Johnson v Mackintosh
[2011] VCC 1440
•11 November 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
DAMAGES AND COMPENSATION
FAMILY PROPERTY DIVISION
Case No. CI-11-03850
| CHRISTOPHER RICHARD JOHNSON | First Plaintiff |
| STEPHEN ALEXANDER JOHNSON | Second Plaintiff |
| v | |
| KIRSTEN LEIGH MACKINTOSH | Defendant |
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| JUDGE: | HIS HONOUR JUDGE MISSO |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 21, 24-28 October and 4 November 2011 |
| DATE OF JUDGMENT: | 11 November 2011 |
| CASE MAY BE CITED AS: | Johnson v Mackintosh |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 1400 |
Subject: EQUITY the monies applied by the deceased plaintiff to the defendant’s benefit, and that the defendant pay the plaintiffs the sum of $176,749.72, and transfer her right, title and interest in the Foster Street property to the plaintiffs, and that the defendant pay the deceased plaintiff’s costs to be taxed in default of agreement, including the cost of the preparation and filing of court books.
Catchwords: Unconscionable conduct – monies applied by the plaintiff for the benefit of the
defendant – plaintiff at a special disadvantage – defendant’s exploitation of that disadvantage –
jurisdiction to order that the defendant repay the monies applied to her benefit
Subject: PRACTICE AND PROCEDURE
Catchwords - Plaintiff died after the close of the evidence and after the completion of final
addresses – application to substitute the executors and trustees of the estate appointed under his
will as plaintiffs pursuant to Rule 9.09(1) and (2) and 16.03(1)
Cases Cited: Louth v Diprose (1992) 175 CLR 621 – Muschinski v Dodds [1986] 160 CLR 583 –
Waltons Stores (Interstate) Ltd v Maher & Anor (1998) 164 CLR 387 – Blomley v Ryan (1956) 99
CLR 362 – Bridgewater v Leahy (1998) 194 CLR 457 – Williams v Maalouf [2005] VSC 346 –
Diprose v Louth (No 2) (1990) 54 SASR 450
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J Isles | Tolhust Druce & Emmerson |
| For the Defendant | Ms B Tulloch | Jane Curtis & Associates |
| HIS HONOUR: |
The Plaintiff/ Plaintiffs
1 The plaintiff died after the close of evidence and the completion of final addresses. I asked counsel to appear before me on 4 November 2011 to deal with an amendment to the title of the proceeding, and also to clarify the relief sought by the plaintiff.
2 Mr Isles filed an affidavit of his instructing solicitor, Ms Louise Claire Tolson, sworn 4 November 2011, in which she deposed to information which she had acquired since the death of the plaintiff that the plaintiff's sons, Christopher Richard Johnson and Stephen Alexander Johnson, have been appointed executors and trustees of the estate of the plaintiff by the plaintiff’s last will.
3 Mr Isles further submitted that Rule 9.09(1) and (2) provide that as a result of the death of the plaintiff, the cause of action is to survive, that his interest devolves upon his executors and trustees permitting the exercise of a discretion to substitute the plaintiffs sons as plaintiffs.
4 Mr Isles also referred me to Rule 16.03(1) which provides that where a deceased person was interested in any question in the proceeding where the deceased person has no personal representative, then subparagraph (b) permits the exercise of discretion to appoint a person to represent the estate for the purpose of the proceeding.
5 It seems to me that both Rules apply, but I am more inclined to think the appropriate Rule is Rule 9.09(1) and (2). In the circumstances, I will order that Christopher Richard Johnson and Stephen Alexander Johnson be substituted as plaintiffs in the proceeding on an undertaking that affidavits will be filed by each of them prior to the date upon which I deliver judgment consenting to such joinder. Ms Tulloch did not oppose the application.
6 For convenience sake, and also for the sake of avoiding confusion, I will continue to refer to Richard John Johnson as the plaintiff.
Introduction
7 The plaintiff filed a Writ on 11 August 2011. The Statement of Claim endorsed on the Writ is an extensive, if not turgid and discursive pleading of a number of causes of action relied upon by the plaintiff to recover a substantial amount of money which he says he applied to the benefit of the defendant.
8 Mr Isles of Counsel appeared for the plaintiff and Ms Tulloch of Counsel appeared for the defendant.
9 In the course of the trial, Mr Isles made an application to amend the Statement of Claim, and more particularly, to amend paragraph 34 by adding subparagraph (d) “the plaintiff was infatuated with the defendant” and subparagraph (e) “as at 13 February 2009 the plaintiff was recovering from double bypass heart surgery and was hospitalised at John Flynn Hospital.” After hearing a significant body of evidence, I considered that it was fair to allow the amendment. The question of the plaintiff's infatuation with the defendant was central to his case, and was a subject on which Ms Tulloch had ample opportunity to cross-examine the plaintiff before I finally gave consideration to whether I would allow the amendment.
10 Essentially, the plaintiff alleges that he entered into a relationship with the defendant, which he described as a loving and intimate relationship which commenced in about August 2008 and ceased after Easter 2010. During the course of what the plaintiff alleges was a relationship, he applied in excess of $770,000 to the benefit of the defendant.
11 Furthermore, the plaintiff alleges that the defendant was guilty of unconscionable conduct in procuring the monies which he applied to her benefit. Mr Isles referred me to Louth v Diprose[1] as authority for the proposition that if a gift is made in circumstances where the donor is at a special disadvantage, then the exploitation of that disadvantage can amount to unconscionable conduct. Equity will then intervene and permit the recovery of the gift.
[1] (1992) 175 CLR 621
12 The next cause of action relied upon by the plaintiff was that there was a joint endeavour in the relationship between the plaintiff and the defendant which led to the plaintiff contributing financially to the development of the plaintiff’s business and the purchase of 159 Foster Street, Sale (“Foster Street”). In the circumstances, the defendant holds the plaintiff's equitable interest in the business and Foster Street on a constructive or resulting trust. Mr Isles referred me to Muschinski v Dodds[2] as authority for the proposition that if the plaintiff applied monies for the benefit of the defendant in a joint endeavour, then equity will not permit the defendant to retain the benefit of the monies because it would be unconscionable for her to do so.
[2] [1986] 160 CLR 583
13 The next cause of action relied upon by the plaintiff was promissory estoppel. Mr Isles referred me to Waltons Stores (Interstate) Ltd v Maher & Anor.[3] Mr Isles submitted that the conduct of the defendant amounted to a promise that she and the plaintiff would live together in a relationship which the defendant relied upon acting to his detriment by applying monies to the relationship and therefore the defendant should be estopped from asserting that she held and holds her interest in the business and Foster Street free of any equitable interest in the plaintiff.
[3] (1998) 164 CLR 387
14 The last cause of action relied upon by the plaintiff was that the monies he applied for the benefit of the defendant were monies had and received. It was not a cause of action pursued with any particular vigour.
15 The defendant filed an equally turgid and discursive Defence, and in some respects not an overly responsive Defence; however, the essential features of her Defence were that she did not deny that the plaintiff had applied monies for her benefit, but that the nature of the relationship could not be characterised as a loving and intimate relationship and certainly not consistent with the type of relationship evident in Louth v Diprose.[4]
[4] supra
16 The defendant alleged that the plaintiff was at all material times an independently very wealthy man who initially made her loans which were later forgiven as loans and made as gifts, and that all the monies applied thereafter to her benefit were gifts. She accepted the gifts, because the plaintiff was assertive and imposed himself upon her despite her stated reluctance to accept gifts from him.
17 Mr Isles conceded that if I concluded that the monies applied by the plaintiff for the benefit of the defendant were gifts, then all of the causes of action relied upon by the plaintiff must fail.
18 It is unnecessary to define the pleadings in any great detail, and in any event, what I have described as the turgid and discursive nature of the pleadings makes that exercise a fruitless one, because all that will be achieved is a repetition of the pleadings rather than defining the heart of what pleadings ultimately disclose in terms of causes of action and defences to those causes of action. I think the summary I have provided thus far is adequate at this point to describe where the battle lines have been drawn between the plaintiff and the defendant.
19 The following evidence was adduced at the trial:
• The plaintiff gave evidence and was cross-examined; • The defendant gave evidence and was cross-examined; • Ms Lynette Thelma Smith gave evidence and was cross-examined; •
The plaintiff and the defendant prepared a Joint Court Book (“JCB”) comprising 717 pages which was tendered in evidence.
The Background Facts
20 The plaintiff was born on 25 January 1935. He is now seventy-six years of age. He contracted mesothelioma. He was in the terminal phase of that disease process. It was estimated that he had a life expectancy of no more than six months. He passed away on 31 October 2011. He gave his evidence from a hospital bed in Mackay in Queensland by video link. It was obvious that he was bedridden and reliant upon constant medical care and a supply of oxygen fed through his nose in order for him to be able to function at a basic level.
21 The plaintiff's marriage ended about seventeen years ago. He wanted to move to Queensland. His then wife refused to move with him. Their marriage ended, either as a result of their disagreement about where they would live or for that reason and perhaps other reasons. In any event, the plaintiff moved to Mackay in about 1981. He purchased a house at 56 Admiral Drive, Dolphin Heads, Mackay (“Admiral Drive”). Until his recent admission to the Mackay Hospital, he has otherwise resided permanently in that house.
22 The plaintiff was accompanied by his two sons who lived with him in Queensland. His daughter stayed with his wife. The plaintiff and his wife were divorced in about 1985. The plaintiff subsequently developed a relationship with a woman in 1984 or 1985. It did not last. The plaintiff developed another relationship which lasted about two years. It ended in about 1991. He has not been in a relationship with a woman since 1991.
23 The plaintiff established a business manufacturing explosives. He registered a company known as Johnson High-Tech (Australia) Pty Ltd (“Johnson High- Tech”). He owns 90 per cent of the shares in the company. The company has a wholly-owned subsidiary known as Johnex Explosives Pty Ltd. The latter mentioned company is the marketing arm for Johnson Hi-Tech.
