Hiralal v Hiralal

[2019] NSWSC 253

Supreme Court

New South Wales

Medium Neutral Citation:	Hiralal v Hiralal [2019] NSWSC 253
Hearing dates:	29 February; 1, 2, 3 and 4 March; 11, 12 and 13 October; and 9 December 2016; and 31 January 2017
Decision date:	13 March 2019
Jurisdiction:	Equity
Before:	Lindsay J
Decision:	Rulings given on disputed items in an account
Catchwords:	WILLS AND ESTATES – Trusts and Trustees – Accounts – Disputed items - Rulings
Legislation Cited:	-
Cases Cited:	Jones v Dunkel (1959) 101 CLR 298 Coshott v Sakic (1998) 44 NSWLR 667
Texts Cited:	-
Category:	Principal judgment
Parties:	Plaintiff: Vidyagauri Hiralal First Defendant: Nitin Hiralal Second Defendant: Vinod Gokal Third Defendant: Vibha Hiralal
Representation:	Counsel: Plaintiff: N Allan Defendants: P Afshar   Solicitors: Plaintiff: Harish Prasad & Associates Defendants: Indus Lawyers
File Number(s):	2012/00082834

Judgment

INTRODUCTION

1. As one of three trustees of the deceased estate of her late husband, and representing the estate in these proceedings, the plaintiff claims against her co-trustees (the first and second defendants) relief designed to provide for due administration of the trusts and, more particularly, orders for the first defendant and his wife (the third defendant) to account for what is alleged to be trust property.

THE ESTATE AND FAMILY OF THE DECEASED

2. Hiralal Bhagwandas (“the deceased”), a businessman, died aged 78 years in Fiji on 13 June 2010, leaving a will dated 15 June 1993, probate of which was, on 11 February 2011, granted by the High Court of Fiji to the plaintiff, the first defendant and the second defendant as executors and trustees named in the will.

3. On 4 June 2012 orders were made by this Court (the Supreme Court of NSW), by consent, to the effect: (a) that the testamentary trust established by the deceased’s will be administered under the control of the Court; (b) that the trustees were to direct maintenance payments of $4,000 per month to the plaintiff; and (c) that, until further order, all decisions by the trustees were to be made jointly and that any disagreement between them was to be resolved by approval of the Court.

4. The plaintiff is the widow of the deceased. The first defendant is one of their four sons. The second defendant is a friend of the deceased, a fellow businessman. The third defendant is the first defendant’s wife.

5. The plaintiff was born in 1936, and is now aged 82 years. She and her late husband married in or about 1953. They emigrated from India to Fiji in 1954. At the time of the deceased’s death, they were in a state of transition, intending perhaps to move from Fiji to Australia.

6. There were six children of their marriage; namely:

1. a son, Bhupendra.

2. a son, Ramesh.

3. a son, Niton (the first defendant).

4. a son, Hariwadan (“Hari”)

5. a daughter, Pushpa.

6. a daughter, Urvashi.

7. The deceased’s will (reproduced at 1 Court Book 85-89 together with the grant of probate relating to it) provided for his “just debts, funeral and testamentary expenses” to be paid from his estate “before any distribution”, and for the residue of the estate to be held on trusts which directed his trustees:

1. “to let [the plaintiff] have the free use of [the deceased’s] home and [his] chattels for her lifetime while she remains unmarried”.

2. to “give to [the plaintiff] such sums of money from either the income or capital of [the deceased’s] estate until her death or earlier remarriage”.

3. on the death or remarriage of the plaintiff, to “divide and distribute such of [the deceased’s] estate as shall then be remaining” between his six children in equal shares for their own use and benefit absolutely as tenants in common.

8. All the children are married with families of their own. The plaintiff has not remarried.

9. In 2006 the plaintiff and the deceased moved to Sydney (staying with Hari’s family) hoping to emigrate, but maintaining links with Fiji that led to several return trips to Fiji before the deceased there met his fateful day.

10. The deceased sold the family home in Fiji in 2009.

11. In an apparent anticipation of a move of himself and the plaintiff to Australia, the deceased appears to have taken steps to transfer some of his wealth to Australia (through informal arrangements with the first defendant) and sought, without success, to buy a motel business in Australia.

12. Whether or not the financial dealings between the deceased and the first defendant were part of a design on the part of the deceased to move to Australia, they are central to the plaintiff’s claim against the first and third defendants.

13. The importance of the deceased’s unsuccessful proposals to enter the motel business in Australia (in or about January - March 2005, with a proposal to acquire the Parkview Motel in St Marys and, in or about October 2007, with a proposal to acquire the Willows Motel in Gosford) lies in the evidentiary value attributed by the plaintiff to documentation prepared by the deceased and the first defendant in support of applications for finance.

