New South Wales Supreme Court CITATION : Lam v Luu (No 2) [2008] NSWSC 127 HEARING DATE(S) : 29-30 January 2008 JUDGMENT DATE : 28 January 2008 JUDGMENT OF : Gzell J DECISION : Amended summons dismissed with costs. CATCHWORDS : EQUITY - Equitable Estates and Interests - Whether a resulting or constructive trust arose - Agreement to contribute $50,000 - Whether contribution made - Whether on failure to contribute, defendant entitled to purchase property herself CATEGORY : Principal judgment CASES CITED : Jones v Dunkel (1959) 101 CLR 298 Dung Lam - Plaintiff PARTIES : Kim Luu - First Defendant (In Person) Kieng Ky Luu - Second Defendant FILE NUMBER(S) : SC 3927/05 COUNSEL : Mr A Ogborne - For Plaintiff SOLICITORS : Ku & Sin Solicitors - For Plaintiff IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GZELL J THURSDAY 28 FEBRUARY 2008 3927/05 DUNG LAM v KIM LUU & ANOR (NO 2) JUDGMENT 1 Dung Lam, the plaintiff, claimed relief against Kim Luu, the first defendant and her father, Kieng Ky Luu, the second defendant. At trial, Mr Lam did not proceed against Mr Luu and I dismissed the summons against him. 2 Against Ms Luu, Mr Lam claims a declaration that property at Smithfield in New South Wales is held by Ms Luu on a resulting or constructive trust in equal shares for both of them. At trial Mr Lam did not proceed with an alternative claim for adjustment of property interests under the Property (Relationships) Act 1984, s 20. Nor did he press his claim for damages for conversion of, or trespass to, goods. 3 Mr Lam and Ms Luu proposed to marry. Prior to that event, they looked for a place to live. At first, they looked at rental properties and then they looked at properties they might purchase. 4 On 6 March 2004 they recorded their agreement that Mr Lam would put a deposit on the property to the value of $50,000 and the two of them would then finance the house together, each paying $500 per week or another amount to cover outgoings. In the event of a sale, the proceeds were to be divided into two. 5 The parties finally resolved to purchase the Smithfield property for $405,000 and contracts were exchanged on 20 May 2004. A holding deposit of $1,000 had been paid to the agent on 14 May 2004. 6 The agent contacted Ms Luu on 27 May 2004 and informed her that the balance of the 10% deposit of $39,000 was due that day. 7 Mr Lam's evidence was that his mother had promised him $50,000 if he found a girl he liked, to help them on their way. He had not been forewarned that the deposit was required on 27 May 2004 and when he approached his mother she said that all she could then make available was $20,000. 8 Mr Lam said that he and Ms Luu had been looking at houses in a lower price range than the Smithfield property and Ms Luu had suggested that she also put in $50,000 so they could look for properties at a higher price. When on 27 May 2004 he was told that the deposit was due that day, Mr Lam said he told Ms Luu he only had $20,000 and she agreed to deposit the balance. 9 The contract for sale was executed in the name of Ms Luu alone. Mr Lam said that Ms Luu had told him that as he had already owned a house, they would not get the first home owner's grant unless the property was bought in her name alone. 10 Mr Lam said that a townhouse in Cabramatta was in his name and his family put in train its refinancing on 31 May 2004 for $115,000 which, upon payment of the existing mortgage of $55,000, would have provided him with $60,000. 11 It was submitted that Mr Lam had every expectation of honouring his agreement to provide up to $50,000 as a deposit and the rush to find the deposit on 27 May 2004 caught him by surprise. $20,000 was deposited to the parties' joint account on Monday 31 May 2004. 12 An affidavit of Cao Nua Lam, Mr Lam's mother, was read without objection. Mrs Lam swore that she provided $20,000 in cash to Mr Lam and saw him walk into the bank on 31 May 2004. Ms Luu appeared in person. She did not cross-examine Mrs Lam. 13 Ms Luu's evidence was that she did not offer to contribute $50,000 and in April 2004, when she was interested in acquiring the Smithfield property, she asked Mr Lam whether they were going to buy the property. Her evidence was that Mr Lam said he did not know as he did not have the money yet. She said that if he didn't want to buy the property, she would buy it herself. Ms Luu denied she told Mr Lam the property would be in her name in order that she could obtain a first home-owner's grant. She said she was not aware of the availability of such a grant until she saw her solicitor after the initial deposit had been paid. Nor, she said, was she aware that the plaintiff owned a Cabramatta townhouse until the current proceedings were commenced. 