24 The plaintiff described himself as semi-retired. He is in receipt of a personal income from the business of the companies amounting to about $365,000 gross per annum. He is also entitled to dividends. There was no dispute that the companies continue to trade and generate significant trading profit. For example, in 2008, Johnson High-Tech had a trading profit of $5,030,955; in 2009, $4,661,301; and in 2010, $4,555,639. Its operating profit before income tax in each of those years respectively was $1,954,490, $1,838,277 and $1,146,587.
25 It is necessary to say something about how the plaintiff became acquainted with the defendant. The plaintiff's best friend was Mr Bill Mackintosh. Mr Mackintosh has a son, Dean. Dean married the defendant. The plaintiff offered Dean and the defendant the use of Admiral Drive for their honeymoon. They took up his offer.
26 Admiral Drive is a large house complex. It comprises five bedrooms and a guest flat. The plaintiff gave me the impression that he had friends to stay reasonably often. Dean and the defendant were his guests about once a year over the duration of their marriage. They visited him and stayed after their daughter, Mia, was born. Mia was born on 2 October 2004.
27 The plaintiff developed a reasonable friendship with Dean and the defendant. In the early part of 2008, he visited Port Welshpool in Victoria for the purpose of inspecting a wharf to see whether it was suitable to store explosives manufactured by Johnson High-Tech. The plaintiff intended to export explosives to Tasmania through Port Welshpool.
28 At the time when the plaintiff visited Port Welshpool, Dean and the defendant were renting a house in Stawell Street, Sale. It was a house comprising four bedrooms and other living rooms. They invited the plaintiff to stay with them. He did so. The plaintiff and the defendant spoke about the defendant's business at some length on that occasion and subsequently.
29 The plaintiff learned from the defendant that she had purchased a franchise in a health studio business known as “Healthy Inspirations”. The defendant gave the plaintiff to believe that the response to the establishment of the business in Sale was overwhelming.
30 In the course of discussions between the plaintiff and the defendant, the plaintiff became aware that the defendant had engaged a Mr Lazaro as a financial adviser. The plaintiff accompanied the defendant to some of her meetings with Mr Lazaro. The plaintiff described Mr Lazaro as being an astute adviser. He learned that Mr Lazaro was charging the defendant a significant fee for his services which the plaintiff understood to be as much as $1000 per week.
31 Subsequently, the plaintiff and the defendant had a further discussion, during which the plaintiff offered to be what the defendant described as her business mentor. The plaintiff developed a greater understanding of the defendant's business. He was impressed by a spreadsheet which she had prepared which outlined her business plans. He considered that the defendant had gone about the preparation of the spreadsheet in a professional way. He thought that she would make a success of the business.
32 In early June 2008, the plaintiff offered to lend the defendant money at the same rate he was receiving on monies which he had invested. He concluded that the plaintiff was a good business risk, and that she would succeed in establishing a successful business. This led to the plaintiff lending the defendant $25,000. He wrote her a cheque for $25,000 on 9 June 2008. The cheque butt is endorsed with the word "loan".[5] The plaintiff understood that the defendant had a number of investment properties which she intended to sell to fund the establishment of the business. It would appear that this was partly the reason why he wanted to lend her money rather than see her sell the investment properties.
[5] JCB 33
33 The defendant denied that she owned three investment properties. She said that she married Dean on 21 June 2003. They separated on 23 October 2008. She entered into a financial settlement with Dean in early 2011. The settlement involved, among other things, that she would retain a property at 25 Forge Creek Road, Bairnsdale worth about $165,000. Dean would retain a flat in Burwood. Dean would pay the defendant $160,000. The latter amount was due in September 2011. At the time of trial it had not been paid. The plaintiff said that she continues to conduct her business which has no goodwill or any assets of value. It has a line of credit of $100,000, chattel mortgages of $65,000 on equipment, and a car under either hire purchase or a lease. Her only other asset is $100,000 in superannuation. She owes her present solicitor about $60,000 for legal costs.
The Relationship
34 The evidence given by the plaintiff and the defendant up to the time when the plaintiff lent the defendant $25,000 was, broadly speaking, the same. It is the events which followed which raise the serious controversy in this proceeding. There does not seem to be much doubt that the plaintiff did apply significant sums of money to the benefit of the defendant, but the events relied upon by the plaintiff to prove his causes of action were hotly contested by the defendant.
35 The plaintiff invited Mr Bill Mackintosh and his wife, a Mr and Mrs Lava, Dean and the defendant and the defendant's daughter, Mia, to stay with him at Admiral Drive in about August 2008. All of the invited guests arrived except for Dean. The defendant said Dean had to stay behind to work. The defendant and Dean were probably estranged at that time.
36 The defendant and Mia arrived a day after the other invited guests. The plaintiff went to the airport to collect them. The plaintiff described the way in which the defendant greeted him as overwhelming and unexpected. She gave him a hug and a kiss on the lips. The defendant denied greeting the plaintiff in that way.
37 The plaintiff and the group of invited guests made their way to the Whitsundays from where they sailed a charter boat over three days. The plaintiff said that the defendant behaved in an attentive way towards him. He described it as amounting to fussing over him. He said that she went to the extent of giving him a little hug around the waist on more than one occasion. The defendant denied that she behaved in that way.
38 It is necessary to digress from the plaintiff's evidence of the development of his relationship with the defendant, and the defendant's response, to observe that Dean and the defendant took their family law issues to the Federal Magistrates’ Court. The plaintiff sought to intervene to have his claim against the defendant litigated in the same proceedings. The defendant opposed his application to intervene. The application was refused.
39 The plaintiff swore an affidavit in support of his application to intervene on 14 April 2011.[6] The defendant swore an affidavit in reply on 10 June 2011.[7] The plaintiff and the defendant referred extensively to those affidavits in the course of their evidence.
[6] JCB 204-210
[7] JCB 218-238
40 The defendant swore in her affidavit that during the sailing trip, the plaintiff sexually harassed her. He put his arm around her and called her “darling” and touched her on the bottom. In her oral evidence, she said that the plaintiff followed her around, and she went so far as to describe the plaintiff as continually chasing her. The defendant said that she stayed close to Mr and Mrs Mackintosh. On a stop at Hayman Island she said that the plaintiff wanted to buy her clothes and a bathing suit. She said she refused; however, the plaintiff did buy Mia a bathing suit. The plaintiff denied that he behaved in that way.
41 The defendant's sister lives in Yeppoon. It is a small town on the Capricorn Coast of Central Queensland. The defendant intended to visit her sister after the sailing trip. The plaintiff drove her to Yeppoon. He stayed at the Iwasaki Resort in Yeppoon. In her affidavit, she said that the plaintiff did not drive her to Yeppoon, but followed her there. She said he was not invited by her. However, in her oral evidence, she said that the plaintiff in fact did drive her and Mia to Yeppoon. The trip took some three hours. The defendant said that she was prepared to travel with the plaintiff in his car despite the sexual harassment on the boat trip because he had apologised for his conduct. The plaintiff denied, firstly, having sexually harassed the defendant, and secondly, that he had offered an apology of any kind. The oral evidence of the defendant that the plaintiff was not invited to Yeppoon was not restated by her in her oral evidence, and in any event, it is at serious odds with the plaintiff's oral evidence that she freely accompanied the plaintiff in his car on the trip to Yeppoon.
42 The defendant accepted the plaintiff's an invitation to have dinner with him at the Iwasaki Resort. The plaintiff said that the defendant wanted him to spend time with her. They had dinner in a restaurant. The plaintiff said it was a romantic evening. The defendant kissed him while they were in the dining room. He felt somewhat embarrassed that her affection was displayed in public. The defendant denied kissing the plaintiff.
43 The plaintiff said that he purchased a bottle of wine to have with the dinner. He said that the defendant only had a glass of wine at the table. He said that she asked about the photographs taken on the sailing trip and suggested they go to his room and look at the photographs. He said that he took the unfinished bottle of wine with him and off they went to his room.
44 While in the room, the plaintiff said that the defendant began unbuttoning his shirt. He said that he did not touch her. The plaintiff had some difficulty obtaining an erection. However, he described the sexual encounter as the first night that he and the defendant had sex. He said to her that he had not slept with a woman for seventeen years and that he might disappoint her, to which she replied that he had probably not found the right woman.
45 The plaintiff’s account of what occurred is entirely at odds with the defendant's account of the sexual encounter. She said that the plaintiff told her that the purpose of the dinner was to discuss some things in private. She said she did not kiss him in the restaurant. He insisted that she try some cocktails. He ordered her food. She said that she became very intoxicated at dinner, to the extent that she could hardly get up from the table. She said she was taken to the plaintiff’s room where he removed some of her clothing and attempted to have intercourse with her. She said that the plaintiff pushed her onto the bed. He could not obtain an erection, and as a result began to cry. In a conversation had at that time, the defendant said that the plaintiff told him that he had achieved everything he wanted in life and that this was “something that he particularly wanted”. The plaintiff denied that he was the instigator of the movement to the room nor the instigator of the first level of sexual contact between them.
46 However, in cross-examination, the defendant described the sexual encounter in a materially different way. She said that she allowed the plaintiff to remove her underpants. She believed she was still wearing her bra. It was put to her that in some handwritten notes, which she described in her affidavit as a diary, she recorded:
"Dick wined + dined me @ Rydges Yeppoon where he attempted to bed me. Dick was unable to perform, in fact early ejaculation - then I knew it could not progress …."[8]
[8] JCB 714
47 She accepted that what she had written in the notes was correct. My strong impression from the plaintiff's oral evidence elicited during cross-examination was that an act of intercourse actually did occur between the plaintiff and the defendant, but it ended when the plaintiff prematurely ejaculated, not because he was unable to obtain an erection.
