Birney v Birney

[2024] NSWSC 591

Supreme Court

New South Wales

Medium Neutral Citation:

Birney v Birney [2024] NSWSC 591

Hearing dates:

6, 7 and 8 May 2024

Date of orders:

8 May 2024

Decision date:

08 May 2024

Jurisdiction:

Equity - Real Property List

Before:

Parker J

Decision:

See [118]

Catchwords:

EQUITY — trusts and trustees — plaintiff won jackpot on Keno lottery game — winnings transferred to account in defendant’s name and partly used to purchase a property for parties to reside — parties fell out — plaintiff excluded from property — application for possession and declaratory relief by plaintiff — whether winnings were split between parties pursuant to purported syndicate arrangement or held on trust for the plaintiff — orders made in favour of plaintiff

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Payne v Parker [1976] 1 NSWLR 191

Nelson v Nelson (1995) 184 CLR 538

Texts Cited:

Heydon, JD, Leeming, MJ and Turner, PG, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2015)

Category:

Principal judgment

Parties:

Statement of Claim filed 19 December 2022
Christopher Birney (Plaintiff)
David Birney (First Defendant)
Kathleen Birney (Second Defendant)

Cross-Claim filed 9 February 2023
David Birney (First Cross-Claimant)
Kathleen Birney (Second Cross-Claimant)
Christopher Birney (Cross-Defendant)

Representation:

Counsel:
P Reynolds (Plaintiff/Cross-Claimants)
D Eardley (Defendants/Cross-Claimants)

Solicitors:
Legal Aid (Plaintiff/Cross-Defendant)
Shoa Legal (Defendants/Cross-Claimants)

File Number(s):

2022/384831

Publication restriction:

Nil

JUDGMENT

Revised from transcript and annotated; issued on 16 May 2024

1. These proceedings arise out of a dispute concerning the ownership of a residential property at Nowra which was formerly occupied jointly by the plaintiff, the first defendant and the second defendant. The property is registered in the name of the first defendant. The plaintiff alleges that it was bought with his money and is held on trust for him.

2. The parties to the proceedings are siblings. For convenience, and without disrespect, I will refer to them by their given names.

3. The eldest sibling is Kathleen Birney ("Kathleen"). She was born in May 1952 and is the second defendant.

4. The next sibling in birth order is David Joseph Birney ("David"). He was born in April 1953 and is the first defendant.

5. The youngest sibling is Christopher John Birney ("Chris"). He was born in November 1956 and is the plaintiff in the proceedings.

6. The money to buy the property came from Chris' share of a jackpot on an electronic lottery game named Keno. The winning ticket was bought by Chris and a friend of his, Mr Peter Doyle, in December 2014. The jackpot was approximately $2 million. It was agreed between Mr Doyle and Chris that the cheque for the winnings would be issued to Mr Doyle, and Mr Doyle would pay approximately half to Chris as his share.

7. Before receipt of the moneys Chris and David established an account in David's name for Chris’ share of the Keno winnings to be paid into. I will refer to the account for the purpose of this judgment as the “Keno Account”. Chris ceased work and the moneys in the Account were used by him to pay his living and entertainment expenses. Other moneys were used to pay debts and buy an expensive car. Chris also made gifts to members of his family.

8. The property the subject of the proceedings is located at Bamarook Place at North Nowra. It was purchased using funds from the Keno Account, a few months after Mr Doyle and Chris won the jackpot. The purchase price was $418,000. The contract was completed early in April 2015.

9. Following settlement of the purchase, Chris, David and Kathleen moved into the Nowra property. According to Chris, he used moneys from the Keno Account to pay the rates and household expenses, or at least a share thereof.

10. The Keno Account moneys ran out about 18 months later. The parties continued to share the house, but eventually they fell out. David left and moved to Western Australia for several years. In September 2022, Chris was forced to leave when, as a result of a complaint on Kathleen’s part, the police commenced proceedings for an apprehended violence order (“AVO”) against him.

11. The AVO proceedings were later dismissed. However, Kathleen and David (who has now returned from Western Australia and remains the registered proprietor) continue to object to Chris living at the at the property. Chris has not returned to it.

Claims and issues for determination

12. The proceedings were commenced in December 2022. It is contended on behalf of Chris that the moneys in the Keno Account were held on trust for him by David and consequently, that David also holds the Nowra property on trust for him. Chris claims declaratory relief and orders for possession of the property.

13. In his statement of claim, Chris alleged expressly that the payment of the Keno moneys into the Keno Account was not a gift in favour of David (or Kathleen). In the cross-claim, David and Kathleen admitted that the payment was not a gift. Their contention was that they had had a right to receive it. They alleged that Chris' share of the winning ticket was bought by him pursuant to what was described as a syndicate arrangement between the three siblings, whereby David and Kathleen contributed money to Chris to buy lottery tickets on the basis that any winnings would be shared equally.

14. A cross-claim to this effect was filed for David and Kathleen. The cross-claim sought declarations to the effect that the Nowra property formed part of the share of the winnings to which David and Kathleen were allegedly entitled. The cross-claim also sought orders that Chris account for his expenditure from the Keno Account to the extent that it exceeded a one third of the total winnings.

