Cressy v Johnson

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 9665 of 2007

BETWEEN

PIPPIN PATRICIA CRESSY	Plaintiff
and
HAROLD JAMES JOHNSON	Defendant

AND BETWEEN

HAROLD JAMES JOHNSON	Plaintiff by Counterclaim
and
PIPPIN PATRICIA CRESSY	First Defendant by Counterclaim
and
DAVID HANLON	Second Defendant by Counterclaim
and
HARWOOD ANDREWS PTY LTD (ABN 98 076 868 034)	Third Defendant by Counterclaim

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JUDGE:	KAYE J
WHERE HELD:	Melbourne
DATES OF HEARING:	2-5, 8-12 December 2008; 5 February 2009; 9-11, 13, 16, 17 February 2009
DATE OF JUDGMENT:	25 February 2009
CASE MAY BE CITED AS:	Cressy v Johnson (No. 3)
MEDIUM NEUTRAL CITATION:	[2009] VSC 52

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PROPERTY – Application for adjustment of property interests under Part IX of the Property Law Act 1958 (Vic) – Whether parties in a domestic relationship – Assessing contributions – Financial and non-financial contributions – Constructive trust – Counterclaims for damages for trespass to goods, lodging caveat and abuse of process.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff and First Defendant by Counterclaim	Mr G Devries	Berry Family Law
For the Defendant and Plaintiff by Counterclaim	Mr H J Johnson appeared in person
For the Second and Third Defendants by Counterclaim	Ms R Sofroniou	Lander & Rogers

TABLE OF CONTENTS

The course of proceedings................................................................................................................ 3

Part 9 of the Property Law Act 1958................................................................................................ 7

Introduction to factual issues.......................................................................................................... 8

The plaintiff’s evidence.................................................................................................................... 9

The defendant’s case....................................................................................................................... 15

Missing documents.......................................................................................................................... 27

The plaintiff’s missing documents................................................................................. 28
The defendant’s missing documents.............................................................................. 29

Final submissions by parties: defendant’s submissions......................................................... 34

Final submissions by parties: plaintiff’s submissions............................................................ 38

Domestic relationship..................................................................................................................... 42

Identification of assets.................................................................................................................... 57

Contributions.................................................................................................................................... 60

Contributions to purchase of properties..................................................................................... 60

Role of plaintiff in purchase of properties............................................................................... 62
Contributions to renovations, repairs and works to properties........................................... 64
Payment of mortgage, utilities, insurances and the like in respect of properties.............. 65
Contributions to household expenses...................................................................................... 66
Contributions as homemakers and parents and to welfare of the family.......................... 69
Assessment and comparison of contributions of plaintiff and defendant......................... 70

Relief under Part 9 of the Property Law Act............................................................................... 76

Alternative claim: constructive trust........................................................................................... 82

The defendant’s cross-claim against the plaintiff..................................................................... 95

Conclusion....................................................................................................................................... 103

Orders............................................................................................................................................... 104

HIS HONOUR:

In these proceedings, the plaintiff makes a claim against the defendant, under Part 9 of the Property Law Act 1958 (Vic), arising from a domestic relationship which she alleges she had with the defendant between September 1998 and May 2007. The plaintiff’s claim is based on the acquisition of a number of properties in the name of the defendant during and after the conclusion of the relationship. Alternatively, the plaintiff claims that the defendant holds the properties, purchased in his name, on a constructive trust on behalf of herself and the defendant. The two claims by the plaintiff are made on the basis of contributions, both financial and non-financial, which the plaintiff alleges that she made to the relationship and to the properties for the benefit of herself and the defendant.

In particular, the plaintiff’s claims are based on the acquisition by the defendant of seven properties during or at the conclusion of the relationship. Those properties are as follows:

(1)2 Dorrington Street, Point Cook.
(2)10 Hawkeshurst Court, Hoppers Crossing.
(3)12 Lisa Court, Hoppers Crossing.
(4)7 Inverloch Drive, Point Cook.
(5)166 Queen Street, Altona.
(6)Unit 9, 2 Gibson Street, East Caulfield.
(7)7A Endeavour Street, Torquay.

In response to the plaintiff’s claim, the defendant has put in issue the existence of the domestic relationship between himself and the plaintiff, and the duration of any such relationship which might have existed between them. He has also put in issue the plaintiff’s allegations as to the contributions which she says she had made to the relationship and to the properties. In addition, the defendant has brought a counterclaim against the plaintiff. He joined David Hanlon, a solicitor as the second defendant to the counterclaim, and Harwood Andrews Pty Ltd (“Harwood Andrews”), a firm of solicitors of which Mr Hanlon is a member, as the third defendant to the counterclaim.

By his counterclaim the defendant has pleaded four causes of action, namely –

(1)A cause of action based on an agreement which he says he entered into with the plaintiff for the occupation by the plaintiff of the Point Cook properties between March 2003 and June 2006, and the Altona property between June 2006 and November 2007. The defendant claims damages against the plaintiff arising out of alleged fraudulent representations by the plaintiff which he claims induced him to enter into the agreement, and, alternatively, on alleged breaches by the plaintiff of the terms of the agreement.
(2)In paragraphs 15 to 21 of the counterclaim, the defendant claims damages against the plaintiff arising out of a caveat number AF085952B lodged by the plaintiff on 8 May 2007 over each of the properties (except the Torquay property) referred to in paragraph 2 above.
(3)In paragraphs 22 to 26 of the counterclaim, the defendant claimed damages against Mr Hanlon, and further alternatively Harwood Andrews, and (it appears) against the plaintiff, arising out of a caveat number AF066328D lodged by Harwood Andrews on 9 May 2007 over the title to the Altona property.
(4)In paragraphs 27 to 33 of the counterclaim, the defendant claims that between January 1995 and November 2007 the plaintiff stole personal and financial records of the defendant, two mobile phones of the defendant, and other items belonging to the defendant. He also claimed that Mr Hanlon, and further alternatively Harwood Andrews, were “intimately involved” in burglaries and thefts committed by the plaintiff on 16 November 2007. It is further alleged that Mr Hanlon and Harwood Andrews acted maliciously in subpoenaing the documents, recovered by the Victorian police from the plaintiff, and causing them to be lodged in the Federal Magistrates’ Court of Melbourne.

The course of proceedings

The trial of the proceeding commenced before me on 2 December 2008. The plaintiff was represented by Mr G Devries of counsel. The defendant appeared in person. Ms R Sofroniou of counsel represented the second and third defendants by counterclaim.

At the outset of the proceeding, Mr Devries submitted that I should appoint a litigation guardian under Rule 15.01 of the Rules of the Supreme Court to conduct the proceeding on behalf of the defendant. He called Mr D List, a clinical psychologist, and tendered some documents, in support of that application. In response, the defendant called Ms M Love, a psychologist, who had examined the defendant in January 2008. After hearing that evidence, I gave an ex tempore ruling, in which I decided not to accede to the unusual application made by Mr Devries. Having had the opportunity to observe the defendant during the long trial of this proceeding, I have remained of the view which I then reached, namely, that the defendant was not so affected by any relevant disability as to justify the Court taking the extraordinary step of appointing a litigation guardian to act on his behalf, particularly where the application for that appointment was made by an opposing party, and in circumstances in which it was opposed by the defendant.

The defendant was admitted to practice as a barrister and solicitor in 1990, and since that date has conducted practice as a solicitor.[1] He told me, on a number of occasions, that he had not conducted any litigation on behalf of his clients. Nevertheless, as I frequently observed during the trial, the defendant displayed a number of skills as an advocate. He told me that he had read about the principle in Browne v Dunn[2], and, in conformity with that principle, he put to the plaintiff, in cross-examination, a number of matters about which he subsequently gave evidence. He exhibited a ready appreciation of the rule against the admission of hearsay evidence. He adduced evidence from a number of witnesses without, generally, asking them leading questions. When the principle in Jones v Dunkel[3] was drawn to his attention, and I explained it to him, he readily understood it. I gained the impression that the defendant, at the least, is a very intelligent person. He has a quick and incisive intellect. In fact, for a person who professes never to have practised in Court before, he displayed a number of skills of a natural advocate.
[1]During that time he was employed by two major national law firms and, subsequently, by two substantial corporations.
[2](1893) 6 R 67.
[3](1959) 101 CLR 298.

On the other hand, throughout the trial, the defendant deliberately sought to introduce into the case a number of issues which were irrelevant to those pleaded in the action. Although, at one stage, he protested that I had the power to dispense with pleadings, on the other hand, on the second day of the proceeding, he objected to the plaintiff amending her statement of claim, stating “I had understood that the time for amending pleadings closed some weeks before the trial date”.[4] The defendant clearly understood the issues which were pleaded. Nevertheless, time and again he sought to expand the ambit of the proceeding well beyond those issues. He also indulged in tactics, frequently at the beginning of the day, which were designed to frustrate the case, and to delay the hearing of it. On a number of occasions, he made applications and long winded speeches about matters which were irrelevant to the proceeding. I cautioned him, repeatedly, that it was not in his interests to indulge in those tactics. Time and again, I reminded the defendant of the central issues in the case, which he was to address. I gained the clear impression that the defendant was seeking to wear me down, in order that he might seize control of the proceeding, and thereby run whichever issues he desired. I expressly warned the defendant that I was alert to that tactic, and that he was not capable of distracting me from the issues which I was to determine.
[4]T 156.

In particular, it was a constant refrain by the defendant, throughout the trial, that this proceeding should be combined with an entirely different proceeding instituted against him by Trust Company Fiduciary Services Limited (formerly known as Permanent Trustee Company Limited) in Proceeding No. 9263 of 2008. At the outset of the proceeding, I ruled against the submission of the defendant that the two proceedings should be so combined. In the other proceeding, Trust Company Fiduciary Services Limited has sued the defendant as mortgagee of the property at Dorrington Street, Point Cook. In response, the defendant delivered a counterclaim directed, not only to Trust Company Fiduciary Services Limited, but also to nine other different defendants to counterclaim. They include a member of counsel who had previously represented the plaintiff in the current proceedings, Mr Devries who represents the plaintiff in the current proceedings, a psychologist, the Minister for Human Services, the Federal Magistrate who has heard proceedings between the plaintiff and the defendant in the Family Court, the Legal Services Commissioner, and the Attorney-General for the State of Victoria. The counterclaim comprises 156 pages of florid allegations. Unsurprisingly, I ruled that the two proceedings should not be combined. They involve different parties. The other proceeding has not yet been set down for trial. Notwithstanding my ruling, the defendant constantly disregarded it, and railed against it throughout the case. He wasted a substantial amount of time in Court attempting to raise issues in the current proceedings which, if they have any relevance at all (on which I express no view), seem to arise out of the counterclaim in the other proceedings.