48 The impression I was left with at this point in the evidence was that the plaintiff and the defendant had developed a relationship that was likely to be consummated by a sexual encounter at some stage. Firstly, the defendant described having a conversation with the plaintiff in the car on the drive to Yeppoon, during which she says he raised that very subject:
[9] Transcript 371
Q: “Did you know by that point in time, after 17 years of being alone, that he was very, very interested in a romantic relationship with you? This is the night at Yeppoon, Iwasaki Resort?--- A: I'm not sure if I knew he'd been on his own 17 years at that stage, but he did say he was very keen on a relationship with me, of any sort at that stage, and if he could have it romantic, well, that was his - that would be his ultimate. We did talk lots about how he could - you know, he could pay somebody to be his partner, you know, like an escort, he could have lots of women that he could try and give all his gifts to, but he said he didn't want to give his gifts to anybody but me, and he kept pursuing and he kept pushing and pushing all the time."[9]
49 The defendant’s oral evidence regarding when she had the foregoing conversation with the plaintiff appears to have been on the trip in the car to Yeppoon. At first she said that she had that conversation with him before the sexual encounter, and later she said that she thought the conversation occurred after that night, but in answer to a question premised on the conversation occurring during the car trip to Yeppoon, it was my impression that it occurred before the sexual encounter at Yeppoon.
50 In the context of the car trip to Yeppoon, and the dinner at the restaurant, the defendant then described the sexual encounter, and her decision to participate in it in the following way:
[10] Transcript 371
Q: “… and engaging in a sexual relationship with him on that night, aren't you rather suggesting that you are a willing participant in a romantic and sexual relationship?--- A: Well, my thoughts were that if I just got this out of the way then he might just settle down and stop pestering me. Because he, that's what he said to me, ‘If you just let me try, just let me try’. And for - and as he kept saying, ‘I've helped you out so much, with so many things, and we could just - nobody needs to know about this’. There were lots of things he said to me to coerce me. He said lots and lots of things."[10]
51 I accept the plaintiff's evidence that it was the defendant who showed affection for him at the airport, and then on the boat trip. I reject the defendant’s evidence that she was sexually harassed by the plaintiff. I think it is improbable that if she was sexually harassed to the extent described by her, that she would have accepted the plaintiff's offer to drive her to Yeppoon.
52 Furthermore, I think it is improbable that the conversation described by the defendant regarding her advice to the plaintiff that he engage an escort to whom he could direct his sexual desires and amorous intentions occurred. The substance of the conversation was not put to the plaintiff. I think her failure to do so is highly significant, because the defendant gave that evidence for the purpose of explaining that she had no intention of having any romantic relationship with the plaintiff. It is not the sort of conversation by its subject that the defendant was likely to easily forget.
53 Whilst the defendant might have privately held some reservations about whether she wanted to have any level of romantic relationship with the plaintiff, I think that it is probable that she was prepared to have the plaintiff believe that she was interested in developing such a relationship with him. Her behaviour towards him on the boat trip, during the car trip to Yeppoon, at the dinner and in the hotel room demonstrates that she intended to create that idea in the plaintiff's mind.
54 At the end of that evening, and after the sexual encounter, I think it is probable that the plaintiff and the defendant did have a conversation regarding the plaintiff's sexual potency. I accept the plaintiff's evidence that the defendant suggested that he see a medical practitioner to obtained a prescription for Viagra in readiness for the next occasion when they met. I also accept that the plaintiff and the defendant arranged to meet in Melbourne on the defendant’s birthday on 18 September 2008.
55 The defendant said that she intended to travel to Melbourne on the weekend of her birthday to attend a business conference. She travelled to Melbourne with Ms Caroline Berdsy. They had booked accommodation at the Vibe Hotel in Carlton. She said that the plaintiff insisted that they meet in Melbourne. The plaintiff denied that. He said the meeting in Melbourne had been planned when he and the defendant were in Yeppoon.
56 The plaintiff purchased a yellow Argyle diamond friendship ring for $7,000 on 4 September 2008 when he was in Perth. He also purchased a matching set of earrings on 5 September 2008 in Perth for $3,877. He took the plaintiff shopping and bought her a new dress for her to wear at a dinner they were planning to have together that Saturday night.
57 The plaintiff said that when he met the defendant in Melbourne she rushed up to him and gave him an embrace and a hug. He said he felt ten feet tall and was overwhelmed by her behaviour. It was after that initial meeting that they went on a shopping trip. Following the shopping trip, the plaintiff said that the defendant virtually demanded that they have intercourse before they went to dinner. They had intercourse, and then went off to have dinner together. The plaintiff gave the defendant the friendship ring and the earrings at the dinner. He said that she was overwhelmed by those gifts, to the extent that she uttered expletives in expressing her surprise and joy at receiving those gifts.
58 The defendant said that she returned the ring to the plaintiff on three occasions. The evidence is unclear whether the ring is in the possession of the plaintiff or the defendant.
59 The defendant denied that she behaved effusively and affectionately towards the plaintiff. She admitted that he made her a gift of jewellery and bought her a dress, and that they had dinner together, but otherwise she denied the thrust of the plaintiff's evidence of what occurred around the time of her birthday. It was put to the plaintiff in cross-examination that he offered the defendant $50,000 per annum if she became his partner, his house at Admiral Drive, and a limited directorship in Johnson High-Tech. The plaintiff said it was possible that he offered her $50,000 per annum, but denied that he offered her his house and a limited directorship in the companies, although, he said that he did make the offer about a limited directorship some months later.
60 However, the defendant’s oral evidence was significantly different from what was put to the plaintiff. The defendant said that the plaintiff told her she was a wonderful friend and that he was happy in her company. He gave her the ring, which she did not put on. He then offered her $50,000 as an allowance. She responded by saying that it was as if the plaintiff was trying to buy her. He then said that was not the case, but that if the defendant became his partner he could increase the annual sum to $100,000. He asked her if she liked pink Argyle diamonds, and that he would obtain one as an engagement ring.
61 The defendant’s evidence gave me the impression that she was not only overwhelmed by the interest shown in her by the plaintiff, but that she found it disagreeable. She said, about this occasion, and in relation to subsequent occasions when the plaintiff gave her sums of money and other benefits, that on no occasion did she ask for any money or other benefits, but because he was a big, strong and imposing man, that she felt she could not refuse the offers he made. Furthermore, that after a number of gifts of money had been made by the plaintiff, she felt obligated to see him and have some level of relationship with him, but all the time being reluctant to have a relationship with him with a preference that he leave her alone.
62 The defendant said that the plaintiff urged her to stay at the hotel where he had booked a room for himself. It was either the Sofitel or the Hyatt Hotel. She said that she understood that the plaintiff had agreed to book two rooms. She discovered that the plaintiff had booked only one room. She reluctantly stayed with the plaintiff, sharing a bed with him. On the following day, the plaintiff attended the balance of the conference in Melbourne and then returned to Sale.
63 I accept the plaintiff's evidence that there was an arrangement for him to meet the defendant in Melbourne on her birthday. I accept his evidence that after the first sexual encounter at Yeppoon, and his difficulty in engaging in sexual intercourse, that there was a discussion about that subject which led to the defendant suggesting that he obtain a prescription for Viagra before they were to meet in Melbourne. I accept the plaintiff's evidence that when they parted company in Yeppoon, that the plaintiff and the defendant contemplated having an ongoing sexual relationship.
64 The defendant may well have booked a room at the Vibe Hotel in Carlton with Ms Birdsey, but she subsequently met up with the plaintiff and stayed with him at his hotel. The defendant referred to Ms Birdsey during her oral evidence when describing the arrangement she had made to travel to Melbourne, where she intended to stay, and a discussion with Ms Birdsey regarding a change of plans when she accepted the plaintiff's invitation to stay with him. Ms Birdsey was not called to give evidence. Whilst her evidence would have been limited to travelling arrangements and hotel bookings, and perhaps some admissible evidence of conversations which she had with the defendant relevant to the appearance of the plaintiff on that weekend, her evidence would have been of some importance to corroborate some of the peripheral matters on which the plaintiff gave evidence about that weekend.
65 Despite the impression I was again left with that the defendant found the plaintiff's conduct on that weekend to be disagreeable, she nonetheless met the plaintiff when he subsequently travelled to Sale on a number of occasions.
66 The plaintiff gave the defendant a cheque for $50,000 on 30 October 2008. The plaintiff said that the defendant asked him for that sum of money. He said that she told him that she had obtained planning approval for the venue for her business, and wanted to move things along in preparation for the opening of the business on 1 December 2008. The plaintiff said that the sum of $50,000 was a loan and was subject to the same interest payments as the previous loan he had made her.
67 The plaintiff gave the defendant a further cheque for $50,000 on 12 November 2008. It was on that date that he also wrote a note addressed to the defendant as follows:
"This is to certify that the one hundred & twenty five thousand dollars I
have advanced to Kirsten Mackintosh is a gift."[11][11] JCB 107
68 The plaintiff signed the note. He said that his reasons for translating the monies he had loaned to the defendant into a gift was because he was of the view that his relationship with the defendant was on the verge of a breakdown. He said that the defendant was stressing about cost overruns relevant to her business. He said that in view of the relationship which he believed that he had with the defendant, he was prepared to write off the loans. He said that he would not have written off the loans if he believed that he did not have a relationship with the defendant.
69 The plaintiff visited Sale and stayed with the defendant at Stawell Street. The defendant did not finally separate from Dean until 30 October 2008. She occupied the same bedroom and bed as Dean up until that time. Mia occupied her own bedroom. The plaintiff slept on a mattress on the lounge room floor. He said that the defendant would join him on the mattress, where they had intercourse. After Dean left Stawell Street, the plaintiff continued to visit Stawell Street, but rather than sleeping on the mattress, he shared the defendant’s bed.
70 The defendant admitted that the plaintiff visited Stawell Street and stayed, sleeping on the mattress on the lounge room floor. She denied that they had intercourse. She said that to leave her bed which she occupied with Dean and to move about the house entering the lounge room to join the plaintiff would not have been possible. Where the plaintiff slept was in close proximity to Mia’s bedroom. She added that Mia would often get up during the night and enter her bedroom.
