Ah Far v Ah Far [2003] WSSC 1 (9 January 2003)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

SEUGAALII PATI AH FAR of Leili,
SEUMALO SEKOA AH FAR of California USA,
FANIA AUMUA (nee Ah Far) of Ululoloa,
PITA VITALE (nee Ah Far of Lalovaea,
OTILA TUSI (nee Ah Far) of Vaitele-fou,
AITULAGI POI (nee Ah Far) of Tanumalala,
ROSALIA AH FAR of Vaitele,
TAULIA SAILI (nee Ah Far) of Fasitoo-uta,
AH FAR AH FAR of Tanumalala,
MAKERITA AH FAR of Siusega.
Plaintiffs

AND

SENIO TAFA AH FAR
of Christchurch, New Zealand.
Defendant

Counsel: TRS Toailoa for plaintiffs
PA Fepuleai for defendant

Hearing: 21, 22, 26 November 2002; 3 December 2002
Judgment: 9 January 2003

JUDGMENT OF SAPOLU CJ

Introduction

There is one central issue in this case which calls for determination by the Court. That is, whether the deed of gift by which the deceased mother of the plaintiffs and the defendant conveyed the land in dispute to the defendant is a valid and effectual gift or whether the disputed land, as alleged by the plaintiffs, was given to the defendant by their deceased mother to hold on trust for the benefit of all of her children. It was contended for the plaintiffs that the land was intended by their mother to be given to the defendant, who is their brother, to be held by him as trustee for the benefit of all of their mother’s children but the defendant by some fraudulent act had the land conveyed to him by way of gift. As a consequence, it was submitted that the Court ought to declare the land to be held on a constructive trust by the defendant as constructive trustee for both the plaintiffs and the defendant in equal shares. It is implicit in the submission for the plaintiffs that their mother died intestate and under the rules of succession in an intestacy all of their mother’s children should take the land as tenants in common in equal shares. The defendant denied any fraudulent act on his part in relation to the deed of gift and it was contended for him that the gift of the land to him by his mother was free and voluntary and therefore valid and effectual. That being so, counsel for the defendant submitted that the plaintiffs have no interest in the land and their action should be dismissed.

Even though the central issue is the validity of the gift to the defendant, a number of other issues do arise from the evidence. Some of those issues like the admissibility of extrinsic evidence, often described as “parol evidence”, to explain the real nature of a transaction recorded in a document and the required standard of proof where fraud is alleged were dealt with by counsel in their submissions.

Evidence

I will now deal with the evidence but I will consider the evidence in such further detail as may be necessary when I came to deal with the issues that require the Court’s attention.

There are eleven plaintiffs in this case. All of them are brothers and sisters. The defendant is one of their brothers. So there are twelve of them altogether. Their parents were hardworking planters at Tanumalala. They planted mainly taros and also some vegetables on land which they leased from the then Western Samoa Trust Estates Corporation. According to the evidence of the plaintiff Seugaalii Pati Ah Far (henceforth called “Pati”), who is one of the three plaintiffs who gave evidence, their parents leasehold consisted of a hundred and five (105) acres. Their parents proved to be highly successfully planters as evidenced by the fact that they were able to acquire a number of valuable assets from the income they derived from the sale and export of their taros and the sale of their vegetables in the local market. These assets included a quarter acre of freehold land at Moamoa on which they built a European house, a well-stocked store at Tanumalala, two taxis, a truck and the freehold land which is the subject of the present proceedings. This land is also situated at Tanumalala but is separate from the leasehold and it is approximately twenty four and a half (24 ½ ) acres in area. In 1998, the mother of the plaintiffs purchased another freehold land of one quarter acre at Siusega.

