Brujah v Wolf
[2018] VCC 19
•16 February 2018 7 March 2018
limitation
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-17-01850
| Lalanah Brujah | Plaintiff |
| v | |
| Taras King Wolf | Defendant |
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JUDGE: | His Honour Judge Woodward | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 January, 1, 2, 5 and 7 February 2018 | |
| DATE OF FINAL SUBMISSION: DATE OF JUDGMENT: | 16 February 2018 7 March 2018 | |
CASE MAY BE CITED AS: | Brujah v Wolf | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 19 | |
REASONS FOR JUDGMENT
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Subject: CONTRACTS
Catchwords: Loan agreement – whether funds for purchase of property loan or gift –whether payments were loan repayments or financial assistance – whether signature on loan agreement forgery – handwriting experts – process of signature comparison –– presumption of gift between mother and son displaced
Legislation Cited: Limitations of Actions Act 1956 (Vic) s24; Civil Procedure Act 2010 (Vic) s12, s23
Cases Cited:Trkulja v Markovic [2015] VSCA 298; O’Donnell v Reichard [1975] VR 916
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | D Harrison | Wisewould Mahoney Lawyers |
| For the Defendant | C Dane QC with W Stark | Roberts Gray Lawyers |
HIS HONOUR:
Parties, background and issues
1 The plaintiff is a retired woman in her mid-sixties. She has three children. The defendant is her eldest son, born in 1973. He is a registered architect and operates his business through Wolf Architects Australia Pty Ltd. The plaintiff sues to recover $289,800, which she alleges is the balance of a loan of $500,000 she made to the defendant in 2001 to fund the purchase by the defendant of a house in Sydney St, Collingwood (“Sydney St property”). The defendant says that the house was a gift from his mother.
2 The plaintiff further alleges that the loan is evidenced by a written acknowledgement of loan headed “Loan Agreement” signed by her and the defendant in December 2003 and dated 16 December 2003 (“loan agreement”). The defendant says what purports to be his signature on the loan agreement is a forgery. He alleges that his forged signature was “procured by his mother”. Also, the defendant and his wife (“Dr Wolf”) made numerous payments to or on behalf of the plaintiff between 2006 and 2014, totalling $160,200. The plaintiff says these were loan repayments. The defendant says they were gifts made by him and his wife to the plaintiff, primarily to assist her with living expenses.
3 The central question I need to determine is whether the original advance of $500,000 was a loan or a gift. I am satisfied that it was a loan. The other questions arising from the facts summarised above are, first, is the defendant’s signature on the loan agreement a forgery? In my view, the signature on the loan agreement is the defendant’s. And second, were the payments made by the defendant and Dr Wolf to and on behalf of the plaintiff gifts or repayments of the loan? In my view, they were loan repayments. The consequence of these findings of fact is that the loan is not statute barred. And by reason of a demand made on 11 April 2017 which the defendant admits he received, the loan is currently due and payable by the defendant to the plaintiff.
4 As each of the subsidiary factual issues in this case both inform, and are informed by, the central question of whether the original advance is a loan, it is convenient to deal with those issues in more or less chronological order. So after commenting on credit issues, I propose to examine each of the following questions in turn, and conclude with a brief discussion of the remaining issues raised by the parties’ submission. The questions are:
· Did the plaintiff say that the original advance was a loan?
· Did the plaintiff agree to reduce the loan by $50,000 as a wedding present?
· Was the loan agreement prepared and signed in December 2003?
· Were the payments made to or on behalf of the plaintiff loan repayments?
· Is there other evidence of the loan?
· What does the expert evidence establish?
The lay witnesses
5 The nature of the claims and defences in this proceeding (most notably the allegation of forgery), meant that it was almost inevitable that the credibility of the parties and other witnesses was likely to loom large during the trial and in submissions. And so it transpired. It is therefore appropriate that I say something about the credibility of the lay witnesses before moving to the factual questions set out above.
The plaintiff
6 The defendant’s submissions make many criticisms of the plaintiff’s evidence, which he asserts supports the conclusion that she was an unsatisfactory witness. His submissions conclude on the plaintiff’s evidence that “the Court should reject anything that Ms Brujah has sworn without corroboration”. While I accept that the plaintiff’s memory on some issues was poor, I am satisfied that she was on the whole a truthful witness. Further, unlike the evidence of the defendant and Dr Wolf, there was indeed corroboration for key parts of her evidence as discussed in detail below. This includes, in particular, the loan agreement, the evidence and note of Mr Robb, Dr Wolf’s bank transfer entries and her email to the plaintiff of 29 June 2014.
7 Probably the area of greatest difficulty for the plaintiff concerned the circumstances of the signing of her and the defendant’s wills and the loan agreement. There was inconsistency between her pleaded case and her evidence-in-chief concerning the date of signing. And in cross-examination she effectively conceded that her evidence-in-chief, being that she was present with the defendant when he signed his will and the loan agreement on 8 December 2003, must be a mistake. She accepted that it was more than likely that she was not present with her son at Pearce Webster Dugdales (“PWD”) on 8 December 2003, and added: “Sorry about the confusion, I really believed I was there”.
8 In my view, these lapses in recollection are explicable simply by the passage of time (over 13 years in the case of the will signing) and the fact that none of those involved could have predicted the intense scrutiny that these events would later attract. In particular, memories of meetings with PWD in respect of the wills could easily have merged with memories of other meetings of around that time (such as in relation to the purchase of the Sydney St property – PWD acted on the conveyance) and conversations thought to have occurred in person could have in fact taken place over the telephone (or vice versa). Importantly, in relation to the issue of credit, the plaintiff appropriately conceded failures in her recollection in relation to these matters of detail.
9 Similarly, the defendant has criticised the plaintiff for, for example, being unable to recall precisely the age of her eldest granddaughter and for mixing up the dates of the defendant’s purchase of his Chadstone property and the date of his wedding. These criticisms were unwarranted, particularly in the case of the latter, given these were also events some 13 years or more earlier. It is understandable that recollections of the sequence of events occurring that long ago can become clouded. Again, the plaintiff readily conceded that her dates were mixed up and the defendant’s recollection of the timing of these matters would be more reliable. However, these concessions do not sustain the defendant’s submission that they amount to an invitation to the court “to believe Mr Wolf’s evidence over her own, and thereby effectively conceding that the entire claim has no basis”.
The defendant
10 The defendant presented as someone who has at least since the falling out with his mother in around 2014, formed a particular view of how his mother should have behaved in relation to their financial dealings, and constructed a narrative consistent with that view. Thus many of his answers were discursive and ranged over facts that were largely irrelevant, but appeared designed to give colour and context to the particular issue he had been asked about. And because his answers on key issues were rooted in this broader narrative, they had an air of plausibility. However, they did not stand up to closer examination.
11 The defendant got into particular difficulty when confronted with objectively ascertainable facts that did not sit comfortably in his narrative. Examples of this were his theories about the reference to a loan amount of $340,000 in Mr Robb’s note of the JBWere meeting, his explanation for Dr Wolf’s description of the bank transfers and the 29 June 2014 email. As discussed further below, this evidence was disingenuous and unconvincing. More generally, based on both the defendant’s demeanour and the content of his answers, I formed the impression that his evidence on key issues was contrived.
12 These impressions of the defendant were reinforced by his evidence concerning his LinkedIn profile. The plaintiff’s submissions about this (which I accept) were as follows (omitting references):
“The defendant had created a Linkedin profile which was at best gilded but more accurately, false and misleading. He claimed that he was an “Architect” with Fender Katsilidis from ‘Jan 1994 – Dec 1994”: he was not an architect and was only there for less than 6 months. He had no business name in 1995 – 1996 but claimed in Linkedin that he worked under the name “Universal Trading”. He claimed in Linkedin to have been the “Head of Architecture and Interior design” for Windsor House from January 1997 – January 2000, wherein he had “the responsibility to train the junior designers”, all of which was false. He claimed in Linkedin to have worked for Tomahawk Design in Melbourne from January 2000 – January 2002 yet was in Thailand until July 2000. On Linkedin he claimed to have been the Principle (sic) Architect at Wolf Architects from 2005 but was not an architect until 2009.”
13 The defendant’s evidence seeking to justify and explain his LinkedIn profile (having earlier given conflicting evidence about his professional background), was perhaps even more troubling than the content of the profile itself. Instead of simply conceding that the profile embellished his professional experience, he sought first to deflect responsibility for it and then assert (except for the business name) that, “I think this is still correct. I think this is fine”. The LinkedIn profile and the defendant’s evidence seeking to justify it, speak to a person who will ignore or deny uncomfortable facts, rather than admit error.
14 In his submissions in reply, the defendant asserted that “Mr Wolf stated that he did not create the LinkedIn account referred to and he did not see it”. That submission misstates the defendant’s evidence on this issue. The relevant passage of the evidence is as follows:
Q:And yet what I suggest to you is that you have made a false statement in your LinkedIn profile, do you agree with that?
A: To be honest, I have not looked at my LinkedIn profile.
Q: Don’t tell me your wife does it for you too?
A. No.
Q. You typed it up, didn’t you?
A.This would be information that we would have discussed and put into LinkedIn.
Q. You typed it up didn’t you?
A.This is correct. The chronology is correct the names are a little bit different, but that’s okay.
15 Thus on any view, the defendant accepted at least that he and his wife together put the information into LinkedIn. It was clear from this evidence that the defendant was accepting responsibility for the information in his LinkedIn profile and, indeed, endorsing it.
16 The exaggeration seen in the defendant’s LinkedIn profile was evident in other parts of his evidence. For example, taken in cross examination to an email he had sent to the defendant’s expert Mr Lacroix which referred to his signature in the loan agreement being undated, he was asked why he had described it as “undated”. He responded: “my signature was undated. I always date my signatures”. It was clear from the many examples of the defendant’s signature in evidence that this assertion could not be sustained. Similar absolute (but erroneous) statements appear in his signature deconstruction document discussed below.[1]
[1]At [133]
17 Another example involved his evidence about architectural work undertaken for the plaintiff in 1996 in relation to a property in Chambers St, South Yarra, when the plaintiff was 23, having obtained his undergraduate degree in architecture a year or two earlier. He said:
“I did everything. It was full architectural work, it was design, concept design, working drawings, site inspections pretty much daily. This work was completely customised minimalistic architecture. Every detail was drawn on at 1 to 1 scale, there was no mystery and I was basically creating new ground, I broke a lot of new design ideas that were really fantastic”.
18 The defendant was undoubtedly aggrieved by the plaintiff’s insistence that he continue to repay the loan at a time when his family’s finances were stretched while, as he saw it, the plaintiff was more than comfortably off, and clearly did not need the money to sustain her lifestyle. The evidence concerning the plaintiff’s wealth, particularly by around 2014, would suggest that this was indeed the case. And his father’s claims discussed below, probably fed his resentment – perhaps even precipitated it. But whatever the defendant’s motivations, I am satisfied that his evidence on the key issues in dispute was unreliable.
Dr Wolf
19 Predictably for a case involving a fractured family and serious allegations of dishonesty and fraud, there were many aspects of the trial and these reasons that I have found difficult. But none has been as difficult as the questions presented by the evidence of the defendant’s wife, Dr Wolf. She is clearly a person of considerable intelligence. She is a medical practitioner, but is not currently employed. When asked in examination-in-chief to explain why, she answered: “I was employed up to two years ago and since then I’ve suffered from anxiety and depression and have been on WorkCover ever since”. It appears that before ceasing work (and apart from periods of maternity leave) she worked primarily in the emergency department at Monash Medical Centre in Clayton. It goes without saying a major hospital emergency department is an extraordinarily stressful work environment.