The plaintiff’s case commenced on 2 December 2008. Mr Devries closed his case on 5 December. On the same date, the defendant called four witnesses on his behalf, and commenced his own evidence. Ultimately, his evidence in chief proceeded for two days. It was given in an orderly, methodical and logical manner. The defendant has an almost obsessive mind for detail. On the other hand, the defendant, during his evidence, again indulged in the tactics to which I have just referred, namely, seeking to expand the areas at large in the case. After Mr Devries cross-examined the defendant, he gave lengthy evidence in re-examination. On Friday, 12 December he called one further witness. In the meantime, Ms Sofroniou had foreshadowed making a no case submission at the conclusion of the defendant’s case. She had provided to the defendant a ruling which I had made in a previous case, which outlined some of the principles relevant to such an application. On Friday 12 December, after the defendant called his one witness, he then proceeded to indulge in what I then described as a tactic of filibustering. At one stage he foreshadowed calling a large number of additional witnesses. When he told me the topics which he wished to address with those witnesses, I indicated that it seemed that those witnesses would not be relevant to the issues in the case. Nevertheless, it did seem to me that three of the witnesses, who the defendant stated that he wished to call, may give evidence relevant to the issues between the defendant and the other parties in the case. Accordingly, I acceded to the application by the defendant that the matter be adjourned to 9 February 2009, in order to enable the defendant to have those witnesses available.

During the recess, the defendant subpoenaed a large number of persons to court to give evidence. A number of those persons applied to me to set aside the subpoenas. I acceded to those applications, as it was clear that the matters which the defendant intended to elicit from those persons were irrelevant to the issues contained in the pleadings. In the upshot, and after further filibustering by the defendant, he called two further witnesses, and gave additional evidence himself. After he closed his case on 10 February, Ms Sofroniou submitted that there was no case for her clients to answer on the counterclaim against them. On 11 February, I delivered a ruling, upholding Ms Sofroniou’s submission. Accordingly, I dismissed the defendant’s cross-claim against Mr Hanlon and Harwood Andrews.[5] In a further ruling, I ordered that the defendant pay the costs of Mr Hanlon and Harwood Andrews on a solicitor-client basis [6].
[5]Cressy v Johnson (No 1) [2009] VSC 35.
[6]Cressy v Johnson (No 2) [2009] VSC 42.

After I had made orders dismissing the counterclaim against Mr Hanlon and Harwood Andrews, the defendant then made a lengthy final address to me, in circumstances which I shall describe later in these reasons. His final address took approximately one and a half days of the trial. At the conclusion of his final address, he sought my leave to withdraw from the case. Notwithstanding my advice to him that he should stay, and that I would be amenable to permitting him to make a reply to Mr Devries’ final address, the defendant departed the Court. He did not return to it for the remainder of the proceedings. However, I note that, pursuant to a direction which I gave at the commencement of the trial, the transcript in the case was, and remained, available to the defendant, including the transcript of Mr Devries’ final address.

Part 9 of the Property Law Act 1958

The primary focus of the proceeding was on the plaintiff’s claim under Part 9 of the Property Law Act. That claim is also relevant to the counterclaim of the defendant based on the caveat lodged by the plaintiff over the six properties. I shall deal with that aspect of the proceeding first before returning to the first and fourth causes of action pleaded by the defendant in his counterclaim.

It is useful to commence by setting out the key relevant provisions in Part 9 of the Property Law Act. Section 285(1) of that Act provides:

“(1) A Court may make an order adjusting the interests of the domestic partners in the property of one or both of them that seems just and equitable to it having regard to —
(a)the financial and non-financial contributions made directly or indirectly by or on behalf of the domestic partners to the acquisition, conservation or improvement of any of the property or to the financial resources of one or both of the partners; and
(b)the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the domestic partners to the welfare of the other domestic partners or to the welfare of the family constituted by the partners and one or more of the following —
(i)a child of the partner;
(ii)a child accepted by one or both of the partners into their household, whether or not the child is a child of either of the partners; and

(c)any written agreement entered into by the domestic partners.”

Section 282 provides that, except with the leave of the Court, an application for an order under Part 9 must be made within two years after the day on which the relationship ended. Section 281(1) provides that, subject to subsection (2), a Court may only make an order, if it is satisfied that the domestic partners lived together in a domestic relationship for a period of at least two years. Section 275(1) defines “domestic relationship” to mean —

“The relationship between two people who, although not married to each other, are living or have lived together as a couple on a genuine domestic basis (irrespective of gender).”

Section 275(2) specifies a number of factors which the Court takes into account in determining whether a domestic relationship existed between the parties. I shall return to that provision later in this judgment.

Introduction to factual issues

Although the parties are in conflict over a number of matters in the case, there are some common threads to the evidence. It is common ground that a personal relationship, of some sort, commenced between the plaintiff and the defendant in late 1998. The circumstances in which the relationship commenced are in dispute. However, it appears that, at least at the outset, it was a romantic relationship. It is also common ground that whatever the nature of the relationship, it came to an end in April or May 2007. There was one child of the relationship, a daughter, Illyana Patricia Cressy, born 9 June 2000.

The plaintiff’s case is that the parties commenced to cohabit from late 1998. From that time until 2001, she claims that they lived together at two rented premises in Geelong. The defendant denies that that is the case. The defendant claims that, during that period, he did move to rented premises in Geelong, but lived separately from the plaintiff. It is common ground that the parties did live together at rented premises in South Yarra between 2001 and March 2003. During that time the property at Dorrington Street, Point Cook was purchased as vacant land in the name of the defendant. A house was constructed on it. It is also common ground that the plaintiff and the defendant moved in together to the Dorrington Street property when the construction of it was completed. However, the defendant claims that, after a few months, he moved out, and commenced to live in an apartment in Bourke Street, Melbourne, at which he also had his offices. The plaintiff claims that the defendant continued to live with her at the Dorrington Street address. She also claims that in 2006 they then moved together to the address at 166 Queen Street, Altona, which was purchased in the name of the defendant. That evidence is disputed by the defendant. It is common ground that the seven properties, to which I have referred, were all purchased in the name of the defendant. Further, the defendant was the sole borrower in respect of the loans for the acquisition of those properties, and for the construction of houses on the properties at Dorrington Street, Lisa Court and Hawkeshurst Court. There is an issue as to whether the plaintiff made any financial contribution to the payment of the deposits for those properties. It is common ground that, otherwise, the defendant made all the payments in respect of the loans secured over the properties.

The plaintiff’s evidence

The plaintiff met the defendant in the latter part of 1998. At that time the plaintiff was living in rented premises at Illouera Avenue, Grovedale. Those premises were made available to the plaintiff by the Salvation Army as crisis accommodation. The plaintiff was then a young single mother with a son, Treece aged 3½, and a second infant son, Skye, who was a few months old. The plaintiff’s mother, Gail Cressy, also lived with the plaintiff. Gail Cressy at that stage had a daughter (Rose) who is a half sister to the plaintiff. Subsequently, Gail Cressy gave birth to a second daughter, Grace, in mid 1999. At that time the defendant was a solicitor employed by a large Melbourne firm of solicitors. He was married and had three children. According to the plaintiff, when she met the defendant, he was then very unhappy in his marriage.

The plaintiff stated that shortly after they met, they commenced to date together. Within about six weeks, the defendant left his wife and commenced to live with the plaintiff at the Illeura Avenue address. The plaintiff was then supporting herself by selling handmade jewellery and crafts at local markets. That income was supplemented by a pension. The plaintiff states that she did all of the housekeeping work at the Illeura Avenue address. On occasion, the defendant’s three children would stay with them at that address.

The plaintiff further gave evidence that, in 1999, she and the defendant moved to rented premises at Gheringhap Street, Geelong, together with the plaintiff’s two children. The lease was in the name of the defendant. They lived together at that address for about 12 months. During that time, the plaintiff commenced an art gallery fashion boutique business called The Gallery of Artemis. The defendant had commenced working for the Barwon Water Authority. The plaintiff states that she undertook all of the housekeeping and upkeep of the family and the house at Gheringhap Street.

In 2001, the plaintiff and the defendant moved to rented premises at Nicholson Street, South Yarra. Those premises were also rented in the name of the defendant. The plaintiff stated that she did all of the parenting of Illyana and her two sons. At the same time she commenced a consultancy business. The defendant commenced work for Prime Life Corporation, and also continued to work with the Barwon Water Authority. The plaintiff stated that the income which she derived from her business went to the household and the family. She commenced work as a sex worker part-time in 2002, in which capacity she earned $40,000 per annum. During that time she was also studying part-time. In 2006, she completed her studies and worked full-time as a sex worker, in which capacity she earned between $70,000 and $100,000 per annum.

The plaintiff stated that both she and the defendant located the property at Dorrington Street, Point Cook. They selected the land and jointly chose a Metricon house to build on the land. She stated that she and the defendant together chose the colourings, fittings and fixtures for the house. The property was purchased in the defendant’s name. Nearly the whole of the purchase price, including for both the land and the house, was borrowed, but the defendant and the plaintiff paid a small deposit from their joint funds. After the property was built there were a number of adjustments which needed to be made. The plaintiff dealt with the maintenance supervisor appointed to attend to defects arising during the maintenance period. The plaintiff stated that she also purchased and installed curtains, towel rails and fittings, that she painted the feature wall to the house, and that she and her mother rendered the external brickwork of the house. She also claimed that she did all of the landscaping of the garden including building rockery gardens, planting vegetable gardens, planting fruit trees and the like.

The plaintiff stated that she and the defendant resided at the Dorrington Street property for three years. The defendant’s children stayed with them at that property every second weekend. The plaintiff looked after all of the children. During that time, the defendant opened his own practice in Apartment 909, 166 Bourke Street, Melbourne. He also had a home office at the Dorrington Street property at which he worked.

The plaintiff stated that she and the defendant then moved to the property at 166 Queen Street, Altona in about 2006. The plaintiff had negotiated the price of the house with the estate agent. A deposit of $50,000 was paid out of the joint funds of the plaintiff and the defendant, and the balance of the purchase price was borrowed. The property was purchased in the name of the defendant. The property was badly run down and required substantial renovation. The plaintiff stated that she carried out a large amount of the renovation works. She removed the carpets and pulled out the timber which covered the floorboards. She hired a tradesman to sand and polish the floorboards. She also purchased and paid for the installation of a new kitchen at a cost of $30,000. She paid an electrician to remove and replace the electrical lights. The plaintiff removed all the old curtains and installed new curtains and curtain rails. The plaintiff remained in the Altona property until July 2008. At that time, pursuant to the order of Hansen J made on 16 July 2008, the plaintiff and her children commenced to reside at the Dorrington Street premises.

Shortly after the purchase of the Dorrington Street property, the Lisa Court and Hawkeshurst Court properties were purchased in the name of the defendant. Both properties were purchased as a house and land package from Devine Pioneer Homes. The plaintiff stated that she gave the defendant about $3,000 or $4,000 towards payment of the deposits for both houses. Each property was purchased in the name of the defendant. The loans in respect of them were in the name of the defendant. When the Lisa Court property was completed, the plaintiff’s mother, and her two children, resided in it. The plaintiff did a small amount of gardening on that property and helped with some paving. The plaintiff’s mother paid some rent, which was insufficient to meet the mortgage payments. The defendant paid the mortgage payments in respect of that property and the Hawkeshurst Court property.

The plaintiff stated that she twice landscaped the Hawkeshurst Court property. She initially installed a garden before the house was leased. However, the first tenants to the property did not look after it properly, and as a result a number of plants died. In addition, the tenants damaged the interior of the house. Accordingly, the plaintiff replanted the garden. She also plastered the walls and organised for Carpet Court to replace the stained carpet. The plaintiff stated that she paid for those repairs.