15. The cross-claim faced a number of evidentiary and legal difficulties. Although maintained at the beginning, it was abandoned by counsel for David and Kathleen in the course of the hearing. As I understood it, counsel abandoned the cross-claim on the ground that, although David and Kathleen continue to maintain that the alleged syndicate agreement was made, such an agreement could not be demonstrated to have given rise to legal obligations.

16. Following the abandonment of the cross-claim, David and Kathleen continued to defend the proceedings. They continued to deny that the moneys paid into the Keno Account were held on trust by David. Counsel for Chris submitted that this was not open to them in the light of the position previously taken in the cross-claim, namely that the payment of the moneys was not a gift. Given the conclusions which I have reached, it is not necessary to determine whether such a defence was an impermissible departure: see r 14.18 of the Uniform Civil Procedure Rules 2005. I have dealt with the defence on its merits.

Summary and analysis of the evidence

Chronology of key facts

17. As at December 2014, the domestic situation was as follows. All three of the parties were sharing a rental house at Culburra, not far from Nowra. The house had formerly been rented by their mother, and they had shared it with her. She died in 2009, and thereafter the sharing arrangement continued, with three of them as joint lessees.

18. Chris, at the time, was working as a taxi driver in Sydney. He worked on weekends and occasionally on weeknights and stayed from time to time in Sydney. This meant he was not staying at the Culburra property every night. Kathleen and David were. During her mother's lifetime, Kathleen had been on a carer's pension, and after her mother's death, she was receiving an unemployment benefit. David was also on some sort of pension and was not working.

19. Chris was a long-standing gambler. In particular, he would gamble on Keno. He visited the local club to drink and gamble. He also visited clubs in Sydney when working there, for the same purpose. Mr Doyle was a long-standing friend of his and they would meet from time to time to watch Mr Doyle's son play football, and thereafter, to have a drink.

20. At the time Chris had child support liabilities for two children of his from a former marriage. A statement of account from the Child Support Agency for 2012 to 2017 was in evidence. The initial balance showing as owing on the statement in January 2012 was $46,700. By August 2013, that had increased to $51,600 as a result of monthly non-payment penalties. Those penalties ceased in August 2013, but no payments were made between then and of December 2014, and the amount due remained at $51,600.

21. The day Mr Doyle and Chris won the Keno jackpot was 14 December 2014, a Sunday. They purchased the winning ticket while drinking at the Seaforth Balgowlah RSL Club on Sydney's Northern Beaches. The jackpot payout was about $1.98 million. According to Chris, $2,000 of this was, by agreement, paid out to him in cash by the Club on the day. Mr Doyle and he agreed that the balance would be paid to Mr Doyle in due course. A payment cheque is in evidence, made out to Mr Doyle in the sum of $1,976,793.

22. The Keno Account was opened the following Thursday, 18 December, in David's name. It was a deposit account which did not carry interest.

23. On the following day, 19 December, two payments, one for $5,000 and one for approximately $991,000, were credited to the Account. It is not clear whether the $5,000 formed part of the lottery winnings, but nothing turns on that for the purpose of these proceedings. The case was conducted on the basis that all of the moneys in the Account derived from Chris' share, as agreed with Mr Doyle, of the Keno winnings.

24. Withdrawals from the Account were made with the benefit of a card supplied by the bank. The card could be used, it seems, at ATMs, and also to make over-the-counter withdrawals or transfers at bank branches.

25. The statements for the Account, which are in evidence, show that withdrawals from the Account began almost immediately. There were many withdrawals in a standard sum of $1,000 in cash through ATMs. There were also larger withdrawals made through bank branches. Some of these were in the tens of thousands of dollars.

26. The Nowra property was placed on the market by its then owner early in February 2015. It was a three bedroom residential property. The agent with carriage of the sale on behalf of the owner was Mr John Egan of First National. The conveyancer who acted on the purchase was Ms Joanne Hall, whose firm is known as Southland Conveyancing and has an office at Nowra.

27. The bank statement for the Keno Account shows three withdrawals associated with the purchase. The deposit ($41,800) was withdrawn on 20 February 2015. Stamp duty of $14,300 was paid on 6 March. The remaining amount due on settlement ($377,900) was paid on 1 April. Following settlement, the certificate of title was left with Ms Hall for safekeeping.

28. As already mentioned, following the purchase of the Nowra property, the three siblings moved into the house together. Chris got the largest room, which had an ensuite. David and Kathleen each had a smaller room and shared a bathroom between them.

29. About two months after the completion of the purchase, David made a new will. This was in late June of 2015. The will appointed Chris as executor and sole beneficiary of David's estate. It is common ground that, at the time, David had few assets apart from the Nowra property.

30. After the parties moved in to the house, the drawings on the Keno Account continued. The drawings followed the same pattern, namely, frequent withdrawals of $1,000, apparently in cash, coming from ATMs, interspersed with some larger transfers or withdrawals in figures up to the tens of thousands.

31. The money in the Account ran out, and it was closed, at the end of August 2016. In all, the moneys in the Keno Account lasted for a period of just over 18 months; leaving aside the $430,000 or so spent on the Nowra property, approximately $560,000 was dissipated.

32. About two months after the Account was closed, David again changed his will. He removed Chris as his executor and sole beneficiary and substituted other beneficiaries. In February 2018, he visited Ms Hall's office, and obtained the certificate of title for the property from her. It is not suggested that Chris was aware at the time that David had taken either of these steps.

