Supreme Court New South Wales Medium Neutral Citation: Bijkerk Investments Pty Ltd v Bikic [2020] NSWSC 1336 Hearing dates: 21, 22, 23 September 2020 Decision date: 01 October 2020 Jurisdiction: Equity - Real Property List Before: Leeming JA Decision: 1. Direct the parties to supply short minutes of order as agreed, or orders sought by them and short submissions in support, by 12 October 2020. 2. List the proceedings for directions before me at 9.30am on 14 October 2020. Catchwords: CONTRIBUTION - contribution in equity - lender sued one of two borrowers for unpaid money - judgment obtained - bankruptcy notice served and creditor's petition filed - whether debtor entitled to declaratory relief that other debtor liable to contribution - whether necessary to establish that debtor was ready willing and able to pay REAL PROPERTY - co-ownership - application for sale pursuant to Conveyancing Act 1919 (NSW) s 66G - whether property held on express or constructive trust for one co-owner TRUSTS - common intention constructive trust - whether co-owned property held on trust for one co-owner - whether express or implied common intention that property held on trust - consideration of relationship between common intention constructive trust and estoppel Legislation Cited: Civil Procedure Act 2005 (NSW), s 100 Conveyancing Act 1919 (NSW), s 66G Family Law Act 1975 (Cth), Pt VIIIAB Married Women's Property Act 1882 (UK), s 17 Cases Cited: Allen v Snyder [1977] 2 NSWLR 685 Austin v Keele (1987) 10 NSWLR 283 Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 Cambouya Pty Ltd v Buchanan [2005] NSWSC 743 Caron and Seidlitz v Jahani and McInerney in their capacity as liquidators of Courtenay House Pty Ltd (in liq) & Courtenay House Capital Trading Group Pty Ltd (in liq) (No 2) [2020] NSWCA 117 Dunphy v Russell [2018] NSWSC 721 Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 Gissing v Gissing [1971] AC 886 Grant v Edwards [1986] Ch 638 Green v Green (1989) 17 NSWLR 343 Harpley Nominees Pty Ltd v Jeans [2006] NSWCA 176 Lavin v Toppi (2015) 254 CLR 459; [2015] HCA 4 Mahoney v McManus (1981) 180 CLR 370; [1981] HCA 54 McKay v McKay (Costs) [2008] NSWSC 256 McLean v Discount and Finance Ltd (1939) 64 CLR 312; [1939] HCA 38 Michael Gregory Jones as Liquidator of SBH Australia Pty Ltd (in liq) v Cummins [2018] NSWSC 606 Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 Parsons v McBain (2001) 109 FCR 120; [2001] FCA 376 Pettitt v Pettitt [1970] AC 777 Rochefoucauld v Boustead [1897] 1 Ch 196 Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 Watson v Foxman (1995) 49 NSWLR 315 Wolmershausen v Gullick [1893] 2 Ch 514 Woolmington v Bronze Lamp Restaurant Pty Ltd [1984] 2 NSWLR 242 Texts Cited: G E Dal Pont, "Equity's Chameleon – Unmasking the Constructive Trust" (1997) 16 Australian Bar Review 47 D Hayton (ed), Underhill and Hayton Law Relating to Trusts and Trustees (LexisNexis, 19th ed, 2016) R Leow, "The Death of Stack in Singapore" (2019) 135 Law Quarterly Review 535 L Maniscalco, "Common Intentions and Constructive Trusts: Unorthodoxy in Trusts of Land" [2020](2) Conveyancer and Property Lawyer 124 J Randall, "Proprietary estoppel and the common intention constructive trust – Strange bedfellows or a match in the making?" (2010) 4 Journal of Equity 171 P Ridge, "Tracing and associated claims in Australian law" (2020) 14 Journal of Equity 32 S Thomas, "Proprietary Estoppel and Common Intention Constructive Trusts: Is it Time to Abandon the Distinction?" [2014] Singapore Journal of Legal Studies 168 D Waters, Waters' Law of Trusts in Canada (4th ed, 2012, Carswell) Category: Principal judgment Parties: Bijkerk Investments Pty Ltd (First plaintiff, first cross-defendant) Roy Anthony Bijkerk (Second plaintiff, second cross-defendant) Ned Bikic (Defendant, cross-claimant) Representation: Counsel: C Alexander (Plaintiffs, cross-defendants) B A Coles QC, M Dolenec (Defendant, cross-claimant) Solicitors: Matulich Lawyers (Plaintiffs, cross-defendants) McEvoy Legal (Defendants, cross-claimants) File Number(s): 2019/00402423 Publication restriction: Nil Judgment 1. LEEMING JA: This litigation concerns one aspect of the unravelling of the affairs of Mr Roy Anthony Bijkerk (the second plaintiff) and Mr Ned Bikic (the defendant). Those two men, either personally or through corporate entities controlled by them, bought at least four properties. Two were sold by them at a profit. A third was sold by a receiver. The fourth, a two bedroom apartment in a complex on Cadigal Avenue, Pyrmont, is the subject of an application for sale pursuant to s 66G of the Conveyancing Act 1919 (NSW) which is the principal relief sought on the summons. The registered proprietors are the first plaintiff, Bijkerk Investments Pty Ltd as trustee for the Bijkerk Family Trust, and the defendant, Mr Bikic, as tenants in common in equal shares. Mr Bikic opposes the sale, on the basis that the property is held beneficially for him, pursuant to an express or constructive trust. Mr Bikic also seeks declaratory relief in relation to his liability to contribute in relation to a judgment debt obtained against Mr Bijkerk, arising out of a loan made to both men by Ms Tania Clarke. The opposition is based upon Mr Bijkerk's imminent bankruptcy, and at one stage also upon his failure to account to Mr Bikic for half of the profits from the sale of the other two properties. Parties, properties and companies 1. Mr Bijkerk and Mr Bikic have quite similar surnames (such that some care is required reading the transcript of the trial), and without any disrespect I shall follow the course reflected in much of the evidence and refer to them as "Roy" and "Ned" respectively. 2. It is convenient to refer to the four properties as "Cadigal Avenue", "120 Saunders Street", "122 Saunders Street" and "Tallebudgera" (the Saunders Street properties being the two apartments which were sold by the men at a profit, and Tallebudgera being a ten acre property in Queensland that was sold by a receiver appointed by Ms Clarke). 3. It is as well to identify the corporate entities involved in the events giving rise to this litigation. 1. The first plaintiff Bijkerk Investments Pty Ltd is the trustee of the Bijkerk Family Trust. Its directors and shareholders have at all relevant times been Roy and members of his family. 2. NB Support Services Pty Ltd is a company established in 2013 with Ned as its sole director and shareholder. 3. Alpha Support Services Pty Ltd, Cynergy Support Services Pty Ltd and Sunergos Support Services Pty Ltd were companies of which at various times each of Roy and Ned (and Mr Clarke) were directors. According to ASIC records, Bijkerk Investments owned Alpha and Cynergy, although that might not have been the case years ago, and Roy and Ned each proceeded on the basis that Cynergy owned Alpha (T 28.47). The evidence did not elucidate the different businesses operated by these companies. 1. As will be seen, there have been many undocumented or poorly documented transfers of money between Alpha, Cynergy and Sunergos, in part through actual bank transfers, and in part through ledger transactions effected by the firm of accountants which provided services to both Roy and Ned and their companies, CBC Partners. A director of that firm, Mr Paul Clarke, was called in Ned's case. He is the son of Ms Tania Clarke who lent $1,000,000 to Roy and Ned, who has not to this day been fully paid, and who is threatening to make Roy bankrupt. 2. Separately from the above is a company called Community Work Pty Ltd, which traded as Guardian Youth Care. It contracted to perform work for the Department of Family and Community Services. It was placed into liquidation on around 28 July 2017, and the liquidators commenced proceedings in the Commercial List against 15 defendants, including Roy, Bijkerk Investments and Mr Clarke. The liquidators seek to recover in excess of $22 million. They obtained Mareva relief, including over Bijkerk Investments' interest in Cadigal Avenue. This is relevant to the orders to be made following this judgment. Uncontroversial background 1. Roy and Ned are 64 and 67 respectively. They have known one another since the 1990s. They were both in Silverwater Correctional Centre in around 1998. The evidence did not disclose the criminal background of either man, and I have proceeded on the basis (as advised at the hearing) that I would treat this history as neutral to both men's credit. No reliance was placed at any stage in the litigation upon defences of illegality or unclean hands. 2. While in gaol, Roy spoke to Ned about employing him. Roy was released first. When Ned was released, in 2011, he became employed by Roy, at first directly, later as a contractor. The nature of the work performed was unclear, save that in part it involved obtaining the repayment of loans made by entities associated with Roy which had fallen into default. 3. Roy's case was that he formed an informal partnership with Ned. In his words, "at a certain stage around 2012 I considered that we were partners in everything we were doing" (T29.42). It is common ground that the men regarded themselves as equal co-owners of two properties in Pyrmont purchased in around April 2014 and June 2015, 120 and 122 Saunders Street. Both were sold at a profit in 2018. The registered proprietor of 120 Saunders Street was Sunergos Support Services. The registered proprietors of 122 Saunders Street were Bijkerk Investments (45%), NB Support Services (45%) and Ms Samantha Madigan (10%), who will be mentioned below. Ned accepted that the proceeds attributable to his shares in the properties were transferred into Roy's personal ING account, after Roy had so requested Ned. 4. Most of the evidence was directed to Cadigal Avenue, which was purchased by Bijkerk Investments Pty Ltd and Ned as tenants in common in equal shares. The contract for sale of land was dated 14 December 2014, but contemporaneous documents disclose that exchange occurred on 19 December 2014. The deposit was $75,000 and the purchase price $1.55 million. Settlement took place on 23 February 2015 and it is clear that $1.24 million was provided by funds lent to Bijkerk Investments and Ned by Westpac. The balance comprised some $310,000 (representing the unpaid purchase price and stamp duty of $70,760). 5. There is a lively dispute as to the sources of all funds save for those borrowed from Westpac. There is also a lively dispute as to how the repayments to Westpac over the ensuing three years (which reduced the indebtedness from $1.24 million to around $930,000) are to be characterised. It is common ground that some are attributable to Ned, but otherwise, each of Roy and Ned claim responsibility for the majority of the repayments. 6. It is common ground that Ned has lived at Cadigal Avenue since the property was acquired. 7. Bijkerk Investments claims an entitlement to sell the co-owned Cadigal Avenue property and to retain 50% of its net proceeds of sale. Ned's opposition is based upon his contention that he is the sole beneficial owner. He asserts either an express trust or a constructive trust, in both cases derived from conversations when Cadigal Avenue was acquired, coupled with his detrimental reliance by spending money on the property by way of acquisition, renovations, and loan repayments. He does not say that the men explicitly used the word "trust". However, he says that Bijkerk Investments became a co-owner and co-borrower only because he could not obtain finance in his own name, and at the time of acquisition, Roy said that "If you like [the property], it's yours", and that "It's your house it should be in you[r] name" and other words consistent only with the property being held on trust for him. Roy denies these conversations. None was reflected in any contemporaneous document, or indeed, so far as I can see, in any document brought into existence before this litigation commenced in late 2019. 