GOMES v GUERREIRO SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, PRIESTLEY and CLARKE JJA 4 February 1991, 10 April 1991 [1991] NSWCA 125 NEW POINT sought to be argued on appeal — respondent's case may have been differently (more fully) conducted on the point had it been raised below — in any event, on available materials new point would not prevail. APPEAL against factual findings of trial judge that property in name of parents of deceased son was held by them on trust for him (and therefore his estate) - issues dependent partly on conflicting evidence and partly on inconclusive documentation no reason shown to disturb trial judge's findings on credibility - nor his conclusions from the combination of oral and documentary evidence. ORDER Appeal dismissed with costs. Gleeson CJ I have had the advantage of reading in draft form the reasons for judgment of Priestley JA. I agree with the orders proposed by his Honour and with his reasons for those orders. Priestley JA Outline of matters leading to this appeal. In about 1952 Mr Ricardo Gomes left Portugal with his wife and family to live in Australia. In 1974 Mr and Mrs Gomes went back to Portugal to live. They had some property in Australia at that time. They each gave a power of attorney to their son Mr Albert Guerreiro. These powers of attorney were registered and were in very wide terms. In 1980 Mr A. Guerreiro entered into a contract to buy premises at Botany Road, Alexandria, using the powers of attorney to have his parents named as the purchasers in the contract. The purchase was completed on 25 November 1980 and Mr and Mrs Gomes became the registered proprietors of the premises. Part of the purchase money was furnished on settlement by persons who, in return for the money being handed over received memorandums of mortgage over the premises which were duly registered. Mr and Mrs Gomes were named as the mortgagors in these mortgages. Mr A. Guerreiro died in Portugal on 23 May 1987, after a traffic accident. His widow, Mrs L Guerreiro, was granted probate of his will in New South Wales and became the executrix of his estate. In 1989 she commenced proceedings in this court's Equity Division, both in her capacity as executrix and on her own behalf, against various defendants. The aspect of those proceedings now relevant was a claim by her against Mr and Mrs Gomes that they held the Botany Road premises on trust for her in her capacity as executrix. Another aspect of the proceedings was a claim by Mrs L Guerreiro that she had a personal interest in the Botany Road premises. This claim involved a conflict of interest on Mrs L Guerreiro's part and was left aside by the trial judge, Bryson J, to be resolved in separate proceedings. On the claim litigated before him, Bryson J made a declaration that Mr Gomes (as survivor of himself and his wife, who had died after the proceedings began) held the Botany Road premises on trust for Mrs L Guerreiro as executrix, but without prejudice to the question whether she had an entitlement in her own right. 2 UNREPORTED JUDGMENTS The present appeal is by Mr Gomes against Bryson J's declaration. It will be simplest in setting out the relevant circumstances to refer to Mrs L Guerreiro as the plaintiff and to Mr and Mrs Gomes as the defendants. (There were other defendants at first instance, but they are not concerned, in a legal sense, with the only matter argued in the appeal.) The Pleadings. The plaintiff's original statement of claim alleged: that in or about March 1980 the plaintiff and her husband, Mr A. Guerreiro, agreed they would each contribute moneys to a fund to be invested for the benefit of each of them, and that pursuant to that agreement she handed her available funds to her husband; the purchase of the premises at Botany Road, Alexandria; that the purchase money was made up of (i) moneys contributed by the plaintiff pursuant to the agreement, (ii) moneys contributed by her husband, and (iii) moneys borrowed by her husband from the defendants; that Mr A. Guerreiro bought the premises intending they should be beneficially owned by him and the plaintiff jointly; and that after purchase, the plaintiff and her husband carried out extensive repairs and renovations to the premises to which the plaintiff contributed substantial sums. The amended statement of claim repeated the allegations in the original one, and additionally alleged that the defendants were aware both before and during the work and expenditure on the premises that the plaintiff and Mr A. Guerreiro believed themselves to be the beneficial owners of the whole or alternatively part of the premises, that they intended to carry out the work and incur the expenditure and that they intended so to do and did so in reliance on their belief that the defendants were aware that the plaintiff and her husband believed themselves to be beneficial owners as alleged. In their defence the defendants put in issue the agreement the plaintiff had alleged between herself and her husband. In answer to the allegation of the source of the purchase money for the premises they said that their son Albert had been instructed to buy the premises on their behalf using the proceeds of sale of another property. They denied that the plaintiff or her husband contributed to the purchase price. They also denied the allegation that their son Albert bought the premises intending they should be beneficially owned by him and the plaintiff