Supreme Court New South Wales Medium Neutral Citation: Hansen v Noble [2021] NSWSC 138 Hearing dates: 14, 15, 16 and 17 September 2020; final written submissions received 10 November 2020 Decision date: 24 February 2021 Jurisdiction: Equity Before: Robb J Decision: See pars [292] to [306]. Parties should confer and provide draft short minutes of order giving effect to these reasons. Catchwords: EQUITY — Equitable charges and liens — Contribution to acquisition or improvement of another's property — Intention –– Resulting trusts –– Common intention constructive trusts –– Constructive trusts arising out of the failure of a joint endeavour –– Finding as to the existence of such trusts evolving from one to the other over time as a result of changing circumstances EQUITY — Equitable interests in property — Nature of equitable interests EQUITY — Equitable remedies — Equitable compensation Legislation Cited: Conveyancing Act 1919 (NSW) Social Security Act 1991 (Cth) Cases Cited: Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 Boyd v Thorn [2016] NSWSC 588; (2016) 18 BPR 35 Daniel Terry Behman v Tarek Behman [2015] NSWSC 1787 McKay v McKay [2008] NSWSC 177 Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25 Shepard (Trustee) v Behman [2019] FCA 1801 Shepherd v Doolan [2005] NSWSC 42Spink v Flourentzou [2019] NSWSC 256 Wallis v Rudek [2020] NSWSC 162 Category: Principal judgment Parties: Gloria Ann Hansen (plaintiff) Tracey Lee Noble (defendant) Representation: Counsel: Gordon McGrath (plaintiff) Sean Docker (defendant) Solicitors: Browns the Family Lawyers (plaintiff) Caldwell Martin Cox (defendant) File Number(s): 2018 / 272487 Judgment 1. In these proceedings the plaintiff, Gloria Ann Hansen, sues her daughter, Tracey Lee Noble, for equitable relief arising out of the circumstances in which the defendant acquired an interest in two residential properties. 2. The first property, a home at an address in Wattle Grove Sydney, was transferred to the defendant on 24 June 2005 by the plaintiff and her brother, Allan Reginald Somerville, as executors of the estate of their mother, the late Mary Somerville, for a price of $439,440. 3. The second property is land and a residence at Lakesland in Western Sydney, which the defendant purchased with her husband, Murray Stuart Noble, in 2006. 4. The plaintiff called evidence in support of her case from her elder daughter, Maryann Carter, and from the defendant's daughter, Ashlee Anne Marie Burdon. 5. As the parties did in their submissions, with no disrespect intended, I will refer to the members of the family who gave evidence by their first names. 6. Gloria also called evidence from a solicitor, Helen James, who acted for the parties to the contract for sale of the Wattle Grove property, and also Raymond Victor Zavattaro, who was the witness to Tracey's signature to a mortgage that was executed by Gloria and Tracey in connection with the transfer of the Wattle Grove property. 7. Finally, Gloria called evidence from one of the long-term tenants of the Wattle Grove property, Darren Mark Cooper. Relief claimed by Gloria 1. The pleadings that were in effect at the time of the hearing were an amended statement of claim filed by Gloria on 27 May 2019 and a further amended defence to amended statement of claim filed by Tracey in court on 15 September 2020. 2. By prayer 1 of the amended statement of claim, Gloria seeks a declaration that Tracey holds the Wattle Grove property subject to a constructive trust in favour of Gloria. 3. However, the practical effect of the declaration sought by prayer 1 is immediately varied by prayer 2, which seeks relief in the following terms: Declaration that the defendant can acquire the equitable interest in the [Wattle Grove property] held by the defendant for the plaintiff by: a. repaying to the plaintiff the funds made available by the plaintiff to acquire the [Wattle Grove property] in the name of the defendant without interest, and b. repaying to the plaintiff the funds spent by the plaintiff in making payments towards: i. paying principal, interest and fees on borrowings made by the defendant and secured on 1. the [Wattle Grove property] and/or 2. [the Lakesland property]. ii. rates, house insurance, water rates, repairs and maintenance and other costs of owning or maintaining: 1. the [Wattle Grove property] and/or 2. [the Lakesland property]. c. paying to the plaintiff the difference between the amount of all rent and other income derived by the defendant from the [Wattle Grove property] and the amount paid by the defendant in reduction of the mortgage. d. interest. 1. It must be noted that there is an ambiguity in the wording of prayer 2 in that prayer 2a seeks a declaration the subject of which is Tracey repaying to Gloria the funds made available to acquire the Wattle Grove property without interest, but prayer 2d appears to seek interest on all of the money referred to in the prayer. There is a question of fact in this case as to whether, if Gloria establishes that she is entitled to reimbursement for money paid by her towards the acquisition of either property, there was an arrangement that Tracey would pay interest on that money. 2. The combined effect of prayers 1 and 2 appears to be that, even if Gloria succeeds, Tracey will enjoy the benefit of her legal ownership of the Wattle Grove property provided that Gloria receives the money to which she is entitled. That could occur by refinancing or from the proceeds of sale upon the sale of the Wattle Grove property. 3. In prayer 3, as an alternative to prayers 1 and 2, Gloria seeks a declaration that she is entitled to an equitable charge over the Wattle Grove property to secure Tracey's liability to repay her the same monies as are described in prayer 2. 4. By the filing of the amended statement of claim, Gloria added a further alternative claim for relief by prayer 4, by which she seeks a declaration determining the amount of contributions made by Gloria in respect of the purchase of the Wattle Grove and Lakesland properties, a declaration that Tracey holds both properties subject to an equitable charge in respect of such contributions and interest, orders for the appointment of trustees for sale of both properties, and orders for the distribution of the proceeds of sale to discharge the equitable charge, to pay Gloria's costs of the proceedings, and pay the balance to Tracey. 5. Two features of the prayers for relief must be noted. First, the different forms in which the relief is couched seek restitution, and do not claim any share in either property that might remain after restitution has been achieved. 6. Secondly, Gloria seeks relief in relation to payments made towards the acquisition of the Lakesland property, as well as what is in effect an equitable charge over that property in the form of a portion of the proceeds of sale. As noted above, Murray is a joint owner of the Lakesland property. He has not been joined as a party, and Gloria has not pleaded the basis of any entitlement to relief against him. Summary of primary events 1. The present case has features that are more complex than some others where, within a family, one person contributes funds towards the purchase of a property that is placed in the name of another. As will be seen, Gloria applied her one-third share in her deceased mother's estate, plus funds that she had accumulated in a bank account in the name of Tracey, towards the purchase of the Wattle Grove property in the name of Tracey. For that purpose, Tracey had to borrow $150,000 in her own name on first mortgage security over the Wattle Grove property. 2. Between the date of the contract and its completion, Gloria's case is that she also agreed to make mortgage payments from her own funds. Gloria's case is that it was agreed between herself and Tracey that, notwithstanding that the Wattle Grove property would be transferred into Tracey's name, it would not be her property until she had entirely repaid Gloria. 3. Tracey denies this case, and claims that Gloria agreed to make a gift to Tracey. 4. Initially, it was expected that Tracey and Ashlee would live in the Wattle Grove property, but that did not happen. After six months or so, it was agreed to rent out the Wattle Grove property and to apply the rent towards mortgage repayments. According to Gloria, she continued to make additional payments against the mortgage. The whole of the rent was paid to Tracey so that it could be applied against the mortgage. That left Gloria to pay outgoings not paid by the tenants. 5. In 2006, Tracey and Murray purchased the Lakesland property on the security of mortgages over the Lakesland property and the Wattle Grove property. The deposit was initially financed by a drawdown on the Wattle Grove mortgage. 6. After some time, there was a further substantial drawdown on the Wattle Grove mortgage and the proceeds were used to reduce the Lakesland mortgage. That happened because Tracey and Murray were living at Lakesland and there were negative gearing advantages to Tracey and Murray of a substantial portion of the Lakesland mortgage being transferred to the mortgage over the Wattle Grove property. 7. According to Gloria, she was persuaded by Tracey to agree to this arrangement and also to make payments towards the Lakesland mortgage instead of the Wattle Grove mortgage. 8. Gloria's case is that she was led to believe by Tracey that this course would lead to both of the mortgages being repaid more quickly, which would lead to Tracey being in a financial position to start reimbursing Gloria for the money that she had paid to enable both properties to be acquired. 9. Unfortunately, the relationship between Gloria and Tracey deteriorated, in part because of Gloria remonstrating that the time had well arrived when Gloria could expect Tracey to honour her agreement and begin the reimbursement process, instead of Tracey using her equity in the properties to drawdown funds for her personal purposes. It is accepted by the parties that the relationship broke down irretrievably on 5 April 2013. Since that time, Tracey has adopted the position that she has no obligation to reimburse Gloria for any funds. 10. The issue is further complicated by the fact that, by 2013, only a couple of hundred thousand dollars was owed on the mortgages over the two properties, but that, by June 2020, an amount of about $420,000 was owed as a result of redraws made by Tracey and Murray. 11. These events have the consequence that, assuming that Gloria did not make gifts of all of the money that she paid towards the acquisition of the two properties, the nature of the agreed arrangement between Gloria and Tracey changed over time. Initially, according to Gloria, there was an explicit agreement concerning the true ownership of the Wattle Grove property. However, as Gloria claims, Tracey subjected her interest in the Wattle Grove property to an additional mortgage in order to acquire the Lakesland Property. Thereafter, so to speak, the equity in the Wattle Grove property was substantially transferred to the Lakesland property to obtain the taxation advantage. The parties did not explicitly address the significance of the changes to Gloria's proprietary entitlements to secure her entitlement to reimbursement. Applicable equitable principles 1. Given the unusual complexity of the present case, it will be useful to consider at the outset the principles of equity that may apply. 2. This case requires the Court to apply the equitable principles that govern the circumstances in which the Court will grant equitable remedies that require the legal owner of property to deal with that property differently than the exercise of common law rights of ownership would permit. 3. Gloria does not rely upon any assurance of land made by Tracey, nor did she claim that Tracey created or disposed of an interest in land by any intentional act on her part, or that she declared a trust in Gloria's favour. Consequently, the requirements for the validity of such dispositions imposed by ss 23B and 23C of the Conveyancing Act 1919 (NSW) do not apply. Nor does Gloria seek to enforce any contract with Tracey so s 54A of the Conveyancing Act is also inapplicable. 4. Gloria's entitlement to relief depends upon the creation of resulting or constructive trusts, so that the absence of writing signed by Tracey creating the interests in the land asserted by Gloria will not be fatal to her claim: s 23C(2) of the Conveyancing Act. 5. Equity will grant relief to prevent a legal owner exercising his or her common law rights of ownership where that exercise would be unconscionable in accordance with established equitable principles. Those principles generally justify equitable intervention in cases where one party's contribution to the acquisition of the property is such that, having regard to the circumstances, including the expressed and implied intentions of the parties, good conscience requires that the ownership of the property should, as between the parties, be treated as having effect in a way that diverges from the incidents of ownership that are recognised by the common law. 6. The historical development of Equity has tended to establish recognised circumstances or categories in which the exercise of unfettered common law rights of ownership will be treated as being unconscionable and justify equitable intervention. 7. That consideration has an acute relevance to the present case, because its facts do not suggest that Gloria's claims may be fitted into one or another of the several recognised categories of unconscionable conduct. Instead, the facts outlined above give rise to the possibility of different categories applying over time in an evolving or overlapping way as the nature of the use of the Wattle Grove property changed, the Lakesland property was acquired, changes were made to the way that the mortgages over the two properties secured the accumulated debt, and Tracey and Murray increased the debts secured by the mortgages by drawing down funds for their personal use. 8. The consideration of the equitable principles that follows draws heavily on the judgment of White J (as his Honour then was) in Shepherd v Doolan [2005] NSWSC 42. I consider that this judgment, with which I respectfully agree, is a sufficiently concise, though fully supported, explanation of relevant principles to serve for the purposes of determining the present case. 9. White J first set out an explanation of how Equity will recognise the creation of a resulting trust where the funds for the acquisition of property are not provided exclusively by the party who becomes the owner at common law, or where the proportions in which those funds are provided by multiple owners differ from the proportionate common law ownership. His Honour said: [21] However, where two persons jointly provide the purchase money for property and the property is put into the name of one of them, then, unless the relationship between the parties gives rise to a presumption of advancement, it is presumed that the beneficial ownership of the property is held in the proportions in which they each contributed the purchase money. (Calverley v Green (1984) 155 CLR 242 at 246–247, 258–259)…The presumption can be rebutted by evidence of actual intention. … [23] Ordinarily, the presumption of a resulting trust arises at the time the property is acquired. If the presumption is not displaced, then, unless there is a later agreement to alter the equitable interests in the property acquired, or the beneficial interests arising under the resulting trust are displaced by an interest arising under a constructive trust, the interests are not changed by later contributions to the conservation or improvement of the property. (Currie v Hamilton [1984] 1 NSWLR 687 at 691; Calverley v Green at 262–3). If the evidence establishes that it was the intention of the parties that their respective interests should be in accordance with something other than their contributions to the purchase price, such as their contributions to the purchase of the land and discharge of a mortgage, effect will be given to that intention so that although the trust will arise at the time of purchase, the quantum of their interests will fluctuate in accordance with that intention. (Bloch v Bloch (1981) 55 ALJR 701 at 704; Currie v Hamilton at 692; Calverley v Green at 262–263)… … [26] The presumption of resulting trusts has an historical basis explained by Campbell J in Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 at [130]-[134]; and the High Court in Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3; (2005) 79 ALJR 550; 213 ALR 230 at [24]). Equity presumes that parties intended that land be held beneficially otherwise than in accordance with the legal title, where, there being no presumption of advancement, land was transferred by one to another for no sufficient consideration, or a party paid the whole or part of the purchase price of a property conveyed to another, or the parties contributed in unequal proportions to the payment of the purchase price and took a conveyance of the property into their joint names. As Bryson J (as his Honour then was) demonstrated in Little v Little (1988) 15 NSWLR 43, the circumstances in which the presumption of a resulting trust arises are all referable to persons paying the whole or part of the purchase price of property. In Currie v Hamilton McLelland J (as his Honour then was) held (at 691) that it was the aggregate cost of the purchase price and incidental costs, fees and disbursements which should form the basis of a calculation. This view was upheld in the Court of Appeal in Ryan v Dries (2002) 10 BPR 19,947; [2002] NSWCA 3 at [53] where Hodgson JA said: … on balance, consistently with McLelland J's view, I prefer the view that equity, dealing with presumed intentions and preferring substance to form, would have regard to the totality of the money which purchasers have in truth outlaid to obtain the property. That means that normally the proportion should be determined with reference to the proportions of payments for both the purchase price and the incidental expenses that had to be incurred in order to obtain the property. 