8. In 2016, Roy and Ned purchased Tallebudgera for $720,000 as tenants in common in equal shares in their own names. Ned maintained that he had no beneficial interest in the property, and was pressured into agreeing to being a registered proprietor because Roy had agreed to be on title for him at Pyrmont for Cadigal Avenue. After contracts had exchanged, the bank withdrew its lending offer, and Ned obtained short term finance from two associates for the majority of the purchase price. Ned claimed that those loans were to him personally. Roy said that both of them borrowed the money (T30.8). If these loans were documented, the documents were not in evidence. 9. On around 1 March 2017, Ned and Roy jointly borrowed $1,000,000 from Ms Tania Clarke, secured by a mortgage over Tallebudgera. The money was used to repay the short-term loans Ned had arranged, and Roy said that the balance went to Alpha, and that with Ned's consent the funds were used to repay various other debts. 10. It seems that few if any repayments to Ms Clarke were made. On 11 April 2019, Ms Clarke sued Roy on the loan in the Supreme Court. On 7 May 2019, a receiver was appointed by her to sell Tallebudgera. The property was sold in August 2019 for $850,000. On 28 October 2019, Ms Clarke obtained a default judgment in the District Court of $369,236.37 against Roy. In November 2019 Ms Clarke served a bankruptcy notice on Roy for that judgment debt, and in December 2019 she filed a creditor's petition in the Federal Circuit Court. 11. The present proceedings were commenced in late 2019, expedited, and were set down for final hearing in May 2020. The Federal Circuit Court bankruptcy proceeding has been adjourned until 8 October 2020. 12. Roy acknowledges that Ms Clarke was entitled to sue him for the entirety of the indebtedness, but seeks declaratory orders confirming an entitlement to contribution from Ned. By the conclusion of the hearing, a defence based on estoppel had substantially fallen away, and was replaced by the submission that no such relief, or at most "heavily conditional and qualified" relief, should issue, because Roy was unable to pay any amount of the judgment debt and was shortly to be made bankrupt. 13. Ms Samantha Madigan was a witness in the plaintiffs' case. She had known Roy for many years, and had known his partner Ms Kylie Hawthorne since she was a child. She was employed by Alpha from around 2008 until 2019 as an Executive Administrator and Bookkeeper, and was involved in keeping the books and processing payments for all of the companies in this litigation. She too is a defendant to the litigation commenced by the liquidators of Guardian Youth Care. Her affidavit was read with minimal objection, and she was not required to attend for cross-examination. 14. I did not understand there to be any large dispute as to the applicable legal principles. However, there was a very substantial factual dispute as to the conversations said to give rise to the trust, and as to how the funds for acquisition, and servicing borrowings, on the various properties were derived. In order to resolve that dispute, I have given greatest weight to that part of the documentary evidence which I regard as reliable. It will be convenient first to deal with the testimonial evidence of the three men who were cross-examined, Roy, Ned and Mr Clarke, in order to explain why I have not derived great assistance from any of it in relation to any disputed matter. I shall then deal with the documents, which divide into (a) the contemporaneous documents said to contradict Ned's claim, (b) the documents relating to the acquisition and financing of Cadigal Avenue and (c) the documents bearing upon one or more loans with Mr Edward Hayson. The three main witnesses 1. The parties submitted that I should prefer the evidence of the witnesses each called. The defendant submitted that I would regard Ned's evidence as "direct and responsive and perhaps less argumentative or evasive and certainly not as fulsome as the oral evidence of Roy and indeed we would invite your Honour to consider that Ned for his part had less difficulty acknowledging matters that were put to him by our learned friend as issues which were apparently thought by the cross-examiner as more likely to advance Roy's case than Ned's". I accept that submission, so far as it goes. 2. On the other hand, the plaintiffs pointed to "two very important shifts which are telling" in Ned's evidence. One related to the loan to Mr Hayson, the other to the "buy-out conversations". It was said in relation to the former, that Ned had conflated the agreed repayment of $200,000 in December 2015 with a $200,000 contribution to the purchase of Cadigal Avenue, resulting in the introduction of a second loan to Mr Hayson in his second affidavit and in his cross-examination. The second shift was the "buy-out" conversation, which Ned accepted in cross-examination occurred, and would involve the transfer to him of the whole of the legal title to Cadigal Avenue for a payment of $500,000. I accept the plaintiffs' submission, as far as it goes. 3. The submissions made by counsel as to the deficiencies of the testimonial evidence of Roy and Ned were sound. However, those submissions did not exhaust the deficiencies in their evidence. I have formed the view that I should place only the most limited reliance upon the testimonial evidence of any of the witnesses who were cross-examined in respect of any controversial matter. 4. I bear in mind the nature of the contested issues. These were principally (a) conversations in 2014 or 2015, or (b) understandings or activities underlying certain payments made in late 2014, 2015 and 2016. Memory of such things is fallible, especially when the litigation process intrudes. The nuances of what was said are important, bearing in mind that the critical distinction is whether Ned would have his "own" home as opposed to renting, or whether he would "own" the apartment in equity as opposed to being a co-owner with Bijkerk Investments. The evidence also discloses that there were a large number of poorly documented payments, which led to confusion and disputation at the time, such that it is quite improbable that an unassisted recollection five or six years later is reliable. I return to these considerations towards the conclusion of these reasons, when making factual findings. 5. There were material differences in the manner, and subject matter, of the cross-examination of each man. 6. Roy was cross-examined for somewhat more than half a day over a relatively high quality audio-visual link to Queensland (where he lives). Given the nature of the case, the cross-examination focussed upon particular disputed conversations said to have occurred five or six years ago. He made no significant admission on any major point. He impressed me as a man experienced in buying and selling real estate. However, no differently from many lay witnesses, he had a poor understanding of confining his answers to the question he was asked. Indeed, although I do not think that he was deliberately seeking to obfuscate the truth, his habit was to elaborate a response to a question and to rearticulate the main themes of his case. His fixed idea was that he and Ned had been "partners", that they had drawn money for their shared investments "from the same pot" and that nothing was ever said or done contrary to those precepts. This is not a criticism, but from time to time the cross-examiner paused after an answer was given and Mr Bijkerk took the opportunity to add to his evidence. My impression is that he treated his answers in cross-examination not much differently from conversation in ordinary life. His words, repeating the elements of his position, filled many pauses. 7. Some of Roy's evidence was inconsistent. For example, when first referred to Ned's claim that he had assisted Roy in securing the repayment of a loan of $2.5 million, he confidently said, "I have no knowledge of any loan of $2.5 million, this is the first I've heard of it you mentioning it" (T26.1). Ned's claim was prominent in his first affidavit, and Roy had made an affidavit in reply. Evidently he had seen Ned's claim. His firm elaborate answer about having no knowledge and it being the first time he had heard of it was plainly incorrect. It is consistent with a tendency to give confident evidence supportive of Roy's case even if he lacked an actual recollection of the events the subject of the question. On the topic of the $2.5 million loan, Roy later conceded "it wasn't a loan it was a situation we were in and Ned was very helpful in solving it, but there was no $2.5 million loan. There was money advanced of something and for some reason. I honestly can't remember this one. But yeah, Ned was helpful in that situation, 100%" (T28.2). What the "situation" was, and how Ned had been helpful were unexplained. 8. My overall impression is that for the most part, he had little or no actual recollection of most of the conversations, but was firmly of the view that Ned's account was incorrect. To be clear, that is not intended as a criticism. Very few people recall the precise terms of conversations five or six years ago. 9. Ned was cross-examined for around two hours on the second day of the trial. His English is fluent, but somewhat accented and grammatically imperfect. Indeed, the transcript suggests his answers were less fluent than they seemed at the time, mostly because he spoke quite quickly (as did his cross-examiner). 10. I formed the view that Ned was an intelligent and quick-witted man, who was sensitive to the nuances of a question. I formed the view that he, too, had an acute appreciation of which questions were neutral and which went to issues in the case and the extent to which his answers would align with or prejudice his defence and cross-claims. 11. The first part of his cross-examination was conducted in somewhat trying circumstances, because of technical difficulties which afflicted both sides, and in one instance, the Court (I was informed that there had been a Telstra outage that morning with widespread but short-term consequences). I made it clear that Ned should not guess at any question which he had only imperfectly heard, and that it would be no criticism of him to ask for it to be repeated (there was at least one occasion where Mr Alexander's voice dropped out). I have been cautious before drawing inferences from this first part of the cross-examination. 12. Through good fortune (the settlement of the hearing which had been scheduled to be the only face-to-face hearing on level 7 of the Law Courts Building), I made arrangements for the trial to resume in a courtroom in the afternoon. The second half (in terms of time) and the large majority (in terms of pages of transcript) of Ned's cross-examination occurred face-to-face. 13. The nature of Ned's cross-examination focussed upon putting to him contemporaneous documents which tended to undercut his evidence of what was said and done 5 or 6 years ago. 14. From time to time Ned gave answers which were squarely inconsistent and inherently implausible. In particular, he was taken to the letter written by his solicitor dated 20 November 2019 responding to a demand from Roy's solicitors to sell the Cadigal Avenue property so that "Roy's one half share of the net proceeds from the sale" might be used to pay the Clarke judgment debt. This exchange immediately preceded the commencement of the present litigation. After being shown the letter and reminded of its context and its importance, Ned accepted that he caused his solicitors to respond to that demand and accepted that he approved it prior to its being sent: "Q. So the letter assumes that Bijkerk Investments is entitled to half of the Cadigal Avenue property? A. Of course, they assume, yes. Q. Did you not think it would be important to write back and say Bijkerk Investments is not entitled to anything? A. No. I not want to deal with these lawyers, that's why I deal with him in the first place. Q. But, sir, you did send a response through your solicitors, didn't you? A. Yes, I told Mr Lister, as he responded what he was putting to him. Q. Turn over the page to court book 254. A. Yeah. Q. So, on 20 November 2019. A. Yep. Q. Your solicitor writes a letter which you approved prior to this being sent didn't you? A. Yep." 1. The last unequivocal response was consistent with much of Ned's evidence, which tended to admit the framing propositions which constitute much cross-examination. For that he is to be given credit. However, approval by Ned of his solicitor's letter presented two difficulties, which rapidly unfolded in the cross-examination. 