REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE Claim No. CV 2011-04424 BETWEEN VERNA FOSTER Claimant AND RENEE AYANA BAIN Defendant Before the Honourable Mr. Justice R. Rahim Appearances: Mr. A. Douglas for the Claimant. Mr. C. Neptune for the Defendant.
Judgment 1. By her Statement of Case filed on the 14th November 2011, the Claimant claimed inter alia an account of the sum of $720,000.00 and an order that the Defendant pay to her the said sum. The $720,000.00 arose from the sale of a property situate at Lot No. 524 Maloney Housing Project, Maloney (hereinafter referred to as the property ). Background 2. The basic facts are not in dispute. The Claimant is the Defendant s mother. 3. The Claimant became the holder of a leasehold interest by Deed of Lease dated 2 nd September 2008 and registered as No. DE200802417054 made between Trinidad and Tobago Housing Development Corporation (hereinafter referred to as HDC ) as lessor and herself as lessee. 4. Prior to the execution of the said lease the Claimant had, in 1995, migrated to the United States of America. In 1999 she executed a Power of Attorney dated 10th June 1999 and registered as No. 12828 of 1999 whereby she appointed the Defendant as her lawful attorney. Under this power of attorney the Defendant had the power to, inter alia, deal with any house or land held by the Claimant. 5. Where the dispute lies is in the Claimant s assertion that the Defendant, without her knowledge, sold and assigned the Claimant s leasehold interest to Trevor Shade and Usiline Fuentes at the price of $720,000.00. Further that the Defendant has refused to comply with the Claimant s demand for the payment of the purchase price to her. 6. The Defendant denies that the sale was done without the Claimant s knowledge and avers she never held the property on trust for the Claimant and therefore that she was not in breach of any trustee/fiduciary duties. The Defendant claims that when the Claimant Page 2 of 17
migrated to the US she told the Defendant that the property was the Defendant s property. 7. Further, the Defendant claimed that when the Claimant left Trinidad, she took her youngest daughter, Regelle Thomas, with her and left her son, Rommel Francis, in the Defendant s care. Some six months later, the Claimant sent Regelle back to Trinidad in the care of the Defendant. The Defendant asserts that she and her husband maintained Regelle and Rommel together with the Defendant s two children and they (the Defendant and her husband) lived in and maintained the property. 8. According to the Defendant, when the Claimant left Trinidad, she left several debts including debts to First Citizens Bank (FCB), The Cottage, HDC, T&TEC, WASA and RHAND Credit Union. 9. Owing to the fact that the Defendant believed the property to be hers, in 2008, the Defendant and her husband made the decision to relocate to another area and assigned the leasehold interest in the property. From the proceeds of the sale, the Defendant claims she gave Rommel $40,000.00 for his own use. 10. The Claimant denies that it was solely the Defendant who maintained her children, and states that it was she who primarily maintained them by sending food, clothing and household items in barrels for Rommel and Regelle at least three times a year. Additionally, the Claimant avers that she would send money to the Defendant via Money gram for the maintenance of the two children, household expenses and mortgage payments to HDC. It was also the Claimant s contention that the Defendant put Rommel out of the property when he was about 8 years old without informing her. Page 3 of 17
Issues 11. Counsel for the Claimant submitted that although the Defendant s evidence suggested that she claimed an equitable interest in the property, it was not pleaded in her defence and therefore she cannot now rely on the argument of an equitable interest based on proprietary estoppel. 12. While it is a correct proposition that the Defendant must establish an equitable interest that entitles her to maintain her defence of proprietary estoppel (see Mills v Lloyd CV.2011-04300), it is not true that it was not pleaded. 13. At paragraph 4 of her Defence, the Defendant pleaded: The Defendant states that sometime in 1995 the Claimant informed her that she was migrating to the United States of America as there was nothing left in Trinidad for her. She subsequently left Trinidad and Tobago. Prior to leaving Trinidad and Tobago, she told the Defendant and the Defendant verily believed that the subject property was her property. And at paragraph 8: At all material times the Defendant believed the subject property to be hers having been told that on several occasions by the Claimant, hence following the robbery of the Defendant s son Rondelle Keller in March 2008, the Defendant and her husband took the decision to sell the subject property and relocate from the area. The Claimant was aware of the sale of the subject property 14. The Defendant s defence is therefore that she had acquired an equitable interest in the property by virtue of Proprietary estoppel. Page 4 of 17
