Supreme Court New South Wales Medium Neutral Citation: Pupo v Pupo; Pupo v Pupo [2015] NSWSC 1633 Hearing dates: 7 April 2015; 6, 7, 8, 12 October 2015 Date of orders: 06 November 2015 Decision date: 06 November 2015 Jurisdiction: Equity Before: Hallen J Decision: In proceedings 2014/264225: 1. Order that the whole of the Statement of Claim be dismissed. 2. The parties are to make submissions on what costs orders should be made in the proceedings. 3. Direct that the Exhibits be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (rule 31.16A and rule 33.10), and Practice Note No SC Gen 18 (Para 26). In proceedings 2014/228570: 1. Order that the whole of the proceedings be dismissed. 2. Order that the Plaintiffs' costs as agreed, in the sum of $4,000, be paid out of the proceeds of sale of the Leichhardt property. 3. Note the agreement of the parties in Paragraphs 3, 4, 5, 6, 7 and 8 of Short Minutes of Order dated 12 October 2015 signed by the legal representative of each of the parties. 4. Direct that the Exhibits be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (rule 31.16A and rule 33.10), and Practice Note No SC Gen 18 (Para 26). Catchwords: EQUITY – Trusts – Whether resulting or constructive trust – First plaintiff, the father of the Defendants alleged to have provided part of purchase price of property in name of three of his sons EQUITY – Whether equitable lien securing alleged contributions Court not satisfied that any contribution to purchase price made by first Plaintiff – Even if contribution made, court not satisfied of the amount of the contribution PROPERTY (RELATIONSHIPS) ACT – Claims for adjustments of property pursuant to Property (Relationships) Act 1984 (NSW) – Only one property the subject of claim – Whether parties living together in a close personal relationship – Parents and son – Parents and son and daughter in law – Whether living together – Respective contributions of parties – Where Plaintiffs' financial and non-financial contributions unremarkable – Where Plaintiffs obtain countervailing benefits from relationship, financial and otherwise, including occupation of part of the subject property registered without payment of rent or occupation fee – Holistic value judgment – Not just and equitable to make any adjustment order Legislation Cited: Conveyancing Act 1919 (NSW) Evidence Act 1995 (NSW) Fair Trading Act 1987 (NSW) Property (Relationships) Act 1984 (NSW) Real Property Act 1900 (NSW) Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Ballard v Multiplex [2012] NSWSC 426 Bibby Financial Services Australia Pty Limited v Sharma [2014] NSWCA 37 Blatch v Archer (1744) 1 Cowp 63; 98 ER 969 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 Harbour Port Consulting v NSW Maritime [2011] NSWSC 813 Harkness v Harkness [2011] NSWSC 1421 Howlett v Neilson [2005] NSWCA 149 Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550 Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Federal Court of Australia, Tamberlin J, 29 June 1995, unrep) Nominal Defendant v Smith [2015] NSWCA 339 Nguyen v Cosmopolitan Homes [2008] NSWCA 246 Onassis v Vergottis [1968] 2 Lloyd's Rep 403 P and S Pupo (t/as Pupo Builders and Decorators v Builders Licensing Board [1996] NSWCA 416 Pennimpede v Pennimpede [2009] NSWSC 85 Pennimpede v Pennimpede [2010] NSWCA 121 Pupo v Builders Licensing Board [1996] NSWCA 440 Seltsam Pty Ltd v McNeill [2006] NSWSCA 158 Trosse v Howard [2009] NSWCA 346 Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56 Watson v Foxman (1995) 49 NSWLR 315 Texts Cited: P McClellan, "Who Is Telling the Truth? Psychology, Common Sense and the Law" (2006) 80 ALJ 655 Category: Principal judgment Parties: Ferdinando Pupo (first Plaintiff in 2014/228570) Rosemaria Pupo (second Plaintiff in 2014/228570) Giuseppe Pupo (Defendant in 2014/228570) Saverio Pupo (first Plaintiff in 2014/264225) Rosetta Pupo (second Plaintiff in 2014/264225) Sammy Ferdinando Pupo (first Defendant in 2014/264225) Rosemaria Pupo (second Defendant in 2014/264225) Giuseppe Pupo (third Defendant in 2014/264225) Representation: Counsel: Mr G Carolan (Plaintiffs in 2014/228570; first and second Defendants in 2014/264225) Mr R Brender (Defendant in 2014/228570; third Defendant in 2014/264225) Mr G Gemmell (Plaintiffs in 2014/264225) Solicitors: Kazi Portolesi Lawyers (Plaintiffs in 2014/228570; first and second Defendants in 2014/264225) Bransgroves Lawyers (Defendant in 2014/228570; third Defendant in 2014/264225) Pelosi & Associates (Plaintiffs in 2014/264225) File Number(s): 2014/228570; 2014/264225 Judgment Introduction 1. HIS HONOUR: These reasons relate to two different proceedings, which I shall describe, hereafter, as "the trust proceedings" and "the s 66G proceedings", only the former of which requires determination, as the parties in the latter proceedings have reached agreement on what is to occur in relation to sale of the real estate the subject of dispute. 2. Both proceedings involve only members of the Pupo family, and as is obvious from the existence, and continuation to judgment, of the litigation, the family is deeply divided. (Throughout these reasons, I shall refer to the family members, where necessary, after introduction, by the name he, or she, is known within the family. This is for convenience and to avoid confusion, and I hope it will not be thought discourteous.) 3. It is, undoubtedly, regrettable that the relationships between family members have broken down. However, in this case, I am not required to, and shall not, make any judgment on the state of interpersonal relationships between the various members of the family. Nor am I required to, and shall not, make any finding as to the causes, or consequences to the family, of the breakdown of those relationships. Nor is it necessary to attribute any blame, to one, or more, of the family members for the matters proceeding to a contested hearing. The only proper course available to the court is to decide the case on its merits. 4. I should mention that although the matter commenced on 7 April 2015, I was unable to continue with the hearing because I was unwell on the 2 days following. On the first day of the hearing, however, all of the affidavits were read, objections dealt with, and the cross-examination of the first Plaintiff commenced, but was not concluded. 5. The hearing resumed on 6 October 2015, for 4 more days (as it was clear that it would not conclude in 2 days, the original estimate of the hearing being 3 days). It can be seen from the length of the hearing that it was a keenly contested action. The Claims 1. In the trust proceedings, which were commenced in September 2014, Saverio Pupo and Rosetta Pupo are the first and second Plaintiffs. They are the parents of the first and third Defendants, Sammy Ferdinando Pupo ("Sam") and Giuseppe Pupo, and the parents-in-law of the second Defendant, Rosemaria Pupo ("Rosa"), who is the wife of the first Defendant. There are two other sons of the Plaintiffs, namely Francesco ("Frank"), and Antonio, but each has played no part, other than as a witness called by one party, or the other, in the proceedings. The only other family member who will be referred to in this forensic family drama is Francesco Pupo, who is Saverio's brother, and the uncle of Sam, Giuseppe, Frank and Antonio. He, also, played no part, other than as a witness called by Sam and Rosa, in the trust proceedings. Importantly, no claim was made by Saverio, for example, that Francesco had been, wrongly, paid more than his proper share of the proceeds of sale of the real estate when it was sold in 1990. 2. All of the family members were cross-examined. Based upon the evidence, it will be seen that Saverio, Rosetta, Giuseppe and Antonio appear to be in one camp, whilst the other family members to whom reference has been made are in the other. 3. The three Defendants in the trust proceedings are the current registered proprietors in unequal shares, of the land situated at, and known as, xxx Day Street, Leichhardt ("the Leichhardt property"). Sam and Rosa are registered as joint tenants of a two third share, and Giuseppe is registered as proprietor of a one third share, as tenant in common, with them: Ex. 3D1/1. 4. Importantly, Frank who was one of the registered proprietors between about 1990 and 2000, but who sold his one third interest to Sam and Rosa, in circumstances to which I shall come, was not named as a party to the proceedings by Saverio and no claim is made against him. 5. In broad summary, Saverio seeks a declaration that the Defendants hold part of their interest in the Leichhardt property on constructive trust or, alternatively, on a resulting trust, for him. He seeks an order that the Defendants pay to him an amount equivalent to his equitable interest therein. Alternatively, he asserts an equitable lien, as an unpaid vendor, over the Leichhardt property. There is no claim by Saverio and Rosetta based on proprietary estoppel. 6. In the trust proceedings, in addition, Saverio and Rosetta seek orders, pursuant to s 20(1) of the Property (Relationships) Act 1984 (NSW), on the basis of what they say were their contributions to the acquisition, conservation, or improvement, of the Leichhardt property, and to the welfare of Sam, Rosa and their children. They also seek their costs of the whole of the proceedings. 7. Sam and Rosa deny that Saverio is entitled to any of the equitable relief sought. They deny that they lived in a domestic relationship ("a close personal relationship") with Saverio and Rosetta, so as to entitle them to the relief claimed under the Property (Relationships) Act. Furthermore, Sam and Rosa assert that they were not living together with Saverio and Rosetta, which is a requirement that must be satisfied for the purposes of section 5(1)(b) of the Act. They submitted that since their marriage, they have lived independent, and separate, lives from Saverio and Rosetta albeit that they all live in the home on the Leichhardt property, which property "is effectively configured as a duplex or as two home units. Each has a separate secure entry, separate kitchen and bathroom facilities". 8. Sam and Rosa also submit that neither provided the other with domestic support and personal care. 9. When I raised the question of the costs of the trust proceedings, during submissions, counsel all agreed that they wished to argue the question of how the burden of costs should be borne at the time I delivered the reasons for judgment. Counsel for Sam and Rosa stated that there may be a document that would be relevant to the issue of costs. I shall say nothing about costs until they have had the opportunity to hear the orders I shall make and to make submissions on costs, if that becomes necessary. 10. In the s 66G proceedings, which were commenced in August 2014, relief is sought under s 66G of the Conveyancing Act 1919 (NSW). Sam and Rosa are the Plaintiffs, and Giuseppe is the Defendant. At the commencement of the hearing, the court was asked "not to make any orders… until after [the court delivered] reasons in the proceedings that are to be heard because when we know what shares everyone has there may be some ability to reach an agreement. In principle, there is no argument that the [Leichhardt] property will be sold one way or the other but we may not need formal 66G orders potentially": T1.48-T2.03. 11. On the second day of the hearing (6 October 2015), the court was also informed that the parties "just want an opportunity to potentially avoid a trustee by having some agreement once we know the outcome of the trust case": T71.37-T71.38. 12. On the final day of the hearing, the parties provided the court with signed Short Minutes of Order which will enable me to dismiss the s 66G proceedings, and to make an order that Sam's and Rosa's costs, assessed and agreed at $4,000, should be paid out of the proceeds of sale of the Leichhardt property. Also, I shall note the agreement of the parties as to how the sale of the Leichhardt property is to occur, and when sold, how the net proceeds of sale are to be distributed. (Obviously, the percentage interest of Sam, Rosa and Giuseppe, and if appropriate, Saverio, will be determined by the result of the trust proceedings.) 13. This is not to say that the s 66G proceedings are without relevance. Some of the affidavits filed in those proceedings were read as part of the case of one party, or the other, in the trust proceedings. (I made an order, by consent of the parties, on the first day of the hearing, that the evidence in one proceedings be evidence in the other: T11.01-T11.04.) 14. I pause to mention, before proceeding with a narrative of the facts, that there is evidence that the contents of the Statement of Claim, the affidavit verifying, as well as the contents of each of his, and her, affidavits, respectively, were translated for both Saverio and Rosetta, prior to each swearing to the truth of its contents. As well, the oral evidence of each was translated from the Italian language into the English language on the first day of the hearing, by Ms A Angelone, an interpreter accredited by the National Accreditation Authority for Translators and Interpreters Ltd, and on the second day, by Mr M Santi, also an interpreter accredited by the National Accreditation Authority for Translators and Interpreters Ltd. (I shall return to this topic later in these reasons.) Narrative of Facts 1. There are a number of facts that are not in dispute, or not seriously in dispute. Where possible, and for reasons to which I shall come, I have identified the copy of the contemporaneous documents that have assisted in determining certain events. The narrative represents the Court's findings in relation to these background facts. 2. Saverio was born in Italy in May 1936. Rosetta was born in Italy in April 1943. They were married in January 1962 and remain married to each other. They migrated to Australia in about 1967. 3. Francesco was born in Italy in about 1942. He migrated to Australia in July 1966. 4. Giuseppe was born, in Italy, in April 1963; Frank was born, in Italy, in April 1966; Sam was born, in Australia, in April 1970; and Antonio was born, in Australia, in May 1976. At the time of the relevant events relating to the sale of the Leichhardt property in 1990, Giuseppe was 27 years old, Frank was 24, Sam was 20, and Antonio was 14. 5. In about September 1972, Saverio and Francesco purchased the Leichhardt property as tenants in common in equal shares. At the time of its purchase, there was no building constructed on the land, the building previously constructed having been destroyed by fire. Over the next few years, Saverio and Francesco, together, built a two-storey, 5 bedroom, home on the Leichhardt property, and in about 1975, Saverio, Rosetta, their four children, with Francesco, all moved in. 6. Giuseppe described the home built on the land as being "configured such that there are two separate home units inside – one upstairs and the other downstairs", described as the "the upstairs area" and "the downstairs area". It was never formally subdivided. Each area has its own lockable front door. The two areas share a common entrance from the street, a foyer and a stairwell, but each is otherwise secure and separate from the other. (This accords with Sam's and Rosa's description of it in the submissions filed on their behalf.) 7. Initially, Francesco lived, primarily, in the downstairs area, (although when that occurred and for how long is unclear) whilst Saverio, Rosetta and their children, lived in the upstairs area. 8. Although there is no mortgage shown as having been registered on the title to the Leichhardt property at the time of its purchase, Francesco and Saverio acknowledged that they had borrowed money to enable its purchase, which borrowing was secured by mortgage. They contributed equally to the purchase price, and, at least until about the late 1970's, to the repayment of the mortgage debt. 9. From about 1972, Saverio and Francesco owned, and operated, a building business. There was some dispute about when the business ceased its operations but I am satisfied that it was in about 1977, and not in 1990, as was asserted in Saverio's affidavit. (In this regard, I note that in Paragraph 15 of the Statement of Claim, it was asserted that "[f]rom about 1977 the business ceased to operate but throughout the 1980's [Saverio and Francesco] were involved in litigation and other matters relating to the business", whereas in Paragraph 14 of his first affidavit, Saverio asserts that they owned and operated a building business "from about 1970 until about 1990". In his affidavit in reply, he stated that "we did shut down the business in about 1977". 10. Rosetta did not work outside the home. However, it would appear, from Rosa's evidence, that, from at least about 2002, she was a registered family day care educator and she operated a family day care business from the Leichhardt property. She was able to take care of 5 children, under the age of 5 years, for five days a week. (Sam gave evidence that he could recollect that Rosetta "worked looking after children at our house" but the period during which she did so was not disclosed.) 11. Their four children lived in the Leichhardt property, with Saverio and Rosetta, until about the mid-1990's. Sam and Antonio have continued to live there, albeit that Sam lived in the upstairs area, and Antonio has lived in the downstairs area with Saverio and Rosetta. 12. Before 1990, none of the children paid any rent, or otherwise contributed, financially, to the outgoings on the Leichhardt property. 13. Following the closure of the building business, Saverio only "had casual work", one or two days a week, initially as a plasterer, and then as a labourer doing demolition work and cleaning bricks. He suffered a number of injuries working as a labourer and as a result, was placed on "light duties", had time off work and received compensation benefits. For most of the period between about 1977 and 1990, however, he was in receipt of unemployment benefits. 