New South Wales Supreme Court CITATION : El Masri v Tran [2002] NSWSC 739 FILE NUMBER(S) : SC 1943/02 HEARING DATE(S) : 01/08/02,02/08/02,05/08/02 JUDGMENT DATE : 21 August 2002 PARTIES : Craig Lee El Masri (Plaintiff) Hong Thi Cam Tran (Defendant) JUDGMENT OF : Acting Master Berecry at 1 COUNSEL : S Hughes (Plaintiff) P Morrissey (Defendant) SOLICITORS : Baker Ryrie Richards Titmarsh (Plaintiff) Quy Lawyers (Defendant) CATCHWORDS : Resulting trust - contribution by both parties - property in the name of one party - advancement - nature of relationship - credit - conflicting evidence - equitable charge CASES CITED : Calverley v Green (1984) 155 CLR 242. Cowcher v Cowcher (1972) 1 WLR 425 at 431 DECISION : 1. A declaration in accordance with paragraph one of the amended summons. 2. A declaration that the defendant is entitled to an equitable charge over the Fairfield and Guildford properties. 3. That the plaintiff's share in the Fairfield property is in the proportion of 180/1185. 4. An order in accordance with paragraphs 5 and 6 of the amended summons. 5. The defendant is to pay the plaintiff's costs of the proceedings. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Berecry AM 21 August 2002 1943/02 Craig Lee El Masri v Hong Thi Cam Tran JUDGMENT 1 Master: These proceedings were commenced by way of summons on 19 March 2002. The plaintiff seeks declaratory relief in relation to interest in respect of two properties, namely 15 Brennan Street Fairfield and Lot 19 116 McCredie Rd, Guildford. In the alternative, the plaintiff seeks a declaration that he is entitled to an equitable charge over the two properties and an order that trustees be appointed for sale of both properties pursuant to s66G of the Conveyancing Act NSW. FACTUAL BACKGROUND 2 Every issue is in contention between the parties; therefore it is necessary to set out the facts according to each party. Facts alleged by the plaintiff 3 The plaintiff's evidence is that he met the defendant in or about June 1994, when they started dating each other. Over a period of time, the relationship developed and eventually they came to consider that they were girlfriend and boyfriend. Towards the end of 1995, the plaintiff suggested to the defendant that they should think about getting married and saving together to buy a property. He alleges that the defendant thought that this was a good idea and agreed that they should buy a property, but she told him that her mother would not be happy if she knew that they were buying a property together whilst not married. She suggested that the property could be bought in her name, and that they withhold from her mother that it was in fact being bought by them together. 4 On or about 24 June 1997, they opened a joint account at the St George Bank, Fairfield branch, account number 107558223, in the names of Craig Lee El Masri and Thi Cam Hong Tran. The plaintiff alleges that prior to this date, he had been giving the defendant payments of between $200 and $300 per week to go towards the deposit. He asserts that he commenced these payments in early 1995. He would give the money to her, and she would take it to her room and put it away. At the time the account was opened, the plaintiff was working for Lindar Smash Repairs at Fairfield. He completed an apprenticeship as a smash repairer in January of 1998. The defendant was working at a takeaway shop near the plaintiff's place of employment. He asserts that he gave her as much money from his weekly earnings as he could spare, and that when she had accumulated amounts of between $2,000 and $8,200 she would then deposit it into the St George account. 5 In late 1996, they began looking for houses in the Fairfield area with a view to purchasing a property. In about May 1997, the defendant informed the plaintiff that she had seen the property at 15 Brennan St Fairfield advertised in a newspaper. Shortly thereafter, they drove to the property. The defendant said that she liked the property and informed the plaintiff that she would see a solicitor and an agent to organise the purchase. She also informed him that she would have her boss go with her because of his experience. It is not clear whether she intended to have the boss inspect the property with her or attend on the agent and the solicitor. The defendant left a holding deposit with the agent in an amount of about $500, and informed the plaintiff that she thought the property had potential because of the size of the land. He alleges that he told the defendant that once she had obtained the loan, he would pay it off and she could cover living expenses until they were married. In cross-examination, he was asked what he meant by that statement as both parties were still living at home with their mothers and paying board to their respective mothers. The plaintiff answered to the effect that the intention was that the defendant would continue to pay board and whatever expenses she paid to her mother as well as expenses such as rates and insurance on the property. 6 Soon thereafter, the defendant informed the plaintiff that she had obtained approval for a loan from the Commonwealth Bank for the sum of $60,000. However, the defendant did not take up this loan and instead obtained a loan from the St George Bank. The plaintiff acknowledges that he had no involvement in the exchange of the contracts or in dealings with the solicitor. To his knowledge, the $500 used as the holding deposit came from their joint account at the St George Bank. Settlement of the purchase occurred in August 1997 and soon after, the defendant, her sister and their mother moved into the property. On the plaintiff's evidence the defendant's mother and sister had no idea that he had contributed towards the purchase price. To the plaintiff's knowledge, the purchase price of the property was $118,500. The mortgage from the Commonwealth Bank was $60,000, $500 had been put down as a holding deposit, therefore that left a balance of about $50,000. This leaves a shortfall of $8,000 7 At or about the time that the property was purchased, the plaintiff was a fourth year apprentice, earning approximately $400 and $500 per week in the hand. During this time he was giving the defendant between $300 and $350 per week. He continued to live at his mother's place and paid no board. His mother provided him with food and the only socialising he did was with the defendant. His evidence is that they went out about once per week, spending between $50 and $60. After the St George Bank had approved the loan, the plaintiff asked the defendant how much the repayments would be. She informed him that they would be around about $500 per month. He informed her that he would pay the loan if she paid the rates and other expenses for the property. He alleges that she said she thought that was a good idea. He suggested that they should try to pay as much off as they could, and that he would make payments of $300 per week to pay the loan off quickly. Between July 1997 and January 2002, the plaintiff alleges that he paid cash to the defendant so that she could pay off the loan. He made no direct payments to either the joint bank account or