20 Her answers were measured and calm and there were no obvious signs of wariness or dissembling. On the other hand, on a few occasions I observed that she seemed to be one step ahead of the questioner – providing a plausible and coherent explanation for a vexed issue, even though the question was confusing or unclear. The best example of this was during her examination-in-chief, when she was being asked about schedules of payments to the plaintiff.[2]
[2]At transcript pages 367 to 373
21 Dr Wolf was first taken to pages 32 to 34 of the court book which counsel described as a “summary taken from bank records” of bank transfers made by Dr Wolf to the plaintiff between February 2007 and 30 June 2014. She was then asked a series of questions about the summary over about two pages of transcript. Counsel then moved to an email sent by her to the plaintiff on 29 June 2014 at page 317 of the court book, which included (in the body of the email) a schedule showing total payments made each year. The significance of both these documents is discussed in detail below.[3]
[3]At, respectively, [83] to [94] and [116] to [123]
22 Counsel then asked numerous questions about the email and chart, consistently using the word “chart” to describe the schedule in the email. He then moved on to the topic of Christmas gifts, before jumping back without prelude to ask this question (emphasis added):
“So you discussed on that chart the notations that you made, February, March et cetera; why did you put the months down?”
23 At the time this question was asked, I observed that Dr Wolf still had open in front of her page 317 of the court book, showing the email comprising the schedule that counsel had earlier been referring to as a “chart”. The defendant’s counsel had not used the word “chart” to describe the summary at pages 32 to 34 of the court book, which the question above was directed to. Dr Wolf nevertheless seemed to know without hesitation that counsel had made a sudden change of tack and was in fact referring back to the summary at pages 32 to 34 of the court book, which he had last been dealing with about five pages earlier in the transcript. Dr Wolf answered:
“Again, it was just easier because if something didn’t hit her account, and that was probably the only time she might say, ‘Nothing was received in such and such a month.’ So no matter when it was paid, I would just notate that it was in accordance with the particular month.”
24 I was struck by how quickly and coherently Dr Wolf gave this explanation of the transfer descriptions, despite the significant potential for confusion in the question. In my view (as discussed below), these descriptions accompanying the bank transfers are consistent with the transfers being loan repayments, but very difficult to reconcile with the defendant’s allegation that they were a gift to his mother. This difficulty for the defendant’s case would have been self-evident to anyone of moderate intelligence considering the notations, and reinforced by questions raised during the trial to that point.
25 Thus there are at least two possible explanations for Dr Wolf’s surprisingly adept answer on this issue. One is that her answer was pre-planned by her and she was waiting to deploy it as soon as the question about the transfer descriptions was asked. The other explanation is that her natural intelligence enabled her to appreciate what “chart” counsel was referring to, despite having covered two other topics since asking her about the bank transfer summary (and not using the term “chart” to describe this summary).
26 There were a few other instances where it might be argued that Dr Wolf’s answers were almost too polished. But these instances were of insufficient frequency or prominence to do more than cause me to question whether Dr Wolf’s otherwise persuasive demeanour was genuine. Similarly, there was an air of resignation about her evidence, but it was impossible to tell whether this was a symptom of her illness, or a sign of reluctant acceptance of the part she was forced to play in the proceeding (or both).
27 Dr Wolf had a highly stressful job and, as the mother of three small children, a busy family life. More recently she has become unwell. It is likely that, as with the email dated 29 June 2014 which she said she had “completely forgotten” until recently, she has put from her mind most of the matters now under intense scrutiny in this case. Thus it is possible that in the process of trying to dredge up memories of what happened at the time, she has reconstructed events in her mind in a way that is consistent with the defendant’s narrative.
28 Another possibility is that urged by the plaintiff’s submissions – that it was “the tainted evidence of a loving wife”. Put another way, Dr Wolf believed the defendant had the moral high-ground in his dispute with the plaintiff, and she was prepared to embellish the truth to support that position. In the result, I am unable to conclude with sufficient confidence Dr Wolf gave knowingly false evidence. However, I am satisfied that the documents overwhelmingly support the conclusion that her answers on key issues were at least mistaken.
Other witnesses of fact
29 James Robb was an employee of Goldman Sachs JBWere (“JBWere”) and participated in a meeting with the defendant and Dr Wolf on 18 August 2011 that has come to play a significant part in the outcome of this case. The evidence was that Mr Kirk (the plaintiff’s partner) was JBWere’s primary client at the time of the meeting, and they had also provided financial advice to the plaintiff over a number of years. However, Mr Robb’s evidence showed no signs of being influenced by this affiliation with the plaintiff. I agree with the plaintiff’s submission that he was an “independent witness”, in the sense that (unlike the other lay witnesses) he has no interest of any substance in the outcome of this proceeding.
30 The defendant submits that Mr Robb did his best to recall a short meeting from seven years ago, but that it is extremely doubtful that he could remember anything other than what was in his note. The defendant also points to errors in the note, including in the defendant’s name, the size of the Chadstone land and the amount of the loan the defendant was seeking. The defendant submits that “where Mr Robb’s evidence conflicts with Mr Wolf’s or Dr Wolf’s evidence, it should be dismissed”. I disagree. In my view, given the time that has passed, Mr Robb had a fairly good recollection of the circumstances of the meeting and other relevant events. I am also satisfied that his note was made by him as the meeting with the defendant and Dr Wolf progressed, and is a generally accurate record of what he was told during the meeting, despite the few minor inaccuracies referred to by the defendant.
31 The final lay witness was the defendant’s father and the plaintiff’s ex-husband Chan Wai Fong, formerly known as Prasong Panichpakdee. Mr Chan is a Thai national. He has been in business as a property developer and has substantial property assets in Thailand and elsewhere. Mr Chan’s evidence-in-chief touched on two matters that were at least arguably relevant. The first concerned an alleged agreement with the plaintiff as part of their divorce arrangements and the second concerned the ownership of two apartments in an area in Thailand about two and a half hours’ drive from Bangkok, known as Hua Hin. For the reasons below, I reject Mr Chan’s evidence on both these matters.
32 Turning first to the alleged agreement, it had been put to the plaintiff in cross-examination early in the trial that the defendant would be giving evidence that, as part of the divorce arrangements she had made with her ex-husband, the plaintiff was to provide for each of their children:
· property to the value of $1 million;
· school education up to the completion of two university degrees;
· one safe new car on their turning 18 years; and
· medical care and expenditure, including dental, up until the age of 30.
33 The defendant had not at this point of the trial given notice of any intention to call his father. The plaintiff denied there was any such agreement. Her evidence was: “No. Why would I be doing all this? What is he doing?”. I understood the plaintiff to be here questioning why she would be agreeing to commit $3 million plus other open ended expenses from her share of the marriage settlement and what was her ex-husband committing to this arrangement?
34 Mr Chan’s evidence was that there were two written agreements between the plaintiff and him concerning their divorce in about 1998. The first was to “protect my family, my children from the creditor”, and involved splitting their assets. His evidence was that the plaintiff’s part of the split was worth about $10 million. The plaintiff had earlier given evidence that this was the effect of the divorce settlement, but the property she ended up with was in fact worth closer to $5 million, in part because Mr Chan had “smashed it up and vandalised it and stole all the furniture”. She also gave unchallenged evidence that her husband’s share of the divorce settlement was worth $70 million.
35 Mr Chan’s evidence was that the second agreement was: “to take care of the children. It basically is – she had to buy US$1 million home for each kid”. There was no evidence from Mr Chan (or otherwise) about the plaintiff also agreeing to provide for education, cars and medical expenses, as foreshadowed in the cross-examination of the plaintiff. On the contrary, Mr Chan was taken to a document dated 16 January 1997 entitled “Mutual Consent to Divorce” (“1997 divorce agreement”), which included a term that:
“The husband agrees to be responsible for expenses incurred by the children regarding their education, dental and medical costs”
36 Mr Chan agreed that he had signed this agreement but added:
“I just told you there’s another agreement to take care of the children, and she supposed to provide $1 million home for each kid. It wasn’t in this agreement. There is another agreement.”
37 Mr Chan did not produce a copy of this alleged second agreement. The defendant in his submissions criticised the plaintiff for not giving discovery of the 1997 divorce agreement. I reject that criticism. The document was not relevant to any issue in the proceeding until Mr Chan gave evidence about matters that were apparently inconsistent with the document.
38 The suggestion that the plaintiff had agreed as part of her divorce settlement to purchase a house worth US$1 million for each of her three children is untenable. First, it makes no sense that the plaintiff would first agree to accept a share of $10 million with her husband taking $70 million, and then agree to part with a further $3 million out of her share for the benefit of their children, apparently without her husband making any equivalent contribution out of his share. Second, contrary to what was put to the plaintiff in cross-examination, the 1997 divorce agreement shows that it was Mr Chan who in fact agreed to be responsible for expenses incurred by the children for education, dental and medical costs. There is no reason to think that Mr Chan’s evidence that the plaintiff agreed to buy three US$1 million homes is any more reliable.
39 Turning next to Mr Chan’s evidence that he had given the apartments in Hua Hin to the defendant, Mr Chan described these as being the two seafront penthouse apartments on the top floor of a 12 story building in Hua Hin. The defendant’s submissions also refer to the two apartments as being at “Floor 12, Building 1, Ban Somprasong, Hua Hin Condominium”. Mr Chan said that he kept only these two apartments “for my children”. He said that the apartments were in the name of his development company and were then transferred to the defendant. He said that after the divorce:
“I believe the apartment (sic) was sold. It transferred from Taras to a company called Bridge World, which belonged to Lalanah Brujah. And I learned later that Taras had never signed a transfer paper. So I don’t know how it happened.
40 Regardless of whether the apartments were at some point put into the name of the defendant, I am satisfied that by the time of the divorce at the latest, the apartments were indeed the property of the plaintiff. This conclusion is supported not only by the plaintiff’s evidence but also by the 1997 divorce agreement. It states in clause 4.1 that:
“The Wife is the sole proprietor of:
(a) …
(b) Baan Somprasong Hua Hin apartment 12th Floor
41 None of the other properties referred to in the 1997 divorce agreement resemble the description of the Hua Hin apartments referred to in Mr Chan’s evidence.
42 It seems that the defendant had reconciled with his father in about 2009 and Mr Chan has stayed at the defendant’s home a number of times “in the last few years” (that is, from around 2014). It was also apparent from the evidence that there has been considerable animosity between the plaintiff and Mr Chan since about the time of their divorce. In those circumstances, it may have suited Mr Chan to add fuel to the fire of the defendant’s ill-will towards his mother by telling the defendant about further injustices that she has done to him. However, I am satisfied that his assertions that the plaintiff agreed to pay for a US$1 million homes for each of her children and that she sold apartments belonging to the defendant, were both without foundation.
Did the plaintiff say that the original advance was a loan?
43 The plaintiff returned from Thailand to live permanently in Melbourne in 1999 and the defendant returned the following year. It was not relevantly in dispute that by around mid-2001, the plaintiff had purchased two investment properties, one at Hull Street, Richmond and one in Church Street, Richmond. The defendant alleges that the Hull Street property was bought for the plaintiff’s youngest son Tyler and the Church Street property was bought for her daughter Tessa. The plaintiff denied this. She said in evidence that they were investment properties for her. There was no suggestion that these properties were ever transferred into the names of the plaintiff’s younger children and neither was called to give evidence.
44 The circumstances of the purchase of the Sydney St property were that the defendant said to the plaintiff that he would like to purchase a property and, after a search, identified the Sydney St property as suitable. He negotiated a purchase price of $500,000. The defendant signed the contract of sale as purchaser and the plaintiff provided the deposit of $50,000. Correspondence with PWD in relation to the sale suggests that there was a point in the lead up to settlement when the defendant was to nominate the plaintiff as purchaser in his place, but this instruction was later withdrawn. Settlement went ahead in around July 2001 with the defendant as transferee, noting that at around this time the defendant was using the name “Taras Ventrue”. The plaintiff paid the balance of the purchase price of $450,000 and the stamp duty of $25,660.