While the plaintiff and the defendant were living at Dorrington Street, the plaintiff noticed that the adjoining property at the rear was for sale. Accordingly, that property, 7 Inverloch Drive, Point Cook, was purchased in the name of the defendant. The purchase price was borrowed, and added to the mortgage secured over the Dorrington Street property.

The plaintiff also gave evidence that while she and defendant were living together, the defendant purchased a property at Unit 9, 2 Gibson Street, Caulfield East. The plaintiff did not have any involvement in the purchase of that property or in any work carried out to it. At the conclusion of their relationship, the plaintiff’s solicitors placed a caveat on that property on her behalf. The defendant wrote to the plaintiff’s solicitors, requesting that the caveat be removed, to enable the property to be sold. The plaintiff agreed to that request, and the caveat was removed from that property. However, the defendant did not sell the property, but, rather, refinanced it, and used the further funds to purchase another property, in his name, at 7A Endeavour Street, Torquay.

The plaintiff stated that throughout their relationship she did all the family shopping, and paid all the household expenses. She also normally paid for the cost of their outgoings together. On the other hand, the defendant assumed responsibility for payment of all the expenses relating to the properties, including the mortgages, insurances, and utilities.

The plaintiff was cross-examined at some length by the defendant. The salient parts of the evidence of the plaintiff under cross-examination may be summarised as follows:

•The plaintiff denied that she met the defendant when she was working in a brothel in Geelong in September 2008, while the defendant was attending a taxation conference in Lorne.
•The plaintiff denied that when the defendant commenced to reside at Gheringhap Street, Geelong, she remained at Illouera Avenue. Rather, she said that in the first half of 2001, she was asked by the landlord to leave the Illouera Avenue premises, on the grounds that she was no longer in crisis, because she was then dating a lawyer who had adequate means to pay rent. Accordingly, the plaintiff moved to live with the defendant at the Gheringhap Street premises.
•The plaintiff agreed that while she and the defendant, and the plaintiff’s children, were living at the South Yarra premises, the plaintiff’s mother, Gail Cressy, also resided at those premises with her two other daughters. When the construction of the Dorrington Street premises was completed, the plaintiff, the defendant, the plaintiff’s three children, Gail Cressy and her two children all moved to Dorrington Street.
•The plaintiff denied that, from July 2003 to July 2006, the defendant’s primary place of residence was Apartment 909, 668 Bourke Street, Melbourne, and, subsequently, an apartment on the 23^rd floor of those premises.
•The plaintiff denied that she was an employee of the defendant in the business known as the Gallery of Artemis in Geelong. Rather, she stated that she and the defendant jointly owned that business, that she worked there, and did not receive any payment for her work.
•The plaintiff denied that when Illyana was three or four months old, she resumed work as an adult sex provider at brothels in South Melbourne. She stated that she did work at a brothel in South Melbourne in 2002 and 2003, while they were still living at South Yarra. She said that she last worked at that institution in 2004 or 2005.
•The plaintiff agreed that when she worked for the defendant, performing office administration work, she was paid in cash. She agreed that most of the defendant’s income was used to pay instalments of the mortgage debts, and to pay expenses such as rates, insurance and utilities on the properties. She denied that the defendant gave her the cash which she used to pay for household expenses and the like.
•The plaintiff denied that the defendant did not live at, but rather was only a regular visitor to, the Dorrington Street premises, and, subsequently, the Queen Street, Altona premises.
•The plaintiff agreed that in February 2007 she had the three children booked into extended after hours care while she was working. She denied that she had a relationship with any other man during her relationship with the defendant.

The other witness who gave evidence for the plaintiff was her mother, Gail Cressy. Mrs Cressy stated that she first met the defendant in 1998, when he visited the house where she and the plaintiff were living in Grovedale. She said that the defendant commenced living in those premises one month later. The defendant remained in that property, until the plaintiff and he moved to the Gheringhap Street premises. Mrs Cressy visited those premises from time to time, and saw the defendant there. From that time until the middle of 2007, Mrs Cressy visited the plaintiff regularly. During that time, the plaintiff and the defendant were together. She described the plaintiff and the defendant as a couple, and said that the defendant had never suggested to her that they were not a couple.

Mrs Cressy stated further that she subsequently lived in the Dorrington Street property for about six months, while the house at Lisa Court was being constructed. She then moved into the Lisa Court property, for which she paid rent. She carried out some rendering work to the outside of the Dorrington Street house.

In cross-examination Mrs Cressy stated:

•She helped the plaintiff in the business called the Gallery of Artemis in Geelong. However, she was not employed at those premises.
•The defendant also employed her, and paid her, for 15 hours per week housekeeping at the Dorrington Street property, and she also used those premises to carry out some legal work for the defendant.

The defendant’s case

The defendant gave lengthy evidence, and also called five witnesses on his behalf.

The defendant stated that he is a barrister and solicitor, that he was admitted to practice in 1990, and that he had always practised as a solicitor.

The defendant stated that he first met the plaintiff on 12 September 1998, while she was working at a licensed brothel called Lorraine Starr in Malop Street, Geelong, which he visited on that occasion. Thereafter, he courted the plaintiff over a period of six weeks. They first went out together on their first date on Melbourne Cup Day in 1998. At that time, the defendant was living with his wife and three children at their home in Belgrave, and was working long hours with a large firm of Melbourne solicitors.

The defendant stated that, at that stage, his contact with the plaintiff tended to be late in the evening on a week day, or in the middle of the day at the Lorraine Starr premises. He first visited the plaintiff at her home in Illeura Avenue, Grovedale in December. He denied that he resided at those premises, but stated that he did visit them, and on occasions remained there overnight.

The defendant stated that subsequently, in January 1999, he commenced to lease the premises at Gheringhap Street, Geelong. The plaintiff continued to reside at the premises at Illouera Avenue. However, she would visit and sleep at the house at Gheringhap Street with her children. The defendant denied that the plaintiff lived with him at the Gheringhap Street premises, but, he maintained, she continued to reside at the Illeura Avenue premises.

While the plaintiff was living in Geelong, he commenced employment with Barwon Water in October 1999. He also set up his own legal practice, Sutton Johnson. He used the name “Sutton”, because it is the surname of the plaintiff’s father. During that period, he also commenced a business called the Gallery of Artemis, which consisted of an art gallery, and also a shop selling ladies’ fashion clothing and accessories. He employed the plaintiff at those premises. He maintained that he established the business, and employed the plaintiff in it, in order to induce the plaintiff to cease working as a prostitute.

The defendant stated that the plaintiff’s insistence that she continue to work as a prostitute remained as a bone of contention between himself and the plaintiff. On New Year’s Eve 1999, they had an argument about the plaintiff’s intention to work in that capacity during the holiday period. Early in the new year, the plaintiff, the defendant, and the plaintiff’s two children, drove to South Australia on a holiday. On the return trip, the plaintiff and the defendant had another argument, because the plaintiff insisted on returning to work in the brothel. Thereafter, according to the defendant, they had no contact until May 2000, when the plaintiff contacted him and stated that she wished to resume their relationship. At that time, the Gallery of Artemis business was opened, and shortly thereafter Illyana was born.

The defendant stated that in 2001 he decided to move back to Melbourne, in order to increase his income. At the same time, the plaintiff was under pressure to leave the Illouera Avenue rented premises, which had been let to her as short term crisis accommodation. The defendant located premises in South Yarra which were available for lease. As the plaintiff could find no alternative accommodation for herself and her children, the defendant permitted the plaintiff to move in with him. The defendant maintained that during that time the plaintiff had an affair with a man, to whom I shall refer as “CP”. The plaintiff, the defendant and the children remained at the South Yarra address until March 2003, when they moved into the Dorrington Street property. In the meantime, Mrs Gail Cressy and her two daughters had also moved into the South Yarra premises.

During that period, the defendant obtained employment with Prime Life Corporation. He stated that he was working 60 hours per week for Prime Life, and about 10 to 20 hours per week for Barwon Water. He was earning a large income with a good cash flow. Accordingly, he entered into the agreement to purchase the Dorrington Street property. As part of the purchase contract, a house was to be constructed on the property. When the house was built, the garden had been landscaped, and all fittings and fixtures were in place, including the carpet, tiles and fittings. The defendant stated that he paid all the deposit. He purchased the land for $79,500, on the basis that he contribute 20 percent of the purchase price, and the balance was borrowed. The construction price of the house was $178,100, of which the defendant borrowed 80 percent. The defendant denied that the plaintiff made any contribution to payment of the deposit of $50,000 for the purchase of the land and the construction of the house. He stated that he organised the finance through the Colonial State Bank. The defendant maintained that had he arranged the finance, and organised the design and the optional add-ins to the house, without advising the plaintiff. He stated that he did not tell the plaintiff of the purchase of the property, because at that time she was in a long-term intimate relationship with CP. The defendant claimed that he was contemplating cutting his ties with the plaintiff, because of her relationship with CP, and because she persisted in working in a brothel.

Ultimately, the defendant told the plaintiff about the house at Dorrington Street. The defendant, the plaintiff, the plaintiff’s three children, the plaintiff’s mother and her two children all moved into it in March 2003.

At that time, the defendant also purchased the two properties at Hawkeshurst Court and Lisa Court, Hoppers Crossing. They were also purchased as house and land packages. He purchased two properties, because he thought he would be more likely to secure finance, if he applied for loans for two rather than one property. He maintained that it was he who identified the two properties, one for the cost of $68,000, and the other for the purchase price of $64,000. The defendant organised finance for the purpose of the properties, and borrowed 80 percent of the purchase price of them. The construction price of the house at Lisa Court was $106,000, and the construction price of the house at Hawkeshurst Court was $99,000. The defendant borrowed 80 percent of the contract sums from AMP. He claimed that the borrowing structure was favourable to him, as he was only obliged to pay the last $20,000 on each contract.

The Lisa Court and Hawkeshurst Court properties were completed in early 2003. At that time, the defendant noticed that the property at 7 Inverloch Drive, Point Cook, which abutted the rear of the property at 2 Dorrington Street, was also for sale. He purchased that property for $115,000, 80 percent of which was financed by a loan from AMP.

When the Lisa Court premises were available, the defendant permitted the plaintiff’s mother, Gail Cressy, and her two other children, to live in those premises for some four years. The plaintiff’s mother agreed to pay rent which was equivalent to 50 percent of market rent, and the defendant paid the outgoings in respect of the property, including the mortgage liabilities. In July 2003, the defendant took a lease of Apartment 909, 668 Bourke Street, Melbourne. He stated that at that time, he moved into those premises by himself, and that, since that date, he has always lived on his own. At that stage, the defendant was working at Prime Life Corporation, whose offices were less than half a block away from the Bourke Street apartment. His children, by his marriage, would come and spend time with him at the apartment. The two bedrooms in the apartment were set up as offices. He used fold out couches as beds. He hired a personal assistant who worked for him in his legal practice at the premises for three days per week.

In 2006, the defendant moved to a larger apartment, Apartment 2302, at 668 Bourke Street. That apartment had three bedrooms. He wanted to have a larger apartment, because he was employing more staff to work there. He also used a serviced office in 140 William Street to meet clients. In the meantime, he was still working for Prime Life and also Barwon Water. During that period, the plaintiff’s three children also came to stay with the defendant at the Bourke Street premises. All three children of the plaintiff regarded the defendant as their father, and called him “Dad”. He stated in his evidence that he did not differentiate between the plaintiff’s two older children (of whom he was not the biological father) and Illyana, but treated them equally. He professed paternal affection for all three children.