14. Following the closure of the building business, Francesco returned to regular work, with the employer for which he had worked between about 1966 and 1970. He continued with that employer until 1986, when he went to work elsewhere. Whilst he was working, he suffered a work injury in about 1987. He then received workers compensation payments. 15. Although there was a dispute about when he moved out of the Leichhardt property, I am satisfied that Francesco moved out in about 1988 and also that he did not ever return to live there. In this regard, I prefer his evidence to the evidence of Saverio and Giuseppe, each of whom asserts that Francesco returned, on occasions, to the Leichhardt property. (Rosetta said nothing in her affidavits about when Francesco moved out of the Leichhardt property.) 16. Also, I note that Antonio, who was called in the Plaintiffs' case, accepted that Francesco had left the Leichhardt property in 1988, and that he had not been a party to the conversations to which reference will be made: T126.01-T126.11. 17. When Francesco moved from the Leichhardt property, he went to live in Kemps Creek, a suburb of Sydney. Between about the middle of 1988 and 1990, Francesco did not speak to Saverio, or to any members of Saverio's family. (In this regard, for reasons to which I shall come, again, I prefer Francesco's evidence to that of any other witness who suggests the contrary.) 18. A copy of the Certificate of Title in relation to the Leichhardt property does not reveal any encumbrances before one, being a registered mortgage, dated 12 May 1986 (a copy of which is Ex. 1D6), in which Saverio and Francesco are named as the mortgagors, and Siber Children's Wear Pty Limited is named as the mortgagee. The amount borrowed, as disclosed in the Mortgage, was $65,000. The term of the mortgage was 3 years. 19. Also in evidence, is a copy of three registered caveats, in each of which Istituto Nazionale Di Credito per Il Lavoro Italiano All'Estero ("ICLE") is shown as the caveator. In the first caveat (to which I shall refer as "Caveat X794"), which is dated 18 August 1988 (Ex. 1D7), which was registered on 24 August 1988, the estate or interest claimed is "as equitable mortgagee of the fee simple in the said land" by virtue of an agreement in writing dated 16 June 1988, "[t]he proprietors have agreed to grant to the Caveator a mortgage of the fee simple in the land in consideration of a loan or other financial accommodation granted, or to be granted, by the Caveator to, or at the request of, the proprietors". The second caveat (to which I shall refer as "Caveat Y020"), which was registered on 30 November 1988, is, essentially in the same terms as the first, but is dated 23 November 1988 (Ex. 1D10), and refers to an agreement in writing dated 17 November 1988. The third caveat (to which I shall refer as "Caveat Y244"), which was registered on 20 March 1989, is, essentially, in the same terms as the first, but is dated 3 March 1989 (Ex. 1D12), and refers to an agreement in writing dated 24 February 1989. The Lodging Party identified in the caveat was Gordon & Johnstone Solicitors. The solicitor who signed the Statutory Declaration on the Caveat was Mr K L Brazier. 20. On the third day of the hearing, counsel for Giuseppe tendered a copy of a fourth caveat (to which I shall refer as "Caveat X129"), dated 29 September 1987 (Ex. 3D2), which was registered on 8 October 1987. The Caveator is identified as ICLE, and the estate or interest claimed is "as equitable mortgagee of the interest in the said land of Francesco Pupo pursuant to agreement in writing between him and the Caveator dated 16th September, 1987". 21. The written agreement identified in each of the caveats lodged on behalf of ICLE is not in evidence. 22. There were three copy Withdrawals of Caveat tendered. One was dated 10 November 1988 (Ex. 1D9), and another was dated 3 March 1989 (Ex. 1D11), both of which were registered on 20 March 1989, pursuant to which the caveats referred to above were withdrawn. The first identifies Caveat X129 and Caveat X794 (and another caveat not in evidence) as the caveats to be withdrawn, whilst the second identifies Caveat Y020 as the caveat to be withdrawn. 23. The third Withdrawal of Caveat (a copy of which was Annexure "E" to Saverio's first affidavit), which was registered on 17 August 1990, identifies Caveat Y244 as the caveat to be withdrawn. The solicitor who signed the document is identified as Mr K L Brazier (although the firm Gordon & Johnstone is not identified on the Withdrawal of Caveat). The caveator is identified as "Istituto Nazionale di Credito per Il Lavoro Italiano All'Estero (ICLE)". 24. (I digress to identify the contents of an affidavit sworn by Mr B Kazi, the solicitor with the carriage of the matter on behalf of Sam and Rosa, which was read on the second day of the hearing, in which he stated that ICLE had been deregistered on 29 December 1992. Annexed to the affidavit was a copy letter, dated 29 September 2014, addressed to the firm of solicitors which had lodged caveat Y244, and the response from that firm, being a letter dated 30 September 2014, which stated that "[a]ny files from 1989 have long since been destroyed". (Otherwise, the copy letter in response referred to matters stated in the caveat and the withdrawal of the caveat on 12 August 1990.) 25. Also annexed to Mr Kazi's affidavit, was a copy of a subpoena, addressed to, and served upon, the Commonwealth Bank, which prompted the response (in a copy letter dated 2 March 2015) that "[w]e have conducted a search of the bank records and have been unable to locate any documents and statements for account number xxx103 in the names of Giuseppe Pupo and Francesco Pupo and Ferdinando [Sam] Pupo".) 26. Returning, then, to the narrative, there is also a copy of a registered Mortgage dated 10 November 1988 (Ex. 1D8), which was registered on 20 March 1989, in which Saverio and Francesco are named as the mortgagors, and Permanent Trustee Australia Limited on behalf of Howard Finance Mortgage Trust, is named as the mortgagee. The amount borrowed, as disclosed on this Mortgage, was $130,000. The term of the Mortgage was 2 years. 27. The Mortgage secured the loan amount over the whole of the Leichhardt property and both Saverio and Francesco were liable to repay the mortgage debt: T3.03-T3.12. 28. Although I shall return to Saverio's evidence about this topic, Saverio and Rosetta asserted in the Statement of Claim (Paragraph 16), that in about 1990, Saverio and Francesco "were facing financial difficulties due to, inter alia, litigation relating to their business" and that Saverio "was concerned that the [Leichhardt] property would be repossessed by the bank". 29. (Whilst there is an issue raised by Sam and Rosa about the cause of the financial difficulties, and also whether Francesco was burdened by those financial difficulties, Sam does not dispute (in Paragraph 5(a) of his Defence) that Saverio "in or about 1990 was concerned that the [Leichhardt] property would be repossessed by the mortgagee".) (Rosa, unsurprisingly, bearing in mind the date of her introduction to the Pupo family, asserted in her defence that she did not know and was unable to admit the contents of Paragraph 16 of the Statement of Claim (Paragraph 1 of her Defence).) 30. Saverio gave evidence (at T43.42-T43.45) that "I got that money to pay other mortgages for the mortgage that I paid. I had a mortgage and then that mortgage would run out, and then I would get money to pay that mortgage and then I would pick another mortgage". 31. The financial difficulties being faced by Saverio must have been obvious, whatever their cause, because it is not disputed that discussions took place between Saverio and his sons, and between a person said to be representing Saverio (Pasquale Polistena) and Francesco, about how a forced sale of the Leichhardt property might be avoided. 32. There is evidence that, in about 1989, Frank gave Saverio $15,000 to pay arrears of mortgage instalments and to prevent the execution of a writ of possession. 33. By way of further example of these financial difficulties, in September 1989, Saverio required $9,500 to repay "arrears of interest and balance to October payments" due to the mortgagee. Sam, Giuseppe and Frank raised the money to give to Saverio. Frank gave evidence that each paid an equal amount. There is a copy receipt for this amount in evidence. 34. (Although Saverio, at one stage, disputed the evidence that these two amounts were paid (T98.11-T98.25) in order to prevent the sale of the Leichhardt property, I am satisfied that both amounts were given to him as asserted by Sam and Frank. My conclusion, in relation to the first amount is confirmed by Rosetta's evidence that Saverio said that he had received $15,000 from Frank "to pay some creditors": T115.47-T115.50.) 35. On 12 July 1990, by a Contract for the sale of the Leichhardt property (a copy of which Contract is not in evidence), Saverio and Francesco, agreed to sell the Leichhardt property to Sam, Giuseppe and Frank, as tenants in common in equal shares. The Transfer, a copy of which is in evidence (Ex. 3D1/2), reveals that the sale price was $291,000. 36. Although there was some dispute by counsel for Saverio and Rosetta about whether one firm of solicitors acted for both Saverio and Francesco on the sale of the Leichhardt property, I am satisfied that Emery Berg & Co, Lawyers, and in particular, Mr N Sarajinsky, a solicitor then at the firm, acted for them both, rather than just acting for Francesco (as seemed to be asserted by counsel for Saverio). I am so satisfied because, firstly, Saverio appeared to accept that he was represented by Mr Sarajinsky (whilst not recollecting his name); secondly, the signature of each of Saverio, and of Francesco, which appears on the copy Transfer of the Leichhardt property, was witnessed by Mr Sarajinsky; thirdly, because Ex. 1D14, which includes a copy of the Original Trust Ledger of the firm, is headed "Pupo S - Mtg xxx Day St"; and finally, because the copy Trust Ledger discloses credits into, and payments made out of, the Trust Account, which are unlikely to have occurred without instructions having been given. 37. Indeed, Mr Sarajinsky appears to have been the attesting witness to Francesco's signature on the Deed dated 16 July 1990, to which reference will be made, and is identified as the solicitor who signed the Statutory Declaration in the caveat lodged on Francesco's behalf to which reference will also be made. Emery Berg & Co is identified as the firm of solicitors that lodged the caveat, and the firm's address is shown on the caveat as the "Address in New South Wales for services of notices on Caveator". 38. A copy document, dated 14 June 1990, sent from Realty Leichhardt Pty Ltd, Real Estate and Business Agents, Auctioneers, Insurance and Finance Consultants, to Saverio and Rosetta, reveals that the Leichhardt property "is worth between $275,000 and $300,000" (Ex. 3D1/3). 39. (There is also evidence in Ex. 1D4, that a valuation fee of $280 was incurred by the solicitors for Sam, Giuseppe and Frank to a firm of valuers, which firm had carried out a valuation "for stamp duty purposes". A copy of the valuation was not in evidence.) 40. A copy letter, dated 12 July 1990 (Ex. 1D2), from Messrs Leslie Caplan & Grunstein, the firm of solicitors which acted for Sam, Giuseppe and Frank, addressed to them, confirmed the formal exchange of Contracts; that the stamp duty payable on the Contract was $8,765.50, and on the Mortgage was $225.50; and also made a request for a bank cheque, in the amount of $8,901, payable to the Department of Finance within 10 days. 41. The copy "Customer's Record of Bank Cheque", which forms part of Ex. 1D4, reveals that the total amount of stamp duty, being $8,901, was paid on 24 July 1990, by bank cheque drawn directly in favour of the Department of Finance. The copy letter, dated 1 August 1990, addressed to Sam, Giuseppe and Frank, from their solicitors, confirms that it was paid by them directly. 42. There was a copy of a written Direction, dated 26 July 1990 (Ex. 1D3), to Messrs Leslie Caplan & Grunstein, signed by Sam, Giuseppe and Frank, that confirms there were insufficient funds available from the sale, for arrears of council and water rates to be paid; that there was to be no adjustment of council and water rates at settlement; and that "we will make arrangements between ourselves as to payment of such outstanding rates". 43. The Discharge of Mortgage, subsequently registered on title to the Leichhardt property in August 1990, reveals that the amount received by the mortgagee "in full satisfaction and discharge of the mortgage" was $165,878.58 (Ex. 3D15). 44. The copy Trust account ledger of Emery Berg & Co, which forms part of Ex. 1D14, discloses receipt of the amount of $29,100 (being the deposit) on 12 July 1990; the investment of that amount with ANZ Trustee & Executors on 19 July 1990; and the receipt of $29,213.34 from ANZ Trustee & Executors on 30 July 1990. (It was accepted that the amount received was the amount of the deposit and interest.) 45. The balance of the purchase price of the Leichhardt property appears to have been funded as follows. Sam, Giuseppe and Frank borrowed $190,000 from the Commonwealth Savings Bank. The repayment of the loan was to be $2,620 per month for 25 years (based on a then current rate of 16.25 per cent per annum). A loan establishment fee of $1,220 applied to the approval (Ex. 3D14). 46. In addition, Francesco lent $70,000 to Sam, Giuseppe and Frank. Initially, the term of the loan was 2 years, repayable at any time without penalty, with "interest to be levied after twelve (12) months from the date of settlement at 16.5% by monthly instalments (to be increased to 17.5% in the event of late payment"), and to be secured by unregistered second mortgage. However, by Deed, dated 16 July 1990 between them, the terms of the loan were varied, so that the loan was repayable at any time within 5 years, without penalty, with no interest to be charged by the lender to the borrowers during the currency of the loan, and to be secured by unregistered second mortgage supported by caveat over the Leichhardt property (Ex. 3D1/9-10). 47. (Saverio was not a party to the Deed entered into between Francesco, Sam, Giuseppe and Frank.) 48. These matters are confirmed in a settlement letter dated 1 August 1990 from their solicitors to Sam, Giuseppe and Frank. The letter also reveals that a cash amount of $1,900 had been received into the solicitors' trust account. Attached to the letter was a Memorandum of Costs and Disbursements, disclosing legal costs of $2,037 "BUT SAY $1,800" and disbursements totalling $981.80, of which $500 had been paid. The balance due was said to be $2,281.80: Ex. 1D4. 49. A subsequent letter from their solicitors, dated 14 August 1990, confirmed that an additional amount of $990 was received from Sam, Giuseppe and Frank, and that interest of $56.67, being their share of the interest earned on the deposit, had been received, and credited, to the account, leaving a balance due of $1,235.13: Ex. 1D5. 50. In a letter dated 10 August 1990, from Emery Berg & Co, to Sam, Giuseppe and Frank, they were informed that "steps are now being taken for the Caveat to be registered". 51. In fact, the caveat was registered on 3 September 1990. The estate or interest claimed was "[a]n interest as Second Mortgagee under a Mortgage securing the payment of an amount of $70,000". It bears the signatures of Sam, Giuseppe and Frank as the registered proprietors who consented to the caveat by Francesco. 52. There is a significant dispute about how the proceeds of sale were distributed. There is no doubt that $165,878.58 was paid to the registered mortgagee, that $26,514.31 was paid to I Finance Corporation Limited, and that $70,000 was notionally distributed to Francesco who lent it back, leaving a balance of $28,607.11 said to be unaccounted for. It will be necessary to return to this topic later in these reasons. 53. By letter dated 16 December 1993, sent by Carneys, Solicitors and Attorneys, which firm then acted for Francesco, to Frank, a demand was made for one third of $70,000 (being $23,333). The letter stated that, upon payment of that sum, Francesco would be prepared to release only Frank "from all rights and obligations pursuant to the subject mortgage. Our client, however, reserves his rights as against the other two mortgagors": Ex. 3D1/11-12. 54. Messrs Carneys, subsequently, sent a letter, dated 12 January 1994, to Messrs Leslie Caplan & Grunstein, which firm remained acting for Sam, Giuseppe and Frank, enclosing a copy of the various 1990 documents entered into, reference to which documents has been made. The letter concluded with the suggestion that "perhaps we have some informal meeting after you have perused these documents and obtain instructions… with a view to settling this matter without recourse to litigation". 55. In early March 1994, it appears that a further demand to repay the amount of the loan. By letter dated 8 March 1994, sent by the solicitors for Sam, Giuseppe and Frank, to Francesco's solicitors, it was asserted that the loan repayable to him, was not repayable prior to July 1995, and an offer was made to repay $30,170, in full settlement of the claim. 56. Francesco's solicitors replied to the letter dated 8 March 1994 by letter dated 16 March 1994. In this letter, a copy of which is Ex. A, Francesco acknowledged that Sam, in fact, had repaid his one third share of the amount borrowed, namely $23,330. (Other evidence reveals that Sam lent Francesco money to pay for associated legal proceedings to which this letter referred.) A demand was made for repayment of the balance of $46,670 which was said to be due from Giuseppe and Frank. 