jointly. They admitted that they knew their son had undertaken certain repairs and renovations to the premises but made no admission as to the extent of that activity nor as to the plaintiffs part in that activity. They also said they were aware a mortgage was entered into on their behalf by their son (in context this could only mean in order to satisfy part of the purchase price of the premises) but said that he did so without their permission. The defence which the defendants filed was to the plaintiff's original statement of claim. It was not amended in response to the plaintiff's amended statement of claim, which was filed by leave at the beginning of the hearing before Bryson J, on 10 September 1990, (when the judge remarked that he looked forward to receiving an amendment dealing with the plaintiff's amendment). However, we were told in the appeal by counsel for the defendants that at the trial the original defence was treated as being applicable to the amended statement of claim, and also as putting in issue the additional allegations. On this basis the court can see what were the issues on the pleadings. Issues on the pleadings. On the pleadings the primary case for Mr A. Guerreiro's estate was that, as against the defendants, the whole of the purchase moneys for the premises had been provided by him. The secondary case was that part of the purchase moneys URJ GOMES v GUERREIRO (Priestley JA) 3 had been provided by him. For the plaintiff to establish either of these cases it was necessary to prove where the purchase moneys came from. One way of doing this, as against the defendants, was to show that no part, or alternatively not all, of the purchase moneys came from the defendants. The plaintiff bore the onus of proof in this. Implicit in the primary case was the assertion that whatever Mr A. Guerreiro purported to do concerning the Botany Road premises in the names of the defendants, he was in fact doing for himself (or himself and the plaintiff) without the authority of the defendants. The defendants by their defence sought to rebut any evidence the plaintiff might call in support of her case on the issue of the provision of the purchase money, by asserting that they had provided it, in the sense that Mr A Guerreiro had had funds of theirs in his possession which, as their agent, he used in the purchase. This was coupled with an allegation that Mr A. Guerreiro had been instructed to buy the premises for them using their funds. The questions of fact raised by these issues seem to have been what was contested by the plaintiff and the defendants before Bryson J. Further, what was contested was the course of what I will call the equity funds, ie the moneys other than the moneys lent on mortgage. No attention appears to have been paid to the possibility that Mr A. Guerreiro in using in part satisfaction of the purchase price the funds made available by the lenders who became the mortgagees was doing so on behalf of the defendants. One reason for this not being in issue appears to lie in the statement by the defendants in their defence that the giving of "a" mortgage was done by Mr A. Guerreiro without their permission. I mention a further possible reason later. Evidence adduced by the parties on the issues. The hearing began before Bryson J on 10 September 1990. In his reasons he dealt in detail with the evidence brought forward by the plaintiff and the defendants on the questions of fact I have described. A summary of the evidence and findings follows. The plaintiff's evidence, which supported both her claim as executrix on behalf of the estate, and her claim in her own right which the trial judge did not decide, fell into two parts. The first part described the arrangements between Mr A. Guerreiro and herself leading up to the purchase of the Botany Road premises, and what she and he did in regard to those premises after the purchase. The second part went to showing where the moneys making up the purchase price came from. Plaintiff's evidence of arrangements with Mr A. Guerreiro re purchase of Botany Road premises and their subsequent actions. The first part of the evidence came mainly from the plaintiff herself. She met Mr A. Guerreiro in January of 1977 and went to live with him in April. At that time he had separated from his first wife, Fatima, with the intention of ending the marriage. It was later dissolved, although the evidence does not reveal when, or give any details of any orders made concerning the matrimonial property. However, (according to various witnesses) Mr A. Guerreiro felt that he had fared badly by whatever orders were made concerning property, and was determined to take any available steps to avoid such a thing happening to him again in any later relationship. When the plaintiff and Mr A. Guerreiro began to live together she was unemployed and he supported her. She got a job in June 1977. He then proposed to her that she keep $40 a week for herself from her pay and give the rest to him. 4 UNREPORTED JUDGMENTS They were then living at 24 Chisholm Street, Darlinghurst, which he owned. He owned another property at 7 West Street, Paddington which was rented out and which he sold in about 1978. At times the plaintiff worked in two jobs at once to raise funds for their mutual purposes and continued to leave the holding and management of the pooled moneys to Mr A. Guerreiro. Early in 1980 the two of them planned to invest their