In the meantime, the defendant would visit the plaintiff at the premises at Dorrington Street, Point Cook. On occasion, he would stay overnight at those premises, and sometimes he slept with the plaintiff. He stated that they had sexual relations infrequently. He said that if they went out for a meal together, he would pay for it. During that time, his principal place of residence was in the City. He also occasionally slept overnight at his wife’s house in Belgrave. In the meantime, between 2004 to 2006, he was dating a young lady called “Elizabeth”, who he described as his “main girlfriend”. In January 2007, he met a girl called “Stella”, who he dated for four months. While the plaintiff was living at the Bourke Street premises, he met a mortgage broker, Antonius Ioannou. In about 2004 or 2005, Mr Ioannou introduced the plaintiff to an investment opportunity, consisting of an apartment at 2 Gibson Street, Caulfield East. The plaintiff entered into a contract to purchase Unit 9 at those premises for the sum of $425,000. Ninety percent of the purchase price was financed. There was a delay in settlement of the contract, and ultimately it did not settle until June 2006. In the meantime, the value of the property had increased, so that the defendant in fact borrowed more money than he needed, and he was left with some cash in hand. At that time, he was earning a large income from Barwon Water and from Prime Life.

In about 2006, the defendant identified a site at 166 Queen Street, Altona as a good investment. The house was dilapidated, but the property was a good investment opportunity. He entered into a contract to purchase the property for $500,000. He borrowed 90 percent, and paid the deposit himself. When the purchase was settled, the plaintiff and the three children moved into those premises. The plaintiff cleaned the walls and ceiling of the premises and painted the walls. He denied that the plaintiff removed the old curtains. He helped the plaintiff to pull out the carpet. He stated that he purchased the new kitchen at a cost of $10,000. From June 2006 to October 2007, the plaintiff was the sole resident of the property, together with her three children. The defendant visited her there one or two nights per week, and he would stay over about two nights per fortnight.

The defendant stated that, in the meantime, he had been paying generous amounts of cash to the plaintiff, mainly in order to induce her to desist from working as a sex worker. He was paying the plaintiff $400 to $600 per week cash, to cover living expenses. At one stage, he was paying her $4,000 cash per month. In addition, he paid for the plaintiff to undertake some training courses at Stott’s College and also at Taylor’s College. The defendant also paid for the long-term childcare fees for the three children.

The defendant stated that before Easter 2007, he had discussed sharing a holiday with the plaintiff. However, the plaintiff refused to go on that holiday, so the defendant instead went to Byron Bay with his girlfriend Stella. When he returned, the plaintiff told him that she wanted to have a permanent relationship with him, but he rejected that proposal. It was at that time that, whatever relationship the defendant had with the plaintiff, it came to an end.

In the latter part of 2007, the defendant wished to re-finance the Gibson Street property. In his evidence, he stated that he did not consider that he would qualify for a re-financing, unless he justified it as a step to acquiring a new property. For that reason, he claimed, he entered into a contract to purchase the property at 7 Endeavour Street, Torquay on 18 September 2007 for the purchase price of $397,500. Settlement of that contract was due in April 2008. In the meantime, the defendant resided at those premises as a tenant.

The defendant was cross-examined at some length by Mr Devries, who appeared for the plaintiff. I shall return to some of the matters raised in cross-examination later in this judgment. The principal features of the cross-examination included the following:

•The defendant identified a driver’s licence (Exhibit C), with an expiry date of 18 June 2001, endorsed with the 5 Illouera Avenue, Grovedale address. He also identified an AMP home loan application, signed by him (Exhibit D), in which he had noted the Illouera Avenue, Grovedale address as a “previous residential address”.
•The defendant identified a Valentine’s Card (Exhibit E), which he had sent to the plaintiff in February 2000, in which he protested his unqualified love for her, and in which he stated: “I’d like you to think about moving back to Gheringhap Street. I’ll move out”. He denied that that was an acknowledgement of the fact that the plaintiff had, before that time, lived with him at the Gheringhap Street property.
•The defendant agreed that he signed a large number of financial documents, including his income tax returns, in which he had stated the Dorrington Street, Point Cook address as his residential address between July 2003 and June 2006.
•The defendant agreed that the plaintiff and he lived in the same premises at South Yarra from 2001 to 2003. Although he disagreed that, at that time, they were in a “domestic relationship”, nevertheless he stated that he could “accept a finding” that he and the plaintiff were in a domestic relationship during that period of time.[7]
•The defendant agreed that it was possible that he also used 166 Queen Street, Altona as his residential address. He identified an application dated 19 September 2007 to redirect mail from that address signed by himself (Exhibit O).
•The defendant was cross-examined at some length on the contents of an affidavit sworn by him in the Federal Magistrates’ Court proceedings on 13 September 2007. In that affidavit, he stated (paragraph 4) that he and the defendant had “lived, or partly lived together from December 1998 to January 1999 and from May 1999 to June 2007”. He also stated (paragraph 6) that “since the respondent and I first met I have been a father to the children Treece and Skye”. In paragraph 7, he stated “since the respondent and I ceased living or partly living together I have continued to support her and the children”. In paragraph 8, he identified the times he had spent with the children “since June 2007 when the respondent and I ceased living together … “. In cross-examination, the defendant denied that those parts of his affidavit were admissions by him that the plaintiff and he had lived together for the period 1998 to 2007. He stated that he had been troubled by the language used in the affidavit, and that he had sworn the affidavit based on the advice of the experienced solicitor then acting for him in the Family Law proceedings.
•The defendant was cross-examined at some length about his income and his financial commitments. That cross-examination was undertaken by Mr Devries to demonstrate that, with the financial commitments undertaken by him in respect of the mortgages of the various properties, he could not have provided to the plaintiff the financial support which he claimed, during the relationship between them.
•The defendant was also cross-examined about the work which the plaintiff had stated that she had done on the properties which he had purchased. He agreed that because he was very busy, he did not do much work on the properties himself. He agreed that generally the plaintiff had carried out the work on the property which she had described, but he stated that her evidence as to the quantity of that work was exaggerated. He also stated that the plaintiff did not fund the works. Rather, he gave her money for the work or reimbursed her later. In addition, he paid her for the work which she undertook on the properties.
•The defendant agreed that after re-financing Gibson Street, and applying some of the proceeds of the re-finance for the purchase of the Torquay property, he had a balance of $98,000 cash, which he had banked into his account.
•The defendant denied that the plaintiff earned a substantial income during the period 1998 to 2007. He particularly denied that, if it were not for income brought in by the plaintiff during that period, the tight financial structure, comprising the seven geared properties, would have collapsed earlier. He denied that the plaintiff and he had been engaged in a joint venture in relation to those properties.

[7]T 681; see also T 872.

The defendant also called five witnesses in support of his case.

The first witness was Ms Larissa Dek Fabrikant. Ms Dek Fabrikant has lived at 178 Queen Street, Altona for 20 years. She stated that she first met the plaintiff in September or October 2006. In due course, she became friendly with the plaintiff and her children. In particular, it became her custom to visit the plaintiff’s house at about 6.00 am, in order to feed the plaintiff’s cat and dogs. Ms Dek Fabrikant would then return later in the evening with further food scraps for the plaintiff’s animals.

Ms Dek Fabrikant stated that she became a regular visitor to the plaintiff’s home from late 2006. Although the plaintiff’s children spoke about the defendant, referring to him as “James”, she did not meet him till some time later, when he visited Ms Dek Fabrikant at her home in relation to a lost kitten, which Ms Dek Fabrikant had found. She had gained the impression that the plaintiff and the defendant were separated, and that the defendant from time to time visited the Queen Street premises, in order to see the children of whom he was the father. She stated that she tended to visit the plaintiff’s house between 6.00 am and 7.00 am, and in the evening between 8.00 pm and 9.00 pm. She said that she was not “formally” introduced to the defendant until after 29 September 2007. Ms Dek Fabrikant stated that on many occasions on which she visited the plaintiff’s home, the plaintiff was not home, and the children would open the door. Very often, the children would be playing on the street at a late hour, when Ms Dek Fabrikant brought food for the animals.

The cross-examination of Ms Dek Fabrikant was directed principally to questioning the period of time to which Ms Dek Fabrikant’s evidence related. She agreed that in October 2007 she swore an affidavit, in which she stated “about six months ago the children started to drop over to visit me with their mother’s permission”. She therefore agreed that it was not until that time that the plaintiff’s children became visitors to her house. However, she stated that she had been visiting the plaintiff’s house at Queen Street before then. She said that she never saw the defendant in the house. She believed that the defendant was not living there in the period before May 2007, because she did not see him there, and she occasionally saw him bring the children there.

The defendant also called Mr Antonius Ioannou to give evidence. Mr Ioannou stated that he first met the defendant in about 2004. He stated that the defendant was then interested in purchasing a high rise apartment in the inner city of Melbourne. For that purpose, Mr Ioannou visited him at the Bourke Street apartment. Mr Ioannou understood that that apartment was the defendant’s then home. It had a couple of bedrooms and a kitchen. There were desks in the bedrooms, and some futon type couches.

Mr Ioannou also gave evidence concerning the circumstances of the purchase of the Gibson Street property. He helpfully produced copies of documents relating to the purchases by the defendant of that property, the Altona property, and the two Point Cook properties. In cross-examination, he noted that in the documents signed by the defendant for the purpose of financing Dorrington Street, and the purchase of the Inverloch Avenue premises, the defendant gave his residential address as 2 Dorrington Street. Mr Ioannou agreed that that notation on the loan application with that residential address was based on information given to him by the defendant.

Ms Karen Briggs also gave evidence for the defendant. She is the property manager employed by Mickham of Southbank. In that capacity, she became the manager of the property at 668 Bourke Street in 2006. At that time, the defendant approached her about moving into a larger apartment in the building, when one became available. She identified such an apartment for him, and accordingly the defendant moved from Apartment 909 to Apartment 2302. She stated that the defendant ran his business in Apartment 2302, and, as far as she was aware, he also lived there. She said that there were desks set up in that apartment. She could not remember whether there was a bed there also. In cross-examination, Ms Briggs acknowledged that all of the apartments in the building were set up as residential apartments, and it was not uncommon for tenants to use them also for business purposes.

The defendant also called Mr Kevin Enright, the principal of Altona Primary School. The plaintiff’s children have been enrolled at that school for a number of years, commencing in 2006. Mr Enright stated that they were enrolled by the plaintiff. The defendant was not involved in their enrolment. Mr Enright first met the defendant in 2006. During 2007, he became aware of difficulties in the relationship between the plaintiff and the defendant. Mr Enright had assumed that the plaintiff and the defendant were a “family partnership”, and that they were living together as a family unit, because the plaintiff and the defendant were noted as the parents on the enrolment form, and they had been observed together at the school. He said that, based on those facts, he would ordinarily presume that they were living together, unless he was told to the contrary.