57. There were subsequent negotiations about the amount to be repaid to Francesco by Giuseppe and Frank. On 29 April 1994, the amount of $36,670 was repaid to Francesco, in full repayment of his loan. Bank records reveal that Frank paid this amount to Francesco out of a bank account in the names of Rosetta and Frank. (There is a dispute as to whose money had been deposited into this account but, mercifully, it is unnecessary to determine this dispute.) 58. In return, Sam, Giuseppe and Frank received a Deed of Release, executed by Francesco, and a Withdrawal of Caveat, together with the unregistered Mortgage documents executed in July 1990. The Withdrawal of the Caveat was dated 29 April 1994. 59. Saverio gave evidence that the last court case relating to the building business, in which he and Francesco were involved, was one in the Court of Appeal in 1995: T40.21-T40.27. It appears that the case to which he was referring was heard in September 1996, and the reasons for judgment bear the medium neutral citation P and S Pupo (t/as Pupo Builders and Decorators v Builders Licensing Board [1996] NSWCA 416. (The appeal was one from the District Court, in respect of a judgment given by McCredie DCJ on 18 March 1992.) 60. (Later in these reasons, I shall refer to a prior proceeding, in the Court of Appeal, dealt with in May 1996, in which an adjournment of the hearing of the appeal, ultimately heard in September 1996, was sought and granted. The medium neutral citation of those proceedings is Pupo v Builders Licensing Board [1996] NSWCA 440.) 61. In January 2000, Sam and Giuseppe lodged an Application for dual occupancy with Leichhardt Council. They engaged experts to assess the Leichhardt property and determine whether dual occupancy would be permitted. The application was unsuccessful. 62. Sam met Rosa in 1994. They married in December 1999. By Transfer dated 15 August 2000 (Ex. 3D1/14), Frank sold his interest in the Leichhardt property to Rosa and Sam, for $200,000 (it being then agreed that the total value of the Leichhardt property was about $600,000), although the Transfer also identifies Giuseppe as one of the purchasers. On the same day, another Transfer (Ex. 3D1/15) identified the interests of Sam and Rosa as joint tenants as to a two third interest, and Giuseppe as to a one third interest as tenant in common with them. Thereafter, title to the Leichhardt property has been held in this way. 63. Rosa gave evidence that she and Sam had savings of about $40,000 at about this time. It appears that from the proceeds of sale paid by Sam and Rosa, Frank's one third share of the mortgage debt to the Commonwealth Savings Bank was repaid. The mortgage debt, as at 1 August 2000, was about $105,342. Three substantial amounts are shown as having been credited to the Home Loan (mortgage) account in early August 2000, namely, $35,491.30 on 1 August 2000, $10,000 on 2 August 2000, and $59,408 on 15 August 2000. 64. The purchase of Frank's interest in the Leichhardt property was funded by Sam and Rosa borrowing $210,000 from the Commonwealth Bank. Giuseppe guaranteed the loan that the Bank made to them: Ex. 3D1/20-32. 65. Frank gave evidence that Giuseppe's share of the mortgage debt was repaid by Rosetta paying two amounts, namely $15,491.30 on 31 July 2000, and then, on 1 August 2000, an amount of $20,000 (making up the amount of $35,491 to which reference has been made). Giuseppe says that he has repaid the amounts to Rosetta. It is unnecessary to determine which version is correct as there is no dispute that the whole of the mortgage debt owing by Sam, Giuseppe and Frank and registered on title to the Leichhardt property was repaid in 2000, and because there is no claim by Rosetta against Giuseppe seeking any repayment. 66. With Giuseppe's consent, the loan to Sam and Rosa was increased to $220,000 in about November 2002. 67. The debt secured by the Mortgage, which is owed by Sam and Rosa, as at October 2014, was about $81,000. Not unnaturally, they have always made the repayments on the amounts borrowed themselves, with no contribution from any family member. There is no evidence of the amount of the current mortgage debt. 68. Following the sale of the Leichhardt property, in 1990, to Sam, Giuseppe and Frank, Saverio, Rosetta and Antonio moved into the downstairs area and Sam, Frank, and Giuseppe stayed upstairs. In 1995, Frank moved out. In August 1995, Giuseppe married Catherine. In June 1996, they, too, moved out of the Leichhardt property. Sam continued to live alone in the upstairs area. 69. Saverio, Rosetta and Antonio have continued to occupy the downstairs area of the home built on the Leichhardt property. There is a separate kitchen and bathroom as well as 2 bedrooms in this downstairs area which they occupy. 70. Following their marriage, Sam and Rosa lived in the upstairs area. That area consists of three small bedrooms, a kitchen and one bathroom. They have separate telephone lines and internet. For some time, they have had a separate key to enter the upstairs area. 71. Sam and Rosa have two children, Danielle, who was born in January 2002, and Marcus, who was born in October 2005. Sam and Rosa agree that between 2004 and 2007, Rosetta looked after Danielle on Mondays, for about 8 hours. Rosetta does not appear to have looked after Marcus at any specific times, although it was accepted that she did look after both of the children, from time to time, when asked to do so. On occasions, when Sam was unable to collect the children from school, he would ask Rosetta to collect them. 72. Sam, Rosa and their children would have dinner, about once a week, in the downstairs area of the Leichhardt property with Saverio, Rosetta and Antonio. Otherwise, they did not share meals together. It appears from the evidence, overall, that, otherwise, Sam, Rosa and their children, have lived, for the most part, separately and independently, of Saverio, Rosetta and Antonio. 73. Sam and Rosa hold no joint property with Saverio and/or Rosetta. 74. Since they have been living in the upstairs area of the Leichhardt property, Sam and Rosa have carried out repairs and renovations to it, which renovations have cost a total amount of about $34,700. One of the expenses included in the expenditure was for a hot water system ($2,500) which was, in fact, about half of its cost. (The total cost was $5,273.) The parties agreed that Rosetta had paid the other half of the cost of the hot water system: T236.04-T236.24. 75. There was a dispute between the parties about the use of a communal laundry, but it is not necessary to resolve that dispute other than by noting that part of the renovations carried out by Sam and Rosa have included a change to incorporate a laundry in the bathroom in the upstairs of the Leichhardt property. 76. Sam and Rosa pay two thirds of the Council rates and Rosetta pays one third. They also pay one half of the water rates and electricity bills, whilst Rosetta pays the other half. Sam and Rosa have paid for the house and contents insurance since they purchased Frank's interest in the Leichhardt property. (There was no schedule produced by any of the parties identifying the amounts that have been paid.) 77. Sam gave evidence that as at July 2014, the Leichhardt property had a market value of between $1,475,000 and $1,525,000. A more recent "kerbside" assessment, suggests that the current market value is between $1.8 million and $2.0 million (Ex. B). 78. By undated letter from Giuseppe, which appears to have been received by the Commonwealth Bank, Springwood Branch, on 28 February 2014, he stated that he "would like to cease guaranteeing [the] loan [in the name of Sam and Rosa] as of today" and requested that information be given to "myself and the other parties of this loan of the procedure involved in ending this guarantee". He also confirmed that "any redraw facility on this loan should cease immediately". The Credibility and Reliability of the Witnesses 1. This is a case that is particularly fact sensitive. Findings of fact and assessment of the credibility of the witnesses and the reliability of the evidence are extremely important. It is necessary to form an assessment of whether to accept a witness as a witness of truth, as there are many facts, as well as a number of important conversations, that are the subject of dispute. 2. Of course, as has been observed, many of the events occurred over 25 years ago, some about 15 years ago, and only a few, more recently, with the result that the memory of witnesses will have faded. As has been demonstrated, there is some contemporaneous documentation, the authenticity of which is not disputed. Other documents, which may have proved useful, have not been able to be produced due to the passage of time that has passed since the documents would have been created. 3. As was observed by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315, at 318-319: "Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances … Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience." 1. In that case, his Honour was talking of a cause of action founded on s 52 of the Trade Practices Act 1974 (Cth) or s 42 of the Fair Trading Act 1987 (NSW): see the discussion by McDougall J in Harbour Port Consulting v NSW Maritime [2011] NSWSC 813, at [10]-[18]. However, as McLelland CJ in Eq also pointed out, the views apply to all types of litigation. 2. The present case reveals the importance, also, of what Bryson AJ wrote in Pennimpede v Pennimpede [2009] NSWSC 85, at [29]: "Considerations of these kinds pose serious difficulties of proof for a party relying upon spoken words as a foundation of a cause of action in the absence of some reliable contemporaneous record or other satisfactory corroboration. In this case there is no contemporaneous document which supports the claim that the true arrangement was only a loan on mortgage, not a purchase, and there is no satisfactory corroboration. McLelland CJ in Eq's observations apply with only slight changes to the present case. A great deal of what I was told related to conversations which were alleged to have occurred well over 10 years before I heard the evidence. Most of what I was told about the conversations seemed to me to be little more than impressions, accompanied by plausible details which were very unlikely to be based and were not based on actual memory. These impressions came to me through a filter (perhaps an osmotic barrier) of years of conflict, argument and strong feeling." 1. Although the decision was subject to an appeal (see, Pennimpede v Pennimpede [2010] NSWCA 121), the appeal was dismissed, and there was no suggestion that what Bryson AJ had said about difficulties of proof was wrong. 2. The circumstances of this case, as has been noted, make what was written by Tamberlin J in Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Federal Court of Australia, Tamberlin J, 29 June 1995, unrep), at 122-123 (in a passage cited with approval by the High Court when it upheld his Honour's decision: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599, at [15]), appropriate to remember: "[Given the lapse of time] between the events and conversations raised in evidence and the hearing of the evidence before me, the only safe course is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence. In circumstances where the events took place so long ago, it must be an exceptional witness whose undocumented testimony can be unreservedly relied on. The witnesses in this case unfortunately did not come within that exceptional class. The discussions referred to in evidence were capable of bearing quite opposed meanings depending on subtle differences of nuance and emphasis, and a proper appreciation of the significance of those matters must necessarily be considerably diminished over such a long period of time." 1. I also remember what was said by Emmett J (as his Honour then was) in Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56, at [48]: "When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2)." 1. I have also found useful what Lord Pearce wrote, in his dissenting speech in Onassis v Vergottis [1968] 2 Lloyd's Rep 403, at 431: "Credibility involves wider problems than mere 'demeanour' which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness, and motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process and in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part." 1. I should also mention an article by the former the Chief Judge at Common Law, P McClellan entitled "Who Is Telling the Truth? Psychology, Common Sense and the Law" (2006) 80 ALJ 655, in which he wrote, at 665, quoting a passage from the "Guidelines Relating to Recovered Memories" (2000) of the Australian Psychological Society: "Memory is a constructive and reconstructive process. What is remembered about an event is shaped by how that event was experienced, by conditions prevailing during attempts to remember, and by events occurring between the experience and the attempted remembering. Memories can be altered, deleted and created by events that occur during and after the time of encoding, during the period of storage, and during any attempts at retrieval." 1. Justice McClellan's observations were recently described by Leeming JA, in Nominal Defendant v Smith [2015] NSWCA 339, at [82], as uncontroversial and "supported not merely by one's ordinary experience but also by a body of psychological evidence". 2. Section 140 of the Evidence Act 1995 (NSW) should also be considered. It provides: "(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence, and (b) the nature of the subject-matter of the proceeding, and (c) the gravity of the matters alleged." 1. Ordinarily, the more serious the consequences of what is contested in litigation, the more a court will have regard to the strength and weakness of evidence before it in coming to a conclusion. However, as has recently been reaffirmed by the Court of Appeal in Bibby Financial Services Australia Pty Limited v Sharma [2014] NSWCA 37, at [205], s 140(2) provides for no new principle but simply reflects the principles stated in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, that there should be clear and cogent proof of serious allegations. 2. In Nguyen v Cosmopolitan Homes [2008] NSWCA 246, speaking with the concurrence of McColl and Bell JJA, McDougall J expressed the view, at [44]- [52], that proof on the balance of probabilities required a feeling of actual persuasion; that the event in question was more likely than not to have occurred; with "a probability in excess of 50%". His Honour repeated that view in Ballard v Multiplex [2012] NSWSC 426, at [126]. 3. I have also remembered the general principle, stated by Lord Mansfield CJ in Blatch v Archer (1744) 1 Cowp 63; 98 ER 969, at 970, that evidence is to be weighed "according to the proof which it was in the power of one side to have produced, and in the power of the other side to have contradicted". This has particular significance in considering the submissions made by counsel for Saverio regarding the knowledge of Sam, Giuseppe and Frank on how, and to whom, the proceeds of sale were disbursed. 4. I should also mention that there is nothing, in writing, evidencing what is said to have been the agreement reached between Saverio and his three sons. Accordingly, the evidence of conversations said to have taken place inevitably suffers from lack of immediacy and from subjectivity compared with the available contemporaneous documentation which deals with other events. (I have not forgotten, also, that the competing witnesses are family members. It is, in those circumstances, unexceptionable that any agreement said to have been made between Saverio and his three sons, Sam, Giuseppe and Frank, was not in writing. However, this must be looked at in the context of other circumstances, including events involving Francesco and the evidence of Saverio as to what he was told by a solicitor, Mr Papallo.) 5. Finally, Saverio and Rosetta gave evidence through an interpreter. On occasions, the evidence given by Francesco was difficult to understand because of language difficulties. I have reminded myself that it is often not only difficult, but sometimes may be dangerous, for a Court, dependent on interpretation of evidence of witnesses whose first language is not English, to make clear findings on credibility. 6. In this case, however, I am able to do so, having reviewed the evidence, which confirmed a number of my impressions made at the time of the hearing. I have had regard, amongst other things, to whether the evidence given is inherently plausible or implausible; whether it is consistent; and whether, in a material way, it is, or is not, conformable to other evidence in the case including the available contemporaneous documents; and whether it is contradicted by other evidence which is undisputed or indisputable. 7. I have endeavoured to consider the evidence, not only in its context, but in the context of the total evidentiary fabric of the case. Common sense and experience in life is also applied. My conclusions cannot be clouded by sympathy. 8. With these considerations in mind, I turn to the evidence of each of the witnesses. 9. I was not overly impressed with the evidence of Saverio. Overall, I formed the view that he was an unreliable witness. 10. Their counsel described Saverio and Rosetta as "simple folk, lacking in sophistication". Whilst that might be an apt description of Rosetta (and I make no finding on whether it is or not), I am sure that the description does not apply to Saverio. In this regard, it is to be remembered that he and Francesco conducted a building business for about 7 years; and as will be read shortly, that in the 1980's and 1990's he conducted, on his own behalf, proceedings in a tribunal and in the Court of Appeal in New South Wales, in both of which he was successful. (Whilst ultimately unsuccessful in the Court of Appeal, in the substantive appeal, he was represented by junior counsel.) 