New South Wales Supreme Court CITATION : Black Uhlans Incorporated v New South Wales Crime Commission & Ors [2002] NSWSC 1060 revised - 10/12/2002 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 5601/01 HEARING DATE(S) : 30/9/02-3/10/02 JUDGMENT DATE : 13 November 2002 Black Uhlans Incorporated (P) New South Wales Crime Commission (D1) PARTIES : Public Trustee of New South Wales (D2) Alan George Reardon (aka Jack Andrew Wilson) (D3) State of New South Wales (D4) JUDGMENT OF : Campbell J J Sexton SC (P) I Temby QC; R Bromwich (D1) COUNSEL : R Bromwich (D2) No Appearance (D3) G Bartley (D4) Peter Duggan & Associates (P) New South Wales Crime Commission (D1) SOLICITORS : Public Trustee of New South Wales (D2) No appearance (D3) State Crown Solicitor's Office (D4) CATCHWORDS : TRUSTS AND TRUSTEES - existence of express trust - legal tests for recognising existence of express trust - examination of facts concerning whether express trust established - TRUSTS AND TRUSTEES - resulting trust through payment of purchase price - tests for existence of resulting trust through payment of purchase price - juristic nature of resulting trust through payment of purchase price - EQUITY - general principles and maxims of equity - unclean hands - circumstances in which equitable relief denied because of unclean hands - EVIDENCE - evidence of convictions Associations Incorporation Act 1984 Conveyancing Act 1919 Drug Trafficking (Civil Proceedings) Act 1984 LEGISLATION CITED : Drug Trafficking (Civil Proceedings) Act 1990 Evidence Act 1898 Evidence Act 1995 Legal Profession Act 1987 Argyle v Argyle [1967] 1 Ch 302 Armstrong v Sheppard & Short Ltd [1959] 2 QB 384 Atilgan v Atilgan [1999] NSWSC 324 Bloch v Bloch (1981) 180 CLR 390 Bodly v -- (1679) 2 Chan Cas 15; 22 ER 824 Brown v Brown (1993) 31 NSWLR 582 Bugg v Day (1949) 79 CLR 442 Cadman v Horner (1810) 18 Ves Jun 10; 34 ER 221 Calverley v Green (1984) 155 CLR 242 Capricorn Financial Planners Pty Ltd v Australian Securities and Investment Commission (1999) 31 ACSR Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Clapham v Shillito (1844) 7 Beav 146; 49 ER 1019 Clifford v Clifford [1961] 1 WLR 1274 Commissioner of Stamp Duties (QLD) v Jolliffe (1920) 28 CLR 178 Commonwealth of Australia v Booker International Pty Ltd [2002] NSWSC 292 Cory v Gertcken (1816) 2 Madd 40; 56 ER 250 Currie v Hamilton (1984) 1 NSWLR 687 Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184 Dow Securities Pty Ltd v Manufacturing Investments Ltd (1981) 5 ACLR 501 FAI Insurances Ltd v Pioneer Concrete Services Ltd (1987) 15 NSWLR 552 Falcon v Famous Players Film Company [1926] 2 KB 474 Gascoigne v Gascoigne [1918] 1 QB 223 Glyn v Weston Feature Film Company [1916] 1 Ch 261 Goddard v Midland Railway Company (1891) 8 TLR 126 Greater Sydney Development AssociationLtd v Rivett (1929) 29 SR (NSW) 356 Griffiths v Griffiths [1973] 1 WLR 1454 Gill v Lewis [1956] 2 QB 1 Hewson v Sydney Stock Exchange Ltd [1968] 2 NSWR 224 In Re Emery's Investment Trusts (1959) Ch 410 CASES CITED : Jones v Lenthal (1669) 1 Chan Cas 154; 22 ER 739 Kettles and Gas Appliances Ltd v Anthony Hordern and Sons Ltd (1934) 35 SR (NSW) 108 Last v Rosenfeld [1972] 2 NSWLR 923 Learmonth v Morris (1868-9) 6 WW & A'B (E) 74 Little v Little (1988) 15 NSWLR 43 Littlewood v Caldwell (1822) 11 Price 97; 147 ER Litvinoff v Kent (1918) TLR 298 Loughrin v Loughrin 292 US 216 (1934) Meyers v Casey (1913) 17 CLR 90 Money v Money (No2) [1966] 1 NSWR 348 Moody v Cox [1917] 2 Ch 71 Mrs Pomeroy Ltd v Scalé (1907) 24 RPC 177 Napier v Public Trustee (Western Australia) (1980) 32 ALR 153 Nelson v Nelson (1995) 184 CLR 538 New South Wales Diary Corporation v Murray Goulbourn Co-Operative Company Limited (1990) 171 CLR 363 Nowell v Palmer (1993) 32 NSWLR 574 Overton v Banister (1844) 3 Hare 503; 67 ER 479 R v Aldridge (1990) 20 NSWLR 737 R v Deputy Commissioner of Taxation (WA) (1987) 72 ALR 365 Re Kerrigan; ex parte Jones (1946) 47 SR (NSW) 76 Rochefoucauld v Boustead [1897] 1 Ch 196 Ryan v Dries [2002] NSWCA 3 Shepherd v Cartwright [1955] AC 431 Slingsby v Bradford Patent Truck and Trolley Co [1905] WN 122; [1906] WN 51 Stephens v Avery [1988] 1 Ch 449 Tinker v Tinker [1970] P 136 Tripodi v R (1961) 104 CLR 1 Vauxhall Bridge Co v Spence (Earl) (1821) Jac 64 Vigers v Pike (1842) 8 Clark & Finnelly 562; 8 ER 220 Wall v Stubbs (1815) 1 Madd 80; 56 ER 31 Wratten v Hunter [1978] 2 NSWLR 367 DECISION : Resulting trust found for part of beneficial interest in property, see paragraph 190 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST CAMPBELL J 13 NOVEMBER 2002 5601/01 BLACK UHLANS INCORPORATED v NEW SOUTH WALES CRIME COMMISSION & ORS JUDGMENT 1 HIS HONOUR: The Black Uhlans Motor Cycle Club (the "Club") has existed as a voluntary unincorporated association from at least the early 1980s. It was an Australia wide club, which had a Sydney chapter, and chapters in various other places. In about 1984 the Club began occupying premises at Factory 3, 15 Stanley Street Peakhurst as its clubhouse. These premises were leased from the owner by a club member, but the rent was paid out of the Club's funds. The clubhouse was located in a building which was divided into three different units, one of which was used as the clubhouse. In 1991 a club member came to purchase the land on which the clubhouse was erected. Also in 1991, the Club had become incorporated under the Associations Incorporation Act 1984. 2 The club member in whose name the premises had been purchased was later convicted of various criminal offences, in consequence of which a restraining order was made under the legislation then known as the Drug Trafficking (Civil Proceedings) Act 1984, which prevented him from disposing of any interests he had in, inter alia, the premises which contained the clubhouse. In 1996 a forfeiture order was made, under the Drug Trafficking (Civil Proceedings) Act 1990, of his interest in that property. That forfeiture order resulted in his interest in the property becoming vested in the Public Trustee on behalf of the State of New South Wales. In these proceedings, the incorporated Club contends that the real estate was held on trust for it, and hence that the beneficial ownership of the property was not forfeited to the State. The Club has a fall back position, that part of the beneficial interest in the property was held by it, and hence was not forfeited to the State. The Club contends that the trust in its favour is an express trust, or alternatively a resulting trust. Facts Proved From Documents 3 There are some facts relevant to the transaction in which the property was acquired which can be proved by contemporaneous documents. One is that by 1991 the Club had several tens of thousands of dollars, which it had been accumulating over a period of years. The Club deposited $3,000 with Australian Guarantee Corporation on 26 November 1987, and redeemed that amount on 28 March 1988. The Club deposited a further amount of $23,000 with Australian Guarantee Corporation on 19 March 1988, and redeemed it on 17 August 1988. The Club deposited an amount of $6,000 with Australian Guarantee Corporation on 30 September 1987, and redeemed it on 19 August 1988. The evidence does not establish what happened to any of these three deposits immediately after they were redeemed. However, on 6 April 1989 the Club lodged an amount of $30,574 with the Commonwealth Bank, as a term deposit. It was withdrawn on 8 January 1990, by which time the addition of interest had caused it to grow to $34,295.76. That precise amount was then used, on 8 January 1990, as the opening balance for a current account, in the name of "Black Uhlans Motor Cycle Club", with the Commonwealth Bank at its branch in the Sydney suburb of Carlton ("the BUMC Commonwealth Account"). Further deposits were made to the BUMC Commonwealth Account until, on 1 May 1991, the balance to its credit was $67,170.27. 4 On 4 June 1991 Hancock, Alldis & Co, solicitors, sent to Justin Hill, solicitor, a draft contract for the sale of the land in question. Hancock Alldis & Co were acting for the vendors of the land, Austral Power Products Pty Ltd. Mr Hill acted as solicitor for the purchaser named in that contract, Jack Andrew Wilson. The contract related to the sale of the land in volume 8383 folio 23. The contract stated that the land was located at 15 Stanley Street, Peakhurst, and it had erected on it three factory units, each of which was leased. The sale was for the sum of $400,000, and was subject to those existing tenancies. 5 Contracts for sale of that land were exchanged on 30 July 1991. The contract as exchanged must have differed from the contract as originally submitted, because the document which was tendered as the contract as exchanged, showed factory 1 as being leased for a period of three years commencing 6 June 1991, factory 2 as being leased for one year commencing 9 June 1991, and factory 3 as leased for three years commencing 11 July 1991 – each of the commencement dates of those leases is after the date the contract was originally submitted. The third of those factory units is one which was in fact used as the clubhouse of the Black Uhlans Motor Cycle Club. 6 The deposit payable under that contract was $40,000. On 21 June 1991 an amount of $40,000 was withdrawn from the BUMC Commonwealth Account. That withdrawal took the form of two bank cheques. One was a cheque dated 21 June 1991, drawn on the Commonwealth Savings Bank, Carlton Branch, in favour of Hancock Alldis & Co in the sum of $20,000. The other was a bank cheque drawn on the Commonwealth Savings Bank, Carlton Branch, dated 21 June 1991, in the sum of $20,000, in favour of Melville McGregor Solicitors. The evidence does not establish what role Melville McGregor Solicitors played in this transaction, if any. Mr Hill gave tentative assent to the proposition that Melville McGregor had nothing to do with the acquisition of 15 Stanley Street, Peakhurst by Wilson. 7 The deposit for purchase of the Peakhurst property was paid to Hancock Alldis & Co towards the end of July 1991 (and banked by Hancock Alldis & Co on 1 August 1991). It took the form of the bank cheque for $20,000 which had been withdrawn from the BUMC Commonwealth Account on 21 June 1991, and bank cheques in the sum of $8,000, $5,000 and $7,000, drawn on 23 July, 26 July and 29 July 1991 respectively, on the Commonwealth Savings Bank, Kogarah Branch. Each of those three cheques had been purchased by Mr Hill. Counsel for all parties in this litigation hypothesised that Mr Hill had requested the Club to provide him, for some purpose of his own, with the cheque for $20,000 made payable to Melville McGregor Solicitors, and had later repaid the $20,000 which the Club so made available to him, and used the repayment funds to provide $20,000 of the deposit. While the Crime Commission and the State retreated, in some written submissions delivered after judgment had been reserved, from this hypothesis, it seems to me that it is a reasonable inference to draw. It has the consequence that the whole of the deposit of $40,000 was paid from funds of the Club. 8 The purchaser of the Peakhurst land applied to Citibank for a loan to enable him to complete the purchase. On 19 July 1991 the sum of $1,500 was withdrawn from the BUMC Commonwealth Account. It took the form of bank cheques for $1,250, and $250, each payable to Citibank Savings Limited. Those cheques were sent to Citibank, and constituted the application fee, and a valuation fee, in connection with that proposed loan from Citibank. 9 On 30 July 1991, Citibank issued Mr Wilson with a letter of approval for a loan of $250,000, at a rate of interest of 13.5%, repayable by equal monthly repayments over a period of 15 years. On 4 September 1991 Citibank wrote to Mr Wilson confirming some recent discussions it had had with Mr Hill. Citibank had valued the property at $350,000, and in consequence of it requiring a loan to security ratio of 65%, the loan amount was reduced to $227,500. For that loan, the monthly repayments were to be $2,955.45. 10 On 10 September 1991 a further withdrawal was made from the BUMC Commonwealth Account, in the sum of $14,361. It took the form of a bank cheque payable to the Commissioner for Stamp Duties. It was paid to the Commissioner for Stamp Duties, to pay stamp duty on the contract for the purchase of the Peakhurst land, and on the mortgage of that land to Citibank. 11 On 12 September 1991, a further amount of $19,765.54 was withdrawn from the BUMC Commonwealth Account. From that withdrawal, bank cheques for $16,222.53 in favour of Austral Power Products Pty Ltd, and for $3,484.46 in favour of Justin Hill solicitor were purchased. The cheque in favour of Austral Power Products Pty Ltd was paid as part of the purchase price upon settlement of the purchase of the Peakhurst property. I would infer that the cheque in favour of Mr Hill was in payment of his costs and disbursements in connection with this transaction. Those two cheques total $19,706.99. The small difference, of $60 odd, between the amount withdrawn from the account, and the total of the two cheques, was used partly in paying a debits tax on the account, and is partly unexplained. That withdrawal made on 12 September 1991 drew all funds out of the BUMC Commonwealth Account. 12 The settlement of the purchase of the Peakhurst property occurred on 13 September 1991. After making the usual adjustments for periodical outgoings of the property, the amount payable on settlement was $360,565.00. It was made available to the vendor in the form of four bank cheques as follows: Source Payee Amount BUMC Commonwealth Account Austral Power Products 16,222.53 Citibank Austral Power Products 226,528.50 Advance Bank Austral Power Products 4,949.81 Advance Bank Day Dockrill 112,864.16 TOTAL 360,565.00 13 The cheque from Citibank was the net amount made available by Citibank to Mr Wilson from the mortgage loan, after deduction of some fees and expenses. 14 The two amounts made available by Advance Bank arise from a second conveyancing transaction which was settled simultaneously with the purchase of the Peakhurst land. Ms Charmaine Bernoth was a client of Mr Hill, and was selling property which she owned, at 49 Calder Road, Chippendale, to a Mr and Mrs Oryl. Mr and Mrs Oryl were being financed in that purchase by Advance Bank. At Mr Hill's request, the solicitors for Mr and Mrs Oryl asked Advance Bank to make available money which it was advancing in connection with the purchase of 49 Calder Road, Chippendale in the form of the two cheques which Advance Bank drew and which were used to settle the purchase of the Peakhurst property. Mr Hill has given evidence that Ms Bernoth was someone with whom he had had a long-term relationship, that she consented to her money being used in this fashion, and that she was repaid. 15 The explanation for the cheque in favour of Day Dockrill is that a third conveyancing transaction also settled on 13 September 1991. Austral Power Products Pty Ltd purchased a home unit in Jindabyne, and the cheque for $112,864.16 in favour of Day Dockrill was used by Austral Power Products Pty Ltd in connection with that purchase. 16 As part of the settlement on 13 September 1991, Mr Wilson gave a mortgage to Citibank Savings Limited over the Peakhurst land. That was the only mortgage given over the land. 17 Soon after 13 September 1991, the transfer of the Peakhurst land to Mr Wilson was registered, as was the mortgage over that land which Mr Wilson granted to Citibank. 18 Mr Wilson opened an account with Citibank Savings Limited ("the Wilson Citibank Account") at the time his loan from Citibank was approved. Periodical payments due to Citibank, in repayment of its mortgage loan, were debited to that account. Mr Wilson, by a written agreement made on 25 September 1991, appointed Antipas Real Estate, of Penshurst, as his agent in relation to the leasing of units 1 and 2 at the Peakhurst premises. Those agents were given instructions to bank the net proceeds of leasing those two units to the Wilson Citibank Account. Thereafter, the net proceeds of leasing units 1 and 2 were paid into that account. The net proceeds of leasing units 1 and 2 were not sufficient to pay the full amount of the monthly amount payable to Citibank. Other deposits were made to the Wilson Citibank Account from time to time, with the result that the account was kept (at least until May 1994) in credit by a small amount. From May 1994 the periodical debits needed to repay the Citibank mortgage were not made to the Wilson Citibank Account, presumably as a consequence of the restraining order which had been made against Mr Wilson's assets in March 1994. Incorporation of the Club 19 On 3 May 1991, Mark Florence, who was then the Treasurer of the Club, completed a form applying for incorporation of the Club, under the Associations Incorporation Act 1984. He filled out the portion of the form calling for "particulars of property held by a person, in trust or otherwise, for or on behalf of or for the object of the currently unincorporated association" by writing "nil". He filled out another part of the form so that it read, "the income of the association is likely to be $20,000-$25,000 per annum which is likely to be derived from the following sources: members dues and membership fees. The expenditure of the association is/is likely to be $20,000 per annum." The form as lodged, included a statement, signed by the then Secretary and President of the Club that, "At a meeting of the Black Uhlans Motor Cycle Club Australia held on the 15th day of May 1991, it was resolved that the presently unincorporated body will be taken over by Black Uhlans Incorporated." 20 That form was lodged with the appropriate government department on 25 June 1991. The plaintiff was incorporated that same day, 25 June 1991. 21 Schedule 2 to the Associations Incorporation Act 1984 provides: "2. (1) On the incorporation of an association … under this Act the following provisions have effect: (a) the assets of a former association of the incorporated association vest in the incorporated association without the need for any conveyance, transfer, assignment or assurance, (b) the rights and liabilities of a former association of the incorporated association become the rights and liabilities of the incorporated association." 