The defendant also called CP to give evidence. He had alleged in his evdience that CP had had a relationship with the plaintiff in the years 2001 to 2003. Mr CP was subpoenaed to Court. He appeared quite bemused, if not bewildered, when he entered the Court. He had a speech difficulty and, in the course of his evidence in chief, told me that he had suffered a stroke in 2002, which had affected his memory. In his evidence, he denied that he knew the defendant. He was asked whether at any time he had known “a lady by the name of Pippin Cressy”. He responded “I don’t know”. He was asked if he had ever assumed the defendant’s name, James Johnson. He responded “I’ve never met or known who you are. I’ve got no idea what I’m doing here”. The defendant put before him an email, which apparently identified the defendant’s hotmail account. Mr CP, again looking totally bemused, stated that he did not identify that account. The defendant did not ask Mr CP any other questions. He was not cross-examined.

Detective Senior Constable Jennifer Locke was subpoenaed by the defendant to give evidence in relation to the question whether CP did have a relationship with the plaintiff. She gave evidence that in 2002 she investigated a complaint that a person had been stalking the plaintiff. The stalking apparently consisted of a number of emails which had been sent from a computer to the defendant’s address. Ms Locke traced the source of the emails to a particular work site at which CP was employed. CP admitted that he had sent the emails, and pleaded guilty to a charge of stalking. Senior Constable Locke stated that she had taken a statement from the plaintiff in the course of her investigations. The plaintiff told her that she had met CP at a brothel known as “Harem International” in South Melbourne. The plaintiff had said that she had had a relationship “of some sorts” with CP at the time. In cross-examination, Senior Constable Locke said that the plaintiff had told her that CP had been a client of hers over a period of time, and that the connection or relationship between them had extended outside the brothel, because CP had followed her home. Ms Locke also stated that she had become involved in the dispute when the defendant had complained that his name had been used in emails. Ms Locke stated that, to her observation, the defendant and the plaintiff at that time were a couple.

Missing documents

The presentation of the case for both the plaintiff and the defendant was, to some extent, limited by the lack of documentation tendered in evidence by either side to support their case. The plaintiff sought to explain the absence of documentation tendered by her, by alleging that in about August 2007 the defendant had broken into the Altona property, while she was absent, and removed her financial documents from it. On the other hand, the defendant alleged that the plaintiff, in November 2007, had stolen documents and other articles belonging to him from the Dorrington Street premises. That allegation forms part of one of the causes of action pleaded by the defendant against the plaintiff, and against Mr Hanlon and Harwood Andrews, in the counterclaim. In addition, the defendant alleges that in March 2008 the plaintiff had failed to make available to him a large part of the documentation, which he kept stored at the Altona property, contrary to an understanding reached between the parties in proceedings before Whelan J on 12 March 2008. Before examining the evidence of the witnesses in relation to the claim under Part 9 of the Property Law Act, it is convenient to deal first with the issue of the missing documentation.

(i) The plaintiff’s missing documents

In her evidence, the plaintiff stated that she had kept a number of files in her bedroom at the Altona property. Those files contained her tax returns, financial institution documents, bank statements, insurance documents and work diaries for the last three years. In August 2007, she went on a short ski holiday with her children. While she was absent, all the financial documents belonging to her disappeared. There were no signs of forced entry into any of the rooms. None of the electrical equipment, and no items of value, such as her jewellery, were stolen. She stated that only the defendant and she had keys to the house. In cross-examination, the plaintiff maintained that she went on the ski holiday from Thursday to the Sunday, and not, as put to her, from Monday to Thursday. She conceded that, when her documents were stolen, none of the defendant’s documents, which were stored in a shed in the garden at the Altona property, had been removed.

In his own evidence, the defendant said that in August 2007 he had organised for an estate agent to look at the property at Altona, in order to give him a rental evaluation for it. When he arrived at the property, no-one was home. The defendant climbed the side fence. The house was not locked, and so he entered it through the back door. When he was in the house, he started to look for papers belonging to him, which had been missing since 2003, and which he believed were in the plaintiff’s possession. He went into her bedroom and saw two diaries under her bed, as well as some bank statements. He saw that the diaries contained references to a man who, he believed, was the boyfriend of the plaintiff. He photocopied those documents, using a printer attached to a photocopier at the Altona house. The defendant was not cross-examined on that aspect of his evidence by Mr Devries.

The allegation made by the plaintiff against the defendant is a serious allegation, and, in order to be satisfied of it, I would need to reach a high level of persuasion on the balance of probabilities.[8] It is common ground that the defendant did enter the premises at Altona while the plaintiff was absent. However, the defendant denies that he removed the plaintiff’s documents from the premises. I did not find the defendant’s account, in evidence in chief, to be particularly credible. Nevertheless, he was not cross-examined in relation to it. In addition, there is some force in the point made by the defendant that, if he had been minded to remove documents of the plaintiff from those premises, logically, he would also have removed his own documents, which were then stored in the shed at Altona. In those circumstances, I am unable to reach any conclusion as to whether the defendant removed the documents from the plaintiff’s premises. Nevertheless, the evidence is such that, in my view, it would be inappropriate to draw an inference in accordance with Jones v Dunkel[9] against the plaintiff by reason of her failure to adduce any such documentation. In the end, however, I am left with a paucity of documentary evidence produced by the plaintiff as to her income, her financial sources, and as to any expenses which she alleges that she incurred in respect of the properties acquired by the defendant.

(ii) The defendant’s missing documents

[8]Briginshaw v Briginshaw (1938) 60 CLR 336.

[9](1959) 101 CLR 298; O’Donnell v Reichard [1975] VR 916, 929 (Newton and Morris JJ).

The defendant stated that in August 2007 he had to move out of his Bourke Street apartment. A few weeks later, he secured a lease of the Torquay property which he had purchased. In the meantime, he persuaded the tenants at Dorrington Street to leave, so he could also use those premises. On 15 November 2007, he collected Illyana from school. That night they stayed at the Dorrington Street property. He said that the house was not locked. He had two mobile phones at the premises. He also had a number of boxes there containing tax returns, financial documents and similar documents. He said that that night he slept heavily. In the morning, when he awoke he noted that the telephones had been removed, and that the boxes containing his financial documents had also been removed. In addition, a modem card for his notebook computer had been taken. The defendant contacted the police and reported the theft. The police executed a search warrant at the Altona property, at which the plaintiff was then residing. The defendant inspected the documents which the police recovered. He stated that they had only comprised 70 percent of the documents which had been taken from the Dorrington Street property.

In the meantime, the defendant’s then solicitors, the second and third defendants to the counterclaim, caused a subpoena to be issued out of the Federal Magistrates’ Court, addressed to the police. As a result, the documents, seized by the police, were produced to the Federal Magistrates’ Court, where they are currently lodged. The defendant also stated that the two mobile phones were recovered by the police and have also been lodged at the Federal Magistrates’ Court. Those telephones had a large number of photographs stored on them, which he wished to use as evidence in the Family Court proceedings. When he inspected the telephones in late January 2008, he noted that the photographs had been deleted. The defendant also tendered in evidence an affidavit sworn by the plaintiff on 11 March 2008, in which the plaintiff identified further documents which she had removed from the Dorrington Street premises on 16 March 2008. Attached to the affidavit were the residue of the documents which the plaintiff, in her affidavit, stated had not been seized by the police (Exhibit 20).

The defendant also stated that he had kept a large quantity of financial and legal documentation in one of three sheds, which he had had constructed in the rear garden at the Altona property. On 12 March 2008, the parties appeared in the Practice Court before Whelan J, on the hearing of a summons issued by the plaintiff seeking discovery of documents from the defendant. In the “other matters” section of his Honour’s order, it was noted that the plaintiff’s counsel had advised the Court that the defendant could collect the boxes of records presently in the shed at 166 Queen Street, Altona on 14 March 2008. The defendant stated that he attended at the premises at Altona on that date, and collected a large number of documents left in front of the house for his collection by the plaintiff. However, he claims that there were about 39 folders of documents which the plaintiff failed to make available to him.

In her evidence, the plaintiff gave brief, and in hindsight, rather cryptic, evidence in chief about the circumstances in which documents and other items were removed by her from Dorrington Street in November 2007. In response to the counterclaim, she said that she had not retained in her possession or control any of the defendant’s records or possessions. She said she had given records and possessions of the defendant to the Victorian police. She described the documents as “our joint financial information documents”. She said that they came into her possession at 2 Dorrington Street, Point Cook. She said she had also had possession of the defendant’s two phones, because they contained evidence of the defendant stalking her. She had taken possession of those documents temporarily to give to her lawyers for evidence, but the police took the documents and telephones from her before she could pass them on to her lawyers. She regarded the telephones as their joint property. She denied taking the defendant’s modem card. In cross-examination, the plaintiff agreed that the defendant had used a shed at the rear of the Altona property to store some of his legal files. She agreed that in the course of the hearing before Whelan J, her counsel had stated there were archived boxes of documents in that shed. She said that, pursuant to the indication given to Whelan J, she placed all of the documents contained in that shed at the front of the house. Some of the boxes containing the documents broke in the process, and she had to re-package them. She denied that she had retained any of those documents for her own use. In cross-examination by the defendant, she stated that there were still boxes containing files on shelves at the Dorrington Street, Point Cook property, but she did not know the contents of the files.

After the case resumed before me on 9 February 2009, the defendant gave further evidence. He stated that on 26 December 2008 he had found three bags of documents in the garage of the premises at 2 Dorrington Street, Point Cook. Those documents were tendered in evidence before me. Mr Johnson stated that those documents comprised some of the records which should have been returned to him pursuant to the notation of “other matters” in the order of Whelan J dated 12 March 2008. Mr Johnson also stated that, on the same date, he had found a green shopping bag which contained other documents, and a wireless modem, which had been taken from his premises in February 2006 by the plaintiff. The defendant was not cross-examined in relation to that further evidence given by him.

In the state of the evidence, it seems clear that the plaintiff has accepted that in November 2007 she did remove, from the Dorrington Street premises, documents and two mobile phones belonging to the defendant. I note that the defendant was not cross-examined in relation to his description of the circumstances in which those items were removed from Dorrington Street. On the other hand, as I have already stated, in hindsight, the plaintiff was rather reticent in describing how she came into possession of those items. I shall return to this aspect of the case when I consider the defendant’s counterclaim against the plaintiff. However, my findings in relation to the circumstances in which the plaintiff removed the documents and the two mobile phones from the defendant’s possession do not reflect well on the plaintiff.

I am also concerned that, it would appear, not all of the documents so removed by the plaintiff were accounted by her to the police, when they executed the search warrant on her premises at Altona. It seems that the plaintiff had retained some of the documents, removed by her, until March 2008. Her affidavit of 11 March 2008, which was tendered in evidence on behalf of the defendant, does not contain any explanation why the plaintiff had not, earlier, accounted for those documents.

The defendant submitted that his further evidence, that, on 26 December 2008, he also found documents, and a modem, which had been removed by the plaintiff from the address at Dorrington Street, Point Cook, contradicts the affidavit sworn by the plaintiff on 11 March 2008 (Exhibit 20), to which she had attached the residue of the documents which she stated she had taken from the Dorrington Street property and which had not then been seized by the police.