to the Mortgage account with the St George Bank. His evidence is that on payday, he would take the money to the defendant and leave it with her. There was a period of time when the plaintiff was unemployed and was a recipient of moneys from the Department of Social Security. The plaintiff's evidence in this respect was found wanting, and it would seem that the periods of unemployment were not as he stated in his affidavit. It appears that at different times the plaintiff received the benefit of Social Security benefits when he was in full time employment. In or about May 1998, he changed employment and worked as a smash repairer for Club Concourse Pty Ltd. During his period of employment with Club Concourse, he was still living at home with his mother, but now paying $20 per week board to her. The arrangement that he had with his mother concerning food, continued. That is, he did not contribute to the purchase of food, and in fact his mother provided him with food. His social habits did not change either. He only went out with the defendant, and when he was not with her he would stay at home. 8 During the periods that he was also the recipient of Social Security, he continued to give money to the defendant on a fortnightly basis, in the amount of $150. When he commenced employment with Club Concourse in May 1998, his income was $650 in the hand per week. His evidence is that he gave the defendant $500 per week out of his salary. In August 1999, his income had increased to $750 per week in the hand. He increased the weekly amount that he gave to the defendant to between $500 and $600 per week. This continued until late 2001, when he increased the weekly payments to the defendant to $650. 9 In 1998, the defendant was in Vietnam for three months, between August and October. Again, in January 1999, she was in Vietnam for approximately three months. Whilst the defendant was overseas, the plaintiff deposited money in the St George Bank Account. However, there were some occasions when he did not make those payments. His reason for that was unclear. It appears that he deposited monies into his own savings account instead. However, his evidence is that generally he continued to make the payments towards the mortgage. During the period in 1999 when the defendant was in Vietnam, the plaintiff arranged for his mother to bank monies with the St George Bank. His evidence was that he gave his mother between $500 and $600 to put into the loan account. Whilst the defendant was overseas, he did not pay the mortgage weekly, but only monthly. His evidence is that he paid the defendant two lump sums of approximately $2,000 to catch up on the mortgage shortly after she returned from Vietnam. 10 The plaintiff gave evidence that during 1998 and 1999 he had numerous discussions with the defendant about the transfer of the mortgage and also the possibility of their marriage. He indicated to the defendant that he wanted to be debt free before they married. His evidence is that the defendant was in agreement with this. He also alleges that the defendant's sister asked them from time to time when the two of them were getting married. His response to that was that it was up to the defendant to decide when she wanted to get married. 11 Some time prior to December 1999, the plaintiff purchased a motor vehicle for the defendant. His evidence is that he spent $12,000 on the purchase of the vehicle, a Jeep Wrangler Sport, and $3,000 on parts, material, registration and repairs. The vehicle was registered in the defendant's name on 15 February 2002. The purchase of the vehicle was serviced through the sale of another vehicle to his mother, which gave him approximately $10,000, and he had savings of approximately $2,000. Throughout 1999 and 2000, he continued to live at home, paying board of $20 per week to his mother. During this period, he was given a company car for his own use. His employer paid petrol and expenses associated with the vehicle. He alleges that from 1995, he also did work outside of his employment involving repairing vehicles for friends and family members. This work gave him a cash income of approximately $10,000 a year. 12 In late December 2001, he asked the defendant how much money was still owed on the mortgage. She informed him that it was approximately $5,000. She also informed him that she didn't like her current employment and wanted to start up her own business. He responded by saying that he thought that would be a good idea and he could leave his job and work in the business with her to build it up. She suggested that rather than rent a factory, they should look for a factory unit to buy and operate out of those premises. He appeared to express some concern about that. His view was that they should think a bit more about getting married and that if they were to purchase the factory unit it should be purchased in their joint names. She was not responsive to that suggestion and wanted the business to be in her name because the property at Fairfield was in her name. 13 In early January 2002, they inspected factory units at 116 McCredie Rd, Guildford. They decided on the unit they would purchase. The plaintiff then negotiated the purchase price of $210,000 and informed the agent that they were both buying the property. On 11 January 2002, they attended the agent's property for the purchase of putting a deposit on the unit. The plaintiff put a deposit of $1,000 on the unit. 14 The agent started to write out a receipt in his name, but the defendant insisted that the receipt be put in the name of "MM Blinds Modern Design" (her business). He crossed out the plaintiff's first name on the receipt, and then followed the instructions given by the defendant. 15 The parties then appear to have begun arguing over whose name the properties should be in. Subsequently, the plaintiff saw a solicitor and instructed the solicitor to put a caveat on the title of the Fairfield property. At that point, the relationship between the parties had completely broken down. He insisted that she return the Jeep Wrangler to him. He obtained her signature on the RTA transfer and he alleges that he sought payment for his contributions of $80,000. She informed him that she could not afford to pay him at one time, but would pay him $2,000 per month until it reached $80,000. He was not prepared to do that, and wanted the relationship to end immediately. He suggested that she remortgage the property and pay him a lump sum. Thereafter, these proceedings were commenced on 19 March 2002. 16 In his affidavit in reply, he says that they started going out in 1994. They would usually go out once a week and would see each other usually once or twice a week. If they didn't go out they would usually meet either at her home or at his mothers house. His evidence is that they commenced a sexual relationship from around about April 1995 and that lasted until the beginning of 2002. In 2001, he spent time in Vietnam, and met her four sisters who lived in Ho Chi Min City. He gave evidence that he was aware that the defendant was sending money to her sisters in Vietnam. His evidence is that there were times when they would go together to a Vietnamese bank in Cabramatta, and he would wait outside while she went in and conducted business in the bank. Although he had no evidence of seeing her depositing money, he was under the impression that that was the purpose for going to the bank. The plaintiff gave evidence that during the two trips the defendant took to Vietnam in 1998 and 1999, he stayed in the house at 15 Brennan St Fairfield, on one occasion with the defendant's sister Van, and on the other occasion by himself. 