Brims, Brims, Hahndorf Investments Pty Ltd, Brims & Ors v Siganto & Anor [1992] QCA 136

IN THE COURT OF APPEAL [1992] QCA 136 SUPREME COURT OF QUEENSLAND C.A. No. 1005 of 1989. BETWEEN: JOHN RAYMOND BRIMS (First Plaintiff) First Appellant - and - MARILYN JEAN BRIMS (Second Plaintiff) Second Appellant - and - HAHNDORF INVESTMENTS PTY LTD (Third Plaintiff) Third Appellant - and - GARY PATRICK BRIMS (Fourth Plaintiff) Fourth Appellant - and - JOAN MARY BRIMS (Fifth Plaintiff) Fifth Appellant - and - G & J BRIMS CONSTRUCTIONS PTY LTD (Sixth Plaintiff) Sixth Appellant AND: HENRY WILLIAM SIGANTO and DORIS MARY OXENFORD (as personal representatives) (Defendants) Respondents ___________________________________________________________________ Mr Justice McPherson Mr Justice Pincus Mr Justice Derrington ___________________________________________________________________ Judgment of the Court Delivered the fifth day of June 1992 ___________________________________________________________________ -- 1 of 15 -- Appeal dismissed with costs. IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND C.A. No. 1005 of 1989. Before the Court of Appeal Mr Justice McPherson Mr Justice Pincus Mr Justice Derrington BETWEEN: JOHN RAYMOND BRIMS (First Plaintiff) First Appellant - and - MARILYN JEAN BRIMS (Second Plaintiff) Second Appellant - and - HAHNDORF INVESTMENTS PTY LTD (Third Plaintiff) Third Appellant - and - GARY PATRICK BRIMS (Fourth Plaintiff) Fourth Appellant - and - JOAN MARY BRIMS (Fifth Plaintiff) Fifth Appellant - and - G & J BRIMS CONSTRUCTIONS PTY LTD (Sixth Plaintiff) Sixth Appellant AND: HENRY WILLIAM SIGANTO and DORIS MARY OXENFORD (as personal representatives) (Defendants) Respondents JUDGMENT - THE COURT Delivered the fifth day of June 1992 -- 2 of 15 -- MINUTE OF ORDER Appeal dismissed with costs. Counsel: P Keane QC, with him Radcliff for the appellants. Sofronoff QC, with him Bland for the respondents. Solicitors: Dowling & Dowling, town agents for Robinson & Robinson. Surfers paradise for the appellants. Corrs Chambers Westgarth for the respondents. Hearing date:18 May 1992. -- 3 of 15 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND C.A. No. 1005 of 1989. BETWEEN: JOHN RAYMOND BRIMS (First Plaintiff) First Appellant - and - MARILYN JEAN BRIMS (Second Plaintiff) Second Appellant - and - HAHNDORF INVESTMENTS PTY LTD (Third Plaintiff) Third Appellant - and - GARY PATRICK BRIMS (Fourth Plaintiff) Fourth Appellant - and - JOAN MARY BRIMS (Fifth Plaintiff) Fifth Appellant - and - G & J BRIMS CONSTRUCTIONS PTY LTD (Sixth Plaintiff) Sixth Appellant AND: HENRY WILLIAM SIGANTO and DORIS MARY OXENFORD (as personal representatives) (Defendants) Respondents JUDGMENT - THE COURT Delivered the fifth day of June, 1992 At his death on 18 June 1945 Jesse Siganto owned land at Oxenford, which is a settlement on the Pacific Highway between Brisbane and the Gold Coast. At that time the -- 4 of 15 -- 3 land comprised two or more registered lots on one of which there was a derelict service station and a post office of sorts. This appeal arises out of an action concerning rights claimed by the plaintiff to or in what is referred to as the service station land, and also some other land formerly owned by Jesse Siganto and referred to as the nursery land. The appellants are the first and second plaintiffs in the action, who are John Brims and his wife Marilyn; the third plaintiff Hahndorf Investments Pty Ltd, which is a family trust company for John Brims and Marilyn Brims; and the fourth and fifth plaintiffs Gary Brims and Joan Brims, for whom the sixth plaintiff G & J Brims Construction Pty Ltd is trustee. John and Gary Brims are brothers. All these individuals had lived in the Oxenford area for many years and knew Jesse Siganto and his son Dion well. Dion was a cousin of Joan Brims. The defendants are the personal representatives of Dion Siganto, who died on 23 October 1987. He was Jesse Siganto’s only son, and under the Will of Jesse dated 4 June 1973, he inherited Jesse’s land the subject of this action. It was registered in Dion’s name pursuant to an application dated 27 July 1977 for transmission (ex. 34) registered in the Titles Office on 24 October 1978. The relief claimed in the further amended statement of claim is in substance for a declaration that the defendants hold the service station land and post office land as trustees for John Brims; and for a further declaration that the nursery land was an asset of a partnership (of which John and Gary Brims and Dion Siganto were members) known as Oxenford Soil Supplies. Consequential relief is also sought in the form of transfer of the land, and, in the case of the partnership, winding up, accounts and inquiries. There was also an amended defence and counterclaim