The defendant was not cross-examined on the additional evidence given by him on those matters. Nor did the plaintiff seek to be recalled to give evidence in response to it. It may well be that Mr Devries made a tactical decision not to challenge the evidence, or recall the plaintiff, because of his understandable concern that the hearing of this case had become unduly protracted by reason of the matters to which I have already referred earlier in this judgment. Nevertheless, the fact remains that the defendant’s additional evidence was not put in contest, nor was it contradicted. In this respect, I do not accept Mr Devries’ submission that the plaintiff’s earlier statement in evidence in cross-examination, that there were further documents at the Point Cook property, referried to the documents she had removed from that property on 16 November 2007. Rather, it is clear that, in that part of her evidence, she was referring to the boxes of documents which the defendant had kept at those premises. In the circumstances, I accept the defendant’s evidence that, on 26 December 2008, he found at Dorrington Street further documents taken by the plaintiff from those premises on 16 November 2007. I also accept the submission made to me by the defendant in final address that, in those circumstances, the additional evidence of the defendant as to the documents which he found at the Dorrington Street property on 26 December 2008, is relevant to my assessment of the credibility of the plaintiff, both in relation to this issue, and more generally.

In this regard, the defendant also referred to his further evidence, given after the trial resumed in February 2009, that on 26 December 2008 he found further documents at the premises at Dorrington Street, Point Cook which he had previously stored in the shed at 166 Queen Street, Altona. He submitted that his further evidence contradicts the evidence of the plaintiff that all the documents of the defendant contained in that shed had been made available to the defendant in March 2008, pursuant to the “other matters” notation to the order of Whelan J of 12 March 2008.

However, as Mr Devries correctly pointed out in final address, the plaintiff, in cross-examination, did state that there were further boxes, containing files, at the Point Cook premises. I accept her evidence that she was ignorant of the contents of those files. Therefore, I do not accept that her evidence was contradicted, in that respect, by the fact that the defendant found further documents at the Point Cook property on Boxing Day 2008.

Finally, I should note that the defendant sought to repair the hiatus caused by the missing documents, by having Mr Ioannou produce some documents which had been given to him by the defendant, in support of applications for mortgage finance in respect of the properties acquired by the defendant. Those documents included some of the contracts of purchase, and some of the loan documentation, relating to the properties.

Final submissions by parties: defendant’s submissions

At the conclusion of the evidence, and after I had ruled in favour of the no case submission by the second and third defendants to counterclaim, the defendant made a final address to me. He initially submitted that Mr Devries should first address me on behalf of the plaintiff. However, I ruled that I perceived no unfairness to the defendant by requiring him to adhere to the normal practice that, having called evidence on his behalf, the defendant should first address me. The defendant then made a lengthy final address to me over a period of one and a half days, which occupied some 200 pages of the transcript. A large part of the final address was, unfortunately, irrelevant. The defendant persisted in seeking to reopen issues relating, not only to the counterclaim which I had dismissed against Mr Hanlon and Harwood Andrews, but also to issues which, if they have any relevance at all, have a connection with the allegations made by him in his counterclaim in the other proceeding commenced by Trust Company Fiduciary Services Limited against him. In addition, the defendant spent a substantial part of his final address seeking to denigrate the plaintiff and her legal advisers. I cautioned him that I was not impressed by his conduct in doing so, and that his persistent repetition of such opprobrious allegations only reflected adversely on his own credit.

Throughout the defendant’s final address, I endeavoured to direct him to the relevant issues on which he needed to address me. From time to time he did adhere to that direction, and made some submissions on his behalf. At the conclusion of his final address, he sought leave to withdraw from the case. I told him, as I had advised him before he commenced his final address, that I would be sympathetic to an application by him to reply to the final address by Mr Devries, in particular to cater for any matters raised by Mr Devries which he might not have anticipated. I therefore encouraged him to remain during Mr Devries’ address. Notwithstanding my admonitions to him, when Mr Devries rose to his feet to commence his final address, the defendant packed up his papers, and left.

The following is a summary of the points made by the defendant in his final address which might have relevance to the issues in this case. In making that summary I have reordered those points into a more logical framework, in order to ensure that I do justice to the arguments made by the defendant.

The defendant submitted, on a number of occasions, that the plaintiff had failed to adduce any objective evidence establishing either that they had cohabited at any of the residences purchased by him, or that she had made any contributions to them. The defendant submitted that I should reject the plaintiff’s evidence that he had stolen her documents. He further submitted that, whatever the reason for the plaintiff’s lack of documentation, she could have repaired it by obtaining copy documentation, such as copy pay slips from her employer, copy tax returns, and copy bank statements.

The defendant denied that he had lived with the plaintiff in Geelong. He drew my attention to the birth certificate of Illyana (Exhibit 9) in which the plaintiff’s address was given as 5 Illouera Avenue, Grovedale, and the defendant’s address as 142 Gheringhap Street, Geelong. The defendant also submitted that the plaintiff had been inconsistent in her evidence as to when she had moved from the Illouera Avenue address to the Gheringhap Street address. He submitted that, although the parties did live together in South Yarra, the arrangements at those premises were not typical of a domestic relationship between himself and the plaintiff. Mrs Gail Cressy also lived at the same address with her children. Further, he submitted that the only evidence that he lived at the Queen Street, Altona address was the application by the defendant to re-direct mail from the Queen Street address dated 19 September 2007 (Exhibit O). He referred to the evidence which he gave that he signed that document to ensure that all bills which were sent to the Queen Street address were forwarded to him so that he could pay them. He referred to the fact that the plaintiff had not called any evidence of neighbours, friends or relatives who had observed them living together at the Queen Street address (or at the Point Cook property). He further referred me to the driver’s licences which he had tendered in evidence, and which disclosed that the address given by him to VicRoads was not the Queen Street address but, rather, the address of the office at Bourke Street, Melbourne. He submitted that I should accept that he used the Bourke Street premises as his home. The two clients for which he predominantly worked (Barwon Water and Primelife) provided office space to him for his work there, and therefore it was not necessary for him to lease large city offices for the purposes of that work.

In addition, the defendant attacked the credibility of the plaintiff. He submitted that because of the admitted theft by her of his documents from the Point Cook property, her credibility had been severely damaged. That damage had been exacerbated by her failure to reveal, in her affidavit of March 2008, that she still retained other documents taken by her. In addition, the plaintiff had failed to abide by the agreement noted in the order of Whelan J of 12 March 2008, that she make available to him the documents stored in the Queen Street property sheds.

The defendant also attacked the credibility of Mrs Gail Cressy. He submitted that I should reject her evidence that she did not know, until 2003, that the plaintiff worked as a sex worker. He submitted that Mrs Gail Cressy was not truthful when she gave that evidence to me. He also submitted to me that Mrs Gail Cressy was discredited by the fact that she failed to abide by the agreement she had made with the defendant to pay him rent for her use of the Lisa Court premises, but, rather, had used her money to purchase a motor vehicle.

A joint endeavour of this character is one which has the aim of adding to the parties’ material wealth for their mutual benefit rather than being one where the plaintiff simply provides loving care and support to the defendant as a normal incident of a defacto relationship. In that sense it is right to say that the joint endeavour must be one intentionally or deliberately entered into for the purpose of advancing the parties’ mutual material wealth. Only if it bears that character will it be unconscionable to allow the defendant to retain the entirety of the beneficial interest in that wealth. To hold otherwise, and in particular to hold that it would be sufficient if in fact the efforts of the plaintiff advance the defendant’s capacity to acquire wealth, would, in my opinion, be to commit the error to which Deane J adverted in Muschinski of giving undue rein to the Court’s idiosyncratic notions of fairness and justice.”[58]

[56](2002) 25 WAR 360.

[57]See especially at [16], [30] to [31] (Murray J, with whom Hasluck J agreed); [86] (Pullin J).

[58][30] to [31].

In my respectful view, the passages from Green, Stowe and Lloyd v Tedesco, which I have quoted above, reflect the reasoning of Deane J in his seminal judgment in Muschinski v Dodds. His Honour commenced by identifying the constructive trust which was under consideration, namely one which was fundamentally remedial in its operation.[59] He disavowed the proposition that equity would intervene, to provide such a remedy, based on any idiosyncratic notion of justice and fairness; rather, equitable relief by way of constructive trust would only be available “if applicable principles of the law of equity” should require that the person, in whom the ownership of property is vested, should hold it to the use or for the benefit of another.[60] His Honour then identified the relevant principles of equity. He did so by referring to the equitable principles which operate when legal relationships, such as partnership and joint ventures, fail without attributable blame. In particular, where the legal source of the relationship (such as the contract) does not provide for relief, equity intervenes to entitle each party to such a relationship to a proportion of repayment of capital contributions made by them to the particular venture.[61] Deane J observed that that remedy was based on a more general principle of equity which “operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct”.[62] That reasoning of Deane J immediately preceded the passage in his judgment, which I have already quoted[63], in which his Honour defined the circumstances in which equity would intervene to impose a constructive trust on the legal interests of the parties to a failed relationship. Thus analysed, the constructive trust identified by Deane J, and discussed in the interstate decisions to which I have referred, constitutes a remedy postulated on contributions made by parties in a relationship to property held by one of the parties to the relationship, where the relationship subsequently has failed without attributable blame, in circumstances in which the legal owner of the property would derive an unintentioned benefit at the expense of the other party, if not for the intervention of equity.
[59]Page 614.
[60]Pages 615 to 616.
[61]Pages 618 and 619.
[62]Page 620.
[63]Above para [134].

In other words, the remedy of a constructive trust is not a response by equity to a perceived unfairness where, on the termination of a personal relationship, the legal arrangements between the parties do not reflect the commitment and contributions of each party to that relationship. Rather, the equitable remedy of a constructive trust is available to adjust the legal interests in property of a party or parties to a relationship, where, during and on the basis of the continuation of the relationship, one party has made a contribution to the acquisition, maintenance or improvement of the property, such that it would be unconscionable for the other party, on the failure of the relationship, to insist strictly on his (or her) legal rights without an appropriate adjustment commensurate with the contribution made by the former party to the property. Accordingly, in order to be entitled to an interest under a constructive trust, the plaintiff must establish that the contribution, on which she relies, was not simply directed to advancing the welfare of the defendant, and of the family unit of which he was then a part. Rather, the contribution of the plaintiff, on which the constructive trust is to be based, must have been directed to the acquisition and maintenance of the assets in respect of which the plaintiff claims an interest under the constructive trust.

On the other hand, as expressly recognised by Deane J in Muschinski v Dodds[64], the context of the relationship between the parties is important in identifying the contribution by the party who claims rights under a constructive trust. In a “de facto” relationship, such as in this case, a contribution may be made in a different form, and in a less direct manner, than in a relationship which is wholly commercial in character, such as a joint venture or a partnership. As the decisions in Green, Stowe and Lloyd v Tedesco make clear, the contribution must not be solely directed to maintaining the personal relationship between the parties. However, in determining that question, it is important, of course, to take into account the realities of the type of relationship shared by the parties in a case such as this. Of its nature, such a relationship had, as its origin, the mutual love and affection on which it was based. It is that aspect of the relationship which was the source of, and which accounted for, the duration of the relationship. On the other hand, the nature of the relationship between the plaintiff and the defendant did, in time, evolve and develop, as personal relationships do. The first property purchased by the defendant – the Dorrington Street property – was, as I have found, the product of a shared concept between the plaintiff and the defendant. It was purchased and developed to be part of a family home shared by the parties. As the relationship developed and progressed, the plaintiff was sufficiently connected with the enterprise of the defendant, consisting of the purchase of the properties, to be involved in carrying out some works on them. Thus, she carried out some (albeit relatively minor) work on the Dorrington Street property, and subsequently carried out further work on the Hawkeshurst Court property and the Altona property. The fact that she worked on the Hawkeshurst Court property, notwithstanding that she did not live in it, demonstrates that she was not entirely detached from the investment enterprise undertaken by the defendant.
[64]Page 622 (See para [191] above).