THE REFINED QUESTIONS FOR DETERMINATION

14. In proceedings which canvassed diverse other issues, the parties ultimately agreed that the only issues that require a determination of the Court are those noted as items 10, 16 and 17 on a schedule marked for identification as MFI D10.

15. Item 10 relates to a sum of $685,448.81 alleged by the plaintiff to have been held on trust for the deceased by the first and third defendants.

16. Item 16 relates to recovery on behalf of the estate of disputed “loans to Ramesh” totalling $250,000 or thereabouts.

17. Item 17 relates to a sum of $46,872 paid to or for the benefit of Nilesh, a son of Bhupendra, a grandson of the deceased (the first defendant says at the direction of the deceased) for a kidney transplant.

18. At the conclusion of the hearing of the proceedings the Court made formal notations defining the nature of the issues to be determined and the parties’ competing contentions. Those notations were to the following effect:

“4.   NOTE that the parties are agreed that the only issues that require a determination by the Court are those noted as items 10, 16 and 17 on the schedule marked for identification as MFI D10.

5.   NOTE, by reference to that schedule, the plaintiff contends that the first and third defendants should restore to the estate of the testator (represented in these proceedings by the plaintiff):

a)   in respect of item 10, the sum of $685,448.81 (noted at Court Book Volume 2A, page 446 in respect of the date 7 October 2008).

b)   in respect of item 16, the sum of $250,000 recorded in the handwritten note on page 1917 of Volume 5 of the Court Book against the entry “Bal Loans”.

c)   in respect of item 17, the sum of $46,872 (referred to in paragraph 12 of the affidavit of Hariwadan Hiralal sworn 12 June 2015, reproduced at page 265 of Volume 2A of the Court Book) which the plaintiff contends should be laid to the account of the first defendant personally and which the first defendant contends was paid out at the express request of the testator and on the testator’s account, not his.

6.   NOTE that the plaintiff contends that the amount of $685,448.81 is attributable back to the sum of:

a)   Australian $300,000;

b)   an Australian equivalent of $74,622 (referrable to the sum of Fiji $30,000, Australian $46,000 and Indian Rupees $170,000); and

c)   Australian $104,000 (which the plaintiff contends was a loan to the first defendant and the first defendant contends was a loan to his brother, Ramesh).

7.   NOTE that the plaintiff contends that the monies culminating in the sum of $685,448.81 were held on trust by the first and third defendants as a result of, or consequentially upon, admissions made by the first defendant said to be found in the evidence at pages 433, 438 and 494 of Volume 2A of the Court Book and in evidence of conversations.

8.   NOTE that the first and third defendants contend that any monies received by them from or on the account of the testator were received by way of a personal loan by the testator to the first defendant without the intervention of any trust”.

19. Ramesh swore two affidavits which were formally read in the defendant’s case. However, at the conclusion of the hearing the Court formally noted that he was not available for cross examination and, on the joint application of the parties, ordered that his affidavits and accompanying exhibits be removed from the evidence.

20. The plaintiff’s closing submissions invited the Court to draw inferences against the defendants, arising from Ramesh’s failure to give evidence, more adverse than any associated with Jones v Dunkel (1959) 101 CLR 298. I decline to embrace those submissions. Neither Ramesh’s failure to give evidence nor the defendants’ failure to secure his attendance for cross examination of itself proves the plaintiff’s case against the first and third defendants or disproves theirs. Nevertheless, in the absence of an explanation for Ramesh’s failure to attend for cross examination, it is appropriate to draw a Jones v Dunkel inference (that his evidence would not have assisted the defendants) despite a familial link between the plaintiff and Ramesh, no less significant than that between Ramesh and the first defendant, which might have supported an expectation that the plaintiff could have taken steps to secure Ramesh’s attendance at court.

21. The plaintiff’s case is based essentially upon disputed inferences sought to be drawn from sundry documents and disputed conversations. Each party’s case is hampered by an informality in record keeping which is not altogether surprising in a family context; but which the plaintiff attributes to breaches of fiduciary obligations on the part of the first defendant in dealing with his father’s funds, and the first defendant attributes, at least in part, to a (hotly disputed) design on the part of his father to avoid Fijian income tax and currency exchange controls.

22. There is little love lost between the principal witnesses in the case. I treat all their evidence with more than customary caution. The plaintiff and her son Hari have lined up against the first defendant. The plaintiff’s case depends upon documents and long distant conversations brought to light by Hari in circumstances in which the defendants contend that his evidence was concocted. The plaintiff repays the compliment by an equal and opposite criticism of the scrap(s) of paper by reference to which the first defendant contends that he and the deceased settled a running account between them. The absence of any authoritative evidence from the deceased explains, and compounds, the reciprocal problems encountered on each side of the record.