in which the defendants sought to recover possession of the subject land. The learned trial judge gave judgment for recovery of -- 5 of 15 -- 4 possession subject to certain conditions; but he refused the principal relief claimed by the plaintiffs in the action, and in respect of it gave judgment in favour of the defendants together with costs of the action. In substance the plaintiffs failed in the action. They now appeal against the decision given against them in the court below. It is useful in considering the questions on appeal to adopt the dichotomy between the service station land and the nursery land. In respect of the former, the foundation of the claim by John Brims was a promise or offer alleged to have been made to him in mid-1973 by Jesse Siganto. The land was then the site of a service station, which had by that time ceased to be used, in consequence, it would seem, of the diversion of the old Pacific Highway. John Brims had had experience as a mechanic and at times before 1973 had been employed at one or more service stations at which he had worked on Jesse’s vehicles. According to John’s evidence he learnt that Jesse wished to speak to him. They met at the Oxenford Hotel, where Jesse tried to interest John in starting up the service station again. John at first showed little enthusiasm for the idea. Then Jesse "basically" said "Get over there, it’s yours. You can do what you want with it." John’s response, according to his testimony at the trial, was that he would "have a look at it". After he had thought the matter over, a further conversation took place in which John repeated his doubts about the potential profitability of the service station. Eventually Jesse said: "John, you get that going, and I will give you the land and the service station". John asked "Why would you do that?", to which Jesse replied: "You are a nice bloke, and you have always done the right thing by myself, my family, Dion and I have never heard you say a bad word about anyone". On the same day, according to John, Dion confirmed that his father had told him he had given the service station to John. -- 6 of 15 -- 5 Soon after these conversations in mid-1973 John took possession of the service station site. The building was renovated and tanks were installed. By 1975 or 1976 a petrol pump was located there. The trial judge accepted that John spent significant amounts of time and money in rehabilitating the service station. By mid-1975 the business established there by John and his wife was operating. It was eventually sold in 1981 to the corporate trustee Hahndorf, which is the third plaintiff. The land on which the service station was situated was never transferred to John Brims either by Jesse or by Dion Siganto before his death. On any view of the matter, and even if this evidence of John Brims were accepted, there are some real difficulties in sustaining his claim to the land. We were invited to consider the transaction as giving rise to a contract between Jesse and John, by which the former promised to transfer the land in return for John’s renovating and running the service station as well as maintaining Jesse’s vehicles free of charge (to which there are frequent references in the evidence). On that approach, the difficulty is that the plaintiffs’ claim to enforce the contract is made not against Jesse or his personal representatives, but against the personal representatives of Dion, who was not a party to the alleged contract. Alternatively, if the transaction is viewed as a gift subject to a condition that was later satisfied by John, the gift was never effectuated. The land was not transferred. There being no equity to complete an imperfect gift, John is bound to show a promise or contract enforceable against Dion. This he cannot do. A further alternative is that there was expenditure by John and Marilyn Brims on the service station land in the expectation, as they asserted, of becoming owners of the land. This is capable of raising an equity against Jesse or his personal representatives, and also against Dion on the assumption that he acknowledged or knew and acquiesced in the expenditure. Most of the expenditure -- 7 of 15 -- 6 seems to have taken place before Dion became registered as proprietor in 1977; but it might nevertheless be sufficient to raise a personal equity against him capable of displacing the indefeasibility of his registered title. The fundamental problem for the plaintiffs remains, however, that the trial judge was not prepared to accept the evidence with respect to the underlying facts given by John Brims and his supporting witnesses. His Honour found John’s recollection of various conversations with Jesse and Dion to be "fragmentary and suggestive of conscious reconstruction