15. The law on Proprietary estoppels was correctly re-stated in Fulchan v Fulchan CV. 2010-03575 Rajkumar J: If A under an expectation created or encouraged by B that A shall have a certain interest in land thereafter, on the faith of such expectation and with the knowledge of B and without objection from him, acts to his detriment in connection with such land, a court of Equity will compel B to give effect to such expectation. Taylor Fashions Ltd. v Liverpool Victoria Trustee Co. Ltd. Per Oliver J. cited in Snell s Principles of Equity 31st Ed. Para 10-16. 16. The issues for determination therefore are: a. Whether the Claimant created an expectation in the Defendant that she would obtain an interest in the property. b. Whether, the Defendant acted on the faith of such expectation with the knowledge and without objection of the Claimant. c. Whether the Defendant incurred expenditure or otherwise acted to her detriment. The First Issue 17. The Defendant must prove that the Claimant, either by making an express promise or by encouraging the Defendant to believe that she would obtain such an interest by words or conduct or by encouraging her belief passively and remaining silent: Snell s Principles of Equity 31st Ed. Para 10-17. In Crabb v Arun [1976] Ch. 179 at 187 Lord Denning explained: Short of an actual promise, if he, by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights knowing or intending that the other will act on that belief and if he does so act, that again will raise an equity in favour of the other. Page 5 of 17
18. It is necessary to show that the Claimant intended the promise to be relied upon or that it was reasonable in the circumstances for the Defendant to assume that it was intended to be relied upon. 19. This issue is in the main a factual one. Does the evidence indicate that the Claimant, by her words or conduct, behaved in a manner as to lead the Defendant to believe that she will not insist on her strict legal rights knowing or intending that the Defendant will act on that belief. The Evidence 20. Both the Claimant and the Defendant were the only witnesses for their respective claims. 21. According to the Defendant, prior to the Claimant migrating, she lived at the property with the Claimant, Rommel and Regelle. In 1992 the Defendant became pregnant and sometime in that year she and the Claimant had a disagreement which resulted in her moving out of the property to live with her husband Chester Keller, who was her boyfriend at the time. 22. The Defendant stated that although she returned home in 1993, her mother again put her out in 1994 after her son was born. In or around February or March 1995 the Defendant again returned home and in April or May 1995 the Claimant informed her that she was migrating to the US. 23. The Claimant took Regelle with her and told the Defendant that she was leaving Rommel in her care until she could bring him to the US too. 24. The Defendant testified that her mother told her she was not returning to Trinidad and that the house was hers. However, unknown to the Defendant, the Claimant had left various debts in respect of the property, including a debt to HDC, T&TEC, and Inland Page 6 of 17
Revenue Department. Additionally, the Claimant had left debts owing to FCB and RHAND Credit Union. The Defendant did however know of a debt to WASA which the Claimant had assured her she would send money to clear. According to the Defendant, the Claimant never sent any money to clear any debt which resulted in the Defendant paying off all the debts herself with the exception of the debt to RHAND. 25. Although the Claimant had taken Regelle to the US with her, about 6 months after migrating she sent Regelle back to Trinidad as she could no longer care for her in the US. The Defendant gave evidence that the Claimant promised to send $200 USD per month to maintain both Rommel and Regelle, however, this sum was seldom sent and seldom in the promised amount. The Defendant stated that therefore she and her husband supported and raised her siblings although food stuff and clothing were occasionally sent for them. 26. The Defendant gave evidence that initially she had been working at McDonald s for a small salary but that in 1997, she was able to enlist in the Trinidad and Tobago Police Service and earn a higher salary. Sometime after her new employment, the Defendant and the Claimant spoke wherein the Claimant again reaffirmed to the Defendant that the property was hers. 27. Notwithstanding this, by 1999, the Claimant s debtors began sending letters demanding payment. This included HDC demanding payment for the arrears of the mortgage on the property. The Defendant testified that she went into HDC to discuss the arrears and was advised by an agent that she needed a Power of