Supreme Court New South Wales Medium Neutral Citation: McEvoy v McEvoy [2012] NSWSC 1494 Hearing dates: 3 and 4 December 2012 Decision date: 14 December 2012 Jurisdiction: Equity Division - Expedition List Before: Pembroke J Decision: See paragraphs [45] and [46] Catchwords: TRUSTS AND TRUSTEES - oral trust of land - principles for determining existence of trust - whole of circumstances - subsequent conduct GIFT - conditional - equitable personal obligation CONTRACT - family relationship - no contractual intention Legislation Cited: Conveyancing Act 1919 Limitation Act 1969 Cases Cited: Ashton v Pratt (No 2) [2012] NSWSC 3 Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liquidation) [2000] HCA 25; (2000) 202 CLR 588 Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 Conway v Critchley [2012] NSWSC 1405 Evans v Evans [2011] NSWCA 92 Flinn v Flinn [1999] VSCA 134; [1999] 3 VR 712 Galaxidis v Galaxidis [2004] NSWCA 111 Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 Hyhonie Holdings Pty Ltd v Leroy [2004] NSWCA 72 Jennings v Rice [2002] EWCA Civ 159 Khoury v Khouri [2006] NSWCA 184; (2006) 66 NSWLR 241 Owens v Lofthouse [2007] FCA 1968 Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation [1993] HCA 2; (1993) 178 CLR 145 Reitano v Reitano [2012] NSWSC 1127 Rochefocault v Boustead [1897] 1 Ch 196 Stillisano v Adami [2010] SASC 35 Strang v Strang [2009] NSWSC 760 Sundarjee Bros (Aust) Pty Ltd v Sundarjee Bros (HK) Pty Ltd (in liq) [2004] NSWSC 1158 Vinden v Vinden [1982] 1 NSWLR 618 Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560 Texts Cited: Heydon and Leeming, Jacobs' Law of Trusts in Australia, 7th ed (2006) Category: Principal judgment Parties: Aidan McEvoy - first plaintiff Natahl Cara Liane McEvoy - second plaintiff Mary McEvoy - defendant Representation: Counsel: J J T Loofs - for the plaintiffs Henry Packham (Solicitor) - for the defendant Solicitors: Smallwoods Lawyers - for the first and second plaintiffs Henry Packham - for the defendant File Number(s): 2012/174694 2012/120713 Judgment Introduction 1The underlying issue in this case is the entitlement of the plaintiffs to a half interest in a property at Jamberoo. The plaintiffs and their children have lived there since 1999. They have improved and maintained the property and made substantial contributions to the cost of ownership. It was purchased in 1999 by the first plaintiff's father (Bill McEvoy) who was the initial registered proprietor. When his marriage broke up in 2003, he transferred the title to his former wife, the defendant. She now refuses to acknowledge that the plaintiffs (her son and daughter-in-law) have any interest in the property whatsoever. She has sought to have them removed. 2In 2011, when Bill McEvoy became aware that the defendant was seeking to remove the plaintiffs from the property, he signed a written statement describing the actions of the defendant (his former wife) as "breaching the family trust". He sent a text message to her which commenced with the words "Mary how can you do what you are doing to our son? Aidan has looked after and maintained that property for 13 years and battled to survive". Legal Principles 3Where the existence of a trust is in issue, the principles are well established. The question is whether there is language or conduct which shows a sufficiently clear intention to create a trust. No formal or technical words are required: Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation [1993] HCA 2; (1993) 178 CLR 145 at 165-166. Any apt expression of intention will be sufficient. In order to infer the relevant intention, the court may look to the nature of the transaction and the whole of the circumstances attending the relationship between the parties: Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liquidation) [2000] HCA 25; (2000) 202 CLR 588 at [33]-[34]. Subsequent conduct can be just as much an indicator of the coming into existence of a trust as it may be of the existence of an agreement: Reitano v Reitano [2012] NSWSC 1127 at [25]; Hyhonie Holdings Pty Ltd v Leroy [2004] NSWCA 72 at [46] (Hodgson JA, Mason P and Handley JA agreeing); Owens v Lofthouse [2007] FCA 1968 at [51] (Weinberg J); Strang v Strang [2009] NSWSC 760 at [68] (Nicholas J); Stillisano v Adami [2010] SASC 351 at [70] (White J). 4The overall question is whether in the circumstances of the case, and on the true construction of what was said or written, a sufficient intention to create a trust has been manifested. It is not necessary that the creator of the trust should know that the particular relationship intended to be created is in law a trust. A trust will be created whether or not the creator is precisely aware of so doing, provided that, in substance, the creator intends that his or her actions should have the legal effect of creating the relationship which is known in law as the trust. If the language and conduct is such that an intention to create such a legal effect is manifested, then a trust will be created whether or not the words 'trust' or 'trustee' are used: Jacobs' Law of Trusts in Australia, 7th ed (2006), p 56; Owens v Lofthouse at [49]; Stillisano at [30]. 