1. Gloria's case is that Tracey only contributed the $150,000 borrowed from ING to the cost of the acquisition of the Wattle Grove property. Gloria says that, as a practical matter, she contributed her one third interest in the value of the Wattle Grove property, as she forewent the distribution to her of her share in her mother's estate represented by the Wattle Grove property. Gloria also says that she contributed money that she received from the estate to the purchase price. Finally, Gloria says that money that was transferred out of a bank account in the name of Tracey and applied to the purchase price was in fact Gloria's money. 2. These matters clearly give rise to the possibility that, at the time the Wattle Grove property was transferred to Tracey, she held that property partly on constructive trust for Gloria in proportion to the respective contributions of the parties to the price. 3. It now appears to be established that the presumption of advancement applies against a mother in favour of her children as much as it applies against a father: see Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25 at [32]. Gloria accepted that the presumption of advancement applied to her. 4. There is thus a question about whether no resulting trust arose in favour of Gloria because her contributions were intended to be a gift to Tracey, and in this respect, the existence of the presumption of advancement imposes an evidentiary burden on Gloria to persuade the Court to find that in the circumstances no gift was intended. 5. The present case also gives rise to the possibility that the circumstances considered by White J at [23] will also apply, because it is Gloria's claim that it was initially agreed between her and Tracey that Gloria would make the mortgage payments and that the Wattle Grove property would not become Tracey's until Gloria was reimbursed for all payments. That may have the effect that Gloria's share in the beneficial ownership of the Wattle Grove property increased over time as a result of the resulting trust in proportion to her increasing contributions to the payment of the purchase price through the making of the mortgage payments. 6. White J then considered, at [30] to [45], the principles governing the creation of constructive trusts in this context, which give rise to related but different considerations than those that apply to resulting trusts. I respectfully consider that his Honour has accurately set out the principles that govern the creation of a common intention constructive trust. I will limit my extract from his Honour's reasons to the following initial paragraphs, where his Honour said: [30] The ultimate basis for the imposition of a constructive trust is that it would be unconscionable for the holder of the legal title to the property to assert that he holds it free of any beneficial interest in the claimant. However, although "unconscionability" is the underlying basis upon which equity will intervene, it is not itself a sufficient description of the principles upon which equity does so. Equitable rights do not arise merely because the Court considers it fair in all the proven circumstances that the legal owner of property should hold it, or a portion of it, for the benefit of another. (Muschinski v Dodds (1985) 160 CLR 583 at 615–616). [31] One class of case where equity will intervene to prevent the unconscientious denial by the legal owner of another party's rights, is where the parties agreed, or it was their common intention, that the claimant should have an interest in the property owned by the other, and the claimant acted to his or her detriment on the basis of that agreement or common intention. (e.g Grant v Edwards [1986] Ch 638; Green v Green (1989) 17 NSWLR 343; Maharaj v Chand [1986] AC 898 at 907). … [34] Where a constructive trust is imposed, based upon the parties' common intention as to the ownership of property upon which the claimant has acted to his or her detriment, the inquiry is as to the actual intention of the parties. The law does not impute a presumed intention to the parties based upon what the Court considers fair and reasonable persons in the position of the parties would have intended had they turned their minds to the issue. (Pettitt v Pettitt [1970] AC 777 at 804, 81, 816–817; Gissing v Gissing [1971] AC 886 at 900, 902, 905–909; Allen v Snyder [1977] 2 NSWLR 685 at 690, 698, 701). 1. The following observations of White J concerning how the quantum of the beneficial interest in the subject of a common intention constructive trust is to be determined are also relevant in the present case: [41] The quantum of the claimant's beneficial interest will be that which the parties agreed upon or intended, if that can be established. In Green v Green and in Parianos v Melluish it was held that although the parties did not turn their minds to the particular form of title which they intended the claimant to have, the conclusion which best gave effect to the intentions of the parties was that they were beneficially entitled to the property as joint tenants, so that upon the death of the respondent, the claimant became the absolute beneficial owner by survivorship. [42] If the evidence does not permit of a finding as to the precise size, nature and extent of the beneficial interest the parties intended the claimant to have, one starts with the maxim that equality is equity. (Green v Green at 355). But that standard can and should be departed from where the parties make disproportionate contributions to the acquisition of the property. In Baumgartner v Baumgartner, Mason CJ, Wilson and Deane JJ said (at 149–150): Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they should share the beneficial ownership equally as tenants-in-common, subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind. In Gissing v Gissing, Lord Pearson, who considered the issue was whether there was a resulting trust in favour of the wife by virtue of her contributions towards the purchase of the house, said (at 903): I think also that the decision of cases of this kind has been made more difficult by excessive application of the maxim 'equality is equity.' No doubt it is reasonable to apply the maxim in a case where there have been very substantial contributions (otherwise than by way of advancement) by one spouse to the purchase of property in the name of the other spouse but the proportion borne by the contributions to the total price or cost is difficult to fix. But if it is plain that the contributing spouse has contributed about one-quarter, I do not think it is helpful or right for the court to feel obliged to award either one-half or nothing. … [44] Unlike the presumption of a resulting trust, there is no reason that the beneficial interest cannot change over time. (Green v Green at 356; Austin v Keele at 290). [45] However, if there are to be changes to the proprietary interests of the parties after the property was acquired, the changes must occur according to the same principles as those upon which a constructive trust may arise for the first time. (Pettitt v Pettitt at 816). Where the parties make continuing but different contributions to the maintenance and improvement of the property, I do not accept that the beneficial interests which arose on acquisition of the property are changed merely because the parties later make disproportionate contributions of that kind. If the parties agreed or intended that they should vary their beneficial interests in the property, and one party acted to his detriment, then their beneficial interests could change during the course of the relationship. It may be possible to infer such an agreement or intention from what the parties did as well as what they said. The parties' later conduct may also provide a basis for inferring their intentions at the time the property was acquired. It might also be inferred that the parties intended at the time the property was acquired that their respective beneficial shares would be left to be determined at a future date, eg when the property is sold, based on their contributions to that time. (Gissing v Gissing at 909 per Lord Diplock; Burns v Burns per Fox LJ at 327). 1. White J's statement of the principles that govern the creation of a common intention constructive trust was succinctly summarised by Rein J in Daniel Terry Behman v Tarek Behman [2015] NSWSC 1787 in the following terms: [32] Given that Daniel did not contribute to the purchase price (or ancillary costs) he does not assert a resulting trust but rather a constructive trust based on an asserted agreement or common intention. Reference was made to White J's decision in Shepherd v Doolan; Shepherd v Doolan; Est. Doolan [2005] NSWSC 42 and I think that is a most helpful adumbration of the principles which need to be borne in mind in claims concerning constructive trusts… [33] I derive the following principles from Doolan: (1) the inquiry for the purposes of determining whether there was a common intention is inquiry as to the actual intention of the parties. The law does not impute a presumed intention to the parties based upon what the court considers fair and reasonable persons would have intended: see [34] (2) the intention need not be that the parties have a specific share of the property (3) intention may be established by: (a) agreement as to how the property should be held (b) express statements of intention (c) intentions inferred from conduct (4) a common intention that a party have a beneficial interest in a property owned by another will not be inferred merely from their joint occupation of property, nor the carrying out of household duties, nor the bringing up of children on the property, nor the doing of repairs, renovations, maintenance, decoration or improvement, nor the provision of furniture (Pettitt v Pettitt [1970] AC 777 at 805–6, 811, 818, 826; Gissing v Gissing [1971] AC 886 at 900, 910; Burns v Burns [1984] Ch 317 at 326, 328, 342) (5) the intentions may be inferred from financial contributions, direct or indirect, to the acquisition of property, including the paying of mortgage or the payment of expenses which free up funds for that purpose (see [38]). In the case of "the common intention" constructive trust there is no presumption that the beneficial interest is in proportion with the contribution of the purchase price (6) declarations about intentions before or at the time of the transaction or so close in time after the transaction as to constitute a part of it can be relied on (see [39]) (7) a plaintiff must show that he or she acted to his or her detriment in a way referable to the agreement or intention that she have an interest in the property (8) conduct which is insufficient to establish a common intention as to ownership of the property way be sufficient to constitute relevant actions to the plaintiff's detriment to establish a trust if the common intention is established otherwise (9) conduct may be both the evidence from which an intention that the plaintiff have a beneficial interest can be inferred and the act of detrimental reliance (10) equality is equity but that statement can be departed from when the parties make disproportionate contributions to the acquisition of the property (11) the constructive trust may arise after the acquisition of a property where the common intention is formed at a later time: Doolan at [45] and see Aytul Ak-Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044 at [55] 1. Rein J's summary was set out with apparent approval by Thawley J in Shepard (Trustee) v Behman [2019] FCA 1801 at [22]. 2. In the present case, Gloria and Tracey agreed that the Wattle Grove property would be rented out after it became clear that the property would not be used as a home for Tracey and Ashlee. That agreement was made after Tracey acquired the property. 3. Furthermore, the effect of the acquisition by Tracey and Murray of the Lakesland property on the security of mortgages over that and the Wattle Grove property, the change whereby Gloria repaid the mortgage over the Lakesland Property as well as the transfer of the burden of the debts between the mortgages over the two properties enlivens the possibility that, in complicated ways, the ownership of one or both properties may have become subject to changing constructive trusts. This is because of changes in the common intention of the parties and the detriment that Gloria suffered by reason of her continuing mortgage repayments and payments of outgoings in circumstances where the value of the 'equity' in the properties varied by reason of changes to the burden of the mortgage debts. 4. Finally, White J set out an outline of the principles relevant to the imposition of constructive trusts in circumstances where a joint endeavour between the parties has failed. His Honour said: [32] Another class of case where equity will intervene is to " … [restore] to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them." (Baumgartner v Baumgartner (1987) 164 CLR 137 at 148). The characteristics of a constructive trust which arises on this basis were explained by Campbell J in West v Mead [2003] NSWSC 161 at [52]-[64]. His Honour said (at [59]): … a plaintiff needs to establish there is indeed a joint endeavour between the parties, in which expenditure is shared for the common benefit. It is also necessary to identify what the scope of that joint endeavour is … Further, for any couple, the scope of the joint endeavour they are engaged in might change from time to time. If, within the scope of a joint endeavour … an asset is acquired, as a result of contributions both parties have made, and for a purpose of the ongoing joint endeavour of the parties, this gives rise to the presumption that the beneficial interest ought be shared equally. That presumption can be displaced if one party is able to show that the contributions, both financial and non-financial, to that asset should be regarded as unequal. [33] The imposition of such a trust does not depend on the actual or presumed intention on the part of the prospective trustee to hold property on trust. Baumgartner v Baumgartner was significant for its expansion of the nature of the contributions which may be taken into account in determining the parties' proprietary interests to include non-financial contributions. (Green v Green at 369; West v Mead at [56]). The plaintiff says that the acquisition of the Nora Head property was a joint endeavour between her and the deceased to which each made financial and non-financial contributions. However, more is required to impose a constructive trust on these principles. The joint endeavour must fail, or there must be a premature termination of the parties' joint relationship. (Baumgartner v Baumgartner at 148–149; West v Mead at [64]). In the present case there was no premature termination of the parties' joint relationship or failure of their joint endeavour. I do not consider that the principles established in Baumgartner v Baumgartner and applied in Hibberson v George (1989) 12 Fam LR 725 apply directly in this case. I turn to the claim based on a "common intention" constructive trust. … [46] A constructive trust in different proportions might also arise by other means, such as on the principles of Baumgartner v Baumgartner. In the case of a premature termination of a joint endeavour, if the presumption that equality is equity is displaced, the Court will consider the financial and non-financial contributions made by the parties during the course of the relationship or the endeavour. Such a trust arises when the relationship or endeavour comes to a premature end. (Anson v Anson [2004] NSWSC 766 at [34]-[37]). This is not such a case. 1. As I noted in Spink v Flourentzou [2019] NSWSC 256 at [266], Brereton J (as his Honour then was) said the following in relation to the determination of the relief that ought to be given in McKay v McKay [2008] NSWSC 177: [30] The cases to which I have referred all show that the fundamental principle in this area of discourse is the restoration of contributions upon failure of the substratum of a joint venture. They also show that in those cases that has actually been the result. None of those cases saw one party being permitted to retain the benefit of the other's contribution in return for paying out the other. Such a result would be inconsistent with the basal concept of a return of the contributions on failure of the joint venture. [31] However, too many authorities stress the flexibility of equitable remedies in this area to deny that there is at least some flexibility in what equity can decree. In particular, there is no doubt that, in an appropriate case, a charge securing the return of the contribution may be preferred to a constructive trust based on the contributions. But, from the perspective of principle and certainty, it is unsatisfactory and unhelpful, as well as inaccurate, to state that the remedy is an entirely flexible one. One needs to identify a principle that guides what is the appropriate remedy, or at least the prima facie remedy or starting point. [32] Thus, after toiling for some time with the concept of the minimum equity to do justice in the field of proprietary estoppel, the law has moved to the position that the prima facie remedy in such a case is the making good of the relevant assumption on which the plaintiff acted, although where that relief would be disproportionate to the requirements of conscionable behaviour, equity may, as a matter of discretion, decree something less [Giumelli v Giumelli (1999) 196 CLR 101; Galaxidis v Galaxidis (No 2) [2002] NSWSC 831 [52]–[55]; O'Neill v Williams [2006] NSWSC 707 [73]; Tory v Tory [2007] NSWSC 1078]. [33] In the field of the premature failure of the substratum of joint ventures, the cases made clear that the guiding principle is the return of contributions. Once again, it may well be that, as a matter of discretion, equity can decree something less than that where to so would be disproportionate to requirements of conscionable behaviour. But, in my opinion, the prima facie remedy in such a case is the return of contributions. 1. It may be that the facts of this case initially suggest the relevance of the principles concerning the creation of resulting trusts, but the changing nature of the circumstances over time may make the application of the principles governing the creation of common intention constructive trusts appear more appropriate. It may not be natural to analyse the circumstances of the initial relationship between the parties in terms of their being a joint endeavour. However, there may be a case for concluding that the paradigm that is most apt to meet the case, as circumstances changed with the acquisition of the Lakesland property, is that being one of joint endeavour between the parties. 