Kuyper v Wright

[2005] QDC 41

DISTRICT COURT OF QUEENSLAND

CITATION:

Kuyper v Wright [2005] QDC 041

PARTIES:

JAN KUYPER

Plaintiff

v

SUSAN JANE WRIGHT

Defendant

FILE NO/S:

D112/2003

DIVISION:

PROCEEDING:

ORIGINATING COURT:

District Court, Beenleigh

DELIVERED ON:

18 February 2005

DELIVERED AT:

Brisbane

HEARING DATE:

JUDGE:

Nase DCJ

ORDER:

Judgment is given to the plaintiff in the sum of $61,574.31 together with interest at the rate of nine percent per annum from 3 July 2003.

CATCHWORDS:

COUNSEL:

SOLICITORS:

1. This is an action to recover moneys the plaintiff claims were loaned by him to the defendant.  The defendant, for her part, says the moneys, which she admits she received, were gifts not loans and accordingly no legal obligation rests on her to return the moneys to the plaintiff.

1. The relationship between plaintiff and defendant is that of father and daughter.  Both are South African born, although the daughter (the defendant) and her family emigrated to Australia in 1997.  The bond between father and daughter has been a strong one as the defendant (the daughter) was largely raised by the plaintiff as a single parent.  After the plaintiff retired in 1989 the defendant encouraged him to move to Durban, where she lived with her husband and family.  The defendant said in evidence a number of times that she had always looked after her father, and I have no doubt there is a certain truth in that remark.  After the defendant settled in Australia with her family she proposed he also emigrate to Australia and live with her and her family.  For his part the plaintiff agreed.  In due course he obtained a 12 month visa (with the support of the defendant), and travelled to Australia to live with the defendant as a member of her family.

1. The arrangements between the plaintiff and defendant were not reduced to writing, nor even formulated with any precision.  It is nonetheless important to understand the nature of the arrangements between them, because those arrangements shed light on whether the series of payments in dispute were intended to be gifts or loans to the defendant. 

1. Expressed in very general terms the arrangement was that the plaintiff would travel to Australia to live with the defendant and her family.  The arrangement reflected the defendant’s desire to care for the plaintiff in his retirement.  The defendant described the arrangement in very general terms.  He would live with the family and she would care for him.  Her father, she said, would contribute to the arrangement in whatever ways he could.  The legal analogy that came to mind on listening to the evidence is of something akin to a partnership where the business of the partnership was the carrying into effect of the arrangement between them.  At the time the plaintiff arrived in Australia in October 2000 the defendant was working as a nurse at the Moranbah Hospital, and the defendant’s husband, a teacher, was teaching at Moranbah.[1]  The defendant and her husband enjoyed an income stream and were in a position to provide support to the plaintiff.  The plaintiff had a modest pension,[2] but no other significant income stream.  He did have some assets, which over time he converted to cash.  Most of the cash was paid to the defendant over the period of time in question.  The purpose of the present action essentially is to recover this cash from the defendant.

   [1]Because of the requirement that teachers serve some time in rural or remote schools.

   [2]The amount of the pension is not in evidence.  It is apparently from service in the South African defence forces.  He currently describes himself as destitute.

1. The initial arrangement was that the plaintiff live at a house purchased at Adelong Street, Shailer Park[3] with one or more of the children,[4] who, it had been decided, should remain in Brisbane to complete their education.  Before the plaintiff travelled to Australia he placed $53,700 into a cash management trust account with the CBA opened by the defendant on his behalf.  The defendant was authorised to operate the account.  Subsequently funds were withdrawn from this account to assist with the purchase of the property at Adelong Street, and for other purposes.

   [3]56 Adelong Street, Shailer Park, Brisbane.

   [4]The family unit consisted of the defendant, her husband, their two boys (one in Year 11 in 2001, and one living on the Gold Coast), and another boy from a previous relationship of the husband (in 2001 he was attending university in Brisbane).

1. Throughout 2001 the plaintiff ran the household at Adelong Street while the defendant and her husband lived and worked at Moranbah in central Queensland.

1. While the plaintiff lived in Adelong Street the defendant sent him $230 per fortnight[5] for household expenses for himself and the younger son, who, as I noted, was a Year 11 student.  In addition the defendant paid a number of recurrent household expenses (eg electricity, telephone).

   [5]In the defendant’s statement she said the money ($230) was paid every week, in evidence she corrected this to every fortnight.

1. Towards the end of the 2001 year the plaintiff returned to South Africa to renew his visa.  The arrangement therefore between the plaintiff and the defendant as it worked out in practice in the first year involved the plaintiff and the defendant’s school-age son living in Brisbane with the plaintiff having general oversight of the household.