33. Disputes about the Nowra property first arose at some point in 2019. David moved to Western Australia. As I have already described, Chris remained in the house until the AVO proceedings were brought against him on 18 September 2022. At some point after that, David returned from Western Australia and resumed living at the house with Kathleen. They continued to live there.

Witnesses

34. Mr Doyle and the vendor's agent, Mr Egan, gave evidence in Chris' case. There was also evidence from two members of Chris' family. These were Mr Gregory Furmage, who is a cousin of the parties, and Mr Matt Birney, who is their younger half brother. Mr Furmage lives at Mollymook, south of Nowra. Mr Matt Birney lives in Western Australia, where he was formerly involved in politics. All of these witnesses were cross-examined, but in the end, no issue was raised about their credit.

35. Chris was the last witness called in his case. He was cross-examined at some length, and I will say more about his credit below. Affidavits had been served from other witnesses, but those witnesses were not called. An affidavit from Chris' solicitor explaining why was received into evidence without objection and no point was taken about the failure to call those witnesses.

36. In the defence case, evidence was given by both David and Kathleen. They were both cross-examined at length and their credit was challenged. I will deal with their evidence in more detail below.

37. Neither party called Ms Hall, the conveyancer. Initially, counsel for David and Kathleen submitted that a Jones v Dunkel inference should be drawn against Chris as a result of his failure to call Ms Hall. But the rule in Jones v Dunkel requires, before an inference may be drawn, that the witness be in one party's camp, rather than the other. Generally speaking, where the witness is available to both parties, that condition is not satisfied, and no inference can arise. ^[1]

    1. Payne v Parker [1976] 1 NSWLR 191, see at 197E-G per Hutley JA, 201F-202C per Glass JA, and 208G-209B per Mahoney JA.

38. Furthermore, Ms Hall's actual client was David, as he was the person in whose name the Nowra property was registered. In those circumstances, if any party might have been considered more likely to have called Ms Hall, one would have thought it would have been David. When I made these points to counsel for David and Kathleen, the Jones v Dunkel submission was not pursued.

39. Mr Doyle, in his evidence, gave an account of how the winning Keno ticket came to be purchased. According to Mr Doyle, it was Chris' suggestion that the two of them buy a $20 ticket, which involved twenty $1 bets. That ticket yielded one $5 win. Chris then suggested that the winnings be reapplied to another bet using the same numbers as had been used for the earlier bet. Mr Doyle agreed. One of those bets resulted in them winning the jackpot.

40. Mr Doyle's evidence was that at no stage did Chris mention David or Kathleen being in any way involved in the bet. He also gave evidence that on learning of the win, Chris stated that he intended to use the money to buy a house in the Nowra area.

41. Mr Doyle was cross-examined on some matters of detail, but in final submissions counsel for David and Kathleen made it clear that Mr Doyle's credit was not in issue and that I could accept the substance of his evidence. I do so.

42. Mr Furmage gave evidence of receiving a telephone call from Chris after the lottery win. According to Mr Furmage, in the course of the telephone conversation Chris told him that he, Chris, intended to buy a house in which he could live with Kathleen and David.

43. Later, Mr Furmage received a visit from Chris and David. They were house hunting together. Mr Furmage's recollection of the conversation was that Chris described himself as being the buyer and that David did not object to this characterisation. Later still, Mr Furmage received a telephone call from Chris about the Nowra property. In the course of the conversation, Chris told him that he, Chris, had bought the house.

44. Again, Mr Furmage was cross-examined on matters of detail, but ultimately counsel did not ask me to reject the substance of his evidence, and again, I accept it.

45. Mr Egan gave evidence of his role in the sale of the Nowra property on behalf of the then owner. He recalled meeting Chris at an open house which took place in February after the house had been put on the market. He also recalled Chris calling him back afterwards and making the offer to purchase the property which was ultimately accepted.

46. Mr Egan was aware that ultimately, the contract for the purchase was in David's name not Chris'. He acknowledged that the letter formally reporting on the settlement was sent to David and that follow up letters were sent, on the 6 month and 12 month anniversaries of the purchase, to David. It was however clear from his evidence that the letters were generated automatically because David had been entered in the agency's computer system as the purchaser.

47. Mr Egan's evidence that Chris was the one who he spoke to at the open house and who made the successful offer was not challenged and in final submissions, counsel for David and Kathleen acknowledged that I could accept it. I do so.

48. Mr Matt Birney gave evidence of conversations which he had with Chris over the telephone when he was in Western Australia and Chris was on the east coast. The first conversation to which he referred occurred shortly after Chris and Mr Doyle had won the jackpot. According to Mr Birney's recollection, Chris told him that he and Mr Doyle had won the jackpot and there was no mention of David or Kathleen. Later, Mr Birney recollected a conversation with Chris in which Chris either said that he intended to, or had already bought, the Nowra property and put it in David's name. His explanation for doing so was that he was in dispute with the Child Support Agency, and he wished to settle the dispute before putting the property in his own name. According to Mr Birney, Chris also told him that he had invited David and Kathleen to live in the property rent free. Again, there was some cross-examination but ultimately there was no challenge to this evidence and I accept it.

