Thompson et Al v Hulse

• Jurisdiction: Belize
• Court: Supreme Court (Belize)
• Judge: Moe, J.
• Judgment Date: 09 July 1980
• Docket Number: Action No. 14 of 1978
• Date: 09 July 1980

Supreme Court

Moe, J.

Action No. 14 of 1978

Thompson et al

and

Hulse

Messrs. Denys Barrow and Derek Courtenay for the plaintiffs.

Mr. Glenn Godfrey for the defendant.

Trusts - Property transferred to defendant so that defendant could raise money to pay off mortgage on the property — Arrangement was that the property was to have been transferred back to the plaintiffs — Not done — Finding that property was held in trust for the plaintiffs and was to be reconveyed to them when the mortgage was paid off.

Moe, J.

1 In these proceedings the plaintiffs seek a declaration that the defendant is a trustee for the plaintiffs of the property situate at No. 25 Regent Street in Belize City and now standing in the name of the defendant. They also seek an account of any sums received by the defendant for and on behalf of the plaintiffs and an order that the defendant pay to them the sum found due to them from the defendant with interest thereon. They further seek an order vesting the said property in the plaintiffs absolutely.

2 It is common ground between the parties that in or about the month of September, 1967, the plaintiffs transferred to the defendant the property subject matter of these proceedings, being lot No. 86 and a portion contiguous thereto situate at the corner of Regent and Prince Streets in Belize City and comprised in the Transfer Certificate of Title dated 11th April, 1968 and registered at the General Registry, Belize City, in the land Titles Register at Volume 6, Folio 233.

3 The plaintiffs claim that the said transfer although purporting to have been made in consideration of the sum of $12,000.00 was in fact voluntary and entirely gratuitous and made for the sole purpose of allowing the said property to be used by the defendant to secure a loan with which to repair and improve the building standing on the said property. That it was orally agreed prior to the said transfer by all the parties thereto that the defendant would hold the said property in trust for the plaintiffs and would retransfer the said property to the plaintiffs as soon as the loan with which the property stood charged was repaid.

4 The defendant in his defence filed pleaded (1) that he did in fact pay the purchase price of $12,000 for the said property and he relies S. 51(1) of the Law of Property Ordinance Cap. 193; (2) that he is the beneficial owner of the property and does not hold it on trust for the plaintiffs and relies on S. 43(1) (b) of the Law of Property Ordinance Cap. 193; (3) that the plaintiffs owe him rent for their use and occupation of the said property, since the date of his purchase of the property. He counterclaimed for mesne profits. During trial he amended his defence to plead alternatively, if he is a trustee of the said property for the plaintiffs, the trust to retransfer the said property was conditional on (a) the payment by the plaintiffs to the defendant of all money expended on the purchase and repair of the property; (b) the repayment of all premiums paid on an insurance policy of the defendant's life taken out with the Colonial Life Insurance Company and (c) the payment of interest on the above sums at the rate of 12% per annum.

5 I proceed first to determine whether or not the defendant holds the property on trust for the Plaintiffs. On this there is an abundance of evidence. The plaintiff, Vivienne Thompson stated that she and the other plaintiff Doreen Kobitz are owners of the property. The property was mortgaged to Barclays Bank and as the mortgage was not paid back, Barclays was going to foreclose. In 1967 an arrangement was made with the defendant whereby the property was transferred into the defendant's name in order that he may borrow money on it from Colonial Life Insurance Company with whom he had a policy. The defendant did not pay any money to the plaintiffs for the transfer of the property. The money raised from Colonial Life paid off the mortgage with Barclays. The only object of the transfer was to enable the raising of the money to pay off the loan with Barclays. It was part of the arrangement that after the plaintiffs had paid up the insurance and whatever was owing to him, the defendant would transfer the property back to the plaintiffs. She also put in evidence a deed signed by the parties to these proceedings which she says reduces to writing the basis on which the parties then agreed the property would be reconveyed to the plaintiffs. This deed was dated 15th November, 1969. Her evidence also is that in the matter of the transfer and during discussions or proposals relating thereto the defendant's father acted for and on behalf of the second plaintiff and on some occasions both plaintiffs. There is no dispute between the parties on this.

6 The defendant on the other hand, while admitting (a) that the plaintiffs were the owners of the property, (b) that Barclays Bank held a mortgage over the property, (c) that the plaintiffs failed to repay that mortgage, and (d) that Barclays had taken action to foreclose on the property, stated that he purchased the property with no strings attached. The transaction was an outright sale of the property to him and was not subject to any conditions. From about two weeks after the sale there were discussions and proposals as to the basis on which he would sell the property back to the plaintiffs.

7 The defendant's brother Mr. Bruce Hulse also gave evidence for the defendant and stated that he was aware of the proposal by the plaintiffs that the defendant buy the property as a clean sale with nothing attached, that the defendant would pay the price of $12,000.00 and this the defendant accepted and agreed to in 1967.

8 The account given by the defendant and his brother is not in keeping with the terms of many letters which the defendant himself wrote and to which I now refer. In a letter concerning the proposals addressed to the Administrative Office Manager of the Colonial Insurance Company of Jamaica and dated June19, 1971, he wrote “In the first instance, the property was transferred to me to save it from foreclosure, because of a debt incurred when it was mortgaged to Barclays Bank to obtain money loaned to a third party. The transfer was made to me as a temporary measure against the payment of the debt by the third party.” The defendant gave as an explanation that his father put up the letter and he signed it because he didn't think his father was going to use it. I took that to mean use in the way it has been used in this trial. It was also significant that the brother was shocked when shown the contents of this letter.

9 On the 11th July, 1971 he wrote his Aunt Doreen, one the plaintiffs as follows:–

“Now my arrangement with dad was that the property be transferred in my name (this was required to get the loan from the Insurance) and that on repayment of all commitment to the insurance company I would transfer the property back to dad. The payments to the company were to be made according to the company's stated request of monthly installments. I had absolutely nothing to gain.”

10 The defendant sought to explain this paragraph as a statement of one of the proposals made after the defendant had bought it. I had no hesitation in rejecting this explanation. The paragraph speaks clearly of a transfer to the defendant's name and a transfer back to his dad.

11 The defendant wrote his Aunt Doreen again on 22nd May, 1972. “I realize that you cannot pay me what is owing to me. So I have decided to propose to you something else” and then made the following proposals:–

“(a) why do not we join in ownership of the property? You retaining 2/3 of the property and I 1/3, rightly what my dad should at least have inherited. You spend whatever money you have in repairs to the house. I am willing to supervise the spending of every penny and give you an account of every penny … As to the four thousand dollars that is owned to me personally, I donate $2,000.00 to my share, the other $2,000.00 I do not want you to pay me until the house is repaired and is in a paying situation.

(b) another proposal is that we own the property evenly, you not repaying me nothing of the $4,000.00 ….”

12 He stated that by the expression you retaining 2/3 of the property he meant, the plaintiffs being in possession, he couldn't throw them out. But the evidence is that the letter was to his Aunt Doreen Kobitz who was living in New Orleans, Florida. By the statement that she could not pay what was owing to him, he meant the plaintiffs owed all the money he invested. This is clearly inconsistent with the position that the defendant was in truth and fact the owner of the property. I could not accept that the true owner of property would have made a proposal that some other person own 2/3...