5The objective nature of the question was emphasised in Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, where Heydon and Crennan JJ said at [114]: The intention referred to is an intention to be extracted from the words used, not a subjective intention which may have existed but which cannot be extracted from those words. This is as true of unilateral declarations of alleged trusts as it is of bilateral covenants to create an alleged trust. It is as true of alleged trusts which are not wholly in writing as it is of alleged trusts which are wholly in writing. In relation to alleged trusts which are not wholly in writing, the need to draw inferences from circumstances in construing the terms of conversations may in practice widen the extent of the inquiry, but it does not alter its nature. 6I doubt very much whether Bill McEvoy or the defendant ever had a keen appreciation of the legal relationship that existed between each of them, as consecutive registered proprietors of the Jamberoo property, and the plaintiffs as beneficiaries of the trust. I do not think that any of them was familiar with the legal concept of a trust or the legal incidents of the relationship between a trustee and a beneficiary. But that does not matter. The relevant intention is that which is evident from the words and conduct of the parties. Bill McEvoy may not have known it, but he was close to the (legal) mark when he said of the defendant that she was "breaching the family trust". 7The reality is that Bill McEvoy gave a gift of a half interest in the Jamberoo property to his son and daughter-in-law. A condition of the gift was that they pay an agreed amount towards his monthly commitment on the mortgage loan which he obtained to fund the purchase. The defendant acquired title to the property with notice of that arrangement. She cannot now deny the plaintiffs' interest and they cannot deny their personal equitable obligation to make the financial contribution that was a condition of the gift: Jacobs' Law of Trusts, [234]-[239]; Evans v Evans [2011] NSWCA 92 at [117] (Campbell JA). The Witnesses 8Regrettably, the facts are very one-sided and the evidence of the defendant and Bill McEvoy does not reflect well on them. The defendant herself contributed little in the way of probative evidence. What she had to say largely amounted to an unqualified denial of the material elements of the plaintiffs' case. Most of her evidence was unreasoned and unreasonable. I did not find it helpful. It was neither convincing nor reliable. Her emotional behaviour in court served only to suggest that she was unable or unwilling to put forward a satisfactory contrary explanation that was capable of rebutting the plaintiffs' case. 9Bill McEvoy's evidence was even less reliable. He maintained that numerous prior statements by him, which supported the plaintiffs' case, were not the truth. He said that all of those prior statements were inaccurate; that he had only made them to assist his son; and that when he made them he was not under oath and in the witness box, as he was at the hearing. This was his strange and improbable justification for telling lies. 10In contrast, each of the plaintiffs, and their solicitor Mr Smallwood, gave careful evidence of statements by, and conversations with, the defendant and Bill McEvoy. The evidence of those statements and conversations is damning of the defendant's case. If correct, it suggests that her defence of the plaintiffs' claim has no reasonable basis. I feel quite justified in acting on the basis of that evidence. It was coherent, consistent and plausible. There was little or no attempt made to attack the credit of each of the plaintiffs and Mr Smallwood. And there was little against which to compare it, except the defendant's unsatisfactory denials and Bill McEvoy's implausible about-face. The Ramsay Road Property 11The relevant facts start with a property in Ramsay Road, Panania. Bill McEvoy bought the land and subdivided it in the early 1990s. In 1994 he transferred the rear parcel to the first plaintiff and his then girlfriend. It was known as "47a Ramsay Road". The consideration was $160,000, which reflected the approximate amount spent by Bill McEvoy on the development of the land and the construction of a dwelling on it. The purchase price was financed by a loan of $168,000 from the ANZ Bank to the first plaintiff and his girlfriend. The value of the land was greater than $160,000, a fact that was to some extent evidenced by its sale in November 1995 to a third party for $240,000. 