11. I am satisfied that, at the hearing, Saverio understood far more of the English language than had been suggested by the requirement for an interpreter, a matter I raised with his counsel on the first day of the hearing, at T53.31-T53.47: "HIS HONOUR: Gentlemen, I'm going to take an adjournment. Mr Gemmell, it's quite clear to me that your client understands more than he's letting on. You either tell him, despite the fact that he's in cross examination he obviously isn't going to listen to me, because I've told him more than once that he has to wait for Mr Carolan to finish the question and the interpreter, who is doing a sterling job under obvious difficulties, he is answering in English, it's quite clear to me from my observations of him and please tell me if this is wrong he was able to read para 20 despite his denial of the ability to read para 20, he certainly gave me the impression that he was reading it, so I'm going to take a five minute adjournment, Mr Gemmell, and I think you need to have a firm word with the first plaintiff that it is not doing his case any good at all to continue in this way. Everything in this case so far as what he alleges the arrangements were depends upon my acceptance of him as a witness of truth. Mr Carolan, do you have any objection to me taking this course? I'm just trying to say it's quite clear to me, Mr Carolan, we are not going to finish before Thursday." 1. No objection by counsel for Sam and Rosa is identified in the Transcript. 2. In addition, Saverio appeared to be able to read English: T52.20-T52.40. 3. When his cross-examination continued on the second day of the hearing, which was some months later than the first day, the matter that I had raised became even more obvious. Counsel for Sam and Rosa asked questions regarding Saverio's employment record during the 1980's. Saverio stated that he had some casual work and that for some time he had been in receipt of unemployment benefits. There was then tendered reasons for judgment of proceedings in the Administrative Appeals Tribunal in March 1988 (Ex. 1D13), in which proceedings Saverio, who had appeared without legal representation (T83.42-T83.45), had successfully sought a review of a decision to cancel his unemployment benefit "upon the ground that the applicant was not making sufficient efforts to obtain suitable employment". It was not suggested that he had appeared at the time with an interpreter. 4. I have earlier referred to the Court of Appeal decision in which Saverio and Francesco were involved. Prior to the hearing in the Court of Appeal, there was an application for an adjournment of the appeal. In the reasons for judgment, although there is no specific reference to Saverio as the person who had appeared, I am satisfied, bearing in mind Saverio's evidence, that Francesco did not have anything to do with defending the litigation, that it was Saverio who "applied for an adjournment. He began to address the Court himself in support of his application without the assistance of an interpreter". However, his Honour also noted that "if [Mr Pupo] were compelled to proceed with the appeal today he would have to do so through an interpreter, without an appeal book and further, unable himself to read the appeal book, if he had one". (I note that these matters were raised in proceedings that were heard almost 20 years before the hearing of these proceedings.) 5. In addition, there are examples of Saverio answering questions asked in cross-examination before counsel had concluded the question and before the interpreter had had an opportunity to translate the question into Italian: T83.20-T813.26; T98.20-T98.25; T99.29-T99.36; T105.23-T105.30; and T106.12-T106.13. 6. Otherwise, and perhaps, unsurprisingly, Saverio did not appear to have a particularly good recollection of the conversations. I say, unsurprisingly, because the conversations took place about 25 years ago, they involved his children, who were, at that time, relatively young, and in circumstances in which the course proposed was for the benefit of the immediate family, because it would enable the family home, in which all of the children had lived for virtually all of their lives, and in which their parents also lived, to be retained. 7. To the extent that Saverio makes such an assertion, I am quite unable to accept that there was any agreement between Saverio and Francesco that each would receive $70,000 out of the proceeds of sale of the Leichhardt property. (It is difficult to know whether such an agreement is being asserted because in the Statement of Claim what is asserted is that he and Francesco "were told by [Saverio's] Solicitor that they should each receive approximately $70,000 for their respective shares in the property" (Paragraph 19) (my emphasis) and that "Francesco… informed [Saverio]… that he wanted to be paid money for the sale of his share of the house ($70,000)…") In this regard, Saverio's recollection of any conversations with Mr Papallo is far from precise. 8. I tend to the view that it might have been hoped that there would be sufficient to achieve a distribution of that amount to each of Saverio and Francesco. In this regard, Saverio, at the time, probably, was able to tell Mr Papallo, a solicitor, that the sale price was $291,000 and that $130,000 or thereabouts, had been borrowed and secured by registered mortgage. The difference ($161,000), taking into account costs and expenses of sale, might have led to the statement that about $70,000 should be left for each of the registered proprietors. 9. At the time that Saverio spoke with Mr Papallo, the total amount of the debts to be repaid, on the evidence of Saverio, does not appear to have been known. That the total of the debts would be less than $151,000 is highly unlikely, particularly bearing in mind the events of 1988 and 1989, and the borrowings that had been made during this period. That the total amount to be repaid under the mortgage, was shown to be a little more than $165,000, a short time later, suggests that it was unlikely that the total amount of the debts would be less than $151,000 at the time of the conversation with the solicitor. 10. Saverio did, however, give evidence that Mr Papallo "recommended that I take money the same way as the brother did": T95.34-T95.35; T110.03-T110.04. However, this recommendation was made at a time when the precise debts were not known. 11. (It is worth mentioning at this point, that, on the last day of the hearing, counsel for Saverio and Rosetta sought leave to re-open the case to file in court, and read, an affidavit sworn 11 October 2015, of their solicitor, Mr J Restuccia. Without objection, I granted leave to do so. The contents of the affidavit revealed that an email had been sent to Mr Papallo on 29 September 2015 confirming an earlier telephone conversation in which Mr Papallo had told Mr Restuccia that his firm had "no records pertaining to" and that he had "no recollection" of the conference with Saverio and Francesco prior to the sale of the Leichhardt property. Mr Papallo, in a letter, a copy of which was annexed to the affidavit, that "we have searched our files and all documents that are still in our possession and we have not been able to find any file or document in regard to your client, Saverio Pupo, in the sale of [the Leichhardt property]". He also confirmed in the letter that "we have no recollection of this matter at all".) 12. Also, for reasons to which I shall come, I prefer the evidence of Francesco to the evidence of Saverio, generally, and on this topic, namely that there was no discussion, in Francesco's presence, about what part, if any, of the proceeds of sale, Saverio was to receive. I accept that the only discussion with Francesco related to what amount he, Francesco, would receive to enable the sale of the Leichhardt property to Sam, Giuseppe and Frank, to be achieved. 13. (Although there were some submissions made about Francesco being paid more than that to which he was entitled from the proceeds of sale, it is to be remembered that had Saverio not agreed to pay him, and if Francesco had not agreed to the loan to Sam, Giuseppe and Frank, the likelihood was that the Leichhardt property would have had to be sold, with the result that Saverio and his family would no longer have a home. In addition, bearing in mind the rates of interest at, or about, this time, as evidenced by the original terms of the Deed between Francesco and Sam, Giuseppe and Frank, the grant of an interest free loan was a significant gesture by Francesco.) 14. Accepting Francesco's evidence regarding the sale of the Leichhardt property, it does seem a remarkable coincidence that the amount that he was told he would receive out of the proceeds of sale was the precise amount that Sam, Giuseppe and Frank required to enable the completion of the sale, the other amounts being borrowed ($190,000) or raised by them (about $31,000): T167.50-T169.20. 15. I raised the question of the coincidence with counsel during submissions. Counsel for Saverio and Rosetta made submissions that satisfy me that it was only a coincidence and nothing more: T273.09-T273.46. (Each of the other counsel accepted that it was a coincidence also, so I shall say nothing more about it.) 16. On the other hand, if the total amount of the debts was known to Saverio, then that total was not disclosed to Francesco. Also, it seems that the total of the debts was not disclosed to Sam, Giuseppe and Frank, although they did come to know about the amount due to ICLE prior to the sale being completed. 17. Nor do I accept Saverio's evidence that he told Sam, Giuseppe and Frank that he would "keep my money in the property and Mum and I will continue to live in the property" and that they said "[w]e are happy with that Dad. You and mum can live here for the rest of your lives". Importantly, each of Sam and Frank denies such a conversation, and I prefer his evidence to the evidence of Saverio, generally, and in this regard. 18. Even if the conversation occurred, at its highest it might have been a hope that there would be some of the proceeds of sale left to which Saverio would be entitled to receive. But it is clear that Saverio, even then, did not know precisely, how much had to be repaid out of the proceeds of sale to ensure the discharge of the registered Mortgage, the withdrawal of the caveat registered on title, and in respect of any other debts that needed to be paid. 19. Even accepting that a conversation regarding the family members living in the Leichhardt property occurred, that does not establish the interest that Saverio claims. 20. Furthermore, had such a conversation occurred, it is likely that, despite the family relationship, some attention would have been paid by all of the family members to the amount that Saverio was "keeping" in the Leichhardt property. One might have expected the topic to be discussed with Mr Sarajinsky. 21. More importantly, one might think that Mr Sarajinsky would have been able to calculate the amount, if any, that Saverio was entitled to receive out of the proceeds of sale after the payment of all secured, and other, debts and the amount of $70,000 to be paid to Francesco. As Saverio's solicitor, and one who appears to have been careful to ensure that Francesco's loan to Sam, Giuseppe and Frank, was properly documented and relevantly protected by caveat, he is likely to have been equally careful to ensure that any amount payable to Saverio, which he did not receive, and which created an interest in the Leichhardt property, was properly documented, and relevantly protected, in a similar, or at least in some, way. 22. Not only is there no evidence of any conversation with Mr Sarajinsky, there is no record of the amount, if any, that would be available after repayment of the secured, and other, debts and the amount of $70,000 to be paid to Francesco. All that one has, by way of a contemporaneous document, is the written Direction given to their solicitors by Sam, Giuseppe and Frank, to which reference has been made. 23. Another aspect of Saverio's evidence is demonstrably wrong. He asserted that he had taken out the loan the subject of the registered Mortgage dated 10 November 1988, securing the debt to Permanent Trustee Australia Limited, in order to repay "all" of his debts and that he was left "with one mortgage" (T46.43-T46.48; T57.45-T57.48; T60.21-T60.29; T63.08-T63.31). However, other evidence (Ex. 1D12) reveals that there was a subsequent "loan or other financial accommodation granted or to be granted" identified in Caveat Y244 (and an agreement in writing dated 24 February 1989), which Saverio was unable to explain. In addition, there is also evidence that Emery Berg & Co paid at least one other reasonably large amount ($26,514.31 to I Finance Corporation Limited) out of the deposit paid into its trust account on 30 July 1990. 24. It was submitted by counsel for Saverio that the court could not be satisfied that the amount paid to I Finance Corporation Limited was a debt that was required to be paid out of the proceeds of sale. In written submissions, counsel noted that Ex. 1D14 (the Trust Account Ledger) referred to payments out, one of which is for $234 and the "Item" referred to is "Gordon & Johnstone". The date of the payment is 30 July 1990. The entry immediately above that entry is also dated 30 July 1990, and the "Item" referred to is "I Finance Corp Ltd". 25. Somewhat inconsistently, it was submitted that: "Given that Gordon & Johnstone were paid sequentially to I Finance Corp and that Gordon & Johnstone acted for ICLE, the Court could reasonably find that I Finnace [sic] Corp & ICLE are the same entity and that there is no evidence of any other significant creditor at the time of settlement." 1. This submission does not take into account Saverio's evidence, on the second day of the hearing. It was put to Saverio that his signature on the Transfer had been witnessed by Mr Sarajinsky, to which he responded (T89.25-T89.45): "This is to do with the court case that I had with a finance company that lent me money… and the solicitor handling this was a Polish solicitor in York Street." 1. He also described Mr Sarajinsky as "the solicitor dealing with the finance company": T93.36-T93.40. He could not remember the name of the finance company but identified it as "the finance company who [sic] was charging me double rate of interest": T89.42-T89.46. He did not identify ICLE as the finance company to which he was referring. 2. Saverio added, at T94.01-T94.05: "I never gave any instruction to the solicitor Sarajinsky… for any dealing with the house. He was a solicitor for dealing with the finance company." 1. Saverio's evidence, if accepted, does suggest that ICLE, the caveator, and I Finance Corporation Limited, to whom Mr Sarajinsky paid an amount out of the firm's trust account, were not one and the same creditor, as was submitted, and that there was likely to have been two debts (other than the debt secured by mortgage), one secured on the Leichhardt property by caveat, and one to do with, as Saverio put it, "the finance company which lent me money". 2. Furthermore, the entries in Ex. 1D14 are equally consistent with an amount being paid to I Finance Corporation Limited, and an amount being paid to Gordon & Johnstone for the costs of the Withdrawal of Caveat Y244. 3. Furthermore, the Withdrawal of Caveat clearly refers to ICLE and not I Finance Corporation Limited. Had they been the one entity, it is likely that the reference in the Trust Account Ledger would not have been to I Finance Corporation Limited but to ICLE. 4. In the circumstances, I am unable to accept the submission of counsel for Saverio on this topic. 5. The evidence to which I have referred is also inconsistent with Saverio's affidavit evidence in reply that "my family did not have any significant financial problems until about 1988 or 1989": Paragraph 1(c) of his affidavit sworn 3 December 2014. 6. Saverio's evidence that Mr Sarajinsky was only acting in relation to the finance company is also inconsistent with the information contained in the firm's Trust Account Ledger, as well as with the documents relating to the loan to Sam, Giuseppe and Frank, which demonstrates, clearly, that Emery Berg & Co, and Mr Sarajinsky of that firm, was acting for Saverio and Francesco on the sale of the Leichhardt property. 7. A further difficulty in accepting Saverio's evidence, where in dispute or otherwise unsupported by contemporaneous documentary evidence, is that he said that he could not even remember the sale price of the Leichhardt property: T55.30-T55.41. (He would not even accept the proposition that the sale price was $291,000: T56.02-T56.07.) He asserted, also, that he could not remember what amounts had to be repaid out of the proceeds of sale, maintaining that there was, then, only one debt: T94.07-T94.12. 