money with a view to going to Portugal to live permanently. Mr A. Guerreiro said he would sell the property at 24 Chisholm Street and then buy two commercial properties, one in his parents' names and the other in the joint names of the plaintiff and himself. When the plaintiff asked him why one property would be in his parents' names he said "Taxation reasons, I am also borrowing money off them, and to protect them in case they want to come back to Australia as the Government will not prevent them from migrating if they are paying taxes". The plaintiff said that Mr A. Guerreiro believed that if his parents were Australian taxpayers they would be able to migrate to Australia if they wished. The plaintiff also said that she often told him that this view was incorrect. The plaintiff said that after looking for a commercial property for some time Mr A. Guerreiro told her he had found the premises at Botany Road and that he had gone to see a solicitor about buying them. He mentioned that he would put these premises in his parents' names. She remonstrated with him saying, in substance, that since the premises were to be bought with their money and she was going to be his wife he should trust her enough to put things in her name. He replied that it had nothing to do with his trusting her but that he was putting it in his parents' names for the reasons he had given her earlier in the year. He added that he had already put down the deposit and that there was nothing that could then be done. He also said the next property would be in their names and that "I have got a Power of Attorney from my parents and I make all the decisions". The plaintiff accepted this. (It would seem that Mr A. Guerreiro did not tell the plaintiff, as evidence at the trial revealed, that in fact when he paid the deposit on the premises he did so in his own name and later asked the agent to change the name to that of his parents.) The Botany Road premises were a burnt out factory. Mr A. Guerreiro set about restoring it to a condition in which it would be suitable for leasing. He devoted himself to this full time for about ten months from December 1980. The plaintiff worked with him whenever she was not doing her regular work. During this period the two of them lived on the money she was earning. From this money also, still managed by Mr A. Guerreiro, mortgage repayments and other payments relating to the premises were made and building materials were bought. Also during this period, on 2 May 1981, the plaintiff and Mr A. Guerreiro were married. In 1983 Mr A. Guerreiro sold the property at 24 Chisholm Street, Darlinghurst and in April of that year bought a factory at 44-46 Princes Highway, St Peters. He alone was registered as the proprietor of this property and it has not been contested that it forms part of the estate being administered by his widow as executrix. After the sale of 24 Chisholm Street the plaintiff and her husband went to live in rented premises. When the Botany Road premises were sufficiently renovated they were leased to various tenants. The plaintiff put this as beginning between the middle and end of 1981. She said in cross examination that the rents returned sufficient money to URJ GOMES v GUERREIRO (Priestley JA) 5 meet the mortgage payments leaving an excess which she and her husband lived on. The rents were paid by the tenants sometimes to the plaintiff and sometimes to her husband. In July 1985 the plaintiff and her husband went to Portugal with the intention of living there permanently. They there visited the defendants. Mr A. Guerreiro showed his parents photographs of the factory, saying "This is the property I bought in Botany Road, Alexandria that I put in your names". The only comment from his parents was "It looks very nice". In cross examination the plaintiff said that before they had gone to Portugal her husband had told his parents by telephone and in writing of his purchase of property. She also said in crossexamination that Mr A. Guerreiro had not consulted his parents about buying the property or about any of the work that was done on it. When the plaintiff and her husband went to Portugal in 1985, Mr A. Guerreiro had with him draft wills by which his parents were to leave the Botany Road premises to him. The plaintiff was not present at any discussion between her husband and his parents about the wills, but Mr A. Guerreiro told her that he had discussed the matter with them and that the reason for his having the wills prepared was that his parents would be leaving everything fifty fifty - fifty per cent to him, fifty per cent to his brother - and he was concerned in the event of anything happening to his parents that his brother "could make a claim on the property because it was in his parents' name and get half of the property and with the property being his he did not wish that'. The plaintiffs evidence of origin of purchase price. The evidence concerning this part of the plaintiff's case was mostly documentary, many of the documents apparently having been tendered in evidence by the defendants. From a statement of account to Mr A. Guerreiro from the solicitors who acted on the purchase of the Botany Road premises, dated 18 December 1980, it appears that the $80,000 for the purchase money came from amounts of $1,000 and $9,000 handed to the solicitors on account of deposit and stamp duty, an amount of $22,575 handed to the solicitors on account of balance