12The distribution of the proceeds of sale of 47a Ramsay Road is significant to the plaintiffs' case. The first plaintiff was the sole vendor and the person entitled to the proceeds of sale. (His girlfriend had previously transferred her half interest to him). He expected to receive approximately $72,000 from the sale. This was the difference between the sale price of $240,000 and the outstanding mortgage amount of $168,000. He trusted his parents. He left it to his father to deal with the sale. His father was at the same time selling the front parcel of the Ramsay Road property and purchasing another property at Henry Lawson Drive. The first plaintiff asked the question: "What's happening with my $72,000 out of the sale of this place?" It was a reasonable question. His father had sold the property to him at the beneficial price of $160,000 as a means of helping his son and giving him a start. And for his part, the first plaintiff had committed to a loan of $168,000 from the Commonwealth Bank at the tender age of 22 years. 13It was the defendant who answered the first plaintiff's query. She said that she and her husband were not going to give him his money for the time being because he would just spend it. It was an amicable conversation. She said "We will give you your money back when you buy another home". Bill McEvoy confirmed the truth of the first plaintiff's evidence on this issue in July 2011 when he responded to a text message enquiry from his other son Declan. Declan said to his father that his brother claimed that 'u owed [him] $72k for Ramsay road. Is this ur understanding if how it happened?" Bill McEvoy's response was: Money owed to aidan from ramsay road was still held by me knowing that i was going to buy another property. This property happened to be 19 Macquarie street jambaroo. 14Bill McEvoy's admission is not only unambiguous, it also makes moral and commercial sense. As I have said, the sale to his son of the property at 47a Ramsay Road was a means of giving him a start. The first plaintiff did not want to sell the property in 1995, only a year after he had bought it, and only did so because his father requested it. Bill McEvoy wanted to free up monies that could be put to the purchase of another property at Henry Lawson Drive. But he was not resiling from his desire to assist his son and he was not taking back the benefit which he had bestowed on him. Hence his acknowledgement to Declan that the net proceeds of sale ($72,000) would in due course be put towards the purchase of another property for the first plaintiff. The Jamberoo Property 15That opportunity came in 1999. In the meantime, the first plaintiff had met and married the second plaintiff and they had started a family. He told his wife that he had obtained good money for his first property at 47a Ramsay Road and that "My parents are keeping it until I buy a house". When they found the Jamberoo property, the first plaintiff spoke to his father about it. After referring to the fact that his son would have to borrow too much money, Bill McEvoy said to his son "Do you want to go in on this together half and half?" He added: "That way it will be more affordable. I'll build something on it and we [referring to himself and his wife] can have somewhere to holiday and for when we retire. I like it; it reminds me of home." 16A short time later, the plaintiffs had dinner with the defendant and her husband. Bill McEvoy explained in more detail his proposal. He said "We will buy it 50/50 split; me and your mother; you and Natahl. I will put your money into it, we will borrow the rest and we will work out how much of the mortgage you will need to pay". The plaintiffs were naturally delighted and agreed. The defendant did not oppose and said "It is between you and your father". In July 2011, in response to another query from his son Declan, Bill McEvoy confirmed that the property was intended to be owned equally. He sent a text message to Declan stating: It was always agreed that Jamberoo would not be sold while Aidan and his family lived there and IF sold the money would be divided equally. 17In September 1999 Bill McEvoy purchased the Jamberoo property and became the registered proprietor. The purchase price was $420,000. He obtained a loan from the Commonwealth Bank and gave a mortgage over the land to secure the sum of $337,000. After the auction, he told his son: I bought this for you and Natahl and the grandchildren. It will never be sold until my last grandchild leaves home. If it is ever sold, we will all have to agree to the sale and it would be divided four ways between you, Natahl, me and your mother, no matter who pays what and who spends what money on the property. 