23. Hari’s evidence is of particularly doubtful reliability because affected by a sincere, but commonly speculative, preconception that the first defendant took advantage of their parents and should be held to account accordingly.

THE PLAINTIFF’S “MAJOR CLAIM” (MFI D10, Item 10): $685,448.81 (PLUS INTEREST)

24. On 7 October 2008 a “V2 Plus” account with the ANZ Bank, in the name of the third defendant, was credited with the sum of $685,448.81. The plaintiff claims that that sum represented funds to which the deceased was beneficially entitled, and for which the first and third defendants must account with interest.

25. That credit entry represented a return to Australian dollars of an investment of $AUS518,672.20 made, by a withdrawal from the same account on 15 July 2008, to fund a $US500,000 foreign currency term deposit with the ANZ Bank.

26. The bookend entries of 15 July 2008 and 7 October 2008 reflect decisions ostensibly taken by the first defendant, through the vehicle of a bank account in his wife’s name, in a successful play on the foreign exchange market. Over a three month period a profit of $166,776.61 was realised.

27. The initial investment was made for a term of 31 days and rolled over for similar periods on 15 August and 16 September 2008 (as evidenced at 2A Court Book 464-465), before the term deposit was terminated by a memorandum dated 17 September 2008 (reproduced at 2A Court Book 467) addressed by the third defendant to the ANZ Bank, and counter signed by the first defendant, directing that the deposit be broken at a time to be confirmed by the first defendant. That confirmation came in an exchange of emails between the first defendant and the bank on 7 October 2008, assisted by Hari’s delivery to the Bank (by arrangement with the first defendant) of original documentation required by the Bank: 3B Court Book 1099-1101.

28. The plaintiff contends (and the first defendant denies) that the $US500,000 term deposit was acquired, at the direction of the deceased, using funds to which the deceased was beneficially entitled.

29. The first defendant does not deny that the deceased provided some funds to him, but he says that: (a) so far as may be relevant, those funds were limited to a sum of $193,134.56 paid into the third defendant’s ANZ Bank account on 10 March 2003 from accounts with the deceased then held (in Indian Rupees) with Citibank, together with separate amounts (in three different currencies) with a total value of about $AUD74,622; (b) the sum of $AUD193,134.56, if not also the other moneys, represented moneys never declared by the deceased to Fijian authorities for taxation and exchange control purposes; (c) the relationship between the deceased and himself in relation to those funds was no more than that of debtor and creditor, without trust obligations; (d) his arrangement with the deceased was that he would account to the deceased for interest on that sum, net of tax, with allowance made for expenses of the deceased paid by the first defendant; (e) under that arrangement, he was entitled to, and did, treat as his own the funds provided by the deceased; (f) prudentially, he always retained sufficient money in hand to be able to account to his father for the $193,134.56 and any other indebtedness; and (g) he ultimately repaid everything due to the deceased.

30. The first defendant’s evidence is that the deceased lent him money, repayable on demand, in expectation of a higher interest rate than he was otherwise able to receive.

31. Whether or not money “transferred” by the deceased to the first defendant (to use a neutral expression) was “black money” is not a question I am able with confidence to resolve on the evidence before the Court. Nor is characterisation of such money as “black” of primary significance for a determination of substantive questions in dispute. The main significance of the question whether it was or was not “black” is evidentiary. If the money was “black” that might be thought to lend credence to the absence of an audit trail for financial dealings between the deceased and the first defendant. In light of the evidence as a whole, this is essentially a sideshow. The familial relationship between father and son and the scrappy, informal documentary evidence of their dealings (including rough statements of assets and liabilities in support of finance applications and an immigration visa application) provide explanation enough for accounting problems encountered.

32. The plaintiff’s case is largely circumstantial.

33. In support of her case that the $US term deposit represented funds of the deceased the plaintiff points, in the first instance, to the facts that:

1. each of the Bank’s confirmatory advices that the $US term deposit had been made (respectively dated 15 July 2008, 15 August 2008 and 16 September 2008) was addressed to the third defendant at Hari’s Chullora address, and the third defendant’s memorandum to the Bank dated 17 September 2008 recorded the same address as her own.

2. on the first defendant’s own evidence, Hari assisted him both in arranging for the purchase of the $US term deposit and in cancelling it.

34. The plaintiff contends (and the first defendant denies) that Hari’s involvement corroborates her case that the funds with which the $US term deposit was purchased were those of the deceased, not those of the first and third defendants. The first defendant’s denial rests upon an assertion that Hari had introduced him to “the stock market” and was helping him to execute transactions (including the $US term deposit investment) because, as he was an airline pilot with limited time within which to attend to his own business in Sydney, he called upon Hari’s assistance.