45 The plaintiff’s evidence was to the effect that at some point in her discussions with the defendant about his interest in the Sydney St property she offered to help him. Her evidence was that: “I said to him that I could lend him the money for the property and he could pay me back”. She said that the timeframe for repayment was five to seven years. She later explained that the five to seven year time frame was “because my second son is seven years younger and I was hoping to lend him the money so he could get a good start”. She also explained that she did not seek to document any of this at the time because she trusted her son: “You know, I expected that he would do the right thing. I never expected to be here”.
46 The defendant denied that there was any discussion about a loan. He said: “At that stage there was no loan, no discussion of payments, there was just living happy and it was a happy period”. The defendant’s evidence was that there were no discussions with the plaintiff as she was writing out cheques for $50,000 and then $450,000: “Mum just sort of said, ‘Congratulations, we’re happy for you’”.
47 The defendant submits that, if the money used to purchase the Sydney St property had been described as a loan repayable within five to seven years or repayable on demand, the defendant would not have accepted. He argues that he had no legitimate way to repay the sum in question in the timeframe the plaintiff had set. The defendant further submits that her offer to buy him a home was consistent with her wanting him to return to Australia and her statement to him of her intention to buy a property for each of her three children. He also relies on the fact that when he sold the Sydney St property some 18 months later and purchased the Chadstone property realising a surplus of some $130,000, the plaintiff did not ask for this to be paid off the loan.
48 In my view, none of these matters is inconsistent with the arrangement between the plaintiff and the defendant being in the nature of an interest free loan rather than a gift. The offer of such a loan with a flexible repayment term reflects a desire on the part of the plaintiff to see the defendant put down roots in Melbourne. It was entered into at the time when the relationship between the parties was close, which explains why the plaintiff was content not to formalise the arrangement or seek any kind of security. The plaintiff’s evidence about repayment is consistent with her wanting to be in a position to extend a similar offer to her other children. And given that the sale of the Sydney St property and purchase in Chadstone was well inside the five to seven year timeframe, coupled with the defendant’s plans to renovate the Chadstone property, it is not surprising that the plaintiff did not seek the return of any of the proceeds of the sale of the Sydney St property.
49 The plaintiff has submitted, and I agree, that the existence of a loan is also strongly corroborated by subsequent documents and events discussed below. In the circumstances, I am satisfied that there was a discussion between the plaintiff and defendant at some point in the lead up to the defendant’s purchase of the Sydney St property to the effect that the funds provided by the plaintiff for the purchase were in the nature of the loan. I am also satisfied that the plaintiff spoke of an expectation that the loan would be repaid in five to seven years, and that the defendant agreed. Thus, contrary to the defendant’s submissions, there was a term for repayment, which was in any event superseded by the term in the loan agreement that the loan was repayable on demand.
Did the plaintiff agree to reduce the loan by $50,000 as a wedding present?
50 The defendant and Dr Wolf were married on 16 November 2003. The plaintiff initially gave evidence that she visited the defendant and Dr Wolf at their Chadstone home and presented them with wedding gifts of a diamond necklace for Dr Wolf, a “Benjarong” (Thai pottery from her collection), a small 800 year old Ming statue and $50,000 off her loan to the defendant. She later conceded in cross-examination that she may also have agreed to buy the defendant a watch and that the Ming statue may have been a housewarming gift. In relation to the $50,000 deduction from the $500,000 loan, she said: “I gave it to them as a wedding gift, it was just a deduction”. The plaintiff could not recall what the defendant and Dr Wolf said after she had told them about the deduction, but said that “they were very happy”.
51 The defendant disagreed and said in evidence, “I say, there would be no discussion. The only thing she said was, ‘I would like to give you more but the wedding’s expensive so that’s going to have to be it, and the necklace.’ There wasn’t any cash, I would have loved cash”. He later added:
“There was no gift [reduction of $50,000]. It’s possible that the items she gave were worth $50,000. I never valued what the necklace was worth, I never valued what the Benjarong was worth, I never valued what the Ming was worth so maybe it was $50,000 worth of gifts but definitely no cash, no offset, no loan, not this arrangement that she’s claiming.”
52 Dr Wolf’s evidence was that the plaintiff said she had wished she could have given Dr Wolf and the defendant some cash as a wedding gift, but that it just was not in her capacity to do so. She said that: “it didn’t really register particularly with me, I was happy with what had been given”. Dr Wolf’s evidence is not inconsistent with the plaintiff saying in substance that she could not give cash, but she would instead take $50,000 off the loan. However, I would not go so far as to say that this evidence “partly corroborated” the plaintiff’s account, as submitted by the plaintiff. The plaintiff has also submitted that her evidence about this reduction should be accepted because it is consistent with provisions made in her will about a month later. There is force in this submission, for the reasons below.
Was the loan agreement prepared and signed in December 2003?
The plaintiff’s will
53 The plaintiff’s evidence concerning the preparation and signing of her will is closely tied to her evidence about the preparation and signing of the loan agreement, and thus is subject to some uncertainty about the precise circumstances in which it was signed. However, for present purposes it is sufficient to note that it was signed on 16 December 2003 and is likely to have been prepared based on instructions given by the plaintiff to PWD in person or by telephone a week or two before that date. The relevant clauses of the will are clauses 3 and 4, which provide as follows:
“3.I GIVE AND BEQUEATH the sum of FIFTY THOUSAND DOLLARS to each of my son TYLER BRUJAH and my daughter TESSA BRUJAH upon the day he or she shall marry or attain the age of thirty-five years whichever shall first occur.
4.SUBJECT to the payment thereout of all my just debts funeral and testamentary expenses and the whole of the State Probate and Federal Estate Duties (if any) payable in respect of my estate I GIVE DEVISE AND BEQUEATH the rest and residue of my said estate unto my Trustees UPON TRUST both as to capital and income for such as my son TARAS KING WOLF my son the said TYLER BRUJAH and my daughter the said TESSA BRUJAH as shall survive me and attain the age of thirty-five years and if more than one equally between them.”
54 In cross-examination, the plaintiff explained that the defendant was not included in clause 3 of her will and bequeathed $50,000, because “Taras already had a gift of 50 [thousand dollars], that’s why I was going to give a gift of $50,000 to my two other children”. The plaintiff later reiterated “Taras already got a gift for his wedding of $50,000”. The plaintiff agreed that the will did not explain why the defendant was not included in the specific bequests and in response to the proposition that the will was completely absent the acknowledgement of any debt of the defendant, she responded: “You would have to ask John Pearce”.
55 The defendant submits that (emphasis in original):
“[W]hat is telling about Ms Brujah’s will is not the inclusion of 2 gifts of $50,000. It is that failure to mention the alleged loan of $500,000, or the alleged balance of $450,000. The will completely fails to instruct Ms Brujah’s executors as to how to treat the alleged loan. Is it to be forgiven on Ms Brujah’s death? Is it to be treated as an advance on the defendant’s inheritance? Or is it to be repaid, and then form part of Ms Brujah’s residual estate? This lack of instruction confirms that Ms Brujah did not turn her mind to the alleged loan at that time as it did not exist.
A prudent lawyer (as well as telling Ms Brujah to document the loan) would advise her to make specific mention of the alleged loan in her will, or at the very least provide an explanation as to why specific legacies were being provided to 2 of her 3 children and not her third child.
56 I reject this submission. On the contrary, what is telling is that the will makes no provision to balance any alleged gift to the defendant of a property worth $500,000 in the provisions made by the plaintiff for her other children. There was no suggestion of any disaffection or ill-feeling between the plaintiff and any of her children at that time. Indeed, the plaintiff’s daughter was barely out of high school. Further, the defendant does not provide any basis for the assertion that there is some significance in the fact that the will failed to instruct the plaintiff’s executors about what to do with the debt to the plaintiff. In the absence of any provision to the contrary, it would simply become a debt of the estate recoverable by the executors in the ordinary course of the administration of the estate. And I see nothing untoward or inconsistent with the actions of a prudent lawyer in the fact that the will did not include some express explanation as to why the legacies of $50,000 did not extend to the defendant.
57 In my view, the exclusion of the defendant from the legacies of $50,000 to each the plaintiff’s other children does indeed corroborate her evidence that she had agreed a month or so earlier to reduce her loan to the defendant by this amount, as a wedding gift. I am satisfied that the plaintiff’s evidence on this issue is to be preferred. There are also other aspects of the preparation and signing of the will that support a conclusion that the loan agreement was prepared and signed in conjunction with the will, as discussed below.
The loan agreement
58 The plaintiff’s evidence was that the loan agreement was typed up by PWD. The defendant disputes this, but does not offer any alternative theory as to how, when or by whom the document was prepared. Instead, the defendant points to inconsistencies in the plaintiff’s evidence about the timing of signing by her and by the defendant (as referred to above[4]) and relies on the fact that the onus is on the plaintiff to prove the provenance of the document. The defendant also submits that:
“In order to clarify the timing, the circumstances of the creation, and who was present, it would have been very easy for Ms Brujah to call either John Pearce or Margaret Jackson (who were, on her version of things, central to the drama). Ms Brujah acknowledged that the solicitors could clarify the dates (T108 L13-15). She failed to call anyone from their office, raising a very clear Jones v Dunkel inference that their evidence would not have assisted her in proving this unlikely chain of events [citing Tadgell JA in Kidman v Corstorphan [1999] VSCA 28, paragraphs 22 to 28].”
[4]At [7] and [8]
59 The defendant went on to invite the court: “not only to draw an adverse inference, but also to reduce the weight to be given to Ms Brujah’s evidence and increase the weight to be given to Mr Wolf and Dr Wolf’s evidence”. In response, the plaintiff referred to the defendant’s application during the trial to subpoena a witness from PWD, which application was granted (including by providing for short service). The defendant later indicated that he would not be calling on the subpoena. The plaintiff submitted that no Jones v Dunkel inference could be drawn against either party about the failure to call anyone from PWD, as “such witnesses cannot be said to be in either side’s camp”.
60 Contrary to the defendant’s submission summarised above, a Jones v Dunkel inference is not a warrant to draw an adverse inference about a witness’s evidence on a particular issue, much less about the witness’s credit generally. In Trkulja v Markovic[5] the court stated (citations omitted):
“[T]here are a number of limitations to the application of the rule in Jones v Dunkel. Relevantly for the purposes of this appeal, the rule does not permit an inference that the evidence not called by a party would have been adverse to the party. The rule also does not enable the absence of a witness to make up for any deficiency in a party’s evidence. The rule will not support an adverse inference unless the evidence otherwise provides a basis on which that unfavourable inference can be drawn. It has therefore been said that the rule cannot be employed to fill gaps in the evidence, or to convert conjecture and suspicion into inference.”
[5] [2015] VSCA 298, per Kyrou and Kaye JJA and Ginnane AJA at [96]
61 Thus it is not enough for the defendant simply to say that the plaintiff could have done more to prove the circumstances in which the loan agreement was executed and her evidence about this should therefore not be accepted. For the inference to operate, the defendant must first point to evidence (other than the plaintiff’s failure to call someone from PWD), from which an inference that PWD did not prepare the loan agreement can be drawn. No such evidence is identified by the defendant. In fact (as discussed below), what evidence there is all points the other way.
62 Similarly, while it has been said that it is permissible to treat the failure to call evidence as a reason for increasing the weight of the proofs of the opposite party,[6] this principle does not operate in respect of the whole of the opposite party’s evidence. The opposite party must first adduce evidence relating to the particular issue in respect of which the inference is said to arise (namely, for present purposes, that PWD did not prepare the loan agreement). No such evidence was adduced by the defendant.