17 At about the time that the contracts were exchanged on the property, the plaintiff's evidence is that the defendant was concerned that if she deposited money into a bank account in her name, that the bank would want to know where the money came from. It was suggested that, as the plaintiff was working, a joint bank account should be opened and the money deposited in that account. 18 The defendant had worked for a Mr Bayley. Mr Bayley appears to have become a strong family friend of the defendant's family. In mid to late 1997, the plaintiff alleges that the defendant said to him that if Bayley knew that he was her boyfriend, he (Bayley) would not help her as much or feel so sorry for her. 19 The plaintiff alleges that he helped the defendant move in to the property and assisted with cleaning up the backyard and removing some rubbish. He spent two days assisting with painting. His evidence is that he did not meet Bayley until some months after the house was purchased, and when he did eventually meet him, he was introduced to him as a friend of the defendant. Plaintiff's Income 1994 $200 - $300 per week 1995 $300 - $400 per week 1996 Received approximately the same weekly wage as 1995. From 1995 onwards, did panel beating work for friends and family, and earned about $10,000 per year. 1997 Approximately $470 per week. 1998 From January to June 1998, he received Social Security payments. 1999 For four months he once again received Social Security payments. His employment with Lindar was from 1993 – 1997. He commenced employment in May 1998 with Club Concourse. He received Social Security benefits whilst he was employed, both at Lindar and at Club Concourse. In 1998 and 1999 he received NewStart Allowance. In those years, he was earning $350 per week from Club Concourse. In 1999, from July onwards, he was earning $800 per week. In the financial year 2000 –2001, he earned $58,000 gross. His tax returns for the financial years 1997 to 2001 were tendered and marked Exhibit 1. 20 He admits that the only payments he made directly to the bank were those that he made when the defendant was in Vietnam. All other payments were made to the defendant personally. The evidence of Faye Wendy Wright 21 Miss Wright is the plaintiff's mother. She has sworn two affidavits. Her evidence is that she was aware that the plaintiff and the defendant had been in a "boyfriend – girlfriend" relationship for about 8 years prior to March 2002. She wasn't sure of the exact date or year when the relationship commenced. 22 She gave evidence that the plaintiff has with the exception of short periods always resided with her. The arrangement during his apprenticeship was that he would pay her board of $20 per week, and that continued until August of 2001. When he returned from a visit to Vietnam that year, he ceased paying board to his mother. From her observations, during the course of the relationship, the defendant would usually visit her (Wright's) house once a week, although the frequency of these visits varied. She confirms that the plaintiff had given her a St George passbook, and that she made a number of deposits into the relevant account. She made no enquiries about the plaintiff's financial affairs, but recalls seeing the defendant's name on the account. For a period of approximately twelve months prior to mid 1997, she says that the plaintiff and the defendant would often be at her house looking through newspapers at properties, businesses and cars. Frequently, they would leave the house, saying to her, "We're going to look for a house" or "We're looking for something" and they would leave together. 23 From around July 1997, she saw account statements addressed to her residence in both the plaintiff's and the defendant's names. She did not discuss their financial arrangements with them. In August 2001, she had a discussion with the plaintiff about his board money, when he said to her words to the effect, "I'm giving Meek $600 a week for the house." 24 Miss Wright states that on 22 December 1999, she withdrew two sums of money from her Commonwealth Bank Account. One of those amounts was $10,000. This money was given to the plaintiff for the purchase of a Mitsubishi Lancer, which she bought from him. That money was given to him shortly after 22 December. She conceded that she had no independent knowledge of any payments made by the plaintiff to the defendant. The Defendant's evidence 25 The defendant's evidence is that she met the plaintiff some time prior to April 1995. At that time, she was working at a take away shop in Fairfield and at Siesta Blinds, also at Fairfield. Initially, they only met at the take away shop, where the plaintiff would buy his lunch. Her evidence is that from around April 1995, they went out once every few weeks either to movies or restaurants. In 1998 and 1999, the plaintiff often went to the defendant's house for dinner, and she made lunch for him to take to work for the next day. Her evidence is that they saw less of each other in 2000 and 2001. During that period they went out perhaps every few months. The defendant's evidence is that although she considered the plaintiff her boyfriend in 1998 and 1999, they were never intimate. Her reason for seeing less of the plaintiff in 2000 was because of his aggressive nature. This is something that the plaintiff denied. 26 About two weeks after she met the plaintiff, she lent him $600 to buy a car. He borrowed the money, and repaid her a few weeks later. 27 By June 1996, the defendant had saved approximately $10,000. In January 1997, she had savings of approximately $60,000 in cash. 28 The owner of the business Siesta Blinds was Mr Jim Bayley. After the divorce of her parents, she looked to him for advice, and looked up to him as her father. She started looking for houses in about December 1996. According to her evidence, Mr Bayley would drive her to inspect houses. In May of 1997, she, together with Mr Bayley and her mother, inspected the Fairfield property. The house was listed at $124,000 and Mr Bayley helped her to negotiate the property for a purchase price of $118,500. 