Case Note: Young v Young [2014] TASSC 24

The case of Young v Young [2014] TASSC 24 concerned the application of those legislative provisions derived from the Statute of Frauds 1677 (29 Car II c 3) requiring writing on the transfer or creation of interests in land; here being s 60(2) Conveyancing and Law of Property Act 1884 (Tas) (the equivalent to s 23C Conveyancing Act 1919 (NSW)).

Facts 

In December 2001, Joan Young (the defendant) proposed to purchase a house for her daughter, Wendy Young (the plaintiff). At the time, Wendy had recently separated from her husband and was living in rented accommodation with their child. Due to problems with her estranged husband she had taken steps to ensure that it would be difficult for him to know where she lived. In order to assist in this, Joan suggested putting any property purchased in her own name, rather than Wendy's. A house was soon purchased with funds provided by Joan, with her registered as owner. Wendy moved into the house with her child and resided there for many years. During this time Joan reiterated to Wendy, and others, on numerous occasions that the house belonged to Wendy: at [5]. Nonetheless there was no written evidence as to this fact; only recollections of oral conversations.

Unfortunately, for reasons not disclosed in the judgment, the relationship between Wendy and Joan broke down. Wendy asserted that the property was held on trust for her by Joan, and brought a claim to have it transferred to her: at [1]-[2]. Joan defended the claim by arguing that because of ss 36 and 60(2) Conveyancing and Law of Property Act 1884 (Tas), Wendy must fail; the sections requiring that for Wendy's claim to succeed, there must be evidence in writing: at [4].

Issue

The issue in this case was the application of ss 36 and 60(2) Conveyancing and Law of Property Act 1884 (Tas). Section 36 states: "(1) No action may be brought upon any contract for the sale or other disposition of land, or any interest in land, unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto by him lawfully authorized." Blow CJ held that Wendy was "not seeking to rely upon "any contract for the sale or other disposition of land, or any interest in land". Her claims are not based on any contract at all.": at [9].

Rather, the matter was one that fell squarely within s 60(2):

(2) Except as hereinafter provided –

(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 his agent thereunto lawfully authorized 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 his will; and

(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 his agent thereunto lawfully authorized in writing, or by will –

but this provision does not affect the creation or operation of resulting, implied, or constructive trusts.

There was no disposition under s 60(2)(b) as it "applies only when a settlor or testator intends to create a trust in relation to his or her freehold property": at [12]. In other words, property they already held. Nor was there a disposition under s 60(2)(c) as there was no disposition of a currently existing equitable interest or trust at the time: at [11]. Rather the matter fell within s 60(2)(a) as there was a complete disposition of the vendor's interest when the property was purchased by Joan, that resulted in the creation of Wendy's equitable interest: at [13].

The Exception to Writing

The exception to the requirement for the creation or disposition under s 60(2)(a) to be in writing is stated by Lindley LJ in Rochefoucauld v Boustead [1897] 1 Ch 196 at 206 (cited at [15]):

[T]he Statute of Frauds does not prevent the proof of a fraud; and that it is a fraud on the part of a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land himself. Consequently, notwithstanding the Statute, it is competent for a person claiming land conveyed to another to prove by parol (oral) evidence that it was so conveyed upon trust for the claimant, and that the grantee, knowing the facts, is denying the trust and relying upon the form of conveyance and the Statute, in order to keep the land himself.

Put briefly, if the requirement as to writing could be used to defeat a valid oral creation of a trust (or equitable interest), then the requirement is effectively waived: at [17].

His Honour cited Di Pietro v Official Trustee in Bankruptcy (1995) 59 FCR 470, a case also concerning an oral declaration of trust of real estate in favour of children: at [18]. In that case Sackville J said,

The authorities support the principle that, where land is transferred to a person absolutely, but the transferee undertakes to hold it on trust for another person, the beneficiary may prove the existence of the trust by parol evidence and obtain remedies requiring the trustee to give effect to the trust: Rochefoucauld v Boustead at 206; Last v Rosenfeld [1972] 2 NSWLR 923. The better view is that such a trust is not enforced as a constructive trust, but as an express trust. The beneficiary is entitled to prove the express trust because to do otherwise would be to allow the statute to be used as an instrument of fraud. (at [19]).

Blow CJ saw no reason to distinguish this case from Di Pietro and held that on the facts Wendy was entitled to succeed in her claim; Joan could not avail herself of the writing requirement under s 60(2)(a): at [20]-[21], [23].

Observations

This case is a straightforward and useful illustration of the operation of the Statute of Frauds, and those legislative provisions derived from it. This is especially so for the succinct way Blow CJ illustrates which of the sub-paragraphs of s 60(2) applies and why. It also serves as a reminder that writing requirements cannot be used by unscrupulous persons for their own gain at the expense of another's loss.