1. While in South Africa the plaintiff divested himself of his remaining South African assets.  As best I can work out during this time the plaintiff travelled between Brisbane and South Africa a number of times. 

1. In 2002 the defendant’s marriage failed.  As a consequence late in 2002 the Adelong Street property was sold as part of the property settlement between them.  At that time the defendant and her husband formally acknowledged an indebtedness to the plaintiff in respect of the moneys he had advanced.  The plaintiff ultimately received a payment of $45,545.38 from the proceeds of sale of the Adelong Street property, although he did not receive those funds until 11 February 2003 because of a dispute between the defendant and her husband.

1. During this period of time the defendant decided to remain working at the Moranbah Hospital and to purchase another property in Brisbane.  To assist the defendant purchase a unit the plaintiff remitted a total of R75,000 (equivalent to $14,250) from South Africa to be used by the defendant as a deposit on the Shailer Road unit.[6] 

   [6]The funds were remitted on 5 and 12 November 2002 and 2 January 2003.

1. The plaintiff, on his return to Australia, occupied the unit at 27/69 Shailer Road, Shailer Park with the defendant’s youngest son.  Between 21 February 2003 and 10 March 2003 withdrawals amounting to approximately $47,324 were made from the account in which the $45,545.38 had been deposited.  This was an account held jointly by the plaintiff and the defendant.  Although the $45,545.38 was deposited into this joint account the defendant acknowledged all of the $45,545.38 was the property of the plaintiff.[7] 

   [7]Evidence transcript 44 line 29.

1. Also during the first half of 2003 the relationship between the plaintiff and the defendant progressively deteriorated.  The defendant said that some difficulties emerged from July 2002.  Those difficulties apparently continued into the 2003 year, until on 10 June 2003 the plaintiff was evicted from the Shailer Road unit.  At around the same time as the plaintiff was evicted the defendant wrote to the Australian High Commissioner in South Africa withdrawing her sponsorship of the defendant.[8]  This last action had the consequence that the plaintiff was eventually excluded from Australia.  Indeed at trial his evidence was taken by telephone link from South Africa.

   [8]By letter dated 19 May 2003.

1. The first group of disputed payments occurred in connection with the Adelong Street house.  Of the $53,700 the plaintiff deposited into the cash management account at the CBA he claimed withdrawals amounting to $40,710[9] were loans to the defendant.  The defendant claimed those payments were a series of gifts to her by the plaintiff, representing his contribution to the living arrangements between them.  The argument over these payments has been short circuited by the payment back to the plaintiff of the $45,545.38 from the proceeds of sale of the Adelong Street property.

   [9]Or if a withdrawal of $4,000 dated 19 December 2002 is brought into account $44,710.

1. The second group of disputed payments occurred in connection with the unit at Shailer Road.  The $45,545.38 reimbursement was paid into an account jointly held by the plaintiff and the defendant.  The amounts in dispute consists of funds transferred out of the joint account by net bank transfer ($34,738), a sum of $14,250 remitted from South Africa by the plaintiff to be utilised in the purchase of the Shailer Road unit, and a sum of $3,200 the plaintiff claimed he handed to the defendant on or about 3 March 2003.[10]  A further amount of $9,386.31 is accepted by the plaintiff to have been a loan.  All of the other payments the defendant claimed were gifts by the plaintiff.

   [10]In the amended pleadings the amount claimed is $5,000.  The relevant bank document however shows a withdrawal of $3,200 consistently with the plaintiff’s statement.

1. There are two earlier payments between plaintiff and defendant.  The first was an advance by the defendant to the plaintiff to assist him purchase a flat in Durban.  The plaintiff in his statement described the payment as a gift.  The defendant in her statement said the advance was initially a loan which she later treated as a gift.  She said this occurred in 1995 and the amount advanced was R45,000.

1. The plaintiff said in his statement that he gave the defendant a gift of R10,000 when she and her family migrated to Australia in 1997. 

1. The first group of payments were withdrawals from a cash management account with the CBA opened by the defendant on behalf of the plaintiff when he was still in South Africa.  The defendant was authorised to operate the account.  The transactions set out below in items 1 to 6 inclusive were all withdrawals from this account.  Withdrawals 1 to 5 inclusive occurred in connection with the purchase and establishment of the Adelong Street property.  The second group of payments were from an account jointly held by the plaintiff and the defendant.  The transactions in items 8 and 10 were net bank transfers out of the joint account in the period from 21 February 2003 to 10 March 2003.  The net bank transfers (five in all) were all made by the defendant.  The plaintiff claimed he did not authorise any of these net bank transfers.  The second period also includes the funds remitted from South Africa on or about 5 and 12 November 2003 and 2 January 2003 ($14,250), to pay the deposit on the Shailer Road unit, and the $3,200 withdrawn by the plaintiff on 3 March 2003.  The plaintiff claims he handed the $3,200 to the defendant for improvements to the Shailer Road unit (air conditioning and insulation).