18Somewhat disingenuously, he added "I have put down a deposit of $120,000. Half is yours that's your money from Ramsay Road". The figures do not add up and it seems more likely that Bill McEvoy's capital contribution to the purchase price was insignificant. The point is however that he acknowledged the fact that monies were owing to the first plaintiff from the Ramsay Road sale and that those monies were put towards the purchase of Jamberoo. The first plaintiff was not concerned by the detail of the figures. He and his wife were excited that Bill McEvoy had agreed to acquire the property for their use and benefit. 19All that remained was to work out a reasonable arrangement in relation to the repayment of the mortgage loan that Bill McEvoy had taken out with the Commonwealth Bank. Bill McEvoy proposed that the plaintiffs pay $1,200 towards his monthly mortgage payments of $1,800. He said that he had worked out that amount because "that's what I think you guys can afford". The first plaintiff said in evidence that two-thirds of the monthly mortgage commitment was intended to reflect the fact that he and his wife not only had a half interest in the property but also had possession of it for their own use and benefit. Bill McEvoy also said that the plaintiffs should pay the rates, taxes and other expenses such as those "you would have on a house normally as the owners". It was never said or suggested that the plaintiffs would be mere tenants. They accepted the financial obligations that Bill McEvoy proposed and occupied and maintained the property as owners, not tenants. Their payments were regular until 2003 when the position changed. Transfer to Defendant - 2003 20In late 2002, the defendant and Bill McEvoy separated. Their home at Henry Lawson Drive was sold. The defendant moved in with her son Declan. Bill McEvoy was in financial difficulties. His creditors were circling. In January 2003 the second plaintiff and the defendant went together to a firm of solicitors known as Loughwells & Duncan at Shellharbour. The defendant told the solicitor "This is my daughter-in-law. They own half the property. It is in my husband's name and he is in financial trouble". The solicitor recommended that a caveat be placed on the title recording the interests of the defendant and the plaintiffs. Nothing was done. 21In April 2003 orders were made under the Family Court Act providing for the transfer to the defendant of Bill McEvoy's title to the Jamberoo property. Bill McEvoy told his son that he should keep paying the mortgage and that "only the title has changed". The second plaintiff was not comfortable however. In a stroke of feminine percipience she said to her husband: "This could be dangerous. What happens in the future?" Her concern led the first plaintiff to speak to his mother. He told her that he and his wife would like to have their names on the title to the property. The defendant reassured him. She said: It would cost too much in stamp duty. My solicitor said it would cost about $15,000. It would be best that you save that money. It makes no difference. It is the same agreement you had with your father. You don't have to have anything in writing. 22In about July 2003, the defendant was compelled to pay out her husband's loan from the Commonwealth Bank. The bank was not prepared to leave the loan in place while she was the owner of the property. She paid out the loan using some of the proceeds of sale of the property at Henry Lawson Drive. The defendant was now in an invidious financial position. She lived with her younger son Declan and had little money. The plaintiffs understood her predicament and were sympathetic. The first plaintiff suggested to his mother that she should keep her money (from the sale of Henry Lawson Drive) and that he would "see if we can get a mortgage." He and his wife visited the Credit Union in Wollongong. But there were difficulties and complications, not least because the defendant was the registered proprietor. And she was unwilling to continue the arrangement that had subsisted between Bill McEvoy and the plaintiffs. She would not agree to the first plaintiff's proposal that she "pay the one-third share that Dad's been paying and we'll continue to pay the $1,200". 23From this point the relationship began to deteriorate. The defendant's position was undoubtedly unfortunate but she soon descended into bitterness and irrationality. Nothing could be resolved. She said to the first plaintiff: Why should I have to pay out anything for a loan? I've had a house, why should I have to pay anything now. I don't want you to take out the loan on Jamberoo because if you don't pay it, they'll sell it up. You need to try and get the money from somewhere else. 24The plaintiffs continued to make payments to the defendant - either directly to her or at her request - but without a bank loan, the arrangement was loose and the payments less disciplined. Interminable disputes took place as to whether the