29 Her evidence of a conversation with her solicitor concerning the purchase of a property was that she had the capacity to borrow $60,000 from the bank and that she had $50,000 in cash. She wanted to pay cash, but was advised that the vendor would only accept a bank cheque at settlement. This caused her some concern. She did not want to disclose to the bank that she had $50,000 in cash because she had not paid tax or worked for a sufficiently long period of time to enable her to acquire that sort of money. She discussed this with the plaintiff, and he suggested that she could put the money into his bank account. On or about 24 June 1997, she and the plaintiff went to the St George Bank and opened up a joint account. They deposited $4,000 on the same day. 30 Later on that day, she spoke to Mr Bayley and informed him that she and the plaintiff had opened up a joint bank account. He informed her that was not a good idea to have a joint account, as the money was hers. As a result of that advice, she gave Mr Bayley $20,000 to be held until settlement of the property, at which time the money would be used to obtain a bank cheque. Between 27 June 1997 and 24 July 1997, deposits had been made to the account totalling just over $30,000. The defendant's evidence is that part of this money was sent to her from Vietnam, and that the plaintiff made no contributions. She denies that she received any money from the plaintiff's income, or money from any source from the plaintiff. 31 She states that she was not aware of the plaintiff's financial affairs, and that the plaintiff had friends with whom he socialised. Her evidence was that she usually worked seven days a week and had little time to go out. They went out every few weeks in 1998 and 1999, and from 2000 only once every two months. When they went out, they shared expenses, although she conceded that the plaintiff paid more than she did. She denies that the plaintiff made any offer to make the repayments on the mortgage. Her evidence is that the monthly repayments were $550, and that she always tried to pay at least $1,000 each month. She states that her sister and her mother saved very hard so that they could pay more than the required amount. 32 The defendant agrees that during the two periods in which she travelled to Vietnam in 1998 and 1999, she gave the deposit book to the plaintiff so that he could make loan repayments on her behalf. He had offered to make those repayments, and she accepted the offer. She offered to repay him but he would not accept the offer. She states that although he made some payments, he did not make all of the payments whilst she was away. That was of no concern to the bank, because the payments were ahead of the repayment schedule in any event. Her evidence is that between June and September 1998, the plaintiff made deposits totalling $2,800. Between January and April 1999, he made deposits into the account of $1,000. The defendant concedes that from time to time they discussed their future. Her evidence is that because of his aggressive nature, she was scared of him and needed more time to think things through. 33 She disputes his evidence in relation to the purchase of the Jeep Wrangler. Her evidence is that she made a contribution of $5,000 of which $2,000 went towards the parts. 34 On 12 September 2000, the defendant registered a business name, "MM Blinds Modern Design" (MM Blinds), and commenced working as a subcontractor. She used most of the income from the business to pay off the mortgage on the Fairfield property. Her evidence is that she did this in order to expand the business. She gave evidence that in 2001, she transferred approximately $20,000 from the business account to the home loan. This does not correspond with the bank statements. A comparison between the Business cheque account for MM Blinds and the Property Power account show transfers amounting to $10,800. 35 The defendant acknowledges that the plaintiff met up with her in Vietnam in July 2001, and that they stayed with her family for about a month and then returned to Australia in August 2001. 36 In relation to MM Blinds, her evidence is that she and her sister Van were to be partners in the business to manufacture blinds. She decided she would use the Fairfield property as collateral to buy the factory unit. Her evidence is that the plaintiff wanted to join the venture and give up his full time employment. She discussed this with her sister who was not prepared to have the plaintiff as a part of the business. The defendant informed the plaintiff that he could buy the factory and she and her sister could rent the factory from him. He responded that he did not have any security to ask for a loan to buy the factory, and requested that she guarantee a loan, using the Fairfield house as collateral. Her evidence was that the house was not entirely hers, and that she would need to speak with her mother. If this were so, why wasn't the defendant's mother's name on the certificate of title for the property? Later, she informed him that she could not help him. 37 In December 2001, she asked the plaintiff to help her inspect a number of factory units and she chose the property at 116 McCredie Rd Guildford. She asked the plaintiff to negotiate the purchase on her behalf. The property was listed at $230,000 and after negotiations, an offer of $210,000 was accepted by the vendor. In January of 2002, the plaintiff telephoned her and said that the agent required a deposit to secure the unit. She said she had just purchased some equipment and the money from Vietnam had not yet arrived. He then offered to put down $1,000 as a holding deposit and she accepted his offer. On 20 January 2002, she had received $5,000 from Vietnam, which she gave to the plaintiff, repaying his $1,000 loan and asked him to hold the balance of $4,000, intended to go towards the purchase of the factory. 38 On 20 January 2002, the defendant had a conversation with the plaintiff concerning the purchase of the unit. She told him that she was prepared to guarantee any loan he obtained for the purchase of the unit and she wanted to know whether he wanted to go ahead and buy the unit. 39 Later that day, the plaintiff informed the defendant that he wanted nothing more to do with her. He still requested the payment of $80,000 (when did he first request it??). On 23 January 2002 she attended the office of her solicitor signed the purchase contract and gave him a bank cheque for $20,000 as a deposit. The contracts were exchanged on 8 February 2002, and settlement was due on about 22 March. 40 The defendant denies that the plaintiff has any interest in the property at all, or that he contributed any money towards the acquisition of the property or reduction of the mortgage. Her evidence is that the car was a gift to her, and that the only monies that she owed him were the monies that were paid directly into the bank account by the plaintiff whilst she was overseas. She was not prepared to pay him $80,000. Her evidence is that she was prepared to return the car to the plaintiff, provided he gave her $9,000. That sum was made up of the $4,000 that she had recently given to him to hold on her behalf, and the $5,000 that she put into the purchase and repair of the car. PARTIES' CREDIT 41 Because each party contradicts the evidence of the other, it is necessary to consider the credit of each party. Plaintiff 42 The plaintiff came across in the witness box as a nervous person, one who appeared to be unsure of questions that were put to him, but by and large, attempted to answer the questions to the best of his ability. However, there are still some areas of grave concern regarding the honesty of the plaintiff. 