35. The plaintiff reinforces her case by pointing to diary notes of Hari which record that, in conversations between the Hari and the second defendant on 1 and 8 April 2011, the second defendant reported to Hari that the first defendant had agreed that “the $700,000” belonged to the deceased’s estate; explained that it was only parked in the third defendant’s bank account because otherwise it would have been frozen by the authorities; and recorded that the first defendant would put it in the joint names of the deceased’s six children with income to go to the plaintiff.

36. The reference here to “the $700,000” can be taken to be a reference to the disputed sum of $685,448.81. It is common ground that that sum was in due course taken out of Australia by the first defendant, and not deposited in a siblings’ joint account.

37. The statements attributed to the second defendant are denied by him. I accept his denials. Hari’s evidence is never entirely free of an element of purposive, speculative reconstruction. The second defendant is more independent of Hiralal family feuds, more objective.

38. At each point in the narrative, objective truth is elusive because of competing attacks on the credibility of witnesses in conflict and the absence of reliable records.

39. A forensic difficulty for the first defendant is that he says that his system for accounting to the deceased involved no more than periodic confirmation (on a loose sheet of paper or index card) of an amount agreed with the deceased as due on a running account, with earlier documentation to similar effect then destroyed. His admittedly defective reconstruction of that account for the purpose of these proceedings records (by reference to a handwritten note on an index card) an agreed balance of $229,000 as at 28 February 2010, the last time he says he struck a balance with the deceased.

40. A forensic difficulty for the plaintiff is that, for a want of reliable source records (as her case is put), there is no audit trail of regular accounting documentation that proves that the $US term deposit was purchased with funds provided by the deceased.

41. The plaintiff claims the sum of $685,448.81 by claiming: (a) that the investment of $518,672.20 in the $US500,000 term deposit was an investment made at the direction of the deceased; and (b) that funds made available by the deceased, and interest accrued on those funds, together “covered” the $518,672.20 purchase price of the $US term deposit.

42. There is no reliable, direct evidence that the $US term deposit was an investment made by the first defendant at the direction of the deceased. I accept the first defendant’s denial that it was so. His denial is consistent with his explanation (which I accept) about the character of his relationship with the deceased.

43. The plaintiff invites the Court to journey along a circuitous route to a finding that, at the time the $US term deposit was acquired, the first and third defendants held funds of the deceased in no less an amount than $518,672.20. The first defendant contends that, at the time the $US dollar term deposit was acquired, as at all other times, the credit balance in the ANZ Bank account always exceeded any debt owed by him to the deceased.

44. Much of the controversy centres around: (a) a statement of assets and liabilities of the deceased (reproduced at 2A Court Book 433) in a draft application for finance prepared in January 2005 in connection with the Parkview Motel proposal; (b) a contemporaneous spreadsheet (reproduced at 2A Court Book 494) to similar, but not identical, effect; (c) the terms of an email sent by the first defendant to Hari on 23 March 2005, reproduced at 2A Court Book 438-439; (d) notes (reproduced at 5 Court Book 466 and as Exhibit D6) in the handwriting of Hari in the margin of an Australian Government Immigration Information Sheet bearing the printed date “25/03/2005”; (e) the deceased’s answer to question 33 (reproduced at 5 Court Book 1899, verified at 1913) in an application dated 12 May 2005 to the Australian Government (prepared by Hari in consultation with his parents) suggesting that the deceased and the plaintiff proposed to “bring to” Australia “money, goods and assets” valued at Fiji $1,200,000, said to be equivalent to $AUD925,000, apparently calculated in accordance with Hari’s handwritten notes; (f) statements of assets and liabilities of the deceased and the first defendant (reproduced at 5 Court Book 1941-1943) prepared in October 2007 in connection with the Willows Motel proposal; and (g) the first defendant’s handwritten record (reproduced at 3B Court Book 1052) of the balance of his running account debt to the deceased ($229,000 plus incidental items bringing the total owed to $235,460) as at 28 February 2010 or thereabouts.

34. The plaintiff relies, foundationally, upon an entry in a list of assets attributed to the deceased in what appears to be a draft application for finance (sent to Hari by the first defendant under cover of an email dated 27 January 2005) in anticipation of a purchase of the Parkview Motel. That the document as a draft is illustrated, and confirmed, by a lack of clarity in the list of assets as to whether some entries are to be understood as relating to Fiji dollars or Australian dollars. The entry relied upon by the plaintiff reads: “Held in Trust ny [sic] Nitin Hiralal (AUD) $300,000”. It is common ground that the letters “ny” should be read as the word “by”.

35. The first defendant’s evidence is that Hari inserted the words “in Trust” and he took no exception to the insertion, although he did not regard himself as ever holding any money “in trust” for the deceased.

36. The plaintiff seeks to overcome characterisation of the list of assets as a draft by reference to the contemporaneous spreadsheet which refers, not to funds held by the first defendant “in trust”, but to “Nitin’s Account $300,000”.