2. These are questions that it will be necessary to revisit after consideration has been given to the pleadings and the evidence. Initial arrangement between Gloria and Tracey 1. It will be convenient to approach the determination of the issues chronologically, starting with Gloria's claim that she reached an arrangement with Tracey that Tracey would hold the title to the Wattle Grove property on trust for Gloria until Tracey had reimbursed Gloria for Gloria's contribution to the purchase of the Wattle Grove property and the mortgage repayments. The alternative is that Gloria made a gift of these funds to Tracey. The determination of this issue will influence the resolution of the subsequent issues between the parties. 2. It was accepted on the pleadings that Gloria's mother died on 15 February 2005 and that Gloria and Allan were the executors of the estate. The estate included the Wattle Grove property. 3. Gloria pleaded the terms of her initial arrangement with Tracey in the following terms: 11. In or about the period from March 2005 to May 2005 the defendant raised, and the plaintiff and the defendant discussed and explored, the possibility of the [Wattle Grove property] being purchased from the estate by the plaintiff in the name of the defendant, who was entitled to the duty exemption as a first home buyer, the defendant being allowed to live in in the [Wattle Grove property] with Ashlee and being allowed to acquire the [Wattle Grove property] from the plaintiff by repaying everything that the plaintiff had paid and contributed to buy the [Wattle Grove property]. 12. In this period the executors obtained a valuation and agreed to sell the property to the plaintiff and the defendant for $439,440. 13. The plaintiff and the defendant reached agreement (the "Purchase Agreement"): a. the plaintiff would contribute her interest in the estate of her mother and additional funds amounting to a little over $80,000 towards the purchase of the [Wattle Grove property] b. the [Wattle Grove property] would be acquired in the name of the defendant c. the defendant would borrow the amount necessary to settle the purchase being approximately $150,000 d. the plaintiff would make mortgage payments e. the defendant would hold the [Wattle Grove property] for the plaintiff f. the defendant could live in the property with Ashlee g. the defendant could acquire the [Wattle Grove property] from the plaintiff by paying to the plaintiff the amount of all payments made by the plaintiff including her share in her mother's estate h. unless and until the defendant did so, the defendant held the property for the plaintiff. 1. Tracey denied these allegations, save for the claim that Gloria obtained a valuation of the Wattle Grove property and the executors agreed to sell that property to Tracey for $439,440. Gloria's evidence of initial arrangement 1. Gloria gave the following evidence in support of these allegations in her initial affidavit. Allan was unable to be called as a witness because he died in 2015. Gloria said in her 26 September 2018 affidavit: 22. It was about a month or so after my mother's death (in about March 2005) when the defendant first raised the possibility of her acquiring an interest in Wattle Grove in the following way. The defendant said "Wouldn't be great if you could get the house from nanna's estate, and that would give Ashlee and me somewhere to live. I would pay you back in full plus interest and then I would own the property. It would be good because we would be across the road from Maryann." (Maryann is my eldest daughter and the sister of the defendant) At first I responded "That might be a possibility. I will have to think about it" Over the next days and weeks we had a number of discussions developing the idea. I had some concerns about the ability of the defendant to pay me back and I expressed those to her on a number of occasions saying "How are you going to pay me back?" She responded by saying "That won't be a problem now that I am working" [Gloria then gave evidence of discussions with Allan and Ms James]. 28. Once the sale price was agreed, the defendant and I had more detailed discussions as to the exact way that the purchase was to be funded. I looked at all money that was available to me from savings or other sources, and determined that this amounted to a little over $80,000. 29. We worked out that once I had put in all of my share in the estate of my late mother and the money available to me by way of savings, a further loan of about $150,000 would need to be obtained from a bank or lending institution. I recall that I said to the defendant words to the effect of "We are going to need to borrow about $150,000" The defendant said "Okay–I will see if I can get a loan. I have a bank account with ING and I will ask them" Given that the defendant was to be the legal owner of the property, I thought it appropriate that she obtain the loan. The defendant subsequently told me some time prior to the exchange of contracts in relation to the sale of Wattle Grove on 20 May 2005 "ING said they will lend me $150,000" … 31. I have said in my affidavit sworn 4 September 2018 that in around June 2005 the defendant and I had the following conversation: Myself: We can put Wattle Grove in your name but you do not own it yet. I have put all the money into it and you will buy it off me by repaying me all of money I have advanced, including all of the money I put in from mum's estate, which was my full inheritance. I will make the payments on the mortgage to ING and you can pay me that back later. Once all of the payments have been made to me, you will be the owner of the property. Defendant: That's great mum, it will give me a home for my daughter and myself to live in. It is true that we had a conversation to that effect in around June 2005 but this was one of a number of conversations to a similar effect. We had a large number of conversations about the basis upon which the legal title to Wattle Grove was to be transferred to the defendant. These conversations occurred throughout April-July 2005, and the subject arose (albeit less frequently and in other contexts) in the years thereafter. 32. Sometime shortly after 4 May 2005 I told the defendant about the document that I had signed with Mrs James. I said "Helen James advised that we should sign a document saying that I am lending you money from the estate to buy Wattle Grove. She thinks that is the best way to protect us both, including protecting you against any claim that might be made by a future partner or husband" The defendant responded "You won't need it. I will pay it back. But if that is what Mrs James says, then okay" I said "But Wattle Grove is yours in name only until you pay back all the money that you owe me" She responded "Yes–I understand" … 36. Both before, after and during the period 4 May 2005-24 June 2005 the defendant and I continued to have discussions about the ownership of Wattle Grove and the payment of the debt… 1. A number of features of this evidence should be noted. 2. Gloria said that she had numerous conversations with Tracey on the subject of the acquisition and funding of the Wattle Grove property in the period from shortly after Gloria's mother's death to the transfer of the property to Tracey on 24 June 2005, and even thereafter. 3. The evidence does not support the allegation in par 11 of the amended statement of claim that the Wattle Grove property would be purchased from the estate by Gloria in the name of Tracey, on terms that Tracey would be entitled to acquire the property from Gloria by reimbursing her for all payments made. On the evidence, there was simply a sale by the executors to Tracey. 4. The substance of the agreement as referred to in the affidavit is encapsulated in the statement Gloria says that she made: "We can put Wattle Grove in your name but you do not own it yet… Once all of the payments have been made to me, you will be the owner of the property." 5. In par 31 of her 26 September 2018 affidavit, Gloria referred to something said in her affidavit sworn on 4 September 2018. That affidavit was not included in the court book and was not read in evidence. 4 May 2005 document 1. In par 32 of her 26 September 2018 affidavit, Gloria said: "I told the defendant about the document that I had signed with Mrs James". That document, dated 4 May 2005, was signed by Gloria and witnessed by Ms James. The document said: TO WHOM IT MAY CONCERN I, GLORIA HANSEN OF [GLORIA'S ADDRESS] CONFIRM I AM ASSISTING MY DAUGHTER TRACEY LEE HANSEN IN HER PURCHASE OF [THE WATTLE GROVE PROPERTY] BY LENDING TO HER TWO HUNDRED THOUSAND DOLLARS ($200,000) WHICH WILL BE REPAYABLE ON DEMAND. 1. In so far as Gloria had said in par 32 that "I told the defendant about the document that I had signed with Mrs James", Tracey did not respond to that assertion or refer to the document. I infer that if Gloria told Tracey about the document, she did not show it to her. 2. Tracey did not make any claim that the terms of the 4 May 2005 document affected the nature of the arrangement between Gloria and Tracey. 3. Of course, it would be inconsistent with Tracey's claim that Gloria made a gift to her to acknowledge the terms of the 4 May 2005 document in so far as it described a loan of $200,000 repayable on demand. 24 May 2005 mortgage 1. On 24 May 2005, Gloria and Allan entered into a contract for sale with Tracey that was prepared by Ms James under which Tracey agreed to buy the Wattle Grove property from the estate for $439,440. 2. The contract for sale was completed on 24 June 2005 by the execution of a transfer in favour of Tracey for the consideration of $439,440. 3. In order to partially fund the purchase price, Tracey borrowed $150,000 from ING on first mortgage security over the Wattle Grove property. 4. It is convenient to note at this point that Gloria accepted in her final submissions that the contribution of the $150,000 was made by Tracey personally, although Gloria's case was that her proportionate share of the beneficial interest in the Wattle Grove property increased in proportion to mortgage payments made by Gloria. 5. It is also to be noted that, in par 29 of her 26 September 2018 affidavit, Gloria said that Tracey told her some time prior to the exchange of contracts that ING had told Tracey that they would lend her $150,000. Evidence in this form suggests that Gloria had nothing to do with the loan application. 6. Tracey explained in detail, in pars 16 to 20 of her principal affidavit affirmed 13 December 2018, the circumstances in which the application was made to ING. Tracey said, as was ultimately accepted by Gloria, that Gloria assisted in the making of the application and filled it in in Gloria's hand. 7. Gloria and Tracey executed a mortgage over the Wattle Grove property dated 24 June 2005 (the Mortgage). The Mortgage was not registered. The mortgage was between Tracey as mortgagor and Gloria as mortgagee. Its operative terms were simple: WHEREAS 1. the principal sum is $200,000.00; 2. No interest is payable by the Mortgagor as the loan is between parent and child; 3. the loan is repayable on demand. 1. Gloria said in par 32 of her 26 September 2018 affidavit that she told Tracey that she had been advised by Ms James that she and Tracey should sign a document saying that Gloria was lending Tracey money from the estate to buy the Wattle Grove property because "that is the best way to protect us both, including protecting you against any claim that might be made by a future partner or husband". 2. In her evidence, Tracey denied point-blank that she had executed the Mortgage or that the signature that appeared in the place for execution by the mortgagor had been signed by her. In cross-examination, she went so far as to claim specifically that Mr Zavattaro, who was the witness, and who swore an affidavit confirming that he witnessed Tracey's execution of the Mortgage, was lying in his evidence. 3. In fact, in his earlier cross-examination, Mr Zavattaro had given very persuasive evidence from recollection of his witnessing Tracey signing the Mortgage. Mr Zavattaro was not challenged on this evidence in cross-examination. 4. In final submissions, Tracey agreed that Mr Zavattaro's evidence should be accepted, and that the Court should find that Tracey executed the Mortgage. 5. The document signed by Gloria on 4 May 2005 and the Mortgage were referred to specifically in Gloria's amended statement of claim in the following terms: 14. In or about early May 2005 the plaintiff discussed the plan with Helen James, solicitor. Helen James advised that the plaintiff should ask the defendant to sign a document to protect the plaintiff's interests and the defendant's interests if a future partner of the defendant tried to claim against the defendant. 15. On or about 4 May 2005 Helen James prepared a document for this purpose and the plaintiff signed it and had it witnessed by Helen James. The reference to $200,000 was an estimate of the value of one third of the estate of the plaintiff's mother. There was never any agreement that the plaintiff would lend $200,000 to the defendant and the plaintiff never did. … 19. On or about 24 June 2005 the plaintiff and defendant signed a document dated 24 June 2005 recording a loan of $200,000 interest free and repayable on demand… 1. In her defence, Tracey's response to these allegations was that, in par 6, she did not admit pars 14 and 15, and added "the Defendant admits that there was never any agreement that the Plaintiff would lend $200,000 to the Defendant and the Plaintiff never did lend $200,000 to the Defendant". 2. Tracey pleaded in par 8, in response to par 19 of the amended statement of claim, that she did not admit that she signed the Mortgage but she added: "any document purporting to record a loan of $200,000 interest free and repayable on demand is a sham as there was no such loan and because the Plaintiff's purpose in having any such documents prepared was to protect the Property from any claim by a future partner of the Defendant". 3. It must be noted that, as a result of these pleadings, both parties accepted that the Mortgage did not record a genuine transaction between Gloria and Tracey. 4. This is a material observation because Tracey ultimately made a submission, in pars 139 to 141 of her final written submissions, based upon an acceptance by Tracey that she had signed the Mortgage. Tracey submitted that, on that basis, there were two possibilities. The first was that the Mortgage was binding on Gloria and Tracey in accordance with its terms. If so, the rights arising under the Mortgage would be time-barred, whether treated as a contractual right or a claim for principal under a mortgage. That was because the loan was expressed to be payable on demand so that time began to run immediately. 5. Tracey submitted that the second alternative was that the Mortgage was a sham and had no legal effect. Tracey submitted that if Gloria's evidence that the mortgage is a sham is accepted by the Court "the more likely alternative is that it was concealing a gift". 6. I will deal below with the evidentiary effect of the Mortgage. For the moment I simply note that the parties accepted on the pleadings that the Mortgage was not intended to record the real nature of the legal arrangement between Gloria and Tracey. 7. Accordingly, the first of the alternatives relied upon by Tracey is not available. 8. In fact, Gloria's claim was not pleaded on the basis that any contract recognised and enforceable at common law was entered into between Gloria and Tracey, or that Tracey became indebted to Gloria in any manner recognised by the common law. 9. Gloria's case was pleaded entirely in equitable terms, apparently recognising that in the family context there was no intention by Gloria and Tracey to enter into a binding and enforceable contractual relationship. Tracey's evidence of a gift 1. In her primary affidavit in reply made on 13 December 2018, Tracey effectively denied the versions of the conversation given by Gloria in her affidavit. 2. Tracey's evidence was that Gloria expressly told her that she would give Tracey her share of her mother's house. Tracey said in par 16 of her 13 December 2018 affidavit: 16 … I had a conversation with my mother, which included words to the following effect: Plaintiff: "ING will give you what you need." Me: "How come, when the Commonwealth Bank said they won't help me?" Plaintiff: "They just will. I will give you my one third of Nan's house, you will just have to pay out your two uncles." 1. Tracey also said in cross-examination that she only had two conversations with Gloria about the basis upon which the Wattle Grove property would be acquired by Tracey; one lasting about an hour and the other half that time (T 231.43-T 233.5). 2. In support of Tracey's case, Murray gave evidence in par 10 of his 12 December 2018 affidavit that in about 2005 Tracey said to him words to the effect: I am looking at buying Nan's place. I have to get a loan so I can buy out mum's brothers, but mum is giving me her share of the estate. I went to the Commonwealth Bank but they wouldn't give me a loan, but mum has organised me a loan from her bank, ING. 1. While the purpose of this evidence was to corroborate Tracey's claim that Gloria told her that Gloria would give her share in her mother's estate to Tracey, I do not accept that this evidence has significant weight for that purpose. Murray said that he did not have any involvement in the purchase of the Wattle Grove property. Murray recorded this evidence some 13 years after the alleged statement by Tracey. The significance of the expression "is giving" is in my view inconclusive in the context. In one sense, Gloria did give her share in the estate to Tracey. The question of whether the intention of the parties mutually was that at some time in the future Gloria would be reimbursed is another matter. The primary question: trust or gift 1. The primary question in this case is whether Gloria's contributions to the acquisition by Tracey of the Wattle Grove and Lakesland properties were gifts, or whether, alternatively, the arrangement between the two parties had the effect that Gloria acquired a proprietary interest in one or both properties. In the latter case, it will be necessary to identify the nature and effect of the proprietary interest. 