49. Chris, in his affidavit, began by giving an account of the winning of the jackpot, which was in substantially similar terms to that given by Mr Doyle. His description of his subsequent dealings with his siblings was as follows:

The next day, I drove to the house in Culburra, where David and Kathleen continued to live after our mother had passed away. Kathleen was not there. I said to David words to the effect of, "You're not going to believe this, me and Doyle have knocked off the Keno jackpot." I said words to similar effect to Kathleen when she later returned home.

Later that day, I also said to David words to the effect of, "I want to put the money into your account, for you to hold for me. You know I'm having a dispute with Child Support.". He said to me words to the effect of, "No problem - we can open an account." At that time, I was paying child support and, while I intended to (and did) pay my child support obligations from the winnings, at that time I preferred the winnings to be held by my brother for me rather than by me directly.

50. Chris then described the establishment of the Keno Account. He said that there was one access card provided, which he used. The answer to the security question was "Keno", and the four-digit security code was the day and month of his birthday. He described using the card himself, and occasionally having David assist him with making transfers.

50. Chris also described his searches which led to the acquisition of the Nowra property. He stated that the searches were undertaken with David. He recounted seeing the property in question while they were driving around. He asked David to stop, and went to the open house, where he spoke to Mr Egan. He then told David that he was going to buy the property and David could live there with him. Later, they visited Ms Hall, the conveyancer, and at that meeting, Chris obtained David's agreement that the property would be put into his name.

51. Chris stated that after he and his siblings moved into the property, he used the Keno Account to buy furniture and appliances for the house. He said he also paid council rates and other outgoings, as well as household expenditure, including food.

52. Chris' affidavit also contained a list of the gifts which he said he had made, and other large items of expenditure from the Keno Account. These included gifts of $20,000 to Kathleen; $7,000 to her daughter; prospecting and camping equipment for David worth more than $20,000; and $3,000 for David's son.

53. Chris next referred to the will made by David in December 2015. According to Chris, he was concerned at the possibility that David might die and the property might be inherited by someone else. Chris stated that he raised the issue with David, and David agreed to change his will so as to prevent that from happening. He stated that David never told him of the revocation of that will in October the following year.

54. According to Chris’ affidavit evidence, the siblings lived happily at the house for a period of four years or so after the purchase was completed in April 2015. After the Keno Account money ran out in August 2016, household expenses were shared between them.

55. Then, in 2019, Chris wished to use the equity in the Nowra property to assist members of his family who were in need at the time. Chris approached Ms Hall to obtain the certificate of title and discovered that it had already been collected by David the previous year. There was an altercation before David left for Western Australia. According to Chris, he continued trying to contact David in 2020 to arrange the sale of the property, but his calls were blocked.

56. According to Chris’ affidavit, he continued to live at the property with Kathleen until the AVO proceedings were brought. Only the day before the AVO proceedings were brought he mentioned to Kathleen that he wished to sell the property. The implication was that the AVO complaint was her retaliation.

57. In the course of cross-examination, the syndicate arrangement alleged by David and Kathleen was put to Chris, but he denied that there had ever been any such arrangement between him and his siblings. He was challenged on his version of events concerning the establishment of the Keno Account and the purchase of the Nowra property, but he was not challenged on the list of gifts contained in his affidavit.

58. Part of the cross-examination focused on Chris’ dealings with the Child Support Agency. The statement shows that a few weeks after having won the jackpot, Chris began making repayments to the Agency of $50 per fortnight. These payments began in February 2015.

59. Chris was cross-examined about the discussions which he had had with representatives of the Agency. He said he was concerned at what he described as the punitively high interest rate, by which I assume he was referring to the non-payment fees which had been charged up to August 2013. He said that he had paid his former wife the amounts due to her and she accepted that this was so. But for some reason this information had not found its way to the Agency, (the suggestion was that this might have something to do with the fact that his ex-wife, who is Japanese, had moved back to Japan to live after they divorced.) He said that later he paid off the amount that was actually owing and the balance was remitted by the Agency. The statement indeed records payments totalling approximately $15,000 made the following year and remittance by the Agency of the balance.

60. I found Chris' evidence on this subject rather unconvincing. On his own account, he wanted to keep the winnings (and then the Nowra property which was purchased) out of his name because of some concern or other about the Agency. I think that, despite Chris’ reference to some concern about the Agency’s “powers”, his conduct is only really explicable on the basis that he did not wish the Agency to know his true financial position.

61. Chris insisted that he had never actively concealed from the Agency that he had won the lottery. But his evidence about what he had said to the Agency, and when he had said it, was vague. I find it difficult to accept that if the Agency had known of the win, that Chris would have been required to make repayments of only $50 per fortnight. And if the amount claimed by the Agency was genuinely disputed, it is hard to see why Chris would have agreed to pay anything at all. I also find it difficult to accept that negotiations could have taken place between Chris and the Agency after December 2014 without his financial position having come up.

62. Despite Chris’ evidence, I think the suspicion remains that he may have misled the Agency, or at least not fully disclosed to it, his true financial position. Nevertheless, my reservations about his evidence on this point, while relevant to the assessment of the rest of his evidence, does not compel its rejection. It is a factor, but only a factor, to be considered.