purchase money, $40,000 lent by the first mortgagee on settlement and $10,000 lent by the second mortgagee on settlement. The $1,000 sum came from a cheque drawn on an account with the New South Wales Permanent Building society, as did the $9,000 sum. The plaintiffs evidence was that when she and Mr A. Guerreiro returned from Portugal in February 1980 they had money in a joint savings account with a balance of approximately $6,000 of which she had contributed about $2,500. Into this account she and Mr A. Guerreiro deposited unused travellers cheques and foreign currency totalling $3,000-$4,000. Thus at that time they had money in a joint account, which she recollected as being either at an account at Westpac or the Commonwealth Bank, totalling about $9,000 to $10,000. Going towards the $22,575 figure shown in the solicitor's statement of 18 December 1980 were three cheques of $18,875, $1,000 and $2,200 (totalling $22,075). The first two of these were drawn on accounts with the New South Wales Permanent Building Society and the third on an account with the Sydney Building Society. The account from which the $18,875 cheque was paid was in the name of the defendant, Ricardo Gomes. There was no evidence to show whether Mr A. Guerreiro made the withdrawal under his power of attorney or some other authority given by his father, or whether his father knew anything about the account. 6 UNREPORTED JUDGMENTS The plaintiff gave evidence that during the period leading up to the completion of the purchase of the Botany Road premises she had handed to Mr A. Guerreiro from her income and a tax refund an amount between approximately $4,900 and $5,200. She also gave evidence that when she and her husband travelled to Portugal in July 1985 they took with them a bank draft payable to the defendants in the sum of $17,659.88. Her husband handed the draft to the defendants saying that it was "for the moneys we owe you". At Mr A. Guerreiro's suggestion the defendants asked him to keep it in his account where it would earn a higher rate of interest. Some months after, Mr A. Guerreiro asked his parents whether he and his wife could use the money derived from the draft to use as a part deposit on the purchase of a home unit. The parents agreed and the home unit in Portugal was purchased. Defendants' evidence in support of assertions in their pleadings. Mr Ricardo Gomes came to Australia for the purpose of giving evidence at the hearing. An affidavit had apparently been sworn by him, and some other documents signed by him for use at the hearing. The affidavit, which purported to be sworn on 25 January 1990, was read by counsel for the defendants. The text of the affidavit referred to the property formerly owned by Mr Gomes and his wife at Albion Street, Randwick which was sold after he and his wife went back to Portugal. (This was a block of flats on the corner of Albion and Hooper Streets and was sometimes called the Hooper Street property. Other evidence in the case proved that Mr Gomes visited Sydney briefly in about 1978 in connection with the sale of this property.) The text of the affidavit then said that Mr Gomes' son Albert looked after the sale, remitted some of the proceeds to Portugal and as to a balance of $15,000 kept it for his parents in Australia. The affidavit further said that Mr Gomes discussed the purchase of the Botany Road premises with his son Albert and asked him to use the $15,000 towards the purchase of those premises. When Mr Gomes was shown in the witness box the affidavit and other documents he had apparently signed, he denied that he had signed them. The evidence he gave orally was confused and difficult to follow. It seemed to be considerably different from what was shown in the affidavit filed on his behalf. The only matter elicited from Mr Gomes in examination in chief during his oral evidence was that when his son and his wife saw him in Portugal in 1985 no question of his will ever came up in any conversation. In cross examination he was asked whether he and his wife had ever bought any property other than the house at Hooper Street, Randwick. Asked for details concerning the sale and the disposition of proceeds from the sale of this property he said that he took $20,000 of the proceeds of sale back to Portugal. It was when asked to explain the difference between that statement and what had been said in the affidavit that he repudiated having sworn the affidavit. Later in questions which according to the transcript were asked by Mr Gomes' own counsel, in what, if the transcript is correct, must have been re examination, the following appeared: "Q. Have you ever seen the affidavit which you have before you before today? A. No, is the first time that I see it. Q. You told us before that you took the deposit from the sale of the Randwick property back to Portugal? A. Yes, the deposit, yes. Q. Did Albert ever send you any more money from the sale of that property? A. No. He told me he was buying a house, a property here. URJ GOMES v GUERREIRO (Priestley JA) 7 Q. When did he tell you that? A. It was before the accident. I can't recall, I know it was before the accident. All the money was here in Australia so he could buy the other house. He rung me to tell me he was buying this property in Alexandria and put it into my name." ('the accident" must refer to Mr Guerreiro's fatal accident in 1987.) "Q. Do you recall when that was? A. The date I can't remember. Q. Was