2. For the reasons that follow, I find that the contributions made by Gloria did not take effect as gifts, as that was contrary to Gloria's expressed intention, and was well understood by Tracey. 3. For completeness, I record that I am satisfied that Gloria and Tracey did not intend to enter into an enforceable contract or that Tracey would become indebted to Gloria in the common law sense. Putting aside the detail of the arrangement, it was to the effect that Tracey would not be the full owner of the Wattle Grove property until Gloria was reimbursed. The reimbursement was to happen at some indefinite time in the future when Tracey's financial circumstances permitted it. Gloria was not entitled to enforce on demand an obligation on Tracey's part to repay the whole of the amount contributed by Gloria to the date of the demand. Gloria's earlier assistance to Maryann 1. The appropriate place to start the analysis is the evidence of the earlier assistance that Gloria gave to her elder daughter, Maryann, to acquire her own house. 2. In her 20 May 2019 affidavit, Gloria gave evidence of how she assisted Maryann and her then husband to purchase a property at Wattle Grove. Gloria gave Maryann and her husband $10,000 to complete the purchase of the property and agreed to pay mortgage payments on the basis that the payments would carry interest at the same rate that Gloria would have received from her bank if she had deposited the payments in her bank account. 3. Gloria gave evidence that, at the same time that she made the payments, she kept an Excel spreadsheet of the payments and the interest accruing and periodically gave a copy of the spreadsheet to Maryann. 4. At the time she prepared her affidavit, Gloria had not retained her own copy of the final spreadsheet, although she exhibited a copy that she had been given by Maryann. 5. Maryann and her husband sold the Wattle Grove property in about late 2001, and in January 2002 Maryann paid the sum of $220,847 to Gloria (which included a small additional loan of about $9,000 that Gloria had made to Maryann in connection with her family law proceedings with her husband). 6. Maryann confirmed the substance of this evidence in her 24 May 2019 affidavit. 7. The arrangement between Gloria and Maryann does not appear to have been the same as Gloria claims she had with Tracey. It does not appear that Gloria claims that she had a proprietary interest in the property that she assisted Maryann and her then husband to purchase. That may be because Gloria did not make a substantial initial capital contribution. It may also be that the issue was simply not dealt with in the evidence because Maryann recognised her obligation to Gloria and reimbursed her in accordance with their agreement out of the proceeds of sale of the property. 8. I consider the arrangement between Gloria and Maryann to be of fundamental significance in determining the issue of whether or not Gloria made a gift to Tracey which, on Gloria's reckoning, was in excess of $600,000. 9. First, I consider that it is inherently extremely unlikely that Gloria, having two daughters, would have assisted Maryann on the basis that Maryann was required to reimburse her with interest, but on the other hand, in assisting Tracey in comparable circumstances, Gloria would make a gift to Tracey in an amount almost three times the value of the assistance given to Maryann. 10. There was no evidence that Gloria's affection for her two daughters differed, or that there were practical reasons that could justify Gloria making a gift to one of her daughters but not the other. 11. On Tracey's case, Gloria made a gift of the whole of her inheritance from her mother's estate to one of her daughters without giving any share to the other. I also consider that this outcome is inherently improbable. 12. The evidence does not justify a finding that Gloria would have taken the risk of destroying her emotional bond with Maryann by giving Tracey the preferential treatment that Tracey claims to have received. 13. This issue was not addressed by Tracey at the hearing, and nothing was put to Gloria in cross-examination directed at establishing some credible reason for Gloria to have treated her two daughters in the inconsistent ways claimed by Tracey. 14. The evidence that established the nature of the assistance that Gloria gave to Maryann makes it probable that Gloria would have thought it necessary and appropriate to provide a comparable form of assistance to Tracey, and also that the nature of that assistance would be morally equivalent to the assistance provided to Maryann. Gloria's financial circumstances 1. That conclusion is reinforced by the evidence concerning Gloria's financial circumstances. That evidence was not complete, as apparently Gloria owns a house in Picnic Point and there was no evidence as to the value of that house or whether it was encumbered. 2. The evidence establishes that Gloria had a relatively responsible job until August 1997, when she suffered a work injury to her back that effectively ended her employment. Gloria had the benefit of a superannuation entitlement, but for a period she received a disability pension from Centrelink and, as she was 70 years of age at the time of the hearing, she has been paid the age pension since the date she qualified for it. At one stage her entitlement to receive workers compensation was commuted and she received a payment of about $500,000. For a period Gloria received significant tax-free payments for providing out of home care to indigenous children who had challenging behaviours. 3. The point of these observations is that, while Gloria had sufficient funds to enable her to assist Maryann and then Tracey in the manner established by the evidence, Gloria is by no means wealthy, and does not have the benefit of assets of a value that would make it probable, given her age, that she would make a gift of an amount in the order of $600,000 to one of her daughters but not the other. Credibility of Tracey's evidence 1. Tracey gave evidence on a number of significant issues which I consider was inherently implausible and has caused me to prefer the evidence of Gloria to that given by Tracey when the evidence of the two parties conflicts on the issue of whether Gloria intended to make gifts to Tracey. 2. Gloria gave evidence in pars 13 and 14 of her 20 May 2019 affidavit of the manner in which Gloria caused payments, averaging about $400 a week (although sometimes in significantly larger amounts), to be paid off Maryann's mortgage. At the time, Gloria was working full-time and it was difficult for her to get to the bank during opening hours to make payments. Gloria arranged for Tracey to physically withdraw funds from Gloria's bank account and to make payments to the mortgage account of Maryann. This practice began in 1991 and continued for some years. For this purpose, Gloria would give her ATM card and pin number to Tracey and would fill out the deposit slip in Maryann's deposit book. Typically, Gloria would say to Tracey something like: "Tracey, here is my ATM card and deposit slip for Maryann's mortgage. Can you take the money out of the ATM and then go into the bank and deposit it into the mortgage". Gloria said that this was what occurred for the great majority, if not all, of the deposits to the mortgage set out in the spreadsheet that Gloria maintained to record her assistance to Maryann. 3. Gloria said at par 14: On numerous occasions, in the context of Tracey making these transactions on my behalf, we discussed the arrangement that I had with Maryann. I recall Tracey asked at around the time the arrangement began in 1991 "Why are you giving Maryann all of this money". I replied "I'm not giving it to her. It is a loan. She has to pay me back with interest. I am charging her less interest than she would have to pay on her mortgage to the bank to help her out". After that time, there were several occasions on which I said to Tracey "This is a loan to Maryann" or described the arrangement as "Maryann's loan from me". 1. In cross-examination, Tracey accepted that she had assisted Gloria in making transfers into Maryann's mortgage account in the manner described by Gloria, although she wrongly thought that the payments were usually between $800 and $1,000 per week. However, the cross-examination included the following (T 203.37 to T 206.11): Q. You say there - and I'm now talking about page 617, at the end of the first paragraph - that you did not know of the arrangements between Gloria and Mary Ann and have never spoken to either of them about those arrangements. Right? Do you say that's true? A. That's correct. Q. The arrangements in question are, of course, the arrangements concerning the payments into Mary Ann's loan by your mother, that's right, isn't it? A. (No verbal reply) Q. I'm really going to suggest to you that you ask your mum what was going on with all these payments you were making. Do you agree with that? A. No. … Q. Would you agree that $800 to $1,000 back in the 1990s might have been two weeks wages for you? A. It was a lot of money. Q. It was a lot of money? A. Yes. Q. Even $400 would have been a lot of money, wouldn't it? A. Yes, to me, yes. Q. Are you sure you weren't curious about your sister getting more than you did without working for it? A. No, it was Gloria's money, not mine. Q. Didn't you think it was unfair that Mary Ann, then, was getting this money and you weren't? A. No, Mary Ann had bought a house. I hadn't. Q. Mary Ann was 20 years old at the time, roughly, when she got her land, wasn't she? A. Yes. Q. You would have been 17 or 18? A. I was 18. Q. Did it occur to you that your sister was getting treated rather better than you were? A. No. Q. Did you think it was a gift to Mary Ann-- A. I didn't-- Q. --from Gloria? A. I didn't know what it was. I was just asked to do the payment from one bank to another. That's all I did. … Q. You're aware, aren't you, that Gloria says that you actually asked why Gloria was giving this money to Mary Ann, you're aware of that? A. I am aware of that in the affidavit, yes. Q. Do you say it's not true? A. It is not true. Q. I'm going to suggest to you that you did ask Gloria, your mother, why the money was then given to Mary Ann, would you agree with that? A. No, I would not. Q. Further, that Gloria discussed with you the arrangements between her and Mary Ann. A. That is incorrect, Gloria and I never discussed that financial affair. That was between Mary Ann and Gloria, I was just asked to pay the money off while Gloria was at work. … Q. Did you feel any jealousy at all? A. No. Q. Did you feel any curiosity why your sister was getting a lot of money paid into the mortgage on land she owed and when you were getting, really, nothing like that? A. No, it was Gloria's money, it was Gloria's to do what Gloria wanted, I never questioned her. … Q. You're saying you never felt any curiosity at all about why your sister was getting all this money? A. No. Q. I'm going to suggest to you, I'm afraid, that that's actually unbelievable, would you agree with me on that? A. No, I don't. Q. And that you are lying. A. No, I'm not. 1. I accept the submission ultimately made on behalf of Gloria that this evidence is simply incredible. I cannot accept that a younger sister would physically make payments every week from her mother's account to the mortgage account of her elder sister, whether in sums of $400 or $800 to $1,000, without being curious about the possible preferential treatment being given to her sister, and accordingly asking her mother to explain the reason for the payments. 2. The only conclusion that is reasonably open is that, whether consciously or otherwise, Tracey now professes to have a false recollection of her involvement in making the transfers, which is necessary in order to support Tracey's present case, as, if Tracey conceded that she knew at the time that Gloria expected to be reimbursed by Maryann, that would increase the probability that Gloria's arrangement with Tracey was a comparable one. 3. I have already considered above the evidence concerning Tracey's execution of the Mortgage and her denial that the signature on the document was placed there by herself. 4. It may be understood that Tracey could have forgotten that she signed the Mortgage, given that it was signed on 24 June 2005. 5. However, Tracey maintained her denial in the face of the evidence given by Mr Zavattaro, who was the witness to her signature, and called Mr Zavattaro a liar in her cross-examination, even after he was cross-examined. 6. Tracey's final submissions properly conceded the truth of Mr Zavattaro's evidence and that she had executed the Mortgage. 7. This is another example of Tracey giving false evidence involving the denial of a fact that provided strong objective evidence inconsistent with Tracey's claim that Gloria made a gift to her. 8. There were other, less significant instances, where Tracey's evidence was inconsistent with more credible evidence. I have already mentioned the example that Tracey denied that the weekly transfers that she made to Maryann's mortgage account were mostly $400. I consider that it is highly improbable that Gloria and Tracey would have only discussed the acquisition of the Wattle Grove property by Tracey in two relatively brief conversations. Tracey gave evidence that the tenants of the Wattle Grove property signed a written tenancy agreement, when that was denied by both Gloria and Mr Cooper. Mr Cooper was not required for cross-examination, so he was not challenged on this evidence. Tracey claimed to have had an involvement in the leasing of the Wattle Grove property, but that was inconsistent with the evidence given by Gloria and Mr Cooper. Tracey said that she lived for a while in the Wattle Grove property but that was denied by Gloria and Ashlee. 9. In pars 18 and 19 of her first affidavit affirmed on 13 December 2018, Tracey referred to the fact that her application for the loan of $150,000 from ING referred to the fact that a sum of $101,000 was held in Tracey's name with ING Direct. Tracey said: "… I am not aware of $101,000 being held with ING Direct". However, in par 10 of her 29 October 2019 affidavit, Tracey gave evidence about how this sum of $101,000 was accumulated, and claimed that part of the amount was accumulated from her own funds. 10. Gloria ultimately submitted that Tracey's belated attempt to prove that a substantial part of the $101,000 represented a contribution by her to the price for the Wattle Grove property was a recent invention, and that it was incredible that she could have forgotten that she had accumulated $101,000 as at 13 December 2018, and then remembered it less than 12 months later. 11. Ordinarily, a person would not forget as of 13 December 2018 that they had $101,000 in a bank account in their name in June 2005, and then remember on 29 October 2019 that the money may to a substantial extent have accumulated from their own funds. However, Tracey affirmed her 29 October 2019 affidavit after being able to review her bank statements produced on subpoena by ING and the Commonwealth Bank of Australia (CBA). Tracey accepted that Gloria implemented the transactions whereby money was transferred into Tracey's ING account, and said that she could not remember having done so herself. That evidence was consistent with Gloria's case that she managed Tracey's financial affairs and had authority to transact on the two bank accounts. Gloria said that she did so in order to improve Tracey's credit rating. 12. Tracey said in par 8(d) of her 29 October 2019 affidavit: … I knew that the Plaintiff arranged for money to be paid from my CBA account into my ING Savings Maximiser from when it was opened but I did not know the amounts. Until recently, after the documents were produced on subpoena, I had forgotten about this. One reason was, from about July 2013 onwards, I suffered from chronic pain in my right side and back as a result of a cyst compressing on my nerve endings between L4 and L5, which took the doctors 5 years to find. It was removed in January 2019. 1. In the light of this evidence, I consider that it would be too harsh for the Court to treat Tracey's attempt to prove that some of the $101,000 came from her money as a recent invention that demonstrates that her evidence on this subject is incredible. However, the fact is that, on 13 December 2018, Tracey could not remember that Gloria had accumulated $101,000 in Tracey's ING account, and that part of that money was transferred from Tracey's CBA account. Objectively, that is a very significant lapse of memory. It may be that it was caused by the medical condition referred to by Tracey in her evidence. Even if, for that reason, the deficiency in Tracey's recollection is not blameworthy, it does require a conclusion that, when Tracey affirmed her original affidavit on 13 December 2018, her recollection may have been unreliable. 2. Tracey and Murray borrowed $600,000 from ING in order to buy the Lakesland property. Tracey said in par 40 of her 13 December 2018 affidavit that the loan application was completed on Gloria's dining table at Picnic Point, with Gloria helping Tracey with what she had to write on the application form. Tracey repeated that evidence in cross-examination (T 243.2 and T 243.33). However, Tracey conceded in cross-examination, based upon the fax markings on the application form, that she received it at her place of employment at 2:12 PM on 22 May 2006 and that it was sent back to ING by fax at 6 PM the same night (T 245.11-245.39). Gloria was not present where Tracey worked on that day. Tracey nonetheless refused to accept that Gloria had nothing to do with the completion of the application. 