Attorney to begin liquidating the debt on the property. It was as a result of this conversation that a Power of Attorney was executed in her favour and the Defendant began paying the arrears by monthly installments deducted directly from her salary. In cross examination, the Defendant testified that although the Power of Attorney was phrased in a manner so as to give her authority to deal with her mother s property, she always believed the property was hers. She stated that she believed the words of her mother to be more powerful than the words written in the Power of Attorney. When questioned in cross-examination about the reason a Power of Attorney was executed instead of a Deed of Conveyance in her name, the Defendant Page 7 of 17
stated that HDC would not accept payment of the arrears from her unless a Power of Attorney was done. She claimed she could not make any payments in her own capacity. 28. The Defendant s evidence was that in or around 2002 or 2003, she and her husband took the decision to renovate the property to accommodate her growing family. In total, the Defendant stated she and her husband spent around $200,000.00 on the extensive renovations. The Defendant maintained in her evidence that she believed the property to be hers at all times since debts, renovations and maintenance were financed by her and her husband. 29. The Defendant gave evidence of deterioration in her relationship with the Claimant in 2001 following the Claimant s reconciliation with an abusive man in the US. She gave further evidence of deterioration in 2004 when the Claimant sent for Regelle without informing the Defendant. According to the Defendant she and her husband cared for Rommel until he attained the age of 16 at which point he left home on his own. The Defendant stated that a further strain on her relationship with her mother developed in 2006 when Rommel was charged with a sexual offence. 30. The Defendant gave evidence that in 2008, her son Rondelle was robbed in close proximity to their home. It was this occurrence which spurred the Defendant and her husband on to sell the property and move to another neighbourhood. Thus, the property was sold in 2008 in the Claimant s name since no conveyance to the Defendant had ever been executed. Notwithstanding the execution of the deed as her mother s attorney, the Defendant stated in cross examination that she believed the property to be hers when she sold it. From the sum realized from the sale of the property, the Defendant gave Rommel the sum of $40,000.00. 31. The Defendant thus testified that she was never in breach of any fiduciary duty and denied that she was indebted to the Claimant for the proceeds of sale. She stated in cross examination that while the payments and transactions were worded as being made in her capacity as the lawful attorney of the Claimant, it was not intended to be so. Page 8 of 17
32. The Defendant testified in cross examination that she never sought to have the property transferred in her name because she believed the word of her mother. She stated that they did not have a bad relationship at the time and she did not think it necessary to transfer the property in her own name. 33. The Defendant was referred in cross examination to a letter dated 15 th November, 1996 which she wrote to her mother wherein she stated that I am trying to fix up your house so you will have something nice to come back to. When questioned on this statement and its implications on her averment that the Claimant told her the house was hers, she explained that the natural course of nature I would think is to take care of your mom in her old age so I would want as she ages I would want my mom to be comfortable and that was my goal 34. On the other hand, the Claimant in her evidence denied having any discussion whereby she told the Defendant the property was the Defendant s. According to the Claimant, prior to migrating, she had a discussion with the Defendant and her husband in which they all agreed that it would be beneficial for the Claimant to migrate to the US. Further, they agreed to take care of Rommel and she agreed to take Regelle with her to the US. The Claimant thus left Trinidad in 1995. Subsequent to her migration, the Claimant by Power of Attorney dated 10 th June 1999 appointed the Defendant as her lawful Attorney. 35. While the Claimant admits to having loans in FCB and RHAND, she testified that prior to her migration to the US she applied to offset her arrears of mortgage to HDC by the transfer of Government bonds she held in her name. In cross examination the Claimant admitted that she neither made any arrangements to liquidate the loans to FCB and RHAND before migrating, nor after she migrated. Further, the Claimant testified in cross examination that the bonds did not completely liquidate the debt to HDC but that she sent money home on a regular basis. In addition, the Claimant admitted that she was in arrears of Land and Building tax and WASA rates and that she did not liquidate those debts herself neither did she clear her debts to FCB and RHAND. Page 9 of 17
