Gurappaji v Duncan & Anor

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2019 00999

KAVITHA SIDDIAH GURAPPAJI	Plaintiff
v
CAYLEN DUNCAN (in his capacity as executor of the estate of Ingrid Mary Phillips)	First Defendant
and
REGISTRAR OF TITLES	Second Defendant

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JUDGE:	FORBES J
WHERE HELD:	Melbourne
DATES OF HEARING:	13–27 September 2022 and 6 October 2022
DATE OF JUDGMENT:	18 September 2023
DATE OF REVISION:	26 September 2023
CASE MAY BE CITED AS:	Gurappaji v Duncan & Anor
MEDIUM NEUTRAL CITATION:	[2023] VSC 558

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TRUST, EQUITY AND PROBATE – Common intention constructive trust – Proprietary estoppel – Joint endeavour constructive trust – Whether plaintiff has equitable interest in property in which the deceased held title – Whether there was a common intention that the plaintiff hold a part interest in the property – Whether a constructive trust is established on the basis of plaintiff’s contributions to the property – Where plaintiff was in relationship with the deceased – Where relationship ended six years prior to the deceased’s death – Where plaintiff and deceased engaged in negotiation to purchase property prior to death – No common intent – No unconscionable conduct by deceased given financial and other arrangements during and subsequent to relationship – No beneficial interest identified requiring the imposition of a constructive trust – Defendant entitled to mense profits and occupation costs – Muschinski v Dodds (1985) 160 CLR 583 – Cressy v Johnson (No 3) [2009] VSC 52 – Pollock v NSW Trustee and Guardian [2022] NSWSC 923.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D K Carlile	Starnet Legal
For the First Defendant	Mr D G Collins KC Mr K E Mihaly	Alan Sheppet & Associates

TABLE OF CONTENTS

A.. INTRODUCTION........................................................................................................................ 1

B.. THE EVIDENCE........................................................................................................................... 4

Kavitha and Malcolm Chipperton.............................................................................................. 4
The arrangements to purchase the farm.................................................................................... 7
Funds provided after purchase................................................................................................. 14
Practical arrangements at the farm after purchase................................................................ 19
Richard buys out Colin’s interest............................................................................................. 22
Rezoning....................................................................................................................................... 25
Payment of farm expenses......................................................................................................... 26
Kavitha’s health........................................................................................................................... 27
Funding of the Chipperton estate settlement......................................................................... 28
Separation..................................................................................................................................... 30
Kavitha’s arrest and imprisonment.......................................................................................... 34
Kavitha’s release from prison.................................................................................................... 40
1 September 2017 meeting......................................................................................................... 40

C. LEGAL PRINCIPLES................................................................................................................ 45

Common intention constructive trust / Proprietary estoppel............................................. 45
Joint endeavour constructive trust........................................................................................... 47

D.. SUBMISSIONS.......................................................................................................................... 50

Plaintiff’s submissions................................................................................................................ 50
Pleaded case....................................................................................................................... 50
Closing submissions.......................................................................................................... 51

Defendant’s submissions........................................................................................................... 55
Pleaded case....................................................................................................................... 55
Closing submissions.......................................................................................................... 55

E. . CONSIDERATION................................................................................................................... 59

Fact-finding.................................................................................................................................. 59
Kavitha’s evidence...................................................................................................................... 61
Findings........................................................................................................................................ 63
Conclusions.................................................................................................................................. 77

HER HONOUR:

A. INTRODUCTION

Richard Berian Phillips (Richard) was a barrister who died unexpectedly and intestate on 2 January 2018. Since 1 May 2016 he had been married to Ingrid Mary Phillips (nee Duncan) (Ingrid). Between 2004 and June 2012, Richard was in a romantic or domestic relationship with the plaintiff (Kavitha).

On 6 July 2004, Marble and Granite Import Company Pty Ltd (MAGIC Pty Ltd) entered into a contract to purchase a property of approximately 23 acres at 134 Moores Rd, Clyde (the farm) for $740,000. MAGIC Pty Ltd was incorporated on 2 July 2004 for this purpose. Prior to incorporation, Kavitha had operated her business interests using ‘Marble and Granite Import Company’ as a business name. On incorporation, Richard, Kavitha and Kavitha’s friend Colin Thompson (Colin) each held one of three shares in MAGIC Pty Ltd. On settlement on 25 January 2005 the registered proprietor became the Moores Road Unit Trust (the Moores Rd Trust), which was created for this purpose. Richard and Colin were the initial trustees, each holding one unit. At the time of settlement each was issued a further 395,000 units.

Kavitha and Colin commenced to work the farm operating a market garden that grew Indian and other herbs and vegetables. They supplied grocery stores and sold produce at farmers’ markets. On 18 May 2006, Colin and Richard entered into an agreement by which Colin retired from the Moores Rd Trust and Richard purchased Colin’s interest in the trust, becoming the sole registered proprietor of the farm in his capacity as sole trustee. The parties have agreed for the purpose of this case that, on Colin’s transfer of his interest to Richard, the trust ceased to exist and Richard became the sole legal and beneficial owner, subject to any claims that Kavitha makes.[1]
[1]Transcript of Proceedings, Kavitha Siddiah Gurappaji v Caylen Duncan (in his capacity as the trustee of Moores Road Unit Trust), (Supreme Court of Victoria, S ECI 2019 00999, Justice Forbes, 13 September 2022- 27 September 2022; 6 October 2022) 837.2 (‘T’).

Although not being on title, Kavitha brings this proceeding against Richard’s estate on the basis that she has a beneficial interest in the farm. She alleges that Richard’s estate holds half the farm, or some other proportion of it, on trust for her. She alleges a beneficial interest pursuant to a constructive trust, either because of a common intention or a proprietary estoppel, and alternatively because as her contributions were made in the course of a joint endeavour during her relationship with Richard it would be unconscionable to deny her interest in the farm. Kavitha relies on Richard’s representations as to her beneficial interest. In reliance on those representations, or because of the manner in which their domestic relationship was conducted, Kavitha says she has contributed to the acquisition, maintenance and improvement of the farm.

On 24 April 2018, Ingrid was granted letters of administration upon intestacy for Richard’s estate. She was also appointed trustee and issued all units in the Moores Rd Trust. Ingrid died on 17 December 2020 and her son, Caylen Duncan (Caylen) was granted probate of Ingrid’s estate and appointed trustee of the Moores Rd Trust. Caylen was substituted as the first defendant. He is sued in his capacity as executor of Ingrid’s estate, which is now the registered proprietor of the farm.

Caylen disputes any constructive trust or proprietary estoppel and raises the defence of laches. He also counterclaims, alleging that Kavitha’s presence on the farm was permitted pursuant to a bare licence arising from her domestic relationship with Richard. Caylen says the bare licence was cancelled when Ingrid’s lawyers sent Kavitha a notice to vacate on 8 July 2019, but Kavitha did not vacate and has not vacated. Caylen alleges that Kavitha was trespassing on the farm and that therefore he is entitled to mense profits from 7 August 2019, being 30 days from the date of the notice to vacate.

On 12 February 2019, Kavitha lodged a caveat over the farm. Ingrid applied to remove the caveat to sell the farm. Against the second defendant, the plaintiff originally sought an order amending the certificate of title. The second defendant took no part in the trial and will abide the outcome. On 25 August 2020, Kavitha and Ingrid (the first defendant at the time) reached an agreement that Kavitha could continue to occupy the premises subject to a number of conditions including payment of occupation costs (the caveat removal agreement). The parties agree that occupation costs from that time until 7 October 2022, if owed, total $38,000.[2]
[2]T 1075.17-18.

On 22 April 2021, Caylen, as executor of Ingrid’s estate, entered into a contract to sell the farm.[3] Neither party seeks any remedy that would preclude settlement of that contract of sale nor the interest of the purchaser under that contract. Settlement is not due until 23 April 2026. Kavitha does not seek any remedy in priority over the purchaser’s rights under the contract. Rather she seeks to remain in occupation until settlement, either pursuant to her proprietary interest if established, or alternatively under the caveat removal agreement. A remedy so fashioned would protect the parties’ interests should the settlement not proceed.
[3]Contract of sale of land, which forms part of tendered Exhibit 2 in Kavitha Siddiah Gurappaji v Caylen Duncan (in his capacity as the trustee of Moores Road Unit Trust) S ECI 2019 00999, 3131-3200.

The key factual disputes for determination are:

1)Was there an agreement at the time of purchase that ownership of the farm would not be in accordance with the ownership as registered on title, but by way of three equal shares?
2)Was there an agreement in 2006 when Richard bought out Colin’s interest that ownership of the farm would be other than as registered on title, by way of two shares?
3)What cash contributions did Kavitha and her parents (on her behalf) make to the acquisition, maintenance or improvement of the farm?
4)By what other conduct or payment did Kavitha contribute to the acquisition, maintenance or improvement of the farm during the relationship with Richard?
5)Based upon the findings of fact, does Duncan hold on trust for Kavitha a proportion of the farm, and if so what proportion?
6)Is Kavitha’s claim barred by a defence of laches?
7)Is the counterclaim for mense profits and occupation costs made out?
8)Finally, what is the appropriate form of remedy?

B. THE EVIDENCE

The evidence in this case contains critical conflicts between documentary evidence, including statements by Richard prior to his death and oral evidence including conversations and oral agreements with Richard both during and after his relationship with Kavitha. The narrative of the evidence highlights the points of conflict. The following people gave oral evidence: Kavitha, her mother, Colin, and three people who undertook work at the farm: Beckim Azemi (Beckim), Sandeep Nehra and David Lightowler. Alan Sheppet, Richard’s solicitor, also gave oral evidence.

The defendant took evidence from Ingrid in a de bene esse hearing prior to her death and tendered the recording and transcript of that evidence.[4] In addition a large number of documents were tendered.
[4]Recording and Transcript of De Bene Esse examination of Ingrid Phillips dated 6 November 2020, which together constitute Exhibit 4 in Kavitha Siddiah Gurappaji v Caylen Duncan (in his capacity as the trustee of Moores Road Unit Trust) S ECI 2019 00999.

Documentary evidence tendered included statements from a number of Richard’s bank account from the relevant periods.

Kavitha was born in India on 13 February 1971. Her mother is a retired psychiatrist and her father a retired administrator that educates health professionals. She was home schooled and privately tutored. She also said that she stopped going to college and didn’t attend Bangalore University as her parents wished. Kavitha and her family have farming interests in India.

Kavitha and Malcolm Chipperton

Kavitha came to Australia in 1988 with an Australian resident, Malcolm Chipperton, to undertake a hospitality course at William Angliss College. She was in a domestic relationship with Chipperton until his death from cancer on 2 May 2003.

Kavitha had several jobs that helped with her course: working in housekeeping on the Spirit of Tasmania, and working as a chef in childcare, nursing homes, and restaurants. She also began a business in landscaping and gardening that led her into the business of importing granite and marble, contracting with builders for the supply of such materials to building projects.[5] She operated this business as a sole trader under the business name of Marble and Granite Import Company. She said she also came to Australia intending to take up farming.[6]
[5]T 200-201.
[6]T 201.26-202.10.

Immediately before Chipperton’s death, he and Kavitha were living together at a property in East Boundary Rd, East Bentleigh (the East Bentleigh house).

Chipperton’s daughter Meredith purchased the East Bentleigh house and became registered proprietor. Meredith was the borrower and guarantor of bank funds as Chipperton was too old to obtain a loan and Kavitha was not an Australian resident.[7] In addition to borrowings, Kavitha said that both Chipperton and Kavitha (or her parents on her behalf) advanced funds.[8] Kavitha said ‘I made sure we had a trust deed signed’,[9] as Meredith was going to hold the property on trust.[10] She said that Chipperton told her that the trust deed was to protect her.[11] She also said she hadn’t seen the trust deed and didn’t know if she was named in it. She said she trusted her partner.
[7]T 484.11-12.
[8]T 484.1; 483.17.
[9]T 487.18-19.
[10]Settlement occurred on 19 March 2001.
[11]T 485.30.