3. Finally, there was a curious piece of evidence to the effect that, on 7 April 2013, two days after the argument between Gloria and Tracey that initiated their final estrangement, an amount of $268,873.06 was transferred from the Lakesland loan account to the Wattle Grove loan account. That transfer had the effect that the Wattle Grove mortgage was repaid. Later, on 26 September 2013, Tracey withdrew $270,232 from the Wattle Grove loan account and paid it back into the Lakesland loan account. When cross-examined on the question of who made the first of these transfers, Tracey gave the following evidence: (T 254.20-30) Q. But you were the only person withdrawing money from that account weren't you? A. At that time, on my affidavit I have done it incorrectly. I stated I changed the login that night. I have just been advised by ING, it wasn't that night it was done, it was actually the seventh, 8 April at 8.16 in the morning, the login was changed. Sorry, 8.27, the login was changed, and this transfer was done at 8.17am. I changed the login at 8.26. Someone logged in, did this transfer, then they logged out. And then I logged in and changed the login. Q. In fact, you never said to your mother anything about the transfer, did you? A. Because I didn't do the transfer. 1. Tracey's earlier evidence had been that she had changed the login details to the Lakesland mortgage account on the night of 5 April 2013, with the effect that Gloria could no longer operate on that account. It is hard to conceive who could have been responsible for these two transactions other than Tracey. Tracey seems to imply that the first of the transfers could have been made by Gloria. No suggestion to that effect was made in Gloria's cross-examination. 2. It is difficult to see this evidence by Tracey as being anything other than a gratuitous falsehood. Credibility of Gloria's evidence 1. I consider that Gloria was a satisfactory witness on the issue of whether she made a gift to Tracey. 2. However, I am not satisfied that Gloria's evidence was always entirely reliable in relation to the detail of events that she professed to recollect. 3. Gloria was obviously discomfited in the witness box in cross-examination because of her back condition and she clearly tired towards the end of her cross-examination on each of the days on which she was cross-examined. Gloria had a visual impairment that required her to use a magnifying device and a ruler when referring to the written evidence. 4. There were inadequacies in the written evidence constituted by the series of affidavits sworn by Gloria. In particular, the first affidavit contained many statements that oversimplified the facts, or omitted detail that was supplied by later affidavits. 5. It is difficult to judge whether this situation has resulted from inadequacies in the process whereby affidavits were taken from Gloria, or whether Gloria's memory was improved by the process of responding to the evidence served by Tracey. 6. The result is that Gloria's evidence may not always be reliable on matters of detail, but it does not follow that her evidence should not be accepted where it deals with the fundamental facts of her relationship with Tracey, and the arrangement between them entered into and implemented by Gloria for the purpose of assisting Tracey to acquire the Wattle Grove property. 7. Tracey made detailed submissions in pars 27 to 72 of her final written submissions as to why the Court should find that Gloria was not an honest witness, and that her evidence was unreliable because much of her evidence was false. Tracey submitted that the Court should not accept Gloria's evidence unless corroborated by another witness or documents, and that, where there is conflict between the evidence of Tracey and Gloria, Tracey's evidence should be preferred. 8. Tracey submitted that the Court should find that Gloria had given dishonest evidence in respect of the spreadsheets that she claimed to have prepared contemporaneously to record the amounts for which she was entitled to reimbursement in respect of the Wattle Grove and Lakesland properties. 9. Gloria gave evidence in par 39 of her 26 September 2018 affidavit of the circumstances in which she claimed that Gloria and Tracey agreed that Gloria would keep an up-to-date spreadsheet of the amounts to which she was entitled, in the same way that the evidence shows that Gloria kept a spreadsheet in relation to the obligations of Maryann. Gloria started by saying that, from 30 June 2005 until 27 August 2008, she made additional payments on the ING loan. Gloria said that Tracey asked her to make the payments in about mid-2005 and that Tracey would pay Gloria back. Gloria's affidavit then said: I said "Yes OK. I will use an excel sheet to record rent and payments and all my expenses, just like I did with Maryann, so you will know how much you owe me. I will also charge you interest"… Thereafter, approximately every 3 months or so I showed the defendant the spreadsheet showing how much was owed, and she would read it. I would give a printed copy of the spreadsheet to her and leave her with it… 1. Tracey denied ever receiving copies of the spreadsheet. 2. Gloria said in cross-examination, when being asked questions about the meaning of entries in the spreadsheet that Gloria had exhibited to her evidence: (T 105.12-105.45) Q. You say don't you that you were charging her interest at the rate charged to you by your bank for the money that you put in. Is that right? A. Yes but Tracey wasn't given these sheets. She was given a separate spreadsheet with interest on it. Which no one seems to know where it is. Q. Just so that we're clear about this. You say do you that this spreadsheet that's here in front of you that starts at page 69 and ends at page 82. Is not an example of the kind of spreadsheet that you gave to Tracey every three months. Is that what you're saying? A. Yes. Q. You say it was a different kind of spreadsheet do you and you haven't been able to find it. Is that right? A. That's correct. Q. You didn't say in your affidavit that this was not a spreadsheet of the kind that you gave to Tracey every three months, did you? A. Could you repeat that please? Q. You did not say in your affidavit that a spreadsheet of the kind that's in front of you was not given to Tracey, did you? A. No. Q. You didn't, did you? A. It wasn't like this no. Q. But I suggest to you that you included this spreadsheet in your affidavit because you were suggesting to the Court that this was an example of the kind of spreadsheet that you gave to Tracey every three months to tell her how much was owing? A. I don't believe that I've made that assertion. This is the payments that I have made on the loan. No interest occurred. The one I prepared for Tracey was exactly similar to - well the same as Mary Ann's with different figures. Of course Tracey's got no record of anything. 1. I do not accept that this exchange justifies a conclusion that Gloria's evidence was dishonest. I accept, as a matter of fact, that Gloria did keep a spreadsheet to record Tracey's obligations, in the same way that she had kept one for Maryann. The existence of the Maryann spreadsheet has been corroborated by Maryann, and Tracey accepted Maryann as a witness of truth. 2. A comparison between the Tracey and Maryann spreadsheets that were in evidence shows that although they are formatted differently, they contain substantially the same types of information. 3. If, as Gloria claimed, she provided spreadsheets at regular intervals to Tracey, those spreadsheets could not have been the same as the final spreadsheet that she exhibited to her affidavit, which contained information that was complete up to 22 March 2013. It is true that Gloria asserted that the information concerning interest in the spreadsheets provided to Tracey was different to the statements of interest in the complete spreadsheet that became an exhibit. This may be because the exhibit apparently contains the interest actually charged by ING on the loan, and Gloria's case was in part that Tracey had agreed to pay the interest that Gloria would have earned if she had left the monies paid in her bank. 4. Gloria ultimately said that she did not have original copies of the spreadsheets because she left the copies given to Tracey with Tracey, and records kept by her were lost when a filing cabinet was partly inundated by a flood and a computer was destroyed. 5. I consider that this aspect of the evidence justifies a conclusion that Gloria was prone on occasions to giving evidence in a more definite form than her real recollection justified, and without thinking through the significance of her evidence in detail. 6. In fact, Gloria's evidence in pars 54 and 57 of her 26 September 2018 affidavit took the form of a statement that a numbered exhibit was "a copy of a spreadsheet which summarises payments made by me… I kept the spreadsheet contemporaneously with the making of the payments and the other transactions contained in the spreadsheet". Gloria did not, when preparing her affidavit, actually explain the steps she took in preparing the spreadsheet, or the provenance of the actual document that was exhibited to her affidavit. 7. At the end of the day, the Court cannot be sure how and when the actual exhibit was prepared. 8. Another example of this problem was Gloria's evidence, in par 28 of her 26 September 2018 affidavit, where she said: "… I looked at all money that was available to me from savings or other sources, and determined that this amounted to a little over $80,000". Evidence in that form would suggest that Gloria was referring to $80,000 held by her in an account in her name containing her money. In fact, it turned out that the amount of the price for the Wattle Grove property of $439,400 that actually had to be paid in cash, after allowing for Gloria's contribution of one third of the value of the property, was $292,933.33. The balance required after allowing for the $150,000 borrowed from ING was $143,865.13. This balance was funded by $53,406.38, being Gloria's share in the balance of the estate, plus an amount of $90,402.52 that was transferred into Ms James' trust account from a bank account in the name of Tracey. There was an issue between the parties as to what proportion of the $90,402.52 was accumulated from Tracey's funds. I will deal with that issue below. 9. For the present, it can be seen that Gloria's statement that she had a little over $80,000 available to her from savings or other sources was inaccurate. 10. As mentioned above, Gloria said, in par 29 of her 26 September 2018 affidavit, that Tracey told her some time before the exchange of contracts on 20 May 2015 that ING said that it would lend her $150,000, when the evidence ultimately showed that Gloria had sat down with Tracey and filled out in her own hand the application form, which included a statement that Gloria would make a gift of $200,000 to Tracey. 11. Gloria did not provide her explanation of this process until her 11 February 2019 affidavit in reply, in which she agreed that the loan application was in her handwriting, but claimed that she inserted the information that was provided by Tracey. Gloria claimed that she made the entry concerning the gift because Tracey said to her that she had already told ING that Gloria would be making the gift and that ING would not give her the loan unless it was confirmed. Consequently, according to Gloria, she struck out the entry under "cash/savings" and put that amount under "gift". Gloria said that she did so having told Tracey that Tracey would be the one signing the form, not Gloria. 12. Gloria said in par 47 of her 26 September 2018 affidavit that she did not know that $170,000 of the loan for the purchase of the Lakesland property had been transferred to the Wattle Grove loan until after it had occurred, and she first learned of the transfer when she looked at the ING loan statements. However, Gloria was obliged to concede in cross-examination that she typed for Tracey and Murray the 7 August 2008 letter addressed to ING in which the request was made for ING to agree to the transfer. Gloria accepted that she learned of the proposal when she typed the letter (T 173.35). It is strange that Gloria made this error as the letter to ING was an exhibit to her affidavit. 13. This is another example of Gloria's initial evidence being inaccurate in a way that required later correction. 14. There are other examples of evidence given by Gloria that proved to be inaccurate on close examination. 15. The prevalence of these inaccuracies obliges the Court to exercise caution when considering the weight of the evidence given by Gloria concerning specific events. They have not caused me to doubt Gloria's general honesty. For the reasons given above, the concerns that I have do not affect my conclusion that the contributions that Gloria made to assist Tracey in respect of the Wattle Grove and Lakesland properties were not made as gifts. Terms of initial arrangement between the parties 1. As I mentioned above, the arrangement between Gloria and Tracey evolved over time. I am satisfied that the initial arrangement dealt with how the purchase of the Wattle Grove property would be funded, and how the ING mortgage payments would be made. 2. There is an issue of fact, which will be considered below, as to what proportion of the repayments towards the ING mortgage should be attributed to Gloria. Tracey accepted that, of a total of $112,355.97 (after giving Tracey credit for the $7,114 first home buyers' grant) $50,970 must be attributed to direct payments by Gloria. As I understand it, although Tracey contests the proportion of the mortgage payments that should be attributed to Gloria, Tracey accepts that Gloria made significant repayments from the inception. 3. The evidence therefore justifies a finding that, before completion of the contract for the purchase of the Wattle Grove property, Gloria and Tracey reached an arrangement about how the purchase and the mortgage would be funded and the proprietary consequences of the arrangement. 4. As I have noted above, Gloria's evidence on this subject evolved to some extent over time, and she acknowledged that there were many discussions that she had with Tracey that were not able to be set out with precision in her evidence. 5. As Tracey denied in her evidence that these conversations took place, and said that there were only two conversations in which Gloria stated that she would make a gift to Tracey, Tracey has not given positive evidence of her version of the conversations that I found must have occurred. 6. It will be convenient to repeat at this stage the observations that I made in Spink v Flourentzou [2019] NSWSC 256 on the difficulty that the Court faces in making specific findings concerning the terms of arrangements reached by family members in circumstances such as the present: I said: [180] The most well-known extract from the authorities relevant to the proof of statements and arrangements made orally is probably the following, taken from the judgment of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318–319 (in the context of whether alleged statements were misleading and deceptive): … Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not … attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712. … [181] The problem that McLelland CJ in Eq so perceptively explained is amplified where the reality is that the same subject was discussed frequently by the members of a family, at a time of family unity, in different locations where, as the evidence shows was true in the present case, the parties were initially reluctant to make the arrangement, but persuaded themselves over time that it was safe and prudent for them to do so. It is almost certain that the proposal was put in different ways by the different parties using different words over the period, and that the proposal may have evolved in its substance and in the way that it was described by the participants. The participants were not contemplating making a clear, formal agreement that would be enforceable at law. It is likely that the participants used expressions intending those words to have a particular meaning and assuming that the others participating understood the intended meaning. [182] In these circumstances, the Court is presented with limited and distilled evidence from the perspective of the individual witnesses which is said to have given rise to an arrangement, whether that alleged in the paragraphs of the statement of claim, or that which is implied in the defence. 1. I am satisfied that Gloria and Tracey did not come to a single specific arrangement in the sense that, although oral, a single agreement with identified terms to which each party consciously agreed was reached. Rather, the arrangement they made was a distillation of many conversations. 2. In these circumstances, the Court must weigh the evidence of what was said in the context of the evidence of the surrounding circumstances in order to make a judgment as to the aspects of the arrangement that the Court can be comfortably satisfied existed. 3. First, I am satisfied that an element of the arrangement was that, even though the legal title to the Wattle Grove property would be placed solely in Tracey's name, Tracey would not become the true owner of the property until Gloria was reimbursed the entirety of her contributions. 4. It does not follow that the parties contemplated that Tracey would hold the title to the Wattle Grove property entirely for Gloria until Gloria had been completely reimbursed. It is implicit in the arrangement that Tracey would borrow $150,000 in her own name and that she would hold the title for herself to that amount, save to the extent that Gloria's proportional interest would increase as a result of the mortgage repayments made by Gloria. 5. It is also an aspect of the arrangement that Gloria's interest in the Wattle Grove property was to be coextensive with her right to reimbursement. It was not intended that Gloria would have an interest in the property proportionate to her contribution to the costs of its acquisition. That intention would have been in conflict with the underlying purpose that Gloria would assist to fund the acquisition of a home for Tracey and Ashlee. 6. The arrangement was that Gloria would assist in making mortgage repayments for an indefinite time in contemplation of Tracey acquiring the financial capacity to reimburse Gloria for her contributions. 7. There is no evidence that the parties expressly dealt with the situation of Tracey being unable to reimburse Gloria, or some other circumstance arising that required the Wattle Grove property to be sold. 8. There is no evidence that the parties addressed the question of what should be done if either one of them wanted to bring the arrangement to an end. 9. There is a question about whether the arrangement included an obligation for Tracey to pay interest on the amounts for which she was required to reimburse Gloria. 