From the relevant deed of conveyance which was produced at the trial, the disputed land was purchased on 26 June 1986 from the National Provident Fund at the price of $24,420 and was registered in the name of the mother, Taulia Ah Far. There is a conflict in the evidence as to who contributed to the purchase price. According to the evidence given by the plaintiffs Pati, Makerita Ah Far (henceforth called “Makerita”) and Rosalia Ah Far (henceforth called “Rosalia”), the land was purchased by their parents for the benefit of all their twelve children inlcluding the defendant and the defendant did not make any contribution to the purchase price. The defendant, on the other hand, testified that before he migrated to New Zealand in 1978, he left $2,000 with his father and when he later returned to Samoa in 1994, his mother told him that the money he had left with his father was used in the purchase of the land. As there is no claim by the defendant for an interest in the land under a resulting trust on the basis of his alleged contribution to the purchase price, I do not find it necessary to resolve this conflict in the evidence.

In January 1994 the father of the plaintiffs and the defendant died. The defendant who had migrated to New Zealand in 1978 did not come to his father’s funeral as he was not told about it. He only became aware much later about his father’s death and in June the same year he came to Samoa with the gravestone for his father. On 12 July while the defendant was still in Samoa, his mother executed a deed before a lawyer conveying the disputed land to the defendant as a gift. It is that deed of gift which is at the heart of the present proceedings.

A great deal of conflicting evidence was given by both sides on this issue. Essentially the evidence that was given by the plaintiffs Pati, Makerita and Rosalia was that the land was intended to be given by their mother to the defendant to be held by him as trustee for the benefit of all of her children. Their mother had told them in the presence of the defendant that the land was to be given to the defendant to look after as trustee for her children. However, as it has turned out, the land has been gifted to the defendant alone as evidenced by the deed of gift executed by the mother. The plaintiffs are therefore in effect saying that the defendant must have committed a fraudulent act which caused their mother to execute the deed which gifts the land to him alone contrary to her wish expressed to them that the land was to be given to the defendant as trustee to look after for the benefit of all of her children. The defendant, on the other hand, testified that the land was gifted to him by his mother freely and voluntarily as shown in the deed of gift without any stipulation that he was to hold the land as trustee for himself and his brothers and sisters. He denied that his mother ever told the plaintiffs Pati, Makerita or Rosalia in his presence that the land was to be given to him as trustee for all of her children. What happened, according to the defendant, was that when he returned to Samoa in June 1994, his mother said to him one day that she wanted to give her land to him alone outright. When he tried to talk his mother into sharing the land with his brothers and sisters his mother was adamant about giving the land to him alone. She was apparently most displeased with her other children whom she described as unkind, liars, crooks and thieves.

At a later date, probably in the beginning of July the following month, the defendant and his mother went to see a lawyer. They saw Mr Vaai who was then one of the most experienced and respected members of the legal profession and who has since been appointed one of the Judges of the Supreme Court. According to the defendant, when he and his mother arrived at the law firm where Mr Vaai was a partner at the time, he waited at the reception area while only his mother went in to see the lawyer. He did not accompany his mother into the lawyer’s office. He said that his mother met with the lawyer for what seemed to be a rather lengthy time while he was waiting in the reception area. As he understood the circumstances, his mother was relaying her instructions to the lawyer on what she wanted done. The defendant also said that when his mother was later accompanied out to the reception area by Mr Vaai, he paid the necessary fees and then left with his mother. It is clear from the defendant’s evidence that no document was signed by his mother on that day and he does not know when his mother signed the deed of gift. It must have been on a subsequent date but he does not know for certain as he did not accompany his mother back to Mr Vaai to sign any document. He only went back by himself later on to the lawyer’s office follow up on the deed whether it had been registered. The deed which was produced at the trial is shown to have been registered on the 3rd of August 1994. So it must have been on or after that date that the defendant uplifted the deed from the lawyer’s office.

The deed of gift shows the mother as donor conveying the land to the defendant her son as donee by way of gift. The deed is dated the 12th day of July 1994 and is signed by the mother and witnessed by Mr Vaai. The deed recites that the donor is desirous of conveying her land to the donee her son by way of gift. The deed further recites that in consideration of the love and affection that the donor bears towards the donee her son, she hereby gives and conveys her land to him to hold the same unto him, his executors, administrators, and assigns forever.