43 In his affidavit in chief, he referred to periods of unemployment. Questions were put to him in cross-examination in which he confirmed those periods of unemployment, however cross-examination of the plaintiff led to a different result. Documents were shown to the plaintiff, which established that the information that was contained in his affidavit was at best misleading. The evidence concerning social security payments directly contradicted the plaintiff's own evidence. He was placed in a position where he had to concede that his evidence was at best misleading. Not only was there an admission from him that he received social security payments when he was not entitled to them, but he failed to disclose to the Australian Tax Office that he had received cash payments over a period of some seven years, from friends and family for work done in relation to repairs to their motor vehicles. He also conceded that he had made a false declaration to the Australian Tax Office in relation to his income for one particular year. 44 It seems to me therefore that the plaintiff's evidence cannot be accepted on face value. Unless there is evidence which corroborates the plaintiff's version of events or, on the balance of probabilities, the facts put forward by the plaintiff have an element of plausibility about them, it will be difficult to accept his evidence. The Defendant 45 The defendant's evidence is difficult to accept in many aspects. In cross-examination she not only contradicted evidence given previously in cross-examination, but also evidence contained in her affidavit. Certain aspects of the evidence she gave lacked plausibility. During some of her oral evidence, I found it impossible to believe that even she could believe what she was saying. It was utterly remote from logic and experience. A number of her responses were very vague. The defendant was not prepared to concede that she attended regularly at the plaintiff's mother's house, although when pressed, she conceded that she had possibly attended on more than one occasion. She denied that she looked at newspapers with the plaintiff in 1996 with a view to purchasing a property. 46 Mr Bayley gave evidence that during the periods that the defendant worked for him, no tax was deducted from her wages. When put to the defendant that she had an obligation to pay tax, she denied that she was aware that she had such an obligation and said that she only became aware that she had an obligation to pay tax sometime after 1998. However, in paragraph fourteen of Mr Bayley's affidavit, he gives evidence of a conversation with the defendant in which she informed him that she didn't pay tax and was afraid that the bank might become suspicious. Likewise, in paragraph 17 of her affidavit of 12th April 2002, she recounts a conversation with the plaintiff where she informed the plaintiff that she had not paid tax. 47 The defendant did not lodge tax returns prior to 1998, the first return in fact was filed in 1999 but it was only in respect of the financial year ending 30th June 1999. There has been no disclosure of income earned any year prior to that year. She maintained that she didn't know that she had to pay tax on income earned during the earlier years. 48 She was then asked questions about Direct Home Products, a company she worked for in November and early December in 1993. She admitted that she had given her employer her tax file number. She was asked how she obtained her tax file number. Her response was that when she arrived in Australia she obtained a Medicare card and also a tax file number and knew that the purpose of the tax file number was for paying income tax. She was aware that her employer would have withheld income for the purpose of paying tax. This evidence is totally contradictory to the earlier evidence that she had given. 49 The defendant's evidence was that she didn't trust the plaintiff, yet the evidence shows that she held a joint account with him which could be operated by both signatories. She gave no plausible explanation of why they held a joint account, given that if the bank had any concerns about the monies in the account, details of the account could be given to the Australian Tax Office, which may have resulted in an investigation of both signatories to the joint account. Her evidence that she didn't trust the plaintiff is inconsistent with the nature of a joint account. Either party could have withdrawn all of the funds at any time. 50 Her evidence was also inconsistent in relation to the $50,000. The initial deposit into the joint account was a sum of $4,000. Her evidence was that she had $50,000, which came from sources other than the plaintiff. After a conversation with Mr Bayley, she gave him $20,000 but the remaining $26, 000 was placed in the joint account. It is inconceivable that if at that time she did not trust the plaintiff that she would have deposited an additional $26,000 of her money into an account shared with a man whom she did not trust. It would have been more believable had she paid that money to Mr Bayley to hold for her, but she did not do that. 51 She denies that the parties were anything other than good friends, however correspondence and cards from 1998 and 1999, (exhibit A) would perhaps suggest something more than friendship. The defendant maintains that there was no sexual relationship between the parties, although by 1999 she loved him. 52 There is inconsistent evidence in relation to the guarantee. Her evidence was that in 2000 and 2001, she saw the plaintiff no more than once every two months. The reason for the cooling of the relationship was, according to her, because of the aggressive nature of the plaintiff. On her evidence, by that stage not only did she not trust the plaintiff, she was also frightened of him because of his aggressive nature. And yet, on her version, after he became aggressive and demanded the return of the Jeep Wrangler, she not only signed the car over to him, but she never followed this up by making a complaint to the police. In fact, her evidence is that she requested him to negotiate a purchase price on the factory unit, accepted his offer to put down a $1,000 holding deposit on the property and then subsequently informed the plaintiff that she would guarantee any loan that he may take out for the purpose of acquiring the property. This, once again, suggests an inconsistency. This was a man that she was frightened of and didn't trust. Why would she agree to those things? 