1. First, the letter stated that the solicitors were "instructed by our client that he is currently attending to selling the property at Cadigal Avenue" and that it would sell quickly and he "expects to be able to revert to you with settlement details in the near future". Although at first he maintained that that was true (T101.14), Ned later accepted that it was false (T102.32), and that he had taken no steps towards attending to a sale. 2. Secondly, and much more importantly, the letter did not dispute or in any other way respond to the demand that half of the proceeds of sale would be paid to Roy. It may be accepted that a party's solicitor at the outset of a retainer may have only an imperfect understanding of the new client's case. However, it is difficult to contemplate a process consistent with Ned's case which led to his solicitor's response. Ned was confronted with a demand to acquiesce in the sale of the apartment where he lived, of which he was one of two registered proprietors. His case at trial is that he was the sole beneficial owner, pursuant to a common intention in 2014 on which he had detrimentally relied over the ensuing 5 years. That is something which might be expected rapidly to be conveyed to a solicitor on receiving a demand such as that from Roy's solicitors. 1. Ned thereupon retreated from accepting that he had approved the letter prior to it being sent, maintaining repeatedly that it was the first time that he had seen it and denying that he had approved it (T103.5-20): "Q. I thought earlier you agreed that you did approve the contents of this letter? A. When I read it first time I see this letter. The solicitor wrote it. First time I see this letter. That's you can ask me any questions you want now I tell you this first time I see this letter. Q. I accept it's the first time you've seen this letter? A. Yes. Q. But do you accept that you approved its contents before it was sent? A. No. Q. You do not-- A. No I don't accept. Q. You do not accept that? A. No." 1. The cross-examination continued (T103.22-38): "Q. So was Mr Grey just sending a letter without getting - without getting approval from you? A. 100% because I'm not is first time I see this letter. Q. So are you seriously telling his Honour that a solicitor wrote a letter on your behalf without getting instructions? A. Maybe ..(not transcribable).. time yes. Yes I telling his Honour that. Yes. Q. You're lying? A. I'm not lying. Q. You did give instructions to send this letter? A. Please you can put on me whatever you want. I tell you how it is. Before if I tell him sell the property I tell him sell the property. Is no hiding. If I give them instruction to do it he's no hiding. And is for me is no different even if I tell to sell the property yes and probably if I go to auction I sell the property but was it true that's true." 1. Ned's solicitor's response was squarely inconsistent with the case he sought to advance at trial. I am certain that Ned appreciated this, shortly after this line of questioning commenced. His response that his solicitor's letter did not accord with his instructions is improbable. 2. Mr Paul Clarke gave evidence at the end of the second day and the beginning of the third. He is a native speaker of English, who is qualified as an accountant. For many years he had supervised the accounting and taxation treatment of the affairs of both men and their companies. I do not regard him to be in any respect independent, and to be fair it was not contended that he was. He is a co-defendant with Roy to the Commercial List proceedings, and it was he who had caused his mother to lend $1 million to the two men in order to refinance short-term unsecured loans made to Ned by two associates in order to permit the pair to buy Tallebudgera. (Roy maintained that the money did not come from Mr Clarke's mother, but nothing turns on this issue so far as I can see.) The non-repayment of this loan, secured by a mortgage over Tallebudgera, had led to the mother causing the property to be sold and obtaining a judgment debt against Roy for the unpaid amount. 3. No differently from Ned, Mr Clarke readily gave unequivocal answers to matters emerging from the documents. However, I regard parts of Mr Clarke's evidence as strained. Two small examples are as follows. 1. He sought to maintain that "Bijkerk Investments as trustee for the Bijkerk Family Trust" could be so described on the loan application (and title to Cadigal Avenue) consistently with it having a bare legal interest on trust for Ned. 2. He had difficulty explaining how he had derived Ned's income of $120,100 on the Westpac loan application form, which was substantially higher than appeared on the taxation return (prepared under Mr Clarke's supervision) a few days earlier. The form was unambiguous – it called for the borrower's taxable income from the most recent tax return. 1. Those points go to peripheral matters. A much more significant issue arose when Mr Clarke was confronted with a draft annual report from the Bijkerk Family Trust prepared by his firm, for the year ended 30 June 2015, which recorded as an asset the half share in Cadigal Avenue, he maintained that he had been requested by the client to record that interest in land as an interest of the trust. He accepted that the document was very likely prepared under his supervision (T155.9), which was a proper concession, given that his name appeared on it. He maintained that his clients were entitled to instruct him as to the contents of those accounts (T154.1-17): "Q. When you came to prepare the financial reports of Bijkerk Investments would it not then be incorrect or would it not then be false to put down Bijkerk Investments as having an asset worth half of the Cadigal Avenue property? A. I don't believe it was false, the only users of those financial reports were Mr Bijkerk and Mr Bikic and they weren't supplied to other parties that I was aware of that I can recall so they were - I thought they were entitled to record the transactions as they - as they required. Q. What about the beneficiaries of the Bijkerk Family Trust? A. I don't have a view on that. Q. But if you put down in the financial reports that the Bijkerk Family Trust has a half share interest and it doesn't - doesn't that mislead the beneficiaries of the Bijkerk Family Trust? A. I don't have a view whether they're being misled or not. They - they're all children or associates of Mr Bijkerk and they have access to that information directly. So I would find it strange that they'd be misled." 1. What was reflected in the draft financial statements reflected what a potential lender, or a discretionary object, would find on examining public documents, namely, that the trustee Bijkerk Investments as trustee of the Bijkerk Family Trust was a 50% co-owner of Cadigal Avenue. If Ned's claims are accepted and he was the sole beneficial owner of Cadigal Avenue, then – contrary to Mr Clarke's evidence – Roy's children or associates might well be misled as to the interest the trustee had in the land. 2. Mr Clarke gave this further evidence (T153.7-25): "Q. Assuming Bijkerk Investments was holding on trust for Ned Bikic then you would not be - when you came to prepare the financial reports for Bijkerk Investments at the end of the year you wouldn't include Cadigal Avenue as an asset would you? A. Depends how I've been instructed by the client to prepare those financial statements. Q. Well if Bijkerk Investments did not have an equitable interest in the property would it not be false to be putting it as holding a 50% interest? A. I don't have a view on that. Q. You don't know or you? A. I would just follow my client's instruction on how to prepare the financials on what basis. Q. But would you - would you just follow your client's instructions even if you knew those instructions were false? A. If I believed they were false or against the law no I wouldn't follow those instructions." 1. It will be seen that Mr Clarke answered three questions concerning documents which were adverse to Ned's case with the words "I don't have a view". But each was a matter where one would expect the accountant involved in preparing the document to have a view. Contemporaneous documents 1. Prominent in Roy's submissions was the proposition that, subject to one possible exception, all contemporaneous documents supported their claim that Ned only enjoyed a 50% beneficial interest in Cadigal Avenue. These may be summarised in chronological order. 2. First, the plaintiffs pointed to an email from Mr Clarke to Ms Madigan, copied to Ned and Roy, dated 17 December 2014 concerning the application for a home loan. It was common ground that Mr Clarke had assisted in completing that application (including by reference to asset and income information) and that the contact at Westpac had been Ms Liesel Coles. Mr Clarke's email included the following: "On speaking to Liesel yesterday, she mentioned that the bank already had Roys information, so I don't think they need anything further at this stage for Roy. I also mentioned to Liesel that Roy's preference is that he be buying his 50% share in the name of Bijkerk Investments Pty Ltd as trustee of the Bijkerk Family Trust and that the loan needs to have a redraw facility that is easy to use." 1. The loan facility document and the contract for sale of land identify the borrower and purchaser as "Bijkerk Investments Pty Ltd atf Bijkerk Family Trust and Ned Bikic". 2. All of those documents point against any common intention that Ned was the sole beneficial owner. Indeed, the express inclusion of the capacity in which Bijkerk Investments held its share, namely, as trustee of the Bijkerk Family Trust, is inherently difficult to reconcile with the legal owners holding the property on trust for Ned. It would be much less awkward if Bijkerk Investments were simply named without reference to its capacity. A single company may be the trustee of more than one trust. 3. Secondly, the loan application signed by Roy and Ned contained the following statement: "I state that the account(s) will be held in the name(s) of a person(s) and will not be held in trust". 1. That is inconsistent with Ned's case, although to be fair the form at least on one view did not provide any obvious option to qualify or delete that statement. 2. Thirdly, the offer document from Westpac, which was executed by Roy, Ned and Roy's partner Ms Hawthorne, stated that the security required by the bank included not merely a mortgage over the land but also: "A new $1,240,000.00 Limited Guarantee and Indemnity by ROY ANTHONY BIJKERK and KYLIE ANN HAWTHORNE". 1. The guarantee (if there was one) was not in evidence. The plaintiffs pointed to the unlikelihood of Ms Hawthorne providing a guarantee for indebtedness to acquire property in which Ned had 100% beneficial ownership. This submission was first advanced in closing address, and met a response that Ned was taken by surprise, and this should have been particularised or, at least, opened on. In fact, the offer document was annexed to an affidavit affirmed by Ned's solicitor Mr Grossman on the first day of the trial, to which it will be necessary to return. The fact that the Bank sought a guarantee from Roy's partner is not a material fact that required pleading. I accept that no deed of guarantee is in evidence, and that it is possible that none was obtained. Nonetheless, I think Roy is right to point to the terms of the security required by the bank, at a time when it was clear that Bijkerk Investments was to be a co-owner and co-borrower, as supportive of the unlikelihood of the apartment being held beneficially solely for Ned. After all, when Ned was permitted on the first day of the trial to read a late affidavit which led to a flurry of calls for and production of documents, he did not seek any limiting order on the use which might be made of what was to be found on the face of Westpac's offer. 