37. A reference to $300,000 (despite the passage of time, apparently the same $300,000) can also be found in a “statement of assets and liabilities at October 2007” attributed to the deceased at the time he and the first defendant were contemplating purchase of the Willows Motel. That statement records an asset of the deceased as “ANZ with Nitin $300,000”. It is matched by an entry in a contemporaneous statement of the first defendant’s assets and liabilities which records as an asset “ANZ-V2 Plus (less $300,000 for Dad) $464,676” at a time when the balance in the ANZ account in the name of the third defendant (recorded against the date 1 October 2007) was $764,676.37, a difference of exactly $300,000.

38. In addition to the statements of assets and liabilities prepared in 2005 and 2007, the plaintiff relies upon an email sent on 23 March 2005, by the first defendant to Hari (copied to the Ramesh) as the siblings debated the merits of how best to approach a “Visa/immigration” application of the deceased.

39. In an earlier email (sent on 22 March 2005) on the same topic, Hari told the first defendant that he had been authorised by the deceased to lodge an immigration application, supported by financial documents. Hari continued:

“… I have just obtained authority from father to do this and you may call him to verify this. As you have been his funds custodian and you have all the information, and as requested by you to put in writing today, I now write to request, initially, all account details of the following:

a)   All term deposits, in Australia and overseas.

b)   Any current accounts here and overseas.

c)   All loan details to anyone including, if any, to you, in your wifes name, Ramesh or anyone else….”

51. The first defendant’s email response the next day was in the following terms:

“I will respond fully on the matter at a later date - suffice to say THAT I MAINTAIN THE CONTINUOUS POSITION I HAVE HELD ALL ALONG THAT IT IS NOT (AND I REPEAT, ITS NOT) IN HIS INTEREST TO LODGE AN APPLICATION ON HIS BEHAVE AT THIS STAGE. IT WOULD BE BETTER HE WAITS TILL HE HAS A BUSINESS IE MOTEL THERE. THE APPLICATION YOU SAID YOU LODGING IS SELF FINANCED RETIREE. HE SAYS HE DOES NOT WANT THAT (23/2/05 CONVERSATION WITH HIM) I WILL NOT GET INVOLVED NOW - I HAVE ASKED HIM TO TALK TO YOU, AS IN THIS CASE I BELIEVE YOU CAN TALK TOO YOUR LAWYER NO MEDICAL BENEFITS ARE GIVEN TO HIM.

ALL HIS MONIES WILL BE IN HIS ACCOUNT WITHIN 4 WEEKS.

I KEPT THE MONEY IN OUR ACCOUNT FOR EASE OF USE FOR MOTEL PURCHASE. HE HAS ADDITIONALLY GIVEN ME $30,000 FID AND ABOUT $46,000 AUD AND HAVE USED HIS APPROX 170,000 INR RUPEES AS FOR AMOUNTS OWED BY RAMESH YOU NEED TO TALK TO RAMESH AND FATHER ABOUT THAT. I AM NOT GETTING INVOLVED IN THAT. THIS OTHER MONIES CANNOT BE PROVED AND YOU NEED TO TALK TO YOUR LAWYER TO FIND A WAY OF ACHIEVING THIS – I WILL SIGN WHATEVER NEEDS TO BE SIGNED – YOU HAVE ARRANGED.

INTEREST WILL BE PAID ON THE MONEY HE HAS TRANSFERRED TO MY ANZ ACCOUNT AND THE AUD 46,000 WHEN I KNOW WHAT THE TAX PAID COMES TOO.

HIS MONIES WERE NOT TRANSFERRED TO HIS ACCOUNT BECAUSE THE ACCOUNT HE OPENED WITHOUT ASKING ME IS TAXED AT MAX AUSSIE RATE – THIS WAY I WOULD HAVE SAVED HIM SOME MONEY. THERE ARE OTHER ISSUES INVOLVED, BUT CANNOT DISCUSS HERE.

THE DOCUMENTS SENT WITH RAMESH WERE FOR HOTEL PURPOSES. NEITHER YOU OR RAMESH ASKED ME TO PROVIDE SUCH DETAILS FOR THIS PURPOSE EVER AND I REPEAT THAT MY POSITION REMAINS NOT THE TIME TO DO HIS APPLICATION NOW WITHOUT BUSINESS – BUT YOU AND FATHER DECIDE….”

52. The plaintiff also relies upon Hari’s handwritten notes in aid of the deceased’s visa application, which too refer to a sum of $AUD300,000, against an oblique reference to the ANZ account of the third defendant. That document was prepared by Hari without reference to the first defendant. It corroborates Hari’s long held belief as to the level of the first defendant’s indebtedness to the deceased; but its reliability is open to question (given Hari’s fixed view about the nature and extent of the first defendant’s indebtedness) and the makeshift character of Hari’s notes suggests that the deceased himself may not have been altogether certain who owed what to whom within the Hiralal family.