22 There is a very wide definition of "assets", and a very wide definition of "liabilities" in schedule 2. The effect is that all assets and liabilities of the unincorporated club became, on incorporation, assets and liabilities of the incorporated association. It is the incorporated association which is the plaintiff in the present case. 23 On 11 August 1992 the plaintiff lodged, with the Department of Consumer Affairs, the annual statement required by section 27 of the Associations Incorporation Act 1984. The statement said that the last financial year of the incorporated association ended on 31 May 1992. Particulars of the income and expenditure of the incorporated association during its last financial year were set out. They were as follows: INCOME Subscriptions 26,264 Run Fees 4,345 Sales – Refreshments 17,023 T-Shirts, Badges 667 Donations 320 Other Income 3,445 52,064 EXPENDITURE Rent 18,155 Light & Power 2,771 Telephone 1,325 Purchase – T-Shirts, Badges 5,593 Waste Disposal 712 Meeting Expenses 6,773 Run Expenses 4,907 Repairs & Maintenance 805 Purchase – Refreshments 15,518 15,559 DEFICIT FOR THE YEAR $4,495 24 The assets and liabilities of the incorporated association at the end of its last financial year were stated to be as follows: ASSETS Cash 1,283 Debtors 410 Loans Payable 15,601 $17,294 RETAINED CAPITAL Reserves acquired following incorporation 21,789 Deficit for the period ended 31st May, 1992 4,495 $17,294 25 The form of the annual statement called for details to be provided of "particulars of mortgage, charges and other securities of any description affecting any of the property of the incorporated association as at the end of its last financial year". That section of the form was filled out by writing, "not applicable". The form also contained a "certificate as to financial affairs" which said, "In the opinion of the members of the committee - (a) the particulars set out in items 5-9 above are not misleading and give a true and fair view of the matters to which those particulars relate …" The statement of income and expenditure, statement of assets and liabilities, and statement that the particulars of mortgage item was "not applicable" were items 5, 6 and 7 of the form. The certificate was signed by two members of the committee, Mr Florence and Mr Gioffre. 26 Mr Florence (who happened also to be the Public Officer of the association) gave another certificate, that "the particulars contained above are true". Mr Gioffre gave a certificate that, "I attended the annual general meeting of the association held on 10th June 1992. This annual statement was submitted to the members of the association at its annual general meeting." That annual statement was lodged by T E Gibbs & Co, Accountants. 27 T E Gibbs & Co also prepared, in October 1992, a tax return for Mr Jack Wilson. That return showed him as having no income from salary and wages, as having earned (after deductions) $36,800 from letting out on hire a refrigerated trailer, and as having suffered a net loss of $9,272 from rental activities. The amount of that loss was derived from a total of $21,330 rental having been received for the rental of units 1 and 2 at 15 Stanley Street, and total expenses attributable to 15 Stanley Street, Peakhurst being paid of $30,602. A working paper of Mr Gibbs shows that those expenses were made up of rates, repairs, agent's fees and other like matters connected with conducting the business of a landlord, together with interest in the sum of $25,424. Mr Gibbs' working papers included a summary statement, provided by Antipas Real Estate, of the income derived from units 1 and 2 at 15 Stanley Peakhurst, and outgoings connected with that property. The figures contained in the tax return, relating to the rental of 15 Stanley Street, matched the figures in the summary statement provided by Antipas Real Estate, save only that the summary statement from Antipas Real Estate did not include any outgoing for interest. 28 On 22 January 1993 Mr Wilson was arrested by police. Police seized some drugs, cash, weapons and other items which Mr Wilson had in a hired storage unit. 29 On 5 January 1994 Mr Gibbs wrote a letter of advice to Mr Florence, as follows: "Following our recent discussion I have given consideration to the problem of the most appropriate method of ownership of club property. There are four alternatives to this problem with each of them having advantages and disadvantages. We have set out your options briefly below. 1. AN INDIVIDUAL NOMINEE With ownership held by an individual nominee. The principle advantage is ease of obtaining finance. The principle disadvantage is of security of the asset, especially in the case of personal misfortune to the nominee. A change in the nominee would also mean that full stamp duty on the property value (eg $10,000) would be payable upon each change of nominee. 2. PARTNERSHIP A partnership has the same advantage as that of a nominee (above). The possible problems of risk with a nominee are reduced as ownership would be spread. Risk would be reduced and stamp duty payable on the change of each nominee would be much smaller. (Depending on how many partners existed in the partnership) 3. COMPANY A company could be established owning the property with the company ownership being split among a number of club members (shareholders). The stamp duty problem could be limited by not notifying the Stamp Duty Office of any changes in shareholding, although we cannot professionally advise you to follow such a practice. The security of ownership can easily be covered by having signed share transfer forms for all shareholders kept on hand. The big negative for the company is that there is no provision for the inflationary increases in value to be tax exempt. This exemption exists for all other options and as the inflation component of the capital gain will amount to close to 100% of that gain then this exemption must be capitalised on. Otherwise you will lose close to 33% on the gain in value on the property in tax. 4. DISCRETIONARY TRUST The final option is I believe your best alternative. It involves the establishment of a discretionary trust with a company acting in the capacity as trustee. Members of the club would act as shareholders of the trustee and the advantages available under the Company option in regards to the change of shareholders and stamp duty extend to this option. As the actual property is owned by a Trust the exemption from capital gains tax for the inflationary increase in the value of the property would also be available to this option. Beneficiaries for the Trust would be required but this requirement can be made very flexible. The Trust also has a finite life (unlike a company) and would only be expected to last for only 100 years. All above changes will involve substantial costs to establish. Stamp Duty and legals, with the company option costing a further $1,000 and the Trust option would be approximately $2,500 extra." 30 On 22 March 1994 Studdert J made a restraining order, under the Act then known as the Drug Trafficking (Civil Proceedings) Act 1990 relating to, amongst other things, Mr Wilson's interest in the Peakhurst property. The New South Wales Crime Commission lodged a caveat against the title of the Peakhurst property on 25 March 1994. It was also on 25 March 1994 that Mr Wilson was served with the restraining order. 31 On 31 March 1994 a company called Peakhurst Nominees Pty Limited was incorporated as a shelf company. On 5 April 1994 shares were allotted in the company to Mr Florence, and to John Richard Nevin. According to Mr Florence, Mr Nevin had been appointed President of the Club in January 1994. Mr Florence and Mr Nevin were appointed as directors of the Company in place of the previous directors who were, I would infer, from the shelf company organisation which had caused the company to be incorporated. Peakhurst Nominees Pty Limited did not, so far as the evidence discloses, carry out any transactions after passing into the control of Mr Florence and Mr Nevin. A death certificate establishes that Mr Nevin is now dead. 32 On 11 March 1996 a forfeiture order was made in relation to, inter alia, Mr Wilson's interest in the Peakhurst property. It is common ground that before that forfeiture order was made the Crime Commission had received notice of a claim that the Peakhurst property was held, by Mr Wilson, on trust for the plaintiff. Hence the defendants in these proceedings do not assert that the Public Trustee took the property free of any trust which existed as between Mr Wilson and the Club. 33 On 25 September 1996 a request was lodged with the Registrar General that the Peakhurst land be vested in the Public Trustee on behalf of the Crown, pursuant to section 23 of the Drug Trafficking (Civil Proceedings) Act 1990, in consequence of the taking effect of the forfeiture order made on 11 March 1996. That request has resulted in the Public Trustee becoming the registered proprietor of the Peakhurst land. The Plaintiff's Claim that Wilson Holds the Land on Trust for the Plaintiff 34 This paragraph of the judgment gives an account of the way the plaintiff puts its claim for the existence of a trust over the Peakhurst premises. In about 1984 the Club began occupying factory 3 at the Peakhurst land as its clubhouse. Those premises were leased from the owner by Barry Keene, who was then a member of the Club, but the rent was paid out of the Club's funds. From time to time at meetings of the Sydney chapter of the Club there were discussions about buying the property which contained the clubhouse. Mr Gioffre, who was President of the Club from approximately 1989 to 1993 had various discussions from 1989 onwards with Mr Kevin Vincent, a director of the company which owned the premises, about the possibility of the Club purchasing the land. Mr Vincent was initially not interested in selling, then was interested in selling, but for more money than the Club wished to pay, and only in 1991 was agreement in principle arrived at that the premises would be sold for $400,000. From early 1991, there were several meetings between office holders and a few other members of the Club, and Mr Hill. Mr Hill was asked whose name the building should be put in. Mr Hill recommended putting it in the name of someone who had a job and assets. He recommended Mr Wilson as being a good person to present to an incoming mortgagee, because he had had a job for 10 years, and owned his own home. Mr Hill recommended that the Club should start feeding money into Mr Wilson's bank accounts to give him a proven savings record, as that would improve the chances of getting finance. Club money was used to increase the balances in some bank accounts which Mr Wilson had, the records of which were duly shown to Citibank. There was some talk about execution of a formal trust deed, but somehow no trust deed came to be executed. The Club raised money in cash, which it gave to Mr Hill to pay the amount of the purchase price which was not derived from the Citibank loan and from the BUMC Commonwealth Account. A significant contributor to the Club's cash contribution to the purchase price was a levy which was imposed on club members in 1991, to help pay for the clubhouse. Wilson regarded himself as the owner of the clubhouse property in name only. Wilson's money found its way into the purchase of the clubhouse to no greater extent than did the money of any other club member. After the purchase was complete, the Club paid money into the Wilson Citibank Account from time to time, to make up the amounts by which the net rental received from units 1 and 2 was insufficient to pay the mortgage repayments. After Citibank ceased debiting the Wilson Citibank Account in May 1994, the Club made payments from time to time to the Public Trustee, with a view to meeting the shortfall between the mortgage repayments and the net rental income from units 1 and 2. 35 The principal witnesses upon whom the Club relies to make good this case are Mr Florence, Alan George Reardon, Mr Gioffre, and Mr Hill. The Club has explained the absence of Mr Vincent by tendering his death certificate. Alan George Reardon 36 Alan George Reardon is the real name of "Jack Andrew Wilson", the person in whose name the Peakhurst property was purchased. He has lived under the name of Jack Andrew Wilson for many years, because he was once charged with a criminal offence in Queensland under his real name, and skipped bail. 37 Mr Reardon has more than one false identity, however. As well, he is known as Peter John Reardon, Graham Wilson, Andrew Spirou, Alan James Bennett, Michael John Wilson, and Alan George Francis. He also had an identity, Trevor James Lane, which he was not sure that he had used. For these false identities he had a variety of documents to establish the identity – he had false birth certificates, false driver's licences, and bank accounts in false names. When, in January 1993, police seized property from the storage unit which he had rented since August 1990 (under the name of Graham Wilson) they found these proofs of identity. As well, they found a 1989 newspaper article titled "How I Created a False Identity", blank Birth Certificate forms from New South Wales and Tasmania, blank Australian Certificate of Marriage forms, and blank Western Australian driver's licences. It was under one of his false names, Andrew Spirou, that he was director of a company which was involved in importing and distributing chemicals, for the purpose of manufacture of prohibited drugs. 38 Sometimes he would supply people with documents which would enable them to have a false identity. At other times, he would supply people with blank documents, so that they could create their own false identities. 39 By a transfer which was registered on 5 September 1991, a parcel of New South Wales land was conveyed to Alan James Bennett. Mr Hill was the solicitor who acted for the purchaser in that transaction. Alan James Bennett was one of the false identities of Mr Reardon. However, Mr Reardon said that, so far as that transfer was concerned, the transferee was not him, but that for that transaction he had lent his false identity to someone else. He did not say who that other person was. 40 He made a practice of carrying only one false driver's licence on him at a time (because there had been an occasion earlier when the police had found two false driver's licences in his wallet). He did this so that if he were to be caught for a traffic offence, the penalty points connected with that offence would accrue against one of his false identities. 41 Mr Reardon had a significant involvement with drug manufacturing and distribution. Arising from his arrest on 23 January 1993, he pleaded guilty (in February 1996) to an indictment which included a count of manufacturing a prohibited drug (methylamphetamine) in a large commercial quantity between 1 January 1991 and 23 January 1993 at Granville and elsewhere in the State of New South Wales. That charge was laid under the Drug Misuse and Trafficking Act 1985. Schedule 1 to that Act defines a "large commercial quantity" of methylamphetamine as being one kilogram. Eleven matters were taken into account on a Form 1 with that count of the indictment. (This means that he admitted his guilt of eleven other offences, had those offences taken into account in deciding the sentence, and thereby achieved immunity from any future prosecution for those eleven offences.) Another count of the indictment, to which Mr Reardon pleaded guilty, related to the deemed supply of a prohibited drug, namely cocaine, on 22 January 1993 at Kings Park in the State of New South Wales. This "deemed supply" arises under section 29 of the Drug Misuse and Trafficking Act 1985, whereby a person who has in his or her possession an amount of a prohibited drug which is not less than the traffickable quantity of the prohibited drug is deemed to have it in his or her possession for supply, unless able to prove otherwise. Schedule 1 of that Act nominates three grams as being the traffickable quantity for cocaine. For the first count on the indictment, Mr Reardon was sentenced to a minimum term of imprisonment of four years and two months, together with an additional term of one year. For other counts on that indictment, he was sentenced to lesser terms of imprisonment, to be served concurrently with the sentence for the first count. 42 When Mr Reardon's storage unit was searched by police in January 1993, it was found to contain, inter alia, five books, and various other pieces of information, concerning the manufacture of drugs. Even after his arrest, he "happened to notice once" that he was present at a "cook" of amphetamines. A "cook" is part of the process of manufacturing amphetamines. 43 The charges to which Mr Reardon pleaded guilty also included two charges of possessing an unlicensed firearm, and four charges of possessing a prohibited weapon. The firearms which the police had found in the storage unit included rifles, and an Uzi semi-automatic pistol. As well, there was a silencer for a gun. 44 Mr Reardon's storage unit also contained a booklet titled, "Lock Picking Simplified". Mr Reardon said that somebody gave him that as a present, that he tried to use it, but it didn't work. 45 Mr Reardon's understanding about illegal drug use is informative: "Q. I suggest to you that numbers of members of the Black Uhlans were involved in illegal drugs? A. Not that I know of. What do you mean by involved? With me? Q. Users of illegal drugs? A. With me? Q. Not necessarily with you but, to your knowledge, users of illegal drugs? A. Everybody uses illegal drugs, everybody. Depends what you call everybody. Everybody smokes pot or whatever you call it, uses amphetamines, I suppose, you go down to the pub down the road now on Friday and everybody uses it or what you suppose - what do you mean? You mean as I understand it everybody uses prohibited drugs? Q. Not everybody but an awful lot of people? A. Young people, sure. Q. And that's what you're saying was included but not confined to members of the Black Uhlans? A. I can't comment about that. Maybe they did, maybe they didn't, I'm not sure. You'd have to ask them." 46 Mr Reardon explained one aspect of his attitude to giving evidence: "Q. Is one of the unwritten rules of the Black Uhlans that you don't, if you're a member, put in other members? A. That's right. You don't put in anybody whether they're members or not. Q. And you sit there as a witness reluctant to put in anyone? A. I don't put in anybody. Q. You can't? A. No, I won't. Q. You won't? A. No." 47 Mr Reardon's activities were such that he had significant sums of cash available to him. At the time of his arrest in January 1993 he had $5,000 in cash in his car, $74,600 in his storage unit, and a further $7,000 in a secret safe at home. In evidence he said that the $7,000 in the safe at home was the product of dealing in motorbikes. Mr Reardon accepts that the chemicals which go into the manufacture of amphetamines are quite cheap, and at the time were fairly readily available. He also accepts that the amounts for which amphetamines, when manufactured, can be sold illicitly are very large, depending on how expert the people operating the selling operation are. Justin Hill 48 Mr Hill was admitted as a solicitor in New South Wales in about July 1981. He stopped practicing as a solicitor (both in New South Wales, and anywhere else) in about 1992. In 1996, after having pleaded not guilty, he was found guilty, in South Australia, on counts of taking part in the production of methylamphetamine, and of a conspiracy to produce 3, 4-Methylenedioxymethamphetamine. For those crimes, he had been sentenced to eight years imprisonment with a non-parole period of five years. Prior to his trial on these drug charges, he had been charged in New South Wales with knowingly making a false statement in a passport application. That charge concerned an attempt he made to obtain a passport in a false name. After his drug trial, he pleaded guilty to that charge, and was fined. At some stage – Mr Hill is not sure precisely when – his name was struck off the Roll of Solicitors in New South Wales. Mr Reardon and Mr Hill Apply for Finance from Citibank 49 Citibank had a standard form for mortgage finance proposals. Mr Hill filled out the details on that form, and Mr Reardon signed it, in the name "J Wilson". That form, as filled out, said that the applicant was Jack Andrew Wilson. This was, of course, not Mr Reardon's real name. It said his date of birth was 10/10/53. This was not his real date of birth. It said his private address was 96 Victoria Avenue Mortdale, and that he had been 1 ½ years at that address. In fact, Mr Reardon/Wilson had never lived at that address. 