2. Fourthly, there is the draft special purpose financial statement of the Bijkerk Family Trust mentioned above, which stated that Cadigal Avenue was a fixed asset of the trust and valued it at $775,000. That reflects exactly one half of the acquisition price of $1.55 million. The same document records, as a liability, the "Cadigal Investment Loan" in the amount of $1,237,766, under the sub-heading "Ned Bikic Partnership". 3. Fifthly, there is a minute of the Bijkerk Family Trust dated 22 May 2019, signed by Roy, his partner Ms Kylie Hawthorne and Ms Madigan. That is around a fortnight after Ms Clarke appointed receivers to the Tallebudgera property. After recording those actions, the minute records: "We expect a considerable shortfall between the sale price of the property at [Tallebudgera] and the above loan, which is the joint r[es]ponsibility of RB [and] Ned Bikic. KH as sole director has agreed and instructed that the property at [Cadigal Avenue] should be sold immediately to cover any expected short falls or as suggested by Ned Bikic, during a conversation Ned had with Roy on or about the 21/5/19, he suggested he would buy out the 50% interest held by Bijkerk Family Trust in the Cadigal Ave property. KH agrees to sell its 50% interest in [Cadigal Avenue] to cover RB's share of the debt." 1. There was testimonial evidence from Mr Bijkerk, in his affidavit in reply, that he had had a face-to-face conversation with Ned concerning buying out Bijkerk Investments, and that roughly two weeks later, Ned offered to pay $500,000. Roy gave evidence that they shook hands on that deal. 2. Ned had a different account. In his affidavit in chief, he said that he had had a conversation in "mid-late 2019" with Roy in relation to the debt owed to Ms Clarke when Roy asked him to sell Cadigal Avenue: "Roy: 'I'm not going to pay Paul back. If you don't want to help me then let him sell your property.' Ned: 'Fuck you. What does this have to with my property.' Roy: 'You'll see.'" 1. Ned said that "[t]he next thing I heard from Roy was when I was served with the summons in this matter. That was the first time that Roy claimed that Bijkerk Investments had any interest in the Cadigal Avenue Property". 2. However, when Roy's affidavit in reply annexed the 22 May 2019 email, Ned accepted in an affidavit provided at the commencement of the trial that he did make an offer to buy Roy out. He said that he had the following conversation: "Roy: 'I want you to sell the Cadigal Property to pay Paul.' Ned: 'What's my property got to do with this? You bought the property in Queensland it had nothing to do with me. Paul's mum would never have sued you if you had just sold the property and paid her back. I just want you out of my life. Will you take $500,000?'" 1. There was a deal of attention given at trial to whether Roy had genuinely been seeking to sell Tallebudgera prior to the appointment of a receiver. Ned and Mr Clarke maintained that he was delaying. Roy relied on a signed agency agreement which was said to have been provided to Ned in the presence of Mr Clarke at a meeting at a pub in early May 2019. I do find that such steps as Roy was taking to sell Tallebudgera were much slower than Ned and Mr Clarke had expected, given the unanswerability of Ms Clarke's claim for payment. But little turns on this. 2. Much more important is Roy's submission that Ned's late affidavit was a change of stance brought about by a need to address the email, and that it acknowledged Roy's interest in Cadigal Avenue. 3. I do not accept this aspect of Roy's submissions, although it was squarely put in cross-examination (T90-91). The offer of $500,000 may have been based on an acknowledged obligation to repay half of the money lent by Ms Clarke. 4. Further, the weight to be given to the minute is diminished by the fact that by this stage it seems that the parties were in dispute, or that a dispute was imminent (receivers had been appointed on 7 May, and Mareva relief had been obtained on 16 September 2019). The minute also has, to my eyes, a self-serving quality to it. No comparable document was in evidence. Indeed, so far as the evidence revealed, the affairs of Roy, Ned and their companies were conducted remarkably free from documented resolutions, instructions, ratifications and approvals. It came into existence at a time of strained relations between the men, and when there is reason to suggest Roy was conscious of the claims being made against him and his companies. According to the ASIC search in evidence, he and Ms Hawthorne had been directors of Bijkerk Investments for some 17 years until 24 March 2019. Thereafter, Ms Hawthorne continued as sole director until she ceased holding that office on 21 February 2020. At that date, Roy resumed office as sole director, being joined on the Board by another member of his family on 9 April 2020. 5. But to my mind, the most telling consideration denying weight to this document is what appears on its face. If the document had been prepared on 22 May 2019, and if indeed there had been the conversation between Ned and Roy on the previous day, 21 May 2019, why record that as "on or about the 21/5/19"? How could Roy have been confused about the timing of an obviously important conversation he said he had had with Ned on the previous day? 6. Sixthly, and related to the above, is an email from Roy to Ned dated 22 May 2019 in the following terms: "Hey Ned, Sorry events have taken the course they have but this whole Paul Clarke Loan or Tania Clarke loan and the actions they have taken have placed both you and I in a difficult situation which was entirely avoidable. I need to sell my share in the property in Cadigal Av to be able to meet the obvious shortfalls that will exist in the above loan we are responsible for. You mentioned you will look at buying out my trusts interest in the property and mentioned you would look into that process in the near future. This will be good for the both of us, but I need it to be done ASAP given Paul will have a judgement against me by June 1, 2019. I am interested in that option if we can agree on the buyout price and to that effect I will get some rough ideas of where the market is at this point of time. In due course maybe you could also get some estimates of what the property is worth. Hopefully we can come to an agreement on terms and move forward from there. Regards Roy." 1. As noted above, Ned made no response to that email. I think its weight stands and falls with the evidence summarised above concerning the minute of the previous day and the evidence of the conversation about a buy out for $500,000. 2. Seventhly, there is the exchange of solicitors' correspondence of 4 and 20 November 2019 mentioned when dealing with Ned's evidence, when Roy's solicitors asserted a one half share of the net proceeds of the sale, and Ned's solicitors rather than denying any such interest, maintained that he was "currently attending to selling the property", that Ned anticipated it would sell quickly and expected to be able to revert with settlement details in the near future. That stance goes beyond a mere non-refutation of the asserted half interest. The statement that the property was being sold and in particular that Ned would revert in the near future with settlement details points strongly in favour of a one half interest. 3. In short, none of the above documents supports Ned's claim, and some tell against it. While I place little weight on the documents of May 2019, I think force should be given to what was told to Westpac at the time, how Cadigal Avenue was recorded in the balance sheet of the Bijkerk Family Trust, and Ned's solicitor's letter of 20 November 2019. Each of those documents is difficult to reconcile with Ned's case. Financial records relating to Cadigal Avenue 1. Roy accepted that when he and Ned were business partners, Ned had access to Alpha and Cynergy, in the sense that he could cause funds held to the credit of those companies to be used to pay his expenses (T28.30). Ned said that Cynergy or Sunergos would, at his request, provide funds to pay for renovations which were undertaken immediately after completion (T108.33). There was some testimonial evidence that the cost was charged equally to Ned and Bijkerk Investments. Ned said he did not know (T108-109). In the absence of seeing primary documents recording as much, I am not prepared so to find. 2. The bulk of the funds used to acquire Cadigal Avenue were borrowed from Westpac in a facility whose account-holders matched the legal title to the property: Ned Bikic and Bijkerk Investments Pty Ltd as trustee for Bijkerk Family Trust. The initial draw-down was $1.24 million, with interest accruing at around $5,000 per month. 3. The bank statements for 2015-2019 were in evidence. They show a relatively rapid repayment of indebtedness until around mid-2017. By that time, the balance had been reduced from $1.24 million to some $935,000. This had been achieved by regular repayments of $5,000 at the beginning of most months commencing December 2015, in each case described in the statement as "Deposit Alpha Support" or "Deposit Alpha Support Cadigal Rent". There were also, from September 2016, regular credits of $4,400 described as "Deposit Alpha Support Se Payment" followed by a three-digit number between 493 and 612. In his first affidavit, Roy had claimed responsibility for all these payments, but he corrected this in reply, and consistently with Ms Madigan's affidavit Roy acknowledged that this latter series of payments reflected amounts paid by Alpha to Ned by way of wages. 4. Thirdly, there were other deposits, some of which were very considerable, which appear to have been made on a one-off basis. On 2 September 2015, $130,000 was credited to the account. The bank statement describes that deposit as "Deposit Online 2939799 Tfr Westpac Bus Paid Off Roy Bijke". Similarly, on 27 January 2016, there is a $25,000 deposit described as "Deposit Bijkerk Invt Off Cadigal St Loa" followed on 29 January by a $2,500 with an almost identical description. On 4 February 2016, a further $25,000 was credited, again with the same description, and other entries with such a description may be seen on 16 February 2016 ($25,000) and 19 April 2016 ($7,000). It is hard to see why Roy's company's name would have been recorded on those deposits if they were not made by him. 5. It may also be noted that between 14 and 19 October 2015 (some six weeks after the $130,000 deposit on 2 September), there were three withdrawals, in the amounts of $10,000, $10,000 and $5,000 from the account with uninformative descriptions along the lines of: "Withdrawal Mobile 1666056 Tfr Westpac Bus". The purpose of those debits was unexplained in the evidence. They seem to be the only times on which the redraw facility was used. 6. From July 2017 there were a series of $5,000 credits, mostly described by reference to Cynergy, which broadly speaking left the outstanding balance at around $930,000 (interest payments at this time were generally slightly more than $4,000 per month). The last Cynergy payment was made on 31 July 2018. There followed a series of six credits of $5,000 between September 2018 and March 2019, most of which identify Ned or "Ned Bikic" as the depositor. On 20 March 2019 there is a deposit at Broadway of $4,500, and the last deposit to the loan account was made on 20 May 2019, in the amount of $9,500 labelled "Deposit Ned bikic Ned". No further deposits were made and interest continued to accumulate. 7. I find that between September 2016 and May 2019, Ned made regular repayments, from his own funds, which kept the loan out of default, and contributed to its being paid down. That finding is supported by Ned's testimony, that of Ms Madigan, and what is most naturally implied by the form of the deposits recorded on the bank statements. 