36. In January 1996, she sent Regelle back to Trinidad as she was unable to maintain her in the US. According to the Claimant, she sent money each month until June 2004 and this totaled $5,120.00 USD. In cross examination she admitted that she brought Regelle to the US in 2004 and that she did not inform the Defendant of same because the relationship had broken down. Notwithstanding the fact that the relationship between herself and her daughter had deteriorated to such an extent in 2004 that she did not tell the Defendant that Regelle was leaving for the States, she stated that she did not think it important at that time to revoke the Power of Attorney. 37. The Claimant also testified that by November 1996 she sent home 3 barrels containing foodstuff, clothing and household items and then one barrel a year until 2002. In cross examination, the Claimant gave evidence that the sum she sent home was to be used both for the maintenance of the children as well as payment to HDC for the arrears of rent. 38. The Claimant gave evidence that she only discovered the property had been sold when she visited HDC in October 2010. However, in cross examination she stated that she became aware of the sale in 2009. When questioned on the disparity she stated I got the full information when I went to the HDC in 2010 of what transpired, but I knew she sold the house but I didn t know the details. 39. The Claimant stated that she was only aware of $27,000.00 being given to Rommel from the proceeds of the sale. 40. In cross examination, the Claimant testified that she was only aware of some of the renovations being done. As far as she was aware, it was only renovation to the bathroom and a fence was built around the property. 41. Counsel for the Claimant cross examined the Defendant on the lack of evidence showing that she made payments to FCB and The Board of Inland Revenue to clear off the Claimant s indebtedness. However, it is not the Defendant s evidence that she made the Page 10 of 17
payments towards these debts. The Defendant stated in cross examination and the court accepts that the property could not have been sold if it were not free from these encumbrances. This also includes the debt to WASA. On a balance of probabilities the court accepts that the Defendant did make payments clearing these debts. Submissions 42. Counsel for the Defendant submitted that the Defendant s evidence has been unshaken and that the Defendant is a truthful witness and the court ought therefore to accept the Defendant s evidence that the Claimant told her the property was the Defendant s. 43. Counsel argued that on the basis of proprietary estoppel, the Claimant should be prevented from asserting any claim in respect of the property. It was argued that based on the assurances made by the Claimant to the Defendant that the property was the Defendant s, the Defendant in reliance thereon, occurred significant expenses in renovating the property. 44. Counsel for the Defendant further argued that should the court find that the assurances were not made, the evidence indicates that the Claimant passively looked on while the Defendant and her husband expended large sums of money on the property. 45. Counsel for the Claimant contended that the letter dated 15 th November, 1996 in which the Defendant wrote to her mother wherein she stated that I am trying to fix up your house so you will have something nice to come back to is at odds with her pleaded case that she thought the property was her own. It was argued that it was important to check the impression given by the witness in evidence against contemporaneous documents. Counsel placed reliance on the case of Horace Reid v Dowling Charles &. Percival Bain Privy Council App. No. 36 of 1987. In that case it was explained that where a case relies solely on the judge s impression of the demeanour of witnesses he should check that impression against contemporary documents, where they exist, against the pleaded Page 11 of 17
case, and against the inherent probability or improbability of the rival contentions, in the light in particular of facts and matters which are common ground or unchallenged. 46. Counsel for the Claimant argued that in any event an oral gift of an interest in land is not normally enforceable under the Conveyancing and Law of Property Act Chap 56:01 unless there has been acts of part performance. In this regard, Counsel submitted that the Defendant has not specifically pleaded acts of part performance. 