rather than recollection of actual conversations". There was, he said, "a lack of precision and inconsistency about his evidence which cannot be explained away merely by the passage of time". In the end, the judge was left with the "distinct impression that both Gary and John Brims had manufactured the conversations alleged with Dion and in John Brims case, Jesse". In this context Gary’s evidence has reference to the nursery land; but the passage reflects his Honour’s overall conclusion as to the credibility of both principal witnesses for the plaintiffs. These findings were, as the reasons for judgment show, made only after thorough and careful consideration of the evidence both in the course of the trial and after it. According to settled principles such findings are very difficult to disturb on appeal. It was nevertheless submitted that, apart from the evidence of John and Gary and also of Marilyn Brims (whose evidence was also rejected in unqualified terms), there were other, independent witnesses whose evidence was unchallenged and uncontradicted and ought to have been accepted as substantiating John’s account of the transaction with Jesse. Among these supporting witnesses, the testimony of Mr Dallinger was quickly discarded by his Honour. He found his demeanour "unpersuasive" and the account he gave "quite unlikely". The only witnesses meriting consideration are Mr Rangely and Mr -- 8 of 15 -- 7 Boyd. They both claimed to have been present at a conversation with Dion, in which Rangely offered to buy the service station. According to his evidence, Dion said, "Keith, there’s no chance. It is John’s. If you want to talk about the service station, go and see Johnny Brims. It’s all his". Boyd’s version was: "Well, if you want to purchase the garage you better go see John Brims. I don’t own it. I have nothing to do with it". Rangely identified the conversation as having taken place in 1980 or 1981; Boyd in 1979, or, at any rate, in the late ‘70s. On either version what was said was capable of referring to the service station business rather than to the land itself, although at one point in his testimony Rangely improved his initial account of the conversation by expressly mentioning the land. His Honour described Boyd’s account as "fragmentary and lacking in conviction", although he thought Rangely’s testimony offered "some support" for John’s evidence about the service station land. This evidence may perhaps be described as "unchallenged" but only in the sense that, with both Jesse and Dion being dead, Mr Sofronoff QC considered he had no specific instructions enabling him to put to the witnesses that the conversations in question had not taken place. The trial judge nevertheless considered it "clear to everybody" that the thrust of the defendants’ case was to deny any agreement or undertaking as alleged. The witnesses might on one view perhaps be seen as "independent", but Dallinger was a brother-in-law of John, and Boyd and a number of the others who testified were friends of John or Gary. It remains true to say the evidence was uncontradicted; in consequence, it was submitted, the judge was bound to accept it unless it was inherently improbable or unreasonable. There were, however, sound reasons for considering the evidence as unreliable and unconvincing. The claim was not formally made until the only individuals -- 9 of 15 -- 8 Jesse and Dion, from whom contradictory testimony might have been expected, were dead. Objective circumstances telling against its acceptance were that the critical conversations were not recalled or recounted either literally, precisely or accurately. That was not surprising in view of the casual character of the conversations and the length of time that had elapsed; but it nevertheless served greatly to weaken the cogency of the evidence given. The case was also one in which particular accuracy was required because of the potential for ambiguity. Speaking of the "service station" might well mean the business apart from the land itself. The case was remarkable for the fact that, although at trial some 17 or 18 years had passed since the dates of the critical conversations with Jesse in mid-1973, it was not until 1988 that the first formal claim to ownership of the land was made. During the intervening period nothing at all had been done to procure a transfer of the land to John Brims, either at Jesse’s death in 1975 or at Dion’s death in 1987, or to record the alleged agreement. The writ did not issue until 1989. For the whole of that lengthy period not a single document came into existence that in any way supported John’s claim to ownership of the land. In contrast there were numbers of documents that were plainly or at least apparently inconsistent with the