53 The original receipt for the holding deposit on the Guildford factory unit (exhibit B) and a copy of the receipt are in evidence in these proceedings. The copy clearly shows the name "Craig". The original has white out over that name. That suggests that the defendant has caused the word "Craig" to be blocked out. I can only draw an adverse inference in respect of the credit of the defendant with respect to that evidence. Nghiem Thi Nguyen 54 Ms Nguyen is the mother of the defendant. She was cross-examined in relation to her affidavit sworn on 2 August 2002. Whilst some aspects of the witness' demeanour in the witness box and responses may have lost something in the translation, despite this I was not impressed with her as a witness. There were many inconsistencies in her evidence which simply did not make sense. For example, in relation to two aspects of her affidavit – firstly money that she acquired, and secondly jewellery that she sold. She asserted that when friends travelled to Vietnam, she would request them to bring back large sums of money (AU$5,000) money from her children who still lived in Vietnam. This evidence is by no means clear, and is otherwise problematic for several reasons. Firstly, a number of these people, who she alleges brought back sums of up to $10,000 to her, seemed to be almost complete strangers to her. She was unable to name all the people who brought back money for her other than general vague descriptions. Some people she referred to as a mother and a child, a grandmother, a person called Tu, and another person called sister four. I find it implausible that a person who requests that another person bring back large sums of money from overseas would make such a request of someone who they know so little about that they could not identify them by name. 55 She gave evidence in relation to the sale of her jewellery. In paragraph eleven of her affidavit, she states that she sold her jewellery in Australia and received $6,500 in cash. However, when cross-examined in relation to the sale of the jewellery, her evidence was unconvincing. Whilst she was able to identify the pieces of jewellery and able to attribute a sale price to them, she was evasive when asked to identify the purchasers of the jewellery. She identified one person by the name of Minh, to whom she sold a chain. The other two items of jewellery were sold to two other individuals, however her evidence in relation to the identity of these people is inconsistent. Firstly she stated that they were friends from the temple. Then, in response to a request to name them, she said that she didn't know their names, notwithstanding that they were friends. Then, she remembered Minh's name, although subsequent evidence from her was that Minh didn't go to the temple. She then identified the other purchasers of the jewellery not by name, but by reference to "sister three and sister four". Her evidence in this respect was totally unsatisfactory. SUMMARY 56 With the exception of the plaintiff's mother and Mr Bayley, I did not find any of the other witnesses to be credible. As I have already indicated, the plaintiff had given evidence both written and oral in relation to payments dishonestly received from the Department of Social Security and failure to disclose income to the Deputy Commissioner for Taxation. Therefore, I am not prepared to accept his evidence at face value unless it is corroborated by other evidence or material. 57 Notwithstanding my reservations about the truthfulness of his evidence in relation to his income and social security benefits, I am prepared to accept his evidence in respect of other matters. So far as his relationship with the defendant is concerned, I accept his evidence in preference to that of the defendant. Throughout his affidavits and cross-examination he maintained that from a time shortly after he started seeing the defendant, up until the end of 2001, their relationship was one which developed from friendship into a loving relationship in which the parties discussed marriage, the purchase of a property and, at least from his point of view, both parties were moving towards achieving those goals as late as the end of 2001. His evidence is consistent with a relationship of that nature. They were seeing each other on a regular basis. 58 Her evidence was that in 1998 and 1999 she did love him and in fact, when he went to her place for dinner, she would also prepare lunch for him for the following day. That, to me, is one element of a caring relationship between two people. His evidence is that he had discussed with the defendant the question of purchasing property and saving their money. Her evidence contradicts this. Taking out an account held jointly in both of their names to me is indicative of two people seeking to reach the same goal. If the $50,000 belonged to the defendant there was no reason for her to open a joint account with the plaintiff, especially if he was not someone who she trusted. A better option would have been to give the money to Mr Bayley. The joint account is not inconsistent with the proposition put by the plaintiff that they were saving money to purchase a property. 59 The plaintiff's evidence was that during 1996 and 1997 they looked for properties together, both driving to inspect properties. They read the real estate section of the newspapers together in order to keep themselves informed of what was on the market. His mother gave evidence that supported this position, which once again is not inconsistent with two people opening up a joint bank account. 60 The plaintiff accompanied the defendant to inspect the property at 15 Brennan St Fairfield. His evidence is that the defendant informed the plaintiff that she would speak to her boss about the place because he had experience. I accept that the plaintiff acceded to this request by the defendant on the basis that her boss, an older man, would probably have more experience than the plaintiff. 61 I found the plaintiff, from his demeanour in the witness box and his difficulty in understanding some questions, to be a person who was not sophisticated or experienced in matters involving finance and real estate. 62 After the property was purchased, the relationship between the plaintiff and the defendant continued. On the defendant's evidence, they were closer in 1998 and 1999 than they had been at any time before. They continued to spend time with one another, go out socially and attend each other's homes. The plaintiff's evidence is that he made substantial payments to the defendant in an effort to discharge the mortgage loan as soon as possible. His evidence was that he thought that they should consider marriage once they were able to discharge the mortgage. 63 In 1998 and 1999 the defendant made two trips to Vietnam. On both those occasions the plaintiff made direct payments to the mortgage account and also resided in the Fairfield property. On one occasion he resided there alone, and on the other occasion he resided there with the defendant's sister. It would seem to me that is indicative of a close relationship. The defendant gave no satisfactory explanation as to why she would allow somebody who is no more than a friend to occupy her premises and make payments on her mortgage whilst she was overseas. 