10. As noted above, prayer 2a specifically claimed that Tracey's obligation to repay the funds made available by Gloria to acquire the Wattle Grove property was without interest. 11. Also, as set out above, what Gloria called the Purchase Agreement in par 13 of the amended statement of claim did not include a term requiring Tracey to pay interest to Gloria. 12. In par 60 of her final written submissions, Gloria acknowledged in respect of the evidence of the conversations that led up to the purchase of the Wattle Grove property: "At this stage there was no mention of interest". 13. However, it is also to be noted that the Mortgage contained the express statement: "2. No interest is payable by the Mortgagor as the loan is between parent and child". 14. Although the parties agreed that the Mortgage did not record the real transaction between them, the fact that it was executed should not be ignored. The Mortgage provides objective evidence that the arrangement did not include a requirement that Tracey's reimbursement obligation would extend to paying interest to Gloria. 15. As I understand it, Gloria nonetheless initially claimed interest on the amounts that she paid in reduction of the Wattle Grove mortgage and in paying the outgoings for the property that were not paid by the tenants. 16. The evidence that Gloria gave in par 31 of her 26 September 2018 affidavit of her conversation with Tracey included: "I will make the payments on the mortgage to ING and you can pay me that back later". There was no mention of interest. The same is the case for the conversation set out in par 32. 17. However, Gloria's evidence in par 39 of her 26 September 2018 affidavit concerning her agreement with Tracey to keep a spreadsheet showing the amount Tracey was required to reimburse Gloria (see [141] above) asserted that Gloria said: "… I will use an excel sheet to record rent and payments and all my expenses, just like I did with Maryann, so you will know how much you owe me. I will also charge you interest". That could be interpreted as the basis for an agreement that Tracey would pay interest on the mortgage payments and outgoings, even though she had not been required to pay interest on Gloria's initial contributions to the purchase price for the Wattle Grove property. However, the rate for the payment of interest was not specified or described. There is no evidence that Gloria informed Tracey that the rate would be the interest that Gloria would have earned on her money if she left it deposited in her bank. I understand that Gloria intended to make out her case by establishing that the spreadsheets that she claims she provided to Tracey from time to time included amounts of interest, and that Tracey agreed to pay those amounts. However, a consequence of Gloria's concession that the spreadsheets that were exhibited to her affidavit were not the documents that she claims were given to Tracey is that Gloria has failed to prove either the quantum of the interest or provided a basis for the Court to conclude that Tracey agreed to pay the amounts claimed by Gloria. 18. As Tracey submitted, Gloria's evidence has not independently established the rates of interest that she claims. 19. As I understand Gloria's final submissions, she accepted the logic of this position, and consequently claimed interest at the Court rate. 20. I find that Gloria has not established that it was an integer of her arrangement with Tracey that Tracey was to pay interest on the contributions made by Gloria. I will deal below with the question of whether Tracey should be ordered to pay interest at the Court rate. Rebuttal of the presumption of advancement 1. In this case, any presumption of advancement that may otherwise have existed in favour of Tracey is rebutted by the evidence that I have accepted concerning the terms of the arrangement that Gloria and Tracey made before settlement of the contract for the purchase of the Wattle Grove property, which included that Gloria would retain a beneficial interest in the property equal to the contributions to the purchase price made by Gloria. At the same time, it was agreed that Gloria's interest would expand by the amounts paid by Gloria in reduction of the mortgage. It is significant that this aspect of the arrangement was included from its inception. Nature of the proprietary interest initially acquired 1. In my view, Gloria acquired a proprietary interest in the Wattle Grove property as a result of the original arrangement in the nature of a resulting trust in accordance with the principle discussed by White J in Shepherd v Doolan (above) at [21] and [23]. 2. Alternatively, a finding that, as a result of the initial arrangement, Tracey held the legal title to the Wattle Grove property partly on trust for Gloria is justifiable on the basis that such a finding would implement the common intention of the parties on the principles set out by White J in Shepherd v Doolan (above) at [30], [31] and [34]-[45]. 3. I agree with the submission made in Tracey's final submissions that the initial arrangement between Gloria and Tracey is not one for which it is apt to apply the principles that may justify the Court making an order restoring to a party contributions which he or she has made to a joint endeavour which fails. This is particularly so when the contributions have been made in circumstances in which it was not intended that the other parties should enjoy them, as considered in Baumgartner v Baumgartner (1987) 164 CLR 137 at 148; [1987] HCA 59. In the present case, Gloria's initial entitlement to a beneficial interest in the Wattle Grove property arose out of both the expressed intentions of the parties at the time it was acquired and the circumstance that Gloria contributed a substantial amount to the purchase price, and then, in accordance with the arrangement, contributed a significant amount by way of mortgage repayments. Subsequent variations to the initial arrangement 1. It is then necessary to determine how the arrangement between Gloria and Tracey changed over time and what the effect of the changes was on Gloria's rights, particularly in respect of proprietary interests capable of securing those rights. 2. In her amended statement of claim, Gloria made the following allegations relevant to the changes in the nature of her arrangements with Tracey: 24. In or about early 2006 the plaintiff told the defendant that as the plaintiff [read defendant] did not wish to live in the Property the plaintiff proposed to rent it out. 25. The plaintiff and the defendant agreed that the rent money would be paid into the defendant's bank account and would then be used to pay the ING mortgage (the "Rental Money Agreement"). … 33. The defendant and Murray Noble financed the holding deposit and the deposit [for the purchase of the Lakesland property] by the defendant redrawing on the mortgage loan on the [Wattle Grove property]. 34. The defendant promised to repay this money with the other amounts owed to the plaintiff in respect of the [Wattle Grove property]. … 36. In or about mid 2006 the defendant asked the plaintiff to make some payments in respect of the Lakesland mortgage and the plaintiff did. … 38. The defendant promised to repay this money with the other amounts owed to the plaintiff in respect of the [Wattle Grove property]. 39. In or about September 2008 the defendant decreased the mortgage that she and her husband had on their Lakesland property by $170,000 and increased the loan on the [Wattle Grove property] by the same amount. … 41. About that time the defendant asked the plaintiff not to make any further payments on the [Wattle Grove property] mortgage so as not to affect the negative gearing advantage but rather to pay the mortgage amounts off the defendant and her husband's Lakesland mortgage. … 43. The plaintiff and the defendant then agreed (the "Property and Lakesland Agreement"): a. the plaintiff would make payments into the Lakesland mortgage in preference to payments into the Property mortgage b. all amounts contributed and paid by the plaintiff for the acquisition of the [Wattle Grove property] and Lakesland would be repaid by the defendant c. all expenses paid by the plaintiff for the [Wattle Grove property] and Lakesland would be repaid by the defendant d. all mortgage payments made by the plaintiff in relation to the ING Property loan and the ING Lakesland loan would be repaid by the defendant e. the defendant would repay the plaintiff after the ING Lakesland loan was paid off f. the defendant would hold the Property for the plaintiff g. the defendant could acquire the Property from the plaintiff by paying to the plaintiff the amount of all payments made by the plaintiff including her share in her mother's estate h. unless and until the defendant did so, the defendant held the [Wattle Grove property] for the plaintiff. 1. In her defence, Tracey denied all of these allegations, save as follows. Tracey admitted the allegation in par 33 that she had redrawn on the Wattle Grove mortgage to pay the deposit on the Lakesland property. Tracey admitted that she had transferred $170,000 from the Lakesland mortgage to the Wattle Grove mortgage, and said that Gloria was aware of the change. 2. Although the parties were in dispute about much of the detail concerning the changes in the arrangement between them after the transfer of the Wattle Grove property to Tracey, the effect of the evidence is relatively clear in relation to the most significant events. 3. First, however the arrangement may have come about, the evidence establishes that, in early 2006, Gloria entered on behalf of Tracey into an oral lease of the Wattle Grove property to the tenants who have remained in possession of the property to the present time. 4. For almost all of that period, the tenants have paid the whole of the rent into Tracey's bank account, and that money has been applied by means of direct debits to mortgage repayments. Gloria has accepted that those repayments should be treated as contributions to the acquisition of the Wattle Grove property by Tracey. 5. As the whole of the rent was paid into Tracey's bank account, that money was not available to pay outgoings in respect of the property. Some outgoings were paid by the tenants but the balance was paid by Gloria from her own funds. As will be seen, Tracey accepts this and has agreed on the amount that Gloria claims she has paid for the Wattle Grove property's outgoings. 6. When Tracey and Murray entered into the contract to purchase the Lakesland property, they drew down on the Wattle Grove mortgage to pay the deposit. Whether or not Tracey made a formal agreement with Gloria to repay the deposit, Gloria's spreadsheet concerning the Wattle Grove property shows that $55,000 was redrawn on 30 May 2006 and $56,830 was repaid on 30 June 2006. 7. There was a peripheral dispute between the parties as to how a small holding deposit for the Lakesland property was paid. This is an example of an evidentiary disagreement between the parties that need not be resolved, and cannot rationally be resolved without the Court engaging in what would effectively be speculation. 8. It is also clear that Gloria started to make repayments against the Lakesland mortgage and eventually stopped making repayments against the Wattle Grove mortgage. However, the change did not take place in mid-2006 and there was a period of overlap. Gloria's spreadsheet for the Lakesland mortgage shows that an initial payment of $14,000 was made on 27 July 2017 and payments continued to be made in varying amounts thereafter. (In her final submissions Tracey accepted that some of these payments were made out of Gloria's own funds, and there is a dispute as to others). Gloria continued to make regular payments against the Wattle Grove mortgage until 9 October 2007, after which there was a gap until a final payment of $800 was made on 27 August 2008. 9. I am satisfied that this change was made with the knowledge and agreement of Tracey, regardless of whoever may have suggested the change in the first place. Whether or not Tracey took care to learn the times and the amounts of the payments that were being made, I find that she was aware that mortgage repayments were being made by Gloria in addition to direct debits for which she and Murray were responsible. 10. I am also satisfied that the arrangement was that Tracey would reimburse Gloria for the repayments that she made of the Lakesland mortgage. It is more probable than not that there was an express agreement between the parties to that effect, but, as the change was a variation of the arrangement agreed before the completion of the contract for the purchase of the Wattle Grove property, I would find that it was implied that, if Tracey accepted Gloria repaying the Lakesland mortgage in lieu of the Wattle Grove mortgage, then the earlier agreement that Tracey would reimburse Gloria would extend to the new arrangement. 11. Gloria's Wattle Grove spreadsheet shows that in September 2008, when the mortgage had been reduced to about $134,000, an amount of $170,000 was re-drawn, which increased the mortgage to about $304,000. 12. Gloria's Lakesland spreadsheet shows that the Lakesland mortgage was reduced on 25 September 2008 from about $390,000 to $220,000 by the transfer of $170,000. 13. There is no evidence that the parties focused on the consequence of increasing the amount secured by the Wattle Grove mortgage by $170,000, and reducing the amount secured by the Lakesland mortgage by the same amount, given that they had agreed that Gloria had a beneficial interest in the Wattle Grove property equal to the value of her contributions. 14. As noted above, Gloria ceased to make payments against the Wattle Grove mortgage at about this time. 15. Paragraph 43 of Gloria's amended statement of claim is an allegation that Gloria and Tracey "then" made an agreement that Gloria called the "Property and Lakesland Agreement". I do not accept that the evidence establishes that there was an agreement made between Gloria and Tracey at any single time, particularly shortly after the transfer of the $170,000, which contained the terms set out in par 43. Rather, there was an initial agreement between the parties, which was varied from time to time as the changes referred to above occurred. 16. However, I am satisfied that par 43 of the amended statement of claim is substantially accurate in so far as it describes the ultimate terms of the agreement or arrangement between the parties, even though that was the result of the evolution in the circumstances relating to Tracey's ownership of the two properties and the uses to which they were put. 17. In particular, I am satisfied that the understanding was, as a result of conversations that took place between Gloria and Tracey, that Tracey would reimburse Gloria, starting from the time that the Lakesland mortgage was repaid. That is why the transfer of the $170,000 from the Wattle Grove mortgage to the Lakesland mortgage took place, and why it was agreed that Gloria would focus her repayments on the Lakesland mortgage instead of the Wattle Grove mortgage, because only the latter enjoyed a negative gearing benefit. The objective was for the Lakesland mortgage to be repaid as soon as possible. It was not envisaged that Tracey would reimburse Gloria by payment of any single amount, but rather that Tracey would start paying Gloria back in generally the same way as the mortgages had been repaid. It was never part of the arrangement that Gloria could require Tracey to reimburse for all Gloria's contributions on demand, and it was not in the contemplation of either party that such a demand would be given. 18. An important qualification to my acceptance that par 43 conforms with the substance of the arrangement between Gloria and Tracey that was ultimately reached concerns the allegation in subpar f that Tracey would hold the Wattle Grove property for Gloria. I find that the nature of the beneficial interest that Gloria had in the Wattle Grove property was essentially the same as it was at the time the property was transferred into Tracey's name. That is, that Gloria's proprietary interest was equivalent to the amount that was necessary to reimburse her for all of the contributions made by Gloria, including her forbearance of receiving her share in the value of the Wattle Grove property, and all of the various payments she made as contributions to the price of the Wattle Grove property and repayments on the mortgages over both properties as well is outgoings. 19. To the extent that the value of the Wattle Grove property may have exceeded at any time the aggregate amount necessary to reimburse Gloria, Tracey was entitled to the beneficial interest in the Wattle Grove property in that proportion. 20. It follows that Gloria's beneficial interest in the Wattle Grove property continued to include a share commensurate with the $170,000 amount whereby the Wattle Grove mortgage was increased in order to enable a reduction in the Lakesland mortgage. 21. The terms of the agreement set out in par 43 do not include that Gloria would be entitled to a beneficial interest in the Lakesland property, particularly in the event that the 'equity' in the Wattle Grove property was not sufficient to cover the full amount for which Gloria was entitled to be reimbursed. 22. There is no evidence that the parties expressly considered the practical effect on Gloria's beneficial interest in the Wattle Grove property of Tracey granting mortgages over that property and the Lakesland property to secure the totality of her and Murray's borrowings from ING. As ING is a registered first mortgagee over the Wattle Grove property, it will be entitled to demand repayment of the whole of the debt owed to it by Tracey and Murray before there will be 'equity' available to satisfy Gloria's entitlement to reimbursement for all her contributions to both properties. It does not appear that the parties gave any specific consideration to this matter. 23. The amended statement of claim inserted pars 60 to 64 into the pleading. By those paragraphs, Gloria made a claim that she was entitled to a beneficial interest in the Wattle Grove property on the basis that the parties had been engaged in a joint endeavour, which had failed. This is the third situation discussed by White J in Shepherd v Doolan (above), in which the Court may find that a constructive trust exists against the owner of property in favour of another who has participated in particular ways in the acquisition of the property as part of a joint endeavour. 