71 I think it is probable that the plaintiff and the defendant had developed a relationship which saw the plaintiff being a welcome guest to the defendant's home. I think it is probable that they did have intercourse while Dean remained resident at Stawell Street. I think it is probable that the plaintiff visited Stawell Street more regularly after Dean left and that they slept in the same bed and continued to have sexual relationship. This seems to fit in with the findings that I have made thus far, that the plaintiff and the defendant had developed a relationship in which intercourse was a feature.
72 The plaintiff planned to travel to Adelaide to attend an André Rieu concert which was scheduled to take place on 21 November 2000. He planned to attend the concert with two friends. He asked the defendant if she would accompany him. She agreed. The plaintiff booked a room at the Rockford Hotel. The defendant slept in the same bed as the plaintiff. They were not intimate on that occasion. The defendant said that she declined the invitation to accompany the plaintiff on three occasions. She eventually agreed to accompany him on the basis that the plaintiff would book two rooms. When she arrived in Adelaide she discovered that the plaintiff had only booked one room. She said they were not intimate nor did they physically touch on any occasion while they slept in the same bed.
73 I accept the plaintiff's evidence that the defendant accepted his invitation to accompany him to the concert in Adelaide. I do not accept the defendant’s evidence that she refused the offer on three occasions. There was nothing between the plaintiff and the defendant at that time which suggests that there would have been any basis for reluctance on the defendant’s part to accompany the plaintiff.
74 The defendant put on a Christmas party on 29 November 2008. The plaintiff was staying with the defendant at Stawell Street at that time. The defendant consumed a large volume of alcohol to the point where she was too intoxicated to drive home. The defendant rang the plaintiff and asked him to come and collect her. He did so. He said after arriving back at Stawell Street, and before he could get her into bed, she began removing his clothing and dragged him into bed with her. She removed her clothing. The defendant then reached into a bedside drawer and pulled out a vibrator. She asked the plaintiff to use it on her. He did so.
75 In her affidavit, the defendant said that she had little recollection of that night. On the following morning, the plaintiff entered the bedroom with a cup of tea. He told her that she was the sexiest woman he had ever been with. When she asked him what he meant, he told her that he had purchased a vibrator and used it on her that night. The defendant said that she understood that to mean that he had penetrated her with the vibrator. She said her reaction to what she was told was horror, distress and she was stunned. She became angry. She told the plaintiff to leave her home and never return. She said she became upset, and began vomiting. Following that event she said the plaintiff persistently contacted her and repeatedly apologised for what he had done.
76 The plaintiff said that the defendant was well aware of the sexual interaction which they had had that night. He said they both laughed about the use of the vibrator. He said that he did not purchase a vibrator, and had no knowledge of the use of one before that night.
77 The defendant's version of what occurred that night was substantially different when she was cross-examined. Firstly, the defendant accepted that because she was intoxicated, that she might have been disinhibited and that the events as described by the plaintiff were more likely to have happened. Secondly, she accepted that that she has no recollection of what really happened that night and that she is not in a position to contradict the plaintiff’s version of what occurred. Thirdly, she accepted that if she had engaged in “consensual sex play” with the plaintiff, that it suggested that she saw the plaintiff as a potential sexual partner.
78 I think it is probable that the defendant was in an intoxicated state, her intoxicated state created disinhibition, and that she was a willing participant in consensual sex acts with the plaintiff which involved her production of a vibrator. The plaintiff said that she owned a vibrator, but that she stored it in a cupboard high up to keep it out of sight of her daughter, Mia. I think the fact that she owned a vibrator makes it more probable that it was that vibrator which was produced by the defendant from a bedside table. I accept the plaintiff's evidence that he did not purchase a vibrator.
79 The plaintiff said that he did not leave Stawell Street. The defendant said that he did. The plaintiff was in the habit of paying for all of his expenses by credit card. The credit card statements for that period do not disclose his occupation of a motel or hotel which, I think, makes it more probable that the plaintiff stayed at Stawell Street.
80 What make the defendant's version of the foregoing events so implausible are two other events which followed. The first was the attendance by the plaintiff at the opening of the defendant's new business premises, and secondly, a further gift made by the plaintiff to the defendant of $50,000 on 22 December 2008.
81 On 1 December 2008, a mere two days after the sexual encounter between the plaintiff and the defendant on 29 November 2008, the plaintiff attended the opening of the defendant's new business premises. He said he was invited by the defendant to compere the opening. He attended. He made a speech.
82 The defendant said the plaintiff was not invited. He just turned up. She had organised for Councillor Beth Ripper to open the new business premises. Ms Ripper did as she was asked. It was at that time that the plaintiff came into the business premises. At the end of Ms Ripper’s speech, the plaintiff stood up and made a speech, describing the defendant as having a wonderful facility; being a wonderful person; being intelligent and talented. She said that her staff were shocked by what had occurred, and that she was personally embarrassed. She described the persons who attended the opening as being mainly women.
83 The defendant called Ms Lynette Thelma Smith. The defendant employed Ms Smith as a nanny for Mia. She also employed Ms Smith to work a couple of hours a week in the business. Ms Smith said that she arrived at the opening at about lunchtime. She saw the plaintiff. She said that she thought it was strange that he was there because it was a ladies only function. That is in contrast to the defendant's own evidence that the opening was attended mainly by women, which I infer to mean that there were men present as well.
84 The plaintiff expended money on materials for the defendant’s business, and he also undertook some of the smaller building work himself. The defendant conceded that he did so through November 2008.
85 What emerged from the evidence of the defendant regarding the sexual encounter of 29 November 2008 and the opening of the business premises was a tendency on her part to be very critical of the plaintiff. Whilst she said that she did not invite the plaintiff to attend the opening, it is clear that she did not tell him not to attend. The tone of her evidence suggested that she was displeased with the speech he made at the opening, but on her account it was a speech of some commendation, if not adulation, for her and her efforts in establishing the business. In relation to the monies expended on materials and the work he did, she described his efforts in that regard as being at his insistence. It was as if she were saying that she did not want him to do any of that, but she did not tell him not to.
86 I think it is probable that the plaintiff stayed at Stawell Street after the sexual encounter which occurred on 29 November 2008. I also think it is probable that he was invited to the opening of the new business premises and was asked to act as compere. It is clear that he had not only paid a significant sum of money to the plaintiff directed to the costs associated with establishing the new business premises, but he had also spent monies purchasing materials to assist in getting the new business premises ready for the opening and had actually undertaken some of the work himself. If the defendant had any misgivings about the plaintiff's degree of involvement, I accept the plaintiff's evidence that she did not demonstrate that in any way, but her silence at least encouraged the plaintiff to believe that the circumstances in which the two of them were living at Stawell Street, and the history of their relationship up until then, spoke volumes of an ongoing relationship.
87 The defendant travelled to the Gold Coast in December 2008 for the purpose of attending what she described as a retreat organised by the franchisor. She was accompanied by Mia, Ms Smith and Ms Birdsey.
88 Ms Smith said that the plaintiff appeared at the hotel where the defendant was staying and wanted to know where the defendant was. She told him that she was swimming in the pool downstairs. The plaintiff made his way down to the pool and waited poolside and watched the defendant swim. She said that the plaintiff literally followed her up and down the pool while she did laps. He apologised for what had happened at the opening, and I assume that the defendant meant an apology for turning up to the opening and making a speech without being invited to do either. The defendant said that she told the plaintiff to leave things as they were, and she informed him that she was unable to get through to him. It was then that the plaintiff offered to take Mia to SeaWorld to make up for the behaviour which the defendant condemned.
89 The plaintiff left and returned some days later. He took Mia and Ms Smith to a wildlife park. The defendant said that it was without her knowledge or permission. The defendant said she next saw the plaintiff when he turned up to the retreat dinner. She said he was asked to leave by the franchisor. He left. The defendant said that the plaintiff then rang her, wanting her to come and stay with him at an apartment he was occupying in Southport. Despite the defendant’s misgivings about staying with the plaintiff, she agreed to stay with him, along with Mia and Ms Smith.
90 The defendant said that the plaintiff took her, Mia and Ms Smith to the Versace Hotel and to SeaWorld. He invited them to dinner. The plaintiff and Ms Smith expended some effort in describing events which occurred at the dinner which I consider to be of little consequence. The events involved the plaintiff thinking he had a booking at a restaurant which turned out to be incorrect, but a table was found. He did not like the wine list so he bought a bottle of champagne and returned to the restaurant to be told he was not allowed to open the bottle. A scene unfolded involving the plaintiff arguing with waiters.
91 The plaintiff, the defendant, Mia and Ms Smith returned to the apartment. It was there that the defendant said that an argument broke out between herself and the plaintiff. When the plaintiff was cross-examined, it was put to him that he locked the defendant out on the balcony, but when the defendant gave evidence, she said she and the plaintiff went out onto on the balcony and he closed the door behind them. He attempted to have the plaintiff and Ms Smith drink a bottle of champagne he had purchased, but neither were interested. Ms Smith went off to bed. The defendant said that the plaintiff wanted to make up with her and that he wanted her to enjoy the bottle of champagne with him. She described his mood as aggressive. The argument continued. The defendant demanded that the plaintiff unlock the balcony door, which he did.
92 The following morning their mood was cool. The plaintiff drove the defendant, Mia and Ms Smith to the airport. The defendant and Ms Smith said that there was another scene with the plaintiff behaving aggressively. He then said that the stickers advertising the opening of the defendant’s new business premises that were on his car were reducing the tone of his car. He started to rip them off. He yelled at the defendant, accusing her of being ungrateful, and she said that he may have called her a whore.
93 The plaintiff's account of those events are not dissimilar to the account given by the defendant. At that stage, the plaintiff and the defendant were not getting on well. The plaintiff described the situation as amounting to a separation. The defendant told him that she intended to return to Sale and did not want to see him again. It was that statement which precipitated his visit to the defendant’s hotel. He said he complained at the restaurant, but not to the same degree described by the defendant and Ms Smith. He did invite the defendant and Ms Smith to share a bottle of champagne with him at the apartment. He denied locking the defendant out on the balcony. It should be remembered that it was put to him that he locked her out, which is inconsistent with the evidence of the defendant herself that they were both out on the balcony when he closed and perhaps locked the door. He did not rip any stickers off his car in front of the defendant and Ms Smith.