plaintiffs' payments should be characterised as repayments of interest or principal - on a loan that no longer existed. And the defendant started to describe the payments as "rent". From 2009 the defendant became more embittered when Bill McEvoy commenced divorce proceedings against her. 25Nonetheless the defendant reassured the plaintiffs on a number of occasions that "Jamberoo will not be sold". She apparently had a new partner and was hopeful that when he sorted out his divorce settlement, he would buy a house to which she could move. The plaintiffs continued to pay $1,200 per month, more or less. Sometimes it was wholly or partly cash. Sometimes it was paid to Declan at the defendant's request. Sometimes it was credited against work undertaken for Declan. 26From May 2011 the defendant changed her tune. The evidence did not reveal why but she started to talk about the sale of Jamberoo. At first the plaintiffs agreed to put the property up for sale but soon realised that the defendant would not agree to any reasonable division of the proceeds of sale, and certainly not one which reflected their half interest. She asserted that she needed $1.1 million to retire - $800,000 for a house, $100,000 for a new BMW and "a couple of hundred grand in the bank". She said "I will decide what you get". Unhelpfully, the brother Declan, who did not know or understand the original arrangement, became involved and sided with his mother. The plaintiffs and the defendant got nowhere and no sale took place. 27In July 2011 the defendant commenced proceedings against the plaintiffs in the Consumer Trader & Tenancy Tribunal (CTTT). She claimed vacant possession on the basis that she was a landlord and they were tenants. When the first plaintiff informed his father (Bill McEvoy), who had remarried and was living in Queensland, he said: What your mother is doing is wrong. You were never a tenant. I always bought the property for you and the children. 28In February 2012 the CTTT held that the defendant was entitled to possession of the property. The plaintiffs lodged an appeal which has been transferred to this court. For reasons that I will explain, the decision of the CTTT is seriously flawed and should be set aside. The Plaintiffs' Half Interest 29I have said enough to make clear that the plaintiffs must succeed on their primary claim that they are beneficially entitled to a half interest in the Jamberoo property. Bill McEvoy's objective intention to create a trust has been well and truly established. And when the defendant became the registered proprietor, she intended to continue to hold the property on the same trust for the plaintiffs. She knew of the basis on which the property was acquired; she acknowledged the interest of the plaintiffs; and she intended to continue the same arrangement which her husband had made. 30The subsequent divorce of the defendant and Bill McEvoy was unforeseen at the time that the trust was established and it has caused complications and resulted in hardship to the defendant. But none of that was the doing of the plaintiffs. In 1999 they acquired a valuable proprietary interest in the Jamberoo property and they are entitled to maintain it against the defendant. 31It is in every respect unconscionable for the defendant to deny the proprietary interest of the plaintiffs and she is estopped from doing so. She cannot resile from the known basis on which Bill McEvoy acquired the property. For over thirteen years, the plaintiffs have acted on the faith of that arrangement, bringing up their family, maintaining and improving the property and substantially adhering to the condition of the gift that Bill McEvoy imposed, namely the payment of the monies that were initially intended to go towards his monthly mortgage commitment. The defendant, at least initially, encouraged the plaintiffs and acquiesced in the assumption they made as to their entitlement to a half interest in the property. Absence of Writing 32Section 23C of the Conveyancing Act requires the creation of interests in land to be in writing signed by the person creating the interest. Neither Bill McEvoy nor the defendant signed any document relating to the plaintiffs' interest in the Jamberoo property. But the failure to comply with Section 23C is not fatal to the plaintiffs' claim. The doctrine of part performance is not affected by Section 23C and is expressly preserved by Section 23E. A person may rely on the doctrine of part performance to defeat a defence based on Section 23C: Khoury v Khouri [2006] NSWCA 184; (2006) 66 NSWLR 241 at [73]-[92]. 