1. It is I think important to set out each of the disputed payments.  As I have already noted the dispute between the plaintiff and the defendant is confined to whether the payments (that is, each payment) were loans or gifts:

(a)         $2,000 on 20 July 2000.  The defendant said in her statement that she withdrew the $2,000 as reimbursement of the car repairs so that she could travel to Brisbane to look for a house to purchase.

(b)        $15,000 on 11 August 2000.  The defendant said this was a part payment of the deposit on the Adelong Street property.

(c)         $19,610 on 27 September 2000.  The defendant said these funds were used to make up the balance of the deposit and for legal fees and insurance on the Adelong Street property.

(d)        $4,100 on 27 November 2000.  The defendant said this sum represented the cost of transporting furniture from Moranbah to Brisbane (to furnish the house at 56 Adelong Street).

(e)         $7,200 on 22 December 2000.  The defendant said she transferred $7,200 from the CBA cash management account in the name of the plaintiff to a CBA pensioner security account at the plaintiff’s request.  The funds were used by the plaintiff to purchase a motor vehicle.

(f)         $4,000 on 19 December 2002.  These funds were transferred from the plaintiff’s cash management account to the joint account operated by the plaintiff and defendant.  The withdrawal request form was signed by the plaintiff.  The defendant in her statement said she did not utilise this sum of money for her own purposes.

(g)        The three remittances totalling $14,250 (R75,000) to the defendant from South Africa.  The plaintiff said this money was applied as deposit on the unit at 27/69 Shailer Road, Shailer Park, and for legal fees and stamp duty in connection with the purchase of the unit. 

(h)        $30,000 on 21 February 2003.  Utilising the funds remitted by the plaintiff from South Africa ($14,250) the defendant purchase a unit at 27/69 Shailer Road, Shailer Park, Brisbane.  The purchase price of the unit was $120,000.  Apart from the $14,250 remitted by the plaintiff, the purchase was funded by a home loan with the CBA.  The defendant in her statement said the $30,000 was applied to reduce her home loan.

(i)         $9,386.31 on 27 February 2003.  At the defendant’s request the plaintiff withdrew these funds to pay out a loan the defendant had taken out with the National Bank.  The loan was taken out to enable her eldest son to purchase a motor vehicle.  Arrangements had been put in place between the parties for the son to repay the loan.  Up until the plaintiff’s eviction the repayments amounted to $920.  The defendant accepted these funds had been loaned to her and that the outstanding loan amount is $9,386.31.

(j)         A series of net bank withdrawals from the joint account:  $1,500 on 3 March 2003, $2,000 on 4 March 2003, $238 on 5 March 2003, and $1,000 on 11 March 2003.  The defendant’s explanation for these transfers is that the money went generally towards improvements to the unit at Shailer Road.  In the defendant’s statement she mentions specifically the cost of an air conditioning unit, and the cost of insulation.  The defendant’s claim is that the plaintiff had agreed that she could use $5,000 of the $45,545.38 to meet her legal and travel expenses.  The various transfers amount to $4,738.

(k)        $3,200 on 3 March 2003.  The plaintiff withdrew this sum from a pensioner security account with the CBA in his name.  He said he handed the moneys to the defendant to pay for air conditioning of the unit and other incidentals.

1. The defendant in her statement pointed out that she (and her husband) on 13 September 2000 paid one year’s premium ($1,367.85) for the plaintiff’s private health insurance.[11]  Between October 2000 and June 2003 the defendant’s husband made the following payments for the benefit of the plaintiff:

   [11]Private health insurance was a condition of the defendant’s visa.

(i)          $1,112.50 - car registration (by four).

(ii)         $267.20 - RACQ membership (by two).

(iii)        $287 - AAMI Insurance (by two).

(iv)        $1,400.75 - car service and maintenance (by six).

The fortnightly payments of $230 also funded some of the plaintiff’s daily living expenses.