8. Each of Sunergos Support Services Pty Ltd and Cynergy Support Services Pty Ltd operated "Business One" accounts at Westpac. The account numbers ended 0576 and 8676 respectively. An elaborate attempt was made on behalf of Ned to attribute funds to which he was entitled to payments made by Sunergos or Cynergy relating to the acquisition of the property or credits to the loan account. Attention focussed upon the following six transactions of 17 and 18 February 2015, a week before Cadigal Avenue settled. 9. In the Sunergos account: 1. a credit of $116,003.07 on 17 February 2015; 2. A debit of $115,000 on 17 February 2015 described as "PAYMENT TO CYNERGY SUPPORT"; 3. A credit of $85,000 on 18 February 2015 described as "FNDS TFR FROM LOAN TO MAIN"; 4. A debit of $85,000 on 18 February 2015 described as "PAYMENT Part Repay Loan". 1. In the Cynergy Support Services account, attention focussed on these two entries: 1. A credit of $115,000 on 17 February 2015 described as "PAYMENT Sunergos To Cynerg"; 2. A credit of $85,000 on 18 February 2015 described as "PAYMENT Repay Part Loan". 1. I shall return to these payments, insofar as they contribute to a contention advanced by Ned's solicitor Mr Grossman concerning the acquisition of Cadigal Avenue. The loan or loans to Mr Edward Hayson 1. So far, I have summarised primary documents maintained by financial institutions which reflect transactions on three accounts. In order to describe the various classes of records relating to the loan or loans to Mr Hayson, it is necessary to say something of the CBC Partners trust account and trust ledger. CBC Partners' financial records 1. CBC Partners provided accounting and taxation services to the parties and their corporate and trust entities. CBC Partners operated a trust account with Westpac, with an account number ending with the digits 1877. In response to a call, Mr Clarke provided a highly redacted extract of bank statements for the period from 28 February 2013 to 27 February 2015. The transactions which were unredacted responded to a call for documents recording the transactions in FTB 2. FTB 2 was a document constructed by Mr Clarke and provided to Ned by email dated 30 September 2015 in which he said: "Ned, attached is what has gone through the trust account. Let me know what else you need." 1. It is convenient to reproduce the entirety of the document. 1. FTB 2 identified under the heading "TRUST ACCOUNT TRANSACTIONS" two "Amounts paid to Edward Hayson", being $200,000 and $110,000 paid on 5 March 2013 and 28 August 2013 respectively, each described as "Payment to Edward Hayson – Loan". The document also recorded, under the heading "Amounts received from Edward Hayson", some 14 amounts over the period from 21 May 2013 to 24 February 2015, each described as "Repayment from E. Hayson Loan". The total repayments were 1,205,000. Attention was focussed upon two repayments said to have been made on 19 December 2014 and 10 February 2015, in the amounts of $150,000 and $50,000 respectively. 2. The words "EH1" and "EH2" were added to that document by Mr Grossman, shortly prior to the trial, and did not form part of the document emailed by Mr Clarke to Ned in 2015. 3. True it is that for each of the transactions listed on FTB 2, there is a transaction recorded in the CBC Partners Westpac trust account corresponding in value. The descriptions on the Westpac statement, which in part are apt to reflect information provided by the person originating the transaction (for example, the person making a deposit) varied. For the most part, they were simply described as "Deposit Haymarket NSW" or "Deposit Mascot Central NSW" or some other location in New South Wales or Queensland. However, two of the deposits, those made on 17 January 2014 and 19 December 2014, bore a different description. In each case, the entry was described "Rtgs High Value Payment Ref No XXXXXXX" (with a seven digit number), and Mr Clarke gave evidence that that indicated a service whereby funds would rapidly be cleared. In each of those two cases, the Westpac statement identified a female name followed by the words "Credit beneficiary Accou". I permitted, over Roy's objection, Mr Clarke to give evidence in chief in relation to the second of those entries, the deposit made on 19 December 2014, as follows (T140.40-T141.8): "Q. Yes. Now the entry in relation to that deposit has a reference number and refers to a person or refers to a Jamelie Josephine? A. That's correct. Q. Do you know a Jamelie Josephine or Josephine Jamilie perhaps? A. I don't know the person but I made inquiries at the time when the money came into our trust account to Mr Bikic and Mr Bijkerk of who that was and I was advised that deposit was made on behalf of Mr Edward Hayson. Q. I see. Did you know if any - did either of those gentlemen tell you of any connection or association between Ms Jamelie or Ms Josephine Jamelie and Mr Hayson? A. I was advised at the time of the relationship, that they were associated but I can't recall the exact nature of the relationship. Q. I see. Do you remember if the source of your information about that lady was Mr Bijkerk or was it Mr Bikic? A. I had asked both of those individuals and they both - they both agreed that it related to Mr Hayson." 1. It is to be remembered that this was a trust account, with the consequence that the firm was responsible for identifying in relation to each transaction, who the beneficiary was (ordinarily, a client of the firm). The redacted copies of the Westpac business statements bear the appearance of documents printed out years ago and maintained in the records of the firm. Indeed, most pages have handwritten mark-ups on the unredacted entries, and occasionally someone's initials. I infer that careful attention was given to the relatively large sums passing through the trust account, quite possibly in connection with maintaining trust ledgers for the clients of the firm. I mention this because there are what appear to be contemporaneous hand-written annotations on some of the transactions which bear upon the issues of this litigation. 2. The 21 May 2013 deposit of $50,000 has a handwritten annotation "Alpha". 3. The 19 June 2013 deposit of $200,000 has a handwritten annotation "Alpha & Ned Bikic" and there follows "50K-NB" and "150K Alpha". 1. Consistently with the latter, it will be seen that the second deposit in FTB 2, dated 19 June 2013, refers to a repayment in the amount of $150,000 rather than $200,000 in fact credited to CBC Partners' trust account. 2. CBC Partners operated a computerised account system permitting the print-out for all transactions on a particular account between a specified time period. Again, in response to a call made on the second day of the trial, Mr Clarke provided a print-out of "Alpha Support Services Transactions" for the period from 1 March 2013 to 5 December 2015. The document was tendered. Although the document only came into existence during the course of the trial, I am satisfied that the entries reflect contemporaneous records made when the underlying transactions in the trust account were effected. To be clear, trust account ledger entries need not – and in many cases do not – reflect any actual transaction in an account held by CBC Partners with Westpac. For example, it would be possible for CBC Partners to debit trust funds held for Alpha and to credit trust funds held for Sunergos by the same amount on instructions; that would only appear in the trust account ledgers, and would not reflect any transaction involving Westpac. 3. Some of the descriptions in the CBC Partners trust account ledger appear either to have been automatically generated, or alternatively derived from cutting and pasting the descriptions generated by Westpac. For example, the two "Rtgs High Value Payment" credits mentioned above are identified in the same amounts and with the same descriptions including seven digit reference numbers as are found on the Westpac Business One bank statements. Other entries in the trust account ledger have the appearance of being entered ad hoc. Some are relatively informative; thus for example there are entries on 2 April 2013 and 17 June 2013 as "Ned Bikic tax". However, most are quite uninformative. By far the most common description is a reference to "Alpha". Some of those entries have been treated as repayments from Mr Hayson in FTB 2. Occasionally, there are references to "Alpha Loan" or "Alpha – Chq" or "Transfer to Alpha". There are a variety of entries which mention Mr Hayson. Once again, the most common simply states "E Hayson". There are five such entries: a credit of $100,000 on 20 May 2013, another credit of $50,000 on 21 May 2013, a debit of $100,000 on 21 May 2013, a credit of $50,000 on 24 May 2013 and a debit of $50,000 on 27 May 2013. Only one of those found its way into FTB 2. Those entries are entirely unexplained in the evidence. I mention them because a large dispute, although ultimately one which I think goes mostly to credit, was whether there was one or more than one loan to Mr Hayson. Undoubtedly there were substantial transactions involving Mr Hayson in May 2013. The pattern of those transactions as recorded above (five transactions, each in the amount of $50,000 or $100,000) does not remotely resemble a loan. 4. The other entries which mention Mr Hayson are 19 June 2013, a credit of $150,000 described as "E Hayson – Deposit", and a debit of $100,000 on 18 November 2013 described as "Alpha – E. Hayson repayment returned". The loan documentation 1. In evidence was a deed of loan dated 26 June 2013 which had been stamped with ad valorem duty reflecting a loan of $500,000. The parties were the lender, Guardian Care Properties Pty Ltd, the borrower, Mr Hayson, and two security providers, Mr Troy Rugless and Ms Tristen Rugless. The recitals referred to a loan facility for $500,000, which was said to be secured by a caveat over property at South Coogee owned by the security providers. Clause 1 states that the loan was to be advanced on the date of the deed, while cl 2 stated that it had been provided "for the purpose of the Borrower's general business dealings". 2. There is much that is unusual about the deed. Clause 4 provided that: "The Lender and the Borrower agree that the Borrower is not required to pay any interest to the Lender in respect to the Loan during the Loan Term". 1. The loan was repayable on 28 days' demand by the lender, and could be repaid by the borrower at any time. Provision was made for interest to be paid in the event of default, but the interest rate was left blank in that clause (cl 8). Clause 9 stated that as security for the loan, the security providers consented to the registration of a caveat in the form annexed to the deed. That caveat identified Guardian Care Properties as the caveator and the caveatable interest was said to be "[l]egal and equitable as Lender pursuant to Deed of Loan". It reflects a desperately imperfect understanding of the nature of a caveatable interest (the caveatable interest will be either legal or equitable but cannot be both, and further the caveat should identify what that interest is). However, it is at least consistent with the provision in the deed stating that "[t]he parties agree that pursuant to the terms of this Deed, the Lender has a legal or equitable estate or interest in the property". 2. Although the deed appears to have been prepared by a firm of solicitors identified on the front page (a firm which otherwise does not feature in the evidence), much of it is deficient or incomplete. The absence of any provision for the payment of interest until default, if that is taken at face value, makes it difficult to reconcile with any proper commercial purpose on the part of Guardian Care Properties; alternatively, it suggests that the document does not include the full terms of the transaction. The absence of any stated rate of interest in the event of default is conspicuous, especially in light of the acknowledgment throughout the evidence of all parties in this litigation to interest payments being made by Mr Hayson. Roy and Ned agreed that there was an obligation to pay interest, that (unusually) the interest was payable to Sunergos, and that Mr Hayson was an unreliable payer. All indications are that the document does not record the whole of the transaction pursuant to which Mr Hayson borrowed funds. Litigation involving the Hayson loan 1. By statement of claim filed in this Court on 13 August 2015, Guardian Care Properties sued Mr Hayson and Mr and Ms Rugless, stating that the plaintiff had made written demand for repayment on 1 May 2014 and asserting an entitlement to the repayment of principal plus interest at the rates determined by s 100 of the Civil Procedure Act 2005 (NSW). It was alleged that the deed conferred an equitable estate over the Rugless' property by way of mortgage or charge, which entitled the plaintiff to apply for its judicial sale. The total amount claimed was $543,868.09. The statement of claim was verified by Mr Bijkerk. 