New South Wales Supreme Court CITATION : Wentworth v Rogers & Anor [2003] NSWSC 371 HEARING DATE(S) : 29/01/2002-08/02/2002, 15/03/2002, 22/03/2002, 25/03/2002-27/03/2003, 02/04/2002-05/04/2002, 02/05/2002, 10/05/2002, 22/07/2002, 11/11/2002, 06/02/2003 (further written submissions) JUDGMENT DATE : 9 May 2003 JUDGMENT OF : Howie J at 1 DECISION : The summons is dismissed. I direct that verdict and judgment be entered for the defendants on the statement of claim. The plaintiff is to pay the defendants costs. CATCHWORDS : Fraudulent Conveyances - Conveyances Fraudulent as Against Creditors - Mortgage by husband over interest in property to wife - whether fraudulent as against prospective creditor, a litigant in proceedings against the husband. Conveyancing Act 1919 - s 37A Supreme Court Rules - Pt 13 rule 2 LEGISLATION CITED : Supreme Court Act 1970 - ss 23, 88 Justices Act 1902 - s 41(6) Bankruptcy Act 1966 - ss 6, 121, 122 Brigenshaw v Brigenshaw (1938) 60 CLR 336 Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd [2000] FCA 17; (2000) 169 ALR 344 Bradshaw v McEwans Pty Ltd (HCA, 7 April 1951, unreported) Wentworth v Rogers [1984] 2 NSWLR 422 Wentworth v Rogers (No. 5) (1986) 6 NSWLR 534 Wentworth v Rogers (No. 10) (1987) 8 NSWLR 398 Jones v Dunkel (1959) 101 CLR 298 Freeman v Pope (1870) LR 5 Ch App 536 Kang v Kwan [2002] NSWSC 1187 Re Cummins; Richardson v Cummins (1951) 15 ABC 185 CASES CITED : Green v Schellner [2002] NSWSC 671 Re Symon: Public Trustee v Symon [1944] SASR 102 Silvera v Savic (1999) 46 NSWLR 124 Williams v Lloyd; Re Williams (1934) 50 CLR 341 Re Barnes; Ex parte Stapleton [1962] Qd R 231 PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 Middleton v Pollock; Ex parte Elliot [1876] 2 CH D 104 Gregg v Bromley [1912] 3 KB 474 Abignano v Wenkart (1998) 9 BPR 16,765 Alati v Wei Sheung [2000] NSWSC 601; 34 ASCR 489 Van Tri Huynh v Helleh Holdings Pty Ltd [2001] NSWSC 1162 Harkness v Partnership Pacific Ltd (1997) 41 NSWLR 204 PARTIES : Katherine Wentworth v Gordon John Rogers & Anor FILE NUMBER(S) : SC 11094/95 Plaintiff - Ms Wentworth in person COUNSEL : 1st Defendant - Mr Rogers in person 2nd Defendant - Mr R. Lovas Plaintiff - in person SOLICITORS : 1st Defendant - in person 2nd Defendant - Dorrough Smart Solicitors IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HOWIE J FRIDAY 9 MAY 2003 11094/95 Katherine WENTWORTH v Gordon John ROGERS & ANOR JUDGMENT Introduction 1 His Honour: In these proceedings the plaintiff seeks to have set aside certain transactions entered into by the defendants, Mr and Mrs Rogers, in respect of a farming property near Tamworth named "Te Mata". The plaintiff, Ms Wentworth, contends that a deed, transfer and mortgage relating to that property were entered into by the defendants fraudulently for the purpose either of ensuring that she could not obtain satisfaction of any judgment for costs or damages made in her favour in this Court against Mr Rogers or in order to give Mrs Rogers priority if Mr Rogers became bankrupt. Reduced to its essence, the allegation made by Ms Wentworth is that the acknowledgement of indebtedness made by Mr Rogers to Mrs Rogers, set out in the deed and upon which the transfer and mortgage were based, is a sham. 2 At the hearing of this matter Ms Wentworth and Mr Rogers were unrepresented. Mr Lovas of counsel represented Mrs Rogers. The proceedings took place on a number of hearing days from 29 January 2002. The matter was reserved for judgment on 11 November 2002 but the plaintiff sought and was granted leave to file further written submissions. Those submissions were received from the plaintiff on 31 January 2003 and the second defendant replied by submissions filed on 6 February 2003. The first defendant was content to rely upon the written submissions filed on behalf of his wife. In total there were over 100 pages of written submissions placed before the Court by each of the plaintiff and the second defendant. 3 The present claim was commenced by a notice of motion arising in other proceedings between Ms Wentworth and Mr Rogers. Those proceedings were heard and determined by Mr Justice Sperling. During the course of hearing that matter, his Honour severed the subject matter of the notice of motion from the principal matter before him and ordered that the present proceedings be commenced by summons. The plaintiff duly complied with that order and ultimately the proceedings came before me. 4 When opening her case, the plaintiff identified the basis of the relief she sought as the inherent jurisdiction of this Court to protect its own processes. However, it became clear that in substance the claim was that there had been a fraudulent alienation of property and the plaintiff was seeking relief in the nature of that provided by s 37A of the Conveyancing Act. Therefore, over objection from Mrs Rogers, I granted the plaintiff leave to file a Statement of Claim seeking an order under that section and pleading the fraud alleged, see Supreme Court Rules Part 13 rule 2. As none of the parties sought trial by jury and it did not appear to me that it was in the interests of justice to require it, the matter was determined by judge alone notwithstanding the allegation of fraud; see s 88 of the Supreme Court Act. 5 Before reviewing the evidence and the issues raised in the hearing, I should mention two matters that are relevant to the task I am to undertake. Firstly, these proceedings are somewhat unusual in that, although there are significant factual disputes between the parties, it is not a case of word against word. Ms Wentworth's evidence was given by way of affidavits in respect of which she was not cross-examined. The principal purpose of the affidavits was to place before the Court a large amount of material upon which she wished to rely to make out her case. Many of the statements made in the affidavits were subject to objection on the basis that they were argumentative, Ms Wentworth merely drawing inferences or conclusions from the material that she sought to place into evidence. A very significant part of these affidavits was not ultimately relied upon as evidence but was received by me as submissions made upon the evidence as to the financial arrangements of the defendants. 6 In substance the plaintiff is alleging that the defendants acted together to defraud her of the prospect of having any judgments or order made in her favour by this Court being satisfied from the assets of Mr Rogers. She has to prove, at least, that the transactions entered into by the defendants were not bona fide. She seeks to do that, firstly, by drawing inferences about the transactions, the timing of them and the circumstances in which they were made. Next she seeks to show that they are based upon a false premise, being that Mr Rogers was in debt to Mrs Rogers, that debt said to have arisen from the payment by Mrs Rogers of her husband's legal expenses. Finally, she seeks to show that the conduct of the defendants thereafter, particularly in respect of the proceedings between her and Mr Rogers, shows that they had a guilty knowledge of the fraud perpetrated by them and continued in their attempts to frustrate the pursuit of her rights. 7 The resolution of this matter in favour of the plaintiff depends upon whether I am prepared to draw the inferences from the material before me that she wishes me to draw to the necessary standard notwithstanding evidence on oath by the defendants to the contrary. Insofar as I might have to form a view about the credibility of the defendants and, therefore, take into account their demeanour in the witness box, it would be unrealistic and unfair if I did not remain alive to the history and nature of the litigation between Mr Rogers and Ms Wentworth over the past two decades, the acrimonious relationship between the defendants and her, and the fact that they were cross-examined by Ms Wentworth personally in a manner which was, at times, at least confrontational. 8 This brings me to the other significant aspect of this matter: the onus and standard of proof. It is accepted that, because of the nature of the allegations made by Ms Wentworth, she has the onus of proving her case to the standard of proof discussed in Brigenshaw v Brigenshaw (1938) 60 CLR 336. In that case Dixon CJ stated, at 362: No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences. Everyone must feel that, when, for instance, the issue is on which of two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of a kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency A little later his Honour went on, at 363 (case citations omitted): It is often said that such an issue as fraud must be proved "clearly", "unequivocally", "strictly" or "with certainty"……. This does not mean that some standard of persuasion is fixed intermediate between the satisfaction beyond reasonable doubt required upon a criminal inquest and the reasonable satisfaction which in a civil issue may, not must, be based on a preponderance of probability. It means that the nature of the issue necessarily affects the process by which reasonable satisfaction is attained. When, in a civil proceeding, a question arises whether a crime has been committed, the standard of persuasion is, according to the better opinion, the same as upon other civil issues……. But, consistently with this opinion, weight is given to the presumption of innocence and exactness of proof is expected. 9 In this case the plaintiff must satisfy me on the balance of probabilities, but with due regard to the seriousness of the allegations she makes against them, that the defendants have in effect conspired between themselves, and probably with others, to enter fraudulent property arrangements and to manufacture evidence to support them. Where, as here, the plaintiff's case relies upon inferences to be drawn from primary facts, she will not succeed if the circumstances give rise merely to conflicting inferences of equal degrees of probability; Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd [2000] FCA 17; (2000) 169 ALR 344 at 361 and the cases therein cited. The evidence before the Court must give rise to a "reasonable and definite inference" in support of the plaintiff's contention: Bradshaw v McEwans Pty Ltd (HCA, 7 April 1951, unreported). 10 In the present case, I approach the matter on the basis that the plaintiff must satisfy me to the appropriate standard that there is a reasonable and definite inference arising from the material of at least the following: that there was no agreement between the defendants that Mrs Rogers should pay her husband's legal expenses; that she did not do so; and that Mr Rogers was not indebted to his wife as he acknowledged in the Deed supporting the transfer and mortgage of Te Mata. In particular, the inference must arise that documents purporting to support such an agreement and subsequent payments made by Mrs Rogers of her husband's legal expenses are false and manufactured later than 1993 when the defendants became aware that Ms Wentworth might succeed in the litigation then before this Court. 11 In summary the plaintiff's case is that sometime after the middle of 1993 the defendants agreed to take a course that would have the effect of depriving Mr Rogers of his legal interest in Te Mata thereby frustrating any attempt by the plaintiff to obtain satisfaction of any judgment she might obtain in this Court against that interest. According to the plaintiff the fraudulent scheme adopted by the defendants, aided by their then legal representatives, was as follows. They manufactured documents purporting to show that since 1981 there had been an agreement between the defendants that Mrs Rogers would pay her husband's legal fees by way of a loan to him arising from each and every payment. In 1993 Mr Rogers prepared a list of the payments purportedly made by Mrs Rogers on his behalf and future payments that Mrs Rogers had agreed to make. In 1994 the defendants entered into a deed acknowledging the debt of $130,000 purportedly arising from the matters set out on the list and accumulated interest thereon. Mr Rogers agreed to execute a mortgage in favour of his wife over his share of Te Mata. This was accomplished by transferring the defendants' interest in the property from joint tenants to tenants-in–common and then creating a mortgage over Mr Rogers's interest in favour of his wife. At that time there was an existing charge on the property to the Legal Aid Commission in the sum of $131,700 secured by a caveat over Lot 71 and mortgages to the ANZ Bank. 12 The plaintiff does not simply assert that the defendants alone have been guilty of fraudulent conduct in these transactions. She asks the Court to find that a number of legal practitioners, who have at one time acted for one or other of the defendants, have committed one or more of the following; given false evidence, knowingly placed false evidence before the Court, obstructed the course of justice by withholding relevant documents, conspired to pervert the course of justice. 13 The plaintiff spent the greater part of her considerable cross-examination of the defendants investigating their financial affairs over the period from 1981 to 1994 in meticulous detail. A large number of documents, such as bank statements, cheque butts and passbooks were tendered in evidence. I had the distinct impression that the plaintiff had gained, by the time of the hearing at least, a much more detailed and extensive knowledge of the defendants' financial affairs than they did. 14 It should be noted from the outset that the defendants' financial position over the relevant period was complicated, not the least because of the financial pressures placed upon Mr Rogers by the legal proceedings in which he was involved with the plaintiff and the steps taken by him to finance those proceedings or by others to recoup monies from him as a result of them. The matter is also complicated because of the separate and somewhat independent financial arrangements and commitments of each of the defendants as a result of their earlier marriages. Further, the defendants were being asked during their evidence to reconstruct their financial affairs largely from a plethora of documents placed before them. Of course many of the apparent inconsistencies and gaps in their evidence might flow from the falsity of their assertion that Mr Rogers's legal expenses were paid by his wife. On the other hand, they may be due to the fact that the defendants were being asked to recall, many years after the events in question, a large number of financial transactions and arrangements of a relatively complex nature. 15 Many of the arguments relied upon by the plaintiff concern the legitimacy or otherwise of certain arrangements entered into by the defendants or the effects of those arrangements on the entitlements of each of them to assets owned by them or the business partnership into which they entered. For example, a question was raised by the plaintiff in her written submissions about the legal effect of the two variations of the partnership agreement. But I do not believe I should be concerned with those matters except insofar as they might support the plaintiff's contention that the defendants had conspired against her. For the plaintiff to succeed she must prove a fraudulent scheme on the part of both defendants aimed at defeating her interests, and not simply the proposition that Mrs Rogers might not be able to prove that she had any legally enforceable claim against Mr Rogers if he chose to dispute it. 16 In these circumstances it seems to me that the outcome of these proceeding will largely depend upon whether the plaintiff can show that certain documents relied upon by the defendants are fraudulent rather than upon a microscopic examination of financial transactions entered into by them over a period of almost fifteen years. It would be unrealistic not to expect that there would be missing documents, gaps in the evidence, and inconsistencies in accounts and explanations of these transactions over such a period. Further, the defendants are not accountants or financial institutions from whom a high degree of efficiency in recording their financial transactions and arrangements might be expected. Nor are they required to answer to the plaintiff for any or all arrangements they entered into between themselves even if the effect were to put one of them in a more advantageous position over the other. A brief history of the litigation between the parties 17 In order to understand the nature of the allegations made by Ms Wentworth and the background of the impugned transactions, it is necessary to set out in some little detail the history of the continuing litigation between Ms Wentworth and Mr Rogers. It is not intended to refer to all of the interlocutory and related proceedings that have taken place in the more than two decades during which proceedings of one form or another have been on foot. 18 On 17 June 1981 summonses were issued on behalf of Ms Wentworth against Mr Rogers relating to informations for offences of assault and buggery allegedly committed by him upon her on 27 January 1977. At the date of the alleged offences Mr Rogers and Ms Wentworth were husband and wife. Committal proceedings were heard in respect of those offences in the latter part of 1981 and on various dates throughout 1982. On 2 November 1982, the magistrate found that there was a prima facie case but refused to commit Mr Rogers for trial, his Worship having formed the view that no reasonable jury would convict him. The magistrate, thereupon, dismissed the informations and discharged Mr Rogers under s 41(6) of the Justices Act 1902. 19 Ms Wentworth took proceedings in the nature of mandamus in this Court contending that the magistrate had no power to refuse to commit a defendant for trial once he had found that a prima facie case existed. On 31 August 1983 Begg CJ at CL dismissed the summons. On 8 October 1984, an appeal against that decision was upheld by the Court of Appeal, see Wentworth v Rogers [1984] 2 NSWLR 422. The magistrate was directed to consider the informations according to law. As a consequence, when the matter came back before him, his Worship committed Mr Rogers for trial in the District Court. 20 In the meantime, on 13 December 1982, Ms Wentworth lodged a statement of claim in this Court seeking damages for personal injuries arising from the allegations that formed the subject matter of the criminal proceedings against Mr Rogers. 21 Mr Rogers stood trial in the District Court on the charges for which he had been committed. On 26 July 1985, after counsel's addresses and without the trial judge summing-up the case, the jury acquitted Mr Rogers of all charges. 22 In August 1985 Mr Rogers was given leave to commence proceedings in this Court by way of cross-claim against Ms Wentworth for malicious prosecution in respect of the allegations contained in the summonses issued in 1981. On 2 September 1985 these proceedings and Ms Wentworth's claim were joined. 23 During November and December 1985 Maxwell J and a jury heard the competing claims. On 20 December 1985, the jury returned verdicts in favour of Mr Rogers on both the claim and the cross-claim. Mr Rogers was consequently awarded $571,000 in damages and costs. 24 Ms Wentworth unsuccessfully attacked the verdicts on the basis they were procured by fraud, see Wentworth v Rogers (No 5) (1986) 6 NSWLR 534. However, she was ultimately successful on appeal and both verdicts were set aside on 6 March 1987, see Wentworth v Rogers (No 10) (1987) 8 NSWLR 398. The matters were returned to the Common Law Division for retrial. 25 In 1992 Ms Wentworth recommenced proceedings for her claim for damages. On 10 September 1993 the matter was placed into a call-over list. On 27 October 1993 the matters were set down for hearing on 26 April 1994. 26 On 4 March 1994 an application by Mr Rogers to have the proceedings adjourned for 12 months on the grounds of prejudicial publicity was refused. He was also advised on that date that he would not receive legal aid for any further proceedings. 27 On 4 April 1994 Sully J severed the cross-claim from Ms Wentworth's action. His Honour and a jury then heard the personal injury claim and on 24 June 1994 a verdict was given in favour of Ms Wentworth in the sum of $2,000. Sully J ordered that Mr Rogers pay half Ms Wentworth's costs. 28 On 11 October 1994 by notice of motion Ms Wentworth sought to have the cross-claim dismissed and the property transactions, which are the subject of the present proceedings, set aside. On 17 October the matter came before Bruce J who stood it over to 24 October before the list judge. 29 On that date the matter came before Loveday AJ. There was no appearance by Mr Rogers and, after receiving evidence from Ms Wentworth and Mr Russo, a barrister who was then acting on her behalf, his Honour dismissed the cross-claim for want of prosecution. His Honour was of the belief that Mr Rogers had at that time no interest in pursuing the matter. 30 On 31 October 1994 Mrs Rogers was joined as a defendant to the application to set aside the property transactions. 31 On 15 November 1994, on the application of Mrs Rogers, Bruce J granted an adjournment of the hearing of the application. The basis of the adjournment was principally the medical condition of Mrs Rogers. She was not in attendance but an affidavit made by her was filed and her then solicitor, Mr Oliver, gave evidence in support of the adjournment. The transcript of these proceedings is in evidence before me. 32 On 12 December 1994 Mr Rogers sought an order setting aside the dismissal of the cross-claim. On 13 December 1994 Ms Wentworth sought an order for a permanent stay of the cross-claim. 33 On 10 March 1995 the matters came before Hulme J in relation to the issuing of subpoenas and answers to notices to produce. Mr Lovas produced some material on behalf of Mrs Rogers. At that hearing Mr Rogers gave evidence and was cross-examined by Ms Wentworth as to his compliance with the notice to produce in respect of documents held by him. The transcript of those proceedings is in evidence before me. 34 On numerous dates from 23 March 1995 through to 24 April 1996 Sperling J heard proceedings relating to Mr Rogers's application to set-aside the order dismissing the cross-claim. As I have already indicated, during this hearing his Honour separated the current proceedings from that relating to the reinstatement of the cross-claim. By consent of the parties, evidence given before Sperling J is before me. Mr Rogers has relied solely upon the evidence given by him in those proceedings as evidence-in-chief in his case before me. 35 On 10 September 1996 Sperling J set aside the order made by Loveday AJ and dismissed an application by Ms Wentworth for a permanent stay of the cross-claim. On 20 December 1996 Sperling J made a further order dismissing an application by Ms Wentworth to dismiss the cross-claim. Orders were made that both Ms Wentworth and Mr Russo, the barrister acting for Ms Wentworth before Loveday AJ, pay the costs of Mr Rogers on an indemnity basis. 36 On 12 June 1997 the Court of Appeal refused leave to Ms Wentworth to appeal against the orders made by Sperling J. On 21 October 1998 the Court of Appeal, differently constituted, dismissed a further application by Ms Wentworth to appeal against the orders made by Sperling J. On 29 October 1999 the Court of Appeal dismissed an appeal against the order for costs made against both Ms Wentworth and Mr Russo. 37 Ms Wentworth has made an application for special leave to appeal to the High Court against the judgments of the Court of Appeal to which I have just referred. That application had not been heard at the date of this judgment. 38 There have been a large number of interlocutory hearings in relation to both the present matter and the cross-claim before different judges of this Court in the years 2000 and 2001. Every aspect of the litigation between the parties is hotly contested. Notwithstanding that proceedings in respect of the cross-claim were commenced over 20 years ago, the hearing of that matter is still outstanding because of the application for special leave in the High Court. A chronology of the domestic and financial arrangements of the defendants including payments for legal fees to Mr Rogers (a) Pre 1981 39 The following chronology contains some highly significant facts that are in dispute before me. Those matters have been indicated and I will return to discuss them later in more detail. 