The defendant was subjected to some detailed cross-examination by counsel for the plaintiffs on this part of the case, as with every other part of the case. However, the defendant adhered to his evidence that the land was freely and voluntarily gifted to him by his mother and was not given to him as trustee to look after for the benefit of himself, his brothers and sisters. The defendant also adhered to his evidence regarding the circumstances of his visit with his mother to the lawyer. Even though there is no express allegation of fraud in the statement of claim against the defendant, there is a clear implication to that effect. Thus the cross-examination of the defendant contained suggestions of actual fraud in the sense of conscious dishonesty. It was suggested during cross-examination that the defendant had pre-arranged the preparation of the deed of gift and only brought in his mother to sign the deed after it was prepared and ready for signing. The defendant steadfastly denied that suggestion and there is no evidence to support that suggestion. There was also another suggestion during cross-examination that as the deed of gift is in the English language and the mother did not speak English, she must have signed the deed without understanding what is in it. From the whole of the evidence, I am of the impression that the mother did have some understanding of English though limited, for she used to come to Apia to order goods for her store and pay her bills. I would, however, accept that such limited knowledge of the English language would not be sufficient for the purpose of understanding the contents of the deed of gift in this case. However, there is no evidence that the mother did not understand the contents of the deed before she signed it. As I have said earlier, the lawyer who was involved in this matter was a highly experienced and respected member of the bar and the legal profession, and I accept the submission from counsel for the defendant that the lawyer must have explained to the mother the contents of the deed in the Samoan language before she signed it. It is elementary and normal legal practice that when a person is required to execute a legal document before a lawyer, the lawyer would first explain the contents of the document to that person in a language that person understands before he or she is asked to sign it. While I would not rule out the possibility of an inexperienced lawyer overlooking that elementary requirement of legal practice, I am very hesitant to accept, in the absence of evidence to the contrary, that a highly experienced and respected lawyer, as it was in this case, would commit such an oversight particularly as the evidence shows that he had met with the mother presumably to obtain her instructions before the deed was later prepared and signed. In any event, the onus of proving actual fraud rests on the plaintiffs, the party who is alleging fraud. I am also still not able to understand why Mr Vaai was not called by for the plaintiffs to testify as to what transpired between him and the mother at their two meetings for Mr Vaai to receive instructions and for the mother to sign the deed, or at least obtain his affidavit which could have been produced by consent. The difficulties which arise from the absence of any evidence from Mr Vaai are compounded for the plaintiffs by the absence of any evidence from the mother who has died.

I will now refer to parts of the evidence which relate to events that occurred before and after the mother executed the deed of gift as they may have some relevance to the outcome of this case. Prior to 1994, the mother and the father of the plaintiffs and the defendant had conveyed outright their freehold land and European house at Moamoa to the plaintiff Pati their eldest son. In 1998, the mother purchased a quarter acre of freehold land at Siusega for $38,500 and registered it under her name and that of the plaintiff Makerita as tenants in common. As the mother died in December 1999, Makerita is now the sole owner of that land by survivorship. It is therefore clear that in respect of the lands at Moamoa and Siusega, the mother did not wish all of her children to share in those lands. So it does not appear unusual for the mother to give her lands to a particular child of hers. What is claimed by the defendant that his mother gifted the disputed land to him alone would not appear to be out of the ordinary as far as the mother was concerned, even though one would concede that the disputed land is much greater in area than the other two lands.