63. David's affidavit evidence began with a description of difficulties which he and Kathleen had allegedly encountered when living with Chris at Culburra in the years leading up to December 2014. He stated that Chris had been a problem drinker for many years. When at Culburra, he would spend most of his time visiting the local club to drink and gamble. He would come home from the club inebriated, making noise in the middle of the night, and on occasion, yelling abuse at David and Kathleen. David himself did not at all approve of this. He drank little and had no interest in gambling.

64. According to David, Chris was also unreliable with money. In particular, there was an occasion when David and Kathleen gave their rent contributions to Chris for him to pay the landlord, only for him to spend the money elsewhere and leave them short. After this, they made arrangements for Kathleen to collect the contributions and pay the rent.

65. Against this background, David described the alleged syndicate arrangement in the following way:

[Christopher] had employment that I would describe as casual. He told me that he drives taxi cabs in Sydney. He drove mostly at weekends but often during the weeks as well. He often told us, as in my sister and I about his visits to various clubs and that he liked to wager on Keno. As a result of his interest in Keno and his often visits to clubs we three set up an arrangement whereby Christopher would let us know that he was going to Sydney and we would then give him $10.00 each. The agreement was that if he won anything on Keno it would be split three ways, myself, Kathleen and me. In addition to the $10.00 each we gave the Christopher he would ask Kathleen for additional money for petrol. It became almost a ritual. Christopher would ask us for our contributions to the syndicate and then ask Kathleen for more money as "petrol money".

67. In cross-examination, David was vigorously challenged about this evidence. Counsel emphasised the vagueness of the alleged arrangement. He asked David whether it was once a week or more often, to which David replied that it might happen up to three times a week that Chris was provided with money. Counsel also asked about whether the arrangement extended to all bets placed by Chris, either with his own money or with David and Kathleen's, and David insisted it extended to all Chris’ winnings on his own account. David also conceded that in the 18 months or so prior to December 2014, while the syndicate arrangement had supposedly been in force, Chris had never accounted to David or Kathleen for any winnings at all.

68. Counsel put to David that, given his own disinterest in gambling, the whole suggestion that he would have contributed a substantial part of his rent money to allow Chris to gamble for no apparent return was simply absurd. David did not accept this, but he was unable to offer any explanation for the apparent incongruities in his account.

69. David's evidence about how he learned about the win is as follows:

On the 15th December 2014 Christopher came home from his regular trip to Sydney and told us that we had won a major prize on Keno. When he described the win to us he referred to it as "major win" and that the ticket was being held by a friend of his named Peter Doyle. He told us it was for about a million dollars and that we would have to wait for a while before the money was paid.

Christopher also told us that he had given Peter Doyle what he described as "a few dollars". We queried why he did that but we were not told any reason for giving Doyle some money. At that time we were not told how much.

Christopher told me that the cheque from Keno would be made out to me. At about that same time Christopher told us that he had given Peter Doyle $1,000,000.00. Kathleen and I were furious with Christopher because we were not told that Peter Doyle was part of our syndicate.

70. David was cross-examined on this account in detail. In response, he departed from his affidavit evidence. He said that there was no mention of Mr Doyle's name in the conversation that took place when Chris told him for the first time that he had won the lottery. According to David he only found out about this on the following day. This was not the impression presented by the paragraphs of the affidavit from which I have quoted, and counsel pressed David on the discrepancies. In the end David insisted that the three paragraphs which I have quoted in fact represented three separate discussions, the first of which happened on 15 December and the latter two, on 16 December.

71. I found this evidence from David convoluted at best. I am not sure how significant it really was whether Mr Doyle's name was mentioned on the first occasion, but I was left with no confidence that the version advance by David in cross-examination was more reliable than what he had said in his affidavit. No real explanation was given as to how, if his version of events in cross-examination was correct, the affidavit had come to be sworn in the form which it took.

72. In his affidavit, David stated that although Chris had an access card for the Keno Account, the bank issued a second card to David, which he retained. I understood his evidence to be that some of the transactions on the account had been effected by him with his own card.

73. In cross-examination, however, David accepted that there had only ever been one access card for the Account. He was forced back to saying that, at least in the period up to the purchase of the Nowra property, he, David, had lent the card to Chris for individual transactions, but otherwise kept it in his possession. Counsel then confronted him with withdrawals made by Chris in Queensland over a period of several days in January 2015. Ultimately, David accepted that Chris had possession of the card for periods of time but insisted that he, David, would retrieve the card at other times. There is no independent evidence to support what David said in this regard and I found it unconvincing.

74. David went on in his affidavit to give an account of how the Nowra property came to be purchased. According to David, the impetus for the purchase came from an agreement between himself and Kathleen that they would buy a house for them to live in with their share of the money in the Keno Account. According to David, he undertook the house hunting with a friend of his, Mr Peter Poropat.

75. David described attending an open house for the Nowra property with Mr Poropat in February 2015 and making the decision, in consultation with Mr Poropat, to buy it. After some vacillation, he then spoke to the agent and made an offer, which was accepted. On David’s version of events, Chris had nothing to do with the purchase. Rather, the purchase was for himself and Kathleen. According to David, he advised Christopher to buy his own house with his own share of the money.