50 The form said that Mr "Wilson" had been identified by a particular numbered gold driver's licence. That was a driver's licence which Mr Reardon/Wilson provided to Mr Hill, which was one of his false driver's licences. The form said that the applicant's occupation was "General Manager". This was untrue. 51 The form said that the applicant's gross monthly salary was $3,500. This was untrue – Mr Reardon's earnings from employment were of the order of $500 to $600 per week. 52 The form said that Mr "Wilson" had a monthly gross income of $2,000 from investments, and $601.25 from rental income. Alongside this listing of income, the form said, "note tax returns for 1989 and 1990 annexed". There were income tax forms, marked "Copy", for the 1989 and 1990 tax years, annexed. Those forms were ones which were drawn up by T E Gibbs & Co, accountants. Notwithstanding that they purported to be copies of income tax returns for the 1989 and 1990 tax years, they were drawn up in 1991, after Mr Hill had referred Mr Reardon/Wilson to Mr Gibbs. No original tax returns, in the form of these "copies" had ever been, or ever were, lodged with the Taxation Department. 53 The 1989 "copy" return purported to be in the name of Jack Andrew Wilson, and gave his residential address as 96 Victoria Avenue, Mortdale. It annexed what purported to be a 1989 Group Certificate for Jack Andrew Wilson, showing that he had received $35,862 gross salary, from Nostalgia Motor Cycles. It also showed that he had received bank interest of $1,589, and a net income (after registration, insurance and repairs) of $18,274 from truck hire. 54 The "copy" return for the 1990 tax year contained the same particulars as the 1989 year about the identity and address of the taxpayer. It annexed a copy of what purported to be a 1990 Group Certificate for Jack Andrew Wilson, from Nostalgia Motor Cycles, showing a gross salary of $39,204. It showed a net income of $22,069 (after deduction of expenses for registration, insurance and repairs) from truck hire. 55 In fact, Mr Reardon did not own a truck, and had received no income from truck hire. He was employed by Blacktown Harley Davidson, a company which traded under the name of Nostalgia Motor Cycles, but was employed so that he was shown on the books under his real name of Reardon, not under his assumed name of Wilson. Further, his salary or wages from Nostalgia Motor Cycles was less than the amounts shown in the purported group certificates. These "copy tax returns" were fabrications, created for the purpose of deceiving Citibank. 56 The Citibank application form also called for a listing of assets. Mr Hill filled out the form by showing the assets of Mr "Wilson" as including a refrigerated trailer worth $60,000, $24,000 with Westpac, a deposit of $40,000, and "investment Justin Hill Solicitor" of $100,000. In fact, Mr "Wilson" did not own any refrigerated trailer. While there were two Westpac Savings accounts in the name of Jack Andrew Wilson, which had balances totalling approximately $24,000, those amounts were almost entirely amounts which had been placed there very recently. The only amount of "deposit" in the sum of $40,000, appears to have been the amount which was sourced from the BUMC Commonwealth Account. There was no investment of $100,000 with Justin Hill Solicitors. 57 The application form also stated "only commitment $500 per month rent". It was not disclosed that Mr "Wilson" was not paying rent at all, but rather living in his own home. The statement of assets did not disclose him as owning the residence he owned and lived in, but rather as owning a rental property, worth $90,000. By failing to disclose to Citibank the residence which Mr "Wilson" actually owned, there was a departure from what some Club witnesses say was the initial plan, of putting forward Mr Wilson as the applicant for finance because he owned his own home. 58 The application form made provision for providing the name of a reference, being a close relative or person not residing with the applicant. There, the form was filled in by nominating "sister – Margaret Wilson", and giving an address of 58 Renway Avenue, Lugarno. In fact, Mr "Wilson" did not have a sister of that name, and the address of 58 Renway Avenue, Lugarno was not the address of anyone known to Mr "Wilson". A telephone number for this fictitious sister was provided on the form. Mr Reardon claimed, in cross-examination, not to know whose number that was. 59 On 23 July 1991 Mr Hill wrote to Citibank saying: "We act for Jack Andrew Wilson with regard to the purchase of the above property. Contract price is $400,000.00. Mr Wilson hereby makes application for finance for an amount of $250,000.00 – 15 year principal and interest loan. Security offered being mortgage over the above property. Pursuant to this application we enclose the following. A. Completed Mortgage Finance Proposal. B. Copy of Contract C. Copy Tax Returns 1989 - 1990 D. Copy of leases re; 3 factory units and associated correspondence. Factory 1 Ty Pringle Motor Trimmer $1250 per month 2 Prestoo Pty Ltd $1120 per month 3 B Keene $1667 per month $48,444.00 per year E. Documentation re; Mr Wilson ownership of house in Queensland Lot 20 Tregana Circuit Edens Landing. F. Documentation re: Mr Wilson ownership of refrigerated trailer. G. Copy of Savings bank account – Westpac Bank showing present balance of $24,000.00 H. Letter from Justin Hill, Solicitor re 10% deposit and other source of funds. I. Signed EASI-PAY FORM. J. Bank cheque to Citibank Limited for $1250.00 re: Establishment fee. K. Bank cheque for $250.00 for valuation fee." 60 The documentation provided to Citibank in that letter concerning Mr Wilson's ownership of a house in Queensland at Lot 20 Tregana Circuit Edens Landing is a letter purporting to be from Salstar Pty Ltd to Mr Wilson, at 96 Victoria Avenue, Mortdale. It said: "Dear Mr Wilson, RE: YOUR PURCHASE FROM SALSTAR PTY LTD PPTY: LOT 200 TREGANA CIRCUIT, EDENS LANDING We refer to the above matter and hereby confirm that settlement of the above property took place on the 30th day of June, 1991. We hereby enclose receipt for balance of purchase monies received. We also advise that the property is now being rented, with a rental income of $138.75 nett per week." 61 Annexed to that letter were two receipts, purportedly given by Salstar Pty Ltd. One of them, dated 1 April 1991, recorded receipt of a 10% deposit of $8,900. The other, dated 30 June 1991, recorded the receipt of $80,100, as the balance of purchase monies for purchase of Lot 200 Tregana Circuit, Edens Landing. The evidence does not establish whether there had been a purchase made in the name of Wilson of such a property in Queensland, or whether these documents are also fabrications. From the fact that the letter is addressed to Mr Wilson at 96 Victoria Avenue, Mortdale, an address he did not occupy, from the fact that it is unusual for residential property to be rented so as to provide an income of a fixed net amount per week, from the fact that the two receipts total a round sum of $90,000 and thus that the unusual conveyancing practice of adjusting outgoings on completion seems not to have been gone through, as well as from the fact that this documentation was part of a concerted attempt to convince Citibank that Mr "Wilson" was a man of substance, there is quite some ground for suspicion that these documents are fabrications also. However, I cannot positively conclude that that is so. 62 The documentation sent to Citibank concerning Mr Wilson's ownership of a refrigerated trailer was a Certificate of Registration of Motor Vehicle, in Mr Wilson's name. A cash register imprint on it records that a transfer fee of $16 had been paid on 1 May 1991. Mr Reardon says that this is a trailer that he did not have any actual ownership of, but which was registered in his name for the purpose of getting finance. It remained registered in "Wilson's" name for a couple of years, and then was transferred back into the name of the true owner. It is obvious enough that this Certificate of Registration of Motor Vehicle, sent to Citibank, was designed to tie in with the fabricated statements in the 1989 and 1990 "copy tax returns", relating to income being earned by Mr Wilson from truck rental. 63 The documents sent to Citibank as "copy of savings bank account – Westpac Bank showing present balance of $24,000" were copies of the current page of two savings bank passbooks, in the name of Jack Andrew Wilson. One account showed a balance of $10,115.04, another of $13,881.93. The first of those savings accounts had had $10,000 deposited into it in May 1991. The second of the accounts had had $13,500 deposited into it in May and June of 1991. The evidence does not establish from what source those deposits were made. 64 The "letter from Justin Hill, Solicitor re 10% deposit and other source of funds", sent to Citibank on 23 July 1991, was a letter which Mr Hill wrote to Citibank dated 17 July 1991. It said: "RE: WILSON PURCHASE FROM AUSTRAL PATTERN CO. PTY LTD PROPERTY: 15 Stanley Street, Peakhurst We act for Mr Jack Andrew Wilson with regard to the purchase of the above property. Contracts in this matter are to be exchanged this week. We are holding Bank cheques to $40,000.00 (note photocopy annexed – payable to Vendors Solicitor being 10% deposit.) We are holding the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) to be applied to the purchase. These sums are from the sale of a property at 65 Ollier Crescent, Prospect which belonged to Mr Wilson." 65 The statement that Mr Hill was holding $100,000 derived from the sale of the Prospect property and to be applied to the purchase was false. Mr Reardon had, at one time, owned a property at 65 Ollier Crescent, Prospect, which was registered in the name of Wilson. However, that property had been sold in about 1984, when "Wilson" purchased his next house. It was sold for something like $62,000, not $100,000. Further, all the net proceeds of sale were put towards the purchase of his next house. 66 The "Signed Easi-pay Form" sent to Citibank on 23 July 1991 was an authority to Citibank, signed by "Wilson" authorising Citibank to make periodical deductions to the account which "Wilson" had opened with Citibank. 67 On 26 July 1991, Mr Hill sent a fax to Citibank. The coversheet of that fax was handwritten, by Mr Hill. It said: "Re loan application JACK ANDREW WILSON Enclosed 1) Copy bill of mortgage for $100,000.00 plus copy C T 2) Copy Bank Statement for withdrawals (a) 40,000.00 (10% deposit) (b) 1,500.00 (est fee)" 68 The enclosures with that letter included a document which took the form of a Queensland Real Property Act Bill of Mortgage. It purported to be a bill of mortgage given by Richard Charles Barber, of an address in Surfers Paradise, to "Jack Andrew Wilson of 96 Victoria Avenue, Mortdale (General Manager) in the State of New South Wales", over the land in an identified certificate of title. The document was dated 20 August 1990. The consideration was stated to be, "$100,000 principal to be lent to Richard Charles Barber at 16.0% percentum per annum interest only loan for one (1) year. Interest payable at six monthly intervals – 20th February 1991 and 20th August 1991 – principal repayable on the 20th August 1991." 69 The bill of mortgage bears a signature of the mortgagee "J Wilson". Mr Reardon denies having signed that bill of mortgage. He says he had not seen it before the time of an examination to which he was subjected, under the Drug Trafficking (Civil Proceedings) Act 1990, in 1994. Mr Reardon says he did not have $100,000 owing to him, whether by Barber or by anybody else, at that time. His explanation for the document is that Mr Hill must have fabricated it. Mr Hill gave evidence that, in relation to all the information and documentation which he sent to Citibank, he provided it in good faith, based on information which "Mr Wilson" gave him. 70 Also annexed to Mr Hill's fax to Citibank of 26 July 1991 was a document purporting to be a copy of a bank statement, from the Carlton New South Wales branch of the Commonwealth Bank, relating to account number 2137 0079 0874. The document shows that account as being in the name of J A Wilson. Mr Reardon says he had never seen that document before February 2001, and had never held the account referred to in the document, either in the name of "J A Wilson" or in any other name. In fact, the account which has the number shown on that document, at the Carlton branch of the Commonwealth Bank, is the BUMC Commonwealth Account. The transactions shown in the document which was sent to Citibank are all transactions which took place on the BUMC Commonwealth Account. The document shows the withdrawal of $40,000 which took place on 21 June 1991, and the withdrawal of $1,500 which took place on 19 July 1991 from the BUMC Commonwealth Account. The document is a forgery, created by someone taking a copy of a statement of the BUMC Commonwealth Account, and on that statement substituting the name "J A Wilson" for the name of the true account holder. 71 On 29 July 1991 a document was faxed to Citibank, this time from the fax number of Blacktown Harley Davidson. This is where Mr Reardon was employed. There, though Mr Reardon was on the books, and paid, under his real name, he was known to staff members and customers as "Jack Wilson". The document faxed to Citibank from Blacktown Harley Davidson read as follows: "To Whom It May Concern: Jack Andrew Wilson has been employed at Harley Davidson of Blacktown for the last 8 years. His position is General Manager. His income ending 30 June 1991 was $43,200 gross wage. Yours faithfully [signed: P Reardon] P Reardon Managing Director" This document is one which Mr Reardon fabricated. "P Reardon" was one of his aliases. His actual income was substantially less than $43,200 gross. 72 As mentioned earlier, it was on 30 July 1991 that Citibank issued its letter of approval for a loan of $250,000. It is obvious, from the history I have just outlined, that Citibank's approval, and its subsequent lending of money for the purchase of the Peakhurst land, was the product of a large number of serious misrepresentations, by both Mr Reardon and Mr Hill. The 1991 Levy 73 The making of the levy, in 1991, is an important part of the plaintiff's case about how it raised money to pay for the clubhouse. There is not a single contemporaneous record of the making of the levy, or of it being collected, or of its proceeds being paid to Mr Hill. Mr Florence gave evidence of there being a meeting, in May or June of 1991, which imposed the special levy. He says that he received payments of the levy in cash from a man called Glenn Hammond (also known as "Boots"), who is now dead. It was not made clear, in Mr Florence's evidence, whether this levy was one which was imposed on only the members of the Sydney chapter, or on the members of the Club nationwide. According to Mr Florence, in 1991 there were between 25 and 30 members of the Sydney chapter of the Club. Mr Gioffre estimated that in the second quarter of 1991 there would have been around 60 odd members of the Sydney chapter on the books, of whom between 30 and 40 were active members. Mr Gioffre says that there were approximately 120 members Australia wide at that time. Mr Gioffre's evidence was to the effect that the levy was a nationwide levy. If the levy was indeed a nationwide levy, no explanation has been given of how it could happen that the Sydney chapter of the Club could impose a nationwide levy. 74 Mr Florence gave evidence about what was done with the proceeds of the levy, as follows: "Q. As the treasurer did you ultimately receive the moneys that were paid? A. I did. Q. Who did you receive them from? A. I received them from a member named Glen Hammond who was in charge of collecting them, and also from members themselves. Q. What did you do with the money? A. Gave it to Justin Hill in the end, who was the solicitor acting for the purchase of the property. Q. What did you do with it in the meantime before you gave it to Mr Hill? A. We had a safe at the clubhouse, it was kept in there, kept some of it at home. Q. As each payment was made to you did you count the money? A. Yeah. Q. When you paid the money to Mr Hill was it paid in cash? A. Yes. Q. Did you count it before you paid it to him? A. Yes. Q. How much did you pay to him? A. It was varying amounts, I think there is one about 40,000, I couldn't be positive of the other amounts." This evidence is extremely vague, as to both the time the money was collected, and the amount collected. 75 In support of the claim that there had been a levy, the plaintiff tendered three statutory declarations made by deceased members of the Club. One of them, from John Nevin, said: "I have paid a joining fee of $1,000 to the Black Uhlans Motor Cycle Club". Another one said, "I Stephen Hancock of the Black Uhlans Motor Cycle Club hereby solemnly and sincerely declare that I donate $1,000 over a period of two years from when I joined the Black Uhlans". The third said, "During the period of my membership I did give of my own funds an amount of $1,000. This was a donation to the Club to be used as part of the Club's funds to acquire property and general Club use". 76 Five club members were called on this topic. Owen Moseley said he had paid $1,000 to the Black Uhlans Motor Cycle Club as a joining fee. Cross-examination established that he had joined in about 1985, and the joining fee was paid during the period of about 12 months after he had joined. 77 Robert Carnegie gave evidence that he had donated $1,500 to the Black Uhlans on 16 October 1987 for the purpose of obtaining property. 78 Richard Griffiths said that he donated $1,000 towards purchase of property for the Black Uhlans Motor Cycle Club. Cross-examination established that he had joined the Club in about 1987, and paid this $1,000 within 12 months or so of joining. 