There was also evidence that the mother had a diabetic condition and heart illness in 1994. That was known to both the plaintiffs and the defendant. How long the mother had been in that state of health prior to her execution of the deed of gift to the defendant on the 12th of July 1994 does not appear from the evidence. In 1995 she left for the United States for a few months. From the evidence, I am satisfied that the mother left for the United States about or more than a year after she executed the deed. There is here another sharp conflict in the evidence as to the true reason for the mother’s trip to the United States. The plaintiffs Pati, Makerita and Rosalia said their mother went to the United States for medical treatment; the defendant on the other hand said his mother went to the United States to visit her brother and have a holiday. Neither the defendant nor any of the plaintiffs accompanied their mother to the United States as one would have expected if the mother was in fact travelling overseas for medical treatment. According to the evidence of the plaintiff Makerita, another woman who happened to be on the same flight accompanied her mother to the United States. When the mother returned from the United States a few months later, it does not appear she was accompanied by anyone. She again continued to operate her store as she had done before she left for the United States. There is also no evidence that the mother was in any serious health condition before she left for the United States. I am satisfied that the real reason for the mother’s trip to the United States was to see her brother and have a holiday.

Counsel for the defendant also submitted that there is no evidence given or suggestion from the evidence that was given by either party to show that the mother’s mental capacity was in anyway affected by her diabetic condition or heart illness. The mother was a hardworking, experienced and successful planter and businesswoman together with her husband. After her husband died in January 1994, she still remained a successful businesswoman and planter hiring farmworkers. The mother may not have attained a high level of education, but she certainly seems to have been intelligent, independent, self-reliant and successful in earning money. I have come to the view that the mother’s health condition did not affect her decision to gift the disputed land to the defendant or to affect her mental capacity or judgment when she went to the lawyer in 1994 to give her instructions as to what she wanted done with her land which was about twelve months before she left for the United States. Neither did the mother’s health condition affect her mental capacity or judgment when she went back to the lawyer to execute the deed of gift to the defendant.

It is clear from the plaintiffs evidence which was not denied by the defendant that while the mother was in the United States, the defendant wanted to subdivide the land and sell it. He told his sisters (probably Makerita and Rosalia) who were living on the land that the land had been conveyed to him by their mother and they would have to leave the land as he wanted to subdivide and sell it. That prompted the plaintiff Makerita to make phone calls to her mother in the United States. When the mother returned to Samoa she had had a change of heart and she wanted the land back. There is here another conflict between the evidence given by the plaintiffs and the evidence given by the defendant. According to Makerita and Rosalia, when their mother arrived back from the United States she reiterated what she had said before that the land had been given to the defendant as trustee for all of her children and she wanted the land back from the defendant. The implication, of course, from the evidence of Makerita and Rosalia is that the defendant must have misled or deceived their mother into executing the deed which conveys the land to him by way of gift contrary to her expressed wish. The defendant, on the other hand, testified that when his mother was in the United States for a holiday with her brother, she met a man she wanted to do business with in Samoa and it was for that purpose she wanted the land back from him. When he refused to give the land back, his mother wanted the land back for all of her children. He again refused to give back the land. The defendant went back to New Zealand shortly afterwards. That was in 1996.

The plaintiffs also produced an unsigned copy of a letter dated 20 November 1997 said to have been sent by the solicitor for the plaintiffs to the defendant in New Zealand together with a deed to be signed by the defendant conveying the land back to his mother. The letter says that the mother was suffering from ill health at the time the land was conveyed to him as trustee for his brothers and sisters. And the defendant was asked in that letter to sign the accompanying deed conveying the land back to his mother. The defendant testified that he did not receive that letter or deed.

I consider that the crucial evidence is the evidence which relates to what occurred prior to the mother executing the deed of gift. If the gift as expressed in the deed was free and voluntary at the time the deed was executed, then it is valid and effectual and beyond recall by the mother. It would be too late for the mother to have a change of heart in 1996 two years after she had executed the deed in 1994. Evidence of what might have occurred after the execution of the deed may be relevant if it shows that the mother was defrauded by the defendant into conveying the land to him outright instead of conveying the land to him as trustee of it for his brothers and sisters as alleged by the plaintiffs.