24. For present purposes, it is to be noted that this alternative basis of Gloria's case did not include a claim that she is entitled to a proprietary interest in the Lakesland property. 25. However, the additional prayer 4 that was added when Gloria's statement of claim was amended includes a claim that Tracey holds both the Wattle Grove property and the Lakesland property "subject to an equitable charge in respect of such contributions and interest". The prayer also seeks orders for the sale of both properties and the distribution of the proceeds of sale in a manner that would reimburse Gloria for all of the amounts claimed by her. 26. The basis of Gloria's claim for a proprietary interest in the Lakesland property is not pleaded in the amended statement of claim in any express way. 27. As Murray was not made a party to the proceedings, and as Gloria has not pleaded any claim against him, Gloria could not establish any more in these proceedings than that she had some equitable entitlement to part of Tracey's share in the ownership of the Lakesland property. 28. Notwithstanding this consideration, in par 140 of her final written submissions Gloria asked the Court to declare that Gloria is entitled to an equitable charge over Tracey's share of the Lakesland property. 29. In my view, the history of the dealings between Gloria and Tracey require an analysis whereby it is recognised that the basis of Gloria's beneficial interests in the properties acquired by Tracey changed in subtle ways over time so that currently Gloria may have equitable rights that are an amalgam of the interests that may be created in the application of the different principles discussed by White J in Shepherd v Doolan (above). Initially, at the time the Wattle Grove property was transferred to Tracey, Tracey held the property on a resulting trust for Gloria. That resulting trust was of the special type considered by his Honour at [23] whereby, because of their intention at the time of transfer that Gloria would pay the mortgage, the quantum of Gloria's interest in the property would increase in the future in conformity with the mortgage payments. 30. As observed above, the same result could be justified on the principles that govern the creation of constructive trusts based upon the common intention of the parties where property is acquired on the basis that the beneficial interests in the property will not conform with the legal interest because of differential contributions to the acquisition and maintenance of the property. 31. However, once the Lakesland property was acquired by Tracey and Murray using loans secured on both properties, and once the burden of the security was artificially shifted from the Lakesland loan to the Wattle Grove loan, with priority being given to repayment of the latter loan before the former, the arrangement between Gloria and Tracey in substance shifted from the original resulting trust. The initial common intention also ceased to be an adequate foundation for determining Gloria's equitable rights. There seems to have been no common intention concerning the consequences of the Wattle Grove property being burdened by the mortgage securing the two loans or of the security for $170,000 being shifted from the Lakesland mortgage to the Wattle Grove mortgage. The relevance of any common intention was further attenuated by the apparent redraws by Tracey and Murray for their personal expenditure. 32. In my view, partly through her agreement and partly without choice, but with her ultimate acquiescence, Gloria engaged with Tracey in a joint endeavour the objective of which was that the loan to purchase the Lakesland property was repaid in a manner that took advantage of the negative gearing benefit in relation to the Wattle Grove mortgage. This was so that Tracey and Murray would come to enjoy the Lakesland property as their unencumbered home, and the value in the Wattle Grove property would then be used, augmented by the earnings of Tracey and Murray, to reimburse Gloria for all of her contributions. If a balance remained in the value of the Wattle Grove property after full reimbursement to Gloria, Tracey would be entitled to that balance. 33. That joint endeavour failed on 5 April 2013 when the relationship between Gloria and Tracey irretrievably broke down, and the latter repudiated the joint endeavour and refused to reimburse Gloria for any of her contributions. 34. It will be necessary for the Court to return to this question in connection with its consideration of the proper form of the relief that should be granted to Gloria. Quantification of Gloria's contributions 1. Tracey accepted that Gloria made part of the contributions that she claimed to have made but disputed part. The dispute did not relate to the total amounts that had been paid, but Tracey claimed that some of the payments were made out of Tracey's funds. Gloria conceded a number of Tracey's arguments. 2. The forensic difficulty that has arisen is that Gloria managed Tracey's bank accounts and implemented the relevant transactions. Some of the contributions made by Gloria were made directly out of her own accounts so that her responsibility for the payments could be directly verified by Tracey. Other payments were made by Gloria out of accounts in the name of Tracey. Funds to which Tracey was entitled, whether her wages or child benefit payments, were paid into Tracey's accounts. Tracey drew money out of those accounts for living purposes and to pay her debts. Gloria also caused money to be paid into Tracey's accounts. A particular difficulty arises because Gloria claims that she paid money into Tracey's accounts where that money had been given to her by Tracey for such matters as board for Tracey and Ashlee or in repayment of debts owed by Tracey to Gloria. Gloria claimed that some of the money that she paid into Tracey's accounts should be treated as Gloria's money because Gloria had paid it into the accounts when she could have kept it for herself. No records were kept at the time that would now enable this dispute to be determined on a proper accounting basis. 3. A further problem is that Gloria set out to prove her case as to the amount of the contributions that she made on the basis that she had provided Tracey with updated spreadsheets on a regular basis and Tracey had agreed that she owed the amounts disclosed in those spreadsheets. I have already explained that this approach miscarried, as Gloria had to concede that the Wattle Grove and the Lakesland spreadsheets that she exhibited were not the same documents that she claimed had been provided to Tracey. 4. The evidence did not establish the actual circumstances in which the spreadsheets were produced. Gloria maintained that she had updated the spreadsheets contemporaneously with the occurrence of relevant transactions. Gloria denied in cross-examination that the spreadsheets had been prepared for the purpose of the proceedings. 5. A comparison between the spreadsheets and the ING loan account statements for the two loans shows that the spreadsheets contain information that appears to have been derived from the loan account statements. 6. In quantifying her claim, Gloria generally accepted that regular direct debits into the loan accounts were made by Tracey, but she claimed that all other payments into the loan accounts were made from her funds. This aspect of Gloria's case was essentially a matter of assertion by her. Gloria submitted that the Court should accept the credibility of her assertion and calculate the quantum of her contributions accordingly. 7. Gloria conceded in relation to the Wattle Grove loan account that she had wrongly treated the sum of $7,114 as a payment made by her when it was in fact the first home buyers grant that had been received by Tracey. Gloria also conceded that it was appropriate to reduce the amount that she claimed for payments into the Lakesland loan account by $18,500, because this sum was the total amount of gifts made by Gloria to Tracey and Murray for their wedding. These errors naturally cast some doubt on the veracity of the forensic approach adopted by Gloria. 8. As it has happened, I have not found it possible in these reasons for judgment to resolve the disputes between the parties as to the proper quantification of the contributions made by Gloria. 9. This outcome stems from the fact that the parties were unable to complete the hearing in the time that they had estimated and had been allotted by the Court. The evidence was completed, but there was no time for counsel to make oral submissions. The Court in the first instance was obliged to allow the parties to make their submissions in writing. Counsel for the parties have provided detailed written submissions. Those submissions have been carefully prepared, but it sometimes happens that written submissions are inadequate in the absence of the Court having an opportunity to discuss the effect of submissions with counsel and be taken through the underlying documentary evidence. The responsibility that the Court has to decide the dispute judicially cannot always be satisfied unless the Court has the benefit of dialogue with counsel concerning factual disputes that may be tenuously related to the relevant documentary evidence, or where that evidence is incomplete. 10. Consequently, I propose to deliver these reasons for judgment and to make some arrangement for counsel for the parties to supplement their submissions on the outstanding disputes concerning the quantification of Gloria's claim. 11. In these circumstances, it will be sufficient for me to outline the residual disputes between the parties on the quantification issue. Contributions to the purchase of the Wattle Grove property 1. On settlement of the contract for the purchase of the Wattle Grove property, Gloria forewent her one third interest in the price of $439,400, which is an amount of $146,466.67. Tracey accepted in her submissions that Gloria had also contributed $53,406.38, which was Gloria's share of the balance of her mother's estate. The total of these contributions is $198,812.76. 2. Tracey contributed the proceeds of the $150,000 borrowing from ING, although the payments made by Gloria of that mortgage increased Gloria's contribution and reduced Tracey's. I will consider that issue below. 3. The dispute arises out of the fact that the balance of $90,402.52 that was paid to Ms James to complete the contract was paid out of an account in the name of Tracey. As I understand it, that was the account with $101,000 in it that I have referred to above at [124]. Tracey accepted in her final written submissions that $58,225.65 of the $90,402.52 could be traced to payments of Gloria's money. The total amount of the contribution by Gloria that Tracey has accepted is therefore $258,038.41. 4. Tracey submits that the Court should find that $32,176.87 was contributed by Tracey. 5. Tracey explained the basis of this submission in pars 94 to 112 of her final written submissions. The thrust of those submissions was that Tracey "could be" the source of that amount of deposits into her account by reason of findings that the Court should make concerning the funds available to Tracey and her expenditures. 6. In response, Gloria submitted that the Court can readily dispose of Tracey's submission, because if Tracey had contributed $32,176.87 to the $101,000 in her account "she would have been aware of it … and it would have been advanced by her early pleadings and affidavit". I already explained above, when considering the issue of the reliability of Tracey's evidence, that there is a basis for concluding that Tracey did not know how much of the money in her account she had contributed by reason of the fact that Gloria exercised complete control over the account, save for monies withdrawn by Tracey at ATMs. 7. The gravamen of Gloria's response was that the Court should prefer Gloria's account over Tracey's late claim to have saved the funds herself. 8. This submission in essence asks the Court simply to accept Gloria's position concerning such matters as the amounts of board that Tracey was obliged to pay Gloria from time to time, the amounts of debts that were repayable, and the financial consequences of Tracey's lifestyle. 9. I have explained above why I prefer Gloria's evidence to that given by Tracey on the issue of whether Gloria intended to make gifts to Tracey. However, I have also explained that I have real reservations with Gloria's evidence on issues of detail. 10. This is not a case where it is proper to decide that one party's evidence should be preferred over the other's, and consequently accept as true the entirety of the first party's evidence on an issue, when that evidence is in large part a distillation of subjective opinions formed by the party over a considerable time. 11. This may be a case in which the uncertainty of the factual situation requires the Court to adopt a broader approach to the determination of the respective contributions of the parties of the nature referred to by White J in Shepherd v Doolan (above) at [42]. Contributions to the payment of the Wattle Grove loan 1. Gloria initially claimed that she had paid $119,469.97 of the Wattle Grove loan, but reduced that claim to $112,355.97, after allowing for the fact that Tracey had contributed the $7,114 from the first home buyers grant. 2. Tracey accepted that Gloria had made direct payments of $50,970, but contested the balance on various grounds set out in pars 115 to 117 of her final written submissions. On different bases, Tracey submitted that the Court might find that Gloria had contributed $50,970, $68,264.24 or $97,217.56. 3. Notwithstanding the effort of counsel for Tracey to explain the basis for these submissions, I do not accept that in the absence of oral elaboration I understand them sufficiently to permit me to rule properly upon them. 4. Gloria's response was to describe Tracey's submissions at par 70 in reply as "various accounting exercises that were not put to Gloria nor were they the subject of pleadings, affidavit evidence or it would appear any evidence in the trial except perhaps some bank statements". Gloria submitted that Tracey's submissions should be rejected on the basis that her evidence should be preferred. 5. Gloria had the burden to prove the quantum of her contributions. She failed to do that by being unable to prove that she provided spreadsheets to Tracey with which Tracey agreed. Gloria provided spreadsheets that appeared to distil the information in the relevant loan account statements. Gloria placed headings in the spreadsheets, including one that attributed contributions to herself. She in effect asks the Court to take her word for the fact that any payment that she listed as being a contribution by her was in fact such. That is not an adequate way to prove Gloria's claim. 6. Tracey was not obliged to plead in detail her response to Gloria's spreadsheets. Her response was properly a matter for evidence. As Gloria did not explain the entries in the spreadsheets in her evidence, it was not incumbent upon Tracey in the cross-examination of Gloria to put Tracey's case as to the significance of the entries in the loan account statements. 7. Tracey is entitled to make the submissions that she has made, but I will require further explanation before I can properly rule upon them. Contributions to the payment of the Lakesland loan 1. Gloria initially claimed that she had made payments totalling $184,908.17 to the Lakesland loan, but she reduced that claim to $166,408 by allowing $18,500 as a gift to Tracey and Murray for their wedding. 2. Tracey submitted that the $166,408 should be reduced by $19,500 as that amount was paid out of the Wattle Grove loan account on 12 October 2007 into the Lakesland loan account via Tracey's CBA account. As I understand it, Tracey's submission is that if Gloria is given credit for paying the $19,500 into the Wattle Grove loan account, it would be double-counting to give her credit again for the same amount when it was transferred into the Lakesland loan account. 3. Gloria's response was that this submission is not open to Tracey because it was not put to Gloria in cross-examination. 4. This is an accounting matter, and it is not clear to me how it could make a difference whether or not Gloria was given an opportunity to give to the Court her view as to whether double-counting had occurred or not. 5. It will be necessary for Gloria to respond to the substance of Tracey's submission, and for that purpose the Court will need the assistance of further submissions. Payment of outgoings 1. Tracey accepted Gloria's claim that she had contributed outgoings totalling $35,565.41. Should relief be granted on condition? 1. Tracey submitted that, if the Court found that equitable proprietary relief should be granted to Gloria, that relief should only be granted on three conditions. Tracey formulated those conditions in pars 12 and 13 of her final written submissions in the following terms: (a) Gloria has received a disability support pension and then an aged pension on the basis she had no interest in the Wattle Grove property and there was no loan owing by Tracey to her for her contributions. She must do equity by making restitution to Centrelink: Wallis v Rudek [2020] NSWSC 162 at [131]; (b) Gloria failed to collect rent or remit it to Tracey for the period between 2 April 2013 and 27 September 2013, $10,560, being 24 weeks at $440 per week (CB 741-755), which Gloria should be required to give Tracey credit for: Wallis v Rudek [2020] NSWCA 207 at [105]; and (c) a deduction for any compensation ordered upon an enquiry as to damages, which is referred to in the paragraph below. 13. Tracey seeks an enquiry as to damages on the undertaking as to damages given by Gloria to [the] Court on 10 September 2018 when Gloria's caveat over the Wattle Grove property was extended, which prevented her from selling the property. Her loss is the loss of opportunity to sell the Wattle Grove property since 10 September 2018. Any equitable relief in favour of Gloria should be conditional on a set-off for any amount the Court orders on enquiry. Condition based upon receipt of pensions 1. Tracey elaborated her submissions concerning restitution to Centrelink in pars 200 to 202 and 209 to 220 of her final written submissions. 