79 Malcolm Roche gave evidence that he donated $1,000 cash "to the Black Uhlans Motor Cycle Club Inc for the purpose of purchasing property at 15 Stanley Street Peakhurst". He said he paid it in instalments of $100, when he could afford it, over a period of probably two years, up to 1992. At the time he paid it, he was an associate member, not a full member, and was not required to pay it. 80 Roy Brinson gave evidence that he donated $1,000 to the Club to be used in the purchase of a clubroom whenever that time would be appropriate. That donation was made about the time he joined the Club, in 1983. 81 The evidence of these eight club members fails to establish that there was any levy in 1991. Rather, it suggests that there was a practice of members paying $1,000 to the Club at the time of, or soon after, joining. 82 Mr Florence gave evidence of holding sums in cash in the clubhouse safe, and a large amount in his home garage. He says at one stage he held about $40,000 in his garage for a week. There was no attempt, in evidence, to identify when that occurred, or what happened to the money immediately after it ceased being in his garage. Mr Florence says that he delivered a total of approximately $90,000 in cash to Justin Hill before settlement. 83 Mr Hill, in evidence which he gave on the first day of the trial, told a significantly different story. He said: "Q. You say, I think, that there was some money that came to you from club officials or members? A. Yes, that's correct. Q. Most of it in cash? A. Dribs and drabs. I think they showed up with cash at different times, they didn't quite understand that is not the way to do it. I have got them to go away and put it in a bank account, I understood they had a bank account, I think I saw a bank account actually. Q. You agree, don't you, that you actually received cash sums on a number of occasions? A. I think they showed up with cash and I got them to go down and get bank cheques. They may have paid the stamp duty with cash, I don't recall, I certainly saw some cash. Q. On a number of occasions? A. Several occasions, yes." (emphasis added) 84 The next day, however, when his evidence continued, Mr Hill was concerned to make sure that the Court understood that he had received some cash, even if that understanding of the Court was arrived at through answers which were not responsive to the questions asked. It was put to him that, to enable the settlement to occur, he had provided about $117,000 (namely, the money derived from the sale of Ms Bernoth's property). The evidence continued: "Q. And provided so that the acquisition by Wilson of 15 Stanley Street could proceed to settlement? A. Yes, I already was, the week of settlement - or settling this whole conveyancing was hard work because the money was supposed to be coming in, when they were organising the money over the plan of six months. It didn't happen and they turned up on the week of settlement and they fell short of cash, and they were supposed to turn up with cheques and it didn't happen. I think on the day of the settlement they turned up with a certain amount of cash. There is a shortfall and I arranged a cheque on the day of settlement, as you can't turn up on settlement with the cash accumulating - it doesn't work that way. Q. And in any event there was a shortfall? A. There was a shortfall, yes. Q. Listen to my question, Mr Hill, if you would? A. Yes. Q. Do you agree that you provided a little less than $117,000 which was used to settle the purchase by Wilson of 15 Stanley Street Peakhurst? A. Yes, but in actual fact it wasn't 117. I was holding a whole lot of cash to a certain extent, or on that week, or it was used - the reality was the shortfall came from the sale of the property for the purchase, but the reality was the shortfall was 40 or something. I can't recall exactly now, but there was a shortfall in terms of holding money, coming in with money on the day of settlement but a cheque was directed in terms of a contra deal of the 117 which was the - beyond the monies that was provided that week, but the reality—" 85 Section 61 of the Legal Profession Act 1987, in the form it had in 1991, provided: "(2) Money received on behalf of another person by a solicitor, in the course of practising as a solicitor: (a) shall, except where the person on whose behalf the money is received otherwise directs, be paid, within the prescribed time, to the credit of a general trust account at a bank in New South Wales and be held in accordance with such regulations as may be in force in relation to trust money; (b) shall, where the person on whose behalf the money is received directs that it be paid otherwise than to the credit of a general trust account and the money is to be held under the direct or indirect control of the solicitor for less than the prescribed period, be paid as directed; or (c) shall, in the case of money referred to in paragraph (b) that is to be held for the prescribed period or a longer period, be paid as directed and held in accordance with such regulations as may be in force in relation to controlled money, and, in any case, shall be disbursed as directed by the person on whose behalf it is held." 86 Section 62 of that Act required: "(1) A solicitor shall keep: (a) in the case of trust money (within the meaning of section 61) – accounting records; or (b) in the case of money other than trust money – such accounting records or other records (if any) as may be required by the regulations, that disclose at all times the true position in relation to money received by the solicitor on behalf of another person. (2) The accounting records referred to in subsection (1) shall be kept in a manner that enables them to be conveniently and properly audited." 87 Section 61(7), and section 62(4) had the effect that a wilful failure to comply with those obligations, on the part of the solicitor, was professional misconduct. 88 There was no documentation to confirm that Mr Hill had received any money at all in cash. In particular, there were no trust account records, of the kind the Legal Profession Act 1987 require to be kept, concerning the receipt of any cash money. Counsel for the plaintiff submitted, with considerable justification, that, given what the evidence had revealed about Mr Hill, it was hardly a surprise that there were no such records. Even so, it means that the plaintiff is without one of the means of corroboration which would ordinarily be available for a story that someone had paid a large sum of money in cash to a solicitor. 89 I am not satisfied that there was any special levy made by the Club in 1991, for the purpose of raising money to buy a clubhouse. Mr Florence 90 Mr Florence swore three affidavits in these proceedings. In his first affidavit, sworn 4 November 1999, he said: "On 21 July 1991 I withdrew an amount of $40,000.00 from the Club's account no.2137 790 874 with the Commonwealth Bank of Australia at Allawah. The money in this account belonged to the Club. The amount of $40,000.00 was to be used as the deposit on the property, but following Justin Hill's advice I paid it to Justin Hill. Justin Hill said to me words as follows or to the following effect: "I'll pay this into one of Jack's accounts"." 91 Strictly, the BUMC Account was maintained with the Commonwealth Bank of Australia at Carlton – but, as Carlton and Allawah are immediately adjacent suburbs, this error is of no significance. Of more significance, however, is the fact that the affidavit gives no clue that the $40,000 was taken out in the form of two bank cheques, neither of which was payable to Mr Hill so as to make it available to him to pay into one of the accounts in the name of Wilson. 92 His second affidavit was sworn on 16 February 2001. It contains the following account: "In June 1991 the President, Steve Gioffre, said to me:- "We need to pay the deposit of $40,000.00 for the property. Find out from Justin Hill what he wants and then draw the cheque from the Club's account." I then telephoned Justin Hill who said to me:- "We need two bank cheques. Make one out to Hancock Alldis & Co for $20,000.00 and the other to Melville McGregor for $20,000.00" At the time I did not know who Hancock Alldis & Co or Melville McGregor were. I accepted Justin Hill's advice that the cheques should be drawn in favour of those parties. On 21 June 1991 Bob Piggott and I signed a withdrawal form, a copy of which is annexed and marked "B". I took the signed form to the Commonwealth Bank at Carlton and withdrew the sum of $40,000.00 from the BUMC Commonwealth Account. At my request the Commonwealth Bank drew 2 bank cheques as follows: Hancock Alldis & Co $20,000.00 Melville McGregor Solicitors $20,000.00" 93 That account is one which fits with the objective evidence. It is of concern that the account he gives of the withdrawal of the $40,000 on 21 June 1991 is different in the two affidavits. 94 There was a repeated line of cross-examination of the Club's witnesses, concerning whether they, or any other of the Club's witnesses, had ever worn a "1% badge". Mr Gioffre was familiar with such badges, and said that some members of the community "buy them as a 1% outlaw". It was suggested to him that the significance of the badge was that wearers were the 1% of society who reject the rules and laws of society. To that suggestion he replied, "That doesn't mean all the rules of society, no, it may be the government rules". Mr Hill was aware that a meaning of that kind was placed on the 1% badge by the press, the media and the authorities, though possibly not by the people who actually wore the badges. I would not be prepared to place any weight, in this case, on the evidence about whether in fact members of the Club ever wore 1% badges. Even if some club members had worn such badges, I would not be prepared, on the evidence before me, to regard such an act as a seriously intended statement of the wearer's attitude. Of some significance, though, is the fact that Mr Florence gave evidence as follows: "Q. What does the one per cent badge signify? A. Um, I believe that it was in response to a statement made by a bloke in America, that only one per cent of motorcyclists were in clubs and the rest were just normal people that rode motorbikes." It is a concern that Mr Florence's evidence on this topic is out of line with that of other witnesses, and makes me wonder whether his answer was truthful. 95 As well, even on his own account of things, Mr Florence was prepared to be party to the scheme for deceiving Citibank by inflating the amounts in the bank account of Mr "Wilson", and presenting those bank records to Citibank as a true indication of the assets of Mr "Wilson". He is a witness about whose honesty I have some concern. 96 Mr Florence also gave evidence about a source of cash being from the sale and purchase of some equipment from Albury. He gave evidence that, at a time which was not identified in the evidence, two members of the Club, who were not identified, said to him that they needed some money to buy air conditioning and hotel equipment. Mr Florence gives evidence: "Q. How much money did you give them? A. I believe I gave them two cheques. Q. Totalling how much? A. I couldn't be sure." He says that, later, he was given back money by those members. "Q. How much money did they give you? A. Probably totalled around 40,000 … Q. What did they tell you about the money, what did they tell you about where it had come from? A. This is the proceeds of sale of air conditioners and others, I think there were some tables and chairs as well." This last answer was allowed on the basis that it was admissible, but not for the purpose of proving the truth of the assertion made in it. 97 When the cheques, the time, and the members involved were not identified, and when there is no contemporaneous documentation to support this story, I am not persuaded that it is correct. 98 Taking these matters into account, together with the fact that I am unpersuaded by Mr Florence's evidence about the levy, Mr Florence's evidence is not evidence I would be prepared to act upon unless it was corroborated from a reliable source. Mr Gioffre 99 Neither would I be prepared to accept the evidence of Mr Gioffre, unless it was corroborated from a reliable source. He gives evidence about the making of the 1991 levy, which I am not persuaded is correct. He was, on his own account, willing to be party to the scheme to deceive Citibank by inflating the amount in the "Wilson" bank accounts. He gives as a reason why Wilson was chosen as the applicant for finance was "because nobody else had any jobs." Yet Mr Florence gives evidence that, though he had been made redundant in July 2002, he had been employed for 24 ½ years prior to that with, essentially, the one organisation. Mr Gioffre gave evidence that he had made a suggestion, to Justin Hill at one of the meetings, that another solicitor was going to prepare a trust deed. He continued: "Q. And why do you say - did you suggest to Hill that another solicitor would prepare the trust deed? A. That was our security, that was all done correctly - that was our safety to us. We looked at it as a safety net that it was ours, you know. Q. Let me just make sure that we are not at cross-purposes? A. Yes. Q. You understood that Hill was to do the conveyancing? A. Yes. Q And you understood, you say that another solicitor was to prepare the trust deed? A. Yes. Q. And tell his Honour again why Hill couldn't do that, but another solicitor was going to? A. I think our club position was for a safety zone to say it was ours, that we were the beneficiaries as we understood. Q. You say it was a club decision? A. Yes." That strikes me as an unlikely story. No other evidence was given of the "club decision" concerning a solicitor other than Mr Hill preparing the trust deed. The Significance of Criminal Convictions of Mr Florence and Mr Gioffre 100 Mr Florence had a conviction in Queensland in the very early 1980s for possession of an "implement". The implement was a water pipe or "bong", used for smoking marijuana. Mr Florence said he was aged "probably 20 at the very most" when he was convicted of that offence. As well, he had a conviction for culpable driving at some stage in the 1990s. 101 Mr Gioffre had some convictions in 1981 and 1982 for offences involving drugs. He was also convicted in the late 1980s on a number of offences involving drugs. For the latter offences, fines were imposed, which Mr Gioffre thought were of the order of $300 or $400. 102 The evidence about convictions does not have any greater precision than I have here set out. It was established through cross-examination and re-examination of the respective witnesses whose convictions were proved. 103 At common law, evidence of the convictions of a witness seems to have been regarded as always being admissible as tending to show that the witness was lacking credibility: Bugg v Day (1949) 79 CLR 442 especially at 457-459 per Latham CJ, 464-467 per Dixon J, 471 per McTiernan J, 474-475 per Williams J, 476 per Webb J; R v Aldridge (1990) 20 NSWLR 737 at 741; Clifford v Clifford [1961] 1 WLR 1274 at 1276; see also Katz "Extrinsic Proof of Prior Convictions to Impeach Credibility in New South Wales" (1990) 6 Australian Bar Review 176. 104 This common law position was modified by section 56 of the Evidence Act 1898, which provided: "When any question put to a witness in cross-examination is not relevant to the cause or proceeding, except so far as the truth of the matter suggested by the question affects the credit of the witness by injuring his character, the Court shall have a discretion to disallow the question, if in its opinion the matter is so remote in time, or of such a nature that an admission of its truth would not materially affect the credibility of the witness." 105 The common law position was summarised by Hunt J (with whom Enderby and Grove JJ agreed) in R v Aldridge (1990) 20 NSWLR 737, at 741, as follows: "The purpose of cross-examination as to credit is to show that a witness ought not to be believed on his oath. The conduct or character of a witness cannot therefore be used to attack his credit unless that conduct or character is of such a nature as to tend logically and rationally to weaken confidence in his veracity or in his trustworthiness as a witness of truth: Bickel v John Fairfax & Sons Ltd [1981] 2 NSWLR 474 at 494. The Crown has argued that, if the nature of a particular offence does nothing to weaken such confidence, a witness' conviction for such an offence is itself irrelevant to the credit of that witness. Reliance is placed upon the judgment of Dixon J in Bugg v Day (1949) 79 CLR 442 at 467. The restriction suggested by Dixon J did not, however, find any support in the judgments of the other members of the court. That case, it should be kept in mind, concerned the admissibility upon the issue of his credit of the defendant's previous traffic offences. It was held that (subject to the discretion afforded by s 56) convictions for any offences (even for offences which do not themselves involve any question of dishonesty) are admissible in relation to credit, upon the basis that a conviction for any offence against the law may have some effect upon the credit of the witness (ibid at 458, 471, 475). The Crown's argument as to irrelevance must therefore be rejected." 106 The Evidence Act 1995 provides: "102 Evidence that is relevant only to a witness's credibility is not admissible. 103(1) The credibility rule does not apply to evidence adduced in cross-examination of a witness if the evidence has substantial probative value. (2) Without limiting the matters to which the court may have regard in deciding whether the evidence has substantial probative value, it is to have regard to: (a) whether the evidence tends to prove that the witness knowingly or recklessly made a false representation when the witness was under an obligation to tell the truth, and (b) the period that has elapsed since the acts or events to which the evidence relates were done or occurred. 106 The credibility rule does not apply to evidence that tends to prove that a witness: … (b) has been convicted of an offence, including an offence against the law of a foreign country, … if the evidence is adduced otherwise than from the witness and the witness has denied the substance of the evidence." 107 The Evidence Act 1995 has the effect of modifying the previous law concerning cross-examination of a witness as to convictions by permitting such evidence to be admissible only if it has substantial probative value. The dictionary to the Evidence Act defines "probative value" of evidence as meaning, "the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue". 