64 By late 2001, the defendant had informed the plaintiff that she wished to commence her own business. The plaintiff's evidence is that he sought to become involved in this business. He suggested to the defendant that rather than rent property, they should buy a factory unit. He spent time with her looking at different units and when a unit was found which was satisfactory to the defendant's needs, he negotiated on behalf of the defendant the purchase price of the unit. To me, once again this is consistent with the type of relationship that the plaintiff asserts they had. 65 There was disagreement between the parties as to whose name the unit should be placed in. By this time, the plaintiff was becoming anxious that he still was not on title in respect of the Fairfield property. Notwithstanding the concerns that he had, he was prepared to go along with the defendant's suggestion that the factory unit be put in the name of her business. He also put down the holding deposit on the property. These are matters, in my view, which go to support the plaintiff's assertion that they had a close relationship. 66 However, whilst in the plaintiff's mind it was a close relationship, the defendant's evidence is that it was nothing of the kind. The defendant always maintained that at best she loved him in 1998 and 1999, but prior to that they were merely girlfriend and boyfriend, and after 1999 they were just friends. Nevertheless, she appeared to rely on the plaintiff in a number of ways. Firstly, he made direct payments to the mortgage account during the periods when she was overseas. Secondly, he resided at her Fairfield property whilst she was overseas. Thirdly, he contributed towards the purchase of a motor vehicle (the Jeep) and carried out the repairs to that vehicle so that she was able to drive to and from work. Fourthly, she allowed him to negotiate in respect of the purchase of the factory unit and he placed the holding deposit of $1,000 with the agent to enable the unit to be purchased. 67 In my mind, these matters would have caused the plaintiff to assume that his relationship with the defendant was one that had a future. It is difficult to accept the defendant's assertions that the plaintiff made no contributions to either the deposit or repayment of the mortgage. She maintains that all monies came from either the family in Vietnam through her own savings, or by transfer of funds from her business. It is necessary therefore to look at what evidence supports the position of either party. 68 The Joint Account and the Deposit 69 The defendant's income between July 1994 and June 1997, based on the evidence of Mr Bayley, came to approximately $48,000. The defendant's evidence is that she saved $10,000 towards the deposit on the Fairfield property. There is no evidence that either the defendant's mother or sister worked during this period. However, it is not beyond the realms of possibility that the defendant, over that three year period, would have been able to save the $10,000. The plaintiff's income over the same period totalled just under $72,000, however it is only the final years income that is verified by a tax return. It therefore is equally probable that the plaintiff would have been able to save money during that period. The defendant's evidence is that the bulk of the funds that went towards the deposit were moneys received from her mother. As I have already indicated, I was not impressed with the evidence given by the mother. I am only prepared to accept her evidence to the extent that she was able to identify the couriers (of the money from Vietnam) or purchasers (of her jewellery). To that extent, the amount that I accept as being a contribution by the mother is a sum of $22,000. Therefore the contributions made by the defendant and her mother amount to $32,000. In my view, the plaintiff's contribution was $18,000. I arrive at that figure based on the income tax return for the financial year 1 July 1996 – 30 June 1997, which shows that his income made it possible for him to make payments to the defendant. The defendant, of course, maintains that the plaintiff gave her no money whatsoever. I do not accept her evidence. Nor do I accept her evidence concerning the reason for opening the joint account. On these matters, I prefer the evidence of the plaintiff. 70 The plaintiff's evidence is that the joint account was opened for the purpose of depositing the money they have saved and using that money towards the purchase of a property. I accept that explanation by the plaintiff. It would appear that in 1996 and 1997, the parties had the intention of working towards saving sufficient funds to place as a deposit on the house. That was the purpose of the joint account. On that basis I am satisfied that the plaintiff gave money to the defendant for that purpose. It is not possible to work out with any precision the amount of money that the plaintiff gave to the defendant over that period, however it would appear that the amount probably was approximately $18,0000. Therefore, the plaintiff is entitled to an interest at a ration of 180:1185 in respect of the property at 15 Brennan St Fairfield. Mortgage Repayments 71 Exhibit 4 consisted of a number of bundles of documents. Included in the exhibit is a bundle of documents headed "Property Power Account" from the St George Bank, comprising account statements covering a period from 1 April 2000 to 31 March 2001. Not all statements have been furnished. There are also loan statements from the St George Bank, covering the period 18 June 1997 – 31 July 1999. Missing are statements covering the period 1 August 1999 – 31 March 2000. Finally, there are statements of Business Cheque Account with the St George Bank for MM Blinds Modern Design. This is the trade name under which the defendant operated her blind manufacturing business. Those statements commence 1 October 2000 and cover the period until 8 June 2002. Once again, some of the statements are missing. I will divide the time covered by the loan repayments into five periods: 72 1 July 1997 – 30 June 1998 There is independent evidence with respect to the income for both parties. However, the evidence does not support the plaintiff's statement that he paid to the defendant on average $325 per week. The defendant's income during this period was at a level that would have enabled her to meet the repayments which are set out in the loan account. Therefore, I make no allowance for the plaintiff for this period. 73 1 July 1998 – 30 June 1999 I only propose to accept the plaintiff's income based on his tax return. Based on the taxable income, the plaintiff would have received a gross income of $106 per week. Mr Bayley stated that he paid the defendant $500 per week cash in hand from 1996 until 1999. Monthly repayments were on average $542 per month, however, in some months, the repayment was $813. It is highly unlikely that the plaintiff made any contributions during this period based on the evidence. Therefore, I propose to make no allowance for him for this period. 