40 The assaults by Mr Rogers upon Ms Wentworth allegedly took place on 29 January 1977. In March of that year the defendants met one another. 41 Mr Rogers and Ms Wentworth were divorced in 1978. Until their separation they lived in a house in Victoria Road, Bellevue Hill. In respect of their matrimonial proceedings Mr Rogers instructed Mr Lloyd a solicitor of the firm Henry Davis York. Mr Twigg, a barrister, was instructed to advise and appear for Mr Rogers. 42 At this time Mrs Rogers was divorced from her husband, Mr Rochford. Their former matrimonial home was in Dalmeny Road Northbridge. After Mr and Mrs Rogers were married on 14 April 1979, they resided at the Dalmeny Road property. 43 From 1979 to September 1982 Mr Rogers worked for Radio Rentals. Over the same period Mrs Rogers worked on a part-time basis for a senator in the Federal Parliament as a telephonist and typist. (b) 1981 44 In June 1981 Mrs Rogers inherited an estate that included a unit at Killara, a half share of a boat, and some furniture. The value of the estate was between $90,000 and $100,000. On 15 June 1981 estate duty of $12,500 was paid. 45 Between 1980 and 1983 Mrs Rogers paid Mr Rochford $80,000 for his half share of the Dalmeny Road property. The defendants' evidence is that $40,000 was paid by Mr Rogers by way of gift or loan. 46 On 17 June 1981 the house in Bellevue Hill was sold. Fifty per cent of the proceeds, about $180,000, was to be received by Mr Rogers. On this same date the summonses were issued on behalf of Ms Wentworth alleging criminal offences against Mr Rogers. He was required to attend the Local Court on 15 July 1981. 47 Mr Rogers had by July 1981 committed himself to purchase Te Mata. He had the expectation of receiving his share of the property in Bellevue Hill. Mrs Rogers was not at that time working, and she had little income for the year before September 1981 apart from interest earned on money in a bank account. However, she would anticipated that she would eventually have the benefit of the property in Dalmeny Road and the unit, which she had inherited, commenced producing income from rent in September of that year. 48 [Disputed by Ms Wentworth] In about early July Mrs Rogers agreed in a conversation with her husband to give his financial assistance to defend the proceedings instituted by Ms Wentworth. Mr Rogers in the same conversation promised to repay his wife whatever money she expended on his behalf. 49 [Disputed by Ms Wentworth] On 8 July 1981, Mrs Rogers's birthday, Mr Rogers prepared what purported to be an indemnity in favour of his wife for any "legal costs or flow ons" paid by Mrs Rogers and interest "in relation to any litigation between the said Gordon John Rogers and Katherine Wentworth". Mr Rogers agreed to "reduce his share in any or all jointly owned property by the value of the legal costs and interest paid by Toni Rogers". The document was signed by Mr and Mrs Rogers and witnessed by Andrew Findlay, a family friend. According to Mr Rogers's evidence, the document was intended to confirm the promise made verbally by him to repay his wife any money expended by her for his legal expenses in defending the charges brought by Ms Wentworth. Mrs Rogers gave evidence that she also understood the document to have had this effect. I shall henceforth refer to this document as the 1981 indemnity and I will return to it in some detail later in this judgment. 50 In September the defendants accompanied by their two children and two of their parents went on a two or three week holiday to Fiji. Although the plaintiff suggested that the holiday would have cost $10,000, there was no evidence at all as to the amount expended on the trip. 51 On 4 November 1981 Mr Rogers purchased Te Mata, for $110,000. The defendants held the property as joint tenants. Mr Rogers considered that his wife's half interest in the farm had been a gift from him to her. The property contained two lots of about 100 acres: Lot 71 on which a dwelling house was later built, and Lot 72, which remained as a paddock or farm. The defendants later purported to operate the property as a hobby farm. 52 [Disputed by Ms Wentworth] Shortly after this time Mr Rogers contributed $40,000 from the sale of the Bellevue Hill property toward the purchase of the Dalmeny Road property as a gift for his wife. Mrs Rogers gave evidence that she believed that it was a loan to her and that she repaid it probably from the sale of the boat and a motor vehicle. She did not hand any money repaid by her to Mr Rogers and it may possibly have been paid in legal fees to Henry Davis York, but she could not remember. 53 Committal proceedings against Mr Rogers commenced in November 1981 and continued on various dates over the next 12 months. (c) 1982 54 On 6 January 1982, Mr and Mrs Rogers entered into a Deed of Partnership in relation to the farming of Te Mata. The terms of the Deed deemed the partnership to have commenced on 14 December 1981. The Deed provided that the partners were entitled to the capital and property of the partnership in equal shares, "unless or until otherwise agreed". The capital of the partnership was stated as $100. 55 On 29 January 1982 Mrs Rogers commenced work on a part-time basis for Economic Secretariat Pty Ltd. For the tax year ending in 1982 she earned $3,818. Mr Rogers for that year disclosed an income of $25,728. 56 On 30 September 1982 Mr Rogers ceased employment with Radio Rentals. He received a lump-sum payment of about $5,000. A short time later he went to Tamworth in order to build a house on the property. It was a kit home paid for in part by his mother. He commenced receiving social security benefits on 29 November 1982 and these payments continued to March 1986 with an interruption between March and December 1985 when he undertook casual work for TAFE. These benefit payments were paid into a cheque account in his name. 57 Sometime towards the end of 1982 Mrs Rogers sold a boat for between $32,000 and $34,000. She had initially owned a half share in the vessel and in 1981 inherited the other half share. 58 On 2 November 1982 the magistrate dismissed the criminal charges against Mr Rogers. 59 On about 14 December 1982 the plaintiff commenced civil proceedings against Mr Rogers for damages as a result of the alleged assaults upon her which were the subject of the criminal proceedings. 60 Later that month Mrs Rogers moved to Tamworth and let the property in Northbridge. She continued to work for the senator on a part-time basis. Also in this month she exchanged contracts for the sale of the unit at Killara. (d) 1983 61 On 28 January 1983 Mrs Rogers sold the Killara unit for about $69,000. 62 Between January and May 1983 a number of payments were made to the solicitors, Henry Davis York, and a barrister, Mr Twigg, on behalf of Mr Rogers. There was a considerable dispute about these payments and who made them. I shall return to consider them in detail later. 63 In February 1983 Mr Rogers applied for legal aid in respect of the proceedings in the Supreme Court arising from his discharge by the magistrate in the committal proceedings. Mr Rogers was informed by his solicitor, by telegram, that legal aid would be granted on condition that he provide a charge in favour of the Legal Aid Commission over his interest in Te Mata. 64 In June 1983 the Northbridge property was transferred to Mrs Rogers as a consequence of a deed of settlement entered into between her and her former husband. Thereafter Mrs Rogers was the owner of that property which was unencumbered. 65 [Disputed by Ms Wentworth] On 30 July 1983 Mr Rogers signed a document purporting to indemnify Mrs Rogers "for any lien by the Legal Aid Commission on any and all jointly owned property by reducing his share of any and all jointly owned property by the amount of the Legal Aid lien". The document went on to state that the agreement was "in addition and complementary to that covering legal costs or flow ons paid by Toni Rogers resulting from legal action between Katherine Wentworth and Gordon John Rogers". The document purports to have been signed by Mr and Mrs Rogers and witnessed by Mr Findlay. I shall henceforth refer to this document as the 1983 indemnity and I shall consider it in detail later in this judgment. 66 In September 1983 the Legal Aid Commission entered into a Deed of Charge with Mr Rogers in respect of his interest in Lot 71. Notwithstanding Mrs Rogers's interest in the property she did not sign, or formally consent to, the charge over the property. 67 At this time Mr Rogers was in receipt of unemployment benefits while Mrs Rogers was employed and also receiving income from the Dalmeny Road property. His taxable income for the year was $7,941 but he also received the sum of $5,000 in 1982 as severance pay. Mrs Rogers's income was declared at a little over $6,000. 68 On 10 August 1983 Mr Rogers received the sum of $6,100 from his former employer in settlement of a wrongful dismissal claim. This sum was paid into a temporary overdraft account with the State Bank. (e) 1984 69 In January 1984 the defendants entered into a variation of the partnership agreement to provide that the entitlement to the partnership property should be, as to Mr Rogers, one quarter and, as to Mrs Rogers, three quarters. 70 During this period Mr Rogers received some payments from the Department of TAFE. His income for the tax year ending in June 1984 was $438 but he had also received the sum on account of the wrongful dismissal claim in August the year before. Mrs Rogers's income was disclosed for taxation purposes as $4,590. (f) 1985 71 Mr Rogers's income for the 1985 tax year was shown as a loss of $1,049. Mrs Rogers's income for that year was $10,827. 72 On 19 June Mr Rogers gave a further charge in favour of the Legal Aid Commission over his interest in Lot 71. 73 On 16 July the defendants borrowed $30,000 from the State Bank, the loan being secured by a mortgage over both lots of Te Mata. This amount was purportedly borrowed to pay legal fees to Mr Shand QC on behalf of Mr Rogers. Mr Shand was appearing for Mr Rogers at the trial of the charges brought against him by Ms Wentworth. The amount borrowed was paid directly to Henry Davis York solicitors. I shall return to the circumstances surrounding the borrowing of this sum and the repayment of the money borrowed as the plaintiff disputes the defendants' evidence about it. 74 On 24 July, during the trial of Mr Rogers on the charges brought by Ms Wentworth, Mr Fitzwilliam Wentworth, her brother, handed Mrs Rogers a cheque for $6,000 to "help you blokes get through this". Mrs Rogers gave evidence that she believed it was a gift to the two of them. Part of the proceeds of the cheque was used to upgrade her motor vehicle. 75 On 31 July Henry Davis York acknowledged receipt of $30,000. 76 On 2 August Mrs Rogers paid $5,000 into the State Bank loan account. She had received that sum from a friend, Mrs McCallum, through Mrs Rogers's mother and she believed it was a gift to her. 77 On 12 August Mrs Rogers paid $2,450 being the balance of the proceeds from Mr Wentworth's cheque into the State Bank loan account. On the same date Mr Rogers filed a cross-claim in proceedings in the Supreme Court alleging malicious prosecution by Ms Wentworth in respect of the criminal proceedings. 78 On Christmas Eve Mr Findlay lent Mr Rogers the sum of $15,000 to pay legal fees for Mr Burbidge QC. The loan was made interest free and to be repaid on 24 December 1988. Henry Davis York acknowledged receipt of $15,000 on 30 January 1986. [Disputed by Ms Wentworth] Mrs Rogers gave evidence that she told Mr Findlay that she would repay the loan. (g) 1986 79 On 14 March 1986 Mr Rogers received the last of his social security payments. His income for this tax year was $196. Mrs Rogers's income was declared at just over $13,000. 80 On 19 May a further charge was created over Mr Rogers's interest in Lot 71 in favour of the Legal Aid Commission. 81 [Disputed by Ms Wentworth] In June Mrs Rogers drew a cheque with which to pay Henry Davis York the sum of $3,233.42. This payment will be considered in more detail later. 82 [Disputed by Ms Wentworth] On 18 July Mrs Rogers withdrew $3,540.65, which was a sum that Mr Rogers had been ordered by this Court to pay to Ms Wentworth. I shall return to this matter later. 83 In October Mr Rogers received $9,952.89 from the estate of his grandfather. The sum was used to reduce the principal owed under a mortgage to the State Bank. 84 [Disputed by Ms Wentworth] On 12 November Mrs Rogers withdrew $5,000 to pay Mr Findlay in respect of his loan to her husband. On 24 November, Mr Findlay endorsed the loan agreement with the payment of $5,000. 85 On 13 November Mr Rogers made an affidavit setting out his financial affairs for proceedings in the Supreme Court. He stated that his only significant asset was Te Mata, his gross income was $190 per week, and his domestic expenses totalled $225 per week. He also stated that Mrs Rogers was working and that she was deriving rental income from the Dalmeny Road property, which was valued at $190,000. He listed as debts, the amount of $20,000 to the State bank, $85,000 in legal fees and the loan to Mr Findlay, and an unspecified amount due to the Legal Aid Commission. (h) 1987 86 During this year and the latter half of 1986 Mr Rogers did some work for the Chamber of Commerce in Tamworth on an hourly basis and earned $9,753 gross for the 1987 tax year. Over the same period Mrs Rogers had a gross income declared of $18,500. 87 On 6 March the Court of Appeal ordered the retrial of the claim brought by Ms Wentworth and that costs of the first trial were to abide the result of the second trial, see (1987) 8 NSWLR 398. 88 On 4 June there was a further variation of the partnership agreement between the defendants, the result of which was that Mr Rogers's entitlement was reduced to 5 percent and Mrs Rogers's increased to 95 percent. 89 On 8 December Henry Davis York rendered a fee note to Mr Rogers for $104,160.41. (i ) 1988 90 During this tax year Mr Rogers earned $9,697 gross from the Chamber of Commerce in Tamworth. For the same period Mrs Rogers's income was declared at $12,935. 91 In November Mrs Rogers drew a cheque for $6,000 but left the particulars on the butt blank. I shall return to this matter later when dealing with the list of payments of legal expenses drawn up by Mr Rogers in 1993. 92 On 23 December Mr Findlay extended his loan to Mr Rogers indefinitely. (j) 1989 93 During this year Mr Rogers earned about $10,161 gross from the Chamber of Commerce in Tamworth. Mrs Rogers's income was declared at $35,385. 94 On 27 January 1989 Henry Davis York obtained judgment in the District Court against Mr Rogers for $69,659.22 including interest. 95 [Disputed by Mrs Wentworth] On 17 April Mrs Rogers withdrew $4,950 from the joint account and together with another $50 paid that sum to Mr Findlay who was with her in the bank when the money was withdrawn. The payment was made towards repayment of his loan to Mr Rogers. On that date Mr Findlay endorsed the loan agreement with the payment of $5,000. 96 On 5 June 1989 Henry Davis York caused a bankruptcy notice to issue against Mr Rogers for the balance of the sum claimed on the fee note which was, with accrued interest, $71,105.92. An agreement was entered into for repayment of the money outstanding by $2,000 a year. The repayment of the money claimed under this agreement is dealt with later in this judgment. 97 On 3 November Mrs Rogers withdrew $4,000 from her account to pay Mr Findlay and receipt of that sum was endorsed on the loan agreement on 6 November. 98 On 22 November Mrs Rogers withdrew a further sum of $1,000 from her account to pay Mr Findlay and a receipt for that sum was endorsed on the loan agreement on 23 November. 99 On 30 November Mrs Rogers withdrew $30.00 from her account to pay Phillip Fox, affirm of solicitors who had acted for Mr Rogers in proceedings involving Ms Wentworth. (k) 1990 100 During this year Mr Rogers earned $8,246 gross from the Chamber of Commerce in Tamworth. For the same tax year Mrs Rogers gross income was $39,197. 101 On 7 February Mrs Rogers withdrew from her account the sum of $2,000 for payment to Henry Davis York. 102 On 12 September the defendants entered into a mortgage with the National Mutual Royal Bank for the sum of $20,000. The Legal Aid Commission, which held a caveat over Lot 71, consented to the registration of the mortgage. 103 On 11 December the loan of $20,000 from the State Bank was refinanced through the National Mutual Royal Bank. This bank ultimately became the ANZ Bank. (l) 1991 104 During the 1991 tax year Mr Rogers earned $9,958 gross from the Chamber of Commerce in Tamworth. Mrs Rogers's gross income for the same period was declared at $45,296. 105 On 4 February Mrs Rogers withdrew $2,000 from her account for payment to Henry Davis York. 106 On 4 December the house at Dalmeny Road Northbridge was sold for $510,000. 107 [Disputed by Ms Wentworth] On 18 December Mrs Rogers withdrew $6,000 to return the money given to her by Mr Wentworth in July 1985. I shall deal with this matter later. (m) 1992 108 During the 1992 tax year Mr Rogers earned $20,115 gross from the Chamber of Commerce in Tamworth. For the same period Mrs Rogers's gross income was $44,193. 109 On 4 February Mrs Rogers withdrew $2,000 from her account for payment to Henry Davis York. (n) 1993 110 Mr Rogers's income for the 1993 tax year was declared at $2,394 gross. Mrs Rogers's gross income for the same period was declared at $38,116. 111 Mr Rogers was advised in September that the proceedings in this Court were being listed for call-over on 27 October. At about this time Mr Rogers, who had been represented by Phillips Fox, informally sought advice from a solicitor, Mr McLean. 112 By 23 September the amount secured by charge over Mr Rogers's share in Te Mata in favour of the Legal Aid Commission was $131,700. 113 [Disputed by Ms Wentworth] In October 1993, at his wife's request, Mr Rogers prepared a handwritten document setting out the amounts paid by Mrs Rogers for legal expenses on his behalf. The document asserts that Mrs Rogers was owed $45,976.25 as repayment of these expenses. I will deal with the circumstances in which the list came to be made in detail later. 114 At this time Mrs Rogers was contemplating a separation from her husband and told him that she wanted the debt "locked in", by which she meant in some way to formalise and secure the debt arising from her payment of his legal fees. 115 About this time there were discussions about putting Lot 72 on the market. The defendants' evidence was that this was because Mrs Rogers wanted to formalise the arrangement made by the 1981 and 1983 indemnities and she hoped to be repaid the monies outstanding to her from the sale. Further, they were not making any money from the business. 116 On 24 October there was a current affairs programme aired on television that made some reference to Ms Wentworth's allegations against Mr Rogers and he considered that his case might have been prejudiced by it. A letter was sent to this Court on 27 October seeking a stay of the proceedings for a period of 12 months. On that day the matter was listed for hearing on 26 April 1994. On 28 October the Supreme Court wrote to Mr Rogers advising him of the hearing date. Mrs Rogers gave evidence that she was unaware of these matters or indeed of the revived litigation. 117 On 21 October Mr MacLean noted instructions he received from Mr Rogers including that the "bottom block to be sold to repay Toni" and "documents evidencing loans in existence probably held by Andrew Finlay (sic) Pt McQ who lent me money which Toni repaid (at both weddings)". 118 On about 30 November Mrs Rogers handed the list of payments prepared by her husband to her solicitor, Mr Oliver, with instructions for him to arrange for the transfer of the interests of the defendants in Te Mata from joint-tenants to tenants-in-common. Mr Rogers instructed Mr MacLean, "What Tony Oliver is coming up with on behalf of Toni Rogers is fine by me". These matters will be referred to later. (o) 1994 119 For the 1994 tax year Mr Rogers's gross income was declared at $441. For the same period Mrs Rogers's gross income was declared at $50,372. 120 By 19 January Mr Rogers had retained Mr MacLean to act for him and to seek an adjournment of the hearing by reason of the television programme. On that date Mr Mclean wrote to Mr Oliver, Mrs Rogers's solicitor, asserting that he had heard from Mr Oliver that: " Mrs Rogers is not prepared to further hazard her finances either by way of contributing to the legal costs or by way of leaving her assets at risk " 121 By letter dated 18 February 1994, Mr Oliver wrote to Mr MacLean stating that his instructions were that, with interest, the total amount due to Mrs Rogers was $130,022.11. The details set out in the letter are similar to those contained in Mr Rogers's list of October 1993. Mr Oliver requested that Mr Rogers sign an acknowledgement of debt for that amount. 122 On 28 February the application by Mr Rogers to vacate the trial date was stood over to 4 March 1994. 123 On 3 March Mr MacLean wrote to Mr Oliver indicating that his client did not dispute the amount claimed. He also sent two undated, apparently alternative, transfer documents bearing the signature of Mr Rogers. 124 On 4 March Mrs Rogers signed one of the transfer forms. Also on that date the Court refused Mr Rogers's application for an adjournment. Further by letter dated that date the Legal Aid Commission informed Mr Rogers and his solicitor that aid was refused, apparently because his assets and income exceeded the threshold for aid. On 9 March the Commission indicated that the previous grant of aid had been exhausted. 125 On 15 March Mr MacLean advised Mr Oliver that the transfer had been stamped but consent to the transfer was required from the Legal Aid Commission and the ANZ Bank. 126 On 30 March Sully J severed the claim and cross-claim and set down the claim for hearing on 14 June. 127 On 6 April the firm of Henry Davis York wrote to Mrs Rogers regarding the outstanding debt to that firm. 128 On 12 April Mr Oliver sent to Mr MacLean a deed and mortgage for execution by Mr Rogers. These were signed on 22 April and returned to Mr Oliver on 26 April. Sometime after this date Mrs Rogers signed them. 129 On 12 July the Legal Aid Commission consented to the registration of the mortgage. 130 On 23 September Mr MacLean wrote to the barrister then acting for Ms Wentworth indicating that Mr Rogers intended to put his affairs into the hands of the receiver in bankruptcy once Ms Wentworth's costs were ascertained. 131 Before leaving this chronology, I should note that Lot 72 of Te Mata was sold in November 2001 for $120,000, the net proceeds being $115,89119. This Court has retained this sum pending resolution of these proceedings. Case for the plaintiff 132 As I have already indicated, Ms Wentworth relied upon two affidavits made by her and which, after numerous objections had been taken and determined, were read into evidence. Ms Wentworth was not required to give oral evidence and was not cross-examined. Those affidavits attached a large amount of material by way of annexure. In addition, Ms Wentworth relied upon a large number of documents including transcripts of proceedings in this Court relating to the litigation between her and Mr Rogers. Included in this material were documents that had been exhibits or MFIs in the proceedings before Mr Justice Sperling. 133 In effect the plaintiff's case is that, from an examination of the banking records of the defendants and their financial and employment history over the relevant period, Mrs Rogers was not in a position to pay her husband's legal expenses and did not in fact do so. She contends that the documents prepared by the defendants to evidence the agreement were not made at the time, or in the circumstances in which, the defendants state that they were and that to this extent they are fraudulent. Her allegation is that these documents were prepared no earlier than 1993 when the re-trial of her claim was listed for hearing. She argues that there was no suggestion of any agreement between the defendants of the type now asserted until the end of 1993. 