1. The defendant in her evidence and statement said the payments[12] were gifts, and each transaction occurred with the plaintiff’s knowledge.  The plaintiff said that each of the disputed payments was a loan, repayable on demand, and he had no knowledge of several of the payments.[13]  I did not have the advantage of observing the plaintiff when he gave evidence, as his evidence was given by telephone from South Africa.  The defendant gave evidence in court and I did have the opportunity of observing her in the witness box.  As is sometimes the case the issues of credibility between the parties is not easy to determine.  Both parties are fundamentally very decent people.  Such qualities however, are no protection against the type of family split that occurred in this case.  In giving evidence both, I believe, fell into the trap of reconstructing conversations in a way that supported their present positions.  Nonetheless I was able to reach a firm conclusion that generally speaking the payments were not gifts.  I will try to explain why I reached that conclusion.

   [12]With the exception of the loan referred to in para 18(k) above.

   [13]For example, the net bank withdrawals from the joint account in 2003.

1. A gift in law is the transfer of any property from one person to another gratuitously.  Accordingly the intent of the donor must be to give without consideration.  To emphasise this latter characteristic in one case it was said that a gift is “a present made without return of any kind.”[14]  While it may be possible to overstate the position an essential characteristic of a gift is that the transfer of property must be gratuitous.  I think that this element is absent in this case.

   [14]Per Lord Radcliffe in Rennell v IRC [1964] AC 173 at 193.

1. The plaintiff is an elderly man, now living in retirement.  He has a limited income stream.  He now regards himself effectively destitute.  Had he remained in South Africa and not entered into the arrangement to live with the defendant it is improbable that he would have donated the bulk of his assets to the defendant, rendering himself virtually destitute and reliant upon the charity of others.  I am satisfied that generally speaking the disputed funds were used to carry into effect the arrangement between them.  The analogy to a partnership where the business of the partnership is to carry out the arrangement is instructive.  The arrangement was for the long term benefit of the plaintiff and it is both reasonable and understandable he would be prepared to support it financially.  The defendant also supported the arrangement financially.  Unlike the plaintiff however she has benefited from the investment of funds into the Shailer Road unit and the reduction of her mortgage debt.  I am satisfied the transfers generally were not gifts.  On balance I believe the correct analysis is that the transfers generally were loans to the defendant to enable her to carry out the arrangement.

1. This latter conclusion is, I think, confirmed by the following evidence.  Firstly by the defendant’s treatment of the first group of payments[15] which were returned to the plaintiff in bulk by the transfer back to him of $45,545.38 on 11 February 2003.[16]  In explaining the repayment the defendant said: 

   [15]See paragraphs 14, 18, 19(a), (b), (c), (d), (e).

   [16]See paragraph 10 above.

“And the both of you, that’s now you and your husband, discussed it with the plaintiff that he will provide money to you, whether it’s a donation or it’s a loan, but that he will provide money for the purchase of Adelong house, that both of you discussed that with him? --  Yes.

And what was the arrangement?  Was it at that point in time that he would donate the money to you, or that he would make it available to you? --  Well, things got a bit cloudy.  He – that the precedent was set – me looking after him in South Africa.  And it was in response to my giving him money in South Africa as a gift, and that is – my dad has never given me money before.  And so I – as a precedent, it was a response to my helping him out and giving him money in 1995 when I had inherited money.  And it was his response to us.  Yes.  That is exactly where the motivation and the intention came from.

So, at that point in time his response was to donate this money to you and your husband? --  Yes.

And I assume your husband must have been aware of that.  He was part of the negotiations? --  Yes.  And we had said that we – we would – my husband offered that we would – well, he offered the agreement that I got my husband to make.

You see that’s precisely the problem I have.  This agreement with your husband.  If he was party to negotiations to receive the donation why would he have signed this agreement you refer to as SJW2 to your evidence.  Why would he sign this?  He knows it’s a donation.  ‘I don’t owe your – your father anything’? --  It was a responsibility.

No.  The question is – why would he sign this agreement at a point in time that he knows this was a donation according to your evidence? --  Look, if my dad – if I give you $5 and you decide to acknowledge that you want to give that back to me, it’s intention and reality.  For a reality was that we had agreed that we would always repay that money.  And took it to the extent that when we drew up that agreement out of honesty we’d actually left out an amount, so if we wanted to go by the letter of the law that amount in that letter is not correct, and – and-----

Yes?--  Was drawn up by a lawyer in fact.  Because I was concerned that if my marriage breaks up because things were going sour, that my dad would be left, as my responsibility or something, with absolutely nothing.  And my husband never denied that that money came from my dad.  And so, that was how we decided amicably – amicably and – and honestly divide the money.

So, what you’re saying, if I understand you, your husband know it was a donation but he was happy to sign this document?--  Well, he signed it, didn’t he?

Yes?--  Yes.  So, there’s no debt.”

The fact of the repayment to the plaintiff, and the written acknowledgement of indebtedness by both the defendant and her husband is consistent with the general conclusion I have reached.