[6]O’Donnell v Reichard [1975] VR 916 at 921, cited in Kidman v Corstorphan [1999] VSCA 28 at [28]
63 There are a number of features of the loan agreement that support a conclusion that it was prepared by PWD in conjunction with the preparation by them of the plaintiff’s will. They have a similar appearance and typeface and were both signed at least by the plaintiff on the same day (16 December 2003). The filepath noted in the footer of the will is: “bruj3134/d/will.doc” and in the loan agreement it is “bruj3134/d/loanagreement.doc”. Although the terms of the loan agreement are very brief, they are in my view consistent with having been prepared by a lawyer whose aim is to ensure that the fact of an existing (informal) loan agreement between a mother and son is recorded, and is held with the will. This way, the plaintiff’s executors would be given notice that there was a debt owing by one of the three beneficiaries under the will, which needed to be accounted for on the distribution of the plaintiff’s estate.
64 In addition to the loan agreement and will, there was in evidence a deed packet produced under subpoena by PWD that recorded movements in documents held by PWD in safe custody for the plaintiff. That deed packet disclosed that documents were recorded as having been lodged into deeds with PWD, including documents described on the deed packet (consecutively) as follows:
“008512 10 BRUJ-L
26 April 2004 26 April 200401 Will
Dated 16.12.2003 – exec RJ Doyle and AJ008512 11 BRUJ-L
26 April 2004 26 April 200405 Agreement
Dated 16.12.2003 with TK Wolf re loan”
65 To the right of these document descriptions, there is a handwritten bracket encompassing these documents (along with some others that are not presently relevant), and the words “TO LORNA 3/9/14 MJ”. There was also in evidence a letter from PWD to the plaintiff dated 3 September 2014 signed by Margaret Jackson, referring to a recent telephone conversation and stating that the letter enclosed (among other things), “Will dated 16 December 2003” and “Loan Agreement with Taras dated 16 December 2003”.
66 It did not appear to be in dispute that the two documents described on the deed packet as set out above were, respectively, the plaintiff’s will and the loan agreement, and I so find. Questions were put to the plaintiff in cross-examination that were premised on that fact. Taken together (and in the absence of any evidence to the contrary), these similar features of the two documents and the information on the deed packet, point overwhelmingly to the loan agreement having been prepared by PWD in conjunction with the preparation of the plaintiff’s will.
67 This being the case, it is open to infer consistently with the plaintiff’s evidence that PWD, in preparing the loan agreement in conjunction with the will were:
· recording in writing the fact of the existing loan (by then reduced to $450,000 because of the $50,000 wedding gift); and
· providing for the specific bequests of $50,000 each to the plaintiff’s other children,
in order to give full effect to the plaintiff’s wish that, upon her death, her three children were treated equally. I so infer. I should also observe that the loan agreement providing for repayment on demand, as distinct from the five to seven year time frame referred to by the plaintiff in her evidence, is explained by the fact that the scenario being contemplated at the time the two documents were prepared and signed, was one in which the defendant would be receiving a substantial inheritance. A deduction from that inheritance in the case of the defendant to allow for the loan would be unlikely to cause him any hardship.
68 The plaintiff has also submitted that the descriptions on the deed packet suggest that the loan agreement and the will were on the solicitor’s file until that file was closed, at which time they were placed in a deed packet. That is a reasonable assumption, but it is also possible (as put to the plaintiff in cross-examination) that the plaintiff had possession of at least the loan agreement, at some point between 16 December 2003 and 26 April 2004. In any case, I am satisfied that the will and loan agreement were from no later than 26 April 2004 until 3 September 2014 held in safe custody by PWD.
69 In my view, the matters referred to above also point to what purports to be the defendant’s signature, having been placed on the loan agreement by no later than 26 April 2004. Both to give effect to the plaintiff’s wishes as referred to above and as a matter of good practice, it is unlikely that PWD would have sent the loan agreement to safe custody if it had been signed only by the plaintiff. It is a single page – the absence of one of the two signatures would have been apparent even on a cursory perusal. Its description on the deed packet as “Agreement” and in the letter from PWD to the plaintiff dated 3 September 2014 as “Loan Agreement with Taras” would also both suggest that the person handling the document at the time noted that it bore the signatures of both parties and was thus, on its face, a concluded agreement.
70 If this is correct, and I am satisfied on the balance of probabilities that it is, both the fabrication of the loan agreement by the plaintiff and her procuring of the forgery of his signature can only have occurred between about 16 December 2003 and 26 April 2004. On this proposition, the plaintiff has submitted that (references omitted):
“There is no sensible hypothesis to explain the loan agreement – other than it being what it purports to be. For it to be otherwise, the plaintiff would have had to have created the loan agreement in late 2003 or early 2004, planted it with PWD, waited over 10 years before asking for it back from PWD, all the while planting false information with JB Were knowing that they would document it. This is utterly implausible.”
71 I agree. I would also observe that the plaintiff “creating the loan agreement” would have required her to draft the wording herself and add a filepath into the footer of the document that mimicked what would have been used on the document if it had been prepared by PWD. The implausibility of this scenario (or anything like it) is even greater in circumstances where there is no suggestion of any ill-will between the plaintiff and the defendant in 2003 and 2004 that might otherwise explain such Machiavellian conduct.
72 I refer above to the proposition put to the plaintiff in cross-examination to the effect that she had access to the loan agreement in the period before 26 April 2004, thus providing the foundation for an argument that the forgery was procured by her at this time. For the reasons stated, I reject that argument. The defendant posits the alternative scenario that the forgery was procured by the plaintiff after the document came into her possession in September 2014. This scenario appears at least in part to be based on the suggestion in Mr Lacroix’s expert reports that the defendant’s signature on the loan agreement more closely resembles those written by him in the period from around 2009 to 2016.
73 I have set out above why, in my view, it is unlikely that the document put into safe custody by PWD on 26 April 2004 did not already bear at least what purported to be the defendant’s signature. I explain below my reasons for rejecting the evidence of Mr Lacroix and for concluding that it is the defendant’s signature on the loan agreement. In view of these findings, it is unnecessary for me to reach a concluded view about precisely when between 8 December 2003 and 26 April 2004 the defendant signed the loan agreement. However, for completeness, I accept the evidence of the plaintiff that the defendant’s signature was already on the loan agreement when she attended PWD on 16 December 2003 to sign both her will and the loan agreement.
74 The plaintiff was evidently confused about the copy of the loan agreement in her safe at home and whether signatures were photocopied or originals and the defendant relies on this to discredit the plaintiff on this issue. In my view, that evidence ultimately goes nowhere and does not support the submission that:
“Mr Wolf submits that [the signature on the document when the plaintiff signed] could have been a photocopied signature from a later time. Once the document came into existence it could have been photocopied numerous times for Ms Brujah or her agent to make many attempts at defendant’s signature.”
It was not in dispute that the document that became exhibit P5 bore two original signatures.
75 It follows that the loan agreement is likely to have been signed by the defendant on about 8 December 2003 and (despite his and Dr Wolf’s evidence to the contrary), I find that he probably did so when he and Dr Wolf attended at PWD to sign their wills, shortly before leaving on their honeymoon on 9 or 10 December 2003 (the defendant’s passport shows him arriving in Vietnam on 10 December). The plaintiff’s belated concession in cross-examination that she was not present when this occurred was rightly made. However, that does not preclude her giving instructions to PWD by telephone or in person at some earlier time about her will and the fact of the loan, thus enabling PWD to have the loan agreement ready in advance of the defendant’s attendance on 8 December 2003 to sign his will.
Were the payments made to or on behalf of the plaintiff loan repayments?
76 At some time around mid-2006, the plaintiff and defendant had a discussion at the defendant’s Chadstone home concerning the plaintiff’s financial position. The plaintiff was visiting the defendant’s house at least once a week at this time to babysit the defendant and Dr Wolf’s baby daughter. It is not in dispute that the discussion occurred in the evening on one of the plaintiff’s regular babysitting visits. Dr Wolf was present, but did not participate in the discussion. Her evidence about her understanding of the meeting is primarily based on what the defendant later reported to her.
77 The plaintiff and defendant each gave differing accounts of how the discussion was initiated. The defendant’s evidence was that the plaintiff came with her bills and folders of paperwork wanting to have a conversation about finances and write out a summary of her expenses. The defendant said that the plaintiff identified her financial shortfalls and overall lack of income and requested that he help support her financially. He said it was not a problem for he and his wife to assist the plaintiff although he found it “a little confusing” and he was “uncomfortable in asking her, is there a real problem…because mum was rich. Mum has money”.
78 At some point in the discussion, the plaintiff set out details of her income and expenses on some of the defendant’s business stationary. It was not in dispute that:
· none of the expenses in the detailed listing provided by the plaintiff in relation to each of her two properties referred to in the notes (Kings and Hull St) referred to payments under a mortgage or otherwise in respect of any liability to a bank; and
· despite being slightly obscured in the copy of the notes in evidence, the plaintiff’s shortfall in income shown at the foot of the notes was $500 per week.
79 The plaintiff’s evidence was that the exercise of going through her income and expenses was at the defendant’s insistence: “Taras has always wanted to know how much I spend, where it comes from, it just goes on and on”. When taken in cross-examination to the section of the notes that stated “Need $500 weekly extra”, the plaintiff asserted that this was not her “asking him for money”. She said that she knew the defendant did not have sufficient funds to be paying her $500 per week, because he was busy renovating. She added: “I wouldn’t have asked it, but I did expect the loan to be repaid.” The plaintiff had earlier denied that her cost of living, particularly those associated with the Kings property, were becoming difficult for her. She said: “It wasn’t actually a problem. I went down to the auction house and I auctioned off some things, including jewellery”.
80 Although the plaintiff’s explanation of the circumstances of the discussion of her income and expenses is not entirely satisfactory, it is certainly plausible that the defendant was seeking to assist the plaintiff to examine her financial position. It is probably no coincidence that she consulted JBWere on that very issue in November of that year, as discussed below. Such a discussion is also explicable in the context of the plaintiff’s evidence that she did not need gifts to assist with her expenses but she “did expect the loan to be repaid”. The plaintiff could well have been seeking to outline for the defendant why she needed him to start to make those repayments.
81 The defendant’s evidence was that he asked the plaintiff, “okay, Mum, what do you need? What are we talking here?”, and she answered: “About $500 weekly”. He said: “and that’s what I talked to Rebecca about afterwards, because that’s about $2000 a month and I thought I could probably manage that, it wouldn’t be a problem”. He confirmed that this conversation occurred in April/May 2006. The defendant was then asked whether he paid the plaintiff any money after that any answered as follows:
“Of course. We started giving her money immediately, pretty much and that wasn’t a problem. I told Rebecca, “Can you just transfer money to mum. She says she needs $500 weekly.” Rebecca said to me, “okay, we will just make it around $2000 a month, something like that, and we will just transfer it to her.” Okay. It really - I was happy to do it. It felt like it was the right thing to do, I’m her son. She had helped me in the past. She is always generous to me and I thought, okay, nothing to asked, nothing to do, just do it. It might have been a bit confusing but it wasn’t a problem.”
82 Dr Wolf’s evidence was that she was not present for the discussions between the defendant and the plaintiff about money. She confirmed that the defendant had shown her the notes of the plaintiff’s income and expenses, but she did not discuss it with the plaintiff. She said she discussed with her husband the fact that, now she had a fairly regular income, “that we could give Lorna some money and we would just do it as and how we could, depending on what was left over, essentially, after I paid the bills for the month”. Her evidence was that: “Being self-employed, my husband’s income is quite variable, so my income pretty much covered all our basics, so we would have a thousand, a couple of thousand left over”. She said that she essentially paid that to the plaintiff: “She wanted more but there wasn’t always more to give, so I just gave her what I could”.