it very long after you returned to Portugal? A. I can't recall. It was such a long time ago. Q. Do you recall whether it was shortly after your return to Portugal or perhaps a couple of years later? A. Mr Martin had 5 years to pay so he reckons it was between 4 and 5 years later." (The answer is in this form because the interpreter was sometimes reporting in indirect speech rather than translating directly.) "Q. As you recall was it about the time that Mr Martin was to pay the balance of the purchase price? A. I can't remember. He paid 20,000 deposit and he was supposed to pay the balance in 5 years. He paid before that so he wouldn't have so much interest, but I am not sure because my son was looking after it. Q. Do you recall your son telling you anything about what he was doing with the balance of the purchase price? A. My son was going to invest the money here in Australia because I was planning maybe to come back here and also the investments here were better. Q. Did he discuss that with you when you were in Australia in 1978 or 79? A. No, he called me by 'phone while I was in Portugal and he said he would buy this property in Alexandria and put it in my name. Q. Incidentally, do you have a telephone at your home in Portugal? A. Yes I do. HIS HONOUR: Q. Did you have one in your house in those days? A. No, I didn't have at that time. It was not long ago that I had a 'phone only when my wife was sick and I had to call the hospital and the ambulance and all that. Q. Did your son tell you that he was going to borrow $55,000 in your name to buy this property? A. He said he would put $15,000 in this property and also 15,000 in St Peters. Q. Did your son Albert tell you that he was going to borrow $55,000 of somebody else's money to use in connection with the property at Alexandria. Did your son ever tell you that he was going to borrow $55,000 in your name to use for the property at Alexandria? A. No he never told me that. He told me $15,000 from me. Q. Did he ever tell you he was going to borrow any large sum of money in your name to use for the property at Alexandria? A. He rung me to tell that he paid $15,000 for Alexandria property as a deposit. Q. He didn't tell you anything else about borrowing a lot of money in your name, did he? A. Yes from a company, something like that for St Peters which was a bigger flat and he kept all my money. Q. Did he ever tell you that the property he bought in Alexandria had been burnt out in a fire and had to be repaired? A. No he didn't mention it. HARRISON: Q. Did you ever find out that it had been burnt out and needed to be repaired? A. No, nobody told me anything. Q. Do you know what sort of a property it is at Alexandria? A. Yes, I have been there." The last questions and answers in the re examination were as follows: Q. Did you ever get back the $15,000 of your money which was used for the Alexandria property? A. He kept all the money. I only got $20,000. 8 UNREPORTED JUDGMENTS HIS HONOUR: Q. Did you expect to get any more money back out of the money that had been used to buy the Alexandria property? A. Yes. I allowed him to do this deal because I didn't need the money. At that time I had some money in Portugal and he was a very good son so I allowed him to use my money. Q. Did you expect that you would ever get the money back? A. Later on, yes when he started receiving from lease or something like that, he could send something to me. HARRISON: Q. Did you ever tell Albert that if ever you needed the money he had to give it back to you straight away? A. Yes. I said that but I didn't have the need for the money and he was a very good son so I never asked for it." Other evidence was given for the defendants. That of Mr JC Guerreiro, a cousin of Mr A. Guerreiro, showed that when Mr A. Guerreiro went to Portugal in 1985, Mr JC Guerreiro, at his cousin's request, looked after "his" properties (the Botany Road and St Peters premises) for him. He deposited all receipts in a bank account at the Randwick branch of the ANZ Bank. He and his cousin were the signatories authorised to draw cheques on this account. He was instructed by letter from his cousin in 1986 to give nothing to the plaintiff. In October 1986 he was instructed by his cousin to pay $1,500 from the ANZ account to the plaintiff, which he did. After his cousin's death he accounted to Mr and Mrs Gomes for the proceeds of the Botany Road premises. He became aware of conflicting claims to the property. In 1988 he gave all records then in his possession to Mr and Mrs Gomes. At about that time Mr DA Guerreiro, Mr A. Guerreiro's brother, took over the management of the Botany Road premises "on behalf of my parents", as he said in an affidavit. Trial Judge's findings on issues contested before him; some criticisms by the appellant. Insofar as Mr Gomes sought, under the defence filed, to make a positive case in rebuttal of the plaintiff's case, Bryson J made no findings in favour of the defendants. Whatever caused Mr Gomes difficulties in giving his evidence - it may have been because he understood very little English, his evidence was given through an interpreter and his school education in Portugal had ended when he was twelve - his disavowal of the affidavit which had been read as sworn by him meant that, in Bryson J's view, no regard could be had to it at all. This meant that it was only Mr Gomes's oral evidence which the judge felt he could consider. He said