94 I think it is probable that the plaintiff and the defendant’s relationship was faltering at some stage not long before the plaintiff and the defendant met on the Gold Coast. I think it is probable that the plaintiff was angry and wanted to speak to the defendant. I think it is probable that his offers to take Mia and Ms Smith to a wildlife park, the dinner, and the invitation to join him at the apartment in Southport were attempts at a reconciliation with the defendant. I think it is also probable that they argued out on the balcony, and that things were cool between them the following day, and that there was an argument at the airport. I think the plaintiff probably did make comment about the stickers on his car and did demonstrate his anger and frustration by attempting to rip them off his car in front of the defendant.
95 The plaintiff and the defendant made telephone contact following the events which occurred on the Gold Coast. The plaintiff said that the defendant rang him and asked him for a further $50,000. The defendant said that the plaintiff offered her the $50,000 as a gift. He denied that he made that offer as a gift. He said he was not chasing the defendant to give her money. The plaintiff wrote the defendant a cheque for $50,000. The cheque was dated 22 December 2008. The defendant was in Mackay when he wrote out the cheque. The plaintiff said that the defendant rang him. She was crying. She told him that her budget had blown out and that she still owed $50,000. She said she did not know where she was going to get that amount of money from, and she added that she had not sold any of her houses. Although the relationship between the plaintiff and the defendant had cooled at that stage, and cooled to the extent that he described it as a separation, he nonetheless gave the plaintiff $50,000 in the hope that it would reinstate their relationship.
96 The defendant said that the plaintiff offered her $50,000. He apologised to her and told her that he hated himself and that he was not aware why he kept doing “this” to the defendant. He said that if she needed more money to complete work at the business premises he did not want her borrowing money. He then said that she meant too much to him and that she was special.
97 The plaintiff and the defendant agreed that there was a cooling in their relationship. They disagree who initiated the discussion about the $50,000. I think it is probable that the defendant rang the plaintiff and told him that she was in financial difficulty and needed money to complete work at the business premises. It is something which the defendant had said to the plaintiff on previous occasions which led to the plaintiff lending, and later gifting, sums of money to her to meet business expenses. I accept the plaintiff's evidence that his motivation in giving the defendant that sum of money was to reinstate their relationship consistent with what it had been previously.
98 The defendant's sister lives in Yeppoon. Her name is Caroline Mead. The plaintiff had extended generosity to Ms Mead and her husband, David. He had allowed David to stay at Admiral Drive on occasions when he needed accommodation in Mackay.
99 The plaintiff said that the defendant invited him to spend Christmas with her at Ms Mead's home in Yeppoon. The defendant denied that she made such an invitation. She said Ms Mead invited the plaintiff, and that she had no knowledge that the invitation had been extended to the plaintiff. She also believed that the plaintiff rang Ms Mead and told her that he would be spending Christmas alone which precipitated Ms Mead to invite him to spend Christmas Day with her and her family. The defendant also said that she told her sister not to invite the plaintiff to spend Christmas Day with them.
100 The plaintiff also attended a barbecue on Boxing Day. The defendant said that the plaintiff invited himself to the barbecue. At some stage following the barbecue, and at Ms Mead's home, the defendant said that she was downstairs with the plaintiff when they had a fight. She told him to leave her alone. The defendant said that the plaintiff accused her of being ungrateful, and she believes it was on that occasion that he called her a whore. Ms Mead was not called to give evidence.
101 As the plaintiff was leaving in his car the defendant handed him a note which read:
"I am very sorry we keep parting on bad terms. I believe it is because I
can't give you what you want and you keep pushing for it.
I think we should leave it at that we had some good times together.
Finally, I know it is none of my business, but I do think you should reconcile with any family members of your own with them things have gone awry - it is important for the soul."[12]
(sic)
[12] JCB 108
102 The plaintiff believed that his relationship with the defendant was all over. He said he felt disappointed by what had occurred.
103 Subsequently, the defendant said that in January 2009, the plaintiff rang her and pleaded with her to speak to him. He said he was in hospital. She said that he sounded depressed. The plaintiff said that it is possible that he rang her. He admitted that he felt depressed that their relationship had ended. He denied that he pleaded with her to ring him. The defendant said that she had a conversation with him regarding his behaviour, in which she told him that she did not want to have a relationship with him.
104 The plaintiff paid the whole of the purchase price of the property at Foster Street. The plaintiff said that the defendant rang him in January 2009 when he was in Mackay and told him that she had found a lovely house opposite the lake in Sale. The defendant said that the subject of where she was going to live was raised by the plaintiff, not by her. It was in the course of that conversation that she mentioned to the plaintiff that the Foster Street property was coming up for sale and that it was opposite the lake.
105 Prior to the first conversation which the plaintiff and the defendant had about Foster Street, they had previously spoken about a property at Aerodrome Road, Sale some time in November 2008. Again, and much like the conversations relevant to Foster Street, the plaintiff said the defendant found the property at Aerodrome Road. It was put to him that the property was for sale for $800,000. He agreed. He said that he and the defendant decided that it was probably better to buy a property in town (Sale) for less than $800,000. He agreed that the defendant did not have any real interest in living on Aerodrome Road. He said he recalled her saying from “day one” that if there was a property for sale on the lake in Sale that it would be an idyllic property to own. He agreed that there were no properties for sale on the lake at that time.
106 The plaintiff said that he was in Sale in January 2009. The defendant agreed that he was. The defendant looked at Foster Street with Ms Smith. She was not aware whether the plaintiff went and looked at the house. The plaintiff said that the defendant wanted to buy Foster Street. He spoke to the selling agent on one occasion, and looked at Foster Street on two occasions. The defendant said that she did not want the plaintiff to purchase Foster Street for her, but the plaintiff pressed the issue. The defendant seemed to want to skirt around accepting any description of her conduct which might have suggested that there was a joint endeavour in the purchase of Foster Street. Her position was always that the plaintiff paid the purchase price of the property and had it registered in her name solely because it was a gift from him to her.
107 The plaintiff denied that he made a gift to the plaintiff of Foster Street. He said that it was a house for both of them, and it was where he expected to live until he died.
108 It is unclear to me precisely how the sale was conducted. The plaintiff executed a Contract of Sale dated 3 February 2009 to purchase Foster Street for $435,000. The particulars of sale disclose that a deposit was payable on the signing of the Contract of Sale of $44,000, with the balance of $391,000 payable at the settlement of the Contract of Sale. The plaintiff gave the defendant a cheque for $44,000 signed on 17 January 2009 payable to the defendant as the deposit on the purchase. The plaintiff's bank statements disclose that the cheque was debited against his account on 2 February 2009. The defendant said that she hung onto the cheque for about a month because she was undecided whether she wanted to go through with the sale because she did not want to be beholden to the plaintiff. However, from the date the plaintiff signed the cheque on 17 January 2009 until the plaintiff banked it and it was debited against the plaintiff's account, was about two weeks.
109 The plaintiff gave the defendant a cheque for the balance of the purchase moneys of $436,000 signed on 13 February 2009. The defendant’s bank statements disclose that it was deposited in her account on 17 February 2009. The settlement of the Contract of Sale occurred on 12 March 2009. The plaintiff was in Sale at that time.
110 At the time when the plaintiff signed the cheque for the balance of the purchase monies he was an inpatient in the John Flynn Hospital. He had undergone heart bypass surgery in February 2009. He wrote the following letter to the plaintiff at the time when he forwarded the cheque to her:
"To my darling Kirsten,
I was deeply concerned to hear you say you had put all your expectations for your lakeside dream on hold. However I guess I have to be realistic & agree with you health & life are very unpredictable. After seeing the happiness in your face each time we drove past or talked about the house, to me it would be a tragedy if you did not get it. To ensure you get your dream I am enclosing a cheque to cover same.
Based on house price of $435,000 plus stamp duty (Approx $15,000) house should cost $450,000 less deposit of $44,000 Bal = $406,000.
May this be the foundation for many more beautiful dreams that we can share together.
Eternal love."
111 The plaintiff signed the letter “Dick” with nine crosses as an abbreviation for his kisses for her. He added a postscript that she bank the cheque as soon as possible.
112 The plaintiff and the defendant both laid claim to the letter as support for the position they each occupied. The plaintiff said that the letter demonstrated that the purchase of Foster Street was a joint endeavour in the purchase of a home where both he and the defendant were to live for the balance of their relationship. The defendant, on the other hand, said that the letter only demonstrated confirmation that Foster Street had been purchased for her as a gift.
113 I think the complexion which the defendant has sought to put on the letter is quite perverse. Firstly, the writing of the letter must be seen in the context of the relationship of the plaintiff and the defendant at the time it was written. Although there had been a separation, there was reconciliation when the defendant found Foster Street and the plaintiff agreed to buy it. Secondly, I accept the plaintiff's evidence that finding Foster Street and his agreement to purchase it led to a fulsome reconciliation which was consummated by the plaintiff and the defendant having intercourse on 17 January 2009. Thirdly, the last paragraph makes it abundantly clear to me that “the foundation” referred to by the plaintiff was the purchase of a family home for he and the defendant, and “the dreams” may well have been his dreams only, but nonetheless were dreams that they would share not only a home together but a life together in their home, and in its context those words were used to demonstrate that they were to have a life together into the future. The latter is entirely consistent with the oral evidence of the plaintiff. Lastly, what followed when the plaintiff and the defendant entered into occupation of Foster Street seems to me to be consistent with a relationship based at Foster Street, although the plaintiff was absent from time to time for the purpose of commuting interstate in the pursuit of his business interests.
114 The plaintiff made an application for a loan to his bank by a formal application dated 22 January 2009. Admiral Drive was used as security for the loan. The amount which the plaintiff applied for was $410,000. The defendant said that she did not know that the plaintiff applied for a loan in order to fund the purchase of Foster Street. The plaintiff has paid the required instalments of interest under the loan from the time he first drew down on the loan.