Further, although the plaintiff and the defendant did not, in a literal sense, pool their joint incomes, nonetheless the arrangements between them were such that they may be fairly described as a combination of their joint financial resources. By directing her part-time earnings to the maintenance of the defendant and the family, the plaintiff enabled the defendant to devote his income largely to the acquisition and maintenance of the properties. Equally, by undertaking the burden of prime carer for the three children, the plaintiff enabled the defendant to focus his efforts on acquiring, financing and maintaining the properties in his ever expanding portfolio. The contributions made by the plaintiff were, clearly, postulated on the continuation of her relationship with the defendant. To use the terminology of Deane J in Muschinski v Dodds[65], the relationship between the plaintiff and the defendant was the relevant “substratum” of the enterprise in which the defendant acquired and maintained the properties.
[65]Page 620.

In my view, in that way the contributions made by the plaintiff were relevantly directed to the acquisition and maintenance of the properties in the sense described by the Full Court of Western Australia in Lloyd v Tedesco, and in the manner contemplated by the High Court in Baumgartner. If the Court were not to impose a constructive trust in the circumstances thus described, on the termination of the relationship between the parties, the defendant would be left to enjoy the benefit of the contribution made by the plaintiff to the acquisition and maintenance of the properties, without accounting for it to the plaintiff. The plaintiff’s contribution was predicated on the continuation of the relationship. It may be inferred that there was no intention by the plaintiff that the defendant should enjoy the fruits of the plaintiff’s contribution, without accounting for it, in the unforeseen event of the breakdown of their mutual relationship. In those circumstances, it would be unconscionable, in accordance with equitable principle, for the defendant to depart the relationship, holding the legal title to each of the seven properties, without any adjustment to his interest to allow for the contributions made by the plaintiff. In that sense, the imposition by the law of a constructive trust would not constitute the indulgence by the Court of any idiosyncratic or random subjective notions of fairness. Rather, in my view, in such a case, the interposition of a constructive trust would conform with sound principles in equity, as explained by Deane J in Muschinski v Dodds and by the High Court in Baumgartner.

In accordance with the authorities to which I have referred, the constructive trust would clearly extend to the two Point Cook properties, the two Hoppers Crossing properties, and the Altona property. In addition, it would cover the Caulfield property, which was purchased as part of the enterprise undertaken by the defendant in connection with his relationship with the plaintiff. However, the constructive trust would not affect the defendant’s interest in the Torquay property, since that property was acquired after the termination of the relationship between the plaintiff and the defendant.

The determination of the content of the constructive trust is affected by the same difficulties, which affected my findings in relation to the claim under Part 9 of the Property Law Act, arising from the paucity of the evidence in the case. Certainly, a number of the factors which are relevant to the quantification of a claim under Part 9 of the Property Law Act are not relevant to the determination of the nature and extent of the constructive trust. Nevertheless, and bearing in mind the principles stated in the authorities to which I have referred, on the alternative claim of the plaintiff, I would make a declaration that the defendant holds his current legal ownership of the properties at 2 Dorrington Street, Point Cook, 7 Inverloch Drive, Point Cook, 10 Hawkeshurst Court, Hoppers Crossing, 166 Queen Street, Altona, and Unit 9, 2 Gibson Street, East Caulfield, on a constructive trust as to one third for the plaintiff. The plaintiff would also be entitled to a declaration, on her alternative claim, that the monies paid into Court upon completion of the sale of the property at Altona be paid, as to one third thereof, to the plaintiff, and as to the balance to the defendant.

The defendant’s cross-claim against the plaintiff

I turn, then, to the defendant’s counterclaim against the plaintiff. As I outlined at the commencement of these reasons, the defendant has asserted three causes of action against the plaintiff in his counterclaim, which I have summarised in paragraph 4 of these reasons.

The first cause of action is contained in paragraphs 7 to 14 of the counterclaim. In paragraph 9 the defendant claims that he entered into an agreement with the plaintiff by which he permitted the plaintiff to occupy the Point Cook properties between March 2003 and June 2006, and the Altona property between June 2006 and November 2007, free of rent, and by which he also agreed to let premises to Gail Cressy on a concessional rental basis from June 2003 to July 2007. In paragraphs 10 to 12 the defendant pleaded that the plaintiff then occupied the Altona property, that Gail Cressy occupied the Lisa Court property until October 2007 and that she subsequently resided at the Altona property with the plaintiff. In paragraph 13 the defendant pleaded that he had been induced to enter into the agreement “by fraudulent misrepresentations made by (the plaintiff), full particulars of which will be provided prior to trial”. In paragraph 14 the defendant pleaded that he had suffered loss and damage as a result of those fraudulent misrepresentations.

The defendant did not provide any particulars of the fraudulent misrepresentations alleged by him in paragraph 13 of the counterclaim. He did not identify, at all, the nature and content of the “fraudulent misrepresentations” alleged by him. The generality of that allegation is characteristic of the manner in which the defendant made other similar allegations later in the counterclaim. It is also characteristic of the tendency of the defendant, during the trial in this case, to cast unsubstantiated aspersions on the character and integrity of other persons associated with this case.

Ultimately, in the course of the trial, it emerged that the defendant’s “grievance”, contemplated by paragraph 13 of the counterclaim, lay in the proposition that, during their relationship, the plaintiff had continued to work as a sex worker, notwithstanding his desire that she not do so. He did not, however, in his long and detailed evidence in chief, nor at any other stage, give any evidence at all of any representation made to him by the plaintiff that she would not work as a sex worker. Nor did he give any evidence that the reason why he permitted the plaintiff to reside at the various addresses to which I have referred, and the reason why he permitted Gail Cressy to reside at Lisa Court, was because of the alleged misrepresentation pleaded by him in paragraph 13 of the counterclaim. It was never put to the plaintiff in cross-examination that she had made any such representation to the defendant. Furthermore, even if any such representation had been made, it was never put to the plaintiff that such representation was, at the time of its making, fraudulent in the sense pleaded.[66]
[66]Compare Derry v Peek (1889) 14 App Cas 337, 374 (Lord Herschell).

At some parts of his evidence, the defendant sought to maintain that, at the relevant time, he was unaware that the plaintiff had resumed working as a sex worker. That evidence was, however, inconsistent with other evidence given by the defendant that he knew that the plaintiff was working as a sex worker, notwithstanding his desire that she should not do so. Indeed, he stated that that matter was the subject of an argument between himself and the plaintiff as early as Christmas and New Year’s Eve 1998. He also stated that the same issue caused the rift between him and the plaintiff in early 2000. He stated that, at the time at which he was contemplating moving back to Melbourne in 2001, the plaintiff was then working at a brothel in Geelong. Subsequently, he claimed that, while living in South Yarra, he purchased the Dorrington Street property because he was looking at cutting his ties with the plaintiff because she was working in a brothel and because of her alleged relationship with CP. In cross-examination, he stated that three or four months after Illyana was born in June 2000, the plaintiff returned to work at the Geelong brothel. He even suggested that, while they were living at South Yarra, the plaintiff at one stage went on a trip to Amsterdam in order to work as a sex worker. In cross-examination he said that he wrote the Valentine Day card in February 2000 (Exhibit E) because the plaintiff got pregnant and was continuing to work in a brothel and he wanted to show his commitment to her. He even stated that, in early 2000, he registered himself as a prostitute as part of a strategy to persuade the plaintiff to cease working in that capacity. He agreed that it was an ongoing point of contention between himself and the plaintiff that she continued to work as a prostitute.

In those circumstances, there is no evidence that the defendant was ever misled by the plaintiff as to her activities as a sex worker. To the contrary, the defendant was well aware of the work undertaken by the plaintiff. There is no evidence that the plaintiff at any time made any representation to the defendant to the contrary. Nor is there any evidence that he permitted the plaintiff to live at the Point Cook and Altona properties because of any such representation made by her. Rather, as I have found, she lived at those residences because they were the homes which she and the defendant shared in the course of their relationship together. There is no evidence that the defendant permitted Gail Cressy to live at the Lisa Court property, or at any other property, as a consequence of any such alleged representation to, or belief, by him. Rather, in his evidence in chief, he told me that he permitted Gail Cressy to reside at the Lisa Court property, at a reduced rent, because Mrs Cressy and her children had not, hitherto, lived at the same residence for two consecutive Christmases, and he wished to give them some stability in their lives.

Thus, the first claim asserted by the defendant, in his counterclaim, must fail.

The second claim by the defendant in his counterclaim is contained in paragraphs 15 to 21. In paragraph 15, the defendant pleaded that in May 2007 the plaintiff had “fraudulently and, further or alternatively, maliciously” executed and registered at the Land Titles Office caveat number AF085952B claiming a beneficial interest in the six properties then owned by the plaintiff. In paragraph 16 the defendant states that the plaintiff had occupied the Point Cook and Altona properties, but had not occupied the Caulfield property or the two Hoppers Crossing properties. In paragraph 17, he stated that he wrote many letters to the plaintiff’s solicitors in October and November 2007 demanding withdrawal of the plaintiff’s caveat, particularly as it affected the Caulfield property. Paragraph 18 recites that in November 2007 the plaintiff executed, and registered at the Land Titles Office, an instrument of withdrawal of the caveat in relation to the Caulfield property, but (paragraph 19) she had not provided to the defendant any explanation for the withdrawal of that caveat. The counterclaim also alleges (paragraph 20) that in January 2008 the plaintiff executed, and registered at the Land Titles Office, a withdrawal of the caveat insofar as it affected the Lisa Court property. Paragraph 21 alleges that by reason of the plaintiff’s registration, maintenance, delay and withdrawal of the caveat to the extent of the Caulfield and Hoppers Crossing properties, and refusal to release the other properties affected by the caveat, the defendant has suffered loss and damage.

It is not at all clear what cause of action the defendant intended to plead in alleging that the plaintiff “fraudulently and/or further and/or alternatively maliciously” executed and lodged the caveat of which he makes complaint. I do not understand that that allegation forms a component of any relevant cause of action which could be envisaged by paragraph 15 of the counterclaim. However, and in any event, the defendant has failed to prove any fraud or malice on behalf of the plaintiff in executing and lodging the caveat. If the allegation of “fraud” is understood in its common law sense[67], there is no evidence that, at the time at which the caveat was lodged, or subsequently, the plaintiff knew that she was not entitled to claim the beneficial interests alleged in the caveat, or that she was recklessly indifferent to that circumstance. Indeed, as I have found, she was, at all relevant times, entitled to an equitable interest in all the properties, except the Torquay property. It is true that the plaintiff’s claim under Part 9 of the Property Law Act, which may then have been in contemplation, was not, on its own, an interest capable of being protected by caveat under s 89(1) of the Transfer of Land Act 1958 (Vic).[68] However, the interest of the plaintiff in the properties, by reason of a constructive trust, was an interest of the plaintiff capable of being protected by caveat.[69]
[67]Derry v Peek, above.
[68]Bell v Graham [2000] VSC 142, [19] (Kellam J); Goldstraw v Goldstraw [2002] VSC 491, [27]-[28] (Dodds-Streeton J); Zhen v Mo [2008] VSC 300, [32] (Forrest J).
[69]Taddeo v Catalano [1975] 11 SASR 492; McMahon v McMahon [1979] VR 239, 236 (Marks J); Goldstraw v Goldstraw [2002] VSC 491, [26] (Dodds-Streeton J); Riverview Projects Pty Ltd v Elleray [2007] VSC 150, [35] (Williams J).