There was a dispute over Chipperton’s will. According to an affidavit that Richard swore,[12] the effect of Chipperton’s will was that Kavitha was to receive the East Bentleigh house provided she paid $105,000 to Chipperton’s daughters. She would also receive his residuary estate.
[12]Affidavit of Richard Phillips sworn 24 March 2015, in the matter of an alleged offender, Kavitha Gurappaji CI-14-06305, which forms part of tendered Exhibit 2, 1512-1600, [10].

Kavitha consulted a lawyer to help her ‘ get the house’.[13] In 2004, Kavitha commenced two proceedings against the Chipperton estate: one for provision under Part IV of the Administration and Probate Act1958 (Vic) and another seeking a declaration that Meredith held the East Bentleigh house on trust for the estate. Chipperton’s three adult daughters had also applied for further provision for their maintenance and support from the estate. All proceedings against the estate were resolved in principle on 24 June 2008.
[13]T 187.21-22.

The defendant put the 2008 terms of settlement to Kavitha in cross-examination as demonstrating that she did not claim any interest in the East Bentleigh house, her only interest was as a beneficiary under the will. Kavitha initially said she didn’t read documents like this as she trusted her partner. She agreed ‘on paper’ that she had no interest in the property but that she had an interest in the East Bentleigh house because she ‘was his partner’.[14]
[14]T 494.4-6.

The 2008 terms of settlement agreed the value of the East Bentleigh house at $400,000. The terms were that Kavitha would pay $400,000 into the estate, discharge the existing mortgage over the East Bentleigh house and pay the sum of $52,500 to each of Chipperton’s three daughters, upon which she would be entitled to transfer of the East Bentleigh house as part of her entitlement to the net residue of the estate. The terms also required Kavitha to pay Meredith’s and the executor’s legal costs for the declaration proceeding.[15]
[15]Terms of Settlement between Kavitha Gurappaji and Frank William Penhauluriack dated 24 June 2008, which forms part of tendered Exhibit 2 in Kavitha Siddiah Gurappaji v Caylen Duncan (in his capacity as the trustee of Moores Road Unit Trust) S ECI 2019 00999, 1817-1823.

On 20 June 2011 the parties signed supplementary terms of settlement confirming that the preconditions set out in the 2008 terms of settlement had been met and setting out the payments that Kavitha was required to make upon settlement.[16] Those payments totalled approximately $738,500.
[16]Supplementary Terms of Settlement between Kavitha Gurappaji and Frank William Penhauluriack dated 20 June 2011, which forms part of tendered Exhibit 2, 1996-1999.

Kavitha met Richard when her solicitor briefed him in relating to the Chipperton matters. By Kavitha’s evidence they were introduced in late 2003. According to Richard’s affidavit they met in early 2004.[17] Kavitha says she moved in to live with Richard between February and April 2004.[18] When the personal relationship developed, Richard ceased to be Kavitha’s barrister. It is uncontroversial that this occurred before Kavitha filed the Chipperton estate proceedings.
[17]Affidavit of Richard Phillips sworn 24 March 2015, [10].
[18]T 191.

The arrangements to purchase the farm

Richard made a signed statement in December 2014 (2014 statement). In that statement he said:

In mid-2004 KG [Kavitha] prevailed upon me to purchase 134 Moores Rd, Clyde (the farm) a 23 acre fully functioning market garden. A friend of KG’s, Colin Thompson was also to be involved.[19]

[19]Statement of Richard Berian Phillips dated 22 December 2014, which forms part of tendered Exhibit 2, 2146-2149.

Kavitha’s evidence was that she wished to purchase a farm in Australia as her family in India had extensive farming interests. In examination-in-chief she gave various reasons for her wish to do so: to pursue the cultivation of silkworms,[20] as a useful site to store landscaping material used in her business,[21] and to run a market garden.[22] Kavitha described finding the farm with a friend Surita Kulkarni. She said that upon seeing the farm:

I had this feeling…like I had the feeling in East Boundary Rd. I knew it was my house…That feeling when you see a property and it hits you in the heart and your mind.[23]

[20]T 201-202.

[21]T 200.

[22]T 200-202.

[23]T 206.5-9.

Kavitha said initially she and Colin wanted to buy a farm together.[24] First she said they thought they would buy on a ‘half and half’ basis.[25] Later Kavitha said she insisted on having a 51%/49% split.[26] She said that if Colin could not contribute half then her parents would cover any extra money.
[24]T 209.23.
[25]T 210.23-25.
[26]T 546.15-19.

Kavitha’s evidence was that she went with Colin to his accountant and learnt that Colin could borrow less than expected. She said she kept Richard informed of her plans but that initially he was not part of the purchase. She said that Richard then proposed that he join her and Colin in the purchase.[27] Following several discussions about the farm, Kavitha said that Richard told her:

‘Well I’ll put in one share and Colin and Kavitha can put in the rest, and I’ll also pay for the stamp duty and stuff.’[28]

[27]T 231.1-6; 219.11-25.

[28]T 237.3-5.

Kavitha said that she sent Colin to the real estate agent to secure the deposit with a payment of $1,001.[29]
[29]T 218.16-24.

Colin recalled initially Richard and Kavitha were going to buy the farm. He said that Richard had said as a barrister he wasn’t interested in running a farm so Colin became involved as a one-third owner to help run the farm.[30]
[30]T 735.19-23.

Kavitha gave evidence of a meeting between the three of them at Richard’s office. She said Richard advised changing the business name MAGIC into a company and having three shares in the company. Kavitha said she disagreed. She said her earlier agreement with Colin was a 51%/49% split in her favour and she wanted to retain a larger percentage ‘because it’s my company, it’s my land’.[31] After that Richard said it would be three equal contributions. Kavitha said she wanted to have one per cent more than either Colin or Richard but that she didn’t know what happened in the end.[32]
[31]T 239.30.
[32]T 240.8-12.

In cross-examination Kavitha was taken to an affidavit she swore in 2019 in support of the caveat she lodged over the farm, in which she said that when the company was formed to hold the farm it was intended that she would hold 51% of the shares and Colin and Richard would hold the other 49%. She said that statement was ‘not a hundred per cent true’ and probably in the wrong order.[33] It was put to her that it was deliberately untrue, and was used by her as an explanation to support a claim for 50% interest in the farm.[34]
[33]T 516.4-11.
[34]T 516.14-17.

The contract note was signed on 6 July 2004.[35] It lists MAGIC Pty Ltd as purchaser of the farm. The price was $740,000 with a deposit of $74,000 due on 13 July 2004. It noted that $20,000 had already been paid. Settlement was to be on 10 December 2004 or earlier by agreement. Colin, Kavitha and Richard were all listed as guarantors.
[35]Contract Note dated 6 July 2004, which forms part of tendered Exhibit 2, 1602-1604.

Kavitha said that her share of the purchase was to be paid from funds her parents would provide. Despite her earlier evidence that her parents would provide any shortfall in the purchase price regarding Colin’s contribution, she said Richard agreed to provide Kavitha’s one-third share until the instalments from her parents arrived. In cross-examination it was put that Richard didn’t agree to borrow Kavitha’s share and pay two thirds at settlement. Kavitha said ‘yes, he [Richard] borrowed two thirds, then my parents were paying him off slowly. That’s probably the arrangement they had’.[36]
[36]T 503.21-22.

Much of Kavitha’s evidence both in examination-in-chief and cross-examination emphasised that she did not make any arrangements concerning money but rather left it to others, nor did she read documents bearing her signature.

Colin said he was involved in the property as a one-third owner, with Kavitha and Richard being the other two owners of one third each. Colin’s evidence was that this arrangement didn’t change during his involvement with the farm.

Colin believed they had each paid one third towards the purchase price. Colin recalled borrowing against his unit in Cheltenham for his contribution. He thought he borrowed about $250,000 but was unsure precisely. Colin said his contribution was only ever the borrowings from his unit in Cheltenham.[37] He said he paid out the borrowing on the sale of the unit which, on the documents shown to him in cross-examination, was for a sale price of $270,000 in November 2005.[38]
[37]T 737.2-4; T 737.9.
[38]Historical title search of Certificate of Title Volume 8846 Folio 747, which forms part of tendered Exhibit 3 in Kavitha Siddiah Gurappaji v Caylen Duncan (in his capacity as the trustee of Moores Road Unit Trust) S ECI 2019 00999, P167-P170.

Colin said that originally the intention was for there to be three owners, but then, because of ‘some legal thing over a house in East Boundary Rd’,[39] they decided not to have Kavitha’s name on the papers because she could lose everything. He understood this was the reason her interest was not recorded on the documents. Colin said Kavitha told him this was what could happen.[40]
[39]T 736.3-14.
[40]T 736.11-6.

Kavitha gave evidence-in-chief that after she commenced the Chipperton proceedings there was a risk that if she lost she would be sued for money if there was property in her name and so she should give up her directorship and give her share to Richard. Colin said on paper he owned half the farm but he only ever paid a third of the purchase price.[41]
[41]T 737.8-9.

In cross-examination Kavitha was asked about the documents showing that in October 2004 she ceased being a director and a shareholder of MAGIC Pty Ltd. She was asked whether she knew of these changes. She first said she did, but shortly later said: ‘Maybe I knew and maybe I didn’t’.[42] She said Richard told her there was a restructure.[43] She said she was reassured because in December 2004 Richard made a will leaving the farm to her and granting her a power of attorney.
[42]T 510.11-12; 512.19.
[43]T 512.23.

In cross-examination, Kavitha was asked about an affidavit she swore in March 2019 that stated she was unaware she had been removed as director and shareholder of MAGIC Pty Ltd. She said the statement was not correct.[44] She attributed it to an error and in fact she meant she was speaking about being unaware of the creation of the Moores Rd Trust.[45] Kavitha was taken to other paragraphs of the same affidavit that specifically dealt with her lack of awareness of the Moores Rd Trust.
[44]T 517.25-518.16; T 518.5-6.
[45]T 518.13.

The source of funds for the purchase of the farm can largely be traced from documents in evidence. The documents show that acquisition costs for the farm totalled $791,034, comprising $740,000 for the purchase price plus $47,934 for stamp duty, registration fees and other transaction costs. Richard’s Bank of Melbourne account shows that on 14 July 2004 a cheque for $73,900 was presented, consistent with the deposit being due on 13 July. Richard’s account showed an online transfer depositing $74,000 on 13 July 2004 described as FNDS TFR FARM DEPOSIT.[46]
[46]Bank Statement of Richard Phillips account number 566289, which forms part of tendered Exhibit 2, 399-400.

On 14 December 2004 the Bank of Melbourne approved an increase of $50,000 to Richard’s existing loan account over and above the $152,352 in available funds on the account.[47] On 15 December 2004, Richard executed a specific power of attorney in favour of Kavitha, dealing with the purchase of the farm and the directorship of MAGIC Pty Ltd.[48] On 23 December 2004, the Moores Rd Trust was established.[49] Richard and Colin were Trustees and Subscribers. Kavitha witnessed Richard’s signature on the trust deed.[50]
[47]Letter from Bank of Melbourne to Richard Phillips dated 14 December 2004, which forms part of tendered Exhibit 2, 1606-7.
[48]Power of Attorney by Richard Phillips to Kavitha Gurappaji dated 15 December 2004, which forms part of tendered Exhibit 2, 1616-17.
[49]Moores Road Unit Trust Deed dated 23 December 2004, which forms part of tendered Exhibit 2, 1618.
[50]Ibid 1652.

Shortly after, on 13 January 2005, Richard executed a general power of attorney in favour of Kavitha.[51] As Richard was overseas at the time of settlement, Kavitha signed the transfer of land and the mortgage documents in her capacity as Richard’s power of attorney. Richard and Colin were registered on title at settlement in their capacity as trustees. A letter dated 3 February 2006 from Richard’s solicitors, Allan Sheppet & Associates, included the following on Richard’s instructions:

We understand that the property was originally bought in the name of a company described as MAGIC Pty Ltd (which was incorporated shortly before the Contract Note was entered into). Subsequently, on accounting advice, it was decided that the property should be bought by a Trustee of a Unit Trust and the original Contract Note was cancelled and a substitute Contract dated 14 January 2004[52] in the names of Richard and Colin as purchasers was entered into after a Unit Trust was formed.[53]

[51]Power of Attorney by Richard Phillips to Kavitha Gurappaji dated 13 January 2005, which forms part of tendered Exhibit 2, 1662.