2. As has been noted above, FTB 2 was emailed to Ned in September 2015, after this litigation had commenced. 3. A partially executed deed of settlement, which was undated, but signed by each of Roy and Mr Clarke as directors of the plaintiff, was in evidence. The deed recited that the plaintiff asserted that "prior to the Loan, [Mr Hayson] owed the Plaintiff the sum of $25,000 and the Loan was accordingly reduced from $500,000 to $475,000" (Recital B). The deed also recited that Mr Hayson asserted that "he repaid the Loan plus interest by way of cash deposits into the bank account of CBC Partners" while Mr Rugless asserted that "he paid the sum of $160,000 to the Plaintiff on behalf of the First Defendant" (Recitals I and J). Recital K was that "[t]he Plaintiff denies the First Defendant's Repayment and the Second Defendant's Repayment and asserts that no moneys have been repaid to the Plaintiff". It is easy, in light of what has been summarised above of the CBC Partners trust account and the references to Alpha and Mr Hayson, to see how there might be scope for confusion and contest. 4. The essence of the deed was that the parties settled the proceedings and granted releases in exchange for a payment of $200,000 in full and final settlement. An email from the solicitors acting for the plaintiff to Roy and Ned dated 4 December 2015 confirmed that "we have received cleared funds of $200,000 in our trust account", and attached a copy of a proposed withdrawal of caveat. Findings concerning the Hayson loan 1. I find that the deed of settlement was executed by the parties shortly prior to 4 December 2015, and that Mr Hayson caused $200,000 to be transferred to Guardian Care Properties' solicitors' trust account on 4 December 2015 in discharge of his indebtedness under the deed of loan. The significance of this is that it potentially explains Ned's evidence about achieving a repayment of $200,000 by Mr Hayson. It was put to Ned in cross-examination that his recollection about being entitled to the $200,000 belatedly repaid by Mr Hayson, which according to Ned contributed to the acquisition of Cadigal Avenue, reflected a confusion on his part with what occurred in December 2015. Ned denied this and indeed maintained that in addition to the $200,000 paid in December 2015, Mr Hayson had paid an additional $50,000 (T127.47-T128.22): "Q. Look at recital O. There's an agreement to pay a settlement sum of $200,000. Do you see that? A. Yep. Q. Can I suggest to you that was the figure to settle the proceedings, 200,000 not 250? A. 250. Q. Why do you say 250? A. Because we paid 200 and another 50 paid months after that because that's how I arrange it. Q. But the other 50, that was documented, is that your evidence? That was on the side? A. I never knew even who documented this. Might be the lawyer. I never knew but I knew money be paid 200 and Troy Rugless plus another 50 three weeks after that. Q. That other 50, did Roy know about that other 50? A. He went to the accountant, whatever, he nominated, Sunergos, Cynergy, I don't know which account but 100%. Q. Just turning over to page 154 it says, 'The defendant shall procure payment of the sum of $200,000 to the plaintiff by way of bank cheque'. Do you see that? Can I suggest the settlement sum is 200,000? A. Incorrect." 1. Ned maintained that he had achieved, separately, the repayment of $200,000 from Mr Hayson in 2014 (T129.21-24): "Q. What's actually happened is you tried to seize on the payment of $200,000 in December 2015 but you got the year wrong. A. Incorrect. In 2015 he did pay another $200,000 which has nothing to do with this. It's for the interest." 1. Mr Clarke had executed the deed and had been a director of Guardian Care Properties. He was cross-examined about the recital which referred to Guardian Care Properties' stance that Mr Hayson had made no repayments whatsoever. He said that he was unaware whether that was true (T173.12), and that he had taken no steps to investigate whether it was true (T173.41). That is somewhat unusual, given he signed the deed, was a director of the lender, as well as a director of the firm of accountants which maintained the trust account into which any repayments had been said to have been made. 2. All of this confirms to my mind that the evidence bearing upon payments of money to and from Mr Hayson is materially incomplete. I do not think any great reliance should be placed on FTB 2. The $310,000 contributed at settlement of Cadigal Avenue 1. The deposit of $75,000 for Cadigal Avenue was transferred from the CBC Partners trust account on 19 December 2014. So far as I can see, it is not possible to identify with any confidence the source of that money. True it is that on that date, there was a deposit of $150,000 into the CBC Partners trust account by Ms Jamelie which was said to be associated with a repayment by Mr Hayson. 2. Settlement of Cadigal Avenue required $309,347.09 to be transferred to the solicitor's trust account. The major components were the outstanding purchase price ($1.55m less $75,000 deposit less loan funds of $1.24m = $235,000) plus stamp duty of just over $70,000. An email from the solicitor to Roy and Ned on the afternoon of 19 February 2015 confirms receipt of the settlement amount (FTB 19), and the solicitor's bank's statement for the firm's trust account shows a transfer of $310,000 made on 18 February 2015 with the description "FROM CYNERGY SUPPORT BIJKERK BIKIC PURC" (FTB 45). 3. An elaborate submission was advanced by Mr Raphael Ezra Grossman, Ned's solicitor, who claimed to trace into the $310,000 transferred (apparently by Cynergy Support Services) into the solicitor's trust account in order to achieve settlement. This was contained in an affidavit served just prior to the commencement of the trial, which I admitted on a limited basis, and permitted further calls for documents on short notice arising from it to be made. 4. Ned's case was that Roy had told him that he would receive $200,000 of an overdue payment by Mr Hayson. Mr Grossman identified payments of $150,000 and $50,000 in the Alpha Trust ledger (on FTB 2) as the $200,000 paid by Mr Hayson: $150,000 paid on 19 December 2014 (the day of exchange) and $50,000 deposited on 10 February 2015, shortly before settlement. These are the deposits labelled EH1 and EH2 on FTB 2 above. Mr Grossman contended that "I have traced about $115,000 from part of the EH1 and EH2 payments into the $310,000 paid into the Tully & Chiper trust account and then paid on settlement of the purchase of the Cadigal Property". Mr Grossman was speaking colloquially about "tracing", rather than identifying proprietary interests in bank accounts and monies held on trust which changed form (cf the principles discussed in Caron and Seidlitz v Jahani and McInerney in their capacity as liquidators of Courtenay House Pty Ltd (in liq) & Courtenay House Capital Trading Group Pty Ltd (in liq) (No 2) [2020] NSWCA 117 and P Ridge, "Tracing and associated claims in Australian law" (2020) 14 Journal of Equity 32. 5. Ultimately nothing turns on this. However, I should indicate that I do not accept Mr Grossman's submission. Much more would be required in order to persuade me that those two payments corresponded with Ned's claim that he was entitled to $200,000 repaid by Mr Hayson. The transactions in evidence in 2013 and 2014 are impossible to reconcile with any ordinary loan. The deed of settlement executed by Roy and Mr Clarke in 2015 is inconsistent with repayments of interest or principal in 2014 or 2015. 6. It may be that some of this evidence was directed to a claim for a resulting trust which Bijkerk Investments abandoned. I accept that Ned made substantial financial contributions to acquisition of Cadigal Avenue (borrowed funds of $620,000) and made substantial repayments of the indebtedness of him and Bijkerk Investments to Westpac over a period of around 3 or 4 years. 7. I also understood Ned to rely upon what could be deduced from the financial contribution to bolster his case that Cadigal Avenue was held on trust for him. I turn to this below. Was there a common intention that Cadigal Avenue be held on trust for Ned? 1. Ned's primary case was based on a common intention constructive trust. While not unprecedented, these are relatively rarely encountered in Australia, in contrast with England. In part that is attributable to the referral of power to the Family Court reflected in Pt VIIIAB of the Family Law Act 1975 (Cth). In part this is attributable to the acceptance in this country of a remedial constructive trust, available in cases of estoppel. 2. The line of authority stems from Pettitt v Pettitt [1970] AC 777 and Gissing v Gissing [1971] AC 886, ultimately driven by litigation under s 17 of the Married Women's Property Act 1882 (UK). While mostly applied to family homes, the principles became extended to commercial cases. Different approaches seem to prevail in Singapore (see R Leow, "The Death of Stack in Singapore" (2019) 135 Law Quarterly Review 535) and Canada, where the matter seems to turn on questions of undue enrichment: see D Waters, Waters' Law of Trusts in Canada (4th ed, 2012, Carswell) pp 486-489. 3. Australian authority for common intention constructive trusts is scant. The highly unusual facts of Green v Green (1989) 17 NSWLR 343, and the Tasmanian bankruptcy appeal in Parsons v McBain (2001) 109 FCR 120; [2001] FCA 376, a decision of Black CJ, Kiefel and Finkelstein JJ, are two appellate decisions post-dating Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59. There is the earlier decision of Austin v Keele (1987) 10 NSWLR 283, dismissing an appeal from the New South Wales Court of Appeal. Unlike Green v Green, Parsons v McBain and Baumgartner v Baumgartner, this concerned the breakdown of a commercial relationship between two businessmen, and in particular considered whether properties owned by two corporate defendants were in fact held on trust for the plaintiff. Lord Oliver of Aylmerton gave the advice of the Judicial Committee. The claim was based on an alleged common intention between the two men that the properties would be held in equal shares on trust for them. The formulation by Lord Diplock in Gissing v Gissing was reproduced and applied. 4. Lord Oliver stated at 291: "A trust does not come into being merely from a gratuitous intention to transfer or create a beneficial interest. There has first of all to be the additional ingredient of an intention or at least an expectation that the cestui que trust will act in a particular way, normally, though not necessarily exclusively, by making some contribution towards the cost of acquisition of the property in which the interest is intended to subsist. Moreover, Lord Diplock's formulation of the principle in Gissing v Gissing involves the further essential element that the trustee has so conducted himself that it will be inequitable to allow him to deny to the cestui que trust the beneficial interest which it is proved that he was intended to have. There has to be some conduct detrimental to the cestui que trust, even if only in the sense of an irrevocable change of legal position, which is referable to the common intention proved and undertaken on the footing of the grant of the beneficial interest claimed. Classically this takes the form of some contribution towards the purchase of the property, a feature which is entirely absent in the instant case. In fact there was not, from first to last, any evidence that Austin ever contributed a cent towards the cost of the properties." 