I have given very careful consideration to the evidence as the land is substantial in area and I do not want the plaintiffs to be deprived of an interest in the land if in law they are entitled to such interest. I am of the view that the first time the mother had expressed any intention that the land was to be conveyed to the defendant as trustee to look after for all of her children was after she returned from the United States. I do not accept the plaintiff’s evidence that their mother had told them in the presence of the defendant that the land was to be given to the defendant as trustee before the mother went to the lawyer and signed the deed of gift to the defendant. In my view, it was only after the mother returned from the United States in 1996 that she said to the plaintiffs that the land had been given to the defendant as trustee for all of her children. It is just unbelievable that the mother told the plaintiffs in the presence of the defendant who had just arrived from New Zealand in June 1994 that the land was to be given to the defendant as trustee and yet in the beginning of July, the very next month, she went to see a highly experienced and respected lawyer and signed a deed conveying the land to the defendant by way of gift. The circumstances related by the defendant of his visit with his mother to the lawyer and the fact that the mother went back unaccompanied by the defendant to sign the deed as witnessed by the lawyer, do not bear out the evidence given by the plaintiffs. There is also no evidence of deceit or other dishonesty against the lawyer or the defendant. Up to the time of her death in December 1999, the mother had also not taken any Court action to have the deed of gift declared void as not reflecting her true intention at the time she executed it. If anything, she purchased another quarter acre of freehold at Siusega in 1998 and effectively gave it to the plaintiff Makerita alone without anything for her other children.

It is also clear from the evidence that in 1994 all of the mother’s children were adults. The youngest who is the plaintiff Makerita was then twenty years old. If it is true that the mother’s intention was for all her children to share in the land, it was not necessary for her to convey the land to the defendant as trustee. All she had to do was to leave the land alone and when she dies intestate, as it appears to have been the case when she died in December 1999, all of her children would have succeeded to the land in equal shares under the rules of succession in an intestacy. Furthermore, even if it is true that the mother was suffering from ill health, it was still unnecessary for her to convey the land to the defendant as trustee for the benefit of all of her children, if her true intention was for all of her children to share in the land. As I have said, all she had to do was to hold on to the land which would necessarily devolve upon all of her children in equal shares by operation of the law of succession if she were to die intestate. Another possibility was for her to make a will and then give and devise her land to all of her children in equal shares. It seems unreal for the mother to constitute the defendant as trustee of her land for all her children if in fact her true intention was for all her children to share in the land. An experienced lawyer, as it was in this case, would have picked up the point and advised the mother either to hold onto the land herself or make a will giving her land to all her children as tenants in common in equal shares. I have also found that the mother was not in a serious condition of ill-health in 1994 and that the condition of her health did not affect her judgment or mental capacity when she executed the deed of gift.

I will now turn to the legal issues in this case.

Extrinsic evidence

It was common ground between counsel that extrinsic evidence, sometimes referred to as “parol evidence”, is, as a general rule, inadmissible to add to, vary, or contradict the terms of a document which records a transaction: Bank of Australasia v Palmer [1897] UKLawRpAC 44; [1897] AC 540, 545 per Lord Morris; Goss v Lord Nugent (1833) 5B & Ad 58 per Lord Denman. Both counsel were also in agreement that there are now a number of exceptions to the general rule. One of these exceptions, as submitted by counsel for the plaintiffs, is that extrinsic evidence is admissible to show the true nature of a transaction recorded in a document so that if the document is shown to be a sham in the sense that it does not reflect the true transaction between the parties, the Court may set it aside: NZI Bank Ltd v Euro-National Corporation Ltd [1992] 3NZLR 528, 539 per Richardson J.