8. Finally, to demonstrate the difficulties of memory that Saverio asserted he had, the following cross-examination is instructive, at T95.48-T97.48: "Q. How much do you say was left over after the finance company had been paid, after the bank had been paid, Perpetual mortgage A. INTERPRETER: I don't remember what it was whether it was 200 or 150, I don't remember. Q. Can you just concentrate on my question for a moment? Let me ask it in a number of tranches. The sale price was $291,000, correct? A. INTERPRETER: No I don't remember. Q. Well that was the amount that was agreed and put into the contract, wasn't it? A. INTERPRETER: I don't remember. Q. The debt to Permanent Trustee company was $165,878. A. INTERPRETER: What I could've done then is to sell the house for $300,000 but I didn't do it because it would have meant putting the children on the, on the street. HIS HONOUR Q. At the moment you're just being asked about some things. Would you have a look at the document that I'm about to show you please? I'm showing annexure C being the copy of the transfer of the property. Would you have a look at that document? You've been shown that document before. A. INTERPRETER: This has been signed by myself and my brother. What is written there I cannot deny it. Q. Yes, would you have a look at about a fifth of the way down, you'll see the figure of $291,000. Do you see the figure of $291,000? A. INTERPRETER: I do not remember. Q. Please listen to my question. Do you see it there? A. WITNESS: Yeah, yeah, yeah. Q. That refers to the sale price of the property at Leichhardt. A. INTERPRETER: I can see that it is there, what can I say? But I do not remember. Q. Would you turn over the page please and look at annexure D? This is a document that relates to the amount paid to the company shown and it is the amount of $165,878.58? A. INTERPRETER: 165,878-- Q. 58. That was the amount that was said to be owing to the mortgagee, the company shown there? A. INTERPRETER: Yes, that amount about 160, 150. HIS HONOUR: Yes, Mr Carolan. Thank you, I'll take those documents back. INTERPRETER: Yes, that was the amount attached but then what they write, whatever as they write, they can write whatever they like. Q. The note of the sale proceeds an amount of $26,514.31 was paid to I Finance Corp Limited? A. INTERPRETER: That was my brother who had the problem, they put my name on it but I never, I didn't get the money, didn't - and I didn't say to give the money. Q. Where is that in your affidavit? A. INTERPRETER: This is the truth, that's what I'm saying. I didn't get money, I don't know what they did. Q. An amount of money was paid to Montepaschi(?) ICLE? A. INTERPRETER: When, when I got to 165 I paid all the debts that I had including Montepaschi. Q. When you were paid the 165 you weren't paid 165 by anybody, were you? A. INTERPRETER: The 165 were borrowed so that I could pay the other debts that I had. Q. You borrowed 130, didn't you? A. INTERPRETER: I don't remember that but the money that I borrowed from the company I borrowed so that I could pay all the debts and be left debt free. Q. Mr Pupo, you've had some time to think about this between the time we were last in Court and today. How much do you say you weren't paid out of the $291,000? A. INTERPRETER: I never got any money. A. WITNESS: Never. Q. How much do you say you were entitled to be paid? A. INTERPRETER: Same, same as my brother, as much as my brother got. A. WITNESS: The same. Q. There was no evidence from you of any agreement with your sons about that though, was there? A. INTERPRETER: My evidence is that my brother got a caveat on the house but I didn't want to take one because I didn't want to put my, the children on the streets. Q. Mr Pupo, there is nothing in your affidavit about any of that, is there? A. INTERPRETER: I've always said that, I've - I said that all along. Q. What I want to suggest to you is that by the time that various financiers had been paid out and the cost and disbursements of conveyance had been paid there was nothing left for you, was there? A. INTERPRETER: That's not true, my children always said you live here and your money's here. A. WITNESS: This is the truth." 1. I note, also, that when Saverio was asked whether Francesco had lent $70,000, being the amount that he agreed he would accept for his share of the Leichhardt property, Saverio answered "I don't know what he did": T56.22-T56.24. He did not say, on this occasion, that he did not remember. It is difficult to believe that Saverio did not know that Francesco was lending his share of the proceeds of sale to Sam, Giuseppe and Frank to enable the purchase to proceed to completion as they could not raise more than $190,000. 2. Nor could Saverio remember how much money, if any, had been repaid to ICLE. He denied that it was $24,121.42 and asserted that the debts to ICLE had been repaid when he had borrowed the money which was subject of the mortgage: T60.23-T60.29. 3. At the conclusion of Saverio's evidence, I was not satisfied of the reliability of his recollection of some of the events that had occurred. I am unable to find that the conversations alleged by him as to "keeping" money in the Leichhardt property were proved, on the balance of probabilities, to have occurred. 4. In my view, the evidence, overall, makes clear that there was no surplus money available from $190,000, being the amount borrowed by Sam, Giuseppe and Frank from the Commonwealth Bank, and that the whole of the available part of the purchase price was used to pay other debts. In addition, Ex. 1D14 makes clear that the amount of the deposit, and the interest accrued, was wholly disbursed as well for debts and expenses. 5. There are other matters, to which I shall turn later in these reasons, that provide additional support for the conclusion to which I have come regarding the reliability of Saverio's evidence. 6. Rosetta stated in her affidavit that Saverio had told her, in about 1990, that the business was in trouble and that if he and Francesco were unable to repay the mortgage debt, that they would lose the house. 7. Although there was some criticism of this evidence, and whilst I think it was unlikely that a reference was made in any conversation to the business being in trouble, I am also satisfied that there was likely to have been some general conversation to the effect asserted. 8. I am also satisfied that Saverio probably told Rosetta that Francesco had wanted to sell his share of the Leichhardt property. The general subject of the conversation was being discussed with Sam, Guiseppe and Frank. It is unlikely that Rosetta, as Saverio's wife and their mother, would be excluded from the conversations, although the significance to her of the conversations is difficult to know. However, she admitted in cross-examination, that she did not really remember what he had said to her, and she acknowledged that he was trying to protect her from additional worry. 9. Rosetta also stated in her affidavit that "there were a number of conversations between Saverio and… Sam, Giuseppe, and Frank, regarding [the three sons] purchasing the [Leichhardt] property to save it from repossession". She also stated, frankly, in her affidavit that "I do not recall specific details of those conversations" which "would usually occur at the dinner table". Again, I am satisfied that the subject of the conversation was likely to have been discussed. 10. I do not accept Rosetta's evidence, however, that there were discussions with Saverio that included Francesco. In my view, the topic of the sale of the Leichhardt property probably occurred at, or about the time, that Francesco moved. Thereafter, as will be shown, Francesco had no discussion with Saverio until shortly prior to the sale of the Leichhardt property. 11. Rosetta said that she recalled Saverio saying "[w]e will leave our money in the house. We will continue to live in the house". This conversation is difficult to accept. At its highest, if it were said, it was likely to have been said when there was a hope of some of the proceeds of sale being available, and at a time when Saverio did not know how much had to be repaid out of the proceeds of sale to ensure the discharge of the registered Mortgage, the withdrawal of the caveat registered on title, and in respect of any other debts that needed to be paid. 12. It is also inconsistent with Saverio's evidence which was to the effect that he was to leave his money in the Leichhardt property. 13. In cross-examination, Rosetta accepted that she could not recollect any conversation of how much money was being "left in the house" but thought that "it was half": T116.43-T117.28. Nor could she recollect when the conversation had occurred. She said that such conversations occurred both before, and after, Rosa and Sam were married. 14. Rosetta also recalled that one of the three sons, said, followed by the actual agreement of the other two, "Mum don't you worry. You and Dad can move downstairs and no one will ever make you move from there". Whilst I am not sure that she had an actual recollection of the conversation, I am satisfied, bearing in mind the general subject of the conversations, namely the retention of the Leichhardt property, that something along the lines of all of them continuing to live in the Leichhardt property was said. It cannot be forgotten that, at this time, all of their children were still living at home with Saverio and Rosetta and that the whole purpose of the sale of the Leichhardt property to them was to ensure that they would all have somewhere to live. 15. As I have said, even accepting that a conversation regarding them all living in the Leichhardt property occurred, that does not establish the interest that Saverio claims. 16. I find the conversations that Rosetta alleges that she had with Rosa about Saverio and her "having money in the house" did not occur. In this regard, I prefer the evidence of Rosa to that of Rosetta. 17. It seems highly unlikely, if the conversation had occurred at, or about, the time that Sam and Rosa were contemplating purchasing Frank's interest in the Leichhardt property, that Rosa would not ask how much Saverio and Rosetta had left in the house, or that Rosa would not raise the issue with Sam or Frank. There is no evidence that she did so and it was not suggested to her that any conversation with either of them had occurred. 18. There are other reasons, to which I shall return, for not accepting Rosetta's evidence of any conversation with Rosa relating to Saverio and Rosetta having money in the Leichhardt property. 19. I accept Rosetta's evidence that she did not expect money for what she did for Sam and Rosa in looking after her grandchildren. As she put it "we [were] on very good terms so there was a great deal of friendship so why should any money be asked [for] or given": T121.29-T121.31. 20. Having heard Rosetta's evidence, I am of the view that Rosetta did not go to the upstairs area of the Leichhardt property after Sam and Rosa married, unless invited to do so. She did not go upstairs to have meals other than "when I got invited it was on a special occasion, once in a while": T120.50-T121.07; T123.09-T123.19 and that, generally, Sam, Rosa and their children, lived separate lives to the lives of Saverio, Rosetta and Antonio. 21. My conclusions regarding the reliability of Saverio's evidence were not altered following the conclusion of Rosetta's evidence. 22. Antonio was next to give evidence. Although it might be thought that he has no personal interest in the outcome of the proceedings, he has lived with Saverio and Rosetta for the whole of his life, and it was not suggested that he would not continue to do so. To his credit, Antonio acknowledged that he had a "big interest in staying in" the Leichhardt property because Saverio and Rosetta were looking after him, but he denied giving evidence to assist them because of that interest: T127.40-T127.48. 23. To his credit, also, Antonio stated that he had suffered an injury in 2000, and that he had had an operation, following which he had difficulties of memory. 24. He acknowledged that in 1990, he did not know about the debts that Saverio and Francesco had that were secured on title to the Leichhardt property; that he did not recollect any discussion about the purchase price of the Leichhardt property at the time of its sale to Sam, Giuseppe and Frank; or any discussions about the loan obtained by them from the Commonwealth Bank. 25. I formed the view that he did not have an independent recollection of the events surrounding the purchase of the Leichhardt property by his three brothers. This is not intended as a criticism of his evidence, because I also remember that in 1990, the time of these events, he would have been about 14 years old. 26. Although Antonio stated that he could recollect Saverio saying "[d]on't worry about paying me for my share. I will leave the money in the property", he acknowledged that Saverio did not say how much money "would be left in the property": T125. Later, in re-examination (at T129.01-T130.31), when asked about the conversation, he gave the following evidence: "Q. Can you recall any conversation between your father, your mother and your brothers at the dinner table regarding the sale of the house to your brothers? A. Yes. Q. Could you tell me as best you can what your recollection of that conversation is? A. My uncle is selling out of the property Q. Could you keep your voice up and speak into the microphone? A. My uncle was selling out of the property and my brothers couldn't afford to buy the house unless my dad kept his house - money in the house. Q. What was said? A. Precisely I don't - I can't remember. Sorry. … Q. Do you recall whether or not there was any discussion about your parents and where they would live? A. Yes. Q. What do you recall about that part of the conversation? A. My brothers said that the house downstairs will be fixed up for my parents to live in, and upstairs they - at one stage or another they'll rent it out, collect the money, cause they were paying off - pay off the house. Q. Was there any discussion about uncle Frank in this discussion? A. That I can remember no. Q. Do you remember any discussion about uncle Frank in relation to his share of the property? A. Yeah. Yes I do. Q. What do you recall about those conversations? A. That my uncle Frank want..(not transcribable).. sell the house - sell you the house and my brothers decided to buy, buy his half. Q. I'm sorry I can't hear. A. Buy his half. My brothers decided to buy his half of the house. Q. When you say his half of the house A. Mm-hmm. Q. whose did you understand was the other half of the house? A. My father's. Q. Do you recall any conversation about what was to happen to that half of the house? A. My father's meant to stay there. My parents. Both my parents was meant to stay there until their death. CAROLAN: I'm sorry, the answer was non responsive. GEMMELL: Yes, well I was going to repeat the question. That's precisely what I was going to do. Q. Do you recall though, was there a conversation about what was to happen in relation to your father's share of the house? A. Not really. I can't remember. Sorry." 1. Antonio's evidence is neither accurate nor precise. 2. My conclusions regarding the reliability of Saverio's evidence were not altered following the conclusion of Antonio's evidence. 3. Giuseppe was then called, albeit that he is the third Defendant, principally because his evidence was said to support the evidence of Saverio and Rosetta. 4. I was reminded, during submissions, that his evidence is, effectively, evidence given against his own interest, since, if Saverio is successful, Giuseppe's interest in the Leichhardt property would be reduced. Whilst this is an important matter in considering his credibility, it is not the only matter. Also, his interest in the Leichhardt property is limited to one third. 5. Overall, I thought that Giuseppe was very emotionally involved in the proceedings and in the case being advanced by his parents. He viewed the conduct of Sam and Rosa as inappropriate, describing their conduct as "pushing their weight around saying that they owned two thirds of the property plus garage, they just were grabbing more and more, creating more problems": T133.06-T133.08. 6. I was not very impressed with Giuseppe's evidence and it does not enable me to alter my conclusions regarding Saverio's evidence. As in the case of Saverio, I am not satisfied of the reliability of Giuseppe's recollection of the conversations. In my view, some of his evidence is implausible and is inconsistent with other objectively established evidence, or evidence that was not really the subject of challenge. 7. Also, as I shall state, I prefer the evidence of Francesco, and of Frank, where there is any dispute between his evidence and the evidence of Giuseppe. 8. Giuseppe gave evidence that "[b]y the late 1980's Dad and Uncle Frank were approaching retirement age and their business was not doing well". Saverio was born in 1936 and would have been in his early 50's. Francesco was born in 1942 and would have been in his late 40's. Also, as earlier stated, the business had ceased to operate in 1977. 9. Giuseppe also stated that he had participated in a conversation with Saverio, Francesco, Sam and Frank "in 1989 or 1990" in which they had discussed the sale and purchase of the Leichhardt property. I do not accept this evidence, firstly, because Francesco gave evidence, which I prefer, that he had no conversations at all with any of Sam, Giuseppe, or Frank, between 1988, the time he moved out of the Leichhardt property, and after the completion of the sale in 1990. He had no conversation with Saverio between 1988 and about the time of the sale of the Leichhardt property. 10. Next, Giuseppe stated that, in the conversation, he said to Saverio and Francesco, "Frank Jnr, Sam and I want to buy the property from you. We will take on the mortgage as the three of us are working", whereas, in cross-examination, he had stated, in giving evidence about the transaction, at T156.33-T156.35: "Like I said, it was a family affair, we were trying to save the, the family home, there was three boys, two of them unemployed, we were trying to please the bank to get this loan. That, that's it. 1. Furthermore, there was no suggestion made by Saverio that the idea of the sons buying the Leichhardt property emanated from them, rather than from him. The suggestion that the three boys, then in their early and mid 20's would make this suggestion seems a little unlikely. 