47. Further, Counsel raised submitted that the Defendant was the Claimant s attorney and sold the property under this power, thus this gave rise to a fiduciary duty to the Claimant. Thus it was submitted that the Defendant was liable to the Claimant for the full amount of proceeds of the sale. 48. It was submitted that the Defendant gave no reason for not seeking to have the property assigned to her after the alleged verbal promise, nor did she give any reason for not objecting to her appointment as the Claimant s attorney. Findings 49. The court agrees with the submission of the Claimant that the contemporaneous documents ought to be considered. In this regard, the court notes: a. In a letter dated 7 th January 1996, the Defendant speaks about wanting to win the Lotto so that she could have the Claimant come back to her. This statement confirms the Claimant s testimony that she migrated for financial purposes. It goes against the Defendant s case that the Claimant told her she was not coming back as it seems the Claimant s driving force was to make more money to take care of her family and it may not have been a permanent move. b. In all of the letters written by the Defendant she asks the Claimant for money and items for the children, household items and personal items. The Defendant s Page 12 of 17
constant request for items does not give the court the impression that the Claimant did not provide assistance to the Defendant. The court therefore does not believe the Defendant s evidence that she and her husband solely maintained Rommel and Regelle. The court believes that the Claimant did send items and money when she could. c. In the letter dated 15 th November, 1996, the Defendant again mentions her wish to win the LOTTO so she could send for the Claimant and then states that she is trying to fix up your house so you will have something nice to come back to. When probed in cross-examination on this the Defendant stated that the natural course of nature I would think is to take care of your mom in her old age so I would want as she ages I would want my mom to be comfortable and that was my goal. This explanation again goes against the Defendant s allegation that the Claimant told her the house was hers and that she was not returning to Trinidad. What is more, had it been the Defendant s intention to take care of her mother, selling the property and keeping the proceeds of sale goes against this intention. This is particularly so in light of the fact that the Defendant was aware of her mother s financial problems. Had she wanted to assist her mother in her old age she would have shared the proceeds of sale with her. d. The Defendant claims that the Power of Attorney was executed to allow her to pay the arrears of rent to HDC. She stated that HDC would not accept payment from her unless the Claimant appointed the Defendant as her lawful attorney. The Defendant in making this statement failed to call a witness from HDC to attest to this need. In the court s view it does not make practical sense to have a power of attorney executed to make payments to a mortgage. The execution of the Power of Attorney weighs against an intention by the Claimant to give the Defendant the property. Further, the Defendant does not offer any evidence explaining why the Power of Attorney was not revoked when she was embarking on the sale of the property. It could have been simple for the Defendant to get the Claimant to Page 13 of 17
execute the revocation and execute a conveyance to the Defendant. Such an act would have shown the Claimant s intention to give the Defendant an interest in the property. The court is of the view that the Defendant's conveyance of the property as the Defendant s lawful attorney is contrary to her assertion that she believed the property was hers. 50. The court believes that the Claimant was faced with a high level of debt in Trinidad and was not able to care for her family. Thus, a decision was made for the Claimant to migrate to achieve financial stability. The Claimant thus left Trinidad and left the Defendant with the care of Rommel and eventually Regelle in the family home. The court does not believe that the Claimant would have promised the Defendant the house particularly in light of the fact that she had two young children for whom she still had to provide. The evidence leads to the conclusion that the Defendant was left to live in the house for the duration of the Claimant s absence. 51. In order for the Defendant to manage all of the Claimant s affairs, including the management of the property, the Claimant executed a Power of Attorney. It is noteworthy that the Defendant stated that her mother received advice from an attorney prior to the execution of the Power of Attorney. The fact that a conveyance was not done, having received legal advice, instead of the Power of Attorney is material to the Defendant s assertion that the Claimant had promised her the property. 52. The court does not believe that any assurance was made to the Defendant. Further, the court does not believe that the Claimant passively looked on while the Defendant and her husband expended large sums of money on the property. The court took notice of the Defendant s evidence that by the year 2002 to 2003 her family had grown and it was obvious to her that the property had become cramped. Accordingly, the court accepts that the Claimant allowed the Defendant to make changes to the property so that they would be comfortable. The renovations were not based on a belief by the Defendant that the Claimant would not insist on her strict legal rights. Page 14 of 17