Accordingly, the second claim made by the defendant in the counterclaim must also fail.

The third claim, pleaded in the counterclaim, is a claim against the second and third defendants to the counterclaim, which I have already dismissed. The defendant also appears to have pleaded that cause of action against the plaintiff, by alleging that she (or Mr Hanlon) procured Harwood Andrews “to fraudulently and, or further and alternatively, maliciously” execute and register caveat AF066328D claiming a beneficial interest on behalf of Harwood Andrews in the Altona property. I have already ruled that there is no evidence of fraud or malice by Harwood Andrews in acquiring that caveat. Further, as I have found, the plaintiff did have an equitable interest in the Altona property. She executed a valid equitable charge, in respect of that interest in favour of Harwood Andrews to secure payment of the latter’s costs. Harwood Andrews were entitled to lodge a caveat protecting its interest under that charge. There is no evidence of fraud or malice, or any other wrongdoing, by the plaintiff, in executing the charge to Harwood Andrews. Thus, the third cause of action in the counterclaim against the plaintiff also fails.

The final cause of action pleaded by the defendant in the counterclaim is that set out in paragraphs 27 and following of the counterclaim. The defendant alleges that the plaintiff, between May and November 2007, unlawfully retained and refused to hand over to the defendant his records and possessions, and that on 16 November 2007, she committed a burglary and theft at the Dorrington Street property.

I have already dealt, in part, with the factual circumstances relating to this part of the counterclaim, when I considered the issues relating to the missing documents.[70] It is not in dispute that the plaintiff, on 16 November 2007, did remove documents belonging to the defendant, and his two mobile telephones, from the premises at Dorrington Street. I do accept the plaintiff’s denial that she took the defendant’s modem. The circumstances of the removal by the plaintiff of the telephones and documents on that date were not put to her in cross-examination. The plaintiff sought to justify the taking of those items by the claim that they were the “joint property” of herself and the defendant. She gave no evidence to support that claim to co-ownership of that and I reject it. She stated that she took the documents and telephones in order to preserve them, so that they could be available for evidence in the Family Court proceedings. She was not cross-examined in relation to that part of her evidence and I accept it. That explanation, given by the plaintiff, does not constitute a defence to a claim in tort by the defendant for trespass to goods. It does, however, negate the allegation made in the counterclaim that she was motivated by “malice”.
[70]Paragraph [65] and following, above.

The defendant has stated that the plaintiff deleted from the mobile telephone a number of photographs which he had taken on them. That allegation was not put to the plaintiff in cross-examination. Indeed, the plaintiff said in evidence that she seized the two mobile telephones, because they contained evidence that the defendant had been stalking her. In those circumstances, I do not accept the allegation by the defendant that the plaintiff did delete any information which he had stored on the mobile telephones. I also accept that the majority of the documents taken, by the plaintiff on 16 November, were taken into possession by the police pursuant to the search warrant, and are now lodged with the Federal Magistrates’ Court, together with the two telephones. The plaintiff’s solicitor did provide to the defendant’s solicitor further documents on 11 March 2008. Further, as I have already stated, the defendant, when recalled to give evidence in February this year, gave uncontradicted evidence that he had found, at the Dorrington Street premises, further documents which he stated had been taken from those premises by the plaintiff.

In the above circumstances, it is clear that the plaintiff took possession of the defendant’s documents and two mobile telephones, on 16 November 2007 at the Dorrington Street premises, without the permission of the defendant. In doing so, she committed a trespass to the defendant’s goods. I also accept that the plaintiff, in March 2008, failed to properly account to the defendant for them, despite her claim to have done so. The defendant has not proven that he sustained any loss and damage as a result of the removal by the plaintiff of those goods. However, the authorities suggest that the tort of trespass to goods is actionable per se, and does not depend on the proof of damage sustained by the person entitled to immediate possession of the goods.[71] In the absence of proof of any damage sustained by the defendant, it is appropriate that I award him nominal damages. Accordingly, I award the defendant $25 damages in respect of the trespass committed by the plaintiff.
[71]Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204, 214 to 215 (Latham CJ); William Leitch & Co Limited v Leydon [1931] AC 90, 106 (Lord Blanesburgh).

The defendant has also claimed exemplary damages against the plaintiff arising from her actions. In light of the plaintiff’s explanation why she took possession of the documents and mobile telephones (which I accept), I do not consider that the plaintiff acted in such a high handed or contumelious manner as to warrant the award of exemplary damages against her.[72]
[72]Gray v Motor Accident Commission (1998) 196 CLR 1, 9; State of Victoria v Horvath & Ors [2002] VSCA 177; (2002) 6 VR 326, 349 [60].

The defendant, in his counterclaim, also claimed the return to him of the documents and items taken by the plaintiff on 16 November 2007. However, he has not proven, to my satisfaction, that the plaintiff has in her possession any further documents or other items of the defendant.

The defendant also pleads, in this part of his counterclaim, that the plaintiff was motivated by malice in the issue of the subpoena, by Harwood Andrews, directed to the Victoria Police to produce the documents and mobile phones to the Federal Magistrates’ Court. It is not clear what cause of action is asserted by the defendant in this part of his claim. However, I shall assume, in favour of the defendant, that the allegation made by him is intended to plead the tort of abuse of process. In order to establish that tort, the defendant must prove that the plaintiff was motivated by an ulterior purpose, in causing her solicitors to issue the subpoena to the police. Further, the defendant must establish that improper purpose as the predominant purpose of the plaintiff.[73] The relevant principles were stated by the Queensland Court of Appeal (consisting of McMurdo P, Pinkus JA and Thomas JA) in Butler v Simmonds, Crowley and Galvin,[74] in the following terms:

“In order to succeed in an action for collateral abuse of process it is not necessary to allege or prove that the initial proceeding has terminated in favour of the plaintiff, or that there was no reasonable and probable cause for instituting the initial proceeding. It is however essential for a plaintiff to show that the defendant instituted proceedings for a purpose or to effect an object beyond that which the legal process offered. Such a purpose of the defendant in instituting the earlier proceedings is of crucial importance. It is not sufficient to assert that the proceedings were instituted with an improper motive. The ulterior objective needs to be identified, and it also needs to be able to be seen as the predominant purpose of those proceedings and as outweighing any legitimate purpose that they might otherwise have.”[75]

[73]Williams v Spautz (1992) 174 CLR, 523, 529; Hanrahan v Ainsworth (1990) 22 NSWLR 73, 96 (Kirby P), 118 (Clarke JA); White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 159, 236-240 (Goldberg J); on appeal; Flower & Hart v White Industries (Qld) Pty Ltd (1999) 163 ALR 758-759 [59]-[64].

[74][1999] QCA 475.

[75]Ibid.

In this case, the plaintiff swore that she took possession of the documents and the telephones in order to preserve them as evidence for the proceedings in the Federal Magistrates’ Court. She was not challenged in cross-examination on that aspect of her evidence. As I have already stated, I accept that the plaintiff’s evidence, to that effect, was truthful. I also accept that it was for that reason that the plaintiff caused a subpoena to be issued to the Victorian police, in order to have the documents available for her use in the Federal Magistrates’ Court. The documents consisted of financial documents, which no doubt would be relevant to a claim by the plaintiff against the defendant for child support. Further, the plaintiff understood that the mobile phones contained photographs of her which, she considered, might establish that the defendant had been stalking her. I would expect that such evidence, if it did exist, may be relevant also to the evidence before the Federal Magistrates’ Court. It was not put to the plaintiff that she had any other motive in having the subpoena issued to the Victorian police. The defendant did not adduce any evidence that the plaintiff did have any such ulterior motive. Accordingly, the defendant has failed to make out a claim against the plaintiff based on the tort of abuse of process in respect of the issue of the subpoena on her behalf.

Conclusion

For the reasons which I have set out in this judgment I have reached the following conclusions on the plaintiff’s claim against the defendant:

1.The plaintiff and the defendant were in a domestic relationship, for the purposes of Part 9 of the Property Law Act 1958, between 1998 and about Easter 2007.
2.The contributions of the plaintiff and the defendant, as defined by s 285(1), were equal, taking into account the financial and non‑financial contributions by them to the property and resources of each of them, to the welfare of each other and to the welfare of the family unit comprising the plaintiff, the defendant and their children.
3.Having regard to those contributions, it is just and equitable that I make the following orders adjusting the interest of the defendant in property of which he is the legal owner, namely:
(a)The defendant pay to the plaintiff the sum of $105,000;
(b)In order to secure payment to the plaintiff of that sum -
(i)Order and direct that the net proceeds of the sale of the property at 166 Queen Street, Altona (after deduction therefrom of the mortgage debt secured over that property, the costs and expenses of the mortgagee, and the costs and expenses of the sale) be paid to the plaintiff.
(ii)Order that the property at 10 Hawkeshurst Court, Hoppers Crossing be sold.
(iii)Order and direct that, out of the net proceeds of such sale (after deduction of the mortgage debt secured on that property, the costs and expenses of the mortgagee and the costs of the sale of the property) there be paid to the plaintiff a sum which, when added to the net proceeds of the sale of the Altona property, results in the payment to the plaintiff of an amount no greater than $105,000.

On the alternative claim by the plaintiff based on the principles of constructive trust, I have concluded that the plaintiff would be entitled to a declaration that the defendant holds his current legal ownership of the properties at 2 Dorrington Street, Point Cook; 7 Inverloch Drive, Point Cook; 10 Hawkeshurst Court, Hoppers Crossing; 166 Queen Street, Altona; and Unit 9, 2 Gibson Street, East Caulfield, on constructive trust as to one-third thereof for the plaintiff. In addition, the plaintiff would be entitled to a declaration that the monies paid into Court on the completion of the sale of the property at 166 Queen Street, Altona be paid, as to one-third thereof to the plaintiff, and as to the balance, to the defendant.

On the defendant’s counterclaim against the plaintiff, I have reached the following conclusions:

1.The claims by the defendant against the plaintiff contained in paragraphs 7 to 14, 15 to 21, 22 to 26, and 28 to 32 of the amended defence and counterclaim dated 18 February 2008, should be dismissed.
2.In respect of the claim by the defendant against the plaintiff that the plaintiff unlawfully took papers and other items of the defendant from the premises at 2 Dorrington Street, Point Cook on 16 November 2007, I uphold the defendant’s claim for trespass to goods. The defendant has not established any loss or damage resulting from that trespass. He is entitled to an order that the plaintiff pay to him the sum of $25 nominal damages.

Orders

I shall hear the parties on the formulation of appropriate Orders in accordance with those conclusions, including orders to effectuate the sale of the property at 10 Hawkeshurst Court, Hoppers Crossing and the distribution of the proceeds of that sale. I shall also hear the parties on the question of costs.

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[2009] VSC 52

25 February 2009