In Barton v Bank of New South Wales [1890] UKLawRpAC 31; (1890) 15 App Cas 379, a deceased debtor had deposited the title deeds to certain property of his to secure a cash credit advance from the respondent bank. Subsequently he executed a deed of conveyance by which he transpired his property absolutely to the respondent bank in consideration of the bank deducting a certain amount of money from the debt he owed the bank. The appellant, the administrator of the deceased debtor’s estate, brought proceedings that notwithstanding the plain terms of the deed of conveyance transferring the property outright to the respondent bank, the true relationship between the deceased debtor and the bank was still one of mortgagor and mortgagee and extrinsic evidence was adduced to cut down the plain words of the deed of conveyance. In delivering the judgment of the Privy Council in that case, Lord Watson said at p 381:

“[Where] in the deed itself the reasons for making it, and the considerations for which it is granted, are fully and clearly expressed, the collateral evidence must be strong enough to overcome the presumption that the parties in making the deed had truly set forth the causes which led to its execution.”

In the present case, the reasons for making the deed of gift and the consideration for which the gift is granted are fully and clearly expressed in the deed. They are to convey the donor’s land to the donee her son in consideration of the love and affection the donor bears towards the donee. The gift is expressed as an absolute conveyance to the donee, his executors, administrators and assigns forever. The words are quite plain that the mother was gifting her land absolutely to her son the defendant in consideration of her love and affection for him. Thus cogent evidence is required from the plaintiffs to contradict the plain words of the deed and to rebut the presumption that the parties in making the deed had set forth the causes which led to its execution.

But what is the evidence that the plaintiffs have adduced. Essentially the plaintiffs said that their mother told them in the presence of the defendant that her land was to be given to the defendant as trustee to look after for all of her children. That evidence was denied by the defendant who testified that one day after he returned to Samoa in June 1994 his mother told him she wanted to give the land to him. When the defendant tried to talk her into sharing the land with his brothers and sisters the mother was adamant in her intention to give the land to the defendant as she was most displeased with her other children. Even though the mother later wanted the land back when she returned from the United States in 1996 that was after she had executed the deed. While evidence regarding the mother’s attitude after the deed was executed may be relevant to show what was her attitude prior to the execution of the deed, the crucial evidence is really the evidence which relates directly to her attitude and state of mind prior to the execution of the deed.

Looking at the evidence, it is clear that the evidence given by the defendant is consistent with the terms of the deed of gift and the evidence given by the plaintiffs is not only inconsistent with the evidence given by the defendant but it is also inconsistent with the terms of the deed. It is also true that the defendant accompanied his mother to see the lawyer but it is clear from his uncontradicted evidence that he was not present when his mother met with the lawyer as he was waiting at the reception area. And he waited for what seemed a rather lengthy time as his mother was relaying her instructions to the lawyer. Then when the deed was signed the defendant did not accompany his mother back to see the lawyer. In fact the defendant said he does not know when his mother went back to sign the deed. The onus is on the plaintiffs who are seeking to contradict the terms of the deed of gift to adduce cogent evidence to show that the plain words of the deed do not reflect the true nature of the transaction as they claim it to be. In my view they have not discharged that onus on the balance of probabilities.

Fraud

Even though there is no express allegation of fraud in the statement of claim, actual fraud in the sense of conscious dishonesty is clearly implied, particularly as actual fraud was also raised against the defendant when he was cross-examined by counsel for the plaintiffs but was denied by the defendant. Actual fraud or conscious dishonesty is the species of fraud in respect of which the common law and equity exercise concurrent jurisdiction. It is trite law that he who alleges fraud must prove it. It is the plaintiffs who are alleging actual fraud and therefore they bear the onus of proving fraud. The required standard of proof is the civil standard of proof but to a higher probability that is commensurate with the fact to be proved. In Hornal v Neuberger Products Ltd [1957] 1 QB 247 which was a case of fraudulent misrepresentation, Denning LJ said at p 258.

“The more serious the allegation the higher the degree of probability that is required: but it need not, in a civil case, reach the very high standard required by the criminal law.”

In Three Rivers District Council v Bank of England [2001] 2 A11 ER 513 which was concerned with the tort of misfeasance in public office, Lord Hobhouse of Woodborough when dealing with the question of fraud states at p569:

“The law quite rightly requires that questions of dishonesty be approached more vigorously than other questions of fault. The burden of proof remains the civil burden - the balance of probabilities – but the assessment of the evidence has to take account of the seriousness of the allegations and, if that be the case, any unlikelihood that the person accused of dishonesty would have acted in that way.”