134 In particular the plaintiff contends that payments of Mr Rogers's legal expenses came from accounts largely funded by him notwithstanding that they might have been joint accounts. Similarly she maintains that repayments made of a bank loan of $30,000, obtained to pay counsel's fees, were made from funds of Mr Rogers. Insofar as those payments came from accounts operated by Mrs Rogers, it is submitted that the Court should conclude that she held the funds in those accounts in trust for Mr Rogers. In the alternative the plaintiff claims that, if Mrs Rogers made payments on behalf of her husband, they were made to repay a debt that arose when Mr Rogers paid $40,000 to Mr Rochford as part payment for his interest in the Dalmeny Road property. 135 The plaintiff claims that the only asset of substance owned by Mr Rogers was his interest in Te Mata. She asserts that she has outstanding claims for the payments of costs arising from various proceedings in this Court and that the purpose of the transactions, which she seeks to set aside, was to leave Mr Rogers with no interest of any value in Te Mata. Case for Mrs Rogers 136 An affidavit by Mrs Rogers dated 29 January 2002 was read. Further, she was permitted to adopt in the witness box a statement that she had made shortly before the hearing commenced. Both the affidavit and the statement annexed documents upon which Mrs Rogers relied, including pages from passbooks of various bank accounts, chequebook entries and deposit slips. In particular Mrs Rogers annexed to her affidavit the 1981 and 1983 indemnity documents. Mrs Rogers also annexed the handwritten list of payments prepared by Mr Rogers in October 1993. In addition, Mrs Rogers sought to rely upon documents and transcripts either tendered by Ms Wentworth or tendered on her own behalf including exhibits and MFIs in the proceedings before Sperling J. Mrs Rogers also tendered various documents connected with the partnership agreement with her husband relating to Te Mata. 137 Mrs Rogers's evidence was that in the first two years of their marriage, both she and Mr Rogers had their own legal expenses arising from their divorces and each was individually responsible for the payment of those expenses out of his or her own resources. However, generally speaking, the income from salary or social security payments was used for the upkeep of the family. Mrs Rogers stated that she never considered the payment of Mr Rogers's legal fees as part of the living expenses of the family. 138 As a result of a settlement with her former husband, Mrs Rogers received a half share of their matrimonial home. In the period between 1980 and 1983 she paid him $80,000 to buy out his share in the property. Mr Rogers gave her money to make the first payment of $40,000 but she could not recall when the second payment was made or how it was funded. She also was the beneficiary of an estate comprising, in part, a unit in Killara from which she received rent of about $430 per month until the property was sold in 1983. 139 Mrs Rogers maintains that from 1981 until 1993 she lent her husband various sums of money by paying legal fees or associated expenses on his behalf. She did not keep specific records of these loans but noted some payments in bank passbooks. She paid these sums relying upon the 1981 and 1983 indemnity documents. She referred to the list of payments made by Mr Rogers in October 1993 and stated that she had no doubt that she had lent her husband more than was set out in that list but that adequate records had not been retained to itemise those payments. 140 In July 1985 the defendants borrowed $30,000 from the State Bank to pay the fees of Mr Shand QC incurred on behalf of her husband. The money was paid directly to Henry Davis York, Mr Rogers's then solicitors. Mrs Rogers's evidence was that she accepted responsibility for repaying this loan and paying interest due because she was working and her husband was unemployed. The fees, charges and repayments of that loan were paid from her money until about mid 1996. Again she says that she made the payments relying upon the two indemnity documents. Her evidence was that money was borrowed from time to time under the loan in order to pay other legal fees. Mr Rogers paid almost $10,000 in reduction of the loan in October 1986. In 1990 it was replaced with a loan for $20,000 with the ANZ Bank. The loan was ultimately repaid in October 2001 141 A statement made by Mrs Rogers, Exhibit D2.1, contains a schedule of payments that she claimed to have made between December 1982 and February 1992 on behalf of her husband's legal fees, together with what she asserted were the banking records that supported the payments. By the end of the evidence in these proceedings, it was conceded by Mrs Rogers that two payments made to reduce the loan account, that is $5,000 and $2,450, and contained in the list in D2.1 were no longer put forward as loans made by Mrs Rogers to her husband. The first of those amounts was the money received from Mrs MacCallum and the second was the residue of the money given to the defendants by Mr Wentworth. Although the plaintiff submitted that further claims of payments appearing in D2.1 had also been withdrawn, I do not believe that they were. However, Mrs Rogers accepted that some of the documents provided to support the payments did not in fact do so. 142 On 30 November 1993 Mrs Rogers attended the home of Mr Oliver, her solicitor, and gave him instructions in the following terms (Ex L): " Contact Duncan. Confirm letters of indemnification. I wish to safeguard my assets. Would you arrange for ownership to be transferred from T in C to J T so that the ownership can be varied to reflect the indemnification and arrange for the sale of Lot 72 (attached) so that I can realise my assets. Legal Aid lien is on Lot 71 (House Block) State Bank over both Lots ." " Duncan " is Mr Mclean, the solicitor acting for Mr Rogers. The references to " T in C " and " J T " are obvious but Mrs Rogers was clearly in error in referring to a transfer from tenants-in-common to joint tenants, as the property had always been held in joint tenancy. 143 It was her evidence that what she referred in evidence as "the 1994 transaction", that is the deed transfer and mortgage, arose from the list prepared by Mr Rogers and these instructions to her solicitor. It was upon her initiative and at her instigation, and not that of her husband, that the list and subsequent arrangements concerning Te Mata were prepared. She said that her intention, initially at least, was to "legally formalise and register" the accumulated debts owed to her by her husband and to ensure repayment of them from the proceeds of the sale of Lot 72. Ultimately the 1994 documents, which are the subject of these proceedings, were prepared by her solicitor and presented to her. She believed that the transaction comprising the deed, transfer and mortgage secured the money she had paid out on her husband's behalf and were based upon the indemnity documents. 144 In an affidavit of March 1995 Mrs Rogers stated that she had lent her husband "at least $45,975.00 by paying some of his debts". In an annexure to that affidavit she set out the following payments as being made by her: Henry Davis York 13,055.00 Philip Twigg 8,350.00 Katherine Wentworth 3,540.00 Andrew Findlay 15,000.00 Phillips Fox 30.00 F.P. Wentworth 6,000.00 45,975.00 However, she believed that she was also entitled to interest on the payments made by her and that the amount of $130,000, being the principal sum in the mortgage, was determined by the solicitors for her and her husband and was appropriate. Case for Mr Rogers 145 Mr Rogers's case was presented by way of evidence that he had given before Sperling J in March and October 1995 touching upon the subject matter of the present proceedings and before his Honour severed the present application from the application by Mr Rogers to set aside the dismissal of the cross-claim by Loveday AJ. He was cross-examined at length on that occasion by Ms Wentworth on the very matters about which he was cross-examined before me. 146 He stated that from the sale of his former matrimonial home he purchased Te Mata and also gave $40,000 as a gift to his wife to help her pay for her half share of the Dalmeny Road property. He derived no benefit himself from that property. 147 His evidence was that he typed the two indemnity documents himself. He said that he understood the 1981 and 1983 indemnities amounted to promises to repay his wife by giving her his entitlement to Te Mata in lieu of any money that she had spent on his behalf. He described them as "deeds of loan". 148 He gave evidence that in 1993 when his wife was "doing the books" she asked him to make up a list of the money she had spent on his legal bills. He made the list from bills or payments that he could identify at the time while his wife was overseas and presented it to her on her return. He believed at the time, and still believes, that he owed her more money than that appearing on the list that he prepared 149 He stated that he intended the transactions, into which he entered in 1994, to repay the money he owed his wife as a result of her paying his legal fees and because of the two indemnity documents. He did not concern himself with the amount of the mortgage because their solicitors determined it as being appropriate and he believed that he owed his wife more than could be identified by him. He believed that the consequence of the transactions was that he effectively transferred his share in the property to his wife. If the property were sold $131,000 was to be paid to the Legal Aid Commission and the rest of the proceeds of his half interest would go to Mrs Rogers to a total of $130,000. The indemnity documents ( a) The 1981 indemnity 150 This document, Annexure "A" to Mrs Rogers's affidavit, appears to be typewritten except for the date and what purports to be the signatures of the defendants and Andrew Findlay appearing on it. It is as follows: The indemnification agreement made [8th July 1981]. Between Gordon John Rogers and his wife Toni Rogers. Said Gordon John Rogers agrees to indemnify Toni Rogers for any legal costs or flow ons paid by Toni Rogers and interest at State bank overdraft rate current as of todays (sic) date, in relation to any litigation between said Gordon John Rogers and Katherine Wentworth. Said Gordon John Rogers agrees and promises to reduce his share in any and all jointely (sic) owned property by the value of legal costs and interest paid by Toni Rogers. This document is to ensure that Toni Rogers is not dissadvantaged (sic) financially by any litigation between Gordon John Rogers and Katherine Wentworth. Signed by said Gordon John Rogers G J Rogers In the presence of Toni Rogers Toni Rogers And Andrew John Parks Finlay Andrew J. P. Findlay 151 The authenticity of this document is of central importance in determining these proceedings. If I were satisfied that the document is not what it appears to be or did not come into existence in the way that the defendants swore that it did, not only would the credit of the defendants be effectively destroyed but also the plaintiff's case, that there was a fraudulent arrangement between them, would be well advanced. Such was the importance of this and the other indemnity document to the resolution of the issues before me, that at a very late stage in the proceedings I gave the plaintiff leave to uplift the documents and have them inspected by document examiners. I will discuss the result of those inspections shortly. 152 The defendants gave consistent evidence that the document was produced by Mr Rogers on the date shown on it, that is 8 July 1981. This was Mrs Rogers's birthday and it was being celebrated in Sydney. Mr Findlay, a neighbour from Tamworth, was present and all three signed the document on that occasion. Mr Rogers said that he had typed the document on a typewriter belonging to his wife. He produced that typewriter late in the proceedings. The typewriter was also inspected by a document examiner at the behest of the plaintiff and I shall refer to the results of that investigation shortly. 153 It will be recalled that the summonses had been issued against Mr Rogers in June 1981 and, as a consequence, he was to appear at the Local Court on 15 July of that year. Mr Rogers gave evidence that he was distressed by the prospect of these proceedings and was concerned about his ability to pay for the costs of defending the matters. Mrs Rogers gave evidence that there was at this time a conversation in which Mr Rogers expressed his concern as to his capacity to pay for his defence. Mrs Rogers said: "I'll help you with the money I got from the inheritance". To which Mr Rogers stated: "OK, but I'll pay you back". 154 I note that evidence of this conversation was given, for the first time, in an affidavit of Mrs Rogers filed on the morning that the hearing commenced. Ms Wentworth has submitted that the evidence is a last minute fabrication to give authenticity to the 1981 indemnity document. By itself this evidence has little weight. 155 Mr Rogers gave evidence that he prepared the document upon a typewriter owned by his wife without any assistance and in his own words. When he presented it to Mrs Rogers and asked her to sign it he said, "This is so I will pay you back any money you pay on my behalf for legal fees." 156 There was a deal of cross-examination about the wording used in the document, in particular why Mr Rogers used the word "indemnify" and what he meant by that term. There was also cross-examination relating to the fact that there was no joint property at the time of the production of the document. Mr Rogers's evidence was that he intended by the document to safeguard any money spent by his wife on his account for legal fees by the use of his interest in the property, Te Mata, that they were then about to purchase. Mrs Rogers's evidence was that she understood it to be a promise to repay any money she expended for her husband's legal fees. 157 As I have already indicated, Ms Wentworth argues that I would be satisfied to the requisite degree that the document was not prepared in July 1981 but at a much later date when the defendants were concocting evidence to support the transfer and mortgage of Te Mata. She cannot specify when this was but on her case it was many years after 1981 and probably later than September 1993. In order to support this submission the document was subjected to expert examination by Mr Holland of Scientific Document Services Pty Limited. The findings in relation to this document can be summarised as follows: (a) The document was prepared upon the typewriter tendered by Mr Rogers. (b) The same pen was used to write the handwritten date and the three signatures upon the document. (c) The paper used was the same as a sheet found with the typewriter when it was tendered. (d) The same paper was used for the preparation of the 1983 indemnity. (e) No date could be identified for the preparation of the document or the handwriting and signatures upon it. 158 An examination, for the purpose of comparison, was made of the signature of Mrs Rogers appearing on the document and her signature appearing on other documents over a period of time after 1981. A report prepared by Mr P. Westwood, Handwriting and Questioned Document Examiner, of 5 June 2002, stated that there was "limited support for the conclusion" that the signature of Mrs Rogers appearing on the 1981 indemnity was written "sometime after January 1982". He later examined further material provided to him and in a report dated 17 July 2002, he concluded that, having regard to the formation of the letter "g" in what purports to be Mrs Rogers's signature on a document dated 26 January 1983, the opinion he expressed in his earlier report should be amended to read "sometime after January 1983". 159 This finding is in my view of little assistance to the plaintiff. Mr Westwood was guarded as to any conclusion that could be drawn about the date of the signature because of the limited material available to him upon which he could form his opinion. I would not be prepared on his report to form any view as to when Mrs Rogers signed the 1981 document. She was never questioned about the appearance of her signature on that or any other document. In any event, there is nothing to suggest that she signed the document as late as 1993 or 1994 as she must have done on the plaintiff's case. 160 Putting the issue of her signature to one side, there is nothing in the objective evidence that suggests that the 1981 indemnity was prepared in 1993 or 1994 as the plaintiff asserts that it was. I could not possibly conclude from the reports of the examination of the document that the defendants' evidence about it was false to any standard. To the contrary, it seems to me that in all likelihood the document was prepared at or close to the date appearing on it. 161 Further, the wording of the document appears to me to suggest that it was prepared other than as part of a fraudulent scheme entered into by the defendants and their solicitors many years later. Certainly it does not seem to me to be the sort of document that one would expect to be prepared if the defendants were attempting to ensure that they could justify the transfer and mortgage of Te Mata. It seems to me, on its face, to be what Mr Rogers said it was, a somewhat clumsy attempt to protect Mrs Rogers's interest in the property that was about to be purchased as the family home. Of course the maker of the document could have been clever enough to misuse legal terminology, make errors of fact and insert spelling mistakes in order to make the document appear to be the work of a non-lawyer with limited spelling and typing skills, but that does not seem to me to be a realistic scenario. Assessing the document on its face and taking into account the findings of the document examiners, I am not persuaded that the document is fraudulent, as the plaintiff contends it is. 162 Mr Westwood's examination also revealed that there was a partial impression of a handwritten date "thirtieth of July 1983" appearing on this document, suggesting to him that this document was beneath another document when that date was inserted on the upper document. I shall return to this finding when considering the 1983 indemnity document shortly. 163 Of course, if the 1983 indemnity document were, as the plaintiff asserts, not what it appears to be and made at a later date than appears on the face of the document, that finding would itself have an impact upon any determination made about the 1981 document. It is necessary then to consider the 1983 document. (b) The 1983 indemnity 164 By June 1983 the magistrate hearing the committal proceedings had dismissed Ms Wentworth's informations against Mr Rogers and proceedings had commenced in the Supreme Court challenging that decision. About 1 June 1983 a telegram was received by Mr Rogers from his solicitor indicating that legal aid had been granted for the proceedings which were to commence before Begg J on 6 June and stating: Conditions of aid charge over Tamworth for the amount of the costs interest free repayable only upon sale of Te Mata if you sell estimated costs $1000 all up please confirm okay regards 165 Mrs Rogers gave evidence that her husband showed her the telegram and told her "legal aid wants a lien on the farm". She understood that a debt was to be created over Te Mata and it was to be repaid when the property was sold. On 25 July 1983 Mr Rogers created a charge over his interest in Lot 71 to the Legal Aid Commission. 166 The defendants' evidence is that towards the end of July of that year Mr Rogers produced a typed piece of paper and asked his wife to sign it. He said that he had prepared it "in regard to the legal aid lien on the farm" and that he wanted to make sure that she was not out of pocket because of his legal fees. The defendants gave evidence that the document was signed by them and witnessed by Mr Findlay on 30 July 1983. The document, 167 Annexure "C" to Mrs Rogers's affidavit, is as follows: This Indimnification (sic) agreement made [thirtieth of July 1983] Between Gordon John Rogers and his wife Toni Rogers. Said Gordon John Rogers agrees and promises to indemnify Toni Rogers for any lien by the Legal Aid Commission on any and all jointly owned property by reducing his share of any and all jointly owned property by the amount of the Legal Aid lien. This indemnification agreement is in addition and complimentary to that covering legal costs or flow ons paid by Toni Rogers resulting from legal action between Katherine Wentworth and Gordon John Rogers. Signed by said Gordon John Rogers G J Rogers In the presence of Toni Rogers Toni Rogers And Andrew John Parks Finlay Andrew J. P. Findlay 168 As with the other indemnity document, the plaintiff's case is that this document is fraudulent in that it was not prepared, signed or witnessed on the date appearing on the face of the document or in the circumstances to which the defendants have testified. In effect the plaintiff maintains that this document was prepared at the same time as the 1981 document and at a time very much later than its date, probably in 1993 or 1994, although she suggested in her written submissions that it might have been prepared as late as 1995. 169 During cross-examination, it was put to the defendants that the document was prepared using a computer and a dot matrix printer. Ms Wentworth asserted to Mrs Rogers that the document was prepared using the 1981 document as a template. At one stage the plaintiff even suggested to Mrs Rogers that this and the 1981 document were prepared on the same machine that prepared the partnership agreement and the loan agreement with Mr Findlay. 170 This document was subjected to examination at the same time and by the same document examiner who prepared the report on the 1981 indemnity document. The results of that examination can be summarised as follows: (a) The document was prepared upon the typewriter tendered by Mr Rogers. (b) It is highly probable that the same pen was used to write the handwritten date and the three signatures upon the document. (c) The ink used was from a ballpoint pen and was manufactured between 1979 and 1982 and it was commercially available prior to 1983. (d) The paper used was the same as that used for the 1981 indemnity document and a sheet found with the typewriter when it was tendered. (e) No date could be identified for the preparation of the document or the handwriting and signatures upon it. (f) There was some evidence to suggest that this document and the 1981 indemnity document were typed on different occasions. 171 I have earlier noted Mr Westwood's finding that suggests that, when this document was dated, the 1981 document was beneath it. His report was tendered very late in the proceedings and after the oral evidence had concluded. There was no application made by any party to have either of the defendants recalled for questioning about that finding. But the fact that the 1981 document might have been present when the 1983 document was signed does not necessarily indicate any impropriety on the part of the defendants. To the contrary, it seems to me to be quite understandable that the 1981 indemnity document, which is referred to in the 1983 document, would be present when the second document was signed. 172 The findings of the document examiner seem to me strongly to support the account given by the defendants that this document was signed in 1983. The date of manufacture of the ink is consistent with the document being signed in that year. I think it highly unlikely in the extreme that a biro manufactured in 1983 would be used to sign a document over a decade later. The fact that the paper used in both documents is similar and, is also similar to paper found with the typewriter, does not seem to me to contradict the account given by the defendants, particularly as the paper was found in the typewriter case. The objective evidence relating to this and the 1981 indemnity suggests that this document was prepared and signed on a different occasion than that when the 1981 indemnity document was prepared and signed. 