108 In the present case, evidence of these convictions was admitted without objection. I do not find that the evidence of the convictions assists me in reaching a conclusion about any matter in issue, and accordingly, even though it has been admitted, I have placed no weight on it. Significance of the Annual Return 109 Section 26 of the Associations Incorporation Act 1984 requires an incorporated association to hold annual general meetings. Section 26(6) provides: "At the annual general meeting of an incorporated association, the committee of the association shall submit to members of the association a statement which is not misleading and which gives a true and fair view of the following: (a) the income and expenditure of the association during its last financial year, (b) the assets and liabilities of the association at the end of its last financial year, (c) the mortgages, charges and other securities of any description affecting any of the property of the association at the end of its last financial year, (d) in respect of each trust of which the association was trustee during a period, being the whole or any part of the last financial year of the association: (i) the income and expenditure of the trust during that period, (ii) the assets and liabilities of the trust during that period, and (iii) the mortgages, charges and other securities of any description affecting any of the property of the trust at the end of that period." Section 27 provides: "The public officer of an incorporated association shall, within 1 month after the date of each annual general meeting of the association, lodge with the Director-General in an approved form, verified as prescribed, a statement: (a) containing the particulars referred to in section 26 (6) and such other particulars as may be prescribed, (b) accompanied by a certificate signed by 2 members of the committee of the incorporated association authorised by resolution of the committee to the effect that the statement has been submitted to the members at an annual general meeting of the incorporated association, (c) accompanied by a copy of the terms of any resolution passed at that meeting concerning that statement, and (d) accompanied by the prescribed fee." 110 It was pursuant to section 27 that the annual statement, details of which I have set out at paragraphs 23 and 24 above, was prepared and lodged. That annual statement is inconsistent with the Club's contention that there was an express understanding that Wilson would hold the premises as its nominee. The statement of income does not include any income from the rental of units 1 and 2 in the premises. The statement of expenditure contains an item of "Rent", which, if the Club's case about there being an express trust were correct, would not have needed to have been paid. It is not as though the amounts involved are ones which, in the context of the Club's income and expenditure, could have been overlooked – Mr Gibbs' working papers connected with preparation of the "Wilson" tax return (paragraph 27 above) showed that the total income received from rental of units 1 and 2 in the year to 30 June 1992, was $21,330. Only a proportionate part of that $21,330 would have been received in the period ending 31 May 1992, but even so, if the Club had been entitled to it, it would have been the second largest item of income of the Club. The expenditure which was claimed for rent was the largest of the items of expenditure in the statement of income and expenditure. 111 Further, the statement of income and expenditure does not include items of expenditure which correct accounting would have included if there had been an express trust. There is no claim made for expenditure for outgoings connected with the premises, like council rates and water rates. Further, if the arrangement between the Club and Wilson was that the Club was to be responsible for repayment of the mortgage, correct accounting would have included an item of expenditure for interest on borrowings. 112 Similarly, the statement of assets and liabilities does not record the asset which the Club would have had, if its case about express trust were correct, namely the land at Peakhurst. The statement of assets and liabilities shows no liabilities at all, which points up a difficulty in the Club's case, namely that no arrangement at all seems to have been made about who was to meet the ongoing mortgage obligations. 113 Mr Florence said that the reason the property at Peakhurst was not listed as an asset was that it was not in the Club's name. He said: "At the time of the annual statement I thought that the property belonged to the Club but, because it was in Jack Wilson's name, there was no need to list it as an asset of the Club. Under the heading Expenditure in annexure A to the Annual Statement is an item named "Rent" and an amount of $18,155 beside that item. This item represents the deposits which I made into the Wilson Citibank Account … . The deposits were called "Rent" in the Annual Statement because I could not think of a better way to describe them. I did not think that they could be described as "mortgage payments" because the mortgage and the property were not in the Club's name. I did not think of the payments as rent paid by a tenant." 114 Mr Gioffre gave a different explanation for these entries in the annual statement, that the Club had not changed the entries in its ledger for the payments which were made. While these explanations are different, they are not necessarily inconsistent. However, given my reservations about Mr Florence and Mr Gioffre as witnesses, I am not prepared to regard those explanations as completely negativing the effect of the annual statement, as being a significant admission by the plaintiff that it does not hold a beneficial interest in the Peakhurst premises. The significance of that admission is increased by the fact that the annual return was filed in August 1992 comparatively soon after the acquisition of the property, and before Mr Reardon's arrest in January 1993. The Application for Incorporation of the Club 115 I have set out, at paragraph 19 above, relevant portions of the application for incorporation of the Club, which was filled out on 3 May 1991, and lodged on 25 June 1991. According to the Club's case, as at both of those dates plans were well advanced to acquire the Peakhurst premises. If those plans went ahead, the income and expenditure of the Association would be quite different to the amounts stated in the application as being the expected amounts of income and expenditure of the Association. However, as at both those dates, contracts had not been exchanged, nor finance obtained. In those circumstances, I do not regard the terms of the application for incorporation form as counting against the Club's case. The 1992 Tax Return of Mr "Wilson" 116 I have set out, in paragraph 27 above, relevant details of a tax return for the 1991/1992 tax year of Mr "Wilson". That tax return was not only prepared by T E Gibbs & Co, it was lodged with the Taxation Department. In consequence, the Taxation Department issued a Notice of Assessment of Income Tax to Mr "Wilson". The evidences does not disclose whether that assessment was ever paid. While the contents of that tax return are inconsistent with the Club having any beneficial interest in the Peakhurst premises, that taxation return (unlike the annual statement) does not have effect as an admission by the Club. It is a piece of evidence which is inconsistent with the account Mr Reardon gave to the Court of his understanding of the basis on which the Peakhurst property was being purchased. However it contains, as income, income from letting out on hire of the refrigerated trailer which Mr "Wilson" had never owned beneficially. There is a real possibility that one of the purposes for its preparation was so that it could be submitted to Citibank, and tell a story consistent with the false basis on which Citibank had originally granted Mr "Wilson" a loan. When there is a real possibility that the tax return was part of an attempt to deceive, I am not prepared to place weight on it. Mr Gibbs' letter of 5 January 1994 The text of this letter is set out at paragraph 29 above. This letter is, as the Crime Commission points out, one which is prospective – it gives advice about how Club property could be owned in the future. There is no basis for believing that it related to any property other than the Peakhurst property. The terms of the letter do not sit well with any suggestion that the Peakhurst property was already held by Mr "Wilson" as nominee for the Club. Mr Reardon's Understanding of the Basis on Which the Club Occupied the Property after Purchase 117 Mr Reardon's understanding of the basis on which the Club occupied the property after it had been purchased emerged in some cross-examination about the Wilson Citibank Account: "Q. Into which-- A. The rent went, yeah. Q. The rent went? A. That's right. Q. And there were payments on unit 1 which were made to the real estate agency called Antipas? A. Yeah. Q. And paid by them into that account? A. Right. Q. And the mortgage payments came out of that account automatically month by month? A Yep. Q. And with respect to unit 2 there were payments made by whoever occupied that unit to Antipas Real Estate? A. I suppose so, yeah. Q. Paid into the City Bank account? A. Yes. Q. Correct? A. Yep. Q. And the third stream of moneys that went into that account were amounts paid by the club, correct? A. For the rent on that clubhouse, yeah. Three different rents were paid, I think. Q. The third stream was moneys paid by the Black Uhlans by way of rent on the clubhouse? A. Yes." (emphasis added) 118 Mr Reardon was, soon afterwards, cross-examined about his 1992 tax return, which included rent from units 1 and 2. "Q. So do you see that the rent item is at the top of the page as listed there, relating to unit 1 and unit 2? A Yep. Q. But not to unit 3? A. I don't even know the clubhouse was numbered 3. I just knew where it was but I take your word for it. Q. Because, as you just said, the club was, in fact, paying rent on the clubhouse to you? A. Not to me personally. The rent was used to pay the payments. I mean, I wasn't getting any money out of it, put it that way." 119 It is of some significance that Mr Reardon regarded the payments that the Club was making as being "rent", and that he volunteered the use of that word, repeatedly, rather than adopted it from the language of a question which was put to him by the cross-examiner. While Mr Reardon's credit is such that I would not be prepared to simply accept and act on anything he said, even in cross-examination, the fact that he gives this evidence is a further obstacle in the way of my being persuaded that the Club's case concerning express trust is correct. Existence of Express Trust – The Law 120 Before there is an express trust, there must be an intention to create a trust: Commissioner of Stamp Duties (QLD) v Jolliffe (1920) 28 CLR 178 at 181. "To create a trust no formal words are required once the intention is clear. The relevant intention, if a trust is to be held to be created, must be that the [legal title holder's] legal ownership of the land is to be held beneficially, in the case of a private trust, for ascertained persons, or in the case of a permanent public trust, for charitable purposes." ( Brisbane City Council v Attorney General for Queensland [1979] AC 411, at 421). 121 The intention can be inferred: see cases collected in Commonwealth of Australia v Booker International Pty Ltd [2002] NSWSC 292 at [34]-[45]. As well, "… unless there is something in the circumstances of the case to indicate otherwise, a person who has "the custody and administration of property on behalf of others" ( Taylor v Davies [1920] AC 636 at 651) or who "has received, as and for the beneficial property of another, something which he is to hold, apply or account for specifically for his benefit" ( Cohen v Cohen (1929) 42 CLR 91 at 100 per Dixon J) is a trustee in the ordinary sense" ( Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145, at 165-166. Existence of Express Trust – Conclusion on Facts 122 I did not regard any of the principal witnesses called by the Club (that is, those apart from the five members called to give brief evidence on the topic of the supposed levy) as witnesses I could rely on. There is nothing implausible, or inconsistent with the objective evidence, in the hypothesis that Mr Reardon was in need of an investment for profits from drug dealing, and that the Club was prepared to assist him by making some of its money available for the purchase of the Peakhurst property. Even though it is not necessary for me to make a positive finding that this hypothesis is correct, the fact that there is a plausible explanation for the objective evidence, inconsistent with the oral testimony, makes it harder for the oral testimony to be accepted than would be the case if there were no such plausible alternative hypothesis. The calculated dishonesty of Mr Reardon, Mr Hill and Mr Gibbs, in preparing false documents to raise money, which the Club was privy to at least to the extent of intending to inflate the bank accounts of "Wilson" for the purpose of deceiving Citibank, casts a cloud over the whole transaction – if I know that one aspect of the transaction was fraudulent, it is harder for me to be satisfied about the true nature of the rest of the transaction, than would be the case with a transaction where everything was honest and straightforward. 123 While the Club was an unincorporated association, it would have been necessary for some person, or people, to hold land in trust for it, if the Club was to acquire land at all. However, once the Club was incorporated, there was nothing to stop it from holding land in its own name. Mr Hill must have been aware of that. There was no attempt to explain why a trust was necessary or desirable, apart from the evidence to the effect that the only way of raising money was by putting forward to a bank a borrower who was falsely made to appear to be a man of some financial substance. No explanation was offered for why the transaction was not structured so that "Wilson" guarantee a borrowing by the Club. 124 It also seems to me that there is some implausibility in the story which the Club tells about the acquisition of the premises, so far as what it does not contain is concerned. There is no account given of there being any investigation of what the net return from units 1 and 2 would be, or of any consideration being given to how the amount which either "Wilson" or the Club would need to pay, to make up the shortfall in payment of the mortgage money, compared to the rental which the Club was previously paying. There is no account given of the Club saying anything to Mr Reardon, to make it clear that it would be the Club which would be responsible for the ongoing payments of the mortgage loan. That "Wilson" has borrowed from Citibank well over half of the total purchase price, and undertaken a personal obligation to repay that money to Citibank, tells significantly against either "Wilson", or the Club, having an intention that the property should belong beneficially to the Club. 125 There is not a single contemporaneous document, emerging either from Mr Hill, Mr Gibbs, the Club, or Mr Reardon, which supports the Club's case. When the Club's case involves payment of large parts of the purchase price by large sums of cash – a type of story about which one should scrutinise the evidence with care – the absence of documentation is particularly important. Mr Florence gave some evidence in very general terms, seeking to explain the absence of at least some of these types of records. He said that there were minutes of Club meetings in existence at one stage, and "a lot of our records have been removed by the Police on different occasions, either from peoples houses when they raided them, or from the clubhouse". However, if such documents exist, and are in police custody, it is still possible for those documents to be placed before a civil court for the purposes of evidence. No explanation has been proffered for the absence of any file notes of Mr Hill, or Mr Gibbs. 126 In the result, I am not satisfied that (whether it be the intention of the Club that matters, or the intention of Mr Reardon) either of them had an intention that, in substance, the beneficial interest in the Peakhurst property would be held by Mr Reardon for the Club. Absence of Writing 127 The Crime Commission has submitted that if there is an intention to create an express trust, that intention cannot be given effect to because section 23(1)(a) and (b) of the Conveyancing Act 1919 would require writing. The Club submits that, if there were an intention which (were it not for the lack of writing) would be sufficient to establish an express trust, in circumstances where Mr Reardon has taken title to the land on the basis that he would be a trustee, it would be fraudulent for the Crime Commission (as Mr Reardon's successor in title) to rely on the absence of writing, and that equity would enforce the trust notwithstanding the absence of writing: Rochefoucauld v Boustead [1897] 1 Ch 196; Last v Rosenfeld [1972] 2 NSWLR 923; Wratten v Hunter [1978] 2 NSWLR 367 at 369-370. Given the conclusion I have come to concerning whether there was an intention to create an express trust, it is not necessary to consider these submissions. Existence of Resulting Trust – The Law 128 Judicial findings about who holds the beneficial interest in land are made with the assistance of presumptions. The first is "… that prima facie the beneficial ownership of real property is commensurate with the legal title." (Currie v Hamilton (1984) 1 NSWLR 687 at 690 per McLelland J.) In some situations this first presumption is displaced by a presumption of a resulting trust, while in other factual situations a presumption of advancement operates. The fundamental nature of the presumption that the beneficial interest is the same as the legal interest is illustrated in the explanation of Deane J in Calverley v Green (1984) 155 CLR 242 at 267 of how the presumption of advancement operates. "The third "presumption", usually called the "presumption of advancement" , is not, if viewed in isolation, strictly a presumption at all. It is simply that there are certain relationships in which equity infers that any benefit which was provided for one party at the cost of the other has been so provided by way of "advancement" with the result that the prima facie position remains that the equitable interest is presumed to follow the legal estate and to be at home with the legal title or, in the words of Dixon CJ, McTiernan, Fullagar and Windeyer JJ in Martin v Martin (1959) 110 CLR 297, at p 303, that there is an "absence of any reason for assuming that a trust arose" . "The child or wife has the legal title. The fact of his being a child or wife of the purchaser prevents any equitable presumption from arising" (1959) 110 CLR, at p 304 (quoting Ashburner's Principles of Equity, 2nd ed (1933), p 110n)." See also Nelson v Nelson (1995) 184 CLR 538 at 547 per Deane and Gummow JJ, 584 per Toohey J. 129 A presumption of a resulting trust can operate in, broadly, three different types of factual situation. The first is where property is conveyed at law, but the entire beneficial interest in that property is not disposed of. The second is where property has been conveyed at law, on a basis which, initially, disposes of the entire beneficial interest, but at a later time equitable obligations attaching to the property fail or are set aside. The third situation is that a presumption of resulting trust arises where one person provides the purchase price of property, which is conveyed into the name of another person. 