53. The evidence therefore does not show in the court's view, that the Claimant created an expectation in the Defendant that she would obtain an interest in the property. 54. The other issues therefore do not arise for consideration. In any event the court believes that the Defendant s expenditure on renovations to the property was an attempt to make herself and her family more comfortable as was stated by her in her evidence. The court does not believe that the renovations were done in reliance of any assurance by the Claimant. Power of Attorney 55. The Power of Attorney gave the Defendant the power to sell property held in the Claimant s name and realize the benefit thereof as trustee. Thus, when the Defendant sold the property, she did so as trustee of the Claimant s property and stood in a fiduciary relationship with the Claimant. 56. In Bristol and West Building Society v Mathew [1998] Ch. 1, Millett L.J. at page 18A set out the duties of a person who stands in a fiduciary relationship with another: "A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of the principal." Page 15 of 17
57. The Defendant sold the property for $720,000.00. The Defendant, as trustee must account for any advantage which she has obtained by reason of her ownership of the trust property. Benefits acquired by her as the owner of the property cannot be retained, but must be surrendered for the advantage of those beneficially interested: Halsbury's Laws of England. Volume 47 (2014) 5th Edition para. 235. 58. Further, where a trustee misapplies trust property in an unauthorised fashion his strict obligation is to restore the trust property to its state or value as if he had specifically performed his duties in the proper fashion: Halsbury's Laws of England. Volume 98 (2013) 5th Edition para. 679. Had the Defendant performed her duties under the Power of Attorney, the Claimant would have been in receipt of the proceeds of sale. The Defendant is therefore liable to the Claimant for the proceeds of sale. 59. Notwithstanding this, the Claimant has stated that she is willing to recognize the Defendant s expenditure on the property. She has accepted that the Defendant expended the sum of $200,000.00 on the renovations to the property. 60. Where a trustee in breach of trust pays away trust moneys to a person who has no right to receive the same, there is an immediate loss, placing the trustee under an immediate duty to restore the moneys to the trust fund: Halsbury's Laws of England. Volume 98 (2013) 5th Edition para. 686. The Defendant stated that she paid to Rommel the sum of $40,000.00 from the proceeds of sale. The Claimant stated that she was aware that $27,000.00 was paid to Rommel from the proceeds of sale. In fact this is the only amount for which the Defendant has proof of payment. Nevertheless, whether it is $40,000.00 or $27,000.00, the Defendant, as trustee was in breach of her duty to the Claimant when she paid to Rommel money from the proceeds of sale. The Defendant therefore is still liable to restore to the Claimant any amount paid out to Rommel, a third party having no right to receive same. Page 16 of 17
Disposition 61. The result is that the Defendant is liable to the Claimant for the amount of $520,000.00. The court will therefore enter judgment in the following terms: a. Judgment for the Claimant in the following terms: i. The Defendant is to provide an account of the money realized from the sale of ALL AND SINGULAR that certain piece and parcel of land situate in the Ward of Tacarigua in the Island of Trinidad known as Lot No. 524 Maloney Housing Project, Maloney, comprising TWO HUNDRED AND NINETY SEVENTY POINT SEVEN METRES SQUARE (297.7m 2 ) be the same more or less and bounded on the North by Lot No. 523 on the South by Lot No. 525 on the East by Lot No. 551 and on the West by South West 1 st Avenue 12.20 metres wide and which said piece or parcel of land is delineated and coloured pink and shown as Lot No. 524 on the General Plan thereto annexed and marked A to Deed registered as No. DE200501811290D001 together with the buildings thereon and the appurtenances thereto belonging. ii. The Defendant is to pay to the Claimant the sum of $520,000.00 together with interest at the rate of 6% per annum from the 26th November 2008 to the 12th June 2014 in the sum of $85,987.00. iii. The Defendant is to pay to the Claimant the prescribed costs of the claim in the sum of $79,449.03. iv. There shall be a stay of execution of 42 days. Dated this 12 th day of June, 2014. Ricky Rahim Judge Page 17 of 17