In the present case there is really no evidence of actual fraud or conscious dishonesty. There is no evidence that the defendant misled or deceived his mother. Given the length of time that the mother spent with the lawyer while the defendant waited at the reception area and the fact that the mother went back at a later date unaccompanied by the defendant to sign the deed, it is most difficult to see any evidence of actual fraud by the defendant. I would also find as a secondary fact that the lawyer did explain to the mother the contents of the deed before she signed it. I would have expected that if the defendant had exercised any deceit over his mother, that would have been revealed by the mother during her interview by the lawyer which took a lengthy time or when she went back to sign the deed, when its contents were explained to her. The plaintiffs had the opportunity of calling the lawyer or obtain an affidavit from him to be produced by consent as to what might have transpired in his meetings with the mother, but the plaintiffs did not do so. I therefore conclude that the plaintiffs have not discharged the onus of proof that rests on them. The allegation of actual fraud is accordingly dismissed.

I must, however, also point out that where a party in a case intends to rely on fraud or dishonesty, then fraud or dishonesty must be distinctly pleaded with sufficient particularity and must be specifically proved: see the observations and the authorities discussed by Lord Hope of Craighead in Three Rivers District Council v Bank of England [2001] 2 A11 ER 513 at pp528-530. At pages 569-570, Lord Hobhouse states:

“At the pleading stage the party making the allegation of dishonesty has to be prepared to particularise it and, if he is unable to do so, his allegation will be struck out. The allegation must be made upon the basis of evidence which will be admissible at the trial.”

Lord Millet also dealt with the issue of pleading regarding an allegation of fraud and His Lordship states at p578:

“It is well established that fraud or dishonesty (and the same must go for the present tort) must be distinctly alleged and as distinctly proved; that it must be distinctly particularised; and that it is not sufficiently particularised if the facts pleaded are consistent with innocence: see Kerr on the Law of Fraud and Mistake (7^th ed 1952) p644, Davy v Garrett [1878] UKLawRpCh 8; (1878) 7 Ch D 473 at 489, Bullivant v A-G for Victoria [1901] UKLawRpAC 15; [1901] AC 196, [1900-3] A11 ER Rep 812, Armitage v Nurse [1997] 2 A11 ER 705 at 715, [1998] Ch 241 at 256. This means that a plaintiff who alleges dishonesty must plead the facts, matters and circumstances relied on to show that the defendant was dishonest....."

Lord Millet then goes on to explain the principles behind the pleading requirement that an allegation of fraud or dishonesty must be distinctly alleged with sufficient particularity and distinctly proved. His Lordship states at p578:

“It is important to appreciate that there are two principles in play. The first is a matter of pleading. The function of pleadings is to give the party opposite sufficient notice of the case which is being made against him. If the pleader means ‘dishonestly’ or ‘fraudulently’, it may not be enough to say ‘wilfully’ or ‘recklessly’. Such language is equivocal..........

“The second principle, which is quite distinct, is that an allegation of fraud or dishonestly must be sufficiently particularised, and that particulars of fact which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference.

“At trial the Court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the Court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded “and proved.”

Those who are interested to find out the pleading requirements where fraud or dishonesty is intended to be relied upon in a case are advised to study Three Rivers.

I had decided to allow the statement of claim by the plaintiffs on the issue of fraud to proceed to trial for two reasons. The first and main reason is that counsel for the defendant did not see fit to challenge the pleadings in the statement of claim. Perhaps counsel for the defendant was confident of succeeding on the merits of the defence that was raised that he decided not to further delay this case and incur further costs for the defendant in raising the pleadings issue as a preliminary issue. The second reason, which I have already adverted to in this judgment, is that even though the word “fraud” or “dishonesty” is not expressly mentioned in the statement of claim, that is the clear implication from the primary facts alleged and pleaded. Experienced counsel for the defendant must have understood what the plaintiffs clearly meant. However, for the future, counsel would have to follow what is said in this judgment as to how fraud or dishonesty is to be pleaded where such is intended to be relied upon in a case.