76. Again, David was challenged on this account in cross-examination. He insisted that it was he who spoke to Mr Egan and made the successful purchase offer. When asked why, if the property was bought for him and Kathleen, he did not put it in their joint names, he said that there was initially no time to do so: he was told by the vendor and by Mr Egan that there were other interested purchasers and there was no time to lose. After the property was purchased, a share was not put in Kathleen's name because of the stamp duty which would have been entailed.

77. Mr Poropat was not called as a witness to support this version of events. At the time David made his affidavit (mid 2023), Mr Poropat was in Croatia, but he was returning at the end of the year. There was some confused evidence which suggested that Mr Poropat might in fact have given an affidavit. Evidence was not, however, led from him at the trial, and his absence was not explained.

78. But there is a more fundamental difficulty with David's evidence on this point than the failure to call Mr Poropat. As I have explained, the testimony of Mr Egan, who was an independent witness, was that the successful offer came from Chris, not David. That testimony has not been challenged, and it would not, having regard to the rule in Browne v Dunn, have been open to counsel for David and Kathleen to do so. I must therefore reject David's account. In the end, I did not understand counsel to resist that conclusion.

79. The rejection of his evidence on this point is a significant blow to David's credit. His counsel pointed out that the events in question had taken place many years before, and some fading of recollection was to be expected. Counsel also suggested that David did not present as a sophisticated person. But I do not think that is an adequate explanation.

80. David's account was an elaborate one, and I can see no possibility that that account, in which David professed to recall extensive details of his supposed purchase, could have been the result of an honest mistake. At best, David had forgotten the details, and simply invented the story which appears in his affidavit. Even if he had persuaded himself by the time the trial took place that it might have happened that way, he must have known in his heart of hearts that he had no real recollection.

81. In his affidavit, David responded to Chris' account of how his June 2015 will came to be made, but that evidence was not admitted, and no application was made to supplement it. In cross-examination, it was put to David that the will reflected an agreement between himself and Chris that the Nowra property belonged to Chris and would stay with him in the event of David's death. According to my recollection, David may not have accepted this, but he certainly did not advance any alternative explanation for the making of the will.

82. On David's account, he and Kathleen stood by while Chris expended the moneys in the Keno Account, apart from those used to buy the Nowra property, on his own personal expenditure and on gifts by him to other members of the family. In doing so, Chris consumed significantly more than his supposed one-third share of the winnings.

83. Counsel for Chris pressed David in cross-examination on why he permitted this to happen if, as he claimed, he and Kathleen were entitled to two-thirds of the winnings. Again, I did not find his explanation persuasive. I thought it was particularly unpersuasive in circumstances where, according to David, Chris never contributed anything to the running costs of the household either before or after the Keno Account was exhausted, yet at no stage did David ask Chris to pay rent or to make any contributions to the outgoings.

84. Kathleen's affidavit evidence ran along the same lines as that of David. Indeed, the language of her affidavit, apart from some minor variations, followed the language of David's exactly, including typographical and grammatical errors.

85. Kathleen was cross-examined about this. Her evidence on the subject I found confused and difficult to follow. Eventually her version of events seemed to be this.

86. She first visited her solicitor's office in May last year to make her affidavit. On that occasion she gave instructions to the solicitor, who made notes, but did not prepare or give her a draft. A few weeks later she went back. She was presented with a draft, and, according to her, a further discussion ensued. She then swore the affidavit. About three months later she swore a further affidavit, which is in similar form, but which added an additional recollection about the alleged syndicate agreement. According to her second affidavit, on each occasion when money was handed over to Chris to gamble with, she would expressly ask him to confirm that the syndicate arrangement was still in place, and Chris would do so.

87. Kathleen was pressed on how this highly self-serving evidence had appeared in her second affidavit but not her first. Her response was to say that she had realised something was missing after signing the first affidavit in June and had made calls to the solicitor to tell him so. She left messages but there was no response. This evidence simply raised more questions than it answered, and eventually, as I understood her, she withdrew the whole of her evidence on the subject.

88. The result was that the similarity of Kathleen’s initial affidavit with David's, and the addition of the further evidence about the supposed syndicate arrangement, was simply left hanging. On any view, Kathleen’s explanation was not adequate.

89. Kathleen was cross-examined on the same lines as David about what counsel for Chris put to her as absurdities and inconsistencies in her version of events. I do not think that it is necessary to summarise the cross-examination in any detail. Kathleen made no concessions, but like David, she failed to offer any explanation for the points raised by counsel.

90. I will however refer to one piece of her evidence. She was asked by counsel why she allowed Chris to spend moneys, which on her account, were part of her’s and David's share of the winnings. Her response was that she was just grateful to have the house.

91. I think that answer was revealing. It is readily reconciled with Chris' version of events under which, from the outset, he had intended to allow David and Kathleen to live with him rent free, effectively as an act of generosity. I find it easy to accept that, having been presented with somewhere to live, effectively rent-free, Kathleen would have been grateful. She is unlikely to have contemplated the possibility that the parties might fall out as they have. There was nothing in her evidence, in my view, to support the case now made on her behalf, namely that the purchase of the Nowra property involved the discharge (and then only partially) by Chris of an obligation on his part.