173 Mr Westwood also examined the signature of Mrs Rogers appearing on this document but, on the limited material he had available for comparison, he found that the signature was consistent with the date of the document. 174 As with the 1981 indemnity, the wording of the document does not suggest to me that it was prepared as part of a conspiracy formed many years later to invent a basis to justify the transfer and mortgage of Te Mata. There was cross-examination of Mr Rogers as to his knowledge of what it was that the Legal Aid Commission required in respect of the property and his understanding of the words "charge" and "lien" in 1983 and later. The plaintiff relies on the use of the term "lien" in that document as supporting her argument that it is was made some years later, but I do not find that to be convincing especially in light of the objective evidence. I appreciate that it is not inconceivable that the defendants had the guile to produce these documents in a way that gives them the appearance of being amateurish attempts to produce legal documents by a person with little understanding of their legal effect. But it seems to me to be highly unlikely. 175 If it is accepted, as I do, that the 1983 indemnity document is probably genuine, there appears to be no reason to doubt the legitimacy of the 1981 indemnity document, despite any concerns about Mrs Rogers's signature raised by Mr Westwood's finding. The proceedings have been conducted on the basis that either the two documents are genuine or they were both prepared in 1993, 1994 or as late as 1995. 176 The plaintiff asserted that a document that appeared to be a note taken by Mr Oliver, Mrs Rogers's solicitor, of a telephone conversation on 6 January 1994 contained the genesis of these documents. That note referred amongst other things to agreements dated "8/7/81" and "13/7/83". There was no cross-examination of Mrs Rogers about this document. However, the plaintiff contends that this document is proof that there was a plan on foot to fabricate agreements bearing those dates. In my view it offers no such inference at all, but is simply a mistaken note of the date of existing documents. 177 I have taken into account, when considering these documents and assessing as best I can whether they are genuine or fraudulent, that the defendants did not call the person who witnessed their signatures, Mr Findlay. No explanation was forthcoming for that failure. I am prepared to infer that his evidence would not have assisted the defendants. But it does not follow that I should for that reason alone or in conjunction with other evidence relied upon by the plaintiff find that they were fraudulent. In my view the objective evidence supporting the defendants' evidence about the documents is compelling if not overwhelming. 178 The plaintiff submitted that I should conclude that the typewriter was tendered after Mrs Rogers's evidence concluded because she was not prepared to lie about it having been the instrument used to prepare the documents. This submission sits uncomfortably with the allegations made by the plaintiff against Mrs Rogers of repeated acts of perjury and the swearing of a false affidavit as to her medical condition to be used in other proceedings. 179 I do not believe that the circumstances of the defendants in 1981 or 1983 tell against the documents being made at that time. I do not accept that the fact that Mr Rogers was apparently in a sound financial position in 1981 and that Mrs Rogers was at that time without significant income, leads to the inevitable inference that the 1981 document cannot be genuine because the defendants could not have formed an agreement that Mrs Rogers would pay her husband's legal fees. She had an expectation of both capital and income that to some extent proved to be correct. I do not have any difficulty accepting that Mr Rogers was intending to purchase Te Mata and establish a family home at the time he learned of the proceedings with their attendant legal expenses. I do not find fanciful the idea that he would wish to provide for his family out of his income and assets as far as possible and not expend them on legal proceedings resulting from an earlier marriage. Although I do not uncritically accept the evidence of the contents of the conversations said to have been held at the time the agreement was reached, I do not reject their import as being improbable. It should also be noted that, although the 1981 indemnity document is dated in July of that year, the first payment made under the agreement to which a claim relates is December 1982 when Mrs Rogers had assets available to her. 180 Although it is unnecessary for me to come to a positive view about the authenticity of the documents in order to determine these proceedings, I believe that they are genuine. Mr Rogers's 1993 list of payments 181 The evidence of the defendants was that in September of 1993, just as she was about to go overseas and at a time when she was preparing accounts and other material for her accountant, Mrs Rogers asked her husband to prepare a list of "what I have paid to, or for, you in relation to legal fees". Mr Rogers agreed to do so. While his wife was absent, he examined the banking records that he had available to him and extracted what he believed to be instances of payments made on his behalf or for his benefit by Mrs Rogers in connection with his legal expenses. Mr Rogers's evidence was that the transactions he listed were not the total payments made by his wife on his behalf. Mrs Rogers gave similar evidence stating that she understood that the items listed were those that could be ascertained by Mr Rogers. 182 Mr Rogers said that he compiled the list from bills and records of payments he was able to find. Some of them were identified from notations made by his wife against transactions appearing in various bankbooks maintained by her. Mr Rogers's evidence was that these notations were placed in the passbooks at a time contemporaneous with the transactions. Mrs Rogers gave evidence to the same effect. 183 The list became Exhibit D2.4. It contains itemised payments made between 27 December 1982 and 4 February 1992 indicating from where the payment originated, to whom the payment was made and the amount of the payment. The payments were totalled at the end of the list as amounting to $45,976.25. There is also a notation of the sum of $30,000 representing the debt to the State Bank arising from, what the defendants said, was the fees paid to Mr Shand QC. Although that debt had not been repaid in 1993, Mr Rogers said that he noted it on the list because it was being serviced by Mrs Rogers. Mr Rogers also added to the list an interest component of $50,000 as a rough estimation of the value of interest on the amount paid out, calculated at, perhaps, 16 per cent. 184 When Mrs Rogers returned home, her husband presented her with the list and she accepted that it set out what she had paid out, although she did not look at any of the documents to verify the transactions referred to in the list. She passed on the list to her solicitor. The information on the list ultimately formed the basis for the acknowledgment of the debt made by Mr Rogers in the deed, and the associated transfer and mortgage of the property, that the defendants assert were designed to reimburse Mrs Rogers for the sums paid by her and the loss of interest on those funds. 185 Before going to the detail of the list I should refer to some subsidiary but not unimportant matters relevant to the making of the list. (a) the defendant's financial arrangements 186 Much of the plaintiff's contention about the source of money used to pay Mr Rogers's legal fees is based upon, what seems to me to be, an overly-technical and somewhat unrealistic view of what arrangements a husband and wife might make about their finances. In the present case one cannot lose sight of the fact that, when the defendants married, they were a mature couple who had both been previously married and had their own assets. Mrs Rogers had her share in her former matrimonial home and an interest in a deceased estate. Mr Rogers had his share of the proceeds of the former matrimonial home. During their married life money came into the defendants' household from various sources. At different times one or other of the defendants had an income while the other did not or one of them received a sum of money from some personal source. At other times there was a necessity to make payments or to bear expenses arising from one or other of the defendants' personal commitments. There were also, from time to time, commitments that arose from their joint activities, such as in respect of the operation of the hobby farm. 187 The defendants lived at Te Mata with Mrs Rogers's two teenage children. Mr Rogers gave evidence, which I would be prepared to accept, that he believed that he should be responsible for maintaining the family from his income whenever possible, even if it meant that Mrs Rogers was asked to pay his personal legal expenses. Mrs Rogers's evidence was that generally income was expended in household expenses. 188 The defendants had various bank accounts during the relevant time. From 1984 Mr Rogers had no account in his own name or jointly with Mrs Rogers. Any income he derived was paid into accounts held by his wife. Mrs Rogers had a number of bank accounts over the relevant period. She had a passbook account in her name that she called the "Killara account" and into which she placed money she received from rental of the unit before it was sold in February 1983. From May 1983 the defendants apparently operated an overdraft account with the State Bank. In July 1985 they had a loan account for $30,000 with the State Bank. That account was later refinanced with, what ultimately became, the ANZ Bank. Mrs Rogers also had a cheque account but the defendants gave evidence that they considered it to be a joint account even though Mr Rogers was not a signatory to it. He had a number of withdrawal slips signed by Mrs Rogers that he could use to obtain money from the account. There was also a business account that operated for a period. It seems that Mrs Rogers was generally in control of the family finances and she transferred funds to and from various accounts as she saw fit. 189 In those circumstances there does not seem to me to be any reason why the defendants could not themselves, as between themselves, determine what income would be designated as being joint money or as belonging to either one of them and into which account income should be placed at any particular time. Nor does it seem to me to be unreasonable that they might themselves, as between themselves, determine that one person would accept the burden or responsibility for particular expenses from an income which had, notionally at least, been designated as belonging to one or other of them. It might be that a dispute could later arise between them as to these arrangements and the lack of any strict accounting records might give rise to difficulties of proof of the arrangements if such was necessary. It might be that complicated questions could arise as to what legal or equitable interest each held in their joint or individual assets at any given time. 190 But it does not necessarily follow that, because funds are paid out of a joint account, those funds must be regarded as being jointly owned, or, if paid out of the account in the name of one of the defendants, that it should necessarily be treated as money belonging to that defendant. Nor does it follow, that, if at any particular point in time the source of the apparently joint funds can be traced to one particular defendant, those funds should be regarded as necessarily belonging to that defendant. Yet that type of reasoning is the basis for much of the plaintiff's argument that funds apparently paid towards Mr Rogers's legal expenses were paid by Mr Rogers himself and not by Mrs Rogers. If it is accepted that there was an agreement that certain funds would remain identifiable as belonging to Mrs Rogers whenever they were received and to whichever account they were paid, and if it were agreed by Mrs Rogers that she would use her funds to pay Mr Rogers's legal expenses, there is no reason why, at the behest of the plaintiff, this Court should find that, contrary to that agreement, the payments, were in fact made by Mr Rogers from his own money. 191 So, for example, simply because the first two items set out on the list drawn up by Mr Rogers in 1993 are sourced as coming from an account held by him, it does not necessarily follow that there should be a finding made in these proceedings that the funds belonged to him. Nor should the sums designated as being paid out of an account in the name of Mrs Rogers be treated as belonging to Mr Rogers simply because the source of the funds in the account at that particular time might be traced to him. The plaintiff argues somewhat inconsistently that, if sums of money are paid out of an account in the name of Mr Rogers, those sums should be attributable to Mr Rogers, but in the case of sums paid out of an account in the name of Mrs Rogers, they should be attributed to Mr Rogers also, because he was funding the account at about the time the payment was made. ( b) notations in the passbooks 192 Mr Rogers gave evidence that, when he was making his list, he relied, amongst other things, upon notations made by Mrs Rogers in various passbooks indicating to what the transactions in those passbooks related. Mrs Rogers gave evidence that she had inserted the notations at a time roughly contemporaneous with the particular transactions. The plaintiff submitted that the Court should find that the notations were later reconstructions made in an attempt to give credibility to the 1993 list and as part of the fraudulent conduct engaged in by the defendants. 193 There is no evidence that would suggest that the notations were other than they appear to be. Mrs Rogers's evidence was that the notations were made because it was necessary for her later to identify the use of the funds, usually for tax purposes or because they were payments made for Mr Rogers's legal fees. There is no evidence that would suggest to my mind that she was not telling the truth about them. The fact that Mr Rogers also made notations in the books identifying various entries does not lead me to doubt that the entries were not placed in the books as Mrs Rogers says they were. Rather, the fact that there appear to be some notations that have nothing to do with payments made for legal fees, notations made as late as 1994 and notations made by persons other than Mrs Rogers, such as an accountant, tend to suggest to me that the entries were not inserted later as a fabrication to justify the list prepared by Mr Rogers but that it was a genuine method of identifying amounts paid out of the accounts. There are cash withdrawals in respect of which there are no notations at all. Mrs Rogers gave evidence that, if there were no need for her to indicate the purpose for which those funds were used, she made no notation against them. 194 It should also be noted that there was in fact a passbook notation in relation to a payment made to Henry Davis York that did not find its way on to the list prepared by Mr Rogers. The notation was against a withdrawal of $400 for 29 December 1982 in the joint account. Mr Rogers's only explanation for the fact that this payment did not appear in the list was than he must have missed it. Apparently this sum found its way into Mr Rogers's cheque account as there was a cheque drawn for $400, for payment to Henry Davis York on 5 January 1983. The notation against the $400 withdrawal is somewhat unusual in that it is written "HDYork" rather than "HDY". But to the untrained eye the handwriting appears to be the same, at least in the construction of the "H". This tends in my view to support, to a limited degree, the defendants' evidence as to the notations and the compilation of the list. (c) the state of legal proceedings at the time of making the list 195 In August 1993 Mr Rogers's solicitors were advised that Ms Wentworth's claim and the cross-claim were to be listed before this Court for a call-over on 1 September 1993. It will be recalled that in 1987 the Court of Appeal had set aside the verdicts in favour of Mr Rogers that followed the trial before Mr Justice Maxwell. On 10 September Mr Rogers received notification from the Court of the listing of the revived proceedings for a call-over on 27 October. On 29 September Mr Rogers wrote to the Court indicating that he did not wish to impede the listing of the matters. 196 On 27 October, the date of the call-over, Mr Rogers wrote to the Court seeking an adjournment of the hearing of the matters on the basis of possible prejudice caused by the airing of a television programme some days earlier. On 28 October Mr Rogers was informed by the Court that the matters were listed for hearing on 26 April 1994. 197 The plaintiff contends that it was the revitalisation of her claim against Mr Rogers that was the cause of the defendants taking steps to protect Mr Rogers's sole asset of any significance, his interest in Te Mata, and led to the conspiratorial arrangement between the defendants and their legal representatives to defraud her by placing that asset beyond her reach. The defendants claim that the actions taken to secure Mrs Rogers's interests were unconnected with the litigation between Mr Rogers and the plaintiff. I shall return to this matter later. (d) payments listed by Mrs Rogers 198 At the outset of her evidence Mrs Rogers tendered a statement made by her and which was referred to during the proceedings as Exhibit D2.1. The statement contained a number of paragraphs dealing with the financial arrangements between the defendants generally. In particular Mrs Rogers listed a number of payments made by her in respect of her husband's legal fees. They were numbered from (a) to (y). In setting out the items listed by Mr Rogers as payments made by his wife, I have also referred to the items set out in Exhibit D2.1 by the applicable letter assigned to the item in the list prepared by Mrs Rogers. (e) payments listed by Mr Rogers 199 It should be noted that as against each of items (i), (ii), (iv) and (ix) there appears an asterisk and Mr Rogers indicated on the document that this signified "G.R. unemployed during this period A/C funded by Toni Rogers". Items numbered below as (i) to (ix) were headed "Monies paid by T. Rogers". Above item (x) appears the heading "Funded by Toni Rogers". Mr Rogers gave evidence that he did not by those headings intend to indicate any fine distinction between the groups of items. (i) 27.12.82 HDY Joint A/C $400 200 The first item, despite the reference in the list to a joint account, related to a cheque dated 27 December 1982 drawn from an account in the name of Mr Rogers. The payee is "HDY", that is Henry Davis York who had been solicitors for Mr Rogers in relation to both his matrimonial disputes with the plaintiff and in respect of the criminal proceedings she had commenced against him. The amount was for $400. 201 The plaintiff argues that Mr Rogers and not his wife in fact made the payment as it was from his account and he drew the cheque. But the defendants' evidence in respect of this payment was that, although it came from Mr Rogers's account, it had been funded by an amount of $400 paid in cash by Mrs Rogers to her husband for this purpose and withdrawn from a joint NSW Building Society passbook account on 29 December 1982, D2.1(a). Mrs Rogers's evidence was that the $400 was paid into Mr Rogers's account to cover the cheque previously drawn. (ii) 28.01.83 HDY Joint A/C $400 Payment 202 This item is a reference to a payment similar to the first item, in that it was a cheque paid to Henry Davis York in the sum of $400. It was dated 28 January 1983. The cheque butt was in Mr Rogers's handwriting. 203 Mrs Rogers gave evidence that on 14 January she deposited into that cheque account the sum of $1,000 that had been withdrawn from her funds in the "Killara account", D2.1(b). She said that this was a loan made at the request of Mr Rogers so that he could pay his legal expenses. (iii) 1.02.83 HDY T.R. Book 2A $500 204 This was a payment made out of a joint account. Mrs Rogers said she withdrew the sum of $500 from that account to pay Henry Davis York, D2.1(c). Mr Rogers said that, when making the list, he identified the payment from a notation made by Mrs Rogers in the passbook. (iv) 21.02.83 HDY Joint A/C $1,400 205 This item was similar to the first two as it related to a cheque drawn from an account in the name of Mr Rogers, the cheque butt was written by him and the payment was paid to Henry Davis York. The sum was $1,400 and the cheque dated 21 February 2003. 206 The plaintiff submitted that this was a payment made by Mr Rogers. But Mrs Rogers gave evidence that the source of these funds was a payment made into the joint account of $10,000 by her on 7 February, the funds coming from the sale of the Killara unit, D2.1(d). She initialled the notation of the deposit in the passbook to indicate that it was from her funds. She also gave evidence that on 21 February she withdrew $1,000 and paid it into Mr Rogers's account in order for him to pay legal fees, D2.1(e). She had previously paid $1,000 into the account on 7 January as noted above. Mrs Rogers said that she considered this payment as part of her agreement to loan him money to pay his legal fees. (v) 18.03.83 HDY T.R. Book 2A $400 207 This item related to a sum of $400 paid to Henry Davis York as a consequence of that sum being withdrawn by Mrs Rogers on 18 March 1983 from the joint account for that purpose, D2.1(f). The plaintiff submits that the funds in the account were derived from Mr Rogers. (vi) 11.04.83 HDY T.R. Book 2A $500 208 This item referred to a sum of $500 withdrawn by Mrs Rogers from the joint account on 11 April 1983 for the purpose of a payment to Henry Davis York, D2.1(g). The plaintiff submits that the funds in the account were derived from Mr Rogers. (vii) 2.05.83 P Twigg T.R. Book 2A $1,000 209 Mr Twigg was the barrister who had appeared for Mr Rogers in relation to his matrimonial matters. On 2 May 1983 Mrs Rogers withdrew $1,000 for payment to Mr Twigg, D2.1(h). Mr Rogers noted this item relying upon a notation in the account made by Mrs Rogers. 210 There was a deal of cross-examination of Mr Rogers about this item and whether it appeared, from fee notes and other documents emanating from Henry Davis York about the time of the alleged payment, that there was any money owing to Mr Twigg at that time. It was put to Mrs Rogers that this was in all probability merely a withdrawal made by Mr Rogers for payment to Henry Davis York. But Mrs Rogers was adamant that she had a clear recollection about this particular payment because of a conversation with Mr Twigg during which she told him that she had sent him the money. (viii) 2.02.83 HDY T.R. Book 2A $222.18 211 On 2 May Mrs Rogers withdrew the sum of $222.18 from the joint account for payment to Henry Davis York, D2.1(i). The plaintiff submits that the funds in the account were derived from Mr Rogers. (ix) 12.05 83 P. Twigg Joint A/C $7,350 212 By a letter dated 9 May 1983 Henry Davis York wrote to Mr Rogers indicating that accounts of Mr Twigg for 15 October 1981, and 11 and 12 February 1982 remained unpaid and requesting a cheque for $1,529.70 and $7,350 "to clear the balance of the liability to Philip Twigg". Mrs Rogers gave evidence that she drew a cheque to pay the latter amount, D2.1(j) 213 The reference to the payment of $7,350 to Mr Twigg gave rise to a deal of evidence at the hearing before me. Mrs Rogers was adamant that the payment was made from the sum of $10,000 that she had deposited into the joint account in February from the sale of the Killara unit, D2.1(d). However, the account from which the cheque was drawn to pay Mr Twigg does not show any deposit of that sum but rather appears to be an overdraft account that was in debit as a result of the payment to Mr Twigg. Later the sum received by Mr Rogers for his wrongful dismissal from Radio Rentals was paid into that account. But there was no evidence to suggest that at the time Mrs Rogers wrote the cheque that there was any belief that Mr Rogers would receive any money from Radio Rentals to fund the payment. 