1. Ned's position was very different from that of Mr Austin. I accept that Ned contributed to the acquisition of Cadigal Avenue, by supplying one half of the $1.24 million borrowed from Westpac. He may have contributed more. Do common intention constructive trusts continue in Australia? 1. It is perhaps significant that Lord Oliver stated at 290 that "[i]n essence the doctrine is an application of proprietary estoppel", and proceeded on the basis that the intention could be formed later than the time of acquisition. I mention this because there seems to be a large question whether this doctrine of common intention constructive trusts survives, following developments in Australian law over the last 35 years. This has generated more academic literature than case law: see G E Dal Pont, "Equity's Chameleon – Unmasking the Constructive Trust" (1997) 16 Australian Bar Review 47; L Maniscalco, "Common Intentions and Constructive Trusts: Unorthodoxy in Trusts of Land" [2020](2) Conveyancer and Property Lawyer 124 at 136-137; J Randall, "Proprietary estoppel and the common intention constructive trust – Strange bedfellows or a match in the making?" (2010) 4 Journal of Equity 171, S Thomas, "Proprietary Estoppel and Common Intention Constructive Trusts: Is it Time to Abandon the Distinction?" [2014] Singapore Journal of Legal Studies 168 and the consideration in D Hayton (ed), Underhill and Hayton Law Relating to Trusts and Trustees (LexisNexis, 19th ed, 2016) pp 588-590. Mr Alexander accepted that while there was "no proprietary estoppel pleaded, but I do accept that the very elements that would get a party up on a proprietary estoppel would also get one up on a common intention constructive trust". 2. If one were to approach the question from first principle, it will be seen that the common intention constructive trust reflects an English response to the problem which was addressed by the High Court in Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 and Baumgartner v Baumgartner. In the latter case, the High Court identified a constructive trust which did not turn on a common intention but rather the pooling of resources for the purposes of the de facto couple's joint relationship. That may be seen in the reasoning at 146-147, where may be found: 1. the conclusion that the finding by the majority of the Court of Appeal that "there was a common subjective intention to create a trust cannot be sustained", 2. the rejection of what had been said by the majority of this Court in Allen v Snyder [1977] 2 NSWLR 685 as to the need for there to be an "actual understanding or reciprocal intention", and 3. the ultimate conclusion that the constructive trust was imposed as a remedy to circumvent the unconscionable conduct where there was no intention to create a trust or to hold the property on trust. 1. It would be odd if equity would yield a different conclusion for a common intention constructive trust as opposed to a constructive trust based on estoppel – especially if, as Lord Oliver said, the common intention constructive trust is in essence an application of proprietary estoppel. Yet I could readily contemplate cases where a plaintiff's reliance fell short of the "life-changing decisions" which often characterise such claims in intimate relationships, and might not be entitled to relief based on an estoppel to fulfil the representation, but might nonetheless make out a case based on a common intention constructive trust: Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 at [84]. I have in mind in particular the emphasis given by Mr Coles in final address on what had been said in Grant v Edwards [1986] Ch 638 at 657 approved in Green v Green at 357 as to what amounted to sufficient detriment to qualify for relief. 2. I do not express any concluded view, because none of this was argued, nor have I attempted to do more than sketch the position, but it may be that this form of trust no longer survives in Australian law as an institution separate from an entitlement in estoppel. Nonetheless, it was said in Michael Gregory Jones as Liquidator of SBH Australia Pty Ltd (in liq) v Cummins [2018] NSWSC 606 at [76]: "One recognised class of case in which equity will intervene is where the parties have agreed that the claimant should have an interest in the property acquired by the other and has acted to his or her detriment on the basis of that agreement (Grant v Edwards [1986] Ch 638; Green v Green (1989) 17 NSWLR 343; Maharaj v Chand [1986] AC 898 at 907; Lloyds Bank plc v Rosset [1991] 1 AC 107 at 129)." 1. I shall proceed on that basis. Other points not necessary to decide 1. I shall also pass over the debate whether such a trust is an express trust, which is enforceable despite the absence of writing in accordance with the principles in Rochefoucauld v Boustead [1897] 1 Ch 196, as Glass JA suggested in Allen v Snyder at 693, or a constructive trust which is outside the modern formulations of the Statute of Frauds. 2. I understood it to be common ground that it would suffice for Ned to establish that Roy and Ned held an actual intention that Ned should have the sole beneficial interest in Cadigal Avenue, in circumstances where Ned had acted to his detriment in a way referable to the common intention. That accords with what was said in Green v Green, upon which Ned relied. Ned emphasised that the requisite common intention could be proven directly, or else inferred, for example by making contributions or meeting expenses. 3. However, there was on one view a sharp division on a question of principle as to the nature of Ned's detrimental reliance. Roy relied on the formulation of principle by White J in Cambouya Pty Ltd v Buchanan [2005] NSWSC 743 at [41]: "... Mr Buchanan would have to show that he acted to his detriment in a way referable to the agreement or intention that he have an interest in the property, in this case beneficial ownership. (Carruthers v Manning [2001] NSWSC 1130 at [124].) To qualify, the conduct in question must be such that Mr Buchanan could not reasonably have been expected to embark upon it unless he were to have an interest in the property. (Grant v Edwards per Nourse LJ at 648)." 1. On the other hand, as noted above, the endorsement in Green v Green of what was said in Grant v Edwards as to the circumstances in which reliance was to be imputed, at least in an intimate relationship, may on one view be difficult to reconcile with the passage in Cambouya. That is another issue which was not argued and which I shall not determine. Was there in fact an express or implied common intention that Cadigal Avenue be held for Ned? 1. This litigation can and should be decided on the facts. I readily accept that it is unnecessary for the parties to have used any special or technical language. I am also prepared to proceed on the basis that the requisite intention may be inferred from the circumstances, and that given the close personal relationship between Roy and Ned at the time and the informality which characterised their dealings with each other, one would neither expect nor require the precision that would be expected in an arms-length commercial transaction: see the authorities summarised in Dunphy v Russell [2018] NSWSC 721 at [113]-[116]. 2. I am unpersuaded that Ned has established that there was a common intention – whether express or implied – between him and Roy that the Cadigal Avenue property would be owned beneficially by him. A variety of considerations contribute to my lack of satisfaction. 3. First, there is the unchallenged evidence of Ms Madigan. Her affidavit was filed in reply. It accepted part but also disagreed with part of Roy's account of the payments made on the Westpac facility. She gave evidence that she personally processed some of the payments in the amounts of $4,400 made by Ned, and that all 20 of those payments were deducted from his wages. However, she also gave unchallenged evidence that some of the payments of $5,000 were from Roy, saying that Roy would say: "I paid $5,000 from Bijkerk Investments to the mortgage; this is a payment from myself to the mortgage, please code as a contribution from Bijkerk Investments". 1. Ms Madigan also gave evidence that she was involved at the time the Cadigal Avenue property settled. In particular, she gave unchallenged evidence that around the time of its acquisition she was with Roy and Ned and Roy said words to the following effect: "Myself and Ned Bikic have bought this property for Ned to live in and we own it 50/50". 1. Ned denied that conversation but because Ms Madigan was not required to attend for cross-examination, it was not put to her that her recollection was faulty. I do not regard this as dispositive, in the sense that the decision not to cross-examine Ms Madigan is not a trump which entails rejection of Ned's case. However, in circumstances where the cross-examination disclosed Roy's and Ned's imperfect recollections, I do place considerable weight upon her unchallenged evidence. 2. Secondly, Ms Madigan gave evidence that Roy had said to Mr Clarke in her presence at their Burwood office words to the effect: "Mate, at the end of the financial year make sure the Cadigal Property outgoings are split 50/50 between myself and Ned Bikic." 1. Ms Madigan said this was around the time of the purchase of the Cadigal property. Mr Clarke accepted in cross-examination that it was quite possible that something to that effect had been said. He then gave this evidence (T156.6-12): "Q. At no point did Roy say, 'Bijkerk Investments is the purchaser but the property is not for me' or words to that effect? A. No, Mr Bijkerk made it clear that the property was for Mr Bikic to live in and it was his property. Q. Then why code the outgoings as 50/50. Why split them? A. Because I was asked to." 1. That is somewhat borne out by the draft Bijkerk Family Trust balance sheet, which records as a liability the "Cadigal Investment Loan" of "$1,237,766" from which is deducted the "Ned Bikic Partnership interest" at "(619,069)". According to the Westpac statements in evidence, the outstanding balance on the Cadigal Avenue loan at 30 June 2015 was $1,237,766.44. (The draft profit and loss statement does not, so far as I can see, permit an analysis of individual outgoings which are unequivocally referable to Cadigal Avenue, as opposed to other assets held on trust.) 2. Thirdly, the other contemporaneous documents mentioned above, including what was on the Westpac application and Ned's solicitor's letter of 20 November 2019 tell against acceptance of Ned's case. Importantly, the latter does not merely undermine a case based upon an expressed intention, it also is inconsistent with an unexpressed understanding on the part of the Ned, and even after he had been servicing the loan without assistance from Roy's companies for some period. 3. Fourthly, although I am fully cognisant of the contestability of some of the repayments to Westpac, I did not understand there to be any dispute that at least some of the repayments were made by Bijkerk Investments, and not by Ned. I accept Ms Madigan's evidence that many of the $5,000 repayments were made by Bijkerk Investments and for some period of time there was approximate parity between those payments and those which were treated as salary to Ned. That is consistent with equal beneficial ownership, and inconsistent with Ned's case that the property was held on trust for him. There are also sporadic substantial repayments made by Bijkerk Investments. 4. It is not possible on the state of the evidence fully to resolve the underlying basis of all of the payments made to service the loan from Westpac. But I do find that Roy caused some very substantial payments to be made (including the deposits of $130,000 and $25,000 mentioned above). On Ned's case, those deposits were acts of substantial largesse – they were gifts which exceeded Ned's annual wages being paid at the time. It is much more plausible that they reflected Roy's intention to reduce the bank debt as quickly as possible on a property as to which Roy had, through Bijkerk Investments, a 50% beneficial interest. 