2. Interestingly, there is nothing in Giuseppe's first affidavit, affirmed 29 September 2014, in which he recites any conversation about Saverio "keeping" his share of the proceeds of sale in the Leichhardt property. He does state that Saverio "was not paid anything for transferring his half share of the property" but simply adds: "Instead he, Mum and Antonio continued to live upstairs with me, Frank Jnr and Sam". 3. Giuseppe does, however, refer to a conversation in his affidavit in reply affirmed on 17 December 2014, in which Saverio is alleged to have said "I will retain my share of the property and Mum and I will continue to live there". Had such a conversation occurred, I tend to think that it would have appeared in Giuseppe's first affidavit rather than in an affidavit in reply. 4. Giuseppe also gives evidence of a conversation with Sam and Frank, some months prior to Sam and Rosa's marriage, in which Sam said that "[w]e were thinking to buy one of you out". I do not accept that this conversation occurred as there was unchallenged evidence from each of Sam and Rosa that, in January 2000, they were looking to purchase an apartment in the Five Dock area, and that they subsequently found one which they wished to purchase. It was only when Frank raised the possibility of them buying his share that they gave consideration to doing so. 5. Nor do I accept Giuseppe's evidence that he had a conversation with Frank and Sam sometime after the marriage of Sam and Rosa, in which Frank said that "the house is valued at $600,000, but Mum and dad still have money in the house"; or that Giuseppe said "[t]heir interest would be worth around $120,000"; that Frank agreed to "accept $160,000" from Sam and Rosa for his one third share; or that Sam agreed with what had been said; and that Giuseppe said that he would allow Sam and Rosa "five years to get on your feet from when you were married but then we need to rent upstairs". 6. My reasons for rejecting his evidence on this topic are as follows. 7. Firstly, Giuseppe admitted in cross-examination that he had no basis to suggest that Frank had not received $200,000: T161.43-T161.45. (Frank denied that he was prepared to accept, $160,000 for his one third share, in circumstances where the value of that share was agreed to be $200,000.) As part of this reason, Sam and Rosa each gave evidence, and I accept, that they paid Frank, or paid for his benefit, the total sum of $200,000, which Frank had acknowledged he received (or of which he had the benefit): Ex. 3D1/14). 8. Secondly, Giuseppe was unable to explain, in a comprehensible way, how the value of the interest of $120,000 (or 20 per cent of the then value of the Leichhardt property) to which reference was allegedly made in this conversation, had been calculated. On this topic, in his cross-examination, the following passage appears at T150.35-T150.43: "Q. How did you place a value on that interest? A. Well, we evaluated the house at about 600 to 650 thousand and we basically divided it into three, for the three sons, came to two hundred and so thousands. And we said there is a value, there is equity that we should leave behind in case things go foul with Tony - with Sam and Rosie in the future. Anything can happen in the future. So if Frank can just accept a reasonable offer of 150, 165 thousand, leaving an amount of equity in the house, so if something goes wrong the equity can be used to assist my parents in buying the property or moving on in life." 1. This evidence does not suggest, even remotely, that Giuseppe was asserting to his two brothers that Saverio had any interest in the Leichhardt property. Interestingly, Saverio was not even mentioned in this version of the conversation, other than in the context of there being a fund available to "assist my parents in buying a property or moving on in life", to which the three owners would contribute. 2. Then, after further trying to explain how the figure of $120,000 was reached, he was forced to admit that "[w]e made a guess. It was three brothers involved, we made a guess, a fair estimate guess at their estimate value of their equity": T160.04-T160.07. 3. Like some of his other evidence, to which I shall refer, I did not find his evidence on this topic at all convincing. 4. Thirdly, Frank, Sam and Rosa, all deny such a conversation and I prefer the evidence of each to the evidence of Giuseppe. 5. Next, correspondence was tendered (Ex. 1D15), passing between Sam and Rosa's solicitors and Giuseppe, in April 2014, in which they had suggested the sale of the Leichhardt property upon the basis that its then value was $1.5 million. They offered to sell him their interest for $1 million, but in the alternative suggested that the Leichhardt property should be sold by public auction with a reserve price of $1.5 million. 6. Giuseppe replied in two letters, neither of which even faintly suggest that he was aware of, or that he asserted that, Saverio (or Rosetta) had an entitlement to any part of the proceeds of sale (although there was a reference to Saverio and Rosetta, living "in my 1/3 of the property at no benefit to myself and that they [had] agreed to have our mother and father live there till there [sic] death"). 7. Indeed, in the correspondence, Giuseppe offered to purchase Rosa's share of the Leichhardt property for $500,000 (one third of $1.5 million), which does not suggest that her interest in the Leichhardt property was affected by any interest of Saverio or Rosetta in the property. 8. In the second letter sent, Giuseppe suggested that the solicitors "advise [their] client on this particular matter of what is to happen with the tenants first before we can consider any sale" and noted that Saverio and Rosetta "are seeking legal representation to this matter". 9. Finally, in cross-examination, he said at T162.36- T163.02: "Q. …Going first to your letter of 14 April 2014, nowhere in that letter do you make any reference to any equity in the property held by your parents, do you? A. When I wrote that letter Q. I'm sorry. A. No. Q. Similarly in relation to your letter of 22 April 2014 A. No. Q. I want to suggest to you that if, as you now seek to say, there was such an arrangement, and if there was an unpaid purchase price which had subsisted since 1990, that would've been the first thing you would've said in this letter - firstly in the letter of 14 April and in fact all you asserted was that you owned a third, Sam owned a third and Rosemaria owned a third. Is that correct? A. That's, that's what's on the title but in our hearts we know it's different." 1. The answers given by Giuseppe do not provide any corroboration of an agreement to leave money in the Leichhardt property to which Saverio was entitled from its sale. 2. I also do not accept Giuseppe's evidence, given in his last affidavit, and at T140.15-T140.24, that the deposit of $29,100 was paid to Francesco directly, at, or about, the time of the sale. I set out later some reasons for rejecting Giuseppe's evidence on this topic when I deal with Francesco's evidence. 3. Importantly, the trust account ledger (Ex. 1D14), to which reference has been made, does not reveal any such payment to Francesco. Indeed, Giuseppe conceded that the cheque for the deposit, made payable to Emery Berg & Co, was given to Saverio to pass on to the solicitors: T139.43-T139.50. 4. Ultimately, Giuseppe conceded that "all I know is that we paid $29,100 to Emery Berg directed at his solicitors, as a deposit": T141.22-T145.28. He did not attempt to explain his affidavit evidence and the unambiguous assertion made in it that the deposit had been paid to Francesco. 5. Another aspect that does not sit well with the contemporaneous documents, but which was relied upon by counsel for Saverio and Rosetta (and his own counsel) was Giuseppe's evidence that the amount of $190,000 that he, Sam and Frank had borrowed was "applied to paying out the existing mortgage to the Howard Mortgage Trust for a sum of $165,878.58, stamp duty, mortgage duty and various other expenses" (my emphasis). 6. I have earlier set out the contemporaneous evidence about the date of the payment of stamp duty on both the Contract and the mortgage (on 24 July 1990), whereas settlement of the sale of the Leichhardt property took place on 30 July 1990, some six days later. As stated earlier, in Ex. 1D4, there is a reference to $8,901, which includes the amount of stamp duty and mortgage duty, having been "paid by you by bank cheque drawn directly in favour of the Department of Finance" and the receipt bears the date 24 July 1990. This leads to the conclusion that it was not part of the $190,000 borrowed by Sam, Giuseppe and Frank. 7. There is no evidence of the "various other expenses" to which Giuseppe referred in his evidence. 8. Furthermore, unless Sam, Giuseppe and Frank were reimbursed from the borrowing, and it was not put in cross-examination to either Sam, or Frank, that he had been, the payment of stamp duty on the Transfer and mortgage duty occurred before the Commonwealth Bank was likely to have made the amount of the borrowing available to them (that is, at the time of the settlement of the Contract). 9. Although Giuseppe gave evidence, in cross-examination, that "we reinvested [sic] ourselves plus had paid other bills that were left behind, like counsel [sic] fees and bits and pieces that my father and my uncle couldn't afford to pay", he accepted that he "didn't put that in the affidavit": T144.20-T144.34. 10. The following passage of the cross-examination, at T145.01-T145.29, is significant: "Q. There is nothing in your affidavit, nor is there any document that you have produced, which suggests that any part of the $190,000 was ever returned to you, Sam or Frank. A. No. Q. In fact what your solicitors say is that when they settled the sale there was insufficient funds, either from your father A. Correct. Q. or available A. Correct. Q. to pay the rates? A. Stamp duties, bits and pieces. Q. Well, no - or to pay their fees? There's no suggestion by them that any of the $190,000 was paid back to you, was there? A. Like I see - you've got those documents in front of you. Those documents, they're not very clear most of the time. I mean, we borrowed the 290, 291, for the purchase of the property and 163 went to the, the, the main borrowers or the lenders, and the 29,000 went to Francesco Pupo Senior to pay off his caveats that he had on top of that loan. HIS HONOUR Q. I'm not sure that that's entirely accurate. First of all, you didn't borrow 291,000 A. No, no, sorry, not - the 190. I apologise, the 190 we borrowed, of the sale price of 291." 1. Later, Giuseppe said that, initially, he did not know the amount of the debts that were required to be repaid to have the caveat by ICLE withdrawn or the amount to repay I Finance Corporation Limited: T146.05-T146.11. 2. He also said that they did find out that "they had another $30,000 or so with ICLE" and that this was discovered on the second occasion they had gone to the Commonwealth Bank: T151.22-T151.32; T151.48-T151.50; T152; T153.44. He accepted that about $195,000 was required to repay the registered mortgagee and ICLE: T153. 3. Giuseppe maintained that he did not know anything about the payment made by Emery Berg & Co to I Finance Corporation Limited: T159.39-T159.42. I accept the evidence that he did not know of the payment. There is no reason why he would have known since that firm was not acting for the purchasers but for the vendors. 4. However, it may mean, since Giuseppe gave evidence that he knew of the ICLE debt which required the amount to be borrowed from the Commonwealth to be increased to $190,000, that there was not only the debt to ICLE that was required to be paid out of the proceeds of sale, but also the amount that was paid out of the trust account of Emery Berg & Co. 5. Although it was submitted by counsel for Saverio that the court could not conclude that the payment to I Finance Corporation Limited was the repayment of a debt, I am satisfied that it was. I base this finding upon, amongst other things, Saverio's evidence about what Mr Sarajinsky had been retained to do, and because of the likelihood that the vendors' solicitors would not have paid out of the funds held for, and unless it was a debt due by, the vendors. 6. I should also specifically mention the following exchange that occurred between Giuseppe and the Bench, at T167.50-T169.20: "Q. Mr Pupo, your attention has been directed quite a lot during the course of the cross-examination to the amounts that had to be paid out of the proceeds of sale. Could I just ask you some questions about the payment of the purchase price of the property? As I understand it your evidence and the evidence that has been filed so far is firstly that the purchase price was $291,000. That was a figure that was agreed to by your father, Saverio, and Francesco as vendors and by you, Sam and Frank as purchasers. Is that correct? A. Correct. Correct. Q. I understand that you, Sam and Frank raised between yourselves $29,100 which was paid by way of the deposit and deposited into the solicitors acting for the vendors on 12 July 1990. It also appears that $190,000 was able to be borrowed by you, Sam and Frank from the Commonwealth Savings Bank which resulted in a mortgage being registered on title to the property after the purchase was completed. Is that correct? A. Mm. Q. Thank you. Keep your voice up, would you? A. Correct. Q. …In addition to that I observe that in a letter to you, Frank and Sam dated 1 August 1990 which is exhibit 1D4 in the proceedings that an amount of $1,900 was paid for in cash by you and your brothers-- A. Correct. Q. --to the solicitors. And finally there was the loan amount of $70,000 which was the balance of the amount required to enable you to put together, as it were, with your brothers the total of the purchase price. Is that correct? A. Correct, yeah. Q. It was that $70,000 which was the subject of the mortgage to Francesco that you and your brothers subsequently signed. Is that correct-- A. On paper, correct, yeah. Q. --all of that correct? A. On, on paper, correct, yes. Q. I'm just wondering whether in fact the figure of $70,000 was reached because that was the amount that was the balance of the purchase price that had not been able to be raised by you, Frank and Sam to get to $291,000. A. Well yeah, yeah, correct, that's correct. Q. Is that what occurred? A. Yeah, well, there was, there was no money left. We were paying already a huge amount on the interest itself of 190,000. … HIS HONOUR: He says that that was all that was left. WITNESS: That's-- HIS HONOUR: They couldn't-- WITNESS: --..(not transcribable).. HIS HONOUR: --raise any more money themselves. Q. Is that right? A. Correct. There's no more money. Q. So the $70,000 was the balance of the purchase price which if there was not going to be a forced sale would be required to be raised to enable the purchase to be completed? A. Correct. Q. And it was for that reason, was it, that Francesco Senior agreed to, as it were, provide vendor finance in that sum to you three boys as the purchasers of the property? A. Correct. It wasn't what we paid for it." 1. (As previously mentioned, for the reasons provided by counsel for Saverio and Rosetta, I am satisfied that it is only a coincidence that $70,000 to be paid to Francesco out of the proceeds of sale was the precise amount required by Sam, Giuseppe and Frank to complete the purchase price.) 2. Francesco was another witness. He has no personal interest in the proceedings but was called in the case presented by Sam and Rosa. I was impressed with him in the witness box. I found him to be open and forthright and he endeavoured to assist the court. Whilst there were some difficulties of understanding some of what he said (because he spoke with a heavy accent and quite quickly), it seemed to me, at the time, and when I re-read his evidence, that he answered the questions asked of him to the best of his ability. 3. I regard Francesco as an honest witness and am confident that what he told me was truthful. Importantly, there is no financial benefit to be gained by him in the result of the case. Nor was it suggested to him, by counsel for Saverio and Rosetta, that he had any reason to support Sam's and Rosa's case in preference to their case. 4. (I reject any submissions made by counsel for Saverio and Rosetta that Francesco felt "sympathy for Sam who had helped him when he faced criminal charges", as this assertion was not put to Francesco during cross-examination. I also reject the submission that it is "human experience that Francesco is grateful to Sam": T267.06-T267.07.) 5. Furthermore, Francesco's version of the events is more consistent with the contemporaneous documents to which reference has been made, and with an overall view of the evidence. 6. I accept his evidence that he and Saverio shut down the building business in about 1977; that he then returned to full time work; that, thereafter, he started making all of the mortgage repayments because Saverio was unable to do so; that he provided about three quarters of his net wage to Saverio for the mortgage repayments and as a contribution for living expenses; and that when he did so, he had no family to support and regarded Saverio, Rosetta and the four children as "my only family". 7. It is also clear that at about the time that Francesco left the Leichhardt property in mid-1988, he spoke with Saverio about selling, and that Saverio was opposed to the idea, asking where he and his family would then live. I accept Francesco's evidence that the reason why the conversation occurred at that time was because Saverio was still receiving unemployment benefits and some cash for casual work, whilst Francesco was receiving only workers compensation benefits. 