he took a very guarded view of this evidence. Indeed, once the material in the affidavit was set on one side, there was no evidence of any instruction by the defendants to Mr A. Guerreiro to buy the Botany Street premises for them using their funds and the only non documentary evidence tending to show that the Botany Road premises had been bought with the defendants' funds was that contained in the portions of Mr Gomes's oral evidence reproduced above. The furthest this evidence went, if accepted, was that a sum of $15,000 of the defendants' moneys was "put in" the Botany Road premises. Even then, the last question in re examination would seem to be more consistent with Mr A. Guerreiro's use of that money being by way of loan, repayable to his father whenever he asked for it, than as money intended to comprise part of the purchase price and thus carrying with it a proportion in the equity in the premises bought. The defendant's positive case not having been accepted by the trial judge, the question became whether the plaintiff had made out her case, on the probabilities. Bryson J found that she was a reliable witness, that her demeanour was URJ GOMES v GUERREIRO (Priestley JA) 9 impressive and that she was frank, confident, careful and responsible. He also found, primarily on the evidence of the plaintiff, that the defendants had contributed $15,000 to the Botany Road purchase, but that this sum was by way of loan, not for a share in ownership. As to Mr Gomes' evidence on this point, Bryson J said it could not support any clear finding as to the terms on which he put money into the purchase of the Botany Road property, but he thought on the probabilities the only money of Mr Gomes which could possibly be thought of as put into the property in any form was the $15,000 he had lent to Mr A. Guerreiro. Bryson J referred to a number of unresolved anomalies about the amounts and character of various payments mentioned in the evidence. However, he concluded positively that no amounts other than the $15,000 could be considered as having gone into the purchase, either by way of loan or equity. Bryson J found as a fact that the persons who truly acted and took the part of the purchasers of the Botany Road premises were Mr A. Guerreiro and the plaintiff. This was a finding critical to acceptance of the plaintiff's case. Bryson J pointed to expressions in the evidence that showed that both Mr A. Guerreiro and his father regarded Mr A. Guerreiro as "using" his parents' names in the purchase. One example of this was an incident, recounted in the plaintiff's evidence and clearly accepted by the trial judge, in which Mr A. Guerreiro, in Portugal in 1985, showed his parents photographs of the factory, saying "This is the property I bought... that I put in your names". The only comment was: "It looks very nice". The inference, which I think was open to him, that Bryson J drew from evidence of this kind was that both Mr A. Guerreiro and the defendants knew that Mr A. Guerreiro was using their names in connection with a purchase so that it would appear that the parents were the purchasers when, as Mr A. Guerreiro and the parents all knew, the purchase was in their name only, but was being made not on their behalf by their son, but on his own. After making this finding, Bryson J continued: "The relevant intentions and motives are those of Albert Guerreiro and of the plaintiff. There was a mixture of motives for doing this; one was to provide security for moneys borrowed from the first defendants, and this has been fully achieved with repayment. Another was for some shadowy taxation reason but an altogether dominant motive which also, it would seem, has been fully achieved, was to keep the property beyond the reach of enforcement measures by Fatima Guerreiro and her daughter." This paragraph was criticised because, among other reasons, it was said that to look to the intentions and motives of Mr A. Guerreiro and the plaintiff was a mistake. It was said the judge had looked to their intentions because they acted as purchasers. This was not a proper reason for having regard to their intentions. However, this submission does not seem to me to be correct. Bryson J only came to the question of the intention of Mr A. Guerreiro and the plaintiff after he had given his reasons for finding that the two had not only acted as purchasers, but were the purchasers, with Mr A. Guerreiro pretending, for his own purposes, to persons other than his parents and the plaintiff, that his parents were the owners of the property. In addition to the reasons already indicated for the trial judge taking this view concerning the use of the defendants' names by their son, he relied on another basis for the same conclusion. He referred to the resources devoted by Mr A. Guerreiro and the plaintiff and the work done by them to the Botany Road property. He commented, with in my view considerable force, that people did not 10 UNREPORTED JUDGMENTS behave the way they had, when working for or in the interests of others. He said "In terms of ordinary reasonable human behaviour, it is not possible that they undertook this and bore its burdens in the interests of anyone but themselves". Later he said: "T see no mark in the evidence than an idea that the first defendants were the true owners of the property ever had any reality. There is no sign of accounts being rendered to them during Albert Guerreiro's lifetime, either