[52]Presumably a typographical error in the letter which should read 2005. The updated contract note was not in evidence.

[53]Letter from Alan Sheppet & Associates to Gilberthorpes dated 3 February 2006, which forms part of tendered Exhibit 2, 1699.

Fair Legal’s legal fees associated with the conveyance were invoiced to MAGIC Pty Ltd.[54] The invoice included attendances by the conveyancer on Michael Carley and Kavitha regarding changes to the loan structure and settlement. The reference to Carley is a reference to an accountant and taxation advisor who acted for the Moores Rd Unit Trust and Richard personally.
[54]Fair Legal Invoice dated 20 January 2005, which forms part of tendered Exhibit 2, 1665.

The Notice of Acquisition of an Interest in Land dated 21 January 2005 identified the relevant contract as being dated 14 January 2005.[55] It also identified Colin and Richard as the buyers. The statement of adjustments as at 21 January 2005 notes that the total deposit paid by that time was $224,000.[56] The documentary evidence does not make clear when or from where that sum was paid other than the $73,900 paid on 13 July 2004. The total deposit left $516,000 owing on the purchase price, with adjustments and penalty interest added to that figure.
[55]Notice of acquisition of interest in land dated 21 January 2005, which forms part of tendered Exhibit 2, 1666.
[56]Statement of Adjustments as at 21 January 2005, which forms part of Exhibit 2, 1664.

At settlement on 25 January 2005, $450,000 of borrowed funds were used for the purchase. Those funds were made up of two loans both in the joint names of Richard and Colin (joint purchase borrowings). One loan was for $190,000, the other for $260,000. The repayment of those loans were interest only. The documentary evidence demonstrates that from March 2005 all repayments for both loans were made from accounts in Richard’s name in accordance with his instructions.[57] Richard’s instructions requested that any payment deducted from Colin’s account be reimbursed to Colin. In his evidence, Colin accepted that the documents he had signed showed that on paper he owned 50% through the Moores Road Trust but he said that he was never a half owner because it was ‘a three way split’.[58] Colin said he did not borrow any money other than the loan against his own unit which he paid ‘upfront’,[59] and said he could not remember anything about joint borrowings with Richard. Colin accepted that his memory on these matters was incomplete.[60]
[57]Relevant bank statements forming part of Exhibit 2, as identified by an aide memoire handed up to the Court titled ‘Farm Purchase funding’ (specifically, page 4).
[58]T 743.14.
[59]T 751.2
[60]T 747.29; 754.7-8.

Colin’s evidence was that the reason settlement was late was because of delays in arranging the finance, which a friend of Richard’s was organising.

At settlement, the balance owing excluding adjustments and late fees and charges was $516,000.[61] $450,000 of that sum came from the joint purchase borrowings. The source of funds for the balance of the purchase price ($66,000) and the balance of deposit funds ($150,000) together with costs of purchase are not disclosed. Colin’s ‘up front’ contribution would form part of that amount.
[61]Statement of Adjustments as at 21 January 2005, which forms part of Exhibit 2, 1664.

The value of Colin’s contribution is not supported by contemporaneous documents at the time of purchase. His evidence was that he could not recall the amount he contributed but thought it was about $230,000 or $250,000.[62] Kavitha’s evidence was that his contribution was a lesser amount of approximately $225,000.[63] His financial contribution is referred to in 2006 documents described below.
[62]T 751.29.
[63]T 214.11.

In addition to the documentary evidence, Kavitha and her mother gave oral evidence about cash contributions by Kavitha’s parents. Only Kavitha gave evidence of a cash gift of $20,000 prior to purchase (detailed below), otherwise the evidence as to cash contributions all occurred after settlement.

Kavitha said Richard spoke with her mother about how Kavitha’s share was to be funded and Kavitha didn’t have any discussions with Richard about this.[64]
[64]T 240.14-15.

Manjula gave evidence by audio-visual link. Manjula said Kavitha was looking for a farm and was going to buy it with Colin, but he didn’t have enough money and later he backed out. Manjula said Kavitha told her Richard would contribute and then ‘we work out something’.[65] Manjula thought the first discussion with Kavitha was in February 2005 and her evidence of that conversation was ‘[t]he time Kavitha was with Richard, and then they wanted to buy the farm, and they bought it.’[66] Manjula’s evidence was that Richard and Kavitha would contribute 50% each.[67] She said she understood Richard was to pay Kavitha’s share of the farm, because of discussions between Richard and her husband.[68] She did not give any evidence of discussions with Richard about Kavitha’s share or payment for Kavitha’s share other than to say such discussions occurred between her husband and Richard.
[65]T 799.29-31.
[66]T 800.24-25.
[67]T 806.17.
[68]T 806.22-31.

Ingrid gave evidence at a de bene esse hearing on 6 November 2020. She said Richard had discussed the circumstances of the purchase of the farm with her. Richard told her he had bought the farm in partnership with Colin who sometime later opted out and Richard borrowed money to buy him out.

Funds provided after purchase

Kavitha’s oral evidence of funds that her parents provided her and Richard is as follows:

(a) Her parents gave $20,000 to her when she and Richard became engaged.[69] Kavitha thought this was within six months after they had met and before the farm was purchased. She said later, once the farm was identified, she told Richard to put these funds towards the purchase. She gave oral evidence that Richard put this $20,000 as a deposit on the farm.[70] She said otherwise she had no discussion with Richard about funding her share of the purchase price, rather those discussions occurred between Richard and her mother. She said she was present on a phone call when her mother said ‘whatever funds are there please start pay it and we’ll start paying you immediately. Just let us know how much and we’ll start sending it in instalments’.[71] It was unclear when Kavitha said this phone call occurred.
[69]T 241.17.
[70]T 273.10.
[71]T 240.20-23.

(b) ‘[A]fter we got the farm’[72] she said her parents gave $20,000 in cash to a friend, Dr Chakrabati, to bring to Australia.[73] The friend, who had been a student of Manjula’s, lived in country Victoria so Richard and Kavitha drove up to visit him and they were given a white envelope containing hundred dollar bills, which Kavitha said ‘looked like 20 grand’.[74]
[72]T 254.24.
[73]T 254.26-27.
[74]T 256.12.

(c) Kavitha’s parents sent contributions from India with their friend Surita Kulkarni. On the first occasion Surita handed Richard a sum of money during a meal at Surita’s home. Kavitha first described this as occurring before the farm was purchased, although later her evidence was unequivocal that it was after.[75] Kavitha’s evidence was that Surita gave ‘$10,000 once, 5 once, 10 again’,[76] and the amounts were given as part of a loan and repayment arrangement between family members.
[75]T 257.15-260.6.
[76]T 260.11.

(d) Her parents came to Australia after the exchanges with Dr Chakrabati and Surita. Kavitha said her father gave Richard $30,000 that had been in his pockets and a money belt, and her mother gave a further $30,000 to Richard and a further $10,000 for Kavitha who wanted to buy a seeder.[77] This last sum from her mother was a gift to Kavitha from an uncle.[78]
[77]T 266.10-18.
[78]T 287.17

(e) After that occasion her parents didn’t travel all the time and other people kept bringing money in.[79] However, her parents came and gave money to her and Richard some three or four times at least during their relationship.[80]

(f) Her parents either brought or sent money to Australia both before her relationship with Richard and continued on after it ended.[81]

(g) Her mother finally transferred altogether over $400,000 including for tractors and repairs.[82]

[79]T 268.27-28.

[80]T 269.22-23.

[81]T 271.28-31.

[82]T 505.22.

On all occasions, Kavitha said that Richard was told the money was for the farm.

In an affidavit sworn 5 March 2019 in support of the application to delay transfer of the farm to Richard’s estate, Kavitha said that ‘altogether my parents gave Richard $260,000’.[83] In a further affidavit sworn 18 September 2019, Kavitha said she intended to visit India to obtain details of the $260,000 her parents contributed to the farm.[84] In Further and Better Particulars of the Statement of Claim filed 20 December 2019, the amount identified as being contributed by Kavitha’s parents (directly or through third parties) totals $175,000.
[83]Affidavit of Plaintiff sworn 5 March 2019, [62].
[84]Plaintiff, ‘Affidavit of Plaintiff’ sworn on 18 September 2019 in Kavitha Siddiah Gurappaji v Caylen Duncan (in his capacity as the trustee of Moores Road Unit Trust) S ECI 2019 00999, [8].

In her evidence-in-chief, Manjula said she learnt of her daughter’s relationship with Richard at the end of 2004 and first met him when they came to Australia at the end of 2005.[85] She said she had been to Australia many times and could not remember dates, other than that she did come in 2005 and 2006, again in 2014 when Kavitha was arrested, and in 2017 on her release.
[85]T 793.

Manjula said that she and her husband brought cash into Australia themselves as follows:

(a) They brought money each time they went to Australia.[86]
[86]T 809.16.

(b) She recalled coming to Australia once or twice a year between 2005 and 2009 and then again each year from 2014 to 2017 but could not recall specific dates.

(c) She brought $20,000 ‘at least’ for Richard on the first occasion they met him,[87] carried as cash and $5,000 as travel cards. Her husband also brought $20,000.[88] She said the money was given ‘for Kavitha’s share’ of the farm.[89]
[87]T 804.5-7.
[88]T 805.3-5.
[89]T 805.15-16; 806.1-2.

(d) On the next occasion they came to Australia she and her husband each carried $20,000 in cash and travel cards, which they gave to Kavitha and Richard.[90]
[90]T 807.15-16; 808.28-30.

(e) An occasion in 2009 or 2010 was the third occasion on which they brought $20,000 each in cash and a $10,000 travel card.[91]

(f) Manjula said the amounts were the same every time because that was the maximum amount allowed.[92]

(g) On one occasion they carried $25,000 each and were questioned by Australian customs about the amount carried but that it was allowed.[93]

[91]T 809.2-3.

[92]T 809.25-26.

[93]T 807.22-27.

Manjula said that she sent money to Australia through others as follows:

(a)$20,000 through Surita on two occasions in 2006,[94] and $5,000 through Surita’s brother in India;[95]
(b)$20,000 cash through Dr Chakrabarti in 2005;[96]
(c)$20,000 in 2006 with Dr Kumar, a student of hers.[97]

[94]T 801.22-24; 802.24.

[95]T 801.27-29.

[96]T802.2 and 802.14

[97]T 803.6-8.

It was put to Manjula in cross-examination that she did not give more than $10,000 to Dr Chakrabati to bring to Australia. She disagreed and said she understood that he could and did carry $20,000 because he was a resident.[98] Dr Chakrabati’s incoming passenger card dated 15 February 2005 was left blank in answer to the relevant question.
[98]T 883.3.

In cross-examination the particulars of cash amounts that Kavitha filed on her return from India in 2019 were put to Manjula as contradicting the evidence she had given about amounts and timing.

The documents showed that Surita did not travel to India in 2004 and that her incoming passenger card of 20 December 2005 declared that she was not bringing in to Australia more than $10,000 cash.[99] It was put to Manjula that this contradicted her evidence-in-chief and the further particulars of claim Kavitha provided in 2019.
[99]Incoming passenger card of Sarita Kulkarni dated 20 December 2005, which forms part of tendered Exhibit 2, 2956.

In cross-examination it was put to Manjula that any cash that was brought from India between 2005 and 2007 was money given to Kavitha as a gift. She agreed it was.[100] In cross-examination it was put to Manjula that other occasions of her providing money did not occur because she was not in Australia between May 2007 and May 2013. She said that maybe they occurred later but that they did give money to Richard.
[100]T 878.22.

Manjula was taken to the incoming passenger cards she completed on arrival in Australia and in particular the question on that card asking ‘Are you bringing into Australia AUD$10,000 or more in Australian or foreign currency?’. She was shown the card for arrival on 11 October 2006, which recorded ‘yes’ as her answer. She agreed that on that occasion she indicated she was bringing a larger sum. She said sometimes she didn’t mark an answer but that she didn’t lie, rather she left it blank. She also said there were occasions when she did not answer the form truthfully.[101]
[101]T 880-882.