Trust claim

92. There is no dispute that the moneys paid into the Keno Account belonged to Chris. They were paid into the account at Chris' direction by Mr Doyle. Counsel for David and Kathleen accepted that a presumption arose from the moneys being paid into an account in David's name as volunteer of a resulting trust in favour of the owner of the moneys, namely Chris. Counsel also accepted that the onus lay on David and Kathleen to rebut the presumption. In turn, the same resulting trust would apply to the Nowra property purchased as it was from the moneys in the account.

93. On a factual level, the case then comes down to a single issue. What was the arrangement under which the Keno Account was established? The issue is one which depends upon the terms of discussions between Chris and David. It was not suggested that Kathleen was involved in those particular discussions. As I understood it, counsel for Kathleen and David accepted this analysis.

92. In resolving this issue, I think there are six points of significance.

93. First, I think the account given by David and Kathleen by way of explanation for the moneys being put into David's name, namely that it was pursuant to the alleged syndicate agreement, is inherently implausible. David is evidently a very different man from his brother, Chris. Indeed, he is known within the family as "the Reverend". I think the idea that he would have contributed to some form of gambling syndicate with Chris is indeed absurd. As I have stated, David failed to provide any explanation which I found credible for why the arrangement was supposedly made, and the vagueness of the alleged arrangement speaks for itself.

94. The second point is that the case made on David and Kathleen’s behalf is inconsistent with their subsequent conduct, and particularly David's conduct. Among other things, David allowed Chris unfettered access to draw on the Keno Account; Chris gave gifts from those accounts to David and Kathleen and members of their families; Chris selected the Nowra property and made the decision to buy it; Chris persuaded David to make a will leaving his estate (and thus, effectively, the property) to Chris; and David and Kathleen allowed Chris to occupy the master bedroom, even though on their own account he never at any stage paid any rent or made any contributions to the household. None of those circumstances have been, to my mind, adequately reconciled with David and Kathleen’s version of events.

95. The third point concerns the credit of the defence witnesses. I have already indicated that I disbelieve David's evidence about the circumstances in which the Nowra property was acquired. I have also indicated that I find other aspects of his evidence unpersuasive, and indeed, so far as it concerns the alleged syndicate arrangement, absurd.

96. The adverse effect of these matters was reinforced by the way in which David gave his evidence. Frequently, it was inconsistent with his affidavit evidence. At best, David cannot have paid proper attention to the form of the affidavit before signing it. David's evidence was also frequently non-responsive. He appeared to me to be making determined efforts to argue his case and defend the position which he had taken in his affidavit, but I thought that those efforts were unavailing. I am not satisfied that he was trying to give me an honest recollection of what he could, in fact, remember.

97. Similar comments apply to Kathleen's evidence in cross-examination. Some of it was less detailed, and thus less vulnerable to challenge than David's, but I still found her wholly unconvincing, especially in the evidence which I have summarised about the formulation of her affidavit evidence. In the end she made no concessions, but allowance must be made for the fact that she was in court during the whole of David's cross-examination. She too frequently gave evidence which was non-responsive, and when pressed, tended to withdraw into non-recollection. I am not satisfied that she has any real recollection of the events which she described in her affidavit, or if she does, that the version she presented in court truthfully reflects such recollections.

98. The fourth point is that, by contrast, Chris' account is plausible. As I have said, it reflects no credit on him that he wished to put the winnings, and later the Nowra property, in David's name so as to avoid any inquiries which might be made by the Child Support Agency. But avoiding the Child Support Agency is a plausible reason for what he did, and I see no reason to doubt his evidence on that account.

99. Fifthly, Chris' evidence, unlike that of David and Kathleen, is corroborated by other independent witnesses whose credit is not in issue. I refer to the evidence of Mr Doyle, Mr Furmage, Mr Egan and Mr Matt Birney. All of their evidence was consistent with Chris' version of events, and all of them, except for Mr Egan, gave evidence on contemporaneous statements of Chris' intent to buy the house for himself.

100. The sixth and final point to be considered is Chris' credit. As I have mentioned, he was cross-examined on the details of the transactions which happened a long time ago. In such circumstances, perfection of recollection cannot be expected. But in my judgment, Chris made no concessions of any significance in is cross-examination, and there was nothing in his evidence which required explanation which he was not able to deal with. His conduct in his dealings with the Child Support Agency may have been discreditable, but his credibility, in my view, is far superior to that of his siblings.

101. All of the factors which I have mentioned tend against the acceptance of David and Kathleen's case and in favour of Chris'. I am not satisfied that David and Kathleen's version of events is correct. I do not consider they have discharged the onus involved in rebutting the presumption of a resulting trust in favour of Chris over the moneys in the Keno Account and the Nowra property acquired with funds from that account. Indeed, on the evidence, I am affirmatively satisfied that David agreed to look after the winnings for Chris and specifically to hold the property on his behalf. I am prima facie satisfied, therefore, that he held, and holds, the property as trustee.

102. Counsel for David and Kathleen advanced a defence of laches. This was based on a delay coupled with events happening during the period of delay which would make the enforcement of Chris' rights inequitable, rather than “mere” delay. ^[2]

     2. Heydon, JD, Leeming, MJ and Turner, PG, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2015) at [38-015]-[38-020].