8. I also accept Francesco's evidence that following the conversation about the sale of the Leichhardt property, Saverio said that he would make all of the mortgage repayments after Francesco moved out of the Leichhardt property. Thereafter, Saverio was unable to keep up those repayments and that the debts secured on the Leichhardt property continued to increase as a result of him being unable to do so. 9. I accept Francesco's evidence that he was approached by a mutual friend of his and Saverio, Mr Pasquale Polistina, and that a discussion had taken place regarding the sale of the Leichhardt property to Sam, Giuseppe and Frank, otherwise there would be a forced sale. I am also satisfied that he was told that if he agreed to sell the Leichhardt property, he would receive $70,000 out of the proceeds of sale. 10. (The fact that Francesco was approached by a third party, rather than by Saverio, or one of Francesco's nephews, also provides a basis for rejecting the evidence of Saverio, and of Giuseppe, that Francesco was coming and going from the Leichhardt property. Had this occurred, there would have been no need to involve a third party, albeit a mutual friend of Saverio and Francesco.) 11. I have earlier referred to accepting Francesco's evidence that he moved out of the Leichhardt property in mid-1988 and that he did not return. I also accept his evidence that after he left "I never, never meet Frank, Sammy, Joe when I sell the place. I never have any conversation with them": T215.40-T215.41. 12. There was no reason put to him for making untrue statements about each of these matters. This makes Giuseppe's evidence about the conversations that he said he had involving Saverio and Francesco unlikely and I have said that I do not accept those conversations. 13. Importantly, then, I am satisfied that there was no discussion between Francesco and Saverio, or with Francesco and any solicitor, as to what amount, if any, Saverio would receive out of the proceeds of sale. Francesco's evidence is clear that when he attended on Mr Papallo, with Saverio, there was only talk about what Francesco's share of the proceeds of sale would be, not what Saverio would receive out of those proceeds: T213.03-T213.04; T213.17-T213.23. 14. I reject the submission by counsel for Saverio that the amount of $70,000 communicated to Francesco as his share was "most likely to have just been an estimate of what they thought would be left over" because, in fact, there was no evidence to suggest that there was ever any amount to which Francesco would be entitled. Furthermore, the amount of $70,000 was the amount that he actually lent to Sam, Giuseppe and Frank to enable the completion of the sale. 15. There is no suggestion that Francesco made any cash contribution to enable the purchase to proceed. As stated, what he did was to provide vendor's finance, in the amount of $70,000, to enable Sam, Giuseppe and Frank to complete the purchase of the Leichhardt property. 16. Francesco must have been informed, at some point in time, that Sam, Giuseppe and Frank would not be able to pay the $70,000. It was only then that he agreed to enter into the Deed and its variation to which reference has been made. (I have dealt with the lodgement of the caveat, the repayment of an amount to him in 1994, and the withdrawal of the caveat that was lodged on his behalf.) 17. It is to be remembered that Francesco agreed to receive no interest for 5 years, which, at that time, would have meant that he would not receive a significant amount of interest. 18. As stated earlier, I do not accept any suggestion in Giuseppe's evidence that Francesco received any part of the proceeds of sale (namely the deposit of $29,100) of the Leichhardt property in 1990. Firstly, Francesco denied that he did so, a denial that I have no hesitation in accepting. Secondly, it is clear from Ex. 1D14 that no payment was made to Francesco out of the funds paid to Emery Berg & Co. Thirdly, had the deposit, or any part of it, been paid to Francesco, it is unlikely that he would have received the amount that he did receive in 1994. 19. There was no suggestion in any correspondence passing between solicitors in regard to the repayment to Francesco, in 1993 and 1994 that he had received, directly or indirectly, any amount out of the proceeds of sale. 20. I am satisfied that where there is any conflict between the evidence of Saverio and Francesco, or the evidence of Giuseppe and Francesco, I should accept the evidence of Francesco unless the evidence of the other witness is supported by a contemporaneous document. 21. Frank also gave evidence and was cross-examined. I am satisfied that Frank gave his short evidence calmly and dispassionately. I accept his evidence as truthful. Also, I remember that he has no personal interest in the outcome of the proceedings as he, no longer, has any interest in the Leichhardt property. 22. It was not put to Frank by counsel for Saverio and Rosetta, that he was giving evidence in order to assist Sam and Rosa, which evidence was untrue. 23. Frank says, and I accept, that he was paid for his one third share of the Leichhardt property, in about 2000. He confirmed that the value of that share, at the time of the payment made to him, or on his behalf, was $200,000, the whole of which amount he received. He gave evidence that he had received about $149,000 directly into his bank account; he had his share of the mortgage debt repaid (about $35,000); and he received the balance from Sam in cash: T230.35-T230.47. (He did not mention the cash component in his affidavit, but he confirmed, in cross-examination, that he had received an amount in cash from Sam: T231.03-T231.07). 24. Frank also denied any conversation with Saverio in which it was suggested that any part of the proceeds of sale to which Saverio was entitled from the sale to Sam, Giuseppe and Frank would be retained in the Leichhardt property: T229.01-T229.13. 25. Finally, as I have earlier noted, it was not put to Frank that any part of the amount of $190,000 not used to repay the mortgage debt, was repaid to him or was used to reimburse him for moneys expended on the Leichhardt property. 26. Sam was another witness to be cross-examined. He was cross-examined on the key events in question and he was not shaken in the process. 27. It was put to him that some of his evidence, as to what was paid out of the proceeds of sale had not been based on an actual recollection but had been calculated bearing in mind what had been found to be payments that had been made. He accepted that this was so and did not prevaricate in giving this answer. 28. I am not sure that the criticism of his evidence was valid because it was not for him to establish how the proceeds of sale had been spent, or for that matter, what amount, if any, had been left in the Leichhardt property by Saverio. As he admitted, he did not know but was inferring the expenditure from the fact that the amount borrowed from the Commonwealth Bank was expended. It was not put to Sam that any part of the amount of $190,000 that was borrowed and not used to repay the mortgage debt, was repaid to him. 29. Importantly, Sam, too, denied that any conversation had occurred between himself and Saverio in which it was suggested that any part of the proceeds of sale to which Saverio was entitled would be retained in the Leichhardt property. That such a conversation took place is unlikely in any event, and that Sam's (and Frank's) evidence in this regard should be accepted, is also based on the written direction to the solicitors regarding the adjustment of rates. Had there been available funds from the amount borrowed, then one might think that the rates would have been adjusted in accordance with proper conveyancing practice. Also, there would have been no need for each of Sam, Giuseppe and Frank, to contribute $1,900 towards the purchase price, which it seems they did. 30. Rosa also denied that she had heard about any interest that Saverio held in the Leichhardt property prior to her marriage to Sam. This is hardly surprising since she met Sam in 1994, when in her early 20's and at a time when she would not have been interested in his family's private affairs. They did not marry until about 5 years later. 31. Following their marriage, however, it is far more likely that Rosa would have taken an interest in family affairs, particularly when those affairs might impact upon her, and Sam's, financial interests. 32. Rosa gave evidence that she had a conversation with Rosetta to the effect that Frank had offered to sell her his interest in the Leichhardt property, but she categorically denied that Rosetta had responded by saying anything about any money that she and Saverio had in the house. Rosa also disputed that Rosetta had said that she, Saverio and Antonio, would continue to live downstairs: T239.25-T239.38. 33. Rosa maintained her denial that when she purchased her interest in the Leichhardt property, she knew that Saverio had an interest in it: T247.40-T247.50. Having observed her in the witness box, I am satisfied that this evidence was truthful. 34. I have no doubt that had there been any discussion about Saverio having an interest in the Leichhardt property, she would have been involved in that discussion, since, effectively, she (and Sam) were purchasing Frank's one third interest for its full value. That he was paid one third of what Sam, Giuseppe and Frank agreed was the value of the Leichhardt property cannot but lead to the conclusion, when taken with other evidence to which I have referred, that there was no discussion about any interest held by Saverio and Rosetta in the Leichhardt property. 35. Furthermore, had there been such a discussion, it would have been the perfect opportunity for all of the family members to calculate the value of that interest, in order to determine the true value of Frank's share. That they did not do this is clear from Giuseppe's evidence to which I have already referred. 36. If Saverio did, indeed, have a 20 per cent interest in the Leichhardt property, as was asserted by Giuseppe, the share of each son would have been reduced by about 6.66 per cent, or, taking account of its agreed value of $600,000 at that time, by about $40,000. Rosa specifically denied that she and Sam paid Frank $160,000, as did Frank. 37. Alternatively, that Sam and Rosa would have been prepared to pay an additional amount of $40,000 to purchase Frank's interest in the Leichhardt property seems somewhat unlikely, and if they paid $200,000, which I accept they did, Saverio would not have been receiving the benefit because the value of that proportionate interest was being paid to Frank. 38. Rosa was also cross-examined about the continued occupation of the Leichhardt property by Saverio, Rosetta and Antonio. Whilst she was somewhat defensive, I regard her evidence as truthful on this topic also. She denied that any agreement had been made that they would continue to live in the downstairs area because Saverio had an interest in the Leichhardt property. 39. Where her evidence conflicts with that of Saverio, Rosetta or Giuseppe, I prefer her evidence. 40. Rosa explained that following her marriage, she was "happy in my space", which she regarded as "ample", and that she had not made any enquiries about the reasons why Saverio, Rosetta and Antonio were living in the downstairs area. She said, "I was 24 years old, so I didn't make any enquiries". 41. She also said, candidly, that she had no interest in whether Giuseppe was, or was not, receiving any rent from Rosetta, as she did not regard it as her business. 42. In relation to Rosa's evidence as to what she would have done if she had been told of any interest that Saverio had, I remember what was said in Seltsam Pty Ltd v McNeill [2006] NSWSCA 158, per Bryson JA, with whom Handley and Tobias JJA agreed, at [115]-[123], that evidence by a witness of what he, or she, would have done, if some aspect of the past had occurred differently to the way it in fact occurred, is admissible, though its weight should be carefully assessed because "[o]bservations on the limited value, and self-serving and hindsight nature of evidence of this kind have considerable force…" (at [121]). Even so, I accept her evidence, which evidence I consider to be inherently credible. 43. Whilst Rosa, not unnaturally, was a little emotional, she was prepared to make concessions about her relationship with Rosetta, and she conceded that Rosetta had assisted her, on occasions, in looking after the children. I accept her evidence that Rosetta did, on occasions, look after Danielle and Marcus when she had time to do so. As described, it was an ad hoc arrangement. 44. Rosa also accepted that, on occasions, Sam might have called on Rosetta to collect one, or both, children from school, if he was running late. She said collecting them from school was part of his parental duty. Determination of Trust Claim 1. In relation to the amount that had been "left in" the Leichhardt property, counsel for Saverio submitted in writing that: "Of the $96,021.42, Francesco… instead of being paid his share of the net proceeds of sale enters into the arrangement with [Sam, Giuseppe and Frank]… On this basis Saverio's share of the net proceeds of sale is $48,010.71. If the Court finds that the difference ($24,121.42) between $190,000 and the Howard Finance mortgage ($165,878.58) was paid to or applied for the benefit of [Francesco] and Saverio, then the net proceeds of sale would have been $71,900.00. Francesco… instead of being paid his share of the net proceeds of sale enters into the arrangement with [Sam, Giuseppe and Frank]… On this basis Saverio's share of the net proceeds of sale is $35,950.00." 1. However, at the hearing, counsel acknowledged that if the court found that the agreement between Francesco and Giuseppe, Sam and Frank, did not bind Saverio, then the amount left in the property is $28,607.11 as at July 1990. That equates to about 9.8 per cent of the gross value of the Leichhardt property at the time of its sale to Sam, Giuseppe and Frank ($291,000). 2. How the proceeds of sale were disbursed was not a matter for Sam, Giuseppe and Frank. It was a matter for Saverio and Francesco as the vendors. In this regard, Francesco would have little interest in how the balance of the proceeds of sale was disbursed since his share of the proceeds of sale was established ($70,000), and he was lending that amount to the purchasers. Accordingly it was for Saverio to establish on the balance of probabilities how much had been "left" in the Leichhardt property. 3. Considering all of the evidence, Saverio has not satisfied me that he was entitled to any amount from the proceeds of sale of the Leichhardt property at the time of its sale to Sam, Giuseppe and Frank. To the contrary, it seems more likely that all of the available funds that were borrowed, or paid, by Sam, Giuseppe and Frank, towards the purchase price, were used to repay the debts owed which were incurred after Francesco stopped making mortgage repayments in or about 1988. 4. In my view, the amount borrowed from the Commonwealth Bank was used to discharge the mortgage and pay the amount owed to ICLE to obtain a discharge of the caveat, and the amount paid from the deposit by the solicitors was paid to another creditor. No other inference is available from the whole of the evidence. 5. Although it was submitted that the amount identified as the payment to I Finance Corporation Limited was not established to be a loan due by either Saverio and/or Francesco, I am satisfied that it was a debt owed by one or both of them, and a debt to which Saverio had referred in his evidence, as the loan from the finance company. 6. I am also satisfied that the amount that was to be repaid to Francesco from the proceeds of sale was agreed by Saverio to be $70,000. In effect, Francesco then lent Sam, Giuseppe and Frank, this amount, with the result that only $221,000 was required to be raised by them to complete the purchase. As all agreed, they were unable to borrow more than $190,000. 7. In addition, they paid the deposit of $29,100 which was shown as a deposit in the trust account ledger. Taken with the other amounts to which I have referred that they paid, I am satisfied that the proceeds of sale were not used to pay the stamp duty on the contract or mortgage duty and various other debts. 8. Since I am not satisfied that Saverio has established that he had contributed any amount to the purchase price, from his share of the proceeds of sale of the Leichhardt property, he cannot succeed on his claim for the imposition of a resulting or constructive trust. It is, therefore, unnecessary to discuss the law that applies in respect of that aspect of the trust proceedings. That part of the trust proceedings must be dismissed. 9. For the same reasons, I am unable to accept the submission that the court should declare that Saverio is entitled to, and holds, an equitable lien over that part of the property of which Sam and Giuseppe are the registered proprietors. 10. It is worthwhile mentioning that none of the pleadings, so far as they relate to events in 2000, and the transfer of Frank's interest in the Leichhardt property to Rosa, refer to s 42 of the Real Property Act 1900 (NSW), or to general principles relating to indefeasibility of title or to the exceptions to indefeasibility although there is a general denial, in Sam's and Rosa's defence to the entitlement to relief claimed. Determination of Property (Relationships) Act Claim 1. It is, next, necessary to say something about the claim by Saverio and Rosetta for relief under the Property (Relationships) Act. It is the jurisdiction created by the Act that gives rise to their claim for relief. 2. "Property" is defined in section 3(1) of the Property (Relationships) Act, unless the context or subject matter otherwise indicates or requires, as follows: "Property, in relation to parties to a domestic relationship or either of them, includes real and personal property and any estate or interest (whether a present, future or contingent estate or interest) in real or personal property, and money, and any debt, and any cause of action for damages (including damages for personal injury), and any other chose in action, and any right with respect to property." 