plaintiffs’ claim at trial. The tax returns in respect of the service station business recorded that in and between the years 1974 to 1987 "rent" was paid to Dion; and cheque butts referable to cheques in his favour for what was identified on the butts as "May rent", "June rent", and so on, were admittedly written by both John and Marilyn Brims. The judge rejected as "particularly unimpressive" the explanation given by her that the amounts of these cheques were somehow designed to reimburse Dion for rates paid on the premises. In addition, successive earlier attempts to formulate the basis of the claim betrayed -- 10 of 15 -- 9 serious inconsistencies compared with the case presented at trial. Both a letter from solicitors dated 23 December 1988 and a caveat lodged by the first three plaintiffs alleged as the basis of the claim a declaration of trust not by Jesse but by Dion pursuant to an agreement between him and John and Marilyn in 1973. At that time Dion did not even own the land. An amended statement of claim delivered on 23 March 1990 alleged an agreement with both Jesse and Dion, but only to permit John to conduct a motor mechanics business on part of the land. Oddly, on the very same date, the further amended statement of claim for the first time alleged the agreement relied on at trial, which was that john would "become" the owner of the service station and the land on which it was situated. The judge was entitled to conclude that these differing versions revealed varying instructions from the client, which were in the process of undergoing improvement in the course of time as fresh problems with the claim were encountered. Everything that has been said amply justifies the findings made by the judge in assessing the oral testimony of John Brims and his witnesses in support of the claim to ownership of the service station land. On appeal nothing has been identified which casts doubt on that conclusion, or which suggests that the present case is in any respect an exception to the rule that findings as to credibility made by the tribunal of fact are seldom capable of being disturbed on appeal. In fact, however, his Honour was careful to suspend finial determination of matters of credibility until he had also reviewed the evidence relating to the nursery land. The nursery land was a neighbouring area of low-lying, swampy ground also owned by Dion. John and Gary Brims, or their respective corporate emanations, claimed that this land was held by Dion in trust for the partnership Oxenford Soil Supplies of which all three were members. There was no doubt that such a partnership came into existence late in -- 11 of 15 -- 10 1981. It was dissolved by and upon Dion’s death. Its genesis lay in an earlier partnership between John and Gary for carrying on a carting business, in which Gary drove a truck that had been purchased by John. According to their account of it, John and Gary were approached by Dion with a request that he be admitted as a partner. To this they agreed. He paid $1400 for his share and became a partner in about 1981. Not long afterwards they bought for $15,000 a business of bagging potting mix formerly conducted by one Duncan. Gary worked full-time in the business, and John and Dion, who were otherwise employed during the day, worked in the business at week-ends and outside daily working hours. The carting and bagging businesses were combined and the name Oxenford Soil Supplies was registered as a business name. Some time later Dion suggested that the site of the business be moved from land on which Duncan had conducted it to the nearby nursery land. Gravel was dumped on it and levelled off. The fill was supplied by Gary, who continued to drive the truck and was paid a full wage for doing so. The other two worked in their spare time. It was decided to establish a nursery business on the site. John Brims fabricated some steel work for the business and also did the fencing. In addition to working there physically, Dion kept the books for the partnership. He also agreed to contribute the land. A considerable number of witnesses attested to haring statements to the effect that Dion was "putting up" or "putting in" the land as his contribution to the partnership. Again, however, statements of this kind are ambiguous. They are capable of meaning either that the partnership was to become the owner, at least in equity, of the land; or simply that the land would be made available for the use of the partnership in carrying on the nursery and soil business. It is not really possible from statements like that to tell which of these two -- 12 of 15 -- 11 alternatives was intended. The surrounding circumstances are also inconclusive. The partnership accounts and tax returns do not show the land as an