103. When I asked counsel when Chris should have brought proceedings to vindicate his rights, counsel responded that proceedings should have been brought back in 2014 or at least in 2016 when the money ran out. I cannot accept that submission. I agree with counsel for Chris that a beneficiary under a trust has no obligation, while the trustee is apparently fulfilling his or her duties, to call on the trustee to transfer the property. It could only be when the trustee has repudiated any obligation to the beneficiary that any such duty would arise.

104. In the present case, repudiation could not have happened before 2019 at the earliest. Even in 2019 the position was not clear. According to Chris, he first proposed a sale in 2019 and was met with the suggestion that the sale should be deferred until a bypass on the road to Sydney, which would shorten the drive time, had been completed. On Chris' account, it was not until a year later, in 2020, that he raised the issue again. Even at that stage, David, while declining to discuss the matter with him, did nothing to assert any inconsistent rights over the property: he simply abandoned it. In the present case, that did not happen before 2019 at the earliest.

105. Laches is an affirmative defence and the onus lay on David and Kathleen to demonstrate when it was that Chris should have commenced proceedings and why it was that delay after that date has prejudiced them. In my view, the evidence on both points is insufficient.

106. Counsel suggested that the delay in bringing proceedings could have led to the fading of recollections. But I do not see that, even if there was an obligation to bring the claim in, say, 2020, the fading of recollections between then and when the claim was actually brought would have made any difference. Certainly, there was no specific evidence to that effect. Indeed, David and Kathleen both professed to be able to give clear recollections of the events in 2014 and 2015 in their affidavits and never formally resiled from that position.

107. In any event, I am not satisfied that Chris was under any obligation to commence the proceedings prior to September 2022. It could not have been asserted that the delay between then and December 2022, when the proceedings were commenced, would have made any material difference. For these reasons, I reject the laches defence.

Conclusions and orders

110. Chris therefore succeeds on the trust case. There will be a declaration and an order for transfer of the Nowra property accordingly. Counsel for Chris sought an order that David execute a transfer within seven days, and this was not disputed.

111. As already mentioned, Chris' statement of claim sought an order for possession. If this was intended as a reference to a common law writ of possession, then a difficulty arises, as that remedy is usually only available to a registered proprietor. However, on my findings, David is trustee of the Nowra property, and this Court, under its administrative jurisdiction over trusts, is in a position to make orders requiring him to take steps in the administration of the property in accordance with the trust found by the Court. ^[3]

     3. See Uniform Civil Procedure Rules 2005, r 54.3.

112. Counsel for Chris accepted this and sought orders requiring David himself to vacate the property and to take steps as registered proprietor to require his sister, Kathleen, to do so. An order was also sought requiring David to give "vacant possession" of the property to Chris. As I understand it, this effectively is an order requiring David to hand over the keys and give Chris access to the property, even if the transfer has not been registered when the time comes. I think that the Court's powers are sufficient to allow the making of such an order.

113. Counsel for Chris sought orders that would allow 14 days for the Nowra property should be vacated by David and Kathleen, and for David to give vacant possession of the property to Chris. Counsel for David and Kathleen resisted this. He asserted that it would cause hardship and that they would need 60 days to get their affairs together.

114. This assertion was not supported by any evidence. I see no reason to give the defendants the time which they have asked. On my findings Chris has been wrongfully excluded from the property since September 2022. The defendants have known for a long time that the day of this trial was coming. If they have not taken advice and made arrangements against the possibility that they might lose, that is not the Court's concern and it should not affect Chris' rights. Accordingly, the possession orders will provide for vacation of the property within 14 days.

115. I have referred above to the possibility that Chris may have concealed his winnings from the Child Support Agency in order to obtain more favourable treatment from that Agency. A question arises as to whether I should make the grant of relief in Chris' favour conditional upon him taking steps to rectify the position so far as the Agency was concerned, as in, the conditions which were imposed in Nelson v Nelson (1995) 184 CLR 538.

116. I do not however think that I should go so far. That is for two reasons. First, unlike Nelson v Nelson, the relief claimed by Chris is not directly impeached by any fraud which he may have committed on the Agency. Secondly, it has not been established, in these proceedings, that he has committed any such fraud. It is only a possibility, and it depends on what he may or may not have said to the Agency back in 2015 and 2016.

117. I think in the circumstances that I should order that the papers be sent to the Child Support Agency so that they may consider whether there has been any misleading conduct on Chris' behalf, and what the consequences of this might be. But I will not take the further step of imposing some sort of condition on the grant of relief.

118. The orders of the Court are:

1. Declare that the first defendant holds the land in Folio Identifier 23/778668 located at 6 Bamarook Place, North Nowra, in the State of New South Wales (Property) on trust for the Plaintiff

2. Order that the First Defendant deliver to the Plaintiff’s solicitor a properly executed transfer of the Property to the Plaintiff in registrable form within 7 days.

3. An order that the First Defendant vacate the Property, and take all necessary steps to cause the Second Defendant to vacate the Property, within 14 days.

4. Order that the First Defendant give vacant possession of the Property to the Plaintiff within 14 days.

5. Order that the Defendants pay the Plaintiff’s costs of the proceedings including the cross-claim.

6. Order that the Registrar forward a copy of this judgment and the relevant papers from the Court's file to the responsible officer of the Child Support Agency for consideration by that Agency.

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Endnotes

Decision last updated: 16 May 2024