1. Section 5 of the Property (Relationships) Act relevantly provides: "(1) For the purposes of this Act, a domestic relationship is: … (b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care. (2) For the purposes of subsection (1) (b), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care: (a) for fee or reward, or (b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation)." 1. An "adult person" is a person of, or above, the age of 18 years: s 3(1) of the Property (Relationships) Act. 2. Section 5A, relevantly, provides: "(1) For the purposes of sections 4 and 5, persons are related by family if: (a) one is the parent, or another ancestor, of the other, or (b) one is the child, or another descendant, of the other, or (c) they have a parent in common." 1. Clearly Sam, Saverio and Rosetta are related by family, whilst Rosa is not related by family within the meaning of the definition. 2. Section 5 as stated, requires that the two adult persons in question be living together. 3. In Harkness v Harkness [2011] NSWSC 1421, I discussed, at [41]-[44], the concept of "living together" as follows: "The phrase, 'living together' is not defined by the Act. Given that the two adults may be members of the same family, concepts relating to 'a couple' are not relevant. Thus, the existence of a romantic, or sexual, relationship, a practical union of lives and property, and the public aspects are not necessary criteria. Without attempting to define the term more precisely than the legislature has done; remembering that it is necessary to consider the evidence as a whole, not under isolated headings; that the question must be decided on an individual case basis, without circumscribing any particular factor; that the circumstances of human affairs are varied; and bearing in mind the authorities referred to, it seems to me that the notion or concept of 'living together', has the following elements that require evaluation: (a) Co-habitation, although not necessarily fulltime; however, there must be sufficient shared residence, which invites a consideration of such factors as whether the persons said to be living together had a common residential address; where they usually slept at night (for example, when not absent temporarily for holidays, employment or for other reasons); and where they usually kept their clothing, domestic and personal effects; regardless of the number of days or nights spent, perhaps, at another place; (b) Physical proximity in the same residence, in the sense of simultaneous physical presence; (c) Some personal association with each other; (d) The sharing of facilities of day-to-day living on a regular and recurrent basis, often described as sharing a household, including but not limited to, the performance of domestic tasks; (e) Deciding household questions together and, whilst a social and economic partnership of the parties is not required, there should be a sharing of the burden of maintaining a household; (f) Regarding the place, or places, in which the two adults live as 'their home'; (g) There being no present intention of definite or early removal; a continuity of association with the place; remaining for an undetermined period, not infrequently, but not necessarily combined with design to stay permanently. Whilst each element suggested does not import any concept of proportion of time, each should exist over a long enough period, to amount to 'living together'. The test whether the notion or concept of living together is satisfied is an objective one. It involves assessing the nature and extent of the claimed common residence as well as other aspects of the relationship." 1. Section 5 also requires that there be the provision, by one or each of those adults to the other, of both domestic support and personal care. In Harkness v Harkness, I also discussed the concepts of "domestic support and personal care", neither of which terms are definitions, but qualifying conditions that must also be satisfied before the relationship will fall within the definition in the Act. I wrote, at [46]-[49]: "The second requirement is itself cumulative. The expressions, also, are not defined. However, the adult persons must be living together at the same time as one, or each, provides to, and/or receives, domestic support and personal care from, the other. (It is clear that the indicia of domestic care and personal support need only be given by one of the adult persons to the other.) However, neither domestic support nor personal care, provided alone, suffices. Both must be provided. The word 'domestic' carries connotations of matters relating to a household. The Macquarie Dictionary definition includes 'having to do with the home, the household, or household affairs'. Some of the primary meanings of 'personal' include 'of, or pertaining to, concerning or affecting the individual person or self; one's own; of or pertaining to one's person or body or figure; bodily'. In broad terms it requires one person caring, in a personal way, for the needs of another such as assistance with mobility, personal hygiene, physical comfort and emotional support: Hayes v Marquis at [168]. However, the notion of 'personal care' should not be confined to matters relating to physicality: Hayes v Marquis at [87]. The Second Reading Speech (Legislative Assembly, (Hansard) 26 May 1999, p 535) contemplated that personal care services may encompass ensuring the physical and emotional comfort of one or both parties for the other." 1. There is no dispute that prior to his marriage to Rosa, in 1999, Sam was living with Saverio and Rosetta in the Leichhardt property and that he was living in the upstairs area, whilst they were living in the downstairs area. The period of the domestic relationship asserted by Saverio and Rosetta in the Statement of Claim in relation to Sam alone, however, is alleged to have commenced in 1993. 2. Whilst there is no suggestion that the configuration of the home built on the Leichhardt property altered, I think it is likely, during the period between 1993 and the date of Sam's marriage to Rosa, that the home was treated as one home, with the inhabitants moving freely between the upstairs and the downstairs area. Accordingly, during this period of time, I am satisfied that Saverio, Rosetta and Sam lived together in the home built on the Leichhardt property. 3. There is also no dispute that during this period, Rosetta, in particular, provided Sam with domestic support and personal care. Sam admitted that Rosetta cooked for him, washed for him, cleaned the house, and did other tasks around the house for his benefit and for his siblings (whilst they lived there). He also admitted that she provided him with emotional support before and after he was married: T193-194. 4. However, s 20(1) of the Property (Relationships) Act provides that the court must have regard to (a) the financial and non-financial contributions made directly or indirectly by, or on behalf of, the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family. 5. Thus, I must weigh up Sam's contributions also to Saverio and Rosetta in the period 1993 to 2000, in order to determine whether it is just and equitable to adjust Sam's interest in the Leichhardt property. 6. Although it is usual in a claim for adjustment of property interests under s 20 of the Property (Relationships) Act to establish the assets of the parties at the commencement of the relationship; the assets acquired during the relationship and by whom; the assets of the parties at the end of the relationship; and contributions of each party to the acquisition, improvement and conservation of the separate or joint property (Howlett v Neilson [2005] NSWCA 149), little in the way of evidence of these basic matters was available. Presumably, this was because Saverio and Rosetta only sought an adjustment of Sam's (and Rosa's) interest in the Leichhardt property. 7. There was no suggestion of a pooling of assets, or income, or the sharing of general living expenses, at any time, during either of the two periods in relation to which the claims by Saverio and Rosetta were made. Apart from the contribution to the purchase price of the Leichhardt property (only one third of which, if available, would be relevant to this part of the claim), Saverio and Rosetta did not assert that he, or she, had made any contributions which, either directly or indirectly, enabled Sam, or Sam and Rosa, to acquire any assets or any financial resources. 8. In this regard, I have earlier noted that I am unable to be satisfied of any financial contribution to the acquisition of the Leichhardt property by Saverio. There is no suggestion of any direct financial contribution to its acquisition by Rosetta. There is no suggestion of any contribution by either Saverio or Rosetta to the conservation or improvement of the Leichhardt property during the period 1993 to 2000. To the contrary, the evidence is that only a proportion of the council rates (reduced to one third, at Giuseppe's suggestion made about 4 years ago), was paid by Rosetta, whilst all of the other outgoings on the Leichhardt property during this period were borne by Sam, Giuseppe and Frank equally. 9. Even after Sam's marriage to Rosa, the only financial contribution was to the payment of a proportion of the rates. Rosa gave evidence that, generally, she and Sam would pay their share of the rates by credit card and that Rosetta would pay the balance of the rates at the Council separately, although at times, she and Sam would pay the full amount and Rosetta would give them cash for the one third share: T257.40-T258.06. 10. In relation to the other contributions, including those made in the capacity of homemaker, or parent, made by either of Saverio or Rosetta to the welfare of Sam or to the welfare of their family, constituted by the parties, during this period, there is no suggestion that Sam was not a loving and dutiful son to his parents, or that he did not contribute to their welfare. During this period, Sam, as a son, is likely to have provided to each of his parents, some support and care. Although this was not explicitly put, I can infer that it occurred in light of the evidence of all members of the family that it was a close and loving family. 11. Even if he provided no such support and care, during this period, Saverio and Rosetta were living in a property of which Sam was a one third owner (in the period between 1993 and 2000) and with Rosa, a two third owner thereafter. They were not paying anything to him, or to him and Rosa, after 2000, for their occupation, with Antonio, of the Leichhardt property. 12. (I should note that counsel for Saverio and Rosetta made no submissions on the nature of the adjustment that ought to be made to Sam's interest in the Leichhardt property by reference to the contributions made by them to him during the period 1993 to 1999.) 13. In all the circumstances, I am satisfied that the contributions by Saverio and Rosetta, when taken with the contributions by Sam, do not require any adjustment to be made to Sam's interest in the Leichhardt property as a result of the contributions of the former to the latter. On balance, bearing in mind the holistic nature of the court's consideration in evaluating contributions, I do not think it would be just and equitable to adjust Sam's interest in the Leichhardt property for any contribution made by one to the other during the period 1993 to 2000. 14. Turning to the period after Sam's marriage to Rosa, I am not satisfied that Saverio and Rosetta were "living with" Sam and Rosa in the Leichhardt property. It seems clear that after their marriage in 1999, separation of living arrangements was achieved. I have earlier referred to Rosetta's and Rosa's evidence which suggests that the two different areas were treated as quite separate and that each did not come and go from the area occupied by the other. There was no dispute that the downstairs area, in which Saverio, Rosetta and Antonio lived, consisted of two bedrooms, a kitchen, a study and a bathroom. 15. If my conclusion is correct on this, then Saverio and Rosetta's claim for this period must fail. 16. But even if I were wrong, once again, I must weigh the contributions by each of the parties to the other. Rosetta did not suggest that her relationship with Sam changed after his marriage to Rosa, and she gave clear evidence about the closeness of her relationship with Rosa. 17. Again, Saverio and Rosetta's only contribution financially during this period was to one half of the council rates (reduced to one third at Giuseppe's suggestion made about 4 years ago), and the payment of about $2,635 for one half of the cost of a hot water system. On the other hand, Sam and Rosa, after 2000, were the registered proprietors of two thirds of the Leichhardt property and there is no suggestion that Saverio and Rosetta paid them any occupation fee or rent. That is a period of over 15 years (since 2000) and over 25 years (since 1990). In addition, they were also bearing the burden of repayments of the borrowing to enable them to purchase Frank's interest. 18. Sam and Rosa gave evidence that sometimes Rosetta would babysit for them and, if it was necessary, if Sam was unable to do so, that she would collect one, or both, children from school. Rosetta would also, on occasions, take washing off the line and, on occasions, cook meals. This type of conduct is not such, on its own, as to warrant an order adjusting the interests of Sam and Rosa in the Leichhardt property. 19. I note also, the obvious reality, stated by Sam in cross-examination, that to the extent that Rosetta spent time supervising Danielle and Marcus, that provided an opportunity for her, as a grandparent, to spend time with her grandchildren: T195.20-T195.34. Rosetta, herself, acknowledged that she did not expect any payment, and whilst this concession is not determinative, it does suggest that her contributions were as a mother and grandmother, no doubt, with countervailing benefits. 20. In relation to the period after Sam's marriage to Rosa, counsel submitted that "the Court would… adjust the parties' interest in relation to the Property such that Saverio and Rosetta receive a percentage of the net proceeds of sale of the Property in relation to the Property (Relationships) Act claim… [being] 5% of that part of the Property owned by each of Sam and [Rosa]". In making the submission, he did not seek to identify any contributions made by Sam and/or Rosa, financially or otherwise, to Saverio and Rosetta, to which I have referred, or at all. 21. There was really no articulation of how it was that the contributions said to have been made by Rosetta and Saverio made any adjustment of property interests claimed just and equitable: Trosse v Howard [2009] NSWCA 346, per Hodgson JA (with whom Macfarlan JA agreed) at [22]-[23]. 22. Determinations as to what orders should be made under s 20 are to be made solely on the grounds of the justice and equity of the case. In this regard, as has been written many times, the court is "not required to undertake a reductionist process analogous to the taking of partnership accounts by examining every alleged 'contribution' of the kinds described in the section with a view to putting a monetary value on each in order to reach an accounting balance one way or the other, then to be eliminated by the requisite financial adjustment; rather, the court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind": Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550, at [36]. 23. Since I have not accepted the financial contribution to the purchase price asserted by Saverio, it is really only the non-financial contributions made by Rosetta and Saverio that could properly result in the adjustment of the property interests of Sam and Rosa in the Leichhardt property. 24. On balance, bearing in mind the whole of the evidence, and in the exercise of the court's discretion, I am of the view that it would not be just and equitable to adjust Sam and Rosa's interest in the Leichhardt property for any contribution made by Rosetta and Saverio (to the extent that there is evidence of his contribution) to them during this period. In my view, the non-financial contributions made by them to Sam and Rosa are unremarkable, and, in any event, must be considered in light of the countervailing contributions from the relationship, financial and otherwise, including, but not limited to, occupation of part of the subject property without payment of rent or occupation fee, made by Sam and Rosa as the registered proprietors of two thirds of the Leichhardt property since about 2000. 25. It follows that the claims for adjustment of property interests under the Property (Relationships) Act by Saverio and Rosetta must also be dismissed. 26. In the circumstances, I order that the whole of the Statement of Claim in the trust proceedings be dismissed. 27. I shall hear the parties on what costs orders should be made in the trust proceedings. 28. In relation to the s 66G proceedings, I make the following orders and notations: (a) Order that the whole of the proceedings be dismissed. (b) Order that the Plaintiffs' costs as agreed in the sum of $4,000.00 be paid out of the proceeds of sale of the Leichhardt property. (c) Note the agreement of the parties in Paragraphs 3, 4, 5, 6, 7 and 8 of Short Minutes of Order dated 12 October 2015 signed by the legal representative of each of the parties. 1. I also order, in both proceedings, that the Exhibits be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (rule 31.16A and rule 33.10), and Practice Note No SC Gen 18 (Para 26). ********** 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: 06 November 2015