214 Mrs Rogers gave evidence about conversations between Mr Twigg and her mother and Mr Twigg and herself concerning the payment of his outstanding bills. She believed that it was a result of pressure placed upon her by him to have the bills paid that she sold the unit. She said that she believed she was funding that payment as part of her agreement to pay Mr Rogers's legal fees. The cheque butt is in her handwriting. She accepted that it appeared that at some time after the cheque had been written, she had added to the cheque butt a reference to the sum of $10,000. She said that she had done this to indicate the source of the funds used to pay the cheque for her own accounting purposes. She had also inserted on the butt a reference to the balance in the account being $2,650 after the payment of the cheque to Mr Twigg, although the account records did not show the account to be in credit in this amount. 215 The plaintiff asserts that this amount was not funded by Mrs Rogers from the sale of the unit but was paid out of a joint overdraft account with a limit of $5,000, the money having been borrowed for this purpose. Neither of the defendants was able to identify the account from which the cheque was drawn. Mrs Rogers was insistent that she had funded the payment notwithstanding the account records. (x) 14.06.86 HDY T.R. Cheque $3,233.42 216 This item refers to a cheque butt number 068338 for the sum of $3,233.42 with a reference to Henry Davis York and apparently dated 17 June 1986, D2.1(n). Although the cheque butt exists, the evidence was unclear as to the transaction to which it referred because of the confusing notations appearing in the relevant accounts. Although both defendants were taken through these notations, they were unable to explain what had occurred in relation to this payment. There seems to have been a cheque drawn for this amount on 13 May but later cancelled and a further cheque drawn at a later time. It may be that, as was suggested in the written submissions made on behalf of Mrs Rogers, the particular cheque account used was short of funds at the time the original cheque was drawn and that cheque had to be cancelled and a new cheque drawn later. 217 However that might be, the evidence tends to suggest that such a sum was ultimately paid to Henry Davis York and the only question arising, as with most of the other payments listed, is whether the funds used for that payment were derived from Mrs Rogers. (xi) 18.07.86 KWW T.R. Book 1 $3,540.65 218 This is a reference to a payment of $3,540.65 made to Ms Wentworth as a result of an order for costs made in this Court against Mr Rogers and in favour of the plaintiff. The defendants assert that it was paid by Mrs Rogers as part of her agreement to pay Mr Rogers's legal fees, D2.1(o). (xii) 17.11.86 A. Findlay T.R. Book 1 $5,000 219 This item refers to a payment of $5,000 made by Mrs Rogers from her account to Mr Findlay on 17 November 1986 as partial repayment of a loan made by him to Mr Rogers, D2.1(p). Mr Rogers had noted on the list: " Repayments to A. Findlay are for a loan of $15,000 taken out 24-12-85 ." 220 There was a considerable amount of evidence by way of cross-examination of the defendants as to this loan and the repayment of it. The defendants' evidence was that the loan was for $15,000 and was made on Christmas Eve 1985 for the payment of Senior Counsel's fees. The loan was interest free and was to be repaid on 24 December 1988. The written loan agreement was made between Mr Rogers and Mr Findlay. However, it was Mrs Rogers's evidence, supported by evidence given by her husband, that she had told Mr Findlay and her husband that she would repay the loan. The plaintiff submitted that the Court should not accept that evidence. (xiii) 17.04.89 A. Findlay T.R. Book 3 $5,000 221 This item relates to a payment of $5,000 made as part repayment of the loan to Mr Findlay. Mrs Rogers's evidence was that the payment was made partly by cheque and partly in cash handed to Mr Findlay who was present with her at the bank when the money was withdrawn. Her evidence was that the sum was made up of $4,950 by cheque, D2.1(q) and $50 cash, D2.1(r). She said that Mr Findlay requested that the payment be made in this way. 222 The passbook shows two entries for 17 April 1989: one a withdrawal for $4,950 and the other a deposit of $50. The two entries have been linked with a handwritten bracket. Mrs Rogers's evidence was that she inserted the bracket on the date of the payment notwithstanding that the $50 entry is clearly a deposit. It was suggested to her that she had put the bracket there in 1993, but she denied it. Mrs Rogers insists that she specifically recalls paying Mr Findlay the two sums. It seems to me to be unlikely that the bracket would be placed in the passbook in 1993 or 1994 simply for the purposes of inflating the amount paid by $50 or to fabricate a repayment to Mr Findlay. There is no basis for any assertion that Mr Findlay was not paid such an amount and he has noted a payment on 17 April 1989 of $5,000 on the loan agreement. (xiv) 22.10.89 A. Findlay T.R. Book 3 $1,000 223 This is a reference to a further payment of $1,000 to Mr Findlay in part repayment of the loan he made to Mr Rogers paid by a cash withdrawal made from Mrs Rogers's account on 22 November 1989, not October as noted on the list, D2.1(t). Mr Findlay endorsed the payment on the loan agreement accordingly on 23 November. (xv) 3.11.89 A. Findlay T.R. Book 22 $4,000 224 On 3 November 1989 Mrs Rogers withdrew $4,000 from her account as repayment of the loan made by Mr Findlay to Mr Rogers, D2.1(s). On 6 November Mr Findlay noted the repayment on the loan agreement. (xvi) 30.11.89 Philips (sic) Fox T.R. Book 22 $30.00 225 Phillips Fox acted for Mr Rogers at one stage in respect of proceedings involving Ms Wentworth. On 30 November 1989 Mrs Rogers withdrew the sum of $30 from her account for payment to them, D2.1(u). (xvii) 7.02.90 HDY T.R. Book 4 $2,000 226 On 7 February 1990 $2,000 was withdrawn from Mrs Rogers's account for payment of that sum to Henry Davis York, D2.1(v). 227 On 5 June 1989 Henry Davis York caused a bankruptcy notice to issue in respect of Mr Rogers for unpaid fees and accrued interest. However, sometime in 1990 Mr Rogers entered into an agreement with the firm that it would receive the sum of $20,000 by instalments of $2,000 per year and Mr Rogers would not bring proceedings against the firm for professional negligence. The agreement was not produced to the Court. Mrs Rogers was a signatory to the agreement as a guarantor. She gave evidence that she paid three payments of $2,000 pursuant to that agreement, the amount in this item being one of the payments. (xviii) 4.02.91 HDY T.R. Book 5 $2,000 228 On 4 February 1991 $2,000 was withdrawn from Mrs Rogers's account for payment of that sum to Henry Davis York, D2.1(w). This was a further payment made under the agreement with that firm to which I have just referred. (xix) 4.02.92 HDY T.R. Book 6 $2,000 229 On 4 February 1992 $2,000 was withdrawn from Mrs Rogers's account for payment of that sum to Henry Davis York, D2.1(y). This was a further, and last payment made to the firm under the agreement that has been referred to above. (xx) Nov 1988 F.P. Wentworth repayment of loan $6,000 chq 885733 230 Mrs Rogers's evidence was that in July 1985 during the trial of her husband, the plaintiff's brother, Mr Wentworth, handed her a cheque for $6,000 made out to Mr Rogers. She considered that it was a gift "to help us get through the litigation". Some of the money was used to purchase a motor vehicle for Mrs Rogers. The balance of the money, $2,450, was paid into the State Bank loan account on 12 August 1985 to reduce the debt to the bank, D2.1(m). 231 Mr Rogers gave evidence that in December 1991 Mr Wentworth told him that Ms Wentworth wanted the money repaid. On 18 December 1991 a cheque was drawn for $6,000 as repayment of the loan, D2.1(x). Mrs Rogers's evidence was that she repaid the money, although it was not given for the payment of legal fees but simply to assist them at the time of the trial. However, she said that she and her husband considered the repayment by her to be a loan to Mr Rogers for the payment of legal fees because the cheque was given to Mr Rogers at the time of the litigation when he was incurring legal fees. Mr Rogers put the item on the list and Mrs Rogers did not make any independent judgment about whether it should appear there. 232 When making the list, Mr Rogers attributed a cheque butt from November 1988, number 885733, as being the cheque paid to Mr Wentworth. He wrote that cheque number on the list as against the payment of $6,000. However, at the time of making the list, the butt showed no details as to the cheque to which it related except that Mrs Rogers had written "$6,000" on it. The butt showed no date or to whom the cheque had been made. Mr Rogers, however, completed the butt by inserting "Nov 88" and the initials "PFW" as representing Peter Fitzwilliam Wentworth, Ms Wentworth's brother who had given Mrs Rogers the cheque for $6,000. The cheque did not relate to a payment to Mr Wentworth but probably the purchase of a second-hand tractor. 233 Mr Rogers was cross-examined at length about the circumstances in which this cheque butt was completed. The plaintiff contends that the butt was forged as part of the fraudulent scheme entered into by the defendants to transfer Mr Rogers's interests in Te Mata to his wife. Mr Rogers maintains that it was an innocent error on his part when, having seen the amount of $6,000 written on the butt, he presumed it related to the repayment to Mr Wentworth. Mr Rogers admits that he made the entries on the butt so that the butt would be identified as relating to a repayment to Mr Wentworth. He agreed that he knew there might be questions asked about the cheque in the course of litigation at the time he completed the butt. 234 Relying upon these admissions given in evidence, the plaintiff claimed that Mr Rogers had confessed to having committed the offence of forgery and asked me to refer the matter to the relevant prosecuting agency. I refused to do so. I shall return to this matter a little later in this judgment. However, Mr Rogers maintained, as did Mrs Rogers, that the amount of $6,000 had been repaid to Mr Wentworth. There was no evidence before me that this assertion was false. Mrs Rogers gave evidence that she had never checked the details in the list and was unaware of the error made by Mr Rogers until a time much later after the preparation of the list. Mr Rogers gave evidence that he did not become aware of the error until the proceedings before Sperling J. 235 Notwithstanding vigorous submissions by the plaintiff to the contrary, I do not believe that Mrs Rogers would have been party to the making of an alteration of the butt by adding information that was so obviously wrong. She, so it seems to me, had much more knowledge of the state of the accounts generally than her husband had, as it was she who usually controlled the banking of family funds and managed the household accounts. She would have been aware that the cheque butt had nothing to do with a repayment to Mr Wentworth. (xxi) State bank loan of $30,000 236 Mr Rogers wrote on the list the following: " state bank loan taken out 5-7-85 for $30,000 5-7-85 direct to HDY for fees A Shand QC loan serviced by T.R. G.R. repaid - $9952.89 21-10-86 from the estate of his father - servicing of bal. $18,000 of original $30,000 by T.R. " 237 Mr Rogers's evidence was that he included the loan of $30,000 because it was taken out for legal fees, and, apart from the sum he repaid, it was being serviced by Mrs Rogers and, therefore, was a debt due to her. 238 The defendants' evidence was that, although it was a joint borrowing, Mrs Rogers had agreed to take responsibility for this loan because, at the time it was taken out, Mr Rogers was unemployed and she had casual employment. The money borrowed was sent directly by the bank to Henry Davis York. Mrs Rogers's evidence was that in servicing the loan by repayments of principal and payments of interest and fees she was thereby making loans to Mr Rogers. The principal was reduced by the payment of nearly $10,000 from funds inherited by Mr Rogers but the defendants asserted that the balance of the monies borrowed were repaid by Mrs Rogers. The defendants also maintained that any further borrowings made against that account from time to time were used to pay legal fees. 239 Mrs Rogers's evidence was that she had paid a sum of $5,000 into the loan account on 2 August 1985, D2.1(l). She received this money from a friend, Mrs MacCallum, by a cheque made out to her and received via Mrs Rogers's mother. She believed it was a gift to her. 240 The sum of $2,450, being the balance of the money received from Mr Wentworth after purchasing a car for Mrs Rogers was also paid into that account on 12 August 1985, D2.1(m). (xxii) outstanding debt to Henry Davis York $14,000 241 Included in the list Mr Rogers wrote: " - outstanding debt to HDY $14,000 to be repayed (sic) at $2,000 P.A. " 242 This is a reference to the outstanding amount of $20,000 payable to Henry Davis York in respect of which three payments of $2,000 had been made in each of the years 1990, 1991 and 1992. Mr Rogers's evidence was that he entered this matter on the list because he believed that his wife had an obligation to repay the amount as guarantor. He saw it as a future debt that would be incurred by him to his wife because there was an existing obligation to pay the money to Henry Davis York and he believed his wife was the person who would repay it. The plaintiff alleged that this evidence was a fabrication on his part. In fact no further payments were made to Henry Davis York after 4 February 1992 and the $14,000 remains unpaid. The 1994 transactions (a) instructions to Mr Oliver 243 Sometime before October 1993 the defendants determined to sell Lot 72 because they were making no money from the farm and they had no use for the block. Although it was on the market for $200,000, neither defendant believed it would sell for this sum. On 13 October 1993 the property was placed with a particular agent for sale. 244 Mrs Rogers returned from India on about 17 October. Her evidence was that after she returned she received the list from Mr Rogers without checking it against the documents used by him to draw up the list, as she trusted her husband's reckoning. In particular, she did not give any independent thought to the payment of $6,000 to Mr Wentworth mentioned in the list or its date of payment. Her evidence was that, having seen the list, she told her husband that she wished to "protect my assets". By the word "assets" she meant what she had paid out on his account. At this time she was considering separating from her husband. Mr Rogers's evidence was that this was because of the amount of money expended on litigation. Mrs Rogers was not asked the reason. 245 Mrs Rogers initially expected that she would be repaid from the proceeds of the sale of Lot 72 and she thought she would be repaid the amount shown as payments in the list prepared by Mr Rogers, that is a total of $45,976.25. She believed that the block might sell for $160,000. There had been no discussion with her husband as to what would be done with the balance of the proceeds. 246 On 21 October Mr Rogers's solicitor, Mr MacLean, noted (ex B p 67): Bottom block to be sold to repay Toni Documents evidencing loan in existence probably held by Andrew Finlay(sic) Pt McQ who lent me money which Toni repaid (at both weddings) By the use of the first person pronoun it can be inferred that these were instructions Mr MacLean received from Mr Rogers. 247 According to the defendants, around this time the two indemnity documents were located. Mrs Rogers's evidence was that in a discussion between Mr Rogers and her, she indicated that she did not want to "call up the money" but wished to "lock in the debt", by which she meant "formalise the debt or secure it". She was not sure how this would be achieved but she thought that there would be a formal document in the nature of a mortgage prepared. Mr Rogers gave evidence that he understood that she wanted to "formalise it", that is that she wanted some form of security over the farm. 248 Some short time after these discussions, Mr Rogers told his wife to speak to her solicitor and tell him to contact Mr MacLean as Mr Rogers had already spoken to him about the matter. 249 Towards the end of November Mrs Rogers handed the list prepared by Mr Rogers to her solicitor but did not discuss the figures with him. She also gave him the handwritten document, Exhibit L, set out above at [142]. The plaintiff asserts in her written submissions that this document was not prepared in November 1983. She relies upon the fact that the note refers to arranging the sale of Lot 72 yet that block had already been placed on the market in October or earlier. However, the terms of the document generally indicate to me that it was prepared in accordance with the evidence of Mrs Rogers. The note can be read as instructing Mr Oliver to act on the sale. 250 On 19 January 1994 Mr MacLean wrote to Mr Oliver prompted by a telephone call from the latter to him seeking information "with regard to the parties' situation in the light of the fact that the claims of Miss Wentworth have been revived" (Exhibit B p 51). He notes "your advices that Mrs Rogers is not prepared to further hazard her finances either by way of contributing to the legal costs or by way of leaving her assets at risk". He then goes on to give some information to Mr Oliver about the history of the litigation and Mr Rogers's financial affairs both past and present. After informing Mr Oliver that Mr Rogers has "in effect no realisable assets and no cash resources with which to reimburse his wife the funds that he says he undoubtedly owes her ", the letter concludes: " In that context the writer leaves it to you to outline the nature of Mrs Rogers' now demands and how she says those demands can be met " 251 Mr Oliver's letter of 18 February 1994 (Exhibit B p 37) was written in response to this letter. Mrs Rogers acknowledged in evidence that the contents of Mr Oliver's letter accurately reflected her instructions based upon what she believed to be the true situation as derived from the list prepared by her husband. Mr Rogers gave evidence that, although he agreed to the amount set out in that letter, he thought he owed his wife more than that amount. Both defendants gave evidence that they had never seen Mr Oliver's letter before they signed the deed. 252 The letter of 18 February reflects what is contained in the list made by Mr Rogers and sets out the amount of money owed by Mr Rogers to his wife as follows: (a) Past payments of Mr Rogers's legal fees: 75,875.00 (b) Estimated debt due to Henry Davis York: 14,000.00 89,975.00 (c) Less amount paid by Mr Rogers: (9,975.00) 80,022.11 (d) Estimate of interest paid and forgone: 50,000.00 130,022.11 The amount of $75,975.00 was made up of the claimed payments totalling $45.975.00 and the amount borrowed from the State Bank of $30,000. The amounts differed from that on the list drawn up by Mr Rogers in that it did not refer to the amount owed to the Legal Aid Commission. (b) preparation of the documents 253 The letter of Mr Oliver of 18 February 1994 to Mr MacLean also sets out the proposals for carrying out his client's instructions. Enclosed with the letter were two unsigned transfers, one relating to Lot 71 and the other relating to both lots. It appears that there were two different transfer forms prepared because of stamp duty considerations. Mr Oliver indicated that Mr Rogers would be required to sign an acknowledgement of debt for the sum calculated as being owed to Mrs Rogers. 254 On 3 March 1994 Mr MacLean wrote to Mr Oliver informing him that his client did not dispute the figures set out in the letter of 18 February and did not disagree with the steps proposed. The two transfers were returned signed by Mr Rogers. The next day, 4 March, Mrs Rogers signed one of the transfer forms. On 3 March Abadee J had refused to adjourn the hearing at Mr Rogers's request. 255 On 8 April 1994 Sully J severed the cross-claim from Ms Wentworth's claim and listed it for hearing on 14 June next. 256 On 12 April 1994 Mr Oliver sent a deed and mortgage to Mr MacLean for execution and return. Mr Rogers signed them on 22 April. On 26 April Mr MacLean returned the deed, dated 22 April, and the undated mortgage to Mr Oliver. Mrs Rogers signed them sometime after that date. Stamp duty was paid on the documents on 27 May 1994. 257 The substantive part of the Deed of 22 April 1994, ignoring the recitals, states: 1 The Debtor acknowledges that he is indebted to the Creditor in the sum of One Hundred and Thirty Thousand Dollars ($130,000.00) 2 The Debtor will forthwith execute a mortgage over his interest in Folio Identifiers 71/615640 and 72/615640 as Mortgagor with the Creditor as Mortgagee. 3 The Debtor will repay the said sum of One Hundred and Thirty Thousand Dollars ($130,000.00) to the Creditor within fourteen (14) days of the Creditor making written demand to the Debtor for such repayment together with interest thereon if demanded at the current rate chargeable from time to time by Westpac Banking Corporation on commercial advances in excess of One Hundred Thousand Dollars ($100,000.00) 258 The Mortgage is on a standard form and contains only one provision in an annexure being: 1. This Mortgage is given to secure and assure the performance by GORDON JOHN ROGERS of the covenants given by him in a Deed of even date herewith between TONI ROGERS Creditor and GORDON JOHN ROGERS Debtor and the Mortgagor covenants that any breach of covenant by contained in that Deed shall be a breach of his Mortgage entitling the Mortgagee to exercise all of her powers as herein provided. 259 The plaintiff asserts that the transfer of the property was considered by the defendants' legal representatives to be a separate transaction from the Deed and Mortgage. She asserts that the transfer was to protect Mrs Rogers's interest in Te Mata from the Legal Aid Commission's lien. This is in my view pure speculation without any foundation in the evidence. I believe that the purpose of the transfer was to enable the mortgage over Mr Rogers's interest and for no other reason. (c) the intentions of the defendants 260 Mr Rogers believed that, arising from the 1981 and 1983 indemnity documents, he was obliged to protect Mrs Rogers's loans to him through payment of his legal fees by reducing his interest in Te Mata. He believed that Mrs Rogers wanted to formalise the debt to protect her interests and he intended to do that by "signing over my share of the farm to her". He believed that his wife would take out a mortgage over his share in the property but he was unsure of the legal mechanism necessary to achieve that result. He stated that he believed that he was doing what was necessary to "protect and give Toni the $130,000" and that she would eventually have title to the property. If the property were ultimately sold, he envisaged that $133,000 would be paid to the Legal Aid Commission and the residue to his wife. His evidence was that he was not really concerned with the documents he signed and that he was unaware of the amount of the money specified in the deed, as he simply wanted his wife's interests protected. However, he was aware that the arrangement would not effect his enjoyment of the property provided that his marriage survived. 261 Mrs Rogers understood that the arrangements made in 1994 were a consequence of the 1981 and 1983 indemnity documents and were to ensure repayment to her of the debt that had accumulated as a result. She gave evidence that her husband entered into the 1994 transactions because she asked him to do so. She believed that the amount of $130,000 was determined by the lawyers acting for them, based upon the list drawn up by Mr Rogers, and that they had determined an appropriate interest factor, to which she was entitled. Mrs Rogers claimed that she was unaware of any outstanding liability of her husband to the plaintiff arising from their litigation. 