asset of the partnership. On the other hand, the partnership is recorded as paying "rent" to Dion in respect of the land. This tells strongly against a conclusion that the land was held by Dion on behalf of the partnership. It may have to be discounted to some extent because Dion kept the books and was presumably therefore responsible for making these entries, although the tax returns were prepared by a Mr Imbruglia, who acted as the firm’s accountant. However, it seems, as the trial judge found, unlikely that Dion would have set out to misrepresent the true state of affairs by deliberately falsifying the books in order to deceive his partners. More to the point, perhaps, is the circumstance that in 1982 Dion mortgaged the nursery land as security for partnership borrowings from the bank. This is capable of suggesting that the land was considered to be a partnership asset, but it is not decisive. The instrument of mortgage was not tendered and is not in evidence. Apparently it was executed only by Dion, who presumably gave the usual covenant for repayment. In respect of such a liability he would, however, have been entitled to indemnity out of the partnership assets and if necessary from his fellow partners personally. That would be so whether or not the land itself had become a partnership asset. In the end, the mortgaging of the land to secure partnership liabilities is probably a neutral circumstance. The value of the nursery land is another factor to be considered. There was evidence of occasions on which Dion had said it was "worthless", and of another on which he said it was worth $8,000 to $10,000. The total area of the land was 3.749 hectares, of which the nursery land represented about one quarter. The whole of the land had been valued for the probate purposes in 1975 at $39,450. Gary, John and Dion were said to have been equal partners with shares of one third each. There is little doubt that this was -- 13 of 15 -- 12 so. If, as seems likely, the land was valuable, Dion’s capital contribution was considerably larger than that made by the other two. One would expect to find this reflected in some way in the partnership accounts; but it was not. The onus of proving that the nursery land was partnership property rested with the plaintiffs John and Gary Brims. On the authority of Waterer v. Waterer (1873) 16 Eq. 402, 406, it was submitted there was a presumption that land used in a nursery business was partnership property; however, that case concerned a nursery in nineteenth century England in which the trees and shrubs were planted in the ground, so that the whole of the partnership stock in trade became part of the land itself. In consequence, said James LJ, the partners "necessarily appropriated the soil for gardening purposes which could not be carried on without it". There is no evidence that the nursery in the present case was of a similar kind. If speculation were permitted, experience suggests that it probably was not. Section 2(1) of the Partnership Act 1896 now provides that common property or part ownership does not "of itself create a partnership as to anything held or owned jointly or in common, whether the tenants or owners do or do not share any profits made by the use thereof". In distinguishing Waterer v. Waterer in Davis v. Davis [1894] 1 Ch. 393, 401, North J. said it was "not the law that partners in business, who are owners of the property by means of which the business is carried on, are necessarily partners as regards that property". Such a conclusion he considered to be "expressly negatived" by s.6(1) of the Act. If only one of the partners owns the property, the case is in that respect so much stronger. The question is whether the plaintiffs have discharged the onus upon them. There is really no identifiable objective evidence on which to found a conclusion that the nursery land, which throughout remained registered in the name of Dion, was appropriated by him -- 14 of 15 -- 13 so as to make it partnership property. What was said by the independent witnesses (if that is what they were) was equally consistent with an intention on his part to make the nursery land available for use in the business so long as the partnership continued, but without making a gift of it to or for the partnership. To the extent that the evidence of the plaintiffs went further, the trial judge did not accept it. In this he was influenced by his earlier impressions of their credibility formed in the course of deciding the question of the service station land. It has not been shown that the trial judge’s findings with respect to credibility were wrong. Without displacing them the plaintiffs cannot succeed in the appeal. It follows that the appeal should be dismissed with costs. -- 15 of 15 --