2. The essence of Tracey's case on this issue is that, if Gloria's case is accepted, as it has been, Gloria had a right to repayment of some kind since June 2005, which is property that increased over time, as well as an interest in the Wattle Grove property. Gloria was on a disability pension from June 2005, and she converted to an aged pension in about June 2017. 3. Basing her submissions on acknowledgements made by Gloria in cross-examination, Tracey submitted that Gloria knew that she had to disclose assets to Centrelink and that she was required to tell Centrelink if her assets changed. She knew that, if she owned the Wattle Grove property, she would not have received a pension and thought if she received and actually got an inheritance she had to tell Centrelink but not if she did not get it. Gloria has not told Centrelink about the loan she claims from Tracey because she has not received any payment. 4. Tracey relied upon the decision of Parker J in Wallis v Rudek [2020] NSWSC 162 at [131]. It seems from [54] that a party, Mrs Wallis, had claimed rental assistance from Centrelink in circumstances where it was clear that Mr and Mrs Wallis were not paying rent. The claim was a fraudulent claim. As his Honour noted at [55], he had been told that Mr and Mrs Wallis were already performing an arrangement made with Centrelink to repay the amounts that had been improperly claimed by them. 5. His Honour made an order that Mr and Mrs Wallis be reimbursed with funds provided by them relevant to the purchase by Mrs Rudek of the property in question, such order being conditional upon the amount of the balance of the rental assistance being repaid to Centrelink. 6. It is not clear how the false claim for rental assistance related to the circumstances that gave rise to Mr and Mrs Wallis' entitlement to equitable relief. 7. Parker J did not elaborate his reasons for making the order for equitable relief conditional, but he relied upon the decision of the High Court in Nelson v Nelson (above). 8. In that case, one of the appellants, Mrs Nelson, had provided funds for the purchase of a residential property whose title was put into the names of her two children. It was found by the trial court that Mrs Nelson did not intend to make a gift to her children, and so, absent any impediment to such a finding being made, the presumption of advancement that was held to exist against a mother in favour of her children would be rebutted. 9. However, the Court found that the reason why the decision was made to place the title to the property in the names of the children was an intention, known to all parties, to preserve Mrs Nelson's eligible status under the Defence Service Homes Act 1918 (Cth), so that Mrs Nelson would continue to be entitled to an interest subsidy on her intended borrowing towards the purchase of a different residential property for her own use. 10. Both at trial and in the New South Wales Court of Appeal it was held that the illegality constituted by the intention to fraudulently conceal Mrs Nelson's beneficial ownership of the property in order to preserve her eligible status under the Defence Service Homes Act had the effect that Equity would not give effect to the evidence that would otherwise lead to the rebuttal of the presumption of advancement. Accordingly, those courts declined to make orders giving effect to what would otherwise have been the resulting trust of the proceeds of sale of the property in favour of Mrs Nelson. 11. The majority of the Justices in the High Court, being Deane, Gummow and McHugh JJ, held that Mrs Nelson would do sufficient equity to justify the equitable relief that she sought being made in her favour if she satisfied a condition that she repay to the Commonwealth a sum representing the amount of the interest subsidy that she had wrongfully received as a result of her intentionally causing the title to the first property to be placed in the names of her children in order to achieve that benefit. See in particular the joint judgment of Deane and Gummow JJ at [104]-[108]. The relevant principle governing the effect of the particular illegality, having regard to the provisions of the Defence Service Homes Act, did not require that Mrs Nelson be entirely denied the equitable relief to which she would have been entitled in the absence of the illegal purpose. 12. Dawson and Toohey JJ, on the other hand, took the view that it was not a matter for the courts to impose a condition such as that required by the majority, as it was entirely a matter for the Secretary of the relevant Commonwealth Department to decide what, if anything, should be done in relation to the reimbursement of the interest subsidy. 13. I do not accept that the principle discussed in Nelson v Nelson and Wallis v Rudek requires or justifies the Court imposing the condition suggested by Tracey upon any equitable relief granted in favour of Gloria. 14. On the facts in Nelson v Nelson, the evidence established that there was a positive intention in Mrs Nelson not to make a gift, but that the decision to place the property in the names of the children was formed in order to enable Mrs Nelson to deceive the Commonwealth and wrongfully maintain an eligibility for a benefit to which she was not entitled under the relevant legislation. For the Court to recognise that intention as being sufficient to rebut the presumption of advancement, and then make an order enforcing the resulting trust, would directly and at the one time give Mrs Nelson equitable relief and allow her to retain the benefit of the deception. In that case, the principle that he or she who seeks equity must do equity justified the Court in making the equitable relief conditional upon the remediation of the illegal purpose. 15. In the present case, Gloria was not in a position to know that her claim would be successful until the publication of these reasons for judgment. It may be that she was nonetheless required to disclose the existence of her claim to Centrelink. That may or may not have had an effect on Centrelink's preparedness to accept her claim for the benefit. I do not accept that it has been established with sufficient certainty that Gloria is indebted to Centrelink in respect of overpaid benefits for it to be appropriate that the Court impose the condition contended for by Tracey on the grant of the equitable relief to which Gloria is otherwise entitled. 16. In the present case, I accept the honesty of Gloria's evidence that, in paying her own funds for the benefit of her daughter on the basis that she expected reimbursement at some unspecified time in the future, she did not think that this was an asset that she was required to disclose to Centrelink. In Gloria's mind, she was paying out money not receiving it. There is no reason for the Court to assume that Gloria will not disclose the result of these proceedings to Centrelink. If that occurs, Centrelink will be in a position to take whatever administrative course it thinks is appropriate. 17. It is one thing for the Court to impose a condition of the type imposed in Nelson v Nelson and Wallis v Rudek when there is a clear or acknowledged case that a benefit has been falsely claimed by a party who would otherwise be entitled to equitable relief. It is entirely another where the circumstances would require the Court to act as prosecutor and judge in uncertain circumstances, where the relevant government authority is not a party, and the issue of wrongful overpayment of some statutory benefit has not been pleaded as an issue or been the subject of proper forensic contest. 18. To lawyers, the fact that Gloria was making payments for the benefit of Tracey on a basis that she was entitled to reimbursement and a proprietary interest in the property to protect her right may obviously be an asset that should be disclosed in an application form to Centrelink. That is so even if the effect of the arrangement is that Gloria would not realise any value in the asset unless and until Tracey commenced reimbursement at some unspecified date in the future. However, from the perspective of a layperson, Gloria's failure to recognise that her claim against Tracey was an asset requiring disclosure does not mean that Gloria has engaged in illegal conduct requiring collateral intervention by Equity. 19. In response to a question by the Court as to whether a claim that was denied by the counterparty constituted an asset for the purposes of Gloria's entitlement to the disability and age pensions, counsel for Tracey provided detailed submissions that, put simply, appear to have the effect that, under the Social Security Act 1991 (Cth), Gloria's claim against Tracey was property that was required to be disclosed, and that difficulties in determining the value of the asset or its realiseability arise only if the applicant for the benefit has made a hardship application under s 1129 of the Act. Counsel explained that, generally, an asset is valued at its market value, and if an asset is unrealisable it can be assessed as being worth less than its face value and the hardship provisions may apply. 20. The complexity of these provisions in their application to the facts of this case, having regard to the absence of any proper contest, make it inappropriate for the Court to impose the condition on the grant of equitable relief for which Tracey contends. Condition based upon non-payment of rent 1. As for Tracey's claim that Gloria is obliged to give her a credit of $10,560 for failing to collect rent or remit it to Tracey for the period between 2 April 2013 and 27 September 2013, I accept Gloria's submission in reply that this was not an issue raised by the pleadings; it was not put to Gloria in cross-examination, and it is not a matter for which relief could be granted in these proceedings on the basis of the hearing that has occurred. 2. It is apparently the case that the rent for the Wattle Grove property has been paid, by some means, into the account of Tracey or Tracey and Murray, apart from an initial period when it was paid in cash, and also possibly for the 24 week period the subject of Tracey's claim. The practical arrangements that led to this outcome were not explored in the evidence in any detail. It is probable that Gloria caused the rent to be paid in this way by arrangement with the tenants who Gloria dealt with on behalf of Tracey as the legal owner of the Wattle Grove property. 3. There was no allegation or evidence capable of establishing that Gloria owed a legal duty to Tracey to cause the rent to be paid by the tenants, and to ensure that the money was paid into her account. There is no evidence that might explain why rent was not paid for any period. As Tracey was the legal owner, there is no explanation as to why Tracey did not take steps on her own account to ensure that rent due to her was paid. Condition based upon undertaking as to damages 1. I will not, on the basis of the hearing that has been conducted to date, make any order against Gloria based upon the usual undertaking as to damages that she gave to the Court as a condition to the extension of the caveat that she lodged against the title to the Wattle Grove property. 2. That is not a claim that has been notified by any application made by Gloria, and Tracey's entitlement to relief of that nature has not been the subject of any hearing. 3. In the absence of explanatory submissions, I do not understand how the findings in these reasons for judgment could give any right to Tracey to make an application to the Court that Gloria should be ordered to pay damages to Tracey in performance of her undertaking. I have not considered the terms of the caveat, as it was not the subject of dispute in the proceedings, but it is to be observed that Gloria has succeeded in establishing that she has a substantial proprietary interest in the Wattle Grove property. 4. Further, it is not apparent how Tracey has suffered any damage as a result of the extension of the caveat. It is at least probable that the value of the Wattle Grove property has substantially increased during the pendency of these proceedings. Given the quantum of the value of Gloria's proprietary interest, having regard to the payments made against the Lakesland mortgage and the redraws from the mortgages for the private purposes of Tracey and Murray, any increase in the value of the Wattle Grove property that has occurred is likely to benefit Tracey. 5. Nothing in this judgment will prevent Tracey from making a proper formal application for relief against Gloria in enforcement of Gloria's undertaking as to damages if Tracey is so advised. But there is no justification for the Court to limit the relief to which Gloria has established an entitlement based upon any consideration arising out of the undertaking. Relief 1. I will require the parties to confer and to deliver to my Associate draft short minutes of order that are appropriate to give effect to these reasons for judgment. 2. I recognise that conceptual and practical difficulties must be faced in formulating the orders that should be made. 3. One source of difficulty is the complex nature of the juridical basis of the beneficial interests that I have found Gloria may have in both the Wattle Grove property and the Lakesland property. 4. Gloria is entitled to a declaration that she has a beneficial interest in the Wattle Grove property in the nature of a resulting or constructive trust that has value equal to the amount of the total contribution towards the acquisition by Tracey or Tracey and Murray of the Wattle Grove property and the Lakesland property, including loan repayments and outgoings. 5. If there is any surplus in the value of the Wattle Grove property after the reimbursement of Gloria, Tracey is beneficially entitled to that surplus. 6. Gloria has not established that she is entitled to interest on the contributions made by her up until 5 April 2013. As Tracey repudiated any obligation in equity to reimburse Gloria on or soon after that date, I consider that justice requires that Gloria be entitled to interest at the Court rate from that date. 7. Gloria is also entitled to an order that Tracey pay her equitable compensation in an amount equal to the total of her contributions plus the allowed interest. 8. The principal difficulty that must be faced is that the market values of the Wattle Grove property and the Lakesland property are not known, and the evidence is not complete as to the amounts presently secured by the registered mortgages over the two properties. Consequently, the Court is not in a position to anticipate the practical effect or adequacy of any orders that it may make giving Gloria a proprietary interest in one or both of the properties. 9. In principle, Gloria is entitled to an order in appropriate terms that will cause the sale of the Wattle Grove property. Such an order could be made under s 66G of the Conveyancing Act 1919 (NSW), although that order would impose costs on the parties that could be avoided if they were able to cooperate in a proper way in effecting the sale. 10. A significant unknown is the attitude that ING will take to the sale of the Wattle Grove property. Among other things, that will depend upon the value of both properties and ING's perception of the financial capacity of Tracey and Murray to service the balance of any loan that may remain after the sale of the Wattle Grove property. This consideration will affect ING's decision as to how much of the two loans it will require be repaid out of the sale price of the Wattle Grove property. 11. It is possible that ING will require that the whole of the outstanding amounts of the two loans be repaid out of the sale price for the Wattle Grove property. The Court does not know whether or not that would leave a balance payable to Gloria. 12. This possibility may ultimately require the Court to consider more fully the nature of any proprietary interest in the Lakesland property that Gloria should be given in application of the principles that apply on the failure of a joint endeavour. 13. It is premature for the Court to speculate on the question of whether, and if so what declarations and consequential orders should be made as to Gloria's beneficial interest in the Lakesland property to ensure that she receives the reimbursement to which she has been found entitled by these reasons. The Court should only consider this issue when the relevant facts are more fully known and there is a basis for determining what additional orders are required and what orders will be fair. 14. It is never too late for parties to cooperate in their mutual interests. The Court does not know whether the 'equity' in the two properties is sufficient to fund the reimbursement of Gloria. It also does not know whether it is possible for Gloria to be reimbursed in a manner that permits Tracey and Murray to retain their ownership of the Lakesland property and service any residual mortgage over that property. 15. It will be necessary for Gloria to address the fact that Murray is not a party to these proceedings in relation to the relief that the Court will be entitled to give in his absence: see the decision of White J (as his Honour then was) in Boyd v Thorn [2016] NSWSC 588; (2016) 18 BPR 35, 941. 16. The parties should consider whether it is possible to resolve the outstanding quantification issues without the necessity for a further hearing. If they cannot do so, then arrangements should be made with my Associate for the matter to be relisted for directions. 17. The obligations of the parties to pay legal costs will have an effect on the practical outcome of the proceedings that cannot be known to the Court. 18. Although Gloria asked for an order that her costs of the proceedings be paid by Tracey, Tracey requested to be heard on costs after these reasons are delivered. In the circumstances, I will give the parties an opportunity to address the Court on the issue of costs. 19. As presently advised, I do not see why the Court would make an order that Gloria have a proprietary interest in either of the properties to secure any entitlement that she has to the payment of her costs. ********** 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: 25 February 2021