130 Bogert, The Law of Trusts and Trustees, revised 2nd edition 1991, paragraph 454, page 240-241 explains the origin of a resulting trust arising from payment of the purchase price of property. "These purchase money transactions first arose in England in the middle ages, when the holding of land to uses was a very common practice, and when secret uses were numerous. It was easy to infer that the payor desired to follow the common usage of having the land held to uses, and that he (the payor of the price) was to be the beneficiary of the use. Modern courts have not felt that altered social or economic customs warranted a change from inference of a trust to an inference of a gift. While trusts may not be as common nowadays as were uses of land in England in the middle ages, nevertheless they are sufficiently numerous to make them natural devices for property holding. The courts of equity have therefore established a doctrine that normally the payor of the purchase price of property is entitled to be decreed the beneficiary of a trust where the conveyance was absolute and was made to another with the consent of the payor." 131 Bogert, op cit, page 244-246 explains the naming of this type of trust: "This trust has been called "resulting" on the theory that it results or arises from the peculiar facts about payment and the form of the conveyance." 132 Jacobs Law of Trusts in Australia, 6th edition paragraph [1201] has a different explanation: "The term "resulting" applied to these trusts expresses the view that the property comes back to him after it has been given away, although in truth the beneficial interests may never have left him." 133 Bogert, op cit, page 249 explains the juristic nature of this type of trust: "This resulting trust depends for its existence on the actual intent of the creator, expressed in acts other than writing or the spoken word. The conduct of the payor with reference to the price and deed lead the court to infer an intent to have a trust for himself. The theory of enforcement is that of carrying out the intent of the settlor, just as truly as if he had reduced his trust to writing and inserted it in the deed. Resulting trusts are "intent enforcing" just as much as are the usual express trusts. They bear little or no relationship to constructive trusts, which do not arise out of intent but depend for their existence on the wrongful conduct of the defendant which induces a court to adjudge him a trustee." 134 This account of the nature of the resulting trust arising from payment of the purchase price accords with the law in Australia. In Napier v Public Trustee (Western Australia) (1980) 32 ALR 153 Aickin J (with whom Gibbs ACJ, Mason, Murphy and Wilson JJ agreed) said, at 158: "The law with respect to resulting trusts is not in doubt. Where property is transferred by one person into the name of another without consideration, and where a purchaser pays the vendor and directs him to transfer the property into the name of another person without consideration passing from that person, there is a presumption that the transferee holds the property upon trust for the transferor or the purchaser as the case may be. This proposition is subject to the exception that in the case of transfers to a wife or a child (including someone in respect to whom the transferor or purchaser stands in loco parentas ) there is a presumption of advancement so that the beneficial as well as the legal interest will pass. Each of the presumptions may be rebutted by evidence." 135 In Napier at 158-159 Aickin J quoted with approval the following passage from the judgment of Jordan CJ in Re Kerrigan; ex parte Jones (1946) 47 SR (NSW) 76 at 82-3. "In my opinion in every case of the present type, where there are facts which, unaided by evidence of actual intention, would give rise either to a presumption of resulting trust or such a presumption in collision with a presumption of advancement, the question of how far either trust prevails, and to what extent, depends upon the intention of the parties as gathered from all available relevant facts, due consideration being given to the relevant weight of the two presumptions when they collide." 136 That the presumption of resulting trust, and presumption of advancement, are the starting point of a factual enquiry about with what intention A provided the purchase price for a purchase of property in B's name is stated by Deane and Gummow JJ in Nelson v Nelson (1995) 184 CLR 538 at 547: "The presumptions operate to place the burden of proof, if there be a paucity of evidence upon such a relevant matter as the intention of the party who provided the funds for the purchase." 137 The sort of evidence which can rebut a presumption of advancement was considered, in Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, at 365: "The presumption can be rebutted or qualified by evidence which manifests an intention to the contrary. Apart from admissions the only evidence that is relevant and admissible comprises the acts and declarations of the parties before or at the time of the purchase … or so immediately thereafter as to constitute a part of the transaction. If that evidence is insufficient to rebut the presumption the beneficial gift, absolute or subject only to qualifications imposed upon it at the time, is complete and no subsequent changes of mind or dealings with the property inconsistent with the trust by the donor can as between himself and the donees alter the beneficial interest." In Calverley v Green (1984) 155 CLR 242, at 262 Mason and Brennan JJ (in a portion of the judgment which Deane J agreed in at 271) applied this principle to identify the evidence which can rebut a presumption of resulting trust. 138 In deciding whether a presumption of resulting trust had been rebutted, it would be necessary for the court to take into account not only evidence going to the intention of the provider of the money which tended to cut down the presumption of resulting trust, but also any evidence which tended to strengthen the finding about intention which that presumption dictates. Only by taking into account both evidence which tends to cut down the presumption, and evidence which tends to strengthen the finding about intention which the presumption dictates can the Court reach a conclusion about whether, on the whole of the evidence, the presumption has been rebutted. The sort of conduct which could possibly be taken into account in this way could include who took occupation and control of the property, who made improvements to it and in what circumstances, who paid periodical outgoings on the property, who received any rent from the property, and who paid income tax on any rent received from the property. To the extent that any of these types of transaction occurred at a time which was not "so immediately thereafter as to constitute a part of the transaction", they could be taken into account only to the extent that they were admissions. 139 The admissions which can be taken into account in deciding whether a resulting trust exists would include admissions by a predecessor in title: Falcon v Famous Players Film Company [1926] 2 KB 474 at 488-489 per Bankes LJ, 498 per Atkin LJ (Scrutton LJ at 494 not deciding); Nowell v Palmer (1993) 32 NSWLR 574 at 578 per Mahoney JA (with whom Meagher and Hanley JJA agreed); Cross on Evidence, 5th Australian edition, paragraph 33530; Phipson on Evidence, 12th edition, paragraph 705-714. In the present case, if there were any admissions made by Mr Reardon, during the time he was still the owner of the land, those admissions would be admissible against his successor in title, the Public Trustee. 140 It has been repeatedly reiterated that the presumption of resulting trust is one which "should not … give way to slight circumstances": Shepherd v Cartwright [1955] AC 431 at 445; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; Brown v Brown (1993) 31 NSWLR 582 at 596. 141 The extent of the beneficial interest of the parties, arising by reason of a resulting trust, must be determined at the time when the property was purchased and the trust created: Calverley v Green (1984) 155 CLR 242 at 252 per Gibbs CJ, 262 per Mason and Brennan JJ (a portion of the judgment with which Deane J at 271 agreed). 142 As a consequence of these principles, if part of the purchase price is provided by being borrowed on mortgage, the presumption of resulting trust is applied by treating the monies raised on mortgage as a contribution by the person who is liable to repay that money: Calverley v Green at 251 per Gibbs CJ, 257-258 per Mason and Brennan JJ, 267-268 per Deane J. That particular application of the presumption, like any other, can be rebutted if there is evidence to show that the parties had some other intention at the time the property was acquired. Thus, Bloch v Bloch (1981) 180 CLR 390, a case "where the relevant property which the parties intended to acquire was seen to be not the title to land subject to mortgage but the land freed of the mortgage" (Calverley v Green (1984) 155 CLR 242 at 262-263 per Mason and Brennan JJ, a passage with which Deane J at 271 agreed) was a case where, to the extent that the Court could make such a finding about what the property which the parties intended to acquire was, to that extent the presumption of resulting trust had been rebutted - but otherwise the presumption of resulting trust was left operating. 143 As well, sometimes conduct after the acquisition of title might provide a basis for someone who has made contributions to payment of mortgage instalments to claim a proprietary interest on some basis other than that of a resulting trust, such as constructive trust, or equitable charge or lien. Alternatively, payment of contribution to mortgage instalments might give rise, in some factual situations, to a claim for reimbursement, on the basis of an equity of contribution, or some restitutionary basis. 144 There was formerly doubt about whether the "purchase price" for the purpose of the application of the presumption of resulting trust, included incidental costs, fees and disbursements involved in the acquisition of the property (such as stamp duty, legal costs, bank charges and registration fees, or whether it extended only to the amount actually paid to the vendor (including in that expression any mortgagees of the vendor) as the purchase price of the land: Currie v Hamilton [1984] 1 NSWLR 687 at 691; Atilgan v Atilgan [1999] NSWSC 324 at [111], cf Little v Little (1988) 15 NSWLR 43 at 45-46. That doubt has now been removed by the decision of the Court of Appeal in Ryan v Dries [2002] NSWCA 3 at [52]-[53], which held that the broader concept of "purchase price" was the appropriate one to apply. 145 If two or more people provide the purchase price of property taken in the name of one of them, or in the name of some other person, the presumption of resulting trust applies so as to presume that the beneficial title is taken in the same proportions as the purchase money was provided: Calverley v Green (1984) 155 CLR 242 at 246, 258-259. 146 The presumption of a resulting trust, in circumstances where there have been two or more contributors to the purchase price is frequently stated in terms like those used by Deane J in Calverley v Green (1984) 155 CLR 242, at 266-267: "Where two or more persons advance the purchase price of property in different shares, it is presumed that the person or persons to whom the legal title is transferred holds or hold the property upon resulting trust in favour of those who provided the purchase price in the shares in which they provided it." 147 That way of formulating the presumption assumes that it is possible to know the shares in which the purchase price was provided. That assumption is one which does not apply in the present case on the findings of fact which I have made so far. While the likelihood is that the two contributions to the purchase price of the Peakhurst land which were provided by cheques from Advance Bank (see paragraph 12 above), and which were, in reality, the proceeds of sale of Ms Bernoth's property, were probably treated as a loan, and were probably repaid, I am not satisfied that this "loan" was something which was actually agreed to by either the Club or Mr Reardon, rather than being an expedient improvised by Mr Hill without their knowledge. Neither am I satisfied about who provided the money which was ultimately used to repay Ms Bernoth. 148 In these circumstances, it seems to me that the presumption of resulting trust should be applied so that, to the extent to which a party who asserts that it has provided part of the purchase price can demonstrate what part of the purchase price it has provided, to that extent it should be presumed that the party has a proportionate beneficial interest in the property. This way of applying the presumption is consistent with two different principles. The first is the fundamental principle that, to the extent that it is not demonstrated otherwise, the beneficial interest is presumed to be the same as the legal title. The second is that the rationale for the existence of a resulting trust depends upon presumptions about the intention of the person who provides part of the purchase price for property, when title is taken in the name of another, not on the intention of anyone else. Resulting Trust – Conclusion on Facts 149 The total purchase price of the Peakhurst land (in the extended sense relevant for the law of resulting trust) is $419,910.46, made up as follows: ITEM JUDGMENT PARA AMOUNT Deposit 7 $40,000.00 Citibank Application Fee and Valuation Fee 8 $1,500.00 Stamp duty 10 $14,361.00 Solicitor's fees 11 $3,484.46 Payment to vendor on settlement 12 $360,565.00 TOTAL $419,910.46 150 The amounts provided from the funds of the Club towards this purchase price were: ITEM JUDGMENT PARA AMOUNT Deposit 7 $40,000.00 Citibank Application Fee and Valuation Fee 8 $1,500.00 Stamp duty 10 $14,361.00 Solicitor's fees 11 $3,484.46 Cheque provided for settlement 12 $16,222.53 TOTAL $75,567.99 151 The application of the presumption of resulting trust would confer on the Club a beneficial interest in the Peakhurst property so that it and the Public Trustee now hold the title in the ratio (ignoring cents as de minimis by rounding to the nearest dollar) 75,568:344,342. 152 I turn now to consider whether the presumption of resulting trust has been rebutted. 153 Mr Florence gives evidence that all the amounts which were paid into the Wilson Citibank Account to make up the difference between the net rents obtained from units 1 and 2, and the amount which needed to be paid to Citibank each month on the mortgage, were paid from the Club's own funds. He also says that after the Public Trustee took control of the property in March 1994 he made payments out of the Club's funds to the Public Trustee, and also one payment directly to Citibank, and one to Citibank's solicitors, on account of mortgage repayments. He says that the total amount paid up to 31 December 1999, in this fashion was $143,283.64. He also says that since September 1991 the Club has paid from its own funds for repairs to the property, including the following: "(a) new guttering was installed in Factory 1 because of water leakage in 1993; (b) an agricultural pipe and blue metal sump were installed behind Factory 1 in 1993; (c) the exterior of the Factories were painted in early 1994; (d) a new electrical submain was installed in Factory 3 in early 1994 for three phase electricity; and (e) painting of the interior of Factory 2 and installation of new lighting in Factory 2 in 1994 or 1995." 154 The periodical outgoings of the property were paid from the proceeds of the rental of units 1 and 2. So far as the evidence discloses, no one has paid income tax on any rent received from the property. The Club has continued to occupy unit 3 of the property as its clubhouse, in the same way as it did before the property was purchased by Mr Reardon. 155 Even if I were to accept Mr Florence's evidence about the various payments which were made in connection with the property from Club funds after the property was purchased (evidence which is not supported by any documents, but which was also not the subject of any cross-examination) this would not assist the Club in seeking to rebut any presumption of resulting trust. The various actions of the Club in paying money in connection with the mortgage, and otherwise in connection with the property, are not actions which occurred so immediately after the purchase as to constitute a part of the transaction, and they are not admissions on the part of either the Club, or Mr Reardon. Hence they cannot be used to rebut the presumption of a resulting trust. 156 The Crime Commission submits that the 1992 annual return of the Club rebuts the presumption of a resulting trust, by showing that it was the intention of the parties that Mr Reardon was to have the full beneficial ownership of the property. That annual return, being a document of the Club and one which proceeds on the basis that the Club was paying rent for its occupation of its clubhouse, is an admission by the Club that it did not have a beneficial interest in the Peakhurst property. However, in my view that admission is not enough to displace the presumption of resulting trust. If the presumption of resulting trust were to be rebutted, I would need to be in a state of mind where I was actually persuaded that the intention of Mr Reardon and the Club in purchasing the property was that the beneficial interest would be held in a manner different to the manner which would result from application of the presumption of resulting trust, and persuaded about what that different intention was. I am not so persuaded. The presumption of resulting trust has not been rebutted. Unclean Hands 157 The defendants submit that the plaintiff ought not receive any equitable relief, by way of enforcing the existence of a resulting trust, because of unclean hands on the part of the plaintiff. They say that the only way in which the Peakhurst property was able to be purchased was through obtaining a loan from Citibank. Further, that loan from Citibank was obtained only by Mr Reardon and Mr Hill telling Citibank a pack of lies, and submitting to Citibank a set of fabricated documents. The Club was party to the deception of Citibank, in that its officers agreed to the scheme that involved Mr "Wilson" being presented to Citibank as a man of substance. The defendants say that even though officers of the Club might not have known all the details about the way in which Citibank was deceived, there was still a joint enterprise to deceive, under circumstances such that the conduct of Mr Reardon and Mr Hill, in carrying through that joint enterprise, is to be attributed to the Club: Tripodi v R (1961) 104 CLR 1; McAuliffe v R (1995) 183 CLR 108; Capricorn Financial Planners Pty Ltd v Australian Securities and Investment Commission (1999) 31 ACSR 46. 