14 When Ms Luu and Mr Lam went to the real estate agent on 14 May 2004 to pay the $1,000 holding deposit, Ms Luu said that Mr Lam asked her whether she was sure she wanted to buy without him and she answered in the affirmative. If he was not buying it for her she would buy it herself. She said the agent asked who was buying the property and Mr Lam replied: "Only Kim". 15 Ms Luu said she spoke with a broker and sought a loan of $300,000 because her father had indicated that he would assist her with the balance. 16 Ms Luu said that between 14 May 2004 and the exchange of contracts she had a number of conversations with Mr Lam as to whether he would buy the property with her or not. With respect to one such conversation, Ms Luu said that Mr Lam said he did not have the money. He would have to borrow $20,000. She said that was not enough for the deposit and they would have to start the finance again. She said Mr Lam said he only had $20,000, and asked if she would lend him money to pay the deposit. Ms Luu said she replied that she could lend the extra $20,000 for the deposit but Mr Lam would have to pay it back and they would have to obtain a loan for $350,000 for the settlement. 17 Ms Luu was taxed in cross-examination in relation to this evidence. It was put to her that it was illogical, if she had arranged a loan for $300,000 when she was paying the entirety of the purchase price, to speak of increasing the loan if Mr Lam was to contribute. Her answer was that if the property were to be bought by her and Mr Lam, her father's assistance would drop out. If she bought the house herself, she only needed a loan of $300,000. But if she bought the house with Mr Lam, it was no longer a matter of a loan of $300,000: "Me and dad weren't involved." 18 The cheque drawn on the joint account for $39,000 for the balance of the deposit was dishonoured. $20,000 only was deposited to the account by Mr Lam on 31 May 2004. Ms Luu said Mr Lam told her the $20,000 was the money Ms Luu lent him when he asked for the loan. Whether the moneys were given to Mr Lam by his mother or lent to him by Ms Luu, Mr Lam made a contribution to the joint account of $20,000. 19 The next day, Ms Luu withdrew $20,800 from the joint account, leaving a minimal balance, and paid the balance of the deposit with these funds together with money she withdrew from her own account. 20 Ms Luu continued with the purchase on the basis of her loan of $300,000, and a contribution from her and her father of the balance $105,000. 21 Mr Lam received a gift from his sister of $20,000 which he deposited to the joint account in June 2004. Mr Lam told Ms Luu it was a contribution to the purchase of the house and to leave it there for settlement. Ms Luu said she told Mr Lam it was too late "to chip in" for the property. She said Mr Lam told her he received the money from his aunty. She asked to borrow the amount and she would repay after settlement. 22 An affidavit of Boi Lam, the sister of Mr Lam, was read. She confirmed that she gave Mr Lam $20,000 in cash in early June 2004. Ms Luu did not cross-examine the witness. 23 Ms Luu said she told Mr Lam in July 2004 she wanted to repay the $20,000. She went to the house of the grandmother of Mr Lam in Canley Vale where the aunt lived and handed her $20,000 in cash. Mr Lam denied these events. An affidavit of Nguyet Phung Lam, the aunt of Mr Lam, was read. She affirmed she did not live with a grandmother of Mr Lam. She had never received Ms Luu at her home. She had never lent any money to Mr Lam. She received no money from Ms Luu. This witness was not cross-examined. 24 Whatever the origin of the funds, Mr Lam contributed a second amount of $20,000 to the joint account. 25 Mr Lam said he told Ms Luu in July 2004 that his refinancing of the Cabramatta unit had finally come through. His evidence was that he was asked by Ms Luu to obtain and did obtain a bank cheque drawn in the favour of Permanent Trustees Ltd for $34,000, it being the mortgagee of Ms Luu's father's home. 26 This evidence was denied by Ms Luu. Her father was in Court during the proceedings. Ms Luu did not call him. Nor did she call her mother or those friends from whom she said she raised funds although they were available to give evidence. 