raised a number of defences to the claim for a vesting order which are considered later in these reasons.
66 In Hyhonie Holdings Pty Ltd v Leroy [2003] NSWSC 624 Young CJ in Eq. (as he then was) summarised the relevant principles as follows:
"34 The onus of establishing a trust is on the person who alleges it.
35 It is true that a person can create a fully effective trust merely by declaring himself or herself a trustee. As Jacobs notes at [623] the express declaration must be intended to be final and binding on the settlor. It is also true that, if a fully constituted trust has been declared, it may be enforced even though the plaintiffs are volunteers: Collinson v Pattrick (1838) 2 Keen 123; 48 ER 575; Sheslow v Kostin - Young J, 2 May 1997, BC 9702183.
36 However, difficult questions of fact not infrequently arise where a person, despite that declaration continues to exercise personal dominion over the so-called trust property. In Hughes v Stubbs (1842) 1 Hare 476, 479; 66 ER 1119, 1120, Wigram VC said, "a person not intending to give or part with the dominion over his property may retain such dominion, notwithstanding he may have vested the property in trustees, and declared a trust upon it in favour of third persons" and that, when that occurs, it is a very difficult question for equity to determine whether the trust exists or not.
37 In Commissioner of Stamp Duties (Queensland) v Jolliffe (1920) 28 CLR 178, 181, Knox CJ and Gavan Duffy J applied a statement which was to be found in the 11th (1904) edition of Lewin on Trusts , viz:
"It is obviously essential to the creation of a trust, that there should be the intention of creating a trust, and therefore if upon a consideration of all the circumstances the Court is of opinion that the settlor did not mean to create a trust, the Court will not impute a trust where none in fact was contemplated."
38 That passage which was included in all subsequent editions of Lewin up to and including the 16th (1964) p 35, is missing from the current (17th ed (2000)) where the authors say in a footnote to para 4-23 that the dissenting judgment of Isaacs J would to-day be preferred in England. Whether this is so or not, Jolliffe's case, or at least Jolliffe's case as interpreted by later decisions of the High Court, is binding on me.
39 The cases cited by Lewin are instructive. The principal authority is Gaskell v Gaskell (1828) 2 Y & J 502; 148 ER 1017. That was a case where there were many indicia of a trust created by a man now deceased, yet that man had never communicated the trust to the trustees appointed and the surrounding circumstances showed that it was more likely than not that the man considered what he was doing would save legacy duty. Alexander LCB held in all the circumstances that no trust had been created.
40 The High Court has revisited this matter at least twice, namely in Kauter v Hilton (1953) 90 CLR 86 and Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588. In the latter case, four justices said at 605:
"in Kauter v Hilton, the Court treated Jolliffe as deciding, for the purposes of the legislation there in question that 'all the relevant circumstances must be examined in order to determine whether the depositor really intended to create a trust.' "
41 In Arthur v Public Trustee (1988) 90 FLR 203, 209, Asche CJ, giving the judgment of the Full Northern Territory Supreme Court approved the trial judge's test that:
"equity will only enforce a trust to the extent that the intention to create a trust is clear. …. Words alone may suffice but where those words are at odds with the donor's action proof may be lacking"."
67 In Re Lamshed [1970] SASR 224, Bray CJ said (p 239):
"It is clear law that despite the unambiguous words of the declaration the trust apparently created by them can be rebutted by evidence of a contrary intention (Commissioner of Stamp Duties (Qld) v. Jolliffe (1920) 28 CLR 178). But the onus is on those who seek to prove such an intention and strong evidence is required for the purpose (In Re Steele [1925] SASR 272). Many cases were cited to me where this had been done successfully. In some of these cases the depositor was alive and gave evidence of his own intention and was believed (Jolliffe's case; Starr v. Starr [1935] SASR 263). In other cases when the depositor was deceased there was evidence of specific declarations made by him during his life time (Winter v. Grady (1921) SR(NSW) 686 at 691), though sometimes these related to the interest only and the trust stood as to the principal (Kauter v. Hilton (1953) 90 CLR 86; Re Armstrong (Deceased) [1960] VR 202 at 206). And in some cases the trust was held to be rebutted after the death of the depositor by evidence entirely or largely circumstantial (In Re Appleby's Estate (1930) 25 TasLR 126; Re McGuire, Deceased (1937) 41 WALR 120; Teasdale v. Webb (1940) 57 WN(NSW) 151; Abbot v. Miles (unreported, Supreme Court of South Australia, Napier, CJ, 12 May 1952); Jeffrey v. Miles (unreported, Supreme Court of South Australia, Mayo J, 10 December 1952)"
68 The crucial question is whether there was the requisite intention at the time the declaration was made. In order to determine the true position it may be necessary to consider the circumstances which existed at the time of execution of the instrument, and also subsequent events which may negate the expression of intention to create a trust (e.g. Hyhonie, and on appeal Hyhonie Holdings Pty Ltd v Leroy [2004] NSWCA 72). However, it must be kept in mind that strong evidence of a contrary intention is required to rebut the unambiguous words of a declaration of trust (Lamshed p 239). The question is one of fact in all cases.