115 The plaintiff wanted Foster Street to be registered solely in the name of the defendant. He was concerned to ensure that upon his death no claim would be made by his children against the defendant. The defendant said that the only reason why Foster Street was registered solely in her name was because it was a gift, and that she made it abundantly clear to the plaintiff that she would not accept Foster Street on any basis but as a gift. It was consistent with her evidence throughout the trial that after the plaintiff wrote the note that the $125,000 he had given her was not a loan, but a gift, that all the monies applied to her benefit thereafter were gifts.
116 The plaintiff said that he stayed with the defendant at Stawell Street on 17 January 2009. He said that they slept in the same bed and had intercourse. He said that the defendant was the instigator of that sexual encounter. He said that the sexual encounter was something of a celebration of the decision to purchase Foster Street. The defendant denied that they were intimate to any extent. The plaintiff said that it was the last occasion that he and the defendant had intercourse.
117 The Joint Court Book contains a very large volume of financial materials relevant to the plaintiff and the defendant. Large quantities of those documents are statements relevant to the plaintiff's use of a credit card. Both Mr Isles and Ms Tulloch referred to the statements for the purpose of determining when the plaintiff was in Sale, or in the district, from 29 October 2008. Mr Isles prepared a reconciliation of the plaintiff's use of the credit card which included its use on 29 October 2008 in Traralgon, through to its last use on 3 April 2010 in Sale. Ms Tulloch had the opportunity to match up the card reconciliation with the primary documents. She informed me that it accorded with the primary documents.[13]
[13] The card reconciliation is appended to these reasons for judgment
118 The card reconciliation demonstrates that after Dean left Stawell Street, the plaintiff was in Sale often, and after the settlement of Foster Street, more often. The reconciliation also demonstrates that the plaintiff purchased building and hardware materials which he obtained for the purpose of undertaking work by way of repairs and maintenance at Foster Street, and indeed, before he and the defendant entered into occupation of Foster Street on the defendant’s business premises. The plaintiff said that he undertook repair and maintenance work on Stawell Street. The defendant admitted that he in fact did so, but chose to describe what the plaintiff did as if it was without her approval, but was tolerated. However, the plaintiff said that the defendant would leave lists of things for him to do which he would then set about doing.
119 I think it is probable that the plaintiff took it upon himself to assist the defendant by purchasing materials and doing repair and maintenance work at her business premises and at Foster Street. However, to the extent that the defendant did not approve of what the plaintiff did in that regard, I reject her evidence. Furthermore, after the settlement of Foster Street, I think it is probable that she not just tolerated the plaintiff's enthusiasm to purchase materials and undertake repair and maintenance work, but tacitly approved of what he was doing because in the end she was the beneficiary of his work in that respect.
120 The domestic setup at Foster Street fulfilled the desires of the plaintiff. It also seemed to have also fulfilled the desires of the defendant. At one point in the defendant’s oral evidence she conceded that there was a level of domestic harmony between herself and the plaintiff:
Q: "Do you agree that you found it difficult sometimes because you'd
be affectionate towards him and he'd take it the wrong way?---A: Yes. Q: Can you give me some instances where you were affectionate
towards him and he'd misinterpret it?---A: Just normal smiling or just asking, you know, when he did - I don't
know what examples you want but at the - - -.Q: Well, for instance, when he stayed with you and you were going off to work, would you give him a kiss?--- A: No. Q: Would you give him a kiss when you came back?--- A: No, no, no. Q: Do you remember when - - -?--- A: I was bringing him - because I do a lot of cooking, so if he was doing some work in the garden and I'd say, ‘Well, do you’ – ‘I'll go inside and make some scones and jam and cream and a cup of tea,’ you know, he just loved that, and he'd say, ‘You're so kind and this is wonderful’. He seemed really taken by that."[14] [14] Transcript 388
121 The card reconciliation also supports the plaintiff's oral evidence that he purchased the defendant flowers on a few occasions. He also purchased a car which he left at Foster Street. He used it when he was in Sale. He later sold it to the defendant’s son, Adam.
122 The plaintiff and the defendant occupied separate bedrooms on the occasions when the plaintiff was in Sale. He said that he spoke to the defendant about why that was so, and she answered that she needed more time to be on her own. If the plaintiff planned to go to Sale he said he would ring the defendant a day or so beforehand to warn her that he was on the way.
123 It was put to the defendant that it was no coincidence that the plaintiff was in sale on the day when the settlement occurred. She said, however, that the plaintiff was in Sale because he wanted to take the defendant, Adam and Madeleine[15] out to dinner to celebrate “my new home”. The defendant said he made a little speech at the dinner in which he announced that Foster Street was the defendant’s home. Neither Adam nor Madeleine was called to give evidence by the defendant. The plaintiff consistently denied that the purchase of Foster Street was a gift for the defendant.
[15] These are the defendant’s two children by her previous marriage. Adam is about nineteen years of age and Madeleine is about twenty-one years of age
124 In about April 2009, the defendant asked the plaintiff to move out of Foster Street. She said that she had some outstanding issues with Dean which was the basis for her request. The plaintiff complied. The plaintiff said that on 28 April 2009, the defendant asked him to pay $12,000 for a new kitchen at Foster Street. He did so. The defendant said that the plaintiff insisted that there should be a new kitchen at Foster Street. She said that despite the calculations made by the plaintiff about what monies would be required to settle Foster Street and pay, among other things, for a new kitchen, she found that she was short, which led to the plaintiff paying her that sum. It was about June 2009 that the plaintiff moved back into Foster Street. He continued to reside there from time to time until March 2010. Despite the defendant's version of what occurred, the sum of $12,000 was paid to her for the purpose of building a new kitchen.
125 The plaintiff applied other monies for the benefit of the defendant. He said that the defendant spoke to him about travelling to Greece in about June/July 2009. She said it was a trip that she wanted to undertake with him. The plaintiff wrote a cheque for $5,000 on 1 July 2009 which he forwarded to the defendant as a deposit for the trip. The defendant said that the plaintiff had been invited to travel to Hawaii for what she understood was a business trip, and that he had paid the sum of $5,000 into her account without telling her he was intending to do that. She said that she refused to go on the trip with him. The plaintiff said in his affidavit that he believes that the defendant used the money to buy a dining suite. In response, the defendant said that she might have in fact brought a dining suite with the money.
126 On 13 September 2009, the defendant attended ladies day at the Sale races. The defendant had organised a table for her business. The plaintiff arrived and sat at the table amongst a number of ladies who were also seated at the table. It was put to the plaintiff that he was not invited. He disagreed. He said he had been invited, and presumably by the defendant. It was also put to him that he offered to buy the defendant a racehorse. He denied that he ever made that offer, saying that he did not know where she got that idea from. It was not something on which the defendant gave evidence. None of the other ladies who were at the table were called to give evidence.
127 During Easter 2010, the plaintiff was in Mackay. The defendant rang him and asked if she could come and stay, accompanied by Mia, her mother and two of her relatives from overseas. The plaintiff said that they were all welcome. He took them around the Whitsundays. It was at that time that the plaintiff told the defendant that he wanted to spend Easter with her. He asked her what she was doing over Easter, to which she replied that she would be gardening and that she had nothing else on. The plaintiff stayed at Foster Street. He was there for about three days when the defendant told him that she was going out for the night with another man whom she had known for some time and that she would not be back that night. It was as a result of that conversation that the he told her that he would leave and not return.
128 The defendant said that she spoke to the plaintiff about him coming to stay over Easter. She told him it was inconvenient because she was to attend a tennis tournament for Mia in Maffra, that her mother was coming to stay and she was going out to dinner in Bairnsdale with some friends. She said that the plaintiff said he wanted to speak to her. She said she was unable to prevent him coming to Sale. At some stage after he arrived she gave him an ultimatum. She said that she was going down the street for two hours and that if the plaintiff was not there when she returned then the house was hers, but if he was still there the house was his. When she returned she noted that he had packed some belongings and had left.
129 Irrespective of the competing versions regarding the payments of the sums of $12,000 and $5,000, it is clear that both sums were paid by the plaintiff to the defendant. I think it is probable that the sum of $12,000 was paid for the purpose of replacing the kitchen. I think it is probable that the plaintiff and the defendant spoke about a trip, but whether it was to Greece or Hawaii is difficult to determine, as is whether the transfer of $5,000 into the defendant's account was with her knowledge. However, I think it is probable that the defendant used the sum of $5,000 to buy furniture, and probably a dining suite.
130 I think it is probable that the defendant did invite the plaintiff to the Sale races. There was nothing between the plaintiff and the defendant at that time which suggests that there would have been any basis for reluctance on the defendant’s part to extend such an invitation to the plaintiff. Again, the plaintiff's attendance at the race meeting must be seen in the context of their relationship at that time. The plaintiff had just given the defendant $12,000 to rebuild the kitchen at Foster Street, and a further sum of $5,000. Following the occasion of the race meeting, the defendant asked the plaintiff if she could bring Mia, her mother and two relatives to Mackay. I do not accept that these events occurred on either side of the race meeting without the defendant at least indicating to the plaintiff that she had organised a function at the race meeting. I think it is probable that she did invite him. It seems to me to be unusual for her to have accepted the two sums of money and then taken a holiday in Mackay and yet to have demonstrated ill feeling towards the plaintiff because he attended the race meeting apparently uninvited.
131 This brings me to the last event in the long saga of the relationship. I accept the plaintiff's evidence that he rang the defendant a day or so before arriving in Sale in order to notify her that he intended to come to Sale. He did not have to give her that notification, but it was his habit to do so. I accept the plaintiff's evidence that when he rang to notify the defendant that he wanted to come to sale over Easter, that the defendant did tell him that she was likely to be occupied in the garden and otherwise had nothing else planned. I do not accept the defendant’s evidence that what she described as her plans were likely to be interfered with by the plaintiff coming down to Sale and staying over Easter.
132 I am in no doubt that something occurred of such seriousness that the plaintiff realised that his relationship with the defendant was no longer viable. Whether it was because the defendant made a demand that the plaintiff leave or whether it was because she intended going out with another man and not returning that night, is difficult to determine. Either event is consistent with a demonstration that their relationship was no longer viable.