83 There were a number of features of the payments that were made by Dr Wolf to the plaintiff over ensuing years that do no sit comfortably with the evidence of both the defendant and Dr Wolf. These are:
· contrary to the defendant’s evidence that the payments started “immediately” after the conversation that he said occurred in April/May 2006, some payments were apparently made as early as January 2006, but the regular monthly bank transfers by Dr Wolf to the plaintiff did not in fact commence until February 2007;
· none of the regular monthly payments over the ensuing years were for $2,000; and
· both the consistency in the amount paid from month to month and the descriptions Dr Wolf gave to each of the bank transfers, had the hallmarks of loan repayments rather than gifts of whatever funds the defendant and Dr Wolf happened to have available at the end of each month after paying their household expenses.
84 Expanding on these features, there were two sources of information concerning the payments. The first was bank statements from the plaintiff’s ANZ account into which Dr Wolf made regular bank transfers. The defendant’s evidence was that the payments were made from his and Dr Wolf’s joint account. The second source was a series of spreadsheets maintained by Dr Wolf, which she provided to the plaintiff from time to time. A bundle of these (one each for the years 2006 to 2011, inclusive) were produced by the plaintiff for the first time during Dr Wolf’s evidence. Dr Wolf agreed that they had been maintained by her and emailed to the plaintiff. She said she no longer had either the spreadsheets or the emails on her computer.
85 The first bank transfer was made in February 2007 as mentioned above. However, Dr Wolf’s spreadsheets show that payments in some form began in January 2006, beginning with an amount in the “PAID” column of $1,000 each month for the first four months of 2006, and ongoing amounts thereafter. These later amounts were a combination of amounts in columns headed “mobile”, “anz visa” and “misc”, and then a rounding amount in the “PAID” column to bring the total to roughly $1,000 for each month, except August. The evidence would suggest that these amounts of $1,000 and the rounding amounts were paid by the defendant or Dr Wolf to the plaintiff in cash. In the spreadsheets for each year thereafter, each of the amounts shown in the “PAID” column (with the exception of the January 2007 payment) equated to a bank transfer as reflected in the plaintiff’s bank statements.
86 Dr Wolf’s evidence was to the effect that the sums appearing in the spreadsheets columns other than the “PAID” column, were her record of expenses paid by the defendant and Dr Wolf on behalf of the plaintiff, including in respect of the plaintiff’s mobile phone, her Visa card, for presents for the children and other miscellaneous expenses. Notably, the bank transfer amount in a particular month, when added to the expenses amount for that month, almost always resulted in the total for the month reaching a fixed amount each month. This was $1,000 per month in 2006, $1,300 per month from January to June 2007 and $1,500 per month thereafter, until the last entry for December 2011. So, for example, in May 2011, the spreadsheet records $140 as “mobile” and $85 as “Kai wedding outfit”, with the result that the bank transfer that month was $1,275 (bringing the total for May to $1,500). In December 2008 and December 2009, the spreadsheets record a payment of $10,000, described as “Xmas bonus”. These were made in addition to the usual $1,500 December payments for those years.
87 These precisely calculated, fixed monthly payments are difficult to reconcile with Dr Wolf’s evidence of the variable $1,000 to $2,000 of available funds “left over, essentially, after I paid the bills for the month”. Or with what the defendant described as “whatever…money we could afford to [pay] after our own living expenses were done”. Further, with the exception of the $10,000 amounts, the highest regular payment was $1,500, thus falling significantly short of the $2,000 that the defendant and Dr Wolf both said they believed the plaintiff needed to cover her living expenses each month, and which the defendant asserted “wouldn’t be a problem”. And if the defendant and Dr Wolf decided they could afford a “Xmas bonus” of $10,000 in December two years running, why also pay the $1,500 for that month?
88 Similar questions arise in relation to the way that Dr Wolf recorded the bank transfers, in two respects. First, she gave each transfer a description “mort” or “mortgage”. As mentioned above, there is no reference to a mortgage or bank loan anywhere on the plaintiff’s notes of her income and expenses and the defendant agreed that he had no idea in 2006 whether the plaintiff had a mortgage. Dr Wolf’s evidence was that she was not instructed by the defendant to use the descriptor ‘mort’ or ‘mortgage’ for the payments. Rather, she assigned those words herself. She said:
“I started using that word because money that I was giving to her was to support her ability to stay at Kings apartment, which was an expensive place to live, body corporate. She also has a mortgage as [I] understood. She also wanted to gather funds for her other son as well, Tyler, and that was a word that I just started to use and continued to use throughout the words [sic].”
89 Second, in respect of all but two of the 66 individual bank transfers, Dr Wolf included in her description of the payment a reference to the month in respect of which the payment was made. In a number of instances, the month stated was not the month of the payment, but an earlier month. So, for example, in 2009 there was no bank transfer made in February, a single transfer in March described as “March mort 09” and then two payments made in April. The first of these was dated 8 April for $1,350 and described by Dr Wolf as “Mortgage Feb 09” and the second was dated 14 April for $1,400 and described as “Mortgage April 09”. Dr Wolf’s spreadsheet for that year shows mobile phone payments for the plaintiff in February of $150 and for April of $100. Thus, Dr Wolf has missed the February bank transfer in February, but noted a payment in April for $1,350 as being for “Mortgage Feb 09” (that is, $1,500 less the $150 February mobile phone payment).
90 Again, this level of discipline and precision in the making and description of payments is, in my view, not consistent with the payments being gifts to the plaintiff as and when funds allowed. In evidence, Dr Wolf explained that she used these descriptions because she wanted to reflect the lack of payment in February, due to a shortfall in funds, and that she had made up the payment in April. She said:
“She wanted $2,000 a month. That wasn’t going to be possible. We had committed to try and give her anywhere between $1000 and $1500, $2000 if possible, a month and if I didn’t supply the money regularly, then there would be some — I was going to use the word backlash, from her and so it was just an easy way to ensure that I represented the months as per was my husband’s expectations in order to support his mum”.
91 The defendant has submitted that the “gifts” represented by the these payments, “do not bear the hallmarks of loan repayments; they are not the same amount; they are not paid regularly”. I do not agree. With only a handful of exceptions, the bank transfers together with the additional payments shown in the spreadsheets, were for consistent amounts each month as set out above. And not only were the payments generally very regular, on the few occasions where a payment was made late, Dr Wolf made a point of identifying that the payment related to an earlier month. In that sense, in my view, the payments had all the hallmarks of repayments of the plaintiff’s loan to the defendant and I so find.
92 I am also satisfied Dr Wolf used the description “mort” and “mortgage” to identify that the payments were in reduction of the defendant’s loan from the plaintiff. Although the plaintiff did not in fact have a mortgage over the defendant’s property, it was not in dispute that the funds provided by the plaintiff were originally provided to purchase the Sydney St property, and thereby contributed to the purchase and renovation of the Chadstone property. The use of the term “mortgage” as shorthand for this arrangement is more natural and likely than her, in my view, contrived explanation that these were gifts that helped the plaintiff with her general living expenses (especially body corporate fees), which she assumed (wrongly) included a mortgage over the plaintiff’s Kings apartment.
93 Despite the fact that the last three payments in 2014 did not fit the same pattern as the early payments, I am nevertheless satisfied that they too were essentially make-up loan repayments. This is reinforced both by the email from Dr Wolf of 24 June 2014 discussed below and by the description of the final payment on 30 June 2014 as “JUNE MORT 2014”. Accordingly, I find that all of the payments identified in the spreadsheets and the bank statements, including the three payments in 2014, were repayments of the loan, including for the purposes of s24(3)(b) of the Limitations of Actions Act 1956 (Vic).
94 For completeness, I note that the defendant submitted in reply that the payments cannot be treated as effective for the purposes of s24 of the Limitations of Actions Act 1956 (Vic), because they were made by Dr Wolf and not the defendant. This submission is without substance. Although Dr Wolf may have caused the payments to be made, as noted above, it is not in dispute that the defendant was responsible for initiating the payments in around mid-2006. He also gave evidence that they were made from his and Dr Wolf’s joint account. Further, the effect of Dr Wolf’s evidence was that her income was used to cover the family’s monthly household expenses and it was the defendant’s income that gave rise to the excess funds used to cover the payments to the plaintiff.
Is there other evidence of the loan?
JBWere
95 The plaintiff’s partner Mr Kirk was a longstanding client of JBWere. By about 2006, JBWere was also providing financial and superannuation advice to the plaintiff. By a letter dated 22 November 2006 referring to a “recent meeting and subsequent discussions”, JBWere sent to the plaintiff a document titled “Strategic Financial Plan – ‘Statement of Advice’”. The statement outlined the plaintiff’s current financial position (such as, remuneration, interests, relationships and associates), a preliminary strategic financial plan and projection for Ms Brujah’s consideration. Relevantly, the statement of advice included the following:
“In addition to the above noted investment assets you have also noted that you have lent your son $500,000 and he will pay these funds back to you interest free over a period of time noting that the repayment period has not been determined. Due to the uncertainty as to when these funds will be repaid we have excluded such funds from our modelling. When funds do arrive back we will determine the most appropriate course of action for these funds at that point in time.”
96 Mr Robb gave evidence that he was involved in providing the advice as the assistant to Angela Manning and James Hufton, the advisers named on the covering letter. He said that the statement set out above was based on discussions with the plaintiff. The plaintiff said in evidence that she had no idea why the amount of the loan referred to was $500,000 and not $450,000, as by this stage she had reduced it by $50,000 as a wedding gift to the defendant and Dr Wolf. She said: “It’s probably a typing error”.
97 Despite the error in the amount, in my view the fact that the plaintiff was informing her financial advisers about the loan as early as 2006, strongly reinforces that, at least in her mind (some eight years before her falling out with the defendant), the original arrangement with the defendant was a loan and not a gift. It is also worth noting that the statement that the defendant “will pay these funds back to you interest free over a period of time”, is consistent with those repayments commencing earlier that year. References such as these in documents in the period up to the falling out between the parties in around July 2014 are both relevant and admissible in response to the defendant’s submission to the effect that the idea of the loan is the plaintiff’s recent invention. The defendant has not submitted otherwise.
98 In 2011 the defendant and Dr Wolf were looking to obtain finance to complete the renovation of their home in Chadstone and the plaintiff suggested that they meet with her and Mr Kirk’s financial advisers from JBWere, as they may be able to provide some advice and assistance. By email dated 11 August 2011, the plaintiff wrote to Mr Robb to arrange a meeting with the defendant and Dr Wolf. The meeting was confirmed for 18 August 2011. On the morning of 18 August 2011, the defendant and Dr Wolf arrived at JBWere with their baby for the meeting.
99 The defendant gave evidence that when they arrived the plaintiff and Mr Kirk were already in a meeting with the JBWere representatives. He said they waited in the foyer and Mr Kirk and the plaintiff then came out of their meeting and introduced them to Mr Robb and Mr Hufton. However, Dr Wolf’s evidence was that when she and the defendant arrived, the plaintiff and Mr Kirk were waiting for them in the foyer and they all then went into the conference room together.
100 The meeting began as a joint meeting including the plaintiff, Mr Kirk, the defendant and Dr Wolf. The discussion in this meeting was primarily concerned with the plaintiff’s financial affairs and, in particular, discussing how to maximise the plaintiff’s contributions to superannuation in advance of her turning 65 some five or so years later. Despite Mr Robb’s lack of recollection on this issue, it was not relevantly in dispute as between the parties that this joint meeting was followed by a private meeting between the JBWere representatives (including Mr Robb), the defendant and Dr Wolf. This second phase of the meeting was focussed on the defendant and Dr Wolf’s financial affairs. However, there was some confusion and inconsistency in the evidence about what was said about any loan from the plaintiff to the defendant during these meetings and whether this occurred in the joint meeting or the private meeting, or both.