69 For the plaintiff it was put that it is self evident that the declaration was carefully drawn by Stanley's solicitor on his instructions in terms which are unambiguous. It was common ground that it was signed by Stanley, and there was evidence that his signature was attested by his solicitor, Mr Greening. It was put that the recitals concerning the weekend lease and the provision of money for the erection of the residence by Stephen were statements consistent with the evidence that at the time the house was incomplete and under construction, and reflected Stanley's situation of need for money to complete construction in compliance with the terms of the lease. It was submitted that relevant circumstances indicative of a genuine intention included the payment of stamp duty in the sum of $54, and leaving the document with the solicitor for safe keeping. Furthermore, it was argued that the registration of the deed by his solicitors on 31 March 1977 was an affirmation by Stanley of the existence of the trust, in that the evidence supported the inference, as a matter of probability, that registration was arranged by Pollack, Greening & Hampshire on his instructions or with his knowledge.
70 It was put that evidence indicative of intention was that at latest by about November 1967 Stephen had told the plaintiff of the existence of the trust, from which it might be inferred that on an earlier occasion Stanley had told him about it.
71 In anticipation of the defendant's submissions that Stanley's subsequent conduct was inconsistent with an intention to create a trust, the plaintiff referred to Stanley's failure to challenge the validity of the trust deed although there was ample opportunity to do so after becoming aware of the plaintiff's claim in about June 2000, and although in July 2006 he had denied to the defendant and to Mr Abbott knowledge of its existence and/or that he signed it, and claimed to them that it was a fraud. It was put that such failure supported the inference that Stanley accepted the validity of the document, and chose to do nothing about it.
72 In short, the plaintiff submitted that the terms of his declaration were sufficient to establish Stanley's intention to create an immediate and absolute trust in favour of Stephen and the evidence of subsequent conduct simply confirmed such intention. The consequence was that the onus was squarely upon the defendant to demonstrate a want of intention at the time.
73 For the defendant it was submitted that Stanley's conduct after making the declaration on 21 February 1967 was inconsistent with an intention to create a trust. It was put that from then until he died he exercised undisputed dominion over the property. In support, reliance was placed on the evidence of his dealings with the Land Board in order to achieve compliance on 18 March 1970 with the conditions of the grant, and of obtaining the grant of a perpetual lease on 5 October 1977 in his name, and thereafter obtaining the conversion to freehold and the issuing of a certificate of title on 19 July 2007 in his name as registered proprietor for which he paid the sum of $14,332.04. Further, it was submitted that the fact that he and Jean lived on the property as their home from about 1978, and paid the rates and other expenses in relation to it, was further evidence of dominion. Other matters relied upon as evidence of exercise of personal dominion over the property were Stanley's will of 2 April 1971 in which he left the whole of his estate to Jean, and of his will of 11 September 2000 in which he left all to the defendant. Support was said to be found in Stanley's statement to the defendant on about 25 May 2006 that he wished to leave the property to her. It was submitted that his assertion to Mr Abbott on 25 July 2006 to the effect that the declaration was a fraud should be understood in the context of his denial of knowledge of the document as indicating, after the lapse of about 40 years, that he had completely forgotten about it. That he had no recollection at this time, so it was put, further demonstrated his lack of intention at the time of the declaration.
74 In essence, it was put that during the whole of the period from 1967 to 2007, Stanley acted as though he was the absolute owner of the property, which conduct undermined the intention to create the trust prima facie evidenced by the terms of the declaration. The absence of evidence that he sought Stephen's consent to live on the property was said to support this conclusion.
75 Further, the defendant submitted that it was not open to find that the registration of the deed on 31 March 1977 was at Stanley's request. It was argued that the unchallenged evidence of Ms McCann demonstrated that the solicitors were then acting for Stephen, thus supporting the inference that it was probable that either Stephen, or someone on his behalf, had requested registration.