Findings
133 For reasons which are now plain, I prefer much of the evidence of the plaintiff to that of the defendant.
134 My reasons for preferring the evidence the plaintiff, apart from the specific findings I have made which I have referred to in some detail above, is that the sums of money applied by the plaintiff to the benefit of the defendant are easily traced through the evidence of the plaintiff and the documents tendered in evidence.
135 The plaintiff's benevolence towards the defendant began because she was the daughter-in-law of his very close friends, Mr Bill Mackintosh and his wife. I think it is probable that the plaintiff is by nature a generous man with the financial means to be generous, and that he was prepared to extend that generosity to the defendant. However, a point was reached where his benevolence towards the defendant went from simple generosity to a growing and serious interest in the defendant. It occurred because of the defendant's greeting at the airport and her behaviour towards the plaintiff on the boat trip. I find that there was a tangible change in her behaviour towards the plaintiff which resulted in a tangible change in the plaintiff's behaviour towards her.
136 The subsequent benevolence of the plaintiff in loaning the defendant significant sums of money, which he later made as gifts to her, I find occurred as a result of the defendant’s behaviour towards the plaintiff. She gave him to believe that they either were or could be in an amorous relationship. I find that the plaintiff became captivated by the defendant and infatuated and then obsessed with the defendant. He was clearly emotionally attached to the defendant. He could not do enough for her. That is quite evident from the purchase of jewellery and his subsequent benefaction.
137 Although there were occasions when the plaintiff and the defendant had a downward spiral in their relationship, it was revived, and it is more than coincidence that the revival occurred when the defendant was in need of money for her business. That is certainly evident when the last tranche of $50,000 was given to the defendant in late December 2008 when the defendant would have it that their relationship was either non-existent or was very rocky. It is further apparent that when the plaintiff thought his relationship with the defendant was over, it was again revived when the defendant told him she had found a house on the lake which then led to the plaintiff paying for the house and subsequently staying at the house with the defendant often until after Easter 2010 when their relationship finally came to an end.
138 I think it is probable that the plaintiff, who was seventy-three years of age in 2008, was in little doubt that after the purchase of Foster Street that he was in a stable relationship with the defendant. I find that the defendant was prepared to allow him to believe that was so.
139 There were aspects of the evidence of the defendant which I found disquieting. She persistently denied that she ever wanted any money from the plaintiff; however, despite her statements to that effect, she nonetheless accepted sums of money from the defendant, and the purchase of Foster Street registered in her name in the face of protestations on her part that she did not want the money unless it was a gift, and did not want the plaintiff to purchase Foster Street to be registered in her name unless it was a gift.
140 The defendant’s persistent explanation for accepting money and Foster Street registered in her name was the imposition by the plaintiff of power over her will. I do not accept the defendant’s evidence in that regard, because it flies in the face of occasions when their relationship was brought to an end, for example, the period leading up to the defendant notifying the plaintiff that she had found a house on the lake when it was her own conduct which brought the relationship to an end when she handed the note to the plaintiff referred to in Yeppoon.
141 Whilst I recognise that a trial judge should be slow to come to an adverse view of a witness just because of the way a witness might behave while giving evidence, what struck me about the contrast in the evidence of the plaintiff and the defendant was that the plaintiff gave evidence in a straightforward manner and was almost always responsive to the questions being asked of him. I consider that the content of his evidence was fair and had the ring of truth about it overall. On the other hand, the defendant often gave non- responsive answers, and in many cases those answers were designed to press her case that she did not want the money or Foster Street unless they were a gift, and when she accepted them it was because of some position of power which she said that the plaintiff had over her and because she felt beholden to him. My impression was that the defendant was at times not prepared to tackle questions directly, and I think that tainted not only the way she gave evidence but also her answers, which left me with a sense that her evidence was unreliable overall.
142 There were no other witnesses who the plaintiff could have called to corroborate his version of the relationship which he had with the defendant. I accept his evidence that he did not tell his children of the relationship, and it was not put to him that there were witnesses he could have called to corroborate various aspects of his evidence. However, the defendant could have called a number of witnesses, but did not do so. She could have called her sister relevant to what happened during Christmas 2008. She could have called Ms Birdsey regarding the arrangements for the conference in September 2008, the conference on the Gold Coast, and the incidents involving the plaintiff at the conference, and the extent to which the plaintiff involved himself in the defendant’s business. She could have called Adam and Madeleine regarding the dinner with the plaintiff at which he is alleged to have represented that the purchase of Foster Street was a gift to the defendant.
143 The only witness called by the defendant was Ms Smith. I considered that her evidence was coloured by a desire to assist the defendant as much a she could. She wanted to make a characterisation of the plaintiff which put him in a bad light regarding his attendance at the opening of the new business premises, and his conduct on the Gold Coast. Otherwise it was evidence of little value to the defendant. The witnesses I have referred to are in the camp of the defendant. No explanation was given by the defendant for not calling those witnesses. Whilst I will not speculate as to what those witnesses would have said, I am entitled to draw an inference that their evidence would have been of no assistance to the defendant, and in that setting, I may more comfortably accept the evidence of the plaintiff.[16]
[16] Jones v Dunkel (1959) 101 CLR 298
144 I think the failure to call Ms Birdsey, who could have given some evidence regarding the plaintiff's involvement in the set up of the new business premises, his attendance at the opening and his appearance on the Gold Coast at the conference would have been relevant, but having said that, I do not want it to be thought that I am speculating on what she might have said. The most critical failure on the part of the defendant was the failure to call Adam and Madeleine. The central platform of the defendant's defence was that the plaintiff made her a gift of Foster Street. He announced that in unequivocal terms at the dinner attended by both Adam and Madeleine for which that could have given some evidence of what the plaintiff said or did not say. The failure to call them has led me to more comfortably accept the plaintiff's version of what occurred at the dinner, and that is, that he did not say any of the things attributed to him by the defendant.
145 The foregoing is a summary of the more pertinent and obvious descriptions of the nature of the relationship which developed between the plaintiff and the defendant. I think the summary is sufficient to capture the nature of their relationship and the conduct of each of them relevant to the causes of action raised by the plaintiff and the defendant's defences to the causes of action.
146 The plaintiff and the defendant engaged in a war by correspondence and email. Mr Isles and Ms Tulloch referred to the correspondence and e-mails in their cross-examination and addresses. I have read all the correspondence and e-mails. They demonstrate that once it was clear that whatever relationship the plaintiff and the defendant believed they had was finally over, that their positions became completely polarised, and they subsequently argued with each other from those polarised positions. I do not think that the content of the correspondence and the e-mails really assists me much at all.
The Legal Principles
147 Mr Isles submitted that the plaintiff was at a special disadvantage, that the defendant exploited that disadvantage for the purpose of obtaining money and Foster Street from the plaintiff, and that the defendant's conduct in procuring the money and Foster Street was unconscionable.
148 Mr Isles principally relied upon Louth v Diprose[17] in support of his submissions. In some ways the facts of Louth v Diprose are not dissimilar to the facts here. Essentially, the respondent was infatuated with the appellant. She was largely indifferent to him. He gave her $58,000 to purchase a house over which he was the registered proprietor. The appellant manufactured an atmosphere of crisis relevant to her living conditions in order to influence the respondent to provide her with money for the purchase of the house. She played upon his emotions by making threats of suicide, being aware of his infatuation for her which she manipulated. The respondent succeeded before the primary judge and then on appeal to the Court of Appeal.
[17] supra
149 The trial judge concluded that the respondent was “utterly infatuated by the appellant” and “completely in love” with her. He found that the respondent's infatuation placed him in a position of emotional dependence on the appellant and gave her a position of great influence on his actions and decisions. In conclusion, the trial judge held that the appellant was under a special disadvantage. On appeal to the High Court, the appellant contended that the findings of fact of the trial judge were not warranted. Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ did not interfere with the findings of fact of the primary judge or the Court of Appeal. Toohey J held that the relationship between the appellant and the respondent was inconsistent with the respondent being in “a special situation of disadvantage”.[18]
[18] at 655
150 Mason CJ, and Dawson, Gaudron and McHugh JJ, in a joint judgment, dealt directly with the attack made by the appellant on the conclusions reached by the trial judge and the Court of Appeal that their findings were not warranted. In separate judgments, Brennan J and Deane J traced the genesis of the principle that there is jurisdiction in equity to set aside gifts procured by unconscionable conduct.
151 Deane J summarised the principle of law as follows:
“It has long been established that the jurisdiction of courts of equity to relieve against unconscionable dealing extends generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party to the transaction with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that special disability was sufficiently evident to the other party to make it prima facie unfair or ‘unconscionable’ that that other party procure, accept or retain the benefit of, the disadvantaged party's assent to the impugned transaction in the circumstances in which he or she procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: "the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain" or retain the benefit of it.[19]” [20]
[19] See per Lord Hatherley, O'Rorke v Bolingbroke (1877) 2 AppCas 814, at 823; Fry v Lane (1888) 40 ChD 312, at 322; Blomley v Ryan (1956) 99 CLR 362, at 428-429; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, at 474
[20] 637
152 It follows from the findings of the trial judge and of the Court of Appeal, that on the peculiar facts of the case before them, that despite the fact that the respondent was a solicitor who was presumed to have experience of worldly affairs,[21] it was his infatuation with the respondent which was sufficient to found a such a conclusion. Deane J summarised the findings of the trial judge as follows:
“On the findings of the learned trial judge in the present case, the relationship between the respondent and the appellant at the time of the impugned gift was plainly such that the respondent was under a special disability in dealing with the appellant. That special disability arose not merely from the respondent's infatuation. It extended to the extraordinary vulnerability of the respondent in the false ‘atmosphere of crisis’ in which he believed that the woman with whom he was ‘completely in love’ and upon whom he was emotionally dependent was facing eviction from her home and suicide unless he provided the money for the purchase of the house. The appellant was aware of that special disability. Indeed, to a significant extent, she had deliberately created it. She manipulated it to her advantage to influence the respondent to make the gift of the money to purchase the house. When asked for restitution she refused. From the respondent's point of view, the whole transaction was plainly a most improvident one."[22]
[emphasis added]
[21] Dawson, Gaudron and McHugh JJ at 639
[22] at 638
153 In Bridgewater v Leahy,[23] the majority, comprising Gaudron, Gummow and Kirby JJ (Gleeson CJ and Callinan J dissenting), applied Louth v Diprose as accepting that emotional dependence can amount to a special disadvantage.[24] The majority also appears to have approved of a statement made by Jacobs J in the Court of Appeal in Diprose v Louth (No 2),[25] where his Honour observed that it was an oversimplification to say that because the respondent acted as he did with his eyes open and with a full understanding of what he was doing, that he was not in the position of disadvantage and not the victim of unconscionable conduct.[26]
[23] (1998) 194 CLR 457
[24] at 490
[25] (1990) 54 SASR 450 at 453
[26] A very similar issue was dealt with by Hargrave J in Williams v Maalouf [2005] VSC 346
154 So it would appear that in Louth v Diprose, the respondent's infatuation and emotional dependence were sufficient to establish a special disability, but in fact it was both his infatuation and extraordinary vulnerability which supported the conclusion that the respondent was under a special disability.