101 The joint meeting began with a presentation by the JBWere representatives, using a whiteboard to give an overview of how superannuation worked generally, and of the plaintiff’s superannuation scheme. Consistent with Mr Robb’s evidence, the defendant and Dr Wolf gave evidence that JBWere had said that the plaintiff should put as much money into her super account as possible prior to attaining a certain age. Initially, the defendant thought JBWere was “trying to sell me some sort of investment or something, because it wasn’t why I was there”. However, he continued to listen to the presentation.
102 The plaintiff gave evidence that at the conclusion of the presentation, Mr Hufton and Mr Robb spoke directly to the defendant and Dr Wolf about the loan, asking when they could repay it so the repayments could be put it into the plaintiff’s superannuation before she turned 65. The plaintiff said that the defendant and Dr Wolf did not question or deny the existence of the loan. Rather they “agreed”, with the defendant commenting that, “provided they did it the day before I turned 65, it should be alright”, and Dr Wolf saying “they would try and see what they could do”.
103 Dr Wolf’s evidence was that the term “loan” was not used. According to Dr Wolf, JBWere “were aware that we had been giving Lorna some money and they were keen to see if we could up the rate at which we were supplying that money”. The defendant gave evidence that Mr Kirk and the plaintiff were not in the meeting when the matters referred to in Mr Robb’s note were discussed. He went on at some length to seek to construe what Mr Robb’s note meant or how the reference to “loan” appeared there, but was vague and evasive about what in fact was said about a loan in either meeting.
104 Mr Robb said he could not recall who spoke the words about the loan; it was just part of a general discussion. Apparently referring to a part of the meeting where everyone was present, Mr Robb said:
“I think there was some discussion around the loan and if it was possible that Lalanah had a limited amount of time that she could contribute to superannuation, so it would be useful if that was repaid just so Lalanah could take advantage of that.”
Mr Robb also gave evidence that he had no recollection of the defendant or Dr Wolf dissenting to or disagreeing with the assertion that there had been a loan between the plaintiff and the defendant.
105 It is not in dispute that the private meeting with the defendant and Dr Wolf began with the Wolfs providing details of their personal financial circumstances and then moved on to discussions about financing their home renovations. As mentioned above, Mr Robb’s note from that day was in evidence. Although Mr Robb could not recall there being a separate meeting without the plaintiff and Mr Kirk present, I am satisfied from considering the content of the note and from the evidence of the defendant and Dr Wolf, that the note recorded only matters discussed during the private meeting. Notably:
· Mr Robb indicated that it was his practice to record the names of the people present at the meeting, factual information and any follow-up action that was required. The only names at the top of the notes are “Rebecca Wolf & Taras Brujah”;
· the note commences with details of the Wolf’s various superannuation investments which in my view (and despite the defendant’s suggestions to the contrary), is information that could only have been provided by the defendant and Dr Wolf; and
· the note concludes with a reference to a mortgage broker recommended by JBWere, which both the defendant and Dr Wolf confirmed was the last matter discussed during the private meeting.
106 Mr Robb’s note includes the following (emphasis added):
“- House (Taras Mum) no loan → loan with Lalanah
- Doing renovation with loan from bank and loan from Rebecca’s Mum
- Land 1000 sqm $800K-$900K
- Taras had designed renovation
Post Renovation in the order of $2M.
- Because of home office 30% of expenses claimed (ie electricity)
- Loan to Lalanah now $340K
- Investment prop (Rebecca Inheritance)
- Rebecca on a ... from Taras
®708K – 800K valuation. 700pw
-$160K debt
- $550K was the sale price of Lalanah to
- Rebecca working 1 day a week from October.
- Wants to borrow $300K from bank to fund reno
- June – 2010 Rebecca’s … was a touch over 80K* Neil Cameron
® Meet again in October 2011
- WP Smith Glen Waverly. Wayne Smith 039803 1477
- Alan Stone was the old Accountant [email protected]”
107 There are some errors in the note. For example, it wrongly identifies the defendant’s surname as “Brujah” and, according to the defendant, the Chadstone property is not 1,000 square metres and the amount of the loan being sought as referred to in the note was incorrect. Also, it is clear that the reference to “Loan to Lalanah” should read “Loan from Lalanah”. Other contemporaneous documents show that JBWere had been told by the plaintiff about a loan from the plaintiff to the defendant (albeit for $500,000) and there is no suggestion in the evidence of any loan the other way. Apart from these inconsequential matters, I am satisfied that the note is an accurate contemporaneous record of what was said to Mr Robb during the private meeting. Crucially, it records that he was told that the loan was “now $340K”. Mr Robb’s evidence was that he wrote this down because: “That would have been indicated as the level of the loan between Taras and Lalanah at the time”.
108 A simple calculation based on Dr Wolf’s spreadsheets confirms that this figure of $340,000 is within a few hundred dollars of what would have been outstanding in respect of the loan at the date of the meeting on 18 August 2011, based on a starting amount of $450,000. As at that date, the total amount transferred and otherwise credited by Dr Wolf as set out in her spreadsheets was $110,248.60 (giving a balance owing of $339,751.40). This figure includes the payments totalling $1,500 for August 2011 and, in particular, a bank transfer of $1,330 made by Dr Wolf the day before the meeting (as recorded in Dr Wolf’s spreadsheets), and credited to the plaintiff’s bank account on the day of the meeting (as recorded in the plaintiff’s ANZ bank statements). Given the accuracy of that figure based on Dr Wolf’s running tally and the fact that it accounts for a payment made by her as recently as the day before, it is difficult to avoid the conclusion that this information can only have come from Dr Wolf (or, perhaps, the defendant).
163 In setting out the results of Mr Holland’s examination of the stroke sequences, the Holland Report describes a total of nine particular stroke sequences observed by him in his microscopic examination and looks to see if the same or a similar sequence is observable in the signature standards. It is important to emphasise that Mr Holland was here identifying (so far as possible under microscopic examination) the order in which particular strokes were made, having noted in effect that it is very difficult for a forger to replicate the order of pen strokes in a signature, particularly with confidence and fluency. Indeed, Mr Holland had earlier opined (as set out above) that the stroke sequence of this signature is so complex, it is impossible to forge.
164 By way of example, the first of Mr Holland’s nine comparisons of individual stroke sequences was as follows:
“The highest point of the questioned signature is at the top of an almost vertical ascending stroke and at the top a sharp change in direction is made back to the baseline forming a very narrow elongated loop at the top.
Whereas with the standard signatures this same stroke sequence was observed and in some standard signatures the elongated loop is wider and in some there is only a retrace back down the descending stroke.”
165 Similarly, his third comparison was as follows:
“In the questioned signature below the highest point of the signature a stroke sequence was observed that takes on a triangular formation.
This was observed in the signature standards.”
166 Mr Holland concludes that these observations of stroke sequence are “significant similarities in the construction between the questioned and standard signatures” and that (emphasis in original):
“In respect to the original ‘Taras Wolf’ questioned signature written on the questioned ‘LOAN AGREEMENT’ item 1, it is my opinion that the original questioned ‘Taras Wolf’ signature written on the ‘LOAN AGREEMENT’ document item 1 has been written by the writer of the ‘Taras Wolf/Ventrue’ signature standards items 2 to 25.”
The Lacroix reply report
167 The email thread referred to above confirms that the preparation of Mr Lacroix’s reply report was initiated by Mr Lacroix himself. It includes a number of personal criticisms of Mr Holland, which were unwarranted and did Mr Lacroix no credit. It also included an even more intense focus on particular letter formations in the contemporaneous signatures when compared to the questioned signature. This included instances of referring to the former in terms that were both gratuitously flattering and demonstrably wrong. For example (italics added; bolding and underlining in original):
· “Mr Holland avoids acknowledging that the available contemporaneous handwriting evidence clearly shows that in the years 2003 and 2004, Taras Wolf had designed a commendably unique signature (described as having a structure ‘like the Eiffel Tower’)”. It was Mr Lacroix himself who so described the structure of the signature.
· “His centrally positioned letter “t” exhibited a long staff with retrace, which was remarkably straight”.
· “His upper letter “A” was relatively tall but quite narrow at its base, appearing to have an intricate structure and some superstructure, and with it being symmetrically placed with its apex centred upon, and approximately midway up the previous letter”.
· “His letter “R” included a significant representation of the right leg of this letter in the contemporaneous specimen signatures. Where as in the corresponding letter in the questioned signature, there was NO representation of the right leg of this letter”. The evidence showed there were examples of contemporaneous sample signatures that also had no representation of the “right leg” of the “R”.
· “His representation of the (lower) second letter “A” in his signature habitually exhibited a fairly straight left side and a fairly straight right side, with the apex centred approximately, upon the lower staff of the letter ‘t’”. Contrary to the suggestion that the second letter “A” habitually exhibited certain features, the evidence showed there were examples of contemporaneous sample signatures that also had no representation of the “right leg” of the “A”.
168 Mr Lacroix carries this focus on this letter formation into the personal criticisms of Mr Holland. For example, he states (emphasis added):
“I believe that Mr Holland is in error, in that he has not been forthcoming with any due acknowledgement [of] the signature differences between the questioned signature compared to the truly contemporaneous signatures (of the 2003/2004 period). Although he has paid lip service, in noting the signatures of that period, in effect [he] heavily relies upon the other signatures of a later period. And in those respects, he is in deliberately focusing on unrepresentative sampling, which is quite unscientific and is not objective practice.
Mr Holland appears, from the manner of his report, as if he is still a stranger to that questioned signature, in that he is not competent to name any of the component letters, and their connecting and disconnecting points within the signature, to which he refers merely by his word description of various strokes, angles and points, with assurances that they are similar to corresponding components within the specimen, to which his comparison chart refers. However, for the purposes of endeavour, a man of his considerable experience has chosen to ignore or dismiss the relevance of those very obvious differences which I observed and have described”.
169 The tenor of Mr Larcroix’s criticisms of Mr Holland and his strident statements concerning the differences between the questioned signature compared to the contemporaneous sample signatures, are all the more surprising given Mr Lacroix’s concession in his reply report that he was still to examine any original signatures. Why this had not been arranged before he finalised this report in the few weeks before the trial was never adequately explained. Early in his reply report, Mr Lacroix states:
“In respect of [Mr Holland] examining the original questioned document and [other identified original documents], it would be incorrect for me to give an opinion or conclusion, without expressing some reservations about the documents and signatures thereon, when I have not had the opportunity to study and examine any available originals in fine detail.”
170 Mr Lacroix notes that the sample signatures of 2007 to (and including) 2016 “do look to bear relatively some more resemblance to the questioned signature”. He postulates that the writer of the questioned signature probably prepared the signature: “by using a copy of some later signature/s (from the period of the year 2012 onwards) of Taras Wolf, as a model, from which to produce that free-hand simulation”. Mr Lacroix then states:
“The nature of a free-hand simulation of a signature, is such that the examiner is normally unable to deduce from their examination of the questioned writing, who the writer of the simulated signature may have [been], [or] who they may have not been. Other than for me to presently form the opinion that in this instance, they must have been quite a skilful writer to produce such an intricate signature, written without observable signs of hesitation in that writing.”
171 Thus, like Mr Holland, Mr Lacroix accepts that writer of the questioned signature has executed an intricate signature skilfully and “without observable signs of hesitation”. However, he does not otherwise explain why these factors are not sufficient to support a conclusion that the signature was in fact executed by the defendant.
The experts’ oral evidence
172 The experts began their oral evidence concurrently, and their conflicting approaches to the examination of the signature in their respective reports, emerged very early in their oral evidence. I began by asking Mr Holland to expand on the finding in his report that the defendant’s signature was “impossible to forge”. He said in substance that he studied the signature under a stereo-microscope but was “still not in a position to fully understand that complex signature”. He explained: “It has been written with speed and it’s a very well-constructed signature but it is so complex that stroke sequences, not all of them could be determined”. He said that even a skilled penman would find it impossible to produce something that he or Mr Lacroix would not be able to detect.