Estoppel by deed was raised by counsel for the defendant. In my view such estoppel cannot be raised against the plaintiffs who are not parties to the deed of gift. The estoppel was also not pleaded. Estoppel by deed cannot, however, be maintained if the deed was procured by fraud. It also cannot preclude the Court from examining the facts where fraud is alleged in order to find out whether there is fraud and to declare the deed as void if fraud is established. In the present case, fraud has not been established.

Gift

On the evidence that I accept, the mother, before she had a change of heart, had done everything which was necessary for her to have done to effect a transfer of the legal title to her land to the defendant so that the gift was complete in equity: Corin v Patton (1990) 169 CLR 540, 559 per Mason CJ and McHugh J. That involved in this case the mother instructing the lawyer to prepare the deed of gift conveying the land to the defendant, having the deed executed and the lawyer giving the deed to the defendant after it was registered. Once the gift was complete in equity, it was beyond recall by the mother as donor; the equitable estate or interest in the gift has passed to the defendant as donee: see Corin v Patton (1990) 169 CLR 540, 559 per Mason CJ and McHugh J. It is not for the Court to say whether a validly completed gift is fair or unfair, just or unjust, foolish or otherwise. The Court does not have such jurisdiction. The deed was also registered in August 1994 so that the legal title to the land had become vested in the defendant in 1994 before the mother had a change of heart in 1996.

I should also mention that there was no dispute whether the gift was complete in equity. Both counsel seem to have implicitly accepted that the gift was complete in equity and the legal title to the land vested in the defendant upon registration. What the plaintiffs sought to do was to impeach the gift on the ground of actual fraud or conscious dishonesty. They have not succeeded in doing so.

Before I conclude, I must point out that I have extensively considered in depth the plea of non est factum, unconscionable dealing and presumed undue influence as possible grounds for impeaching the gift from the mother to the defendant. I did make a start in setting out in writing my reasons for deciding that none of those grounds would have succeeded in this case because of the evidence I have decided to accept and because of the lack of evidence to establish any of those grounds. However, soon after I started writing out my reasons for saying that none of those grounds would have succeeded, I realized that if I were to carry on, it will add many, many more pages to this judgment, but those grounds were not pleaded or covered in the submissions by counsel. I therefore decided to stop. If, however, I had considered that any of those grounds was likely to succeed, I would have carried on nonetheless, then give the opportunity to counsel for the defendant for further submissions before a final decision is made.

For relevant authorities on the plea of non est factum, see the judgment of Tipping J in Bradley West Solicitors Nominee Co Ltd v Keeman [1994] 1NZLR 111 and Law of Contract in New Zealand (1997) by Burrows, Finn and Todd at pp 297 – 302. For relevant authorities on unconscionable dealing and presumed undue influence, see Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362; Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447; Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621; ASB Bank Ltd v Harlick [1996] 1NZLR 655; Nichols v Jessup [1986] NZCA 84; [1986] 1 NZLR 226; and the relevant pages in Equity and Trusts in Australia and New Zealand (2000) 2nd ed by Dal Pont and Chalmers. I have studied many more cases than those cited, but the few I have cited provide sound guidance for research to other relevant authorities. The textbooks cited also refer to the relevant old and modern authorities.

All in all then the plaintiffs claim is dismissed. Judgment is entered for the defendant.

Costs which in all the circumstances I fix at $2,000 are awarded to the defendant plus reasonable disbursements to be fixed by the registrar and the return airfares from Christchurch, New Zealand, for the defendant to attend to this case.

CHIEF JUSTICE

Solicitors:
Toailoa Law Office for plaintiffs
Fepuleai & Schuster Law Firm for defendant