74 1 July 1999 – 30 June 2000 The plaintiff's evidence according to his tax returns is that, when converted to a weekly amount, he grossed approximately $845 per week. He asserts that during this period, he made payments to the defendant of, on average, $550 per week. There is no evidence of the defendants' income during this period, however the payments recorded in the statement of the property power account are consistent with the plaintiff's evidence to the extent that, whilst I do not accept that he made these payments on a weekly basis, that he was earning sufficient income to make the monthly repayments on the mortgage. One of the difficulties with this period is that there are no records produced for the time between August 1999 and March 2000. Therefore, for the period from July 1999 to April and June 2000, I allow provision for the plaintiff in the amount of *$1,700. In the absence of any evidence from the defendant concerning her income in this period, I accept that, based on the tax return for the year ended 30 June 2000, the plaintiff had the capacity to meet the loan repayments. Therefore, the total amount that I apportion to the plaintiff for this period is $14,800 75 1 July 2000 – 31 January 2001 There is no evidence of the defendant's income. The plaintiff's tax returns for the financial year ending 30 June 2001 support the inference that he earned sufficient income to make the repayments, therefore I allow the plaintiff the amount shown as deposits for this period. The deposits amounted to $10,700. Also, in this period, not all financial loan statements have been provided to the court. The missing statements cover the period from May to August 2000 inclusive. Although this covers part of the period of the previous year, provision has been made for May and June in the period immediately above. Therefore, the amount that I allow for this period is $15,600. 76 1 February 2001 – 31 January 2002 A reconciliation of the statements of MM Blinds Modern Design's Business Cheque Account statement with the Property Power Account statement (the Fairfield loan) shows that for the period February to June 2001 inclusive there was a direct transfer of funds from the Business Cheque Account to the Property Power Account. The exact transfer is not only as to amount, but also the same day. The inference that can be drawn from that is that the funds going from one account went into the other account. Therefore, the evidence is that during that period the defendant was solely responsible for the reduction of the mortgage to the extent of about $10,800. The evidence is that the defendant made no payments from the business cheque account in respect of the mortgage for the period July to December 2001. No independent evidence of income earned by the defendant during this period has been provided. At best, Mr Bayley's evidence is that he commenced paying the defendant a weekly wage of $650 from December 2001. The plaintiff's evidence for this period is supported in part by his tax returns. His tax return shows a gross weekly income of approximately $1,110. He alleges that he made payments to the defendant in the sum of $550 per week. Annexure J to his affidavit of 13 March 2002 is a copy of a Commonwealth Bank statement in relation to his account for the period 11 October 2001 to 13 February 2002. His wages were paid into this account. The weekly wage deposit was $760. His evidence was that he paid the defendant $650 per week in late 2001. From October to December inclusive, there are payments into the Property Power account which are consistent with the above. Therefore, I will attribute the sum of $3,600 as being the amount paid by the plaintiff to the defendant for the purpose of applying those payments to the Property Power account. 77 For the period February 2001 to September 2001, there is no independent evidence supporting the plaintiff's allegations. The credits in the Property Power account are inconsistent with his evidence, and in fact the only payments appear to be those from the business cheque account of MM Blinds, between February and June of that year. The deposits in the Property Power account in January 2001 are consistent with the transfers from the business cheque account (MM Blinds). Although the statement for January was not tendered, the inference I draw is that the January deposits were made from the defendant's sources. 78 Therefore, in my opinion, the plaintiff contributed the sum of $34,000 towards the mortgage repayments for the period 1 July 1997 to January 2002. 79 It is alleged by the plaintiff that a resulting trust arises as a result of the contributions that he made towards the purchase of the Fairfield property. A resulting trust arises in a situation where equity requires the holder/recipient of the property to hold it on trust for the person who provided the purchase money. Where two or more parties contribute to the payment of the purchase price, and the legal title to the property does not reflect those contributions, there is a presumption of resulting trust for the contributors in proportion to their contributions Calverley v Green (1984) 155 CLR 242. In Cowcher v Cowcher (1972) 1 WLR 425 at 431, the court said that a resulting trust arises where a person acquires the legal estate but has not provided the consideration or the whole of the consideration for its acquisition, unless a contrary intention is proved. In Calverly v Green (supra) at 246, the court said that a resulting trust would not arise in favour of the provider/contributor to the purchase price, unless he made the contribution in the character of a purchaser. In my view the plaintiff has established that there is a presumption of a resulting trust. The Fairfield property was transferred to the defendant. I accept the plaintiff's evidence that he made some contributions towards the purchase price and that it was not his intention that the defendant should benefit by his contribution. It was his intention that his contribution would go towards the purchase of a property by both parties. Therefore, the plaintiff did not make the contributions by way of a gift, nor does the presumption of advancement apply, as they were not related, married or living in a de facto relationship. 80 In relation to the contributions that I have found the plaintiff made towards the repayment of the mortgage, in my view the plaintiff is entitled to an equitable charge to secure those payments over both the Fairfield and Guildford properties. The defendant used the Fairfield property as collateral for the loan to purchase the Guildford property. The benefit that she derived from the plaintiff's actions enabled her to provide as security for her loan application a property which was virtually unencumbered. The plaintiff made a significant contribution towards that position. 81 Therefore, the appropriate orders and declarations that should be made in these proceedings are: 1. A declaration in accordance with paragraph one of the amended summons. 2. A declaration that the defendant is entitled to an equitable charge over the Fairfield and Guildford properties. 3. That the plaintiff's share in the Fairfield property is in the proportion of 180/1185. 4. An order in accordance with paragraphs 5 and 6 of the amended summons 5. The defendant is to pay the plaintiff's costs of the proceedings. 82 The parties have asked me, if I make findings in favour of the plaintiff, that I should stand the matter over to enable them to agree to the appropriate form of short minutes. I accede to that request and stand the matter over with liberty to restore on seven days notice. ********** Last Modified: 09/03/2002 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. 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