33In this case, for reasons which I will shortly explain, there was no legally binding agreement with Bill McEvoy or indeed with the defendant, whether in writing or not, and the doctrine or part performance does not strictly apply. But at least where, by reason of the part performance of an arrangement or understanding that falls short of an agreement, it is unconscionable for the defendant to deny the plaintiffs' proprietary interest, the absence of the writing required by Section 23C(1)(b) will not amount to a defence: Rochefocauld v Boustead [1897] 1 Ch 196. It is a fraud for a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land as her own: Rochefocauld v Boustead at 205-206 (Lindley LJ). 34The regular payment by the plaintiffs of the sum of $1,200, their undertaking of responsibility for the rates, taxes and outgoings of the property (even if, when short of money, they used the defendant's credit card with her permission) and their maintenance and improvement of the property, all represent acts of reliance referable to the arrangement made with Bill McEvoy that were known to the defendant. No other plausible explanation of the plaintiffs' conduct was put forward by the defendant or Bill McEvoy. The plaintiffs' conduct is indicative of a state of affairs that makes the defendant's reliance on the absence of writing unconscionable. No Agreement 35In this case, I do not think that the arrangement made between the first plaintiff and Bill McEvoy in relation to the acquisition and financing of the Jamberoo property amounted to a legally binding agreement. I am not satisfied that in the amicable family context that then existed, there was any contractual intention: Ashton v Pratt (No 2) [2012] NSWSC 3 at [32]. I repeat what I said in Conway v Critchley [2012] NSWSC 1405 at [6]: The formation of a legally binding agreement requires something tangible. Among other things, there must be actual contractual intention by each participant as well as reasonable certainty of terms and subject matter. A loosely formed shared idea, based wholly or partly on common expectations, mutual optimism and misplaced enthusiasm, to which greed and the hope of financial gain may be added in varying degrees, is not a contract. Nor does a mere consensus amount to a contract: ABC v XIVth Commonwealth Games (1988) 18 NSWLR 540 at 548. It is of the essence of contract that there be a voluntary assumption by each participant of a legally enforceable duty: Ermogenous v Greek Orthodox Community [2002] HCA 8; (2002) 209 CLR 95 at 105. Even more formal arrangements may not amount to a contract if the requisite intention is absent: South Australia v The Commonwealth [1962] HCA 10; (1962) 108 CLR 130 at 154. 36However the existence of an estoppel preventing the defendant from denying the trust and the plaintiffs' proprietary interest pursuant to it, does not depend on proof of a legally binding agreement. Arrangements and understandings that lack the requisite contractual intention or are insufficiently precise to amount to an agreement, may still generate the reliance, detriment and essential unfairness that constitute the elements of an estoppel: Flinn v Flinn [1999] VSCA 134; [1999] 3 VR 712 at 738-739 (Brooking CJ); Galaxidis v Galaxidis [2004] NSWCA 111 at [93]-[94] (Tobias JA); Jennings v Rice [2002] EWCA Civ 159 at [44] (Robert Walker LJ); Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101; Evans v Evans [2011] NSWCA 92. Equitable Personal Obligation 37The condition on which the plaintiffs hold their equitable interest in the Jamberoo property is that they make the payments which Bill McEvoy imposed as a condition of the gift. This is an equitable personal obligation only. It does not give rise to any trust or charge over the property. And failure to comply with the condition does not result in the gift ceasing, the trust terminating, or the plaintiffs' interest in the property reverting to the defendant: Evans v Evans at [117]. 38As I have said, complications have arisen because of the divorce of the defendant and Bill McEvoy, the transfer of the property to the defendant and the payment out by the defendant of the mortgage loan on which the initial arrangement was predicated. Nevertheless, the calculation of a reasonable amount to reflect the plaintiffs' equitable personal obligation to the defendant is possible. If the parties do not agree on how much should be paid to the defendant, and on what terms, I will determine the amount myself or refer the question to an appropriate person for resolution. It is always a matter for the court to define the interest which satisfies the equity: Vinden v Vinden [1982] 1 NSWLR 618 at 624. Fixing a money sum that represents the value of an equitable claim is a regular feature of this Court's equitable jurisdiction: see for example, Giumelli v Giumelli at [51]-[57]. 