Sandeep Nehra gave evidence. He had been introduced to Kavitha in about 2006 by a friend who was staying at the East Bentleigh house. Nehra was a student at the time and he did some deliveries of produce for the farm for Kavitha. He stayed at the East Bentleigh house on three occasions: 2007, 2010 and 2016. He gave evidence of a time in 2010 when he was living at the East Bentleigh house. He was not doing deliveries but he drove Kavitha’s parents around during their visit to Melbourne. Nehra said this included driving them to Richard’s home and office. He said that on the way to see Richard they stopped and withdrew cash from an ATM or got travellers cheques. He said he observed this once in 2010.[102] He said he helped them withdraw cash from the ATM on one occasion using what he thought were overseas cards and he did not know what was done with the cash.
[102]T 783.1-15.

In cross-examination he was not sure whether 2010 was the correct year. It was put to him that Kavitha’s parents were not in Australia in 2010. He said the events he described as happening in 2010 could have been in 2011 or 2012.

Practical arrangements at the farm after purchase

Both Kavitha and Colin gave evidence that they had access to the farm prior to settlement and commenced working there. Kavitha said they were trialling the shelf life of products as there was no cool room. She said that equipment had to be purchased. Initially Kavitha was still working in childcare between 7.00am and 1.00pm. She said she would then go to the farm and pick and wash produce and make deliveries to customers. She said Colin did the tractor work and the irrigation.

Colin’s evidence was that from settlement he was living at the farm and was working full-time there between January 2005 and May 2006. During that time he said Kavitha would come to the farm occasionally and would stay there for one or two nights per week.[103] He said Kavitha did less actual farming work than he wished she would have. He said she did some bunching and picking of produce. He said part of the dissatisfaction was that he needed help on the farm and when he asked for help he didn’t get it. He said Kavitha was running the farm by issuing directions as to what other people (mostly him) were to do. He had never worked on a farm before and didn’t know what he was doing. He said the ongoing dispute with Kavitha was because ‘she reckoned I wasn’t working hard enough and I reckoned it was impossible to do what she wanted me to do’.[104]
[103]T 754.20-21.
[104]T 755.3-5.

Colin said during his time on the farm they grew crops and sold direct to Indian shops. Colin guessed that the sales produced $300-$400 a week at most. He said he was using some of that money to live on and the rest to run the farm. He said that on occasion there were other people who came to assist and Kavitha paid them.

Kavitha described attending the farm each day to pick and load produce into the van to make deliveries. She said she always did the deliveries bar one that Colin did. She said she was always paid in cash. She said she did not generate invoices but had a receipt book. She said she used the cash for farm expenses: seeds, diesel, fertiliser, wages. She said she took home whatever cash was left and gave it to Richard, who kept it at his home. She explained that wages were for casual pickers because it was impossible for her to do all the picking. She said sometimes if she had a big expense associated with the farm she would ‘call Richard and say “I need some money” so I take it from that. Otherwise it’s just there’.[105]Richard’s 2014 statement said:

I would for the first 5 years (2004 to 2009) go and stay there most weekends. The farm produced vegetables and herbs. It was never overly profitable. Over the years I purchased two tractors and other plant and equipment for the Farm. It became apparent to me that KG was not as good a farm manager as she made out and the farm was an ongoing financial burden to me. I have made the mortgage repayments and met most of the rates and outgoings payments for the Farm.[106]

[105]T 293.29-30.

[106]Statement of Richard Berian Phillips dated 22 December 2014, which forms part of tendered Exhibit 2, 2146-2149.

Kavitha described expanding into boxed vegetables and selling at the Footscray Market where she was trading both product grown on the farm and other product that she purchased. She said that in order to trade at the Footscray Market she had to have a card. She said her card was in the name of Clyde Market Gardens. Kavitha said that she had never seen any registration papers and other than a change in name it made no difference to the way Kavitha went about her business. Clyde Market Gardens Pty Ltd was incorporated on 28 June 2005. Richard was director, secretary and shareholder of the company until his death.

Richard’s 2014 statement made reference to a three-year period in which they leased a shop to sell produce from the farm. Richard paid the rent for the shop. No further evidence was adduced about this arrangement.

Some financial documents are available from Clyde Market Gardens Pty Ltd. For the financial year ending 30 June 2006, relevantly, revenue was $29,423 and total expenses were $43,523.[107] There is no other financial material available relating to Colin’s time at the farm.
[107]These figures are taken from the 2007 Income Statement, which is part of the financial report compiled by Michael Carley of Flinders Partners Group. This financial report forms part of tendered Exhibit 2, 1780-1800.

Kavitha thought Colin didn’t do enough work.[108] Kavitha said in the beginning, when there wasn’t a lot of money, she was paying for everything and there wasn’t much left for profit sharing or a wage, with Colin complaining about how little cash he had to live. She said that in the first six months she was also paying his mortgage on the Cheltenham unit from her job at the childcare centre. Over time as the farm got busier Kavitha said she was getting sicker and she asked Colin to take over some deliveries, which he did not do. Kavitha said if he had taken over between three to five deliveries he could have had $300-$400 a week, ‘[b]ut he just doesn’t want to do that’.[109]
[108]T 576.2-3.
[109]T 301.19-21.

Over time Colin and Kavitha had a falling out. It came to a head in an argument over the automated irrigation. This seemed to be the last straw and led to a big argument between them. Colin then wanted to get out of the farm. Colin engaged lawyers to act on his behalf in selling his interest in the farm to Richard. Kavitha said she told Richard that Colin wanted out and Richard handled all of those negotiations.

Richard buys out Colin’s interest

Although Colin couldn’t recall the exact figure, he said that Richard paid him out the same amount that Colin had originally put in. Colin believed this to be in the order of $250,000 or $260,000.[110]
[110]T 738.6-10.

Colin was taken to the deed of retirement of trustee dated 18 May 2006.[111] It records that Richard and Colin were each registered as proprietors of the farm as tenants in common in two equal shares and held the farm as trustees of the Moores Rd Trust. According to the deed of retirement Colin and Richard each contributed $170,000 and borrowed the balance of their respective contributions. The document states that in consideration of the assumption of outstanding debt of $225,000 by Richard and Richard’s payment to Colin of $175,000, Colin would transfer his units in the Moores Rd Trust to Richard. Colin accepted the accuracy of these documents but said that he had never been paying off the joint purchase borrowings.
[111]Deed of retirement of trustee dated 18 May 2006, which forms part of tendered Exhibit 2, 1703.

Colin said he thought he received more than $175,000 because he said he ‘got enough out to pay $230,000 cash for my house’.[112] In cross-examination when shown documents from the sale of his unit in Cheltenham and the subsequent purchase of his house, Colin agreed that it could be that the funds used for the purchase were $175,000 that Richard paid him and additional cash reserves from the sale of his unit. However, even with these documents to help his memory, he still couldn’t recall how much he originally contributed to the farm purchase price.
[112]T 754.5.

In his letter, on Richard’s instructions referred to above at [43], Allan Sheppet also wrote:

As discussed, Richard was concerned to ensure that Colin was not liable for capital gains tax and instructed our office to meet with the Trust’s accountant Michael Carley of JCW Consulting. Michael Carley has recommended that he should prepare accounting returns for the Unit Trust prior to the matter proceeding so that he can provide us with advice on the appropriate consideration that should be inserted in the Transfer of Units. No doubt this will reflect that Colin has a loan account with the Unit Trust in the sum of $170,000 and it is anticipated that the consideration will be $5,000.
We believe the above accurately reflects our client’s instructions and the most appropriate way in which we have advised our client to proceed to settlement.[113]

[113]Letter from Alan Sheppet & Associates to Gilberthorpes dated 3 February 2006, which forms part of tendered Exhibit 2, 1700.

On the transfer of title from Colin to Richard, Richard swore a statutory declaration as to the transfer of title. He identified himself and Colin as the beneficial owners of the units in the trust as at the date of transfer and sets out the circumstances of Colin’s retirement as trustee. The statutory declaration confirmed that the retiring trustee (Colin) paid the duty at the time of purchase and that no monetary consideration has been paid for the transfer of land. It exhibits the deed of retirement dated 18 May 2006 confirming that Colin and Richard each contributed $170,000 to the purchase price and borrowed the balance of their respective contributions. The deed of retirement recites that Colin and Richard are directors of MAGIC Pty Ltd, which carried on a market garden farming business from the farm. The deed of retirement references irreconcilable difference in MAGIC Pty Ltd, the farm business and the trust.[114]
[114]Deed of retirement of trustee dated 18 May 2006, which forms part of tendered Exhibit 2, 1754.

The deed of retirement required Richard to pay $400,000 in total: $175,000 to Colin and $225,000 as assumption of Colin’s share of their joint purchase borrowings of $450,000. The financial records show that on 29 May 2006 Richard obtained a new loan from Westpac in the sum of $566,000,[115] and drew on his existing Westpac bank facilities for an additional $67,174.[116] On 29 May 2006, Richard settled the refinance of the farm paying out the joint purchase borrowings at $458,174.14,[117] leaving $175,000 available.
[115]Bank Bill Business Loal Statement account number 192855, which forms part of tendered Exhibit 2, 1382.
[116]Account statement of Richard Berian Phillips account number 487132 which forms part of tendered Exhibit 2, 1114 and Account statement of Richard Berian Phillips account number 939270 which forms part of tendered Exhibit 2, 1196.
[117]Account statement of Richard Berian Phillips Colin Thompson account number 66558151, which forms part of tendered Exhibit 2, 1374 and Account statement of Richard Berian Phillips and Colin Thompson account number 63882877 which forms part of tendered Exhibit 2, 1380.

Shortly after Colin had been paid out, Kavitha said she had a conversation with Richard:

Richard – after it was all settled, Richard said ‘You know what? I gave him a lot of extra cash, so he won’t come back and whinge’. I said ‘Oh really? How much? Why did you? You should have just given him what he – you look at the disruption, you should have given me the money’ and Richard said, ‘No, no, let him take it and go’. And he says it’s just us now, I said, ‘Thank god I can work in peace’.[118]

[118]T 307.24-31 (emphasis added).

After Colin left the farm Kavitha had help from a number of people who took over the work Colin had been doing. Some of those people were young men who had been living at the East Bentleigh house. She paid cash for their wages. After some time the three Azemi brothers — Bekim, Fidan and Agron — also came to work at the farm at first for wages.

Kavitha said the enterprise remained a cash business and cash received was used to pay the workers and equipment. The arrangement of giving excess cash to Richard and taking it back as needed also continued.[119] Kavitha said once Colin had left she engaged three tractor drivers instead of having one, which led to an increase in the number of customers. She said this growth continued until her health took a quite dramatic turn for the worse, as detailed below.
[119]T 312.3-4.

To the extent that there are financial records of the business at the farm in this period, they are partially revealed by the financial documents of Clyde Market Gardens. The income statement for the year ended 30 June 2007 shows a loss before income tax of $57,374 which, when accumulated with losses from 2006 (also stated in the 2007 income statement), became a loss of $110,043.[120] Revenue for 2007 was $98,613. By 2008 income had fallen to $44,285 and accumulated losses risen to $151,652.[121] In 2009 and 2010 income fell again and accumulated losses rose. The 2010 financial documents show accumulated losses of $160,662.[122] The balance sheet discloses loans from R Phillips to the company totalling $167,676.[123]
[120]Clyde Market Gardens Pty Ltd Financial Report for year ended 30 June 2007, which forms part of tendered Exhibit 2, 1780-1800.
[121]Clyde Market Gardens Pty Ltd Financial Report for year ended 30 June 2008, which forms part of tendered Exhibit 2, 1825-1846.
[122]Clyde Market Gardens Pty Ltd Financial Report for year ended 30 June 2009, which forms part of tendered Exhibit 2, 1857-1880; and Clyde Market Gardens Pty Ltd Financial Report for year ended 30 June 2010, which forms part of tendered Exhibit 2, 1881-1927.
[123]Clyde Market Gardens Pty Ltd Financial Report for year ended 30 June 2010, 1887.