262 The plaintiff contends that the intention of the defendants has to be seen in light of the revival of the litigation in1993, the refusal of Abadee J in March 1994 to grant an adjournment of the hearing in April, and the severing of the cross-claim from the claim by Sully J in the same month. It is submitted by the plaintiff that it was the certainty of her claim being heard and the probability of her success that caused the steps to be taken to put Mr Rogers's interest in the property beyond her reach. She notes that Mr Rogers was advised that he could not receive legal aid for the further proceedings. Mr McLean in a letter to the Legal Aid Commission indicated that the revival of the litigation had "stirred up a hornet's nest" between the defendants. 263 The plaintiff submits that Mr Rogers would have believed that there was a likelihood that she would succeed in her claims, his earlier success having been overturned by the Court of Appeal. The plaintiff contends that I should reject the suggestion by Mrs Rogers that she was unaware of the revival of the litigation and points to, what she asserts to be, conflicting evidence between the defendants on this matter. She also submits that I should reject the evidence of the defendants that the impetus for the 1994 transactions came from Mrs Rogers and not her husband. The plaintiff draws attention to a threat by Mr Rogers in September 1994 that he would apply for bankruptcy when he received assessments of costs from the proceedings before Sully J. Conclusions (A) Facts (a) generally 264 On many occasions throughout her submissions the plaintiff asks the Court to reject particular evidence of the defendants on the basis that there is nothing to support it or that it is unsubstantiated by the evidence. Yet much of the plaintiff's submissions amounts to little more than conjecture or speculation by her based upon an assumption that the defendants' evidence is false. This is to misapply the onus of proof. Generally speaking it is for the plaintiff to prove to me that the inference of fraud by the defendants arises from the evidence, and it is not for the defendants to prove that any part of their evidence is true or to justify their actions. This is particularly so when many of the matters being ventilated occurred many years before any issue arose as to the propriety of their financial dealings. It would be grossly unfair to proceed, as the plaintiff does, by requiring that the defendants prove every statement they make about their financial arrangements as far back as 1981. Of course the evidence may lead to such disinclination by the Court to accept any evidence given by the defendants that the Court would not act upon it unless it was supported by hard evidence. But that is not an approach that is justified on the material before me. 265 The plaintiff relied upon the failure of the defendants to make timely production of documents. There was considerable cross-examination and argument concerning the circumstances in which the defendants produced documents during the course of these proceedings. It is the plaintiff's contention that the defendants and their legal representatives have wilfully failed to produce documents when requested to do so or at all. Criticism is made that certain documents were not produced until the hearing of evidence before me. I acknowledge that in some circumstances inferences may be drawn against a party who fails to produce documents when requested to do so. But I am not persuaded that in the particular circumstances of the present case I should act on the basis that, because the defendants have been unable to produce certain documents or records, either they do not exist or the defendants are lying about the transaction that might be proved by the documents or records if they were produced. In particular any inference which might have been drawn as against the authenticity of the 1981 and 1983 indemnity documents from the failure to produce them in 1994, is inconsistent with what I believe is the objective evidence in support of their being genuine. 266 Much of the plaintiff's reasoning in her submissions depends upon a strict legal approach being taken to the way the defendants conducted their financial affairs and then undertaking an accounting exercise to determine their interest and rights viz a viz one another. While such a course might be appropriate if there were a dispute between the defendants as to their legal or equitable entitlements in jointly owned property, it is not appropriate where the dispute arises between the defendants and a stranger to their arrangements. In any event the plaintiff appears to undertake her accounting exercise totally disregarding any intentions or understanding the defendants had as to their financial arrangements or the effect of them on their interests and entitlements to joint property. (b) the partnership agreement 267 An example of this approach taken by the plaintiff arises from the partnership agreement entered into between the defendants with respect to the operation of Te Mata. The plaintiff did not assert that the agreement was fraudulent and she positively denied such an allegation in opening her case. This is notwithstanding that in her written submissions of 29 January 2002 she states that the partnership agreement was a step taken by Mr Rogers in seeking to divest himself of his Interest in Te Mata. In her submissions of November 1994 the plaintiff suggests that the variations of the agreement may have been intended to be "the precursor of the present alienation of property" to defeat her rights. No such suggestion was ever made during the hearing and these allegations were not put to the defendants during the hearing. 268 Both defendants gave evidence that they did not really understand the terms of the partnership agreement. Mr Rogers insisted that it was arranged by his accountant in order to minimise taxation. The variations were made on advice of the accountant in order to represent the contributions made to the family income by Mrs Rogers and provide her with taxation relief. The plaintiff appeared to have accepted that this was the situation and that there was no other purpose of the partnership agreement or the variations to it. 269 However, the plaintiff raised a number of, what I would call, technical issues relating to the validity of the partnership in the January 2003 submissions, even going so far as to assert that Mr Rogers owned the whole of Te Mata despite the fact that the defendants were registered as joint tenants. Yet it is clear that the defendants considered that the partnership agreement did not affect their particular rights and interests in Te Mata despite the terms of the agreement. Nor did they consider that the variations had any effect upon their interests in the property. The effect of the agreement, so far as they were concerned, was to enable Mrs Rogers some tax relief as the partnership ran at a loss. 270 I am not prepared to treat the agreement as having any bearing upon the rights and entitlements between the defendants so far as the plaintiff is concerned. Whatever might be the situation on a strict "accounting between the parties", to use the plaintiff's words, it has nothing to do with whether the defendants acted fraudulently in respect of the 1994 transactions. I do not believe that the variations of the agreement had anything at all to do with the litigation between Mr Rogers and the plaintiff and it was never suggested to the defendants that they did. (c) credit of the defendants 271 On one view it is unnecessary for me to decide positively on the credit of the defendants because of the nature of the proceedings and the issues raised. I might not be satisfied that they are telling the truth in evidence before me yet not be prepared to find to the necessary standard that the documents relied upon by the plaintiff give rise to the inference of fraudulent conduct on the part of the defendants. It is not a case where I am necessarily required to choose between competing versions of the facts. It is for the plaintiff to persuade me that I should not believe the account given by the defendants for the transactions entered into by them in 1994 in relation to Mr Rogers's interest in Te Mata. 272 However, I have formed a firm view of the credit of one of the defendants and I believe it would be unfair if I did not indicate that view. Mrs Rogers favourably impressed me as a witness in these proceedings and generally I thought that she was attempting to tell me the truth and explain as best she could the various financial transactions in which she was involved. I had the opportunity to see her in evidence over a number of days and she was subject to the most testing and prolonged cross-examination, often repetitive, and at times provocative. Yet she always appeared to be polite, patient and co-operative. As I indicated earlier, I would have been surprised had there not been inconsistencies, gaps and uncertainties in the evidence of both defendants given the nature of the matters to which they were required to address themselves. 273 One matter that seemed to me to indicate that Mrs Rogers was attempting to tell the truth relates to the $40,000 paid by Mr Rogers to bring about the settlement of Mrs Rogers's Northbridge premises. Mr Rogers insisted that it was a gift made by him and never repaid by his wife. Mrs Rogers, however, maintained throughout her evidence that she considered it was a loan and that she repaid him, although she could not indicate how or when she did so. It seems to me that it would have advanced the defendants' case had Mrs Rogers accepted that it was a gift, but she was not prepared to do so, despite her difficulties in explaining how it was that she repaid the money. Mrs Rogers's stance enabled the plaintiff to submit that any payments made by Mrs Rogers on account of her husband's legal fees was merely a repayment of a loan. I doubt that Mrs Rogers was correct in her evidence that she repaid Mr Rogers this sum. 274 The plaintiff particularly relies upon the evidence of Mrs Rogers as to the filling out of a cheque butt to indicate that $10,000 had been placed in account from which a cheque for $7,350 to Mr Twigg had been drawn as proving that Mrs Rogers had fabricated evidence and lied to the court. I do not come to that conclusion. I believe that it was an error made by Mrs Rogers because she believed that she had funded the payments to Mr Twigg as a result of calls made by him to her mother and herself. Her belief was that it was a result of Mr Twigg's insistence that he be paid that she sold her Killara unit and as a result had funded the payment although she could not recall the account from which the payment was made. The material surrounding the making of this cheque does not disturb the view I had taken generally of Mrs Rogers and her credibility, although clearly her reliability as to events occurring years before may be called into question from time to time. I am not persuaded that she did not fund that payment in some way that can no longer be ascertained. 275 I have already indicated that I accept Mrs Rogers's evidence as to the annotations in the various passbooks and the reasons why I believe her evidence is supported in that regard. 276 The plaintiff has submitted that, in forming any view of Mrs Rogers's credit, I should take into account what the plaintiff alleges was false evidence given by, and on behalf of, Mrs Rogers in proceedings before Justice Bruce in November 1994. This material arises in respect of an application for adjournment based upon what was said to have been the poor health of Mrs Rogers on the relevant days. It is alleged that Mr Oliver, Mrs Rogers's solicitor, gave false evidence to this Court about his client's state of health and Mrs Rogers swore a false statutory declaration. In particular, it is submitted that the activities of Mrs Rogers upon the day in question, which included seeing her doctor, a dentist and a physiotherapist, were inconsistent with sworn evidence given that she was unfit to attend Court. I am asked to assess this particular evidence in light of the whole of the circumstances surrounding Mrs Rogers's illness and the various proceedings in this Court at that time. I have considered that material but it does not affect my view of the evidence given by Mrs Rogers before me which I believe is supported to a significant extent by objective material. 277 I cannot express the same confidence in the reliability of the evidence of Mr Rogers where it stands alone, unsupported by the evidence of his wife or the objective evidence. This is not to suggest that I found that he was positively lying to the Court, even though the plaintiff strongly pressed me to make that finding. Nor do I entertain such doubts about his evidence generally that I could not rely upon anything that he said. But there were significant inconsistent answers given by him not only between his evidence before me and that given by him before Sperling J, but also during his evidence in the present proceedings. Whether his apparent confusion and lack of understanding at times was genuine or artifice is difficult for me to determine. If genuine, then it explains some of the evidence in the case such as the wording of the indemnities and the contents of his list. However, I fully appreciate the atmosphere in which his cross-examination occurred and, as I indicated earlier, I cannot disregard, in making my assessment of him as a witness, the nature of the relationship between him and the plaintiff and the fact that it was the plaintiff herself who cross-examined him as she had done before Sperling J. I will deal with his list and his entries on the cheque butt for $6,000 shortly, but even taking into account some doubts about the reliability of his evidence, I am not persuaded that he acted fraudulently in that regard or otherwise in connection with the transactions which are at the heart of these proceedings 278 Contrary to the submissions made by the plaintiff, I believe that generally the objective material presented supported the evidence given by the defendants rather than revealed its falsity. The two indemnity documents are the best examples of that being so. (d) the indemnity agreements 279 As I have already indicated, I am not persuaded that these two documents are forgeries. Rather, I am satisfied that they are genuine documents. The plaintiff's contention that the defendants had in some way fabricated those documents by using a typewriter of the period obtained for that purpose is fanciful in light of the findings of Mr Holland, particularly having regard to the evidence as to the date of manufacture of the ink on the 1983 document. I do not share the plaintiff's scepticism of the fact that the same paper was used for both documents and was also found with the typewriter many years later. That fact does not seem to me to be outside the scope of what might be expected from common experience particularly where the paper was found in the typewriter's case. 280 The plaintiff raised procedural matters to argue that the Court should draw inferences and conclusions that would support a finding that the documents are not genuine. She argued that, as the typewriter was not produced until late in the proceedings and after Mrs Rogers had given evidence, I should infer that she did not own it at the relevant time. Further, as the two indemnity documents were not produced until 1995 notwithstanding a notice to produce issued by the plaintiff, I should conclude that they did not exist before that date. I appreciate that inferences are available from a failure to produce documents and the application of the rule in Jones v Dunkel. But I am not prepared in this case to raise those procedural inferences to a level where they could displace what seems to me to be the overwhelming evidence derived from the actual documents themselves. 281 The plaintiff relies upon the fact that neither of the indemnity documents is mentioned in the 1994 deed or mortgage. But I do not believe that is a matter of any great moment. The 1994 documents were drawn by the solicitors for the defendants and it was a matter for them whether they mentioned the documents or not, presuming that they knew of their contents at that time. But the plaintiff has always asserted that the fraudulent scheme was concocted in 1993 or 1994 in answer to the threat to Mr Rogers posed by the revived litigation. She has suggested that their respective legal advisers assisted the defendants in putting the scheme into operation. If, as was the plaintiff's case throughout the hearing, the indemnity documents were created at that time in order to provide evidence of the antecedent agreement, one would expect to find them mentioned prominently in the 1994 documents, rather than, as is the case, being referred to obliquely in correspondence between the defendants and their solicitors. The failure to mention these documents in the 1994 documents seems to me to be more consistent with the fact that they existed but were not in the possession of the solicitors rather than that they were fabricated at that time. 282 In her submissions of 13 September 2002, the plaintiff contends that the two documents were prepared after the 1994 transactions, possibly in 1995 when they were first produced. That was not the allegation she made throughout the hearing. But be that as it may, I cannot understand why the documents would be manufactured in 1995 or why they would take the form that they do if that is when they were created. As the plaintiff points out in her submissions, on their face the documents do not have the purpose assigned to them by the defendants. There is nothing in them that could be "invoked" by Mrs Rogers to "lock in" or "formalise" the debt created by them. Why then would they be manufactured in 1993 or later in that form for the sole purpose of evidencing an antecedent agreement to support the acknowledgement of debt contained in the 1994 Deed? 283 What the documents do evidence, whatever might be their legal, or purported legal effect, is that there was in both 1981 and 1983, an understanding that Mrs Rogers might pay some at least of Mr Rogers's legal fees in respect of the litigation between him and Ms Wentworth, that she would be entitled to interest on amounts paid by her, and that Mr Rogers would reduce his share in any joint property accordingly. I can understand how the documents might be viewed by the defendants as a promise made by Mr Rogers to repay amounts expended by Mrs Rogers on his legal fees with a guarantee against Mr Rogers's interest in their joint property. The 1983 document was clearly intended to further protect Mrs Rogers's interest in Te Mata as against a claim made by the Legal Aid Commission. 284 Whether Mrs Rogers could have enforced the agreements to achieve the result brought about by the 1994 transactions does not seem to me to be the point. The plaintiff has to show that there was never any agreement before 1993 to the effect that Mrs Rogers would pay Mr Rogers's legal fees on condition that she recover the payments from their joint property. In my view the 1981 and 1983 documents prove that there was such an agreement. The fact that there was no joint property held in 1981 at the date the document was signed does not alter the position. At the date of the document Mr Rogers was intending to purchase Te Mata as the family home and it is clear that the document intended to refer to that property. 285 There is nothing in the evidence as to the financial arrangements of the defendants that would require me to conclude that, as against the objective evidence, the two documents could not have been created in 1981 and 1983. In 1981 Mrs Rogers had at least the expectation of funds from which she could pay Mr Rogers's legal expenses. The first claimed payment was not until December 1982. As I indicted earlier in this judgment, it does not seem to me to be unreasonable that Mr Rogers would wish to support the family from his own funds and future income, so far as he was able to do so, including the purchase of the property that was to become the family home, and that he did not wish to burden his new family with what were his commitments arising from his previous marriage. His wish to use his own funds for the benefit of his family might explain why he took them on a holiday to Fiji even though he was concerned at having to find the money to pay legal fees to the plaintiff. Nor does it seem beyond belief that Mrs Rogers would be prepared to assist him in regard to those expenses from her own income by way of a loan. In such a situation I can well understand Mr Rogers, when creating the 1981 document, believing that it would fairly address the situation. 286 I should note that throughout the plaintiff's submissions matters are relied upon which were never put to the defendants during cross-examination nor raised in the pleadings. To take but one example, the plaintiff submits that the Court should find that the death duties payable on the estate inherited by Mrs Rogers in 1981 were paid by Mr Rogers and that she was in debt to him for this amount at the time she purportedly agreed to pay his legal fees. It was even suggested in her submissions that Mr Rogers must have paid the burial fees of the deceased and that this payment also gave rise to a debt owed by Mrs Rogers to her husband. This was not a matter investigated at any time throughout the hearing or even hinted at before the written submissions were filed. (e) the making of Mr Rogers's list 287 I believe that the list was compiled in 1993 and that Mr Rogers sought to ascertain the payments made by his wife on his behalf pursuant to their agreement from records he then had available. I have already indicated that, contrary to the plaintiff's submission, I find that such an agreement did exist from 1981 and I believe that generally his evidence in regard to the making of the list should be accepted or at least it has not been shown to be false. 288 The plaintiff put to Mrs Rogers that she helped her husband to compile the list, going through the documents with him as he did so. As I understood the plaintiff's allegations, it was at about the time of the making of the list that various documents were forged including the notations on bank records and, in particular, the cheque butt for $6,000, on which Mr Rogers made alterations to indicate that it related to a repayment to Mr Wentworth. Mrs Rogers denied that allegation and I have little doubt that she was telling the truth. I cannot for one moment imagine Mrs Rogers making the errors that her husband did in compiling that list. Certainly she would not have been mistaken about the cheque butt for $6,000. Nor, if she was present at the time, does it make any sense for Mr Rogers to have filled in the particulars on the cheque butt when it is clear that Mrs Rogers filled in the amount appearing on it. I am not persuaded that the defendants' accounts of the making of the list should be rejected. Mrs Rogers said that she did not review the details of the list before giving it to her solicitor and I do not see why she should be disbelieved in that evidence. 289 The plaintiff maintains that the list itself is a fraudulent one. Her basic submission is that there were no payments made by Mrs Rogers on behalf of her husband because there was no agreement that she should do so. I have already indicated my view that such an agreement did exist from 1981 onwards. In particular the plaintiff submits that I should treat the payments listed as being made out of Mr Rogers's funds. I reject that submission. I am not persuaded that Mrs Rogers lacked the financial capacity to fund the payments or that she did not do so. Counsel for Mrs Rogers sets out in his written submissions a comparison of the income of the two defendants and which he contends shows that Mrs Rogers was better able to make the payments than her husband from 1983 onwards. Even allowing for two matters of correction with regards to amounts received by Mr Rogers and not disclosed in his tax return, I believe the submission is a valid one. I do not intend to set out the table in this judgment because I do not have to make such a positive finding. 