27 In final address Mr Ogborne who appeared for Mr Lam conceded that it was an essential element of his case that $34,000 was paid to Ms Luu's father on her instructions. It was only by the combination of this amount with the two amounts of $20,000 that Mr Lam could satisfy his obligations under the agreement of 6 March 2004 and avoid Ms Luu's contention that he failed to perform his part of that bargain, she was therefore entitled to purchase the property in her own right and Mr Lam is not entitled to any equitable interest in the Smithfield property under a resulting or constructive trust. 28 At the commencement of Ms Luu's address, she said she wanted to make clear that she had not requested Mr Lam to pay her father as a contribution to the house. She said that her father had previously lent Mr Lam $35,000 and the $34,000 payment was in reduction of that debt. She produced a document and sought to tender it. She said that she had not sought to tender it earlier because the point only arose during Mr Ogborne's address: "It was because he point it out at the end, and I wanted to make that clear." 29 In deference to Ms Luu as a litigant in person, I allowed the tender. The document stated that Mr Lam borrowed $35,000 from Ms Luu's father. It bore what purported to be the signature of Mr Lam. 30 In response to the tender, I gave Mr Ogborne leave to read further passages of Mr Lam's affidavit in reply in which he annexed a copy of the document and swore that he did not sign the agreement, he did not repay any loan made to him by Mr Luu, he never owed Mr Luu any money and Mr Luu never made any demand for repayment. 31 When asked, Ms Luu said she did not wish Mr Lam to be recalled for further cross-examination. 32 I was impressed by the evidence of Ms Luu. She readily accepted propositions put to her in cross-examination and disagreed when propositions were put to her inconsistent with the narrative in her affidavit. 33 It was submitted that, in accordance with the principle in Jones v Dunkel (1959) 101 CLR 298, I should infer that witnesses available to corroborate her version of events who were not called, but were capable of being so, would not have corroborated her testimony. It was also submitted that I should reject her evidence and prefer that of Mr Lam because of the corroboration of his version of events in the affidavits of his mother, aunt and sister and the apparent acceptance of their evidence by Ms Luu's failure to cross-examine. 34 I reject those submissions. Ms Luu was a litigant in person and cannot be expected to be familiar with the principle in Dunkel nor the requirement to cross-examine in relation to conflicting testimony. She set forth a version of events and was cross-examined. Her testimony withstood cross-examination. I did not have the advantage of cross-examination of Mr Lam's aunt or sister and the short cross-examination of Mrs Lam did not bear on central issues. 35 If I had to decide between Mr Lam and Ms Luu where their testimony differs, I would prefer that of Ms Luu. 36 But the most telling evidence, in my view, is the document acknowledging a debt of $35,000. I do not accept Mr Lam's evidence that he did not sign the document. The signature on it is remarkably similar to the signature on his affidavits. 37 I find that Mr Luu had lent Mr Lam $35,000 and his payment of $34,000 to Mr Luu's mortgagee had nothing to do with the purchase of the Smithfield property. I find that Ms Luu did not request Mr Lam to make the payment on her behalf. 38 In my view, Mr Lam has failed to establish that he contributed to the purchase of the property in accordance with the agreement of 6 March 2004 and Ms Luu was entitled, and did proceed, to purchase the property in her own behalf. I find no resulting trust with respect to the property came into existence with respect to the two lots of $20,000 paid into the joint bank account by Mr Lam. Mr Lam has failed to establish an entitlement to a constructive trust interest in the property. 39 I dismiss the amended summons. Mr Lam must pay Ms Luu's costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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