Rezoning

Kavitha said she learnt in 2008 or 2009 that the local council was proposing a rezoning of land. Kavitha said this was after she and Richard had paid off the farm.[124] However, the Westpac loan Richard took out to refinance the farm shows that in mid-2010 the loan balance was approximately $369,000 and that this loan was not fully repaid until 2015.[125] The farm was eventually rezoned in 2010,[126] and Kavitha‘s evidence was that she had many conversations with Richard about the rezoning. She said the rezoning was ‘why I bought that land’.[127]
[124]T 314.24.
[125]Account statement of Richard Berian Phillips account number 192855, which forms part of tendered Exhibit 2, 1381-1462.
[126]Statement of Richard Berian Phillips dated 22 December 2014, which forms part of tendered Exhibit 2, 2146-2149.
[127]T 315.8

In evidence-in-chief, when asked about what they planned to do with the farm after rezoning, Kavitha gave many examples – using it for an animal hospice, opening a restaurant, perhaps buying a neighbouring property, or building a large importing warehouse. After a great many questions about her intentions after rezoning, Kavitha eventually gave evidence of a conversation saying she and Richard celebrated when the news came through, during which she said ‘we’re rich’ and Richard replied ‘I’m already Rich, now we are rich’.[128] Kavitha explained that Richard’s mother called him Rich.[129] She said with the rezoning it goes up in value three times on the spot.[130]
[128]T 321.9-10.
[129]T321.19-20.
[130]T 321.27.

In cross-examination Kavitha was asked about this immediate increase in value. She contradicted this evidence saying rezoning takes a four-to-five year period, or even up to ten years for an increase in value to come about.[131]
[131]T 614.18-25.

Richard’s 2014 statement said:

From about mid 2010 I had begun to form the view that the relationship between KG and I was very empty and had no real future. I was visiting the farm less and less as the financial burden on me was great and I need to work to pay off debt. KG had cost me a lot of money (the Farm, and a shop in East Bentleigh that never made money and I covered the rent for 3 years) as the Farm never produced to its potential. I grew to hate it. … At this time I might see KG twice a week at best although we did speak on the phone on a daily basis.[132]

[132]Statement of Richard Berian Phillips dated 22 December 2014, which forms part of tendered Exhibit 2, 2146-2149.

In the 2014 statement he also said:

During 2010 the Farm was placed in the Urban Growth Zone and this had an advantageous effect on its value. Thus, retaining the farm became attractive.

Payment of farm expenses

Kavitha and David Lightowler gave evidence about various contributions Kavitha made to the farm by paying expenses for improvement and maintenance work.

Kavitha gave evidence that she spent $5,000 on drainage work every two years that Lightowler performed. Lightowler gave evidence that he could recall only three visits to the farm for drainage work totalling $15,000, and agreed most of those visits would have been after July 2012.[133]
[133]T 835.23-29.

Kavitha gave evidence that a shed was partially constructed on the farm in 2008 or 2009, toilet and showering amenities were built for farm workers, and a double garage was converted into sleeping quarters for workers, at a total estimated cost of $12,000-$15,000.[134] She did not give evidence about how these works were paid for.
[134]T 428.1-11; T 605.14.

Kavitha stated that she did works on the driveway every year to three years, spending $5,000 to $6,000 yearly or $13,000 every three years. She said she used Lightowler for these works. Lightowler did not keep records. He estimated that he received $5,000 for driveway repairs, some of which may have been before July 2012.[135] He also recalled digging a trench along the driveway.
[135]T 833.13; T 835.23-29.

Lightowler said that he also received $5,000 for the supply of crushed work for an unstated purpose,[136] though the date of this payment is not known.
[136]T 834.11-13.

In cross-examination Lightowler agreed that the trench along the driveway was done on Bekim’s instructions, not Kavitha’s. He clarified that $15,000 was his estimate of the total for the three occasions he carried out drainage works.

Kavitha tendered a number of receipts covering dates between 29 April 2011 and 26 July 2019.[137] Many of the receipts are made out to Clyde Market Gardens. Others reference a cash sale with no payee identified. They include a quote for finance for the purchase of a John Deere tractor with an estimated funding date of 8 November 2012 in the sum of $60,800. Kavitha also tendered an AGL account statement in her name for supply of electricity to the farm for supply for the period 24 October 2018 to 29 August 2019. An amount of just over $1,000 was written off on the account as a bad debt in March 2020.[138]
[137]Receipts were identified by an index handed up to the Court as an aide memoire headed ‘Receipts for work on property’. The relevant receipts were tendered as part of Exhibit 2.
[138]Exhibit 1, AGL Account Statement for 134 Moores Road Clyde VIC for the period 24 October 2018 to 19 September 2022.

Kavitha’s health

Kavitha gave evidence about the various health troubles that she has had since 2003.

She described memory problems and described suffering from PTSD.[139] She said this was associated with a bout of depression when Chipperton died, returned when her dog died, and that over time her poor physical health has impacted her mental health. She said her memory of events comes and goes. Things that she said she could not recall during her evidence, she said might be recalled by her at a later time.
[139]T 194.10; T199.2-3.

Kavitha said she suffered from adenomyosis, endometriosis and fibroids. She had an operation in 2004 for fibroids following which she said her symptoms were worse for some months.[140] She eventually had a hysterectomy in December 2011[141] and said in the two years prior to this her health had been deteriorating. She said she was very sick from the end of 2009 and bedridden for some months in 2010. After the surgery Kavitha returned to the East Bentleigh house to recuperate but as the house was rented, she lived in a garage at the rear. She said that significant mental health issues returned at this time with great intensity.
[140]T 299.19-21.
[141]T 335.19-24.

Four or five weeks after her hysterectomy she returned to the farm. She said the Azemi brothers had been running the farm in her absence.[142] On her return she found a lot of damage, unpaid bills and lots of wear and tear. She said ‘I expected the boys to fix it, they didn’t but later they paid me all the money for it’.[143]
[142]T 336.4-5.
[143]T 337.4-10.

She said she contracted a bad bout of pneumonia in mid-2012 and was admitted to hospital.[144]
[144]T 337.28-30, although later she gave evidence that this was in 2013 (see T 352.10-13).

Funding of the Chipperton estate settlement

Returning to the settlement of the Chipperton estate proceedings in 2011 discussed above at [22], Kavitha needed to borrow funds to meet the settlement agreement (the Chipperton settlement loan).

Richard’s sworn statement said:

The litigation concerning No 230 [East Bentleigh house] and the estate of Mr Chipperton was not resolved until 2011. In order for KG to get the title to No 230, $750,000 was needed to pay out Mr Chipperton’s daughters, legal costs and other associated expenses. $750,000 was borrowed from Westpac Account No xxx418. At the time equity in No 230 was insufficient. I therefore became a co-borrower with KG on the loan and the Farm was put up as collateral security for the loan. On settlement, KG was registered as to sole proprietor of No 230. The loan was interest only for 3 years, and reverted to principal and interest in about August 2014. I have personally paid about $76,000 in interest repayments over that 3 year period. KG did not have the means to pay the mortgage. I believed she was living off renting out East Bentleigh to Indian students and from whatever she made on crops grown on the Farm. Occasionally KG’s parents would send funds from India.[145]

[145]Statement of Richard Berian Phillips dated 22 December 2014, which forms part of tendered Exhibit 2, 2146-2149.

On 24 March 2015 Richard swore an affidavit (the 2015 affidavit) exhibiting the Westpac documents relating to the Chipperton settlement loan.[146] He set out amounts he paid and money that Kavitha or her parents contributed to the loan from inception to December 2014. He swore that he paid $77,600, and Kavitha or her parents paid $73,544.36. He further deposed that the bank statements show:

a)Deposits into the account made directly from India by [Kavitha’s] parents or other person or persons on their behalf;
b)Withdrawals from the account from time to time. These were made when the account was ahead of itself and were made for [Kavitha] at her request. She informed me and I believed that such withdrawals were made for the purpose of paying for materials or labour for the farm at 134 Moore’s Rd, Clyde, or for carrying out repairs and improvement to No 230.
c)That despite my relationship with [Kavitha] coming to an end in June 2012, I still made repayments on the mortgage. This was because I was a co-borrower with [Kavitha] and so liable to Westpac. I did not want the loan to go into default and risk a bad credit rating. Despite my ending our relationship, [Kavitha] continually promised me that she would obtain money from India so that the loan on No 230 could be paid off, and she would then negotiate a purchase of the Farm from me at a price to be agreed, again using money from India.[147]

[146]Affidavit of Richard Berian Phillips sworn on 24 March 2015.

[147]Ibid [20].

Manjula agreed in cross-examination that in 2011 as a result of the settlement of the Chipperton estate, Kavitha had to find $750,000. She accepted that from this time the priority was to repay that debt.[148]
[148]T 877.10-14.

As to payments that Kavitha’s parents made after December 2014, an undated document headed ‘Kavitha Money’ records funds sent from India or deposited in Australia between May 2015 and July 2017 together with the dispersal of those funds.[149] Associated with the ‘Kavitha Money’ document are various bank remittance documents and payments summaries that correspond with some of the deposits and withdrawals to that extent it can be inferred that funds were deposited in Richard’s Westpac savings account. On settlement of the East Bentleigh house in October 2015, the Chipperton settlement loan balance of approximately $687,900 was paid out.
[149]‘Kavitha Money’, undated, which forms part of tendered Exhibit 3P7-13 and a number of corresponding Westpac payment summaries, also in Exhibit 3.

After July 2017 no further deposits were recorded in the Kavitha money document and the balance of funds was disbursed for legal fees and to individuals. The document ended with funds of $30,097.33 remaining. There was no evidence about what happened to the balance of the funds remaining at the end of the document.

Separation

In mid-2012 Richard and Kavitha’s relationship ended.

A number of pieces of evidence went to the reasons for the relationship breakdown. Kavitha said after the hysterectomy she was totally lost and attributes the relationship breakdown to effects of her health problems.[150] Richard’s evidence in the 2014 statement was that he had, from 2010 onwards, been coming to a view that the relationship had no real future. He said:

In June 2012 I formally ended my relationship with KG when I found out that she had received a suspended prison sentence for trafficking cannabis at a time during our relationship. I had no idea of this until I was told by a colleague who had been defending KG on a charge of possession of a ‘joint’.[151]

[150]T 337.12-15.

[151]Statement of Richard Berian Phillips dated 22 December 2014, which forms part of tendered Exhibit 2, 2146-2149.

At the time the relationship ended, in addition to the farm being security for the Chipperton settlement loan of $750,000, the 2006 refinancing of the farm by Richard had an outstanding amount of approximately $253,000.

In examination-in-chief Kavitha said initially there was no discussion until later about what was to happen to the farm on ending the relationship. She thought it was after a number of other unrelated events that she identified in 2013 or 2014. Immediately after that lengthy answer she said that she and Richard discussed the farm within a few days of their breakup. Kavitha said Richard said to her ‘give me a million dollars and you can go. Take the farm and go’.[152] On resuming her evidence the next morning she said there was no discussion about staying on the farm after separation because it ‘was a given’ that she would stay on there.[153] She said sometime in June or July of that year Richard called her and they met. She said Richard proposed Kavitha keep the East Bentleigh house, he keep his own home, and Kavitha pay him $1 million to cover what he had spent purchasing the farm and for losses on the shop.[154] Kavitha spoke to her mother who said to her ‘What another million dollars after paying all this money?’[155] Kavitha said to her parents ‘just pay it and finish’. Kavitha said her parents came at the end of that year and when they saw the state of the house, which students had left in a poor state, they wanted to fix the East Bentleigh house first and then take Kavitha back to India in early 2013. The farm was to be settled after all that had happened.
[152]T 339.25-27.
[153]T 343.5-11.
[154]T 344.9-14.
[155]T 345.1-3.

In cross-examination Kavitha said that in 2012 there was no valuation of the farm. It was put to her that there was no agreement in 2012 to transfer the farm for $1 million. She said that there was such an agreement.