290 There is within the list a sum of $14,000 shown which was said to be the balance due to Henry Davis York under the 1990 agreement between that firm and Mr Rogers. Although that agreement did not involve Mrs Rogers, except perhaps as guarantor, the evidence was that she had undertaken to make the repayments. As it happens that amount it still outstanding. But I am concerned with the legitimacy of the list as at 1993. There was nothing before me to show that at that time the defendants did not intend to make further payments under that agreement. The fact that they did not do so and that Henry Davis York has not apparently sought to enforce the agreement is of no consequence to these proceedings. 291 The list includes the amount of $30,000, being the State Bank loan. This is a highly controversial issue. There is no doubt that this amount was paid directly to Henry Davis York, apparently for payment of barrister's fees. The defendants' evidence was that Mrs Rogers serviced this loan and it was treated as part of her commitment to pay her husband's legal fees. Mr Rogers repaid almost $10,000 and this is acknowledged on the list. But the list does not take into account that payments of $5,000 (the MacCallum gift) and $2,450 (the balance of the loan from Mr Wentworth) were made in reduction of the loan in August 1985. But this seems to me to have been an oversight by Mr Rogers. By 1990 the loan account was for $20,000 and it seems that money was redrawn from the account when needed subject to the limit of the loan. The defendants' evidence is that this was used to pay legal fees and not general household expenses and I do not see why I should reject that evidence. I am not satisfied that the amount of the loan was added fraudulently to the list or that it could not be regarded as money which was, or would be, paid by Mrs Rogers and, therefore, owed to her under the agreement. 292 While there are some doubtful entries in the list, at least in light of the material presented before me, I am not persuaded that the list was prepared fraudulently. I am certainly not persuaded to any degree that the payments attributed to Mrs Rogers were not made by her within the agreement that the defendants had reached in 1981. The payment of $7,350 to Mr Twigg is somewhat problematic. The records indicate that it was paid from a temporary overdraft account and not directly from funds supplied by Mrs Rogers. But I am not persuaded that I should reject her account that she paid that amount from the sale of her Killara property even though she could not produce records to support her. At least I am not persuaded that I should find that the defendants did not believe at the time the list was prepared that Mrs Rogers had funded the payment. 293 Clearly there is an error in the reference to the cheque butt for the payment of $6,000 to Mr Wentworth. As I have already indicated, I do not believe that Mrs Rogers was a party to the additions to that cheque butt. Mr Rogers has admitted that he altered the document believing that it might be necessary to justify the matters on the list in some future proceedings. He was never asked why it was he had that belief or what proceedings he had in mind. One could draw the inference that, given the history of the litigation between him and the plaintiff, he would have reasonably suspected that any act done by him or his wife that might in some way impact upon that litigation or what Ms Wentworth saw as her interests arising from it would itself be subject to proceedings brought by her. Such has proved to be the case. But I am far from satisfied that the additions to the cheque butt were made fraudulently in the sense that, at the time of the alteration, Mr Rogers knew that the cheque butt did not relate to the payment to Mr Wentworth or that the payment to Mr Wentworth was never made. I believe it is likely that Mr Rogers simply mistook that cheque butt as referring to the payment and, having done, so identified it. 294 The plaintiff makes much in her written submissions of the fact that Mr Rogers was claiming that the payments made on her behalf amounted to some $45,000 yet the final debt was $130,000. The claim for payments made by her was set out in Annexure C to her affidavit. However, Mrs Rogers maintained that the $45,000 was only part of the money she had paid on her husband's behalf. Further, the 1981 indemnity document clearly indicated that interest would be due on any amounts paid by Mrs Rogers. (f) the reason for making the list 295 It is the plaintiff's case that the revival of proceedings caused the defendants to fear that she would be successful and spurred them to make the arrangements designed to put Te Mata beyond her reach. Contrary to the submissions made by the plaintiff, there does not seem to me to be anything in the history of the matters up to the end of 1993 that would lead Mr Rogers or his wife to have any particular fear that Ms Wentworth would be successful in her claims and which might panic them to action. Mr Rogers had been acquitted at trial, and he had succeeded before Mr Justice Maxwell and a jury receiving a very substantial award of damages on his cross-claim. True it was that that verdict had been set aside by the Court of Appeal because of errors by the trial judge in relation to evidence sought to be tendered by the plaintiff to rebut an allegation of recent fabrication by her of the sexual assaults. But I do not believe that there is anything in the judgment that would necessarily lead Mr Rogers to the view that the outcome of a further hearing would go against him. It was submitted by the plaintiff that Mr Rogers and his wife had a belief, prior to 1993, that Ms Wentworth would not seek to recommence her action. But that was never put to either of the defendants and such a belief would be ill founded indeed on the history of the litigation up until that time. I can see nothing in the Court of Appeal's judgment that would result in a difference in the defendants' attitude to Ms Wentworth's litigation in 1993 than there had been at the commencement of the litigation or before the trial in 1985. I do not believe that prior to 1993 there is any suggestion of the defendants taking action to protect their assets from the plaintiff and none was suggested to them during the hearing. 296 Mrs Rogers gave evidence that she was unaware during October and November 1993 of the revival of the proceedings as it was not important to her at the time. She said that she was unaware of the television programme until she viewed a tape of it about a week and a half after it was aired. Her evidence was that she asked Mr Rogers to prepare the list because she was concerned that "we had not made any headway financially" notwithstanding that she had made "quite good money". Her evidence was that in September 1993 she and her husband were going through a difficult patch in their marriage. This is what she understood to be a reference, in a solicitor's letter, to there being "a hornet's nest" at the time. She said that because of her personal situation she wished to know the extent of her husband's indebtedness to her. Her evidence was that, when she requested the making of the list, she was not concerned at securing the loan, but she was when she saw the list on her return from holidays and was considering separating from him. It was then that she raised the existence of the indemnity documents and what she understood to be her husband's promise to repay her. She thought that she might be repaid the $45,000 she was owed from the sale of Lot 72, the "bottom paddock". 297 The plaintiff submits that I should disbelieve the evidence of Mrs Rogers that she was unaware and uninterested in the litigation involving her husband. Mrs Rogers was to be a witness in the cross-claim, she had faxed a letter to the Court on behalf of Mr Rogers concerned with the call-over of the matter in 1993, and there was correspondence between her solicitor, Mr Oliver, and Mr MacLean in September 1993 about the position of their respective clients in light of the revival of the proceedings. 298 I have already indicated that I formed the view during her evidence that Mrs Rogers was endeavouring to be an honest witness. I still hold that view having read and in part re-read the transcript. I recall her evidence vividly. I accept her account in respect of the indemnities, and it is supported from the objective evidence. I accept her account of the notations in the bankbooks, for reasons that I have given. I accept her account as to the circumstances as to the making of the list in October 1993: the allegation that she and Mr Rogers acted together in that enterprise, including fraudulently filling in the cheque butt for $6,000, is absurd in my view. 299 Why then should l disbelieve her account as to her motivation in having the list prepared and then in seeking to have some action taken to have her debt repaid or secured? The timing of this activity and the pending revival of the litigation clearly is a significant matter that has to be taken into account. As I have indicated, the plaintiff relies strongly upon this coincidence to contend that the 1994 activity was fraudulent. But Mrs Rogers's evidence was that she was not concerned about the litigation with Ms Wentworth at that time. She stated that in October 1993 she was, for other reasons, thinking of leaving her husband. As I have already indicated, I do not believe that the defendants must have seen the re-activation of the litigation as particularly threatening, given the history of the matter. Before that time Mr Rogers had generally been successful, although clearly the reversal of the verdict entered by Maxwell J was a setback. There is nothing in the correspondence between the legal representatives of the defendants leading up to the transactions in 1994 that drives me to the conclusion that Mrs Rogers's account should not be believed. The fact that Mr Rogers's solicitor in a letter to the Legal Aid Commission wrote that his client had told him that there was "some degree of estrangement …..precipitated by the revival of Miss Wentworth's action" does not lead me to reject Mrs Rogers's evidence that this was not the case. Mr Rogers might have taken quite a different view about the causes of the domestic disharmony at the time than might his wife. In any event in that same letter Mr MacLean, indicated his view that the defence was "in a sense a walk up start". 300 Even if it were the case that the list had been prepared on the basis that the recommencement of proceedings by the plaintiff sparked the defendants into action to preserve Mrs Rogers's position, it does not in my opinion necessarily follow that the preparation of the list and the consequential transactions with respect to Te Mata were fraudulent. There was a suggestion in a letter from the solicitors for Mr Rogers to the Legal Aid Commission in October 1993 that Mrs Rogers had demanded that her husband "put his affairs in order against the possibility that Miss Wentworth might succeed in her proceedings". Mrs Rogers denied that this statement had come from her or represented her instructions to her husband, and I am prepared to accept her on that matter. But even if she did give this instruction, it does not follow that either she or Mr Rogers acted fraudulently in taking that course. I will deal with this matter shortly when I consider s 37A of the Conveyancing Act. (g) preparation of the deed and mortgage 301 The plaintiff contends that the defendants have been untruthful as to the circumstances in which the deed and mortgage were prepared in 1994. There are a number of instances where the plaintiff asserts that the evidence of a defendant is false simply because the defendant states that he or she did not tell his or her solicitor a matter which is contained in a letter written by the solicitor. The plaintiff seems to believe that it should be supposed that everything a solicitor writes on behalf of his client comes from the mouth of his client or represents the client's instructions to him. But a solicitor is not prohibited from making assumptions, drawing inferences, reaching conclusions or even "reading between the lines" when considering what he is told or instructed by a client. Nor is a solicitor prevented from expressing such matters in communications with a solicitor acting for another client, at least not on an informal basis or in an uncontentious matter, even though it may be imprudent on the part of the solicitor to do so. And, like all human beings, a solicitor is not immune from making errors in that regard. 302 Mr MacLean wrote on 19 January 1994 in reference to a telephone conversation with Mr Oliver: " Nevertheless I note your advices that Mrs Rogers is not prepared to further hazard her finances either by way of contributing to the legal costs or by way of leaving her assets at risk ". It does not follow, in my opinion, that the Court has to act on the basis that the views attributed to Mrs Rogers were expressed by her to Mr Oliver in those words or otherwise. This statement may only represent a conclusion being drawn by Mr MacLean about something Mr Oliver told him. Certainly, the Court should not conclude that Mrs Rogers is lying when she denies that she gave Mr Oliver those precise instructions. Yet this is what the plaintiff asks the Court to conclude. 303 Mrs Rogers gave evidence that her only instructions to Mr Oliver was the note she wrote, Exhibit L, together with the list drawn up by Mr Rogers and a bundle of documents, the contents of which she can no longer recall. She denied seeing Mr MacLean's letter of 19 January or Mr Oliver's letter of 18 February before she signed the deed and mortgage. I am asked to reject that evidence, but I am not persuaded that I should do so. 304 It is clear from Exhibit L that Mrs Rogers had little understanding of what was to occur although she understood that there had to be a change in the title to the property in order to secure her loan. She gave evidence that she believed there would be some formal document such as a mortgage prepared and that there needed to be a change in the title of the property. What understanding she had about the arrangements came from Mr Rogers and his understanding came from discussions he had with Mr MacLean. It is clear that Mr Oliver, acting on the note, did contact Mr MacLean and they discussed the matter. It is a reasonable inference that Mr MacLean would have made his suggestions as to what steps might be taken notwithstanding the formality of the letter of 19 January. I cannot see why Mr Oliver would necessarily have to speak to Mrs Rogers again after receiving Exhibit L in order to produce the letter of 18 February or that, if he did not do so, he was acting without instructions by producing the Deed and the Mortgage for Mrs Rogers to sign. 305 The plaintiff alleges the following in respect of the preparation of the deed and mortgage: Ex L was not prepared in 1993 nor was it given to Mr Oliver at that time; Mr Oliver's letter of 18 February 1994 was not written on that date; a handwritten note of Mr Oliver dated 6 January 1994 apparently referring to the indemnity agreements but with the dates "8/7/81" and "13/7/83" is evidence of an intention to fabricate indemnity agreements bearing those dates; the letter of Mr MacLean dated 19 January 1994 is a forgery having a different typeface than any other document on that firm's file; other letters produced from that firm are forgeries because they have a different type face or because of inconsistent "computer generated numbers". Yet there is no allegation in the amended statement of claim, filed on 4 April 2002 the fifteenth hearing day, of a conspiracy between the defendants and their solicitors to defraud the plaintiff and none of these specific allegations are particularised. Rather the particulars assert facts to the contrary. For example, the particulars in respect of allegation 43(j) assert that Mrs Rogers gave her solicitor instructions on 30 November 1983 an assertion that is contrary to the first allegation made above. In any event, there is no evidentiary basis to support these allegations. 306 The plaintiff relies upon a comparison of the chronology of the proceedings in this Court with a chronology of the actions taken in respect of the preparation of the documents and argues that the one must have influenced the other. I do not see why, on the plaintiff's arguments, certain documents had to be prepared or signed or the ultimate agreement put into place simply because of some decision made in the course of the proceedings. I acknowledge that there is some temporal coincidence between the Court proceedings and the arrangements involving Te Mata, but I do not believe that these should dictate that the preparation of the documents was fraudulent. 307 In her written submissions of 20 September 2002, the plaintiff constructs a scenario to fit with the chronology of the court proceedings that is based upon speculation rather than inference and is without any real evidence to support it. In any event it assumes findings of fact that I am not prepared to make, such as the effect of the revived litigation upon Mrs Rogers's equanimity or an expectation on the part of the defendants that the plaintiff would be successful in her litigation. She also draws upon assertions that were denied by the defendants and for which there is no evidentiary support, such as a letter being written by Mrs Rogers to the Court. Further, she states as a fact allegations that were never put to the defendants or raised during the hearing, for example that the defendants were going to use the proceeds of Lot 71, in part at least, to fund the future litigation, that Mrs Rogers "insisted on being compensated for the fact that there was a charge of L[egal] A[id] C[omission] for $132,000 over Lot 71" and that the transfers and mortgages were only to be executed if Mr Rogers could avoid the revival of the litigation. 308 I am not persuaded that there is anything in the circumstances surrounding the instructions given by the defendants to their solicitors or otherwise in the preparation of the deed and mortgage that should lead me to disbelieve the evidence of the defendants in that regard or to find that the arrangements were fraudulent. (h) subsequent conduct of the defendants 309 The plaintiff relies upon the conduct of the defendants in seeking to have the current proceedings frustrated by adjournment applications, failures to comply with orders for production and the like as showing that the fraudulent conduct of the defendants in 1993 and 1994 has continued to the present. It was put to the defendants that in 1994 they sought to frustrate the plaintiff of any entitlement to seek satisfaction against Mr Rogers's interests in Te Mata and they have continued to do so by the conduct of these proceedings. 310 Having regard to the history of the litigation between the parties, it comes as no surprise to me that there have been delays, adjournment applications and disputes about every conceivable aspect of the on-going litigation, including the present proceedings. I would not be prepared to draw any conclusion or inference arising from the conduct of the proceedings by either side. No doubt much of what has occurred has been the result of advice given to one or other of the defendants by their legal advisers. In any event, it does not follow that, simply because a party may endeavour to delay the resolution of a dispute before the court, the party believes that it has no merit or that the other party must succeed. 311 I have considered other facts and circumstances arising after the 1994 transactions were completed and which are relied upon by the plaintiff as part of the material that proves that the documents were fraudulent. However, they do not, to my mind, throw any light upon the questions or issues raised in these proceedings. In particular, they do not cast any doubt upon the findings I have made or my conclusions as to the conduct of the defendants. In my view the plaintiff's case flounders on documents and transactions which I believe are genuine. (i) summary of factual findings 312 The plaintiff has failed to satisfy me that the defendants entered into the fraudulent scheme that she set out to prove. I am satisfied that there was an agreement in place from 1981 to the effect that Mrs Rogers's interests in Te Mata would not be jeopardised by the cost to Mr Rogers of the litigation involving Ms Wentworth. In 1981 there was an understanding between the defendants that Mrs Rogers was not going to be disadvantaged by the costs of litigation involving Ms Wentworth. It was part of that understanding that, if Mrs Rogers expended her funds in paying legal fees for her husband, she would be recompensed for those payments with interest and, if necessary, out of Mr Rogers's interest in the family property, Te Mata. 313 I am satisfied that after 1981 Mrs Rogers took on the responsibility for the payments of her husband's legal fees either by funding payments directly or by servicing loans taken out to pay them. There was an agreement that Mr Rogers's income would generally be expended in maintaining the family and Mrs Rogers would fund the payment of legal costs and associated expenses. I am not satisfied that Mrs Rogers lacked the funds or expectation of funds to either make or honour that agreement. 314 In 1983 that understanding was extended to ensuring that Mrs Rogers was not to be prejudiced by Mr Rogers's liability to the Legal Aid Commission. 315 It may have been the case that at any given time prior to 1993 the defendants had not been concerned to determine how Mrs Rogers's interests would be protected and no occasion had arisen to give effect to the 1981 understanding. It may be that they never contemplated the occasion for a reckoning and the necessity of some action being taken to repay Mrs Rogers until 1993. But I am satisfied that it was always the intention of the defendants that, at the end of the day, Mrs Rogers was not going to be out of pocket because of Mr Rogers's involvement in litigation with the plaintiff. 316 I am satisfied that Mr Rogers was in debt to his wife in 1993 for monies paid out in connection with the payment of legal fees arising from his litigation involving the plaintiff. I am unsure of the actual extent of that indebtedness because of the poor accounting practices of the defendants and the passage of time between the understanding and the determination of the amount owing. But I am not persuaded that in 1993, when he prepared the list, Mr Rogers was other than negligent in his determination of the amount of that debt. In other words, I am not satisfied that the preparation of that list was fraudulent in the sense that Mr Rogers knew that his wife was not entitled to repayment of the money specified in the list. Nor was the acknowledgment of debt or the consequential mortgage fraudulent in that sense. 317 I am satisfied that Mrs Rogers was not a party to the making of the 1993 list. I am not persuaded that, insofar as the list contained errors, that Mrs Rogers was aware of those errors or believed that she was not entitled to the amount of money set out in the list and which was later the subject of the acknowledgment of debt and the mortgage. I am satisfied that the list was made at the request of Mrs Rogers and that when she received it she sought to secure both her past and future payments in accordance with what she believed was promised under the 1981 agreement. 318 I am not persuaded that there was any impropriety in the preparation of the deed and mortgage or that I should reject the evidence of the defendants in that regard. There is no evidence to support any suggestion now made that there was a conspiracy between the defendants and their legal representatives to defraud the plaintiff. (B) The law (a) Fraudulent alienation of property 319 Section 37 A of the Conveyancing Act is as follows: Voluntary alienation to defraud creditors voidable (1) Save as provided in this section, every alienation of property, made whether before or after the commencement of the Conveyancing (Amendment) Act 1930 , with intent to defraud creditors, shall be voidable at the instance of any person thereby prejudiced. (2) This section does not affect the law of bankruptcy for the time being in force. (3) This section does not extend to any estate or interest in property alienated to a purchaser in good faith not having, at the time of the alienation, notice of the intent to defraud creditors. 