1. Secondly, by the offer to pay $60,000 to the plaintiff in mid 2003.  Before the plaintiff was evicted the defendant offered him $60,000 ($30,000 payable immediately, and $30,000 spread over ten years) if he voluntarily vacated the Shailer Road unit.  The plaintiff refused to accept the offer since he objected to the proposed payment of half of the moneys being spread over the period of ten years.  The offer in 2003 to repay moneys advanced by the plaintiff reflects the return of the first group of payments.  The return of the $45,545.38 and the offer to return the second group of payments (the $60,000) are a form of admission by conduct of indebtedness.  Although the defendant gave an explanation for her conduct the explanation for the return of the $45,545.38 does not to my mind remove the implied admission;  and I do not accept her explanation for the offer to pay the $60,000[17] entirely removes the inference against her.

   [17]The defendant said she was distressed by his conduct and desperate for him to be removed from the unit.

1. Thirdly, the defendant’s evidence in court in support of her claim the plaintiff intended the transfers of R75,000 in December 2002 and January 2003 to be gifts was not convincing.  In her statement she claimed the transfers were, “expressed by my father to me to be a gift.”[18]  By contrast her evidence was more of an assumption on her part that the transfers were to be a gift.  Set out below is the relevant cross-examination:

   [18]See paragraphs 50, 51 of the defendant’s statement, which reads as follows:  “My father had returned to South Africa in late 2002.  My father sent R75,000.00 to be used as a deposit on a new home.  This money was transferred from South Africa to my joint account with my father with the Commonwealth Bank.  This money, in the total sum of $14,250.00 was expressed by my father to me to be a gift and it was to be used as a deposit on a house, which it was.  There was never any suggestion that the $14,250.00 was a loan or that my father would obtain any legal or beneficial interest in the property purchased.  The $14,250.00 was always understood by me to be a gift and my father never indicated anything to the contrary until after our relationship broke down when he has had a change of heart about the money.”

“What that you never discussed, can you just clarify that?--  We never discussed what – before my dad left, we never discussed any money being sent over because there wasn’t a need.  The need came up when the money was frozen and my husband got the banks to chase it up because he – he – the – he – what do you call it, we had an agreement with the bank on how the money was going to be disbursed and my husband withdrew his authority and so the money was frozen at the bank.  And because of that, my dad sent the money over and it was as a gift.

When did your dad tell you it was a gift?--  Well, it was never any – it’s – it’s like a gift because that’s what I did-----

No?-- -----for my dad.

No, you said there was never, ever-----?--  My dad did it-----

-----any one-----?-- -----because that’s what I did for him.

So, there was never any specific negotiation that it was a gift?--  No.

It’s just an assumption it was a gift?--  No, it was a precedent set that’s what I did for my dad.

So, because you did it for your dad before this, that it must be a gift this time around?--  Well, he didn’t say anything to the contrary.

But he also didn’t say it was a gift?--  Well, it said a gift, didn’t it.

No, it didn’t say for you it’s a gift.  We’re not talking about the bank form?--  He never said anything – if – if he wanted it as a loan or a repayment or interest, he would have said so, he didn’t.

So, because he never, ever said it’s a gift, you have, in view of your past history, entitled to assume it’s a gift, is that what you’re saying?--  Well, I would say, yes.  It’s in writing and – and it was inferred and the president was set, and – and he was just returning what I’d done for him, yes.  So, I think it was a fair way of looking at it.”

1. In his final submissions on behalf of the defendant Mr Trout placed emphasis on the fact that the plaintiff described the moneys as a gift in the relevant transfer documents.  In this connection however I accept the plaintiff’s explanation that he declared the funds as a gift to facilitate the transfer of these funds from South Africa to Australia.

1. On the whole of the evidence I am satisfied on the balance of probabilities the following advances, transfers, or withdrawals were loans and not gifts:

1.          The three remittances totalling $14,250 (paragraph 19(g)).

2.          The net bank transfer of $30,000 (paragraph 19(h)).

3.          The $9,386.31 (paragraph 19(i)).

4.          The net bank transfers in March 2003 amounting to $4,738 (paragraph 19(j)).

5.          The $3,200 handed to the defendant (paragraph 19(k)).

These payments amount to $61,574.31.

1. I am not satisfied the plaintiff has discharged his onus of proof in relation to any other payment.

1. At trial applications were made by the parties to amend the claim and defence respectively.  I now formally give leave to amend.  The amendments do not affect the conclusions reached by me.

Order

1. Judgment is given to the plaintiff in the sum of $61,574.31 together with interest at the rate of nine percent per annum from 3 July 2003.