Richard’s 2015 affidavit described the situation after the relationship ended in this way:

Despite my ending our relationship, KG continually promised me that she would obtain money from India so that the loan on No 230 could be paid off, and she would then negotiate a purchase of the Farm from me at a price to be agreed, again using money from India. To this end I agreed to let KG continue to grow crops and manage the farm and stay at the house as and when required. This is the basis on which I let KG use the farm and the house from mid 2012 until November 2014. I expressly forbade her from letting anyone else stay in the house without my express permission.[156]

[156]Statement of Richard Berian Phillips dated 22 December 2014, which forms part of tendered Exhibit 2, 2146-2149.

Kavitha’s parents came to Australia in November 2012. Her father stayed only a short time but her mother stayed longer - into early 2013 – to support Kavitha because of her poor health. Kavitha described discussion between her father and Richard to the effect that the East Bentleigh house needed to be fixed up before they could settle the farm.

Manjula agreed that in 2012 when Richard and Kavitha separated she and her husband intended that they would help repay the debt incurred to settle the Chipperton proceedings as a priority.

In cross-examination, it was put to Kavitha that on separation in 2012 she had promised to obtain money from India to pay out the Chipperton settlement loan. She agreed with this. It was put to her that once that had occurred she had promised she would negotiate to purchase the farm. She disagreed with this, saying her parents and Richard had already agreed about the farm. She agreed that nearly all the money was still owing on the Chipperton settlement loan in 2014 but said there had been a lot of problems that explained why the money had not been sent. She said that in November 2014, her mother was coming to Australia to pay the 10% deposit for the farm.[157] She said there was no agreement to negotiate a sale of the farm because the papers were already settled.[158]
[157]T 610.1-2.
[158]T 612.8-9.

Kavitha was asked about the conversation shortly after separation in 2012 when Richard asked for $1 million to transfer the farm to her. She said this was an agreement done in accordance with ‘what we agreed when we bought the farm’.[159] She said her agreement with Richard in 2012 also reflected the earlier statement by her parents at the time of purchase: ‘tell us how much the farm cost and slowly we will pay all of it up’.[160]
[159]T 612.18-20.
[160]T 613.22-23.

Manjula was asked about discussions with Richard in 2012 concerning the farm. She said she did not have any conversation with Richard following the end of his relationship with Kavitha, but that she simply understood they were continuing to send money to Richard and once money was all paid the farm would be Kavitha’s.[161]Manjula did not distinguish between funds sent to the Chipperton settlement loan, funds to purchase the restrained East Bentleigh house, and funds towards the purchase of the farm.
[161]T 812.24-25.

Kavitha said she spent all of 2013 at the farm and there were others there who were working for her.

In 2014 the Azemi brothers returned to work the farm again. Kavitha said they paid her some money for the previous bills and damage that had been left there. Kavitha returned to India in May 2014. She stayed there about three weeks. She said that on her return she did not discuss buying the farm with Richard because she had spoken about it with her parents earlier and it was all arranged.

Beckim gave evidence that he first met Kavitha in 2007 or 2008 at the farm and worked there part time doing farming work with his brother and other workers. Later Beckim also set up his own business doing market gardening.

Beckim said he met Richard once a long time ago and on that occasion had asked if he could buy the farm. Beckim said Richard replied saying ‘ask Kavitha, the farm belongs to Kavitha’.[162] Beckim said that while Kavitha was in prison, Richard put the farm on the market and he tried to buy it but his offer was rejected. He said that while Kavitha was in prison he would talk with Richard who told him he should keep working the farm, pay the bills and keep it clean and tidy.
[162]T 765.1-2.

In cross-examination, Beckim agreed that the change from hourly wages to a share cropping agreement occurred in about 2010 or 2011 when Kavitha got sick. From that time onwards he was sharecropping the whole of the farm until there was a court case about the payment of rent. At that time he stopped cropping on the farm. He was asked whether from 2011 onwards Kavitha did any cropping on the farm. He said he couldn’t remember exactly but at some unknown time she sent a person called Lali[163] to do cropping work. He could not say how much time Kavitha spent at the farm as he did not go into the house there. He said he knew the farm belonged to Richard and Kavitha but that he didn’t pay Richard anything. He said that he would pay some money to Kavitha for the use of the farm contributing to bills.
[163]There was evidence from Kavitha that Lalie was an international student who stayed for a time at the East Boundary Rd house.

Beckim agreed that Richard came to the farm once with his wife Ingrid and handed him a piece of paper. It was put to him that at this time Richard said Beckim should be paying rent to Richard and not Kavitha. Beckim denied that he was asked to pay rent to Richard and said he never paid rent to Kavitha.[164]
[164]T 771.30-31; 772.7-9.

Beckim confirmed in re-examination that some of the crops he planted were given to Kavitha and said she got most of the money from the crops he planted.[165]
[165]T 774.15.

Kavitha’s arrest and imprisonment

In October 2014 Kavitha was arrested on drug charges. Those charges related to possession, cultivation and trafficking of cannabis at both the farm and the East Bentleigh house.

Kavitha was refused bail and she remained imprisoned until May 2017.

As a result of the criminal charges against Kavitha, her interest in the East Bentleigh house and the Chipperton settlement loan were restrained under the Confiscation Act 1997 (Vic) (the confiscation proceeding). Richard’s 2014 statement was a police statement and his 2015 affidavit were both created in the context of the criminal and confiscation proceeding. The 2014 statement said of the ongoing payments for the Chipperton settlement loan:

KG’s [Kavitha’s] parents have from time to time remitted funds to the mortgage account to cover mortgage repayments and to provide some funds for KG to draw upon if required. Since KG was arrested, funds have been deposited into this account from her parents in India to cover ongoing mortgage payments and legal fees.[166]

[166]Statement of Richard Berian Phillips dated 22 December 2014, which forms part of tendered Exhibit 2, 2146-2149.

According to Richard, repayments of the Chipperton settlement loan were made by Richard (totalling $77,600), Kavitha (totalling $49,371.31) and money received from her parents in India (totalling $28,030.05).[167] Some funds were redrawn. By March 2015 the loan balance was $711,314.52. Deposits by Kavitha’s parents prior to the account being restrained are variously described as a gift for Kavitha or for Kavitha to meet various expenses.
[167]Affidavit of Richard Berian Phillips sworn on 24 March 2015, [18], [19].

Richard made an application to exclude his interest in the Chipperton settlement loan and the East Bentleigh house on the basis of his financial contributions.

In September 2015, in resolution of the confiscation proceeding, Kavitha’s parents prevented forfeiture of the East Bentleigh house by purchasing it for the sum of $1 million.[168] They deposited money with Richard for this purpose. The purchase price paid out the balance of the Chipperton settlement loan. Kavitha forfeited the equity she held in the East Bentleigh house in the sum of $206,765.88 to the Department of Justice[169] After settlement Richard’s account held funds from Kavitha’s parents of $112,255.57 as at 19 October 2015.[170]
[168]T 917.15-17.
[169]See ‘Kavitha Money’, which forms part of tendered Exhibit 3, P11-P17.
[170]Ibid.

I reject Kavitha’s explanation for her signature on documents creating the trust and on the transfer of land, being that she signed these (and indeed all) documents without reading them, based on her trust in Richard. While she wished to portray herself at times as a naïve and trusting partner who did not read documents, at other times she portrayed herself as commercially knowledgeable and experienced in business and finance, claiming good judgment in identifying the potential for rezoning benefit presented by the farm.

Although Kavitha gave evidence of an unknown amount remaining from a gift from her parents at an indeterminate time in 2004 being contributed to the purchase price, her particularised claim pleaded only that those funds were committed to the repayment of the joint purchase borrowings. I cannot be satisfied that any funds provided to Kavitha or Richard by her parents prior to 25 January 2005 were used at settlement of the farm. If, as Kavitha claims, borrowings were increased to take account of an agreement that Richard would fund Kavitha’s contribution, it is improbable that the necessary loans to be used for the purchase would be jointly taken out by Colin and Richard as in fact occurred. Any such instalment agreement would be consistent with Richard taking a two-third interest in the Moores Rd Trust. He did not.

The pleaded claim alleges that after purchase Kavitha asked her parents to contribute funds towards repayment of the joint purchase borrowings and her parents did so. [247] This is not made out on the evidence. Richard’s bank statements demonstrate that all repayments on both loans were debited from an account in his name, with a small exception.[248] In 2006 Richard alone took out the refinancing to pay out the joint purchase borrowings and pay funds to Colin. Kavitha’s case at trial was less specific as to contributions towards her interest. She simply relied on cash amounts contributing to acquisition of the farm after the event because cash amounts were given to Richard for that purpose. Those amounts were particularised in February 2020 as:[249]
[247]Further Amended Statement of claim filed 5 October 2022.
[248]That exception covers payments in February and March 2005 totalling approximately $3,500 which Richard gave instructions were to be refunded to Colin.
[249]Plaintiff, Amended Further and Better Particulars dated 24 February 2020.

(a) $20,000 cash given to Kavitha in about April 2004, which was given to Richard, although Kavitha did not know whether any of this amount was put towards repayment of borrowings for the farm;

(b) $10,000 in late 2004 that Surita carried to Australia;

(c) $20,000 that Manjula gave during a visit in December 2004;

(d) $5000 that Surita gave in 2005 in discharge of a debt owed to Kavitha’s parents;

(e) $20,000 that Dr Chakrabati carried in 2005;

(f) $20,000 that Manjula gave during a visit in August 2006;

(g) $20,000 that Manjula gave during a visit in October 2006;

(h) $20,000 that Manjula gave during a visit in May 2007;

(i) $20,000 that Dr Kumar brought from India during 2007; and

(j) $20,000 that Manjula gave during a visit in January 2010.

According to the particulars, each of the amounts (b) to (j) were accompanied by words from the person handing over the cash that it was money for Kavitha’s contribution to the farm.

The evidence at trial as to frequency and amounts of cash brought to Australia between December 2004 and 2011, and evidence that it was given to Richard, varied substantially from these particulars. It was vague and contradictory. It is even less reliable than the particulars compiled after Kavitha visited India to obtain information for the provision of particulars. Kavitha described payments from her father in addition to those from her mother despite particulars being amended to exclude reference to payment from her father. At times Kavitha gave quite definite evidence. At other times she disavowed any understanding of financial arrangements:

‘for me was to get the farm. All the payments, the headache is either mum or Richard or Colin’s.[250]

[250]T 222.19.

One example of her contradictory evidence is about the first contribution. On one occasion she described $20,000 that her parents gave her in 2004 when she and Richard became engaged as being used as the first instalment.[251] Later when describing the money that Dr Chakrabati brought in 2005 she said she told Richard in the car on the way back:

‘there you go that’s your first payment for the farm’.[252]

[251]T 241.23-24.

[252]T 257.8.

Her evidence about this payment from Dr Chakrabati was in other ways completely imprecise saying that she looked in an envelope that contained a wad of notes that looked to be about $20,000.

There was an unexplained absence of evidence from people identified as having brought money to from India: Surita, Dr Chakrabati and Dr Kumar. I infer that their evidence would not have assisted Kavitha’s case. That absence is compelling. Hansen J observed:

…in a claim based upon communications with a deceased persons the Court will treat uncorroborated evidence of such communications with considerable caution, and will regard as of particular significance any failure of the claimant to bring forward corroborative evidence which was, or ought to have been, available.[253]

[253]Richardson v Armistead [2000] VSC 551, [36].

Kavitha’s father did not give evidence. Kavitha gave evidence that her father’s mind has been disordered since he contracted Covid a year earlier and he is not able to give evidence. Although this evidence is less than satisfactory to explain his absence, leaving any medical opinion to that effect I have not drawn an adverse inference from his absence. Given the unreliability of Kavitha’s and Manjula’s evidence, Kavitha has not discharged her onus of proof as to the conversations between her parents and Richard, or her parents’ contributions to the maintenance of the farm.