320 In Freeman v Pope (1870) LR 5 Ch App 536 at 540, in respect of the original statute from which this provision arose, the statute of Elizabeth, Lord Hatherley LC said: "The principle on which the statute of 13 Eliz.c.5 proceeds is this, that persons must be just before they are generous, and that debts must be paid before gifts can be made." 321 The plaintiff relying upon this provision has submitted that the transaction encompassing the deed, transfer and mortgage entered into by the defendants amounted to an alienation of Te Mata, or at least Mr Rogers's interest in that property, with an intention to defraud her, she being then at least a potential creditor of Mr Rogers. The fraudulent intent relied upon is that the defendants knew that there was no debt that could justify the mortgage given to Mrs Rogers and that those transactions amounted in effect to a gift to her in order to put Mr Rogers's interest in the property beyond the reach of the plaintiff. 322 It seems to have been conceded before me that the plaintiff was a creditor for the purposes of 37A albeit that in 1993 she may have been only a potential or prospective creditor pending the resolution of the proceedings ultimately determined before Sully J. This concession is in accordance with the meaning that has been given to the word "creditors" in s 37A, see Kang v Kwan [2002] NSWSC 1187 at [187] - [188]. 323 Counsel for Mrs Rogers has argued that the section has no operation for two reasons: firstly, the section can catch neither the deed nor the transfer, as neither is an "alienation of property" and, secondly, that, as Mrs Rogers was a creditor of Mr Rogers, any alienation of his interest in the property was by way of giving a preference to a creditor and, for that reason alone, there was no intention to defraud creditors within the terms of the section. I do not accept the first of those arguments. 324 "Alienation" is not defined for the purposes of s 37A but has been interpreted as a "parting with property" and includes a "parting with some interest in the property"; Re Cummins; Richardson v Cummins (1951) 15 ABC 185. Barrett J in Green v Schellner [2002] NSWSC 671 treated "alienation" within the terms of the section as synonymous with "transfer" in the analogous Bankruptcy provisions. In In Re Symon: Public Trustee v Symon [1944] SASR 102 at 108 Mayo J said: "Alienation denotes the act or series of acts, of alienating, and takes place whenever the owner of land, or of an interest therein, so acts as to divest himself of his interest or some lesser interest, and to vest the same in another person". 325 In Green v Schellner, above at [28], Barrett J stated: "It is necessary now to say a few words about the meaning of "alienation" in s 37A. It is, in my view, synonymous with "transfer" in the analogous Bankruptcy Act provision, with the result that the following observation of Tamberlin J in Mateo is relevant: "In my view, the 'transfer' in this matter consisted of the whole transaction ranging from the signing of the consent orders on 18 April 2000 through to the completion of the transfer of the interest on or about 10 August 2000. There is no basis on which to isolate the making of the consent orders from the 'transfer' which took place and rely only on the formal instrument of transfer." This is consistent with the approach taken by Hodgson CJ in Eq in Silvera v Savic [(1999) 46 NSWLR 124]: "In my opinion, the 'alienation' in this case was the whole process of obtaining the Local Court order and the consequent transfer; and it is that whole alienation that is made voidable by s 37A." 326 In my opinion the alienation in the present case included the deed, transfer and the mortgage. The purposes of the three documents, taken together, was to achieve the result that Mr Rogers's interest in Te Mata should be subject to a mortgage in favour of his wife for the sum of $130,000. The deed contained an acknowledgment of the debt to which the mortgage related and the transfer of the property effected a change in the nature of the defendants' jointly held interest in the property for the sole purpose of Mr Rogers granting his wife a mortgage over his half interest in the property. The deed contained the terms of the mortgage for repayment of principal and for interest. 327 In any event it has been held that the Court has power under s 37A to take what steps are necessary to void the alienation if it falls within the section. In Silvera v Savic, above, Hodgson CJ in Eq said at [72]: What s 37A says is that the "alienation" is "voidable". In my opinion, when an application is made under s 37A to the Supreme Court, that Court can achieve the effect of avoiding the alienation by such measures as seem appropriate in the particular case…………….. His Honour was of the view that the section permitted him to set aside an order of the Local Court obtained by the defendant fraudulently as a step in bringing about the alienation. 328 The section applies to an alienation made "with intent to defraud creditors". A real intention to defeat or delay creditors must exist if the alienation is to be set aside: Williams v Lloyd; Re Williams (1934) 50 CLR 341 at 372. There must be established actual fraud "that is an actual intention to defeat or defraud creditors": Re Barnes; Ex parte Stapleton [1962] Qd R 231 at 237. But it is not necessary to bring actual proof of the state of mind of the alienor and such an intention may be inferred from all the circumstances of the alienation including its nature, the state of affairs of the alienor at the time of the alienation and the purported justification for it: PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 523. An intent to defraud may be readily inferred where the alienation is by way of gift and there was no consideration passed from the recipient of the property. It may also arise where there was consideration for the alienation but it is less than the true value, although the value of the consideration is only one of the relevant factors to be taken into account. In the present case, although an inference of an intent to defraud might have arisen from the timing of the alienation and the content of the list drawn by Mr Rogers, I am not prepared to draw it in light of the findings I have made. 329 As I have already indicated, I am satisfied that at the relevant time Mrs Rogers was a creditor of her husband for payments made in relation to his legal fees. In effect the alienation of the property achieved by the 1994 transactions was to give Mrs Rogers a preference as a creditor over the plaintiff. It has been generally accepted that a transaction operating to give another creditor preference is not voidable under the section: Middleton v Pollock; Ex parte Elliot [1876] 2 CH D 104 at 108. 330 In Gregg v Bromley [1912] 3 KB 474 the plaintiff in certain proceedings brought against Mr Hay assigned to her husband any benefit she may have derived from certain other litigation in which she was then involved. At the time of the assignment she was in debt to her husband under security of a mortgage over her property. The assignment was made at the request of her husband as further security for her outstanding debts to him and further loans. The proceedings against Mr Hay failed and a costs order was made against the plaintiff. However she was successful in the other proceedings and obtained a sum in damages and for costs. Mr Hay then sought to recover his costs from the damages awarded to the plaintiff but was met by the assignment made by the plaintiff to her husband. It was held that the assignment to the husband was made for good consideration and was not voidable under the statute of Elizabeth. 331 In the Court of Appeal, Vaughan Williams L.J. proceeded on the basis that "mere preference of one creditor over another does not bring the case within the statute of 13 Eliz. c. 5, even though the parties may have been minded to defeat a particular creditor". Fletcher Moulton L.J., who found that the sole purpose of the assignment was a deliberate attempt to prefer the husband to other creditors, stated: "Now it is well settled law that apart from the rules of bankruptcy a person may pay his debts in any order he pleases, and may charge his property as he will as security for paying those debts. The covenous assignments referred to in the 13 Elizabeth are mock assignments whereby in some form or other the assignor reserves some benefit to himself, but an out and out assignment by way of charge to secure an actual existing creditor is not within the class of assignments which are affected by that statute, and, as the facts prove to my satisfaction that this assignment comes under that class, I am satisfied that there is nothing to be made of the suggestion that it was void under the statute of Elizabeth……" Parker J. summarised the position as follows at 492: "………..The question therefore is really a question which reduces itself to this: Does a debtor who gives his creditor security with the intention of preferring him to other creditors or another creditor and consequently defeating or delaying such other creditors or creditor, have an illegal intention within the meaning of the statute? In my opinion it is well decided that he has not, and as far as I can gather no distinction has ever been drawn in the cases between a preference given for fresh security and a preference given without fresh security." 332 This and other cases were considered by Cohen J in Abignano v Wenkart (1998) 9 BPR 16,765 and applied by him. In that case, despite the fact that his Honour found that the transaction, with which he was concerned, being a mortgage of an unencumbered asset to the defendant's company, had been taken to avoid paying a creditor, a person who had obtained a judgment against the defendant in this Court, the transaction fell outside the scope of the section. His Honour was not prepared to find that the mortgage was not given as security for genuine loans made to the defendant by the mortgagee and so, even though the mortgage was given in order "to thwart the prospects of the plaintiffs recovering the amount of their judgment", it amounted to a preference to another creditor and not a voidable alienation under s 37. 333 Glegg v Bromley and Abignano v Wenkart were cited with approval by Young J in Alati v Wei Sheung [2000] NSWSC 601; 34 ASCR 489. His Honour stated that he considered generally correct a submission that it is not acting contrary to that section for a person to prefer to pay some creditors over others, or to cause some creditors to be made into secured creditors, but that the conduct struck down by the section is preferring oneself to the general body of creditors. A similar submission supported by the same authorities is referred to with apparent approval by Hamilton J in Van Tri Huynh v Helleh Holdings Pty Ltd [2001] NSWSC 1162. In Kang v Kwan, above, Santow J referred to both Glegg v Bromley and Abignano v Wenkart when determining that the particular transaction, which he was considering, fell within the ambit of the section rather than being "a mere preference of one creditor over another". 334 The plaintiff submitted that the judgment of Cohen J should not be followed as it is inconsistent with the decision of the Court of Appeal in Harkness v Partnership Pacific Ltd (1997) 41 NSWLR 204, and in particular the judgment of Priestly JA. But that decision was not concerned with s 37A but rather s 122 of the Bankruptcy Act and seems to me to have no bearing upon the present matter. By reason of s 6 of the Bankruptcy Act, there is no need to prove an intent to defraud creditors as a class under s 121 of that Act, as there is under s 37A: PT Garuda Indonesia Ltd v Grellman, above, at 525. Despite the plaintiff's submissions to the contrary, I do not believe that the provisions of the Bankruptcy Act are engaged simply because it was reported that Mr Rogers threatened to "go bankrupt" upon taxation of the plaintiff's costs. 335 On my findings Mrs Rogers was a creditor of Mr Rogers from some time after 1981. There was in 1993 outstanding loans made by her to Mr Rogers in respect of the payment of monies under the 1981 indemnity agreement. The effect of the transactions in 1994 was to give a preference to Mrs Rogers over other unsecured creditors including the plaintiff, who was at least a prospective or future creditor. As I have already indicated, I am not persuaded that I should reject the account given by Mrs Rogers as to the circumstances surrounding the making of the list of payments in 1993 and, therefore, that I should find that it was motivated by the recommencement of the plaintiff's proceedings. It follows, or so it seems to me, that I am not persuaded that the alienation in Mrs Rogers's favour of her husband's interest in Te Mata was performed with an intent to defraud creditors under s 37A. 336 But even if I were persuaded by the timing of the transactions, and statements allegedly made by the defendants to their legal representatives that Mr Rogers at least acted with an intention of giving a preference to Mrs Rogers to ensure that the property was put beyond the reach of the plaintiff, that would not necessarily amount to an intention to defraud creditors under the section, particularly if the preference was given for valuable consideration. 337 In Glegg v Bromley, above at 492 Parker J observed that, in the authorities on the Statute of Elizabeth, it is not always clear whether judges are dealing with the operative part of the statute or with the proviso. This is so when attention is given to the absence or presence of valuable consideration. There is a discussion in that case as to the status of security given for an antecedent debt, that is where there is apparently an absence of consideration moving from the preferred creditor for the giving of security by the debtor. An antecedent debt is not itself valuable consideration supporting an alienation attacked under the section and it was on this basis that the security was set aside in the court below. However, the Court of Appeal held that the additional security provided by the debtor to the creditor, her husband, was given for good consideration where it was the result of pressure brought to bear by the creditor. In such a case, the court will infer further forbearance by the creditor on the giving of the additional security and such forbearance amounts to valuable consideration for the alienation. 338 If it were necessary to consider whether there was valuable consideration given by Mrs Rogers for the mortgage, either to rebut the inference of an intent to defraud creditors or under the proviso of the section, I would find that it existed. The demands made by Mrs Rogers after she obtained the list on returning from overseas was that her debt be repaid from the sale of Lot 72 or secured in some way in accordance with the 1981 agreement. The list referred to both past and future payments by Mrs Rogers and the security was in respect of both classes of payments, that is an antecedent and a future debt. There is nothing to rebut the inference that the giving of security resulted in a forbearance by Mrs Rogers in respect of the antecedent debt and security for further payments. I am not persuaded that she was not a purchaser for value of the interest conveyed to her. 339 Once the plaintiff's allegation of a fraudulent agreement is not made out, there seems to me to be no basis upon which to find, if it were necessary to do so, that Mrs Rogers had notice of the fraudulent intention of her husband. I have indicated that I do not accept that Mrs Rogers was party to the making of the list. I accept her evidence that, when she returned from overseas, she took the list without checking its accuracy against the source documents but relying upon her husband. I would not be persuaded that Mrs Rogers did not fall within the proviso, even if it were necessary to consider it. 340 Clearly I do not find that the transactions in 1994 were a sham whatever meaning might be given to that term. I believe they were what they were intended to be: security for past and future payments made by Mrs Rogers on her husband's behalf. Mr Rogers was intending to mortgage his interest in Te Mata and that is what he did. The transactions have to be considered in the family relationship and it does not seem to me to be significant that there were no terms as to the payment of interest or the repayment of the principal. Although Mr Rogers considered that he had relinquished his interest in Te Mata to his wife, he did not in fact do so: he retained a half share as tenant-in-common. But it does not follow from that fact alone that the arrangement was a voidable alienation. Nor does the mortgage fall within the ambit of the section simply because the property remained the family home and that Mr Rogers was entitled to enjoy occupation of the property, even when his wife left him in the home for a short period because of the matrimonial difficulties. Although this is a matter relied upon by the plaintiff it was never the subject of investigation during the proceedings. I am not satisfied that Mr Rogers retained the benefit of the interest that he purported to transfer to his wife, so giving rise to a fraudulent alienation for the purposes of the section. 341 The plaintiff relied in her additional submissions on the decision of Santow J in Kang v Kwan, a decision to which I have briefly referred. That was a decision based upon its own facts that bore some similarities to the present. The plaintiff had succeeded in proceedings in the District Court for the recovery of money owed to him for work performed on the property of the defendants in those proceedings. However, he was frustrated in recovering his damages and costs because of a mortgage granted by the defendants over their property to a close personal friend and business associate. The mortgage was given as security for a loan purportedly made by the friend to the defendants before the proceedings in the District Court. The defendants also sold the property to a third party and paid part of the proceeds to the friend purportedly in repayment of the loan and transferred the balance out of Australia, leaving nothing from which the plaintiff could have his judgment satisfied. The plaintiff brought proceedings before Santow J to have the mortgage set aside under s 37A. The plaintiff argued that the mortgage was fraudulent and a sham as a result of a conspiracy entered into by the defendants and the friend to prevent him from recovering the money owed to him. The plaintiff sought other relief of an equitable nature including an equitable lien or charge over property later purchased by the defendants' friend. 342 Santow J set aside the mortgage and granted other relief sought by the plaintiff. These orders were based upon his finding that the arrangements between the defendants and the friend were fraudulent and that the mortgage was a sham. He found that the defendants and their friend had entered into a common enterprise to defeat the plaintiff's claims. These were findings of fact made by his Honour on the evidence before him, relying amongst other things, on his impressions of the veracity of the evidence given by the defendants' friend. While, generally speaking, there may have been some similarities in the facts and arguments raised before his Honour and those raised before me, the particular facts and circumstances surrounding the preparation of the mortgages in each case were very different. I do not intend to indicate where the facts differ, as it would be a completely fruitless exercise to do so. But one significant difference was that before Santow J there was no evidence to prove the existence of the loan at the time it was purportedly made. In the present proceedings I have found otherwise by reason of the 1981 and 1983 indemnity agreements. (b) other bases for relief sought 343 Although the plaintiff initially relied upon the inherent jurisdiction of the Court to protect its processes from abuse and s 23 of the Supreme Court Act, those were not matters that loomed large in her submissions except as an aid to the Court setting aside the transactions under s 37A. On behalf of the second defendant it was argued that no cause of action for substantive interference in property rights arose under the Court's inherent jurisdiction. 344 I believe that, having regard to the manner in which the matter was ultimately argued by the plaintiff and in light of the findings that I have made, it is unnecessary to determine whether the Court has jurisdiction to set aside the transactions independently from the power contained in s 37A. The basis for the relief sought under s 37A and under the inherent power was substantially the same: the existence of a fraudulent agreement between the defendants to frustrate Ms Wentworth from obtaining any of the fruits of the proceedings brought by her in this Court. I do not believe it matters whether she is considered to be a potential creditor under s 37A or a litigant under the protection of the Court. I can see no basis upon which the plaintiff would fail in proceedings taken under s 37A, either because there was no proof of a fraudulent intent or because Mrs Rogers fell within the proviso of that section, and yet be entitled to succeed by reason of the exercise of a discretion arising under the inherent jurisdiction of the Court or s 23. The plaintiff did not indicate how such a result might arise on the facts in this case, if at all, and in her final written submissions seemed to accept that s 37A provided her with the relief she sought if the facts as she alleged them to be were made out. In any event, on the findings I have made there would be no basis for the exercise of the Court's inherent jurisdiction. 345 The plaintiff, relying upon the decision in Kang v Kwan, has sought equitable relief similar to that granted by Santow J. That relief was never sought in the summons or the statement of claim. In any event on my findings no such relief is justified, even if there might have been some basis upon which the plaintiff could have sought that relief albeit that she was merely a potential creditor at the time of the transactions. 346 The plaintiff alleged in her amended statement of claim of 4 April 2002 that any money lent by Mrs Rogers to pay her husband's legal fees should be treated as a repayment by her of loans made by him. She relied upon Mr Rogers's payment of $40,000 to help pay for the Dalmeny Road property and she submitted that the Court should find that Mrs Rogers's half interest in Te Mata was a loan to her of half the purchase price notwithstanding that Mr Rogers said it was a gift. This latter submission was made notwithstanding that the plaintiff made no attempt to rebut the presumption of advancement that Mrs Rogers enjoyed in respect of the interest in the property given to her. However, in her submissions of September 2002, the plaintiff apparently abandoned this basis of her claim because she submitted that the Court should find that, contrary to the manner in which the cross examination appeared to have been conducted, Mr Rogers never made any payment in respect of that property and Mrs Rogers paid the whole of the $80,000 out of her own money with the sale of the Killara unit. I accept that Mr Rogers intended to make a gift to his wife of both the half interest in Te Mata and a $40,000 payment on the Dalmeny Road property. In any event the plaintiff's allegation throughout the hearing was unwaveringly that Mrs Rogers made none of the payments claimed. There is nothing in the evidence to support the setting aside of the deed and mortgage on this ground even if it is maintained. Orders 347 The summons is dismissed. I direct that verdict and judgment be entered for the defendants on the statement of claim. The plaintiff is to pay the defendants costs. ********** Last Modified: 05/13/2003 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.