76 The defendant also challenged the efficacy of the declaration on the ground, as I understood it, that there was no evidence of its delivery to any person. It was put that Ms McCann's evidence showed that after the document was signed on 21 February 1967 it was held in the solicitors' file, and transferred to their safe custody packet in 1974 where it remained until sent to the plaintiff's solicitors on 19 October 2000.
77 Finally, the existence of the trust was challenged on the ground that if it had been created, it failed because it was conditional upon the payment by Stephen of money for the erection of the residence, but there was no admissible evidence which established that the condition had been fulfilled. It was put that the plaintiff's evidence of payments made by Stephen towards the building costs should not be accepted unless corroborated and, as there was no corroboration, it followed that the plaintiff had failed to discharge the onus of proof on this issue.
Consideration
78 In my opinion, the precise and unambiguous terms of the declaration manifest Stanley's intention to create a trust of the property for Stephen. Its terms record certainty of intention, subject matter, and the object. To understand its meaning it is unnecessary to look beyond its words, or to resort to evidence of surrounding circumstances at the time it was made. Nothing more was required for completion of the trust. Unless invalid because unlawful, its immediate effect was that Stephen became the beneficial owner of the property and, for as long as the trust continued, Stanley held the legal title.
79 In my opinion, the defendant's submission that the trust was conditional upon the future advance by Stephen of sums for the erection of the residence should not be accepted. The terms of the declaration, upon their proper construction, do not support the proposition that the existence of the trust was conditional, as claimed. The relevant passage from the document is:
"AND WHEREAS the moneys to be provided for the erection of the said residence are being provided by STEPHEN JOHN STRANG (hereinafter called "the Beneficiary") of the other part NOW THESE PRESENTS WITNESS that in consideration of the premises and in further consideration of the sums advanced and to be advanced by the Beneficiary to the Trustees for the erection of the residence as aforesaid IT IS HEREBY DECLARED AND AGREED that the Trustee shall stand and be seised of and interested in the said Lease UPON TRUST for the Beneficiary absolutely."
80 In my opinion, the effect of these words, read as a whole, is to explain that the declaration is made in consideration of, or an acknowledgment of, the sums (already) advanced and of those expected to be advanced in the future by Stephen. They stand as an admission or acknowledgement that Stephen is, in fact, the source of money for the erection of the residence. Had it been intended that the trust was to be conditional upon Stephen making, or continuing to make, advances of money, it may reasonably be expected that clear words would have been used to express such intention. The declaration is clearly the product of careful and precise draftsmanship. The fact that it contains no words indicative of conditional operation supports the conclusion to which I have come. As I have found, the trust was effective upon the making of the declaration.
81 To succeed on the issue of intention the defendant's task is to demonstrate, with reference to subsequent conduct, that, in fact, it was not Stanley's real intention at the time to create the trust; in other words, he did not mean what he said. It is relevant to recall the following history.
82 At some time before November 1967 the existence of the trust was communicated to Stephen. Absent evidence otherwise, it may be assumed that this was by Stanley or by Jean, she having been told by Stanley. On 2 April 1971 Stanley made a will under which he left his estate to Jean. On about 15 June 1977 he applied for the grant of a perpetual lease of the property. In about late 1977 or early 1978 Stanley and Jean came to live at the property as their home. Either or both paid rates and outgoings, doubtless as a normal incident of living there. Over the years, Stephen and his family frequently stayed with his stepfather and mother, including for holidays. Jean died on 26 May 1990. Stephen continued visiting Stanley until about 1999. Stephen died on 26 January 2000.
83 When the defendant raised with Stanley questions about the trust as referred to in the plaintiff's solicitors' letter of 6 June 2000 he denied knowledge of it. On 11 September 2000 he made a will under which he left his estate to the defendant. On 29 May 2006 he made his last will in which he left his estate to the defendant. He also then proceeded with the application to convert title to the property to freehold. On 25 July 2006 he denied to Mr Abbott knowledge of the declaration, and claimed it was a fraud. The issue was not pursued. He continued living at the property until his death on 14 November 2007.
84 In my assessment, the evidence of Stanley's conduct after making the declaration, taken overall, is incapable of proving that he lacked the necessary intention as claimed. To the extent it may be said Stanley exercised dominion over the property, he only did so as its legal owner and occupier in circumstances where, from almost the beginning, Stephen was aware of his beneficial interest. This was not conduct inconsistent with the expressed intention.