for obligations which they had to pay or for profits which they were entitled to receive. There was no sign of their exercising any supervision or control or making inquiries appropriate to the position of owners. They were given scraps of information and descriptions and photographs, and while it is unlikely they had any concept of beneficial ownership or trust obligations and entitlements and they may well have thought that it was a pleasant circumstance that their names were on the title of a property, their involvement was never other than nominal." It seems to me that there was a firm foothold in the evidence for these observations of the trial judge, provided he was right in his view that the names of the defendants had been used by their son to their knowledge; and there does seem to me to have been enough in the evidence to justify this view. Further submissions of defendants on appeal. Before this court, the defendants' submissions fell into two parts. The first part dealt with evidentiary matters, to the effect that the trial judge had made a number of erroneous findings of fact. The second part raised an argument that the $50,000 lent on mortgage and used as part of the purchase price for the Botany Road premises was money borrowed by Mr A. Guerreiro on behalf of his parents so that that part of the purchase money was in fact theirs, giving them an equity in the property purchased. The factual submissions comprising the first part of the defendants' argument, if correct, lead to the conclusion that virtually the whole of the purchase moneys other than that provided by the two mortgagees was money of the defendants. The second part of the submissions went to the moneys provided on mortgage. In dealing earlier with the issues decided by the trial judge I indicated the materials available to him for the findings that he made in regard to the part of the purchase moneys not coming from the lenders on mortgage. As I there said, it seemed to me that there was sufficient material before him to justify the factual findings that he made in favour of the plaintiff. I have described the way the trial proceeded as fully as I have done to show that it was the moneys other than those provided by the lenders on mortgage which were the subject of contest before Bryson J. I can see no sign in the appeal papers that the matters now sought to be argued concerning the provision of the $50,000 by the lenders on mortgage were a matter of contest at the trial. One obvious practical reason for this suggests itself. Although the defendants were liable to the mortgagees under the mortgages, it seems to have been the fact that at all times the property itself was more than enough security for the mortgage moneys. The value of the security must steadily have increased as the factory was put in order. As a practical matter it seems that the defendants were unlikely ever to be called on to pay anything under the mortgages. Thus it is easy to understand how at the trial before Bryson J the attention of the parties became fixed on who provided the equity funds for purchasing the property and paid no attention to the debt to which it was subject, as the property itself would take care of that. URJ GOMES v GUERREIRO (Clarke JA) 11 This was not a technically accurate way of approaching the legal framework of the case, and it may have been better for the defendants if they had taken from the beginning the approach they now seek to follow; but it seems clear enough that it was the source of the equity funds which was in issue at the trial, and that the application of equitable rules to the use by the son of his parents' power of attorney in raising loan moneys was not. In the appeal, counsel for the appellant sought strenuously to press the last argument mentioned. Heavy reliance was placed on the fiduciary duty that a person holding a power of attorney owes to the donor of the power. A powerful submission was made on behalf of the plaintiff that the defendants should not be allowed to raise the fiduciary argument in the appeal when there had been no mention of it at the trial. I am inclined to think that this submission is a sound one. Even if it were not, a further submission made for the plaintiff seems to me to be right; that is that if Mr A. Guerreiro's breaches of duty to his parents were open for argument on appeal, the correct analysis was not that, having borrowed money on behalf of his parents he diverted it to his own use, but rather that he used his parents' names to borrow on his own behalf. On this approach, the defendants had no equitable interest in the Botany Road property but had certain rights directly against Mr A. Guerreiro which, at best so far as the property was concerned, may have entitled them to charges over it: see Lister v Stubbs (1890) 45 ChD 1. In any event, even this analysis depends upon Mr A. Guerreiro having used his parents' names wrongfully in the borrowing on his own behalf. On the facts as found by Bryson J the defendants acquiesced in what their son did. In these circumstances there simply was not available to them at the trial any claim based on breach of fiduciary duty. Conclusion. In my opinion, the grounds of appeal fail and the appeal should be dismissed with costs. Clarke JA I agree with Priestley JA. Counsel: Appellant: JUB ALLSOP / M. MURPHY Respondent: D MURR Solicitors: Appellant: CARROLL and O'DEA Respondent: BRYAN VAUGHAN and CO