158 That someone who comes to equity must have clean hands is an equitable maxim. Such a maxim provides an explanation for the circumstances in which equity recognises rights, and confers remedies, across a broad range of equity's jurisdiction. The approach to the recognition of rights and conferring of remedies which the maxim articulates has resulted in various specific principles of law which are recognised as part of the substantive law of equity. The law of promissory estoppel provides one example. However, the maxim remains of ongoing importance, as a guide to how cases not governed by specific rules of substantive law ought be decided, or as a guide to how specific rules of substantive law ought be extrapolated. 159 The unclean hands maxim requires the Court to look at the conduct of the litigant who seeks the assistance of equity, rather than the conduct of the defendant. Further, it is conduct which the litigant who seeks the assistance of equity has engaged in in the past which is required to be looked at. In this way it differs from the maxim that he who seeks equity must do equity, which looks at the conduct which a litigant who seeks the assistance of equity undertakes to engage in in the future. 160 Some examples of the circumstances in which the maxim has been the basis on which a case has been decided illustrate the breadth of application of the maxim. Thus, specific performance of a contract will not be granted at the suit of a plaintiff who has made a relevant misrepresentation to the defendant: Cadman v Horner (1810) 18 Ves Jun 10; 34 ER 221; Wall v Stubbs (1815) 1 Madd 80; 56 ER 31. Unclean hands can be a ground for refusing relief against forfeiture of a lease: Litvinoff v Kent (1918) TLR 298; Gill v Lewis [1956] 2 QB 1. It can be a ground on which a court declines to enforce a trust: Gascoigne v Gascoigne [1918] 1 QB 223; In Re Emery's Investment Trusts (1959) Ch 410; Tinker v Tinker [1970] P 136. It can be a basis upon which the beneficiary of a trust, who has led the trustee to commit a breach of trust, can be denied a remedy for that breach; Cory v Gertcken (1816) 2 Madd 40; 56 ER 250. It can provide a ground for refusing an injunction to enforce a negative contractual stipulation, if that contract has been procured by a misrepresentation of the plaintiff: Hewson v Sydney Stock Exchange Ltd [1968] 2 NSWR 224. It can provide a basis for refusing an injunction to enforce a restrictive covenant, if a person entitled to the benefit of the covenant has represented it will not be enforced, and that representation is acted upon by the person bound by the covenant: Greater Sydney Development Association Ltd v Rivett (1929) 29 SR (NSW) 356, at 360-361. Where the plaintiff and the defendant are both bound by restrictive covenants arising under a common building scheme, and the plaintiff is in serious breach of the covenant, unclean hands provides a basis on which the plaintiff cannot obtain an injunction to require the defendant to observe the restrictive covenant: Goddard v Midland Railway Company (1891) 8 TLR 126. It can provide a basis for refusing an injunction to prevent passing off, where the reputation which the plaintiff seeks to have protected has itself been built up by deceptive means: Kettles and Gas Appliances Ltd v Anthony Hordern and Sons Ltd (1934) 35 SR (NSW) 108. It can provide a basis for refusing equitable relief to prevent a breach of copyright where the work contained false statements calculated to deceive the public: Slingsby v Bradford Patent Truck and Trolley Co [1905] WN 122; [1906] WN 51. Further, some cases have held that it can provide a basis for refusing equitable relief in circumstances where a plaintiff has engaged in, or advocated, immorality of some kind: Bodly v —— (1679) 2 Chan Cas 15; 22 ER 824; Glyn v Weston Feature Film Company [1916] 1 Ch 261, and cases referred to in Ashburner's Principles of Equity, 2nd ed, p 467, cf now Stephens v Avery [1988] 1 Ch 449. 161 However, the operation of the maxim is not triggered by any act of wrongful conduct by a defendant, regardless of its nature or connection to the subject matter of the suit. A maxim which is a verbal variant of the "clean hands" maxim was recognised by Richard Francis, Maxims of Equity (1727, reprinted Garland Publishing Inc 1978). Francis recognises as his second maxim "he that hath committed Iniquity shall not have Equity". A note to that maxim (at page 5) says: "but it seems, the Iniquity must have been done to the Defendant himself; for where the Plaintiff had, to avoid a Sequestration in the Time of the Great Rebellion, sworn in an Answer that he was satisfied the Debt, and after the Restoration brought a Bill for it; tho' such Answer was objected to him, yet the Court would not suffer it to be read, but decreed the plaintiff his Debt." 162 The case Francis relied upon for that note was Jones v Lenthal (1669) 1 Chan Cas 154; 22 ER 739. It was a case where the plaintiff sought to recover a debt, owing by a deceased person of whom the defendant was executrix. The plaintiff had, in previous litigation, sworn that that debt had been fully satisfied to him. In so doing, the plaintiff had sworn falsely, for the purpose of avoiding a sequestration of the debt. Sir Harbottle Grimstone MR required the debt to be paid. An editorial note in the report explains the decision: "For though the Rule be, That he who has committed Iniquity (as here, in the false Answer) shall not have Equity ; yet it seems, that is to be understood, when the Iniquity is done to the Defendant himself: As where a Lessee is sued at Law on a Forfeiture of his Lease, for Non-payment of Rent or the like; if such Lease was obtained by Fraud or false Suggestion, Equity will not relieve; contra if no Fraud, &C, was done to or imposed on the Lessor." 163 Similarly, Brandeis J has referred to there being a limitation on the types of bad conduct which trigger the operation of the maxim by saying: "Equity does not demand that its suitors shall have led blameless lives": Loughrin v Loughrin 292 US 216 at 229 (1934). Young J has expressed the limitations on the operation of the maxim by saying, "Unless there is established one of the equitable defences, then general naughtiness or the desire of the court to censor the plaintiff's conduct, does not enter into the equation when one is considering whether the plaintiff should get relief": FAI Insurances Ltd v Pioneer Concrete Services Ltd (1987) 15 NSWLR 552, at 554. 164 A test for the circumstances in which the maxim operates was provided in Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184. That case arose from the appointment of a Mr Dering as a collector of customs duties. In connection with the appointment, bonds for his proper performance were given to the Crown by his elder brother (Sir Edward Dering) and two others. When Mr Dearing fell into arrears in making payments to the Crown, the Crown sued Sir Edward Dering on his bond, and recovered the full amount of the arrears. In this action, Sir Edward Dering sought contribution from the other two sureties. Those sureties resisted the action on the ground that Sir Edward Dering had unclean hands. This argument was dealt with by Lord Chief Baron Eyre at 319-320 Cox; 1184-1185 of ER as follows: "The misconduct imputed to Sir Edward is that he encourages his brother in gaming and other irregularities; that he knew his brother had no fortune of his own, and must necessarily be making use of the public money, and that Sir Edward was privy to his brother's breaking the orders of the Lords of the Treasury, to keep the money in a particular box, and in a particular manner, &c this may all be true, and such a representation of Sir Edward's conduct certainly places him in a bad point of view; and perhaps it is not a very decorous proceeding in Sir Edward to come into this Court under these circumstances: he might possibly have involved his brother in some measure, but yet it is not made out to the satisfaction of the Court, that these facts will constitute a defence. It is argued that the author of the loss shall not have the benefit of a contribution; but no cases have been cited to this point, nor any principle which applies to this case. It is not laying down any principle to say that his ill conduct disables him from having any relief in this court. If this can be founded on any principle, it must be, that a man must come into a Court of Equity with clean hands; but when this is said, it does not mean a general depravity; it must have an immediate and necessary relation to the equity sued for; it must be a depravity in a legal as well as in a moral sense. In a moral sense, the companion, and perhaps the conductor, of Mr Dering, may be said to be the author of the loss, but to legal purposes, Mr Dering himself is the author of it, and if the evil example of Sir Edward led him on, this is not what the Court can take cognisance of." 165 What is meant by the expression "an immediate and necessary relation to the equity sued for" is best explained by reference, first, to cases where an allegation of unclean hands was made, but did not result in the plaintiff failing to be granted relief. 166 Notwithstanding that a misrepresentation made by one contracting party to another can disentitle the first contracting party to specific performance (Cadman v Horner (supra); Wall v Stubbs (supra)) if the misrepresentation is not shown to have actually misled the other contracting party, specific performance can still be granted: Clapham v Shillito (1844) 7 Beav 146; 49 ER 1019; Learmonth v Morris (1868-9) 6 WW & A'B (E) 74. This result arises because, notwithstanding the wrongfulness of the plaintiff having made the representation, if it did not mislead, the fact that it was made does not make it unjust for the court to award specific performance. When there is no causal link between the misrepresentation and the entering of the contract, and the equity sued for is to have the contract specifically enforced, there is no immediate and necessary relation between the plaintiff's wrongful conduct, and the equity sued for. 167 If the trustee is induced to transfer part of the trust property to an infant, after being assured that the infant is in fact of full age, and the trustee thereupon receives (but without consideration) a release from the infant from all claims in respect of her share of the trust funds, there is no bar in equity to the beneficiary later seeking an account of the administration of the trust, and payment of what might actually be due to her after allowing for the amount she has actually received: Overton v Banister (1844) 3 Hare 503; 67 ER 479. Notwithstanding the wrongfulness of the beneficiary obtaining a transfer of some of the trust property by a misrepresentation, that wrongfulness does not affect the justice of the beneficiary being given a proper accounting for the trust property which she has not received through that misrepresentation; there is no immediate and necessary relation between the misrepresentation, and the particular relief claimed. 168 Meyers v Casey (1913) 17 CLR 90 concerned a horse-owner who had been disqualified for 12 months for "suspicious practices" in connection with a particular race. The disqualification had initially been effected by the stewards at Mooney Valley. He had appealed against that decision to the committee of the Victoria Racing Club, which had received fresh evidence, and upheld the decision. He also sought an injunction restraining the Victoria Racing Club from expelling him. In fact the stewards did not have power to disqualify a person (as opposed to a horse) for "suspicious practices", but the committee had such power. The majority in the High Court held that the decision of the committee was valid, even though it was taken on appeal from an invalid decision. The majority in the High Court also held that the injunction restraining the Victoria Racing Club from expelling him should be granted, because there was a threat to expel him without according him natural justice. Barton ACJ said that the "clean hands" doctrine should have had no role to play in connection with the challenge to the validity of the decision of the committee. He said, at 101-102: "His Honour who tried the case dismissed the action on the ground that the plaintiff, in seeking the assistance of equity, did not come into Court with clean hands. I do not think that his case can be met by the application of the maxim. The merits of the plaintiff's conduct were not in issue before his Honour. The case raised by the claim and met by the defence was based purely on the asserted illegality of the decision against him. It was not its correctness, but its validity, that was contested in the Supreme Court. Its correctness was assumed for the purpose of the argument, but was not admitted as a fact. The plaintiff could not have been heard to declare his innocence in that proceeding. Evidence as to the turpitude or integrity of his conduct was not admissible on the case made." 169 In other words, the equity which the plaintiff was suing for was an injunction to prevent him being disqualified by a decision made by a body which had no power to disqualify him. When that was the equity being sued for, the fact that (as the committee held) he had engaged in conduct which warranted his disqualification did not have a sufficient connection to the equity which was sued for. 170 Isaacs J (with whom Rich J agreed) considered the "clean hands" doctrine in relation to all the relief the plaintiff claimed. He said, at 123-124: "… the rights asserted by the appellant, namely, membership of the club and public right under the by-laws to enter the racecourse, of course exist, if at all, by reason of circumstances wholly independent of the alleged misconduct; the wrong he complains of, namely, his condemnation by an incompetent and unauthorised tribunal in the one case, and a disregard of natural justice in the other, are equally independent of any misconduct by him. It is therefore impossible to say, in the Lord Chief Baron's words, that his alleged misconduct has "an immediate and necessary relation to the equity sued for," or that it was "a depravity in a legal as well as in a moral sense." It is altogether different from the cases where the right relied on, and which the Court of equity is asked to protect or assist, is itself to some extent brought into existence or induced by some illegal or unconscionable conduct of the plaintiff, so that protection for what he claims involves protection for his own wrong. No Court of equity will aid a man to derive advantage from his own wrong, and this is really the meaning of the maxim." 171 In Moody v Cox [1917] 2 Ch 71 the plaintiff was a purchaser of real estate who sought to rescind the contract of purchase, on grounds of misrepresentation and nondisclosure. The defendants were trustees, and were also solicitors who, it was held, were acting as solicitors for the plaintiff in that particular transaction. The court held the defendants guilty of both misrepresentation, and breach of an obligation to disclose material facts known to the defendants. The plaintiff had given one of the solicitors a bribe, at a time when the plaintiff wished the transaction to proceed. The defendants, by seeking specific performance of the contract, waived their entitlement to rescind by reason of that bribe. Even so, the defendants argued that the giving of the bribe amounted to unclean hands on the part of the plaintiff, which disentitled him to the equitable remedy of rescission. That argument failed. Lord Cozens- Hardy MR said, at 82: "But then it is said ... the plaintiff, who gave the bribe, cannot obtain any equitable relief in respect of this contract, and in equitable relief is included rescission of the contract. Well, I ask myself what principle is there which can compel the court to say "we will not rescind the contract which has been obtained quite apart from the objection of bribes, which objection has been waived by the other party, who does not desire to raise it"? It strikes me as little short of shocking that we should be in that position. The beneficiaries do not repudiate the contract; they hold a considerable deposit in respect of this property, and they seriously suggest that, even assuming that the plaintiff has a good right to rescind the contract on the ground of nondisclosure, or would have but for the bribe, we ought to allow this deposit to remain in the pockets of the trustees and refuse to give any relief to the plaintiff in respect of it. The relief which is sought for in no way depends upon the bribe; it is something quite independent of it, and it is in a certain sense irrelevant to consider it in this connection." 172 Warrington LJ said, at 85-86: "... In order to prevent a man coming for relief in connection with a transaction so tainted it must be shown that the taint has a necessary and essential relation to the contract which is sued upon, and it is not enough to say in general of the man is not coming with clean hands when the relief he seeks is not based on the contract which was obtained by fraud, but is to have the contract annulled on a ground which exists quite independently of the fact that the bribe has been given and received." 173 Scrutton LJ said, at 87-88: "... Equity will not apply the principle about clean hands unless the depravity, the dirt in question on the hand, has an immediate and necessary relation to the equity sued for. In this case the bribe has no immediate relation to rectification, if rectification were asked, or to rescission in connection with a matter not in any way connected with the bribe." 174 Argyle v Argyle [1967] 1 Ch 302 involved an application by the Duchess to restrain her former husband, the Duke, from publishing newspaper articles which revealed various confidential communications which had passed between them while the marriage was on foot. The Duke claimed that she was disentitled to an injunction because she herself had published newspaper articles which revealed some other confidential information which had passed between them, and because her conduct (which the judge hearing their divorce case had described as "wholly immoral") showed that she had no regard for the sanctity of marriage. Those submissions failed. The disclosures which the plaintiff had made in her article included that the Duke had been taking drugs called "purple hearts", and that he had had certain financial embarrassments. Ungoed-Thomas J said, at 329 – 330" "none of the matters complained of in the plaintiff's articles disclosed anything complained of in the Duke's articles. The Duke does not say that he can disclose matters because the plaintiff has already disclosed those same matters; but what he says is that the plaintiff has betrayed the marriage relationship in some ways and so he should be free to betray it in others. … but even after allowing for the disclosure about the purple hearts the accumulation of the Duke's breaches of most intimate confidences in his articles are, to my mind, of an altogether different order of perfidy…. A person coming to Equity for relief -- and this is equitable relief which the plaintiff seeks -- must come with clean hands; but the cleanliness required is to be judged in relation to the relief that is sought. First, with regard to the plaintiff's articles, for the reason is already indicated I do not consider that the plaintiff's own articles justify the objectionable passages in the Duke's articles, or, of themselves, should disentitle the plaintiff to the court's protection." Notwithstanding that Ungoed-Thomas J accepted that the plaintiff's immorality was the basis for the divorce and the termination of the marriage, he held, at 332-3 that confidentiality still attached to communications which had initially been made in circumstances of confidence. 