Kavitha’s evidence by the time of trial is that her parents had transferred ‘over $400,000’ to the farm.[254] She was quite definite about that figure as one according to her mother’s account. She has made no attempt to identify how she arrived at this amount or when her mother provided that figure. This amount is inconsistent with the particulars provided after Kavitha’s return from India to obtain information about the contributions, which informed the particulars of contributions. It is in my view a fabricated figure.
[254]T 505.18-19.

In my view Kavitha’s evidence generally of the amounts given is significantly inflated. She graphically described the first occasion that her parents came to Australia after January 2005 saying her mother produced $30,000 from her petticoats, her father producing $30,000 from his pants and together they gave Kavitha a further $10,000 to buy a seeder. The particulars of contributions describe the first occasion after settlement as a visit in August 2006 in which Richard was given a total of $20,000.[255]
[255]Plaintiff, Further and Better Particulars of Statement of Claim dated 20 December 2019.

By contrast, Manjula’s evidence-in-chief was that she and her husband first met Richard in 2005 and on that occasion she gave him (or Richard and Kavitha together) $20,000, and so did her husband for Kavitha’s 50% share. She described a second occasion amount totalling $50,000[256] and a third occasion occurring in 2009 or 2010 again totalling $60,000.[257] In my view these amounts are also inflated and fabricated.
[256]T 807.23.
[257]T 708.25-809.3.

While I accept that Kavitha’s parents gave some funds, Manjula said at the start of her evidence that at the time the farm was settled she and her husband didn’t have much money.[258] She agreed in cross-examination that funds she gave between 2005 and 2007 were a gift to Kavitha,[259] but at the same time maintained she told Richard it was for the farm.
[258]T 716.15.
[259]T 879.

The impression I formed of Manjula as a witness was that she was easily confused about matters. Her recollection of detail and timing of events was poor. At times she confused payment relating to the East Bentleigh house with payment relating to the farm. Much of her evidence was clearly reconstruction rather than actual recollection. As reconstruction her evidence was clearly influenced by her acceptance of Kavitha’s account of events. I found her evidence unreliable and do not accept it where it is contradicted by other evidence. Where it is the only evidence corroborating Kavitha’s account it does not add any weight to Kavitha’s account, given on other occasions it contradicted Kavitha’s account. I accept the submission that it is implausible that, if given large amounts of cash between 2005 and 2011, Richard would not have banked those amounts in reduction of the loans upon which he was paying interest.

In submissions, Kavitha ’s counsel sought to persuade me that I should infer that certain unexplained amounts deposited in Richard’s account occurring around the time of Kavitha’s parents visits to Australia came from Kavitha’s parents. That is in my view too long a bow to draw. There are however, two transfers of funds in 2007 – $5,000 on 20 August 2007 and $15,465.09 on 2 October 2007 – each described as ‘Deposit Anand Kulkrni Gurupaji request’. Kavitha does not rely on either amount as a contribution to the farm. The evidence does not deal with the purpose of the deposit or who has requested it. There is no evidentiary basis to treat these deposits as having any relevance to the issue of Kavitha’s contribution to the farm.

Doing the best I can on the evidence, I conclude that any money prior to settlement was given to Kavitha (or she and Richard together) but that those funds were not used to contribute to the acquisition of the farm. I conclude that Kavitha’s parents came to Australia on three occasions after 25 January 2005: in August 2006, October 2006 and May 2007. Manjula’s evidence was that she did not always complete the incoming passenger card honestly in relation to the amount of cash she was carrying. This makes the documents themselves an unreliable source of evidence. As completed, the declarations, if honest, would demonstrate that Kavitha’s parents bought no more than $20,000 in 2007 and unknown amounts somewhat in excess of $20,000 in 2006. After 2007 there were no further visits until Kavitha’s father’s visit in June 2011, by which time Richard was arranging the Chipperton settlement loan to obtain Kavitha’s title to that property. From this time Manjula agreed the priority was to repay that loan.

I cannot be satisfied of the precise amount Kavitha’s parents provided before the breakdown of Richard and Kavitha’s relationship. The original estimate of $20,000 contributions is likely to have been calculated on the basis that each parent could bring up to $10,000 into the country. I do not accept Manjula’s evidence converting this amount to $20,000 each or some larger figure. Whatever the actual amount I am not persuaded that it was given as payment of a contribution towards Kavitha’s interest in the farm under an agreement between Richard and Kavitha’s parents that Richard would pay for Kavitha’s share and her parents would repay it in instalments. It is likely that Kavitha used the majority of whatever funds her parents provided in 2006 and 2007 for expenses that she was incurring running the farm or the East Bentleigh house, supplementing her other sources of income.

There is no evidence that Kavitha provided any cash to reduce Richard’s borrowings during this time.

Kavitha’s evidence was that she also gave Richard cash from the income generated by the market garden business to hold from time to time and would take that cash back to use for expenses as needed. Despite Kavitha providing cash from time to time, it is clear that the business was incurring increasing losses, even before Kavitha became ill and debilitated. It is unlikely that any cash surplus was available during the relationship.

I am satisfied that the documents created when Richard bought out Colin’s interest accurately reflect the position at the time of purchase that Richard and Colin each contributed funds of $170,000 and jointly borrowed the balance of the purchase price. I am satisfied that Kavitha knew and understood this arrangement. Given the documentary evidence that Richard maintained to account for cash contributions that he held for the purpose of paying funds on behalf of Kavitha’s interests or at her directions, it is improbable that Richard would make no formal record of any such intended interest in the farm.

There was no issue taken by Kavitha with Richard’s integrity and honesty.[260] In light of his professional experience as a barrister practising in wills and estates, it is unlikely that, had he promised or intended to give Kavitha a beneficial interest, that he would not have documented it. He would also have understood the difference between a testamentary bequest and a promised interest in property.
[260]T 482.27

I am satisfied that Richard, in buying out Colin’s half share of the Moores Rd Trust, and borrowing the funds to do so, intended to become the sole registered proprietor and beneficial owner of the farm.

Kavitha’s evidence of the conversation she had with Richard in 2006 was self-serving in many respects and contrary to the documentary evidence. Richard did not pay extra money to Colin for him to go away. Rather, the correspondence at the time made clear that Richard sought advice to ensure Colin was paid fairly for his investment. Kavitha’s unreliability about these details reflects on her evidence as to the conversation as a whole. I accept that Richard probably said something to the effect of ‘it’s just us now’. Such a comment would be reasonable given the conflict between Kavitha and Colin that had been building for some time and which led to Colin’s departure. I do not accept that it was a statement intending to reflect anything other than the fact of Colin’s departure. I do not accept that it represented any conferral of, or increase in, an interest in land.

Were there a promise to confer or increase an interest in the farm, I would have expected at the very least that there would be some communication of this by Richard with Kavitha’s parents who were, on Kavitha’s case, paying Richard instalments for that interest. There is simply no evidence that in 2006, on Colin’s departure, Kavitha had an interest that increased or changed.

The rezoning of the land in 2010 increased its value. It is probable that Richard and Kavitha celebrated the rezoning decision. The discussion about ‘millionaire babies’ is in my view a worthless piece of evidence, not only because it is likely to be only a flippant comment but also because it took an inordinate amount of time and effort to extract the evidence from Kavitha in her examination-in-chief. Further, Kavitha’s evidence that Richard said to her ‘I’m already Rich, now we are rich’ was given with a degree of precision that itself makes the evidence somewhat suspect. I am not persuaded that Richard made this statement, even as a casual observation. I apply a full measure of caution to the precision of Kavitha’s evidence as to this specific statement that she attributes to Richard, in light of her general inability to recall past events and discussions.

Even if I were satisfied that Richard made the statement, I could not be satisfied that Richard intended it to convey that Kavitha was promised a beneficial interest in the land. As at 2010, Kavitha had an in-principle unfunded settlement that gave her title to the East Bentleigh house. Richard held title to his home in West Melbourne and the farm. For the duration of their relationship each held property separately. Absent a promise or common intention in 2004 and/or 2006 that Kavitha have an interest in the farm, I accept the submission that if made, Richard’s statement at the time of rezoning amounted to no more than a statement of their cumulative wealth.

There is, in my view, nothing to support the submission that during their relationship Richard and Kavitha pooled financial resources. The evidence of the financial arrangements between them is limited. Kavitha’s evidence was that early in the relationship, when she was working in landscaping, the money she made was hers.[261] Richard swore in 2014 that prior to July 2011 Kavitha was living off money she received from using the East Bentleigh house as a boarding house and ‘whatever she made on crops grown’ on the farm.[262] While it is accepted that they were in a domestic relationship, it is also clear that Kavitha moved between Richard’s home in West Melbourne, the East Bentleigh house and the farm. From 2004 Richard was going to the farm most weekends but by 2010 was visiting less and less.
[261]T 213.6-7.
[262]Affidavit of Richard Berian Phillips sworn on 24 March 2015, [21].

With two exceptions, there is no evidence of joint accounts or joint ownership of property. First, there is the joint borrowing in 2011 to fund the Chipperton settlement. This is explained by Richard’s evidence as a consequence of Kavitha being unable to fund the necessary borrowing herself that required Richard to become a co-borrower. Richard was to be repaid his contribution to the borrowings but it was not contemplated that they would jointly hold the East Bentleigh house. Secondly, there is the ANZ joint account, opened specifically to hold the deposit payable under the 2015 contract to sell the farm. This also was for a specific purpose and occurred long after the relationship was ended.

There is no suggestion that Kavitha provided Richard with any of the money made under the sharecropping arrangement with the Azemi brothers. I accept Ingrid’s evidence that Richard was unaware until visiting the farm in July 2015 that the Azemi brothers had been paying money to Kavitha to use the farm.

Beckim’s evidence in my view showed little actual knowledge of the state of Richard and Kavitha’s relationship. It was clear he mostly dealt with Kavitha during his time at the farm. After 2012 while he was at the farm, he was paying money to Kavitha under a sharecropping arrangement. His evidence confirms that he paid no money to Richard for his use of the farm. According to Kavitha some of the money expended on the farm after the end of her relationship came from Beckim as fund to pay for damage to property the farm.

There are two contradictory accounts as to what occurred when the relationship ended. By Richard’s account, from 2010 he began to feel the relationship had no real future and he formally ended it in June 2012 when he learned Kavitha had received a suspended sentence for trafficking cannabis during their relationship.[263] He said he was told this by a colleague defending Kavitha on a charge of possession.[264] As outlined above at [105], Kavitha made promises to negotiate purchasing the farm from Richard once she had paid the Chipperton settlement loan off with money from her parents. By Richard’s account, based upon this promise, he agreed to allow Kavitha to continue to use the farm.
[263]The evidence discloses that this conviction was recorded on 29 May 2009.
[264]A conviction on such a charge was recorded in June 2012.

By contrast, Kavitha’s oral evidence is that she and Richard agreed in mid-2012 that she would purchase Richard’s interest in the farm for $1 million. Kavitha’s evidence provided at least three explanations as to how they arrived at this amount, none of which were by reference to the value of the farm in 2012.[265] Nor did any of the explanations identify any accounting for contributions made during the relationship or her own interest in the farm. Her actions between 2012 and her arrest are inconsistent with an agreement to purchase at an agreed price and are consistent with an ongoing promise to purchase the farm after her parents had repaid the Chipperton settlement loan.
[265]Those explanations included (1) that it represented losses on the shop and the purchase price of the farm (T 344), (2) to payout the Chipperton settlement loan and repay losses on the shop (T 629) and (3) to cover what Richard paid for the farm.

I am not satisfied that there was any oral agreement made between Richard and Kavitha that Kavitha would pay $1 million to Richard and obtain title of the farm. Richard’s statement signed in December 2014 is consistent with events between 2012 and 2014. Manjula confirmed the priority was to repay the Chipperton settlement loan, which in 2012 remained at $750,000. Doing so became further complicated by Kavitha’s arrest and the confiscation proceeding and led to the decision that her parents would purchase the house. Ultimately the Chipperton settlement loan was paid out at settlement in 2015 when Kavitha’s parents purchased the house. It is implausible that Richard agreed in effect that Kavitha ‘buy out’ his interest in the farm for approximately one third of the value of the purchase price some eight years earlier.