173 I asked by way of clarification whether it was the order in which the pen moves that was so complex, such that Mr Holland could not pick up all of the movements even using a microscope. He agreed. I then asked whether it followed from this that even someone using the same microscope would not be able to deconstruct the signature to the point where they could faithfully reproduce it. Again he agreed.
174 I then asked Mr Lacroix to comment on Mr Holland’s finding and his response was:
“Your Honour, I completely disagree with that. I was able to determine each and every one of the sequence of strokes, from the starting point to the finishing of that signature. I don’t understand how Mr Holland’s not been able to determine the sequence of the signature.”
175 In this evidence, Mr Lacroix was essentially repeating his criticism of Mr Holland’s inability to identify the formation of each of the letters in the name “Taras”. As discussed above, Mr Lacroix asserted in his reports (and notably his reply report) that he had been able to do this (noting that at this point Mr Lacroix was working exclusively with photocopies). Mr Lacroix went on to explain in oral evidence that he had not been able to determine the stroke sequences from the photocopies “to the same level” that he had been able to from viewing the original questioned signature. He said he had done that for the first time that morning.
176 Commenting on this evidence, Mr Holland said that he found it a bit disturbing that Mr Lacroix was able to obtain so much information from a photocopy. He added that even with the original, he had been unable to work out certain pen stroke directions. Later when senior counsel for the defendant asked if Mr Holland had been able to discern letters, he answered:
“No. This signature is so complex, when you actually look at it, unless you’re actually told, know what letters that signature was comprised of. Was it actually comprised of definite letter shapes or was it just a group of lines and loops that this individual uses as a signature? You cannot tell.… I could not find anything that I would hang my hat on to say that was a particular letter form.”
177 It was later put to Mr Holland in cross-examination that his description of the signature as “complex” was a “convenient cover for your failure to properly examine the order of letters and the sequences of their formation into this signature”. This was a surprising proposition for senior counsel for the defendant to put, given that the defendant himself had described his own signature as “highly complex”. Mr Holland agreed that he had been unable to determine all the stroke sequences because it is a complex signature.
178 The defendant has submitted that: “Mr Lacroix says the signature is not that complex and classic forgery technique of pen lift and hesitation are present”. However, the submission is not accompanied by a transcript reference. Based on my searches, early in his evidence when responding to Mr Holland’s observation that the signature was complex, Mr Lacriox in fact said, contrary to the submission, that: “I accept that it is complex”. Similarly, while there was debate over pen lifts as discussed below, I could not find in the evidence any statement by Mr Lacroix that there were signs of hesitation in the questioned signature. Indeed, in a passage from his reply report extracted above, he states that the questioned signature was “intricate” and “written without observable signs of hesitation”.
179 It is notable that the effect of Mr Lacroix’s evidence about his heightened ability to “determine each and every one of the strokes” from the “original signature”, was all based on his study of the original questioned signature. He accepted later in his evidence (after considerable obfuscation) that the only original signature he had examined before giving evidence was the questioned signature. Thus paradoxically, the complex sequence of letter formation that Mr Lacroix asserted he could see in the signature (and particularly in the original signature he had examined that morning), were all apparently present in the signature that Mr Lacroix said had not been written by the defendant.
180 Mr Lacroix also gave shifting evidence about so-called “pen lifts”. I asked Mr Lacroix for his views on Mr Holland’s evidence that the questioned signature had been written skilfully and with speed. Mr Holland had added in his oral evidence that, “…it didn’t show any unsteadiness, it didn’t show the signature was laboured…To me, with those really well defined pen strokes, it was written by someone who really knew the mechanics of writing that signature.” Mr Lacroix response was:
“I think there should be a qualifier there. There are numerous occasions on the original questioned signature when there are pen lifts…There are multiple opportunities for someone, even doing it at speed, to do, for example, the first few sequences, take a pause, continue with further sequences, take a pause and continue on. So whilst I agree that there is some degree of fluency there, there are also multiple opportunities for a potential forger [to]…stop and pause.”
181 When asked: “You say multiple occasions, how many occasions are you able to detect?”, Mr Lacroix answered: “There’s at least two very distinct pen lifts on the questioned signature, so that’s at least two opportunities when the pen has stopped”. Two is hardly “multiple” or “numerous”. Mr Holland agreed that there were areas where strokes all came into one point, but said that even using a stereo microscope, it had been impossible for him to say whether the pen had lifted at that point. Mr Lacroix later added that he had been able to observe the pen lifts only from seeing the original, despite referring to pen lifts in his report, when he had examined only photocopies.
182 In my view, Mr Lacroix was at least in part influenced in his views about pen lifts in the defendant’s signature by the information the defendant had given him as to how the signature was formed. A signature made up from a series of individual letter formations would understandably comprise “numerous” pen lifts. Mr Lacroix said:
“It would be impossible to do this signature without any - this particular signature that I’ve examined, which is the original questioned signature, without the pen lifts. The absence of pen lifts would indicate a signature that wasn’t consistent with observations I’ve made on the original questioned document.”
183 The last sentence of this passage is particularly incongruous. On one view, it is suggesting that a version of the signature that did not have pen lifts would be a sign that it was not written by the defendant. However, Mr Lacroix’s observations about this were again derived from his examination of the questioned signature, which he had earlier said did have “numerous” pen lifts. Regardless, it seems that Mr Lacroix’s ultimate point on this was that there were pen lifts and these provided an opportunity for a forger to pause, take stock, and complete the next step in the forgery. In contrast, Mr Holland could discern no pen lifts and was satisfied that the fluent and well formed strokes evident in the questioned signature were inconsistent with a forgery.
184 Mr Holland was asked about the failure of his report to identify any differences between the sample signature and the questioned signature. He said, in substance, that he did not identify any “differences”, because there were none. His evidence was that when a person writes, every signature will be different to the one before and there will be a range of variations due to the writing process. He said that going through and examining the question signature and comparing that to the signature standards, “which were plentiful” it was a large range of variation but “the features of the question signature that I observed were found in the standard signatures, and I didn’t find any differences”. He added:
“So what I’ve actually looked at, there are all these similarities in the construction of this very well written signature and they are really in accordance to the signature standards provided and to me, there is no what I would say differences because there is a slightly different shape, loop or whatever, that’s a variation, it’s not a difference.”
185 One further matter that received a lot of attention during the evidence of the experts was Mr Lacroix’s focus on letter formation and, in particular the presence or absence of particular features of particular letters. Mr Holland opened on this issue by giving the example of the second letter “A” in the defendant’s signature. In his reply report, Mr Lacroix had stated that this letter had “habitually exhibited a fairly straight left side and a fairly straight right side”. Mr Holland pointed out that even in the four signatures on the defendants will apparently signed at about the same time as the loan agreement, the first signature did not have the right-hand side of the “A”. He went on to identify a number of other contemporaneous examples where particularly features were missing.
186 Mr Holland was later cross-examined about these matters at some length. For example, it was put to Mr Holland that the apex of the first “A” in the questioned signature did not sit on the axis of the “t”. Mr Holland agreed, but went on to point out that the same could be said of the first of the will signatures and a number of the other sample signatures. There was a similar series of questions and answers about other suggested letter formations within the signature.
187 Mr Holland exhibited some frustration in dealing with these questions, including by going to a different example to the one that was put to him, and suggesting that the questioned feature could be seen in that example. For example, he pointed out what he described as a formation similar to the number “7” at the bottom right-hand side of the questioned signature. He noted that this was also observed in sample signatures, including “Item 19” in his report and in a signature dated 2 January 2003 appearing on a document at page 271 of the court book, which neither expert had been asked to examine.
188 In the end, this minute examination of elements of letter formation was of limited, if any, assistance. Mr Holland made very clear that he was not an adherent to the signature deconstruction approach, but was instead concerned to identify stroke sequences in the questioned signature and then to look for similar sequences in the specimen signatures. He agreed that there were some signatures that were “more Eiffel Tower ones” but others (notably the one on page 271 of the court book) that were pictorially in a similar style to the questioned signature.
189 Mr Lacroix was cross-examined in what might be described as the reverse of the process engaged in with Mr Holland. Counsel for the plaintiff took Mr Lacroix to numerous of the sample signatures, including ones that were contemporaneous to the alleged date of the questioned signature, and asked him to the effect of: “Do you see the right leg of the letter ‘R’?”, “Does the apex of the first “A” intersect with the axis of the ‘t’?” and: “Do you see the right side of the second letter ‘A’”.
190 Mr Lacroix demonstrated considerable difficulty in answering these questions. Initially his response was to ask to see an original of the document, notwithstanding that he had been prepared to draw conclusions in his reports based on photocopies of the same signature samples. Next he asserted that the particular photocopy that he had been taken to was “distorted”. At one point he said that to answer whether a particular sample signature had “the right leg of an R”, he would need to compare it with the questioned signature. It was entirely unclear how Mr Lacroix would be assisted in determining whether a sample signature included a feature that he said should appear in an authentic signature, by looking at a signature that he considered to be a forgery.
191 Finally, Mr Lacroix asked if he could look at photocopies of particular sample signatures under magnification in order to identify whether or not it had a particular letter feature. This was agreed to, and Mr Lacroix then spent what seemed a considerable amount of time examining in the witness box a particular photocopy signature (item 19 in Mr Holland’s report) with a 10x magnification device, only to again fail to answer what seemed a straightforward question. Similarly, counsel for the plaintiff put to Mr Lacroix that there was “no right leg of an ‘R’” in the signature at page 271 of the court book. He again asked and was granted the opportunity to examine the copy under 10x magnification, only to respond: “Not necessarily. It could have been distorted in this copy”. It was also suggested to him that there was “no right arm to the second “A” that he could determine”. He answered: “Under magnification it’s actually quite a poor quality small image”. After being pressed further, he eventually accepted that he could not see a right leg of the second “A”. He also accepted that the apex of the “A” was closer to the top of the central axis than in the questioned signature.
192 These questions and answers did little to assist in determining the ultimate question of whether the questioned signature was a forgery, except by highlighting the flaw Mr Lacroix’s approach to the examination process. Mr Lacroix showed great reluctance to concede any suggestion that there were contemporaneous sample signatures (in addition to the questioned signature) that departed from the defendant’s signature design concept. In my judgement, this was because he recognised that the design concept approach depended on every signature from the relevant period apart from the questioned signature, conforming to that concept.
193 But the sample signatures (including contemporaneous signatures) clearly show even to the naked eye that there are numerous instances where particular features take on different forms from one signature to the next. For example, what might be said to look like a letter “S” in one signature, looks more like a number “7” in another. Thus looking for particular letters became a distraction. In contrast, Mr Holland’s approach of focussing on stroke sequences (where he could discern them) and searching for differences rather than variations, allowed for a missing right leg of an “R”, or the apex of the first “A” not intersecting with the central axis of the “t”, and so on.
Conclusions on expert evidence
194 In my view, Mr Lacroix was beguiled by the so-called signature design concept and his dogged adherence to it clouded his objectivity, both in the preparation of his reports and in his oral evidence. Further, his introduction to the design concept came early in a period of six weeks when Mr Lacroix was engaging in extensive communications directly and exclusively with the defendant. I am satisfied that the nature and extent of that engagement compromised Mr Lacroix’s capacity to bring an independent mind to his task. That lack of independence was demonstrated by Mr Lacroix’s unwillingness to look past the flaws in his approach. It also manifested in Mr Lacroix’s unwarranted personal criticisms of Mr Holland and contrasting flattering references to the defendant’s signature formation. His oral evidence generally was shifting and inconsistent and many of his answers were evasive.