175 Dow Securities Pty Ltd v Manufacturing Investments Ltd (1981) 5 ACLR 501 was an application by corporation to restrain presentation of a winding up petition. The plaintiff admitted that it owed the debt referred to in a statutory demand, but asserted it had a cross-claim for a greater amount. The defendant submitted that the plaintiff ought not be granted an injunction because of its unclean hands, in that the admitted debt of the plaintiff to the defendant arose from a transaction which was illegal under section 125 of the Companies Act 1961, and that to grant relief will enable the plaintiff to avoid repayment of a loan which should never have been made. Wootten J accepted that if there had been a breach of section 125, that would be conduct of a type appropriate to attract the doctrine of unclean hands, because it would be misconduct "in a legal as well as a moral sense". However, that conduct did not have "an immediate and necessary relation to the equity sued for". He said, at 508-509: "the equity here arises out of [the plaintiff's] substantial and bona fides claim under the 1976 agreement; no part of its case depends on asserting the loan transaction, liability under which is admitted. That transaction would not be in issue in a winding a petition, nor in the common-law action, and is not an issue in this case except in so far as it is important to found the "clean hands" argument (cf Meyers v Casey (1913) 17 CLR 90 and 101-2,124). [The plaintiff's] rights, viz, to have its counterclaim determined by due process, exists, if at all, by reason of circumstances wholly independent of the alleged misconduct; the wrong it complains of, viz, the threat to winding up when it has not in fact "neglected" to pay its debt, is wholly independent of the misconduct ( ibid at 123). The right which the court of equity is asked to protect or assist was not itself brought into existence or induced by the conduct complained of." 176 R v Deputy Commissioner of Taxation (WA) (1987) 72 ALR 365 was an application by a taxpayer for, inter alia, an injunction to restrain the Deputy Commissioner of Taxation from acting upon some assessment notices which had been issued. The taxpayer (who had submitted no tax returns) alleged that the notices of assessment were mere guesswork, not truly the product of a process of "assessment", and hence were nullities. The taxpayer lost that issue. However Sheppard J also considered, obiter, a subsidiary argument which had been raised. The Deputy Commissioner had argued that the taxpayer was disentitled to an injunction on the grounds of unclean hands, because he had deceived the Commissioner and had engaged in fraudulent practices and/or innovative schemes for the avoidance of liability for income tax. Sheppard J held that, if the notices of assessment were truly nullities, that argument would not have prevented the issue of an injunction, because the impropriety alleged would not have had an immediate and necessary relation to the equity sued for. He said, at 389: "In this case the prosecutor seeks an injunction to restrain the Commissioner proceeding on assessments and notices of assessment which, in his submission, were no assessments at all; they were nullities. In my opinion, the matters relied upon by the Commissioner bear no relation to what may be described as the prosecutor's cause of action -- by analogy, his "equity" -- or to the relief which he sought. The assessments were either invalid or they were not. If they be invalid, the Commissioner ought to be restrained from enforcing them, irrespective of what conduct the prosecutor had engaged in prior thereto, because the amounts would, in that event, have been an unlawful exercise of the Commissioner's powers." 177 With these cases are to be contrasted cases where the plaintiff's unclean hands have resulted in relief being denied. That an injunction to restrain passing off is refused when the public has been misled by the conduct of the plaintiff (Kettles and Gas Appliances Ltd v Anthony Hordern and Sons Ltd (1934) 35 SR (NSW) 108, shows that the statements in Francis' Maxims (paragraph 161 above) and Jones v Lenthal (paragraph 162 above), to the effect that it is only iniquity practiced on the defendant which matters, is too narrow. (That unclean hands can exist when a plaintiff misleads the Court (Armstrong v Sheppard & Short Ltd [1959] 2 QB 384 at 397) would also show that the statements in Francis' Maxims and Jones v Lenthal were too narrow.) However, Kettles still illustrates the principle that unclean hands is a reason for denying equitable relief only when it has an immediate relation to the equity sued for – an injunction to restrain passing off requires that the plaintiff prove that it has a reputation with the public, and seeks to protect that reputation, so if the plaintiff's reputation has been built up through its own deception the granting of an injunction would enable the plaintiff to benefit from its own wrongful conduct. 178 Gascoigne v Gascoigne [1918] 1 KB 223 was a case where a husband put a lease of land in his wife's name and built a house upon the land with his own money. He used his wife's name in the transaction, with her knowledge and connivance, for the purpose of misleading, defeating and delaying present or future creditors. After the parties separated, the husband sought a declaration that the wife was trustee for him of the property. He succeeded at first instance, but on appeal he failed. The Divisional Court (Lawrence and Lush JJ) said, at 226: "... What the learned judge has done is this: he has permitted the plaintiff to rebut the presumption [of advancement] which the law raises by setting up his own illegality and fraud, and to obtain relief in equity because he has succeeded in proving it. The plaintiff cannot do this; and, whether the point was taken or not in the County Court this court cannot allow a judgment to stand which has given relief under such circumstances as that." 179 Gascoigne was a case where it was necessary for the plaintiff to prove his own bad conduct to rebut the presumption of advancement and thus to establish the trust he sued to enforce. Gascoigne was followed in In Re Emery's Investment Trusts [1959] Ch 410 (property intended to be held equally by husband and wife put in name of wife only, to enable husband to avoid American withholding tax) and approved by the English Court of Appeal in Tinker v Tinker [1970] P 136. If a plaintiff needs to prove his own bad conduct to be able to prove the circumstances which he says entitles him to an equitable remedy, that bad conduct has an immediate and necessary relation to the equity sued for. 180 By contrast, Griffiths v Griffiths [1973] 1 WLR 1454 was a case where a husband claimed an enlarged beneficial interest in the matrimonial home (which had been conveyed into the name of his wife) by reason of having effected improvements. The wife alleged that his claim must fail because of his unclean hands, in that he had represented to the Law Society for the purpose of obtaining a legal aid certificate, and to a court bailiff for the purpose of avoiding a distraint, that the house belonged exclusively to the wife. Arnold J rejected this argument, at 1456-1457: "in my judgement the point is a bad one because he is not, in preferring his claim to the improvements, relying upon his own disreputable act, as, for example, does a man who seeks to enforce a resulting or express trust of property transferred by him to his wife by saying "oh, the transfer was only to defraud my creditors." Nor is he doing the other thing which is forbidden, by the doctrine of promissory estoppel, of reversing a previous contention where, but only where, the party against whom the contention is made it has in the meantime all that his or her position in reliance on the previous contention. He falls between the two stalls; for it is no ingredient in the claim that he behaved wrongly, and therefore he escapes from the principle of Gascoigne v Gascoigne [1918] 1 KB 223, and it is not suggested that the wife relied on his disclaimer or either of his disclaimer is in such a way as to make it unfair to her that the position should now be reversed." (This decision was upheld the Court of Appeal ( Griffiths v Griffiths [1974] 1 WLR 1350), but with the present point being regarded (at 1359-1360) as depending only on estoppel.) 181 The two tests emerging from the portion quoted at paragraph 164 above, from Dering v Earl of Winchelsea ("immediate and necessary relation to the equity sued for" and "a depravity in a legal as well as in a moral sense") do not provide a complete guide to the circumstances in which the "unclean hands" maxim will be applied to deprive the litigant with the unclean hands of a remedy. Those two tests are a necessary condition for the application of the "unclean hands" maxim, but not a sufficient condition. Equitable relief is always discretionary, and other factors can influence the exercise of the discretion. For example, a restrictive covenant arising under a common building scheme, which binds both plaintiff and defendant, might be enforced at the suit of the plaintiff even if the plaintiff has committed some slight breaches of the covenant: Goddard v Midland Railway Company (1891) 8 TLR 126. If a plaintiff who seeks an injunction has, previously, engaged in conduct of a type which, if continuing, might have provided a ground for refusing the injunction on the basis of unclean hands, but prior to trial the plaintiff has ceased that activity and undertaken not to continue it, an injunction might be granted: Mrs Pomeroy Ltd v Scalé (1907) 24 RPC 177. In Littlewood v Caldwell (1822) 11 Price 97; 147 ER a plaintiff was refused an injunction to restrain the plaintiff's former partner from interfering in the partnership business, receiving debts or drawing bills, and for an account and dissolution of the partnership, on the ground that the plaintiff had removed the partnership books and refused the defendant access to them. The defendant said that, because the partnership books were missing, he was unable to file an answer to the plaintiff's claim. The plaintiff's application was refused because of his removal of the books – but that refusal was expressly stated to be without prejudice to any future application which might thereafter be made. Thus, the order specifically left open the possibility of the plaintiff returning the books and of a situation arising where his having once removed them no longer made it unjust to grant an injunction. 182 Further, the weight which is accorded to bad conduct on the part of the plaintiff can differ depending upon the relief which is sought, and the alternatives for relief which the plaintiff has open to him. In Vigers v Pike (1842) 8 Clark & Finnelly 562; 8 ER 220 Lord Cottenham (at 645 of C & F, 251 – 252 of ER) noted that there is a, "… marked distinction made by the Court of Equity between what is necessary to resist a suit for the specific performance of a contract, and what is necessary to support a suit to set aside a deed executed and an arrangement completed, and consequently to resist a suit founded upon such deed and growing out of such arrangement. When the Court simply refuses to enforce the specific performance of the contract it leaves the party to his remedy at Law; but if it were to refuse to administer equities founded upon a deed executed, it would leave the party applying without remedy, and his opponent in possession of that for which what was sought to be obtained was reserved as an equivalent." 183 If refusal of relief might occasion injustice to people who are not parties, the court might decide to grant relief notwithstanding bad conduct on the part of the plaintiff, if the transaction is objectionable on the grounds of public policy, "the relief not being given for their sake but for the sake of the public" (Vauxhall Bridge Co v Spence (Earl) (1821) Jac 64 at 67; Money v Money (No2) [1966] 1 NSWR 348 at 351-352 per Jacobs J; New South Wales Diary Corporation v Murray Goulbourn Co-Operative Company Limited (1990) 171 CLR 363, at 409). 184 In applying the unclean hands principle in the present case, it is necessary first to identify what is the equity which (absent unclean hands) I would be prepared to uphold. It is the equity of resulting trust, relating to those contributions which the Club has made to the purchase price of the Peakhurst property from its own money. 185 It is not necessary for the Club to prove anything about the circumstances in which Citibank was misled to be able to prove the facts which make good that claim to a beneficial interest. The equity which the Club asserts is one which originally arose against Mr Reardon by reason of the Club's money providing part of the purchase price, and operated to impose equitable obligations on him, concerning his legal ownership of the property – the circumstances in which Mr Reardon came to have money to make his own contribution to the purchase price of the property have no immediate and necessary relation to that. Another way of putting this is that even accepting (as I do) that the Peakhurst property would probably not have been purchased at all if Citibank had not been misled, that misleading of Citibank did not make any contribution to the proportionate beneficial interest which recognition of the resulting trust would give to the Club. The entirety of the fruits of the deception of Citibank have been treated, on my findings, as a contribution to the purchase price by Mr Reardon. Even if the defendants were right in submitting that all of the wrongful conduct of Mr Hill and Mr Reardon, in their dealings with Citibank, could be attributed to the Club (a matter which I do not find it necessary to decide), recognising the particular resulting trust which I would be prepared to uphold does not involve the plaintiff in receiving a benefit from its own wrongful conduct. Recognition of that trust is nothing more than recognising a proprietary interest into which the Club's own money, not shown to be derived from any wrongful conduct, can be traced. No attempt was made to show that the Club is better off by having had its asset in the form of a partial beneficial interest in the Peakhurst property, rather than remaining as cash. In my view the principle of unclean hands provides no reason for refusing to recognise that particular resulting trust. If the Club were to claim an entitlement to part of the beneficial interest in the property derived from Mr Reardon's contributions the position might be different – but I do not need to decide that question. 186 The defendants also submitted that the circumstances in which the Peakhurst property came to be purchased gave rise to discretionary grounds for denying relief, separate to unclean hands. This submission was not expanded upon in any way, and I do not accept it. Consequences of Payment by the Club of Mortgage Payments, and Repairs 187 At the conclusion of the hearing, Mr Sexton SC, counsel for the plaintiff, foreshadowed that, if I were to come to the conclusion which I have actually reached, some further evidence and submissions might be necessary to work out the consequences of payments which the Club has made in connection with the property after title was acquired (see paragraphs 153 and 154 above). He pointed out that the High Court, in Calverley v Green (1984) 155 CLR 242, made provision for remitting the matter to the Supreme Court once it had been decided that there was a resulting trust to a certain extent. 188 In Calverley v Green a man and woman were jointly liable under a mortgage, in consequence of which the money raised on mortgage was treated as a contribution by each of them. Although the proportionate interests in which the purchase price had been provided were calculated on the basis that the two of them had contributed the amount raised on mortgage (and hence, the resulting trust on which the property was held was calculated on that basis, thus giving the woman the benefit of a beneficial interest arising from her having contributed half the amount raised) the man had, after the purchse, made payments of mortgage instalments. Mason and Brennan JJ, at 263 said: "If it is right to regard the payment of the mortgage instalments as having been made by the defendant out of his own funds and on his own account – that is, if he made those payments not intending the plaintiff ultimately to have the benefit of those payments – the defendant may be entitled to contribution from the plaintiff for her share of the payments and an equitable charge to secure the making of her contribution: see Ingram v Ingram (1941) VLR 95, at 102" 189 That basis upon which the payment of mortgage instalments might have conferred an equitable interest in the property upon the person who paid them was available only because both the man and the woman were liable to pay the instalments, but the man had made all the payments – he could assert an equity of contributions against her, and possibly have the amount payable pursuant to that equity of contribution secured by an equitable charge. That situation cannot arise in the present case, where it is Mr Reardon alone who had a liability to Citibank to make the payments. If the plaintiff wishes to advance some other basis upon which it says that the making of the mortgage payments, or anything else which the Club did concerning the property after it was purchased, confers any beneficial interest on the Club, it will be necessary for the Club to make application to further argue the case. Orders 190 The orders I make are: 1. Declare that the interest in fee simple of Alan George Reardon (also known as Jack Andrew Wilson) in the land in certificate of title folio identifier C/404554 known as 15 Stanley Street Peakhurst was, immediately after the purchase of the said property held on trust for the plaintiff and the fourth defendant in the proportions 75,568:344,342. 2. Direct that any party wishing to make any further application concerning this matter make, within 21 days of the date of handing down of these reasons for judgment, an appointment with my Associate, of which not less than five days notice shall be given to the other parties, for the hearing of such further application. ********** Last Modified: 12/11/2002 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.