Richard’s subsequent negotiations about the farm with Kavitha and her parents, as demonstrated by the documents, was on the basis of market value of the farm. In February 2015, the farm was on the market when Kavitha made an offer of $3.2 million, describing it as ‘your full asking price’ while also acknowledging Richard was still owed money for the Chipperton settlement loan. Kavitha obtained family law advice in 2015 and her evidence changed again. She said she decided ‘He [Richard] can have his 3.2. I’ll go for my half.’[266] Again, Kavitha did not take any action that is consistent with this statement. The evidence clearly demonstrates that her parents signed a contract for sale for $3.2 million at the end of 2015. Manjula’s evidence was that this was a delaying tactic and she, with Richard’s agreement, never intended to complete the contract at that price. I reject her evidence that Richard agreed with such a course. It is illogical, implausible and completely at odds with his contemporaneous instruction to his lawyer that it was a deal too good to let go.
[266]T 387.11.

Ultimately Kavitha’s submission that it was a delaying tactic on her parents’ part is borne out. There was a reluctance to finalise matters until Kavitha’s criminal proceeding was concluded and she was released from jail. While Richard acquiesced to this course, it is apparent from the tone of the documents that he was increasingly frustrated by the Gurappaji family delay.

This is also supported by Sheppet’s recollection and his contemporaneous file note of the meeting that occurred on 1 September 2017. At the meeting, Richard offered the farm to Kavitha and her parents for purchase at market value. Richard had obtained an updated valuation of the farm given the two-year delay in agreement. Sheppet’s evidence is that he and Richard left Sdraulig and his clients to discuss and consider their response. This accords with Manjula’s evidence where she described two meetings at the lawyer’s office, one with and one without Richard’s lawyer present.

Sheppet’s recollection and the file note records Kavitha saying she had put a lot of effort into the farm and she did not agree Richard had a right to sell it. To the extent Kavitha explained this view at the time, the note referred to a power supply line and work to fix the driveway. Both of these are in all likelihood references to work undertaken after her release from prison. Kavitha relies on this comment in support of Manjula’s evidence that – at two subsequent meetings with Richard – Richard accepted a price at about a quarter of the valuation presented at the earlier meeting.

It is improbable that Kavitha’s comment was anything more than an expression of her desire to stop the farm being sold to a third party. I reject the submission that this conveyed an assertion of an interest in the farm. Kavitha and her parents were legally represented at the meeting by Sdraulig and I would expect that he would have spoken to address any beneficial interest arising from contributions either financial or indirect that might impact on price. Sdraulig was not called to give evidence about the events in September 2017. Sheppet’s contemporaneous note and recollection in oral evidence was of Richard’s statement to the meeting that ‘I’ve paid for the farm, I’ve paid 100% for the farm. I’ve serviced the debt. I want it sold’ was not challenged as unconscionable at the time it was made, nor in subsequent correspondence between Sdraulig and Sheppet.

I reject the evidence of a subsequent oral agreement with Richard as a fabrication. In light of the documents, Kavitha’s and Manjula’s oral evidence of a subsequent oral agreement to buy the farm for $1 million or $1.2 million with Richard is self-serving and completely implausible. Kavitha’s evidence is that she and her parents went into the meeting thinking that $3.2 million as had been agreed in 2015 was ‘a bit steep’. Consistent with this it is no great leap to accept that a further increased valuation might be also considered ‘steep’ by Kavitha and her parents. The idea that Richard would then agree to an amount of $1.2 million, yet not communicate this with Sheppet, is fanciful.

After the meeting on 1 September 2017, the documents demonstrate that Richard and his lawyer were waiting on a proposal from Kavitha and her parents. Nothing had been agreed and, as Manjula described, she intended to return to Australia in February 2018 ‘to decide about the farm’. Insofar as further payments were made after the September meeting into the ANZ joint account, I accept that payments, both before and after 1 September 2017, were made on the understanding of all parties that they were held to be put towards the purchase of the farm as and when a price was agreed and a contract signed. I find that agreement was not reached at 1 September 2017 meeting and was not concluded subsequently.

Conclusions

It follows from these findings of fact that there was no promise or common intent in January 2005 that Kavitha would hold a one-third interest in the farm. The agreement formed in July 2004 between Colin, Richard and Kavitha did not persist at the time of settlement of the farm. The documents are contrary to any inference that a common intent persisted. Kavitha has not established that at settlement Richard intended or promised, despite non-payment of her one-third contribution, that he would hold a one-third interest in the farm for her benefit.

I am also not satisfied that in 2006 Richard and Kavitha formed a second common intent, or Richard made a promise, that Kavitha now held an equal beneficial interest in the farm. This is because in 2006, Richard alone funded the purchase of Colin’s half share interest and paid out Colin’s cash contribution.

Absent an equitable interest arising from an earlier representation or promise in 2004 and/or 2006, the comments at the time of rezoning that Kavitha relies on are insufficiently precise in themselves to confer an interest in land. In any event, the thrust of Kavitha’s evidence is that she continued farming and the arrangements were unchanged. There is no evidence that demonstrates Kavitha acted to her detriment in reliance on those representations in 2006 or 2009. Those comments may say something about whether a constructive trust arises based upon contributions made during the relationship. I turn to this element of Kavitha’s claim.

Kavitha alleges that she made contributions during the relationship for the common benefit of the relationship and that it would be unconscionable for Richard to deny a beneficial interest as to the value of those contributions.

As Kaye J (as he then was) explained in Cressy,[267] the purpose of imposing a constructive trust on personal relationships is to remedy an unconscionable assertion of legal rights by one to the exclusion of contributions of the other. It recognises that the relationship in question is not merely commercial but also personal.
[267]Cressy (n 226).

Therefore relevant contributions are not limited to financial contributions direct or indirect but encompass an accounting of other ways that a contribution might be made because of the features of the relationship. Lloyd v Tedesco,[268] quoted as part of Kaye J’s analysis at paragraph [195] in Cressy, described the contributions in a domestic relationship as:

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 de facto 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.[269]

[268](2002) 25 WAR 360.

[269]Ibid [31].

The starting point is the particular relationship and its factual arrangements. Richard and Kavitha did not pool financial resources or assets. They had no children, and did not divide responsibilities between housework and financial provision. Rather, Kavitha appeared to give up her landscaping and importing interests because she preferred to farm instead. The farm was purchased by the Moores Rd Trust to which Richard contributed 50% initially and then 100%. Richard also financially contributed to the market garden business and an associated shop for a time as did Kavitha. Overall there was an endeavour arising from the relationship operating the market garden business on the farm and for a time from a leased shop. Kavitha remained committed to this beyond the end of her relationship with Richard. Richard’s comment that the farm was never overly profitable was perhaps an understatement in light of accumulated losses of Clyde Market Gardens by June 2010 of $160,662 funded by loans from Richard. Richard’s description of the farm as an ‘ongoing financial burden’ is borne out by the documents.

While I have found that Kavitha (herself or by her parents) did not make any contribution to the acquisition of the farm, I accept that she has made some contribution to what might be termed its maintenance and improvement as well as to the business that operated there, both directly from cash provided by her parents from time to time and indirectly by living at and organising the business . Most of the documented expenses Kavitha relies on relate to maintenance and repair of equipment, or contractor expenses. In total, the invoiced expenses tendered that were incurred prior to July 2012 amount to approximately $17,000. Kavitha has made no real attempt to identify those that relate to maintenance or holding costs of the farm itself prior to June 2012. As to the frequency of draining the sump dam, Lightowler could not recall any details and estimated only one more visit to mid-2012, contrary to Kavitha’s estimate of visits every two years. Kavitha did not actually give evidence that she paid for most of the works she identified prior to 2012.

At best, assuming in Kavitha’s favour that all of the invoiced amounts are properly contributions that are to be taken into account and accepting that on the three visits to Australia in 2006 and 2007, Kavitha’s parents brought with them and gave her $20,000 on each occasion that she used in relation to expenses associated with the farm, the evidence as to contribution to maintenance or improvement prior to 2012 amounts to something less than $80,000. To the extent that all or some proportion of this may properly be characterised as contributing to maintenance or improvement of the farm, then the question arises whether it would be unconscionable for Richard to deny that contribution.

With any contribution being made during the relationship, it is also relevant to consider the benefits Kavitha gained following the end of the relationship. I accept Richard’s characterisation of the arrangements at that time that Kavitha was permitted to continue to live at the farm and grow crops up until the time Richard learned she was arrested. There was no evidence Kavitha was required to make any payment to Richard from income she generated. There is also no suggestion that Kavitha provided to Richard any of the money she received through the sharecropping arrangements with the Azemi brothers from 2011 onwards. To the contrary it appears she was retaining the benefit of cash received, both during the relationship and after it ended. The permission to remain using the farm was in the context of a promise to negotiate the purchase of the farm at a price to be agreed.

Expenses incurred in maintaining the farm after 2012 cannot be considered a contribution made in the furtherance of a joint endeavour arising out of the domestic relationship. They are relevant only if an equitable interest arose from a promise made or expectation encouraged by Richard. I put them to one side.

For the following reasons I am not persuaded that it would be unconscionable for Richard to assert his legal right to Kavitha’s exclusion. First, there is no reason to conclude that Richard’s sworn statements as to ownership were incomplete or denied Kavitha’s interest. While in 2014 and 2015 in the context of confiscation proceedings, Richard might be careful to explain only his own interest, his statements at that time asserting sole ownership of the farm are consistent with his sworn statement in 2006 that only he and Colin held legal and beneficial interest. Second Richard did assert his legal right in placing the property on the market for sale in 2014 or 2015 when there had been no advancement on a promise to negotiate a purchase prior to Kavitha’s arrest. The response to this action was an offer to purchase at full commercial value at the time. Third, Richard did assert his legal right by his statement in the meeting on 1 September 2017 and Kavitha and her lawyers did not challenge him when he did so. Fourth, the broader context of their domestic relationship demonstrates that in addition to paying the purchase price and servicing the debt on the farm, Richard supported Kavitha financially to assist her and her parents to settle Kavitha’s interest in the East Bentleigh house becoming a joint borrower of loan funds for that purpose. He derived no financial advantage in doing so and incurred additional expense. Fifth, he sustained losses incurred by the unprofitable nature of the market garden business that Kavitha had been managing. To the extent Kavitha generated cash that contributed to the business, it is likely that she also sustained loss.

In my view, the extent of Kavitha’s financial contributions to the maintenance and improvement of the farm, through her own efforts or the largesse of her parents prior to 2011, are to a large extent offset by Richard’s agreement that Kavitha remain living at the farm for two years until her arrest in 2014 and return to live on the farm on release from prison pending the negotiation of a sale as she requested. As far as the evidence revealed Richard received no income from the farm after 2012.

It is also relevant, looking at the overall financial and domestic arrangements between the parties that Richard made financial contributions to enable Kavitha to acquire assets in her own name agreeing to be a joint borrower of the Chipperton settlement loan, and servicing interest repayments for three years and a further period of interest and capital repayment. Although this financial commitment to Kavitha’s advantage was commenced during the relationship, Richard continued the arrangement between 2011 and 2015 to accommodate Kavitha’s interests at financial cost to himself.

These overall circumstances of the relationship do not make it unconscionable for Richard to deny an equitable interest in the land from Kavitha’s contributions arising from the substratum of their relationship.

In the circumstances of this case, where it was Kavitha who instigated and drove the purchase of the farm, funded by others, to express her passion for farming, I do not accept that her actions in farming the land as she wished to do amounted to something that advanced the mutual wealth of the parties.

As I am not satisfied that Kavitha has established an equitable interest in the farm, it is not necessary to say anything about the equitable defence of laches.

It follows from my findings that the defendant succeeds on his counterclaim for mense profits from 7 August 2019 to 25 August 2020. They were claimed at $500 per week based upon the valuation report of Bertacco Ferrier dated 2 October 2020,[270] which was not disputed.
[270]Which forms part of tendered Exhibit 2, 280-326.

Thereafter the parties agree that occupation costs to the date of trial that are payable in accordance with my findings are $38,000. Occupation costs after that date are to be determined.

Finally, I will hear from the parties as to the form of the orders.

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[2023] VSC 558

18 September 2023