85 The history shows that it was not until a few months after Stephen's death that Stanley first denied knowledge of a trust, and made the will of 11 September 2000 in favour of the plaintiff in apparent disregard of Stephen's interest. He maintained the denial when attended by Mr Abbott on 29 May 2006 for the purpose of the conversion application and making his last will, and on 25 July 2006 for the purpose of obtaining a copy of the declaration and related documents. In my opinion this conduct is no support for a finding that the intention at the time of the declaration was not genuine.
86 It is difficult to accept as an explanation for this conduct that Stanley had forgotten making the declaration which, as it was put, indicated no real intention. He was reminded of it by the defendant in September 2000, and by Mr Abbott in July 2006, yet did nothing about it. I find such inaction consistent with his acceptance of the existence of the trust. Alternatively, his conduct after Stephen's death supports the finding, which I make, that he developed a mental reservation not to fulfil what he had openly undertaken by his declaration; in other words, he changed his mind. However the conduct relied upon by the defendant might be explained, I am entirely unpersuaded that it contradicts Stanley's expressed intention on 21 February 1967 to create an immediate trust of property for his stepson.
87 In reaching this conclusion I have found it unnecessary to decide whether or not the registration of the trust deed on 31 March 1977 was under Stanley's instruction or with his knowledge or consent. Also, in my opinion, it is unnecessary to decide the issue of delivery. It is irrelevant. In any event, as I have found, the intention was clearly expressed, and although not essential, the existence of the trust had been communicated to Stephen.
88 Accordingly, I hold that by his declaration made on 21 February 1967 Stanley established a trust under which he held the property for Stephen.
Illegality under Crown Lands Consolidation Act 1913
89 On 16 October 1963 Stanley became the holder of a week-end lease of the property under s 136B CLC Act, when his application was confirmed. On 5 October 1977 a perpetual lease of the property was granted to him. On 19 July 2007 the certificate of title of the property was issued to Stanley as the registered proprietor of the property, with the effect that the property ceased to be Crown land. At the time of the declaration, Stanley's interest in the property was as the holder of a week-end lease.
90 The defendant submitted that if the effect of the declaration was to create a trust in respect of the property for Stephen it was illegal in that the declaration was a dealing by Stanley with Crown land in breach of s 6 CLC Act.
91 Section 6 provides:
"6 Crown lands shall not be sold leased dedicated reserved or dealt with except under and subject to the provisions of this Act.
The Governor on behalf of His Majesty may grant lease or make any other disposition of Crown lands in any case where he is hereby authorized so to do, but only for some estate interest or purpose authorized by this Act and subject in every case to its provisions.
The Minister on behalf of His Majesty may lease dedicate reserve or make any other disposition of Crown lands in any case where he is hereby authorized so to do, but only for some estate interest or purpose authorized by this Act and subject in every case to its provisions:
Provided always that this section shall be read subject to the provisions of sections two and four hereof."
92 The procedure by which the Minister may set aside Crown lands for disposal by way of week-end lease, and the manner in which areas so set apart shall be dealt with are prescribed by s 136A. The procedure for application for a week-end lease, and terms of tenure, are contained in s 136B - s 136H. It has been held that s 136A - s 136H constitute an exclusive code relating to week-end leases (Minister for Lands v Cassin (1966) 45 LVR 26).
93 The defendant submitted that as Stanley was always the holder of a week-end lease he was bound by the CLC Act which included no provision which authorised or permitted him to create a trust of his interest. It was put that "… to the extent that Stanley purported to create an equitable interest in Stephen he was doing so other than in accordance with the proscription contained in s 6" (T p 171). It was argued that, upon its proper construction and with particular regard to its first sentence, s 6 is not limited to acts of the Crown but applies also to holders of property interests granted under the CLC Act. Thus it was put that as the CLC Act contains no express authority for the creation of an inter vivos trust it was unlawful for Stanley to purport to do so.
94 Statutory construction is, ultimately, a text-based activity (Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 218 CLR 273, pars 87, 89).
95 In Walsh v Minister for Lands for NSW [1960] HCA 52; (1960) 103 CLR 240 Windeyer J said (p 254):
"The underlying object of Crown land's legislation from 1861 onwards was to control the Crown prerogative of disposing of the waste lands of the Colony at will and to provide the subjects of the Crown with a statutory right, upon the performance of conditions, to have a grant of land from the Crown."
96 In Davies v Littlejohn [1923] HCA 64; (1923) 34 CLR 174 Knox CJ said (p 183):
"The mutual rights and obligations of the Crown and the applicant for, or holder of, a conditional purchase are to be ascertained by reference to the provisions of the Act and Regulations, for the Crown has no power to dispose of the land except in strict accordance therewith."