5. Fifthly, there is the fact that the three men unquestionably participated at around this time in two other property ventures in 50/50 shares. In the case of 122 Saunders Street, companies controlled by them were named as co-owners in equal shares (at 45%, with Ms Madigan being a 10% tenant-in-common). Cadigal Avenue was different, in so far as Ned lived there, so far as the evidence discloses, rent-free. But why would that co-owned property investment be different? 6. Against the unchallenged evidence of Ms Madigan, and the other objective evidence summarised above, the testimonial evidence of Ned (and, to a lesser extent, Mr Clarke), would have to be very powerful in order to establish a common intention. However, not only was the evidence of both men deficient in the instances mentioned above, but I also bear in mind the nature of what both men were seeking to recollect. 7. There was ample scope for memories of conversations on this topic to be confused. This may be illustrated by the carefully framed questions early in Roy's cross-examination (T31.27-32): "Q. And it was your own view wasn't it that it would be a good idea if Ned has own apartment? A. No I mean the thing we purchased was together. Q. But you wanted Ned to have his own place to live didn't you? A. Yeah well he did." 1. Another example is at T31.46-50: "Q. Look you said to him I want you to have your own place didn't you? A. Well when you talk about own place it's to live there. You know, he had problems with the rental place that he was in as well you know and I didn't want that - I didn't want that for him. So we bought a place together for him to live in." 1. It is one thing for Ned to have his "own" apartment, and another for him to own his apartment (in the sense of beneficially own). It is at least inherently plausible – and, in my opinion, inevitable – that there were conversations between the men to the effect that Ned would have his own home to live in, in contrast to the rented accommodation he had previously resided in. It is easy to see how memory with all its frailties could distort those conversations so as to reflect statements about Ned's beneficial ownership, especially in circumstances where from September 2016 until May 2019 Ned had been maintaining payments from his own funds to Westpac. The succinct and self-evident statement by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 is reflected in the above. 2. The financial contributions made by Ned do not alter the position. They are readily reconcilable with his enjoying a 50% beneficial ownership of Cadigal Avenue. Insofar as Ned relied on his acquiescence in the profits from 120 and 122 Saunders Street being taken by Roy, this occurred in 2018 and does not alter my conclusion that Ned has failed to establish words or conduct over the previous four years giving rise to a common intention constructive trust or a proprietary estoppel. 3. I conclude that Ned has not established that either in 2014 when Cadigal Avenue was acquired, or thereafter, there was an express or implied common intention that it be held on trust for Ned alone. This is fatal to a common intention constructive trust. It is also fatal to any claim based on proprietary estoppel, which in substance was advanced in the alternative (T192.6-46), without opposition from the plaintiffs (T210.3-5). Ned's entitlement to declaratory relief concerning contribution 1. Ned accepted that a distinction between contribution at common law and in equity was that at common law an action for contribution cannot be maintained in advance of actual payment of more than the just proportion of the principal obligation, while equity acts quia timet where the apprehended over-payment appears sufficiently imminent: McLean v Discount and Finance Ltd (1939) 64 CLR 312 at 341; [1939] HCA 38; Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 at [52]. In an appropriate case, declaratory relief is available before any share of the co-ordinate liability has been paid: Wolmershausen v Gullick [1893] 2 Ch 514 at 529. Ned accepted that the threat was sufficiently imminent. After all, Ms Clarke threatens bankruptcy for the whole of the unpaid balance of Roy's and Ned's indebtedness to her. 2. However, Ned relied on what had been said in Lavin v Toppi (2015) 254 CLR 459; [2015] HCA 4 at [53]-[54]: "Prior to the Bank's covenant not to sue and the payment of the guaranteed debt, the respondents' equity was sufficiently cognisable in a court of equity to support a declaration that the appellants were obliged to make contribution to the discharge of the guaranteed debt. In this regard, the plurality in Friend v Brooker said: '[I]n Woolmington v Bronze Lamp Restaurant Pty Ltd, Needham J, whose opinion in such matters deserves great weight, said that as the authorities then stood, none had gone to the length of deciding that the plaintiff surety could maintain an equity suit for contribution without either having paid at least the amount due by the plaintiff under the guarantee or being under a liability by judgment to pay the full amount. However, Needham J was prepared to go so far as to make a declaration and order for contribution in favour of a surety who satisfied the court that he was willing able and prepared to pay at least his share of the principal debt. In the case before him, this was not so and relief was refused.' No doubt any declaration of the respondents' right to actual payment by the appellants would have been conditioned upon the respondents themselves meeting their obligations under the guarantee or proving their readiness, willingness and ability to do so. But to say this is merely to recognise that a plaintiff must do equity when seeking equity. It is not to suggest that a plaintiff's equity may be defeated by dealings between creditor and co-surety." [citations omitted, emphasis added]. 1. Ned made this submission: "So we say, your Honour, that [Roy] has not demonstrated readiness, willingness and - he has not either paid - not paid, but he has not done equity by - he has not demonstrated that he is able to do equity and he has not proved his readiness, willingness and ability to do so and for that reason your Honour must in this case follow the same course as Needham J followed in Woolmington v Bronze Lamp Company and withhold the declaration, or if there's some midway course, it must be a declaration heavily conditioned and qualified." 1. I disagree. The point of Woolmington v Bronze Lamp Restaurant Pty Ltd [1984] 2 NSWLR 242 was that equitable relief might be available even when there had not been either payment or a judgment against a co-obligor, if a co-obligor was ready, willing and able to pay. I do not regard Needham J as purporting to detract from the settled position that relief was available in equity "as soon as the creditor has acquired a right of immediate payment". In any event, this Court is bound by what was held by Gibbs CJ, with whom Wilson and Murphy JJ agreed, in Mahoney v McManus (1981) 180 CLR 370 at 376; [1981] HCA 54. That in turn derived from the endorsement, by Wright J in Wolmershausen v Gullick at 527-528, of the analysis in Lindley on Partnership, emphasising that a person who would imminently suffer loss "is not obliged to wait until he has suffered, and perhaps been ruined, before having recourse to judicial aid". 2. In the present case, Roy is subject to a judgment in respect of the entirety of the debt owed by him and Ned. Ms Clarke has acquired a right of immediate payment. There is a real prospect of Roy paying more than his share of the judgment debt; cf Harpley Nominees Pty Ltd v Jeans [2006] NSWCA 176 at [34]. 3. The pleaded defence based on estoppel was scarcely pressed, if indeed it was not abandoned (T203.22-30). In any event, I do not accept that Ned was told that he would have no liability to Ms Clarke and relied upon such statement in circumstances giving rise to an estoppel. Roy denied this (T61.13-17). This aspect of Ned's case sits ill with the facts that it was Ned who obtained short term non-bank finance to acquire Tallebudgera, for which Ned was concededly liable, and that it was Ned who was personally on title. 4. I do not accept that Ned was not liable on the joint borrowing. I find that the loan to Roy and Ned was no different from the loans to acquire other co-owned properties. Conclusion and orders 1. It follows that there is no reason to deny to Bijkerk Investments the ordinary right of a co-owner to a sale pursuant to s 66G of the Conveyancing Act. Such relief is available "almost as of right": see the authorities collected in Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 at [38]-[40]. Ned's defence that Cadigal Avenue is held on trust for him pursuant to an undocumented express or constructive trust fails. In due course, the cross-claim will be dismissed. 2. It also follows that Roy is entitled to declaratory relief to quell the controversy between the two men that the latter is obliged to pay half of the judgment debt obtained by Ms Clarke when both men defaulted on their obligations to repay her. Roy's summons proposes two declarations, one more elaborately drafted the other. He confirmed they were sought in the alternative. I favour the simpler. 3. I would ordinarily make orders here and now. However, in light of the existing Mareva relief, and to avoid any possibility of argument of contravening those extant orders, I will follow the course suggested during the hearing. Orders substantially to the effect of the document provided to me at the end of the hearing for the sale of Cadigal Avenue, together with the declaration modelled upon prayer 11 of the summons, should be provided to the liquidators for their approval before they are made. (Those orders abandon a problematic claim that Bijkerk Investments' share be directed to pay Roy's half of the outstanding judgment debt to Ms Clarke.) If there is agreement on the form of substantive orders, they will be made in chambers. If that can occur before 8 October 2020, so much the better. It is not clear how long the liquidator will require to provide such confirmation. 4. Subject to any party seeking a special costs order, costs should follow the event. The main issues were Ned's claims for an express or constructive trust in opposition to the sale, and to oppose the declaratory relief concerning contribution. Ned should prima facie pay the costs of Bijkerk Investments and Roy on the summons and the cross-claim. I am conscious that each side abandoned minor aspects of their claims (a claim for a resulting trust in the case of Roy, claims based on estoppel and the claim to half of the proceeds of 120 and 122 Saunders Street in the case of Ned); my present view is that those cancel each other out insofar as they relate to costs. 5. Bijkerk Investments seeks an order that its costs be paid out of the proceeds of sale, or Ned's share of the proceeds of sale. It is not clear that this is appropriate; cf McKay v McKay (Costs) [2008] NSWSC 256 at [7]. What was in issue was the existence of a beneficial interest on the part of Ned. That is not readily seen as an incident of co-ownership, which is the way in which the order sought by Bijkerk Investments is ordinarily justified. Further, insofar as the costs are costs of Roy as opposed to his company, I do not as presently advised see why he should be placed in the position of a secured creditor. 6. However, I regard the parties as entitled, if so advised, to be heard further as to costs. 7. For the present, I merely direct the parties to supply short minutes of order as agreed, or orders sought by them, and short submissions in support, by 12 October 2020, noting that insofar as they are agreed, they may be made sooner in chambers. I will list the matter for directions at 9.30am on 14 October 2020, on the basis that that listing will be vacated if there is no dispute as to orders, or if the parties prefer to have any such dispute resolved on the papers. ********** Amendments 06 October 2020 - Catchwords: "common interest" changed to "common intention" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 October 2020