53. The first defendant explains references to $300,000 in the 2005 and 2007 loan application documentation as an approximation (rounded up from the figure of about $275,000) comprising the sum of:

1. $AUD193,134.56 lent to the first defendant by the deceased, deposited in the ANZ account of the third defendant on 10 March 2003.

2. An Australian dollar equivalent of the sum of three different currency amounts (namely, Fiji $30,000, $AUD46,000 and INR 170,000) lent to the first defendant by the deceased (never deposited in the third defendant’s ANZ account) with an agreed Australian dollar equivalent of about $74,622.

3. An unquantified allowance for interest.

54. A difference between the parties is that the plaintiff contends that the three currency amounts (effectively, $AUD74,622) represent loan funds, in addition to the $300,000, whereas the first defendant contends that references to the $300,000 must be taken as including the three currency amounts.

55. However much they be juggled, the figures do not stack up on either side of the record.

56. That said, the first defendant notes that, at the time $AUD193,134.56 was deposited in the third defendant’s ANZ account on 10 March 2003, there was a credit balance of $363,179.50. He contends, and I accept, that there is no evidence that any part of that balance “belonged” to the deceased.

57. Each side of the record has a forensic problem of proof. The plaintiff bears the onus of proving the fact and character of money transfers to the first and third defendants; they bear the onus of proving that money admittedly paid to them as a loan was repaid: Coshott v Sakic (1998) 44 NSWLR 667 at 671D-G.

58. I am not satisfied that any of the disputed sums were paid by the deceased to the first defendant otherwise than by way of a loan. Characterisation of those sums as moneys held “in trust” has its foundation in ex post facto attempts by Hari to impose on the first defendant terms more onerous than those agreed between the first defendant and the deceased. His characterisation of the first defendant as a “custodian” of funds and as the holder of funds as a trustee reflects this.

59. At day’s end, in the absence of a claim to property said to be impressed with a trust, but in circumstances in which pre-judgment interest can be awarded in any event, little of practical importance appears to turn on whether or not the first defendant (and, through him, the third defendant) was a trustee for funds given to him by the deceased.

60. I accept the first defendant’s evidence that his relationship with the deceased, vis a vis the disputed sums, was that of debtor and creditor, with funds lent to him repayable to the deceased (with interest, less tax) on demand. I also accept his evidence that, from time to time (and, for a last time, on or about 28 February 2010), he and the deceased agreed on the balance owed, taking into account adjustments for expenditure undertaken by the first defendant at the deceased’s request.

61. Underlying my acceptance of the first defendant’s evidence is: (a) a strong doubt about the literal accuracy, and the reliability, of the statements of assets and liabilities (and the associated spreadsheet) prepared by the first defendant and the deceased in connection with the Parkview Motel proposal and the Willows Motel proposal; and (b) acceptance of the first defendant’s evidence about the manner in which (up to and including 28 February 2010 or thereabouts) he and the deceased from time to time reconciled their accounts and established a balance.

62. The balance of $229,000 agreed between the first defendant and the deceased on 28 February 2010 (and adjusted by the first defendant to bring the amount to $235,460) as the amount of the first defendant’s indebtedness provides a baseline for determination of the issues presented to the Court for determination.

63. That baseline having been established, the agreement upon a balance due (which I take to be $235,460) may obviate any need to make a finding about whether the three currency amounts (the equivalent of $AUD74,622) earlier lent to the first defendant were included in, or additional to, the sum of $300,000 referred to in the statements of assets and liabilities speaking to dates in January – May 2005 and October 2007.

64. However, in case it be required, I record my finding that, in the teeth of the first defendant’s denial, I am not prepared to conclude that the $74,622 was a debt additional to the $300,000. The evidentiary foundation for such a finding is too fragmentary, and based upon documents of doubtful reliability and evidence of Hari coloured by antagonism towards the first defendant.

65. The $300,000 figure is itself rubbery. However, the evidence of the first defendant that the $300,000 included the $74,622 is to be preferred over Hari’s hostile speculations. Albeit not a disinterested witness, the first defendant was a co-author, with the deceased, of the principal documentation which purportedly evidenced a debt of $300,000. As graphically illustrated by his handwritten note dated 28 February 2010, in collaboration with the deceased he had a rough hewn system for recording the state of accounts between father and son.

66. The plaintiff’s claim of $685,448.81 (by reference to item 10 in MFI D10) cannot be upheld as a claim to trust property or in the amount claimed. However, consideration needs to be given to whether the first defendant has established that the sum of $235,460 owed on or about 28 February 2010 has been repaid, and whether any adjustments should be made in relation to business transacted after 28 February 2010.