155 Ms Tulloch submitted that I could not be satisfied that the plaintiff was under a special disability at any time during his relationship with the defendant. She submitted that he was a successful businessman. He was a major shareholder in a company which had a significant earning capacity. He was in receipt of a significant income. On his own account, he could afford to gift significant lump sums. He was a man accustomed to staying in hotels, going on boat trips and having the capacity to buy the sort of jewellery he bought the defendant, all of which were well within his spending capacity. Furthermore, she submitted that the financial accounts of the companies disclose that they expended fees on seeking legal advice, so resorting to advice from lawyers was not something new to the plaintiff. In the end, she submitted that he was a man of some sophistication and experience.
156 Despite Ms Tulloch's well structured submissions, I am not satisfied that the principle of law excludes any class of persons. Indeed, it was the subject of particular treatment by Brennan J and Deane J, who both referred to Blomley v Ryan[27] and in particular to the observations made by Fullager J, who listed some examples of special disability,[28] but who added that the common characteristic of such adverse circumstances seems to be that they have the effect of placing one party at a serious disadvantage, vis-à-vis, the other. In other words, the persons who are under a special disadvantage may well come from a background where one might assume that it would be unlikely that such a person would fall into a position of serious disadvantage relative to another person.[29] However, it is at this point that it is relevant to return to the observations made by Jacobs J which I think are relevant to the position of the plaintiff. On one view he was a successful businessman who was no doubt astute, but whilst that might be so, it is not of itself an answer to the position he found himself in, vis-à-vis, the defendant, which resulted in him being under a special disability.
[27] (1956) 99 CLR 362 at 405
[28] the use of the expression "special disadvantage" appears to mean the same as "special disadvantage" as it was used in Louth v Diprose
[29] Dawson, Gaudron and McHugh JJ, at 639, made that very observation in their joint judgment, and observed that with a person like the respondent, he would bear a substantial evidentiary burden to establish a special disadvantage. The other members of the Court appear not to have made any similar observation
157 I am satisfied that the plaintiff was at a special disadvantage, vis-à-vis, the defendant. On the basis of the findings I have made, the plaintiff was captivated by the defendant from the outset of the defendant’s overt showing of affection at the airport and on the boat trip. His captivation quickly became infatuation following the sexual encounter at Yeppoon instigated by the defendant, evidenced most graphically by the plaintiff's purchase of a friendship ring for $7,000 and matching earrings for $3,877 which he purchased in readiness for the weekend of the plaintiff's birthday. His infatuation with the plaintiff was further enhanced by the defendant’s overt showing of affection when they met in Melbourne on that weekend followed by a shopping trip to buy the plaintiff a dress, a further sexual encounter and a romantic dinner, at which time the plaintiff gave the defendant the friendship ring and the earrings. Such was his infatuation at that time that there was talk of the plaintiff giving the defendant a very handsome allowance of $50,000 per annum, and at some later date, a limited directorship in Johnson High-Tech. It must be remembered that the company was at all times successful and earning an income.
158 Furthermore, it was perhaps around that time that the plaintiff's infatuation with the defendant then became an obsession, because he forgave the loans of $125,000 in November 2008. His benefaction did not end there. He later gave the plaintiff a further sum of $50,000 in late December 2008. In the meantime he saw the plaintiff reasonably often and engaged in sexual encounters with her at Stawell Street.
159 By this time the plaintiff was a seventy-three-year-old man who had not had a relationship with a woman for some seventeen years. The defendant, again on the findings I have made, could be described as being aggressive in her showing of affection for the plaintiff. The presence of a much younger woman showing that degree of affection resulted in him giving her what can only be described as a very large sum of money by the end of December 2008 – a sum totalling $175,000. The extent of his benefaction of itself infers infatuation, and the clouding of his judgment.
160 The obsession which the plaintiff then developed for the defendant is evidenced by his pursuit of the defendant and his refusal to accept that the tantalising nature of their contact and the prospect of a life together was something he was not going to give up.
161 Although there were occasions when their relationship appeared to come to an end, it was revived in January 2009 when the defendant told the plaintiff that she had found a house on the lake. The only reason why the defendant made that contact with the plaintiff was because she knew that he was so keen to have a relationship with her that the mere mention of purchasing a home in which they could both live was something she knew the plaintiff craved.
162 The conclusion I have reached is that the infatuation and obsession which the plaintiff developed clouded his judgment. Each time the plaintiff gave the defendant sums of money she must have known that she could exploit and manipulate the plaintiff's infatuation and obsession for her. Indeed, that is what she did when she contacted him and told him she was in need of money for the ongoing development costs of her business. That extended to the plaintiff voluntarily purchasing things for the plaintiff's business, and doing repair and maintenance work himself, and then purchasing Foster Street and also doing repair and maintenance work there as well.
163 The most potent proof that the defendant knew that she could exploit the plaintiff's infatuation came with her answers, which I have quoted above, where the simplest sign of interest and affection for the plaintiff resulted in the defendant’s making of scones, jam and cream with a cup of tea as something which the plaintiff just loved, and it prompted him to say to her that she was so kind and that what she had done was wonderful. This was said at a time when the plaintiff and the defendant were in occupation of Foster Street.
Conclusion
164 I am satisfied that the defendant's conduct leading up to the plaintiff translating the $125,000 he had loaned her into a gift, and her conduct subsequently leading up to the purchase of Foster Street was deceitful, in that she led the plaintiff to believe that they were in a relationship when it suited her, and furthermore, her deceitful conduct amounted to exploitation of the special disadvantage under which the plaintiff was labouring.
165 Mr Isles submitted that if I am satisfied that the plaintiff was at a special disadvantage and that the monies advanced to the benefit of the defendant and the purchase of Foster Street were the product of exploitation of the plaintiff by the defendant, then an onus is cast on the defendant to show that the transactions were just and reasonable. He referred me to that observation made by Deane J in Louth v Diprose.[30] However, Brennan J observed that if it is proved that substantial property has been given by a donor to a donee after the donee has exploited the donor’s known position of special advantage, that an inference may be drawn that the gift is the product of exploitation. He added that the inference may be drawn unless the donee can rely on countervailing evidence to show that the donee’s exploitative conduct was not the cause of the gift. He then added:
"At the end of the day, however, it is for the party impeaching the gift to show that it is the product of the donee’s exploitative conduct. This is the final and necessary link in the chain of proof of unconscionable conduct leading to a decree setting aside the gift."[31]
[30] at 637
[31] at 632
166 The approach I intend to use is that the plaintiff bears both a legal and evidentiary onus to satisfy me of the elements necessary to prove the cause of action. I am not prepared to accept the submission made by Mr Isles that a legal onus is borne by the defendant. In any event, it is probably an academic exercise because I am satisfied that the plaintiff was under a special disadvantage, that the defendant was deceitful regarding the true nature of the relationship which she represented was evident as between herself and the plaintiff, and knowing of the plaintiff’s special disadvantage, she exploited it for the purpose of procuring money and property from him.
167 In the circumstances, I am satisfied that the gifts of money amounting to $175,000 and the purchase price of Foster Street amounting to $480,000, including stamp duty, must be repaid by the defendant.
168 One of the reasons why I asked counsel to appear before me on 4 November 2011 was because it occurred to me that the defendant had not contributed to the acquisition of Foster Street, nor had she established a basis in the evidence for a finding that she has an inequitable interest in Foster Street. Therefore, the appropriate order to make in the circumstances is that the defendant transfers her right, title and interest in Foster Street to the plaintiff. Mr Isles submitted that was the appropriate order if I was persuaded that the plaintiff should succeed, and Ms Tulloch did not submit otherwise.
169 Both Mr Isles and Ms Tulloch agreed that if I was persuaded that an appropriate order was to order the transfer of Foster Street to the plaintiff, that the sums of money claimed by the plaintiff relevant to the purchase of materials pleaded in paragraphs 22, 26, 28, 29 and 30 are subsumed into such an order.
170 The only remaining matter is the plaintiff's claim for the sum of $1,749.72, being his payment of supplies, fixtures and fittings for the defendant’s business premises. I am satisfied by the plaintiff's evidence that he expended those sums in that way and that the defendant must repay that sum to the plaintiff.
171 In summary:
(a)
I declare that it would be unconscionable for the defendant to retain the sum of $176,749.72 and any legal and equitable interest in Foster Street;
(b) I order that the defendant pay the plaintiff the sum of $176,749.72; (c)
I order that the defendant transfer her right, title and interest in Foster Street forthwith;
(d)
I order that the defendant pay the plaintiff's party/party costs to be taxed in default of agreement and I certify the preparation and filing of court books and transcript.
172 I will now hear counsel on the form of the orders and on any other matters before finally pronouncing orders.
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