195 Mr Holland, on the other hand, gave clear, consistent and logically sound evidence, based on thorough and meticulous examination of documents, that was uncontaminated by any pre-conception of what he should be looking for in the questioned signature. I also accept that Mr Holland is vastly more experienced than Mr Lacroix, and there are features of Mr Lacroix’s considerably less extensive curriculum vitae that were troubling, as referred to in the plaintiff’s written submissions.[7] In particular, the curriculum vitae withheld the fact that his “comprehensive five year training program”, in fact involved Mr Lacroix from the age of 19 spending parts of his nights and weekends and occasional holidays working with his father on the latter’s “pro-bono cases”.
[7]At [25]
196 The defendant’s submission on the expert evidence is disarmingly brief. It refers to the two experts’ conflicting “techniques”, but makes no attempt to argue that Mr Lacroix’s technique (or evidence) should be preferred. Indeed, he submits that “whilst the evidence of the experts is in conflict, it is not appropriate that the Court conclude that one expert was more persuasive than the other”. I disagree. For the reasons above, I reject Mr Lacroix’s “technique” or methodology, and evidence and find consistently with Mr Holland’s report and oral evidence, that the signature on the loan agreement is the defendant’s.
197 The defendant submits that, when considering the question of forgery, the court must consider all the evidence and not just the handwriting experts. While that is no doubt true, any other evidence touching on the question should not be considered in isolation from the expert evidence. More particularly, where as I have found, the expert evidence supports a conclusion that the defendant’s signature on the loan agreement is not a forgery, it would be no small thing to treat that other evidence as displacing that finding. In any event, I have set out above[8] my reasons for concluding that the evidence relating to opportunity and otherwise concerning the circumstances of the preparation and signing of the loan agreement, in fact reinforces my finding on the expert evidence.
[8]At [63] to [75]
Remaining issues
198 Contrary to the defendant’s submissions, I have found above that:
· during the course of discussions between the parties concerning the purchase of the Sydney St property, the plaintiff said words to the effect that she would lend the defendant the $500,000 needed to fund the purchase and that the defendant should repay the loan in five to seven years;[9]
[9]At [44] to [49]
· the plaintiff agreed to reduce the loan by $50,000 to $450,000 as a wedding present to the defendant and Dr Wolf;[10]
[10]At [50] to [52] and [57]
· the loan agreement was prepared by PWD in conjunction with the preparation of the plaintiff’s will, and signed by the defendant between 8 December 2003 and 24 April 2004, most likely on 8 December 2003;[11]
[11]At [63] to [75]
· payments by the defendant and Dr Wolf to and on behalf of the plaintiff commencing in 2006 and concluding with a payment of $3,000 on 29 June 2014, were made in reduction of the loan, leaving a balance owing of $289,800;[12]
[12]At [83] to [94]
· details of the balance of the loan outstanding was confirmed by Dr Wolf during a meeting with Mr Robb of JBWere on 18 August 2011 and in an email to the defendant dated 29 June 2014;[13] and
· the expert evidence establishes that the signature on the loan agreement is the defendant’s.[14]
[13]At [94] to [122]
[14]At [124] to [198]
199 That leaves a few remaining submissions by the defendant that I need to address.
Presumption of advancement
200 The defendant has submitted that: “At law, the transaction relating to the Collingwood Property is presumed to be a gift by way of advancement for Mr Wolf, as Ms Brujah and Mr Wolf are mother and son”. He cites the decision of the High Court in Nelson v Nelson[15] and continues (omitting references):
“If in reality that transaction was not a gift, but in fact a loan, Ms Brujah’s lawyers at the time of the transaction should and would have drafted a loan agreement, which would have been dated June 2001. Ms Brujah admits that they did not do so, confirming that the transaction was a gift… As noted above, the onus is on Ms Brujah to disprove the gift. She has not met that onus. Her only evidence about the transaction was one discussion between herself and her son.”
[15][1995] HCA 25; (1995) 184 CLR 538
201 In his reply submissions, the defendant expands on the argument concerning the role of the lawyers, submitting:
“Ms Brujah’s statement of the facts that occurred in 2001 confirms that the presumption of advancement applies to the transaction. Her admission that nothing was documented at the time confirms that she has not met her onus to disprove that presumption. The facts that… No instructions were provided to them about the alleged loan, and… No-one was called from Pearce Webster Dugdales… confirm that the loan did not exist.”
202 The plaintiff’s submission on this issue was that:
“The presumption of advancement is alleged in the defendant’s submissions but it is not pleaded. He should not be permitted to raise the point now. In any event the point cannot assist the defendant. The presumption of advancement is nothing more than that: a presumption. It is overcome by the clear evidence that the advancing of $500,000 was not a gift but a loan.”
203 The decision of the High Court in Nelson v Nelson[16] confirms that the “presumption”, historically limited to transfers from husband to wife and father to child, no longer discriminates on the basis of gender; it clearly extends to gifts from a mother to a child. However, it is at most a presumption,[17] and will be rebutted where the evidence establishes that the transferor intended to retain a beneficial interest in the thing transferred (in this case, money). Thus, my finding above that the plaintiff provided the funds for the purchase of the Sydney St property as a loan and not a gift, simultaneously confirmed the fact of the loan and rebutted any presumption to the contrary.
[16][1995] HCA 25; (1995) 184 CLR 538
[17]Noting the debate over whether the use of the term “presumption” is apt to describe the operation of the principle – see, for example, GE Dal Pont, Equity and Trusts in Australia (6th Ed, Thomson Reuters, 2015 ) at [26.120] and fn 100
204 In that sense, the defendant’s submissions about the failure to document the loan at the time it was made, is merely another factor that informs the broader question of whether the original transaction was a loan or gift. It does not take on any heightened significance by reason of the potential operation of the presumption of advancement. And as discussed above, the absence of any documentation until the plaintiff came to update her will and thus was focussed on ensuring equivalency between her children on her death, is explained by her evidence that she trusted her son. Their relationship at the time was close (and indeed remained close for the ensuing 14 years), and she had no reason until two or so years later, to think that some written record of the loan was necessary.
205 There is also force in the plaintiff’s submission that the defendant first raised the presumption in final submissions and that it is not pleaded. However, as it stands or falls with the central question of whether the original advance of $500,000 was a loan or a gift, there is no obvious prejudice to the plaintiff in the late reliance on the presumption.
No term for repayment
206 The defendant relies on the decision in Maddock and Maddock (No.2)[18] a decision of Judge Burchardt (then Federal Magistrate Burchardt) as a comparable decision with similar considerations to the present. In my view, with respect, the learned Federal Magistrate’s decision says no more (or less) than a loan that is not repayable is not a loan. Whether a transaction involving a transfer of money includes an obligation to repay the money, is a question to be determined on the facts of each case. I have found above that there was a term for repayment, which was in any event superseded by the term in the loan agreement that the loan was repayable on demand.[19]
[18]Maddock & Maddock & Anor (No.2) [2011] FMCAfam 1340 (13 December 2011)
[19]At [49]
207 It may have been open on the facts of this case for the defendant to argue that the plaintiff was estopped or otherwise precluded from demanding repayment of the full amount of the loan in less than 7 years, but that issue does not arise for consideration. The defendant began making repayments in 2006 without objection, and no formal demand for the unpaid balance was made until 11 April 2017, more than 16 years after the original loan.
Limitations of Actions Act 1958 (Vic)
208 I have found above[20] that the payments identified in the spreadsheets and the bank statements, including the three payments in 2014, were repayments of the loan, including for the purposes of s24(3)(b) of the Limitations of Actions Act 1956 (Vic). I have given reasons for rejecting the submission that the payments cannot be treated as effective for the purposes of s24 of the Limitations of Actions Act 1956 (Vic), because they were made by Dr Wolf and not the defendant.[21]
[20]At [93]
[21]At [94]
The “running account”
209 The defendant submits that he “swore…that he provided architectural services (for free) for the benefit of his mother…[and] if the court finds that the gift was in fact a loan…those services should be added to the running account between the parties”. The defendant further submits that:
“Mr Wolf did not keep accounting records of the services, further confirming that there was no ongoing running account between mother and son despite a huge amount of work being completed. Mr Wolf brought a number of folders of architectural drawings to Court. Mr Wolf invoiced his mother for some of this work after the Claim against him was served. Mr Wolf submits that if the Court finds there was a ‘running account’ between his mother and himself, these fees should be taken into account as a set off for the claim… Mr Wolf submits that if the presents and the bills were to be ‘taken off the loan’ it is also fair to ‘take’ the architectural services that he has provided ‘off the loan’.
210 It is disappointing that the defendant has persisted with this submission, particularly as I expressly raised with counsel for the defendant that there was no dispute that the invoice referred to in the submission was not in fact from Mr Wolf, but from his company Wolf Architects Australia Pty Ltd. Counsel agreed, essentially conceding that there was no legal basis for a set-off and added: “we say if she’s going to change the game plan, then we also reserve the right to do so, but that’s as high as we put it…we are not seeking anything at this stage in respect to it”. I responded:
“It’s very important for me, when I sit down to [write] a judgment… to know what’s really at issue and I do not want to spend time dealing with all of the evidence around whether or not work was done and how much work was done, more importantly, in circumstances where the claim obviously can’t, it seems to me on the face of it, be raised as a formal set-off in circumstances where the claimant is a company who is not a party.”
211 The defendant’s submissions do nothing to enhance the argument from where it was left in my exchange with counsel. In fact, they confirm that it is without foundation. They refer to the concept of a “running account”, as if it is a recognised legal construct that operates independently of a right of set-off, but fail to articulate what that is. So far as I am aware, no such construct exists, at least not outside the operation of the (inapplicable) unfair preference provisions found in s588FA(3) of the Corporations Act 2001 (Cth). They then appear to revert to reliance on a right of set-off, but make no attempt to grapple with the fact that the invoice produced in evidence was patently not issued by the defendant personally, but by the defendant’s company. Indeed, rather than confront the problem I expressly identified to counsel for the defendant in the passage above, the submissions ignore it and erroneously assert that “Mr Wolf invoiced his mother”.
212 The alleged fees for architectural services bear no resemblance to the bank transfers and payments carefully itemised by Dr Wolf in her spreadsheets, sent to the plaintiff over the years and accepted by the plaintiff as accurate, both at the time they were sent and in evidence. In particular, there were no contemporaneous invoices or other accounting records of the value of any work, and the only invoice that was sent (belatedly), was not issued in the name of the defendant. Presumably any earlier invoices would likewise have been issued in the name of the corporate entity through which the defendant conducted his architecture business. In any event, the defendant volunteered in evidence that the work he alleges, was done for free.
213 The fact that the defendant might believe that it was now “fair” to take the value of his company’s architectural services off the loan, is no basis for a serious and considered legal submission. Parties and their legal advisers have a statutory obligation as part of their overarching obligations to narrow the issues in dispute.[22] Further, that obligation prevails over any other obligation.[23] In the case of legal practitioners, the overarching obligations prevails over any obligation to act on the instructions of a client. It was therefore surprising to see that two experienced practitioners were willing to put their hand to this submission.
[22]Civil Procedure Act 2010 (Vic), s23
[23]Civil Procedure Act 2010 (Vic), s12
Judgment and orders
214 I will order that there be judgment for the plaintiff against the defendant in the sum of $289,800. On the question of interest, I accept the plaintiff’s submission that it she entitled to interest on this sum from the dated of demand on 11 April 2017, pursuant to s58(1) of the Supreme Court Act 1986 (Vic) as applied in this court by s50 of County Court Act 1958 (Vic).
215 I would also propose to order that the defendant pay the plaintiffs costs of and incidental to the proceeding (including reserved costs) on the standard basis in default of agreement, unless the parties are able to bring to my attention any matters that might justify a departure from the usual order on costs.
216 I will hear further from the parties on the final form of the orders, including the calculation of the interest figure and on costs.
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Certificate
I certify that these 74 pages are a true copy of the reasons for decision of His Honour Judge Woodward delivered on 7 March 2018.
Dated: 7 March 2018
Simone Karmis
Associate to His Honour Judge Woodward
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