67. The first defendant’s admittedly deficient attempt at a reconstruction of his accounts with the deceased (reproduced at 3A Court Book 808-810) includes reference to a balance of $229,000 on 28 February 2010 and credits in favour of the deceased ($360 on 1 March 2010 and $6,626.78 on 15 April 2010) which are, roughly, consistent with the first defendant’s handwritten note (reproduced at 3B Court Book 1052) of a balance due of $235,460.

68. The immediate relevance of the first defendant’s reconstruction is that it draws to attention the possibility that, post 28 February 2010, there should be brought to account in favour of the first defendant maintenance payments made by the first defendant to the plaintiff pursuant to an interlocutory order made on 4 June 2012.

69. Subject to allowing the parties to be heard on this point, and the broader question whether other adjustments should be made, I find (by reference to item 10 in MFI D10) that the estate of the deceased had no right, title or interest in the sum of $685,448.81 there recorded; but that, as at 28 February 2010 or thereabouts, the first defendant was indebted to the deceased in the sum of $235,460.

70. The first defendant contends that he has repaid the whole of the moneys lent to him by the deceased. It is not immediately apparent when, or how, this occurred. However, any lack of transparency may be a product of the limited issue (focused on the disputed sum of $685,448.81 and its characterisation) tendered for the Court’s determination. Before these proceedings are concluded, if there is any subsisting question to be determined I propose to allow the first defendant an opportunity to point to the evidence of repayment upon which he relies.

“(CASH) LOANS TO RAMESH” (MFI D10, ITEM 16) : $250,000 OR, ALTERNATIVELY, $104,000

71. By reference to items 16 in MFI D10, the plaintiff claims against the first defendant the sum of $250,000 said to represent cash loans made to Ramesh, either through the first defendant or for which the first defendant should be held accountable to the estate of the deceased because of a failure on his part to recover money from Ramesh.

72. Any case against the first defendant as a trustee of his father’s deceased estate suffers from the fact that no trustee (including the plaintiff) took any action to recover the disputed money from Ramesh. The plaintiff herself opposed taking any enforcement action against Ramesh. He, for his part, may be taken to have denied any indebtedness to the estate. Moreover, such evidence as there is concerning Ramesh’s financial circumstances suggest that there always was substantial doubt about his financial capacity to repay any indebtedness he may have had to the deceased. No substantial case was advanced, or made out, against the first defendant (or the second) based upon an allegation of default in performance of the obligations of an executor and trustee of a deceased estate.

73. The plaintiff’s case against the first defendant, as articulated, is essentially that the first defendant is liable for the sum of $250,000 (or, alternatively, a sum of $104,000 or $117,000 as a derivative amount) said to have been received by him from the deceased and, perhaps, on lent to Ramesh. The first defendant contends that such a case has no credible foundation in fact.

74. The expression “Bal Loans $250,000” is found, accompanied by three questions marks and crossed through, in an entry in the handwritten notes made by Hari (after discussion with his parents), in about March 2005, in the margin of the immigration information sheet earlier mentioned: 5 Court Book 1917; Exhibit D6. The plaintiff relies upon this entry, together with a conversation (denied by the first defendant) which Hari, belatedly, attributes to the first defendant.

75. In light of the first defendant’s denials, I am not satisfied that any sum of $250,000 can be held to the account of the first defendant. Hari’s notes are, in themselves, less than the equivocal.

76. The alternative formulation of the plaintiff’s case seeks to impose liability on the first defendant for a sum of $104,000 which is sometimes attributed to borrowings of the first defendant - for which he denies any liability, speculating that any reference to $104,000 may represent money paid to Ramesh.

77. The sum (or, perhaps more accurately, a sum) of $104,000 appears in several places:

1. The list of assets of the deceased in the draft loan application for the Parkview Motel (2A Court Book 433) identifies Fiji $104,000, described as “Private Loans Given”.

2. The deceased’s list of assets and liabilities in the contemporaneous spreadsheet (2A Court Book 494) lists as an asset, the sum of $AUD104,000, described as “Personal Loans Given”. That entry is unmatched by any corresponding liability attributed to the first defendant in his accompanying statement of assets and liabilities: 2A Court Book 493.

3. There is a reference to the $AUD104,000, against the first defendant’s name, in Hari’s handwritten notes on the immigration information sheet (5 Court Book 1917; Exhibit D6); but, in the context of those notes as a whole, it is open to be read as equivocal – accompanied by a note (perhaps referable to it, or a nearby reference to another amount) suggestive of doubt about whether money attributable to the first defendant was “given to Ramesh”.

78. There is no reference to $104,000, in the first defendant’s email of 23 March 2005 (2A Court Book 438-439, which, in the plaintiff’s main claim, was a primary source of Hari’s calculations on the immigration information sheet. However, the email did invite Hari to talk to Ramesh and the deceased to sort out the state of accounts between them.