39I should make clear that this is not a matter requiring mathematical or actuarial precision. The essence of the arrangement made with Bill McEvoy is that the plaintiffs would pay the rates, taxes and outgoings associated with the property as well as $1,200 per month towards the existing mortgage loan. The duration of their contribution to the mortgage was intended to be for the period of the loan. And it represented a reduction of both principal and interest. The fact that the defendant has paid out the loan and that the mortgage has been discharged does not prevent, by one means or another, the calculation of a reasonable sum or the formulation of an appropriate order. 40Allowance must of course be made for the fact that the plaintiffs continued to make equivalent payments to or at the request of the defendant after the loan was paid out in 2003. There may be force in the plaintiffs' reasoning that only a sum of $8,895.87 remains outstanding to the defendant pursuant to the original arrangement, as modified to take into account the changed circumstances. However, allowance should also be made for the amounts paid on the defendant's credit card for rates. These remain the responsibility of the plaintiffs. As I have not heard from the defendant on all of these issues, I should give the parties the opportunity to agree. The Appeal 41I earlier mentioned that the decision of the CTTT was flawed and should be set aside. That is because the Member who constituted the tribunal declined to embark on an enquiry as to the true nature of the plaintiffs' interest in the Jamberoo land. He wrongly believed that he was not able to determine the question of whether there was a trust or whether the plaintiffs had an equitable interest in the land. But these were essential prerequisites to a finding as to whether or not a relationship of landlord and tenant existed. In addition, the transcript of the proceedings reveals that the tribunal acted contrary to the requirements of natural justice by its refusal to accept material evidence and submissions from Mr Mazoudier, who was the plaintiffs' representative. The grounds for allowing the appeal and setting aside the decision of the CTTT are ample. Cross Claim 42The defendant has a cross claim for the recovery of monies advanced by her to the plaintiffs. All of those monies are undoubtedly owing to the defendant, at least as a moral obligation, a fact which the first plaintiff freely acknowledged. There is a question however as to whether the effect of the Limitation Act is that the defendant is not entitled to judgment on those claims which derive from loans made between July 2003 and January 2006. Regrettably, I am compelled to accept the plaintiffs' submissions on this issue. I would hope however that my decision will not necessarily mean that the defendant fails to receive what is due to her. 43The Limitation Act imposes a six year limitation period for the recovery of monies pursuant to a contract. Where monies are "lent" between family members, this often results in hardship and unfairness, a matter which has been redressed by statute in the United Kingdom. The hardship arises because the informality of the family arrangement and the absence of documentation usually means that the "loan" is characterised as repayable on demand. In such a case, time starts to run, for limitation purposes, from the date the loan was made: Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560; Sundarjee Bros (Aust) Pty Ltd v Sundarjee Bros (HK) Pty Ltd (in liq) [2004] NSWSC 1158 at [14]. This is such a case. 44For those reasons, it was recognised in this case that unless Section 54 of the Limitation Act applies, the defendant's money claims pursuant to the cross claim are time barred and must fail. However Section 54 cannot apply to assist the defendant because there has been no acknowledgement of the indebtedness in writing signed by either of the plaintiffs within the meaning of Section 54(2) and (4). Orders 45In proceedings 2012/120713 I make the following declarations and orders: (a)I allow the appeal from the decision of the Consumer Trader & Tenancy Tribunal given on 17 February 2012 and set aside the orders made by it. (b)In lieu thereof, I order that those proceedings be dismissed with costs. 46In proceedings 2012/174694 I make the following declarations and orders: (a)I declare that the defendant holds the land described in Certificate of Title folio identifier 25/773151 on trust for the plaintiffs as to a one-half share. (b)I declare that the plaintiffs are and remain subject to an equitable personal obligation to pay to the defendant an amount to be agreed or determined in accordance with my reasons set out in paragraphs [38]-[40] of this judgment. (c)I give judgment to the defendant for the sum of $42,673 on her cross claim. (d)I make no order as to costs with the intent that the parties pay their own costs of these proceedings. (e)I stand over the proceedings before me for further directions, or agreed orders, on Friday, 22 February 2013. 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. Decision last updated: 14 December 2012