79. In light of the first defendant’s denials of any indebtedness for the sum of $104,000 sought to be laid to his account, and the doubtful provenance of the documentation relied upon by the plaintiff as supportive of such a claim, I decline to find the first defendant liable for it

“(CASH) MONEYS PAID TO NILESH FOR HIS KIDNEY TRANSPLANT” (MFI D10) : $46,872.00

80. Nilesh is a son of Bhupendra; a grandson of the plaintiff and the deceased; and a nephew of both the first defendant and Hari.

81. In 2009 Nilesh was desperately ill. He received a kidney transplant in India and treatment in Sydney. He was concerned about his ability to pay for his medical bills and to pay for expensive ongoing medication, without financial assistance.

82. Nilesh looked to the deceased, the first defendant and Hari for assistance, not limited to financial assistance. Hari accompanied him to India.

83. The evidence of the first defendant and Nilesh, supported by evidence given by the plaintiff in cross examination, is to the effect that the deceased agreed to fund Nilesh’s medical expenses.

84. Funded by a transfer of funds from the third defendant’s ANZ bank account on 31 July 2009, on 1 August 2009 the first and third defendants drew a cheque on their ANZ joint account for $50,000 in favour of Hari; the cheque was presented by Hari on 4 August 2009 and later acknowledged by him: 2A Court Book 509; 3 Court Book 1120; 2B Court Book 526; 3B Court Book 1121.

85. Before the testator’s death, Nilesh (in August 2009) received the benefit of a further $10,000 funded by the deceased: 3B Court Book 1121; 3A Court Book 809 and 992. After the deceased’s death (by an email dated 9 August 2010) Hari sought and obtained reimbursement for additional expenditure incurred for the benefit of Nilesh: 3B Court Book 11221.

86. The plaintiff claims that the first and third defendants should restore approximately $46,000 to the deceased’s estate. Two figures are in play. In paragraph 12 of Hari’s affidavit sworn 12 June 2014 the sum of $46,872.00 is claimed on behalf of the plaintiff. In final submissions, the plaintiff claimed a lesser sum ($46,621.91) based upon calculations made by Hari in a spreadsheet attached to an email dated 19 August 2010: 2B Court Book 526 and 530 (cf, 3B Court Book 1121).

87. The plaintiff’s case is based not only on Hari’s calculations but also upon an unfavourable construction of email correspondence between the first defendant and Nilesh on 5 August 2009 (2B 512-515) in which Nilesh was fretting about a perceived inability to meet his future medical expenses and the first defendant was counselling him to look to his own resources as best he could.

88. That correspondence occurred at about the same time as $60,000 was being provided to or for the benefit of Nilesh (via the first defendant and Hari) on the deceased’s account.

89. In the course of the correspondence, the first defendant (he says, on behalf of the deceased) wrote to Nilesh: “We cannot continuely be paying the expenses on the pretext that in future you people will look after – tomorrow never comes.”

90. Contrary to the plaintiff’s submissions, I do not read this, or the first defendant’s email as a whole, as an acknowledgement that the first defendant had agreed that contemporaneous funding provided for the benefit of Nilesh was to be laid to the account of the first defendant, in whole or part.

80. I am not satisfied that the sum of approximately $46,000 which the plaintiff seeks to lay to the account of the first and third defendants can be imposed upon them as a liability to the estate. I am not satisfied that the plaintiff’s case has been made out. It appears, as do other elements of the plaintiff’s claim against the first and third defendants, to have been driven by Hari’s speculative reconstruction of events.

81. I accept the evidence of the first defendant and Nilesh, reinforced by cross examination of the plaintiff, that the deceased agreed to fund Nilesh’s medical expenses.

82. The balance of their running account struck by the first defendant and the deceased on or about 28 February 2010 (accepted by me as genuine) provides a further reason for dismissal of the plaintiff’s claim.

CONCLUSION

94. In summary, subject only to one qualification, the findings made in these reasons for judgment on the disputed items (namely, items 10, 16 and 17) in MFI D10 are adverse to the plaintiff.

95. The one qualification is a question, left open in these reasons for judgment, about whether there is a need for the first defendant to point to evidence corroborating his assertion (grounded upon his note dated 28 February 2010) that he has repaid all moneys due by him to the deceased’s estate.

96. During the hearing of the proceedings discussion was had about the possibility of new trustees being appointed to the deceased’s testamentary trust. Whether, in light of subsequent developments or the Court’s determination of the disputed issues, there continues to be a need for that topic to be addressed is a matter upon which I propose to receive supplementary submissions.

97. I propose to allow the parties an opportunity to view these reasons for judgment before making any orders dispositive of the proceedings or orders for costs.

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Decision last updated: 13 March 2019