Porter v Hoskin

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: PORTER -v- HOSKIN [2004] WADC 156

CORAM: GROVES DCJ

HEARD: 30 SEPTEMBER 2003, 1-2 OCTOBER 2003

DELIVERED : 23 JULY 2004

FILE NO/S: CIV 2187 of 2002

BETWEEN: IAN PORTER
Plaintiff
AND
CHERYL A HOSKIN
Defendant

Catchwords:

Contracts - Payment of monies - Issue as to whether payment was gift or loan - Terms of advancement - Legal professional privilege - Rule in Jones v Dunkel - Turns on findings of credibility

Legislation:

Nil

Result:

Plaintiff's action dismissed

Defendant's counterclaim for $9,457.28 allowed

Representation:

Counsel:

Plaintiff: Mr T Lampropoulos
Defendant: Dr P MacMillan

Solicitors:

Plaintiff: Pye & Quartermaine
Defendant: G M Rattigan & Associates

Case(s) referred to in judgment(s):

Davies v Taylor [1974] AC 207
Dolan v Australian & Overseas Telecommunications Corporation (1993) 42 FCR 206
Giannarelli v Wraith (No 2) (1991) 171 CLR 592
Gillard v Bates (1840) 6 M & W 547
Jones v Dunkel (1959) 101 CLR 298
R v Wilmot (1988) 89 Cr App Rep 341
Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87
Wentworth v Lloyd (1864) 10 HLC 589

Case(s) also cited:

Payne v Parker [1976] 1 NSWLR 191
Shum Yip Properties Development Ltd v Chatswood Investment & Development Co Pty Ltd [2002] NSWSC 13

GROVES DCJ: The plaintiff claims that on 8 June 2000 he loaned the defendant the sum of $240,000. He pleads that it was agreed that the defendant would repay that sum as soon as practicable, but in any event, no later than upon the sale of the defendant's property situate at 17 Devon Road, Swanbourne ("the property").
The defendant denies that it was a loan. She admits that the plaintiff advanced the monies to her but says that as much as she was bound to reimburse was the net amount of such monies that she either had received and was from time to time to receive from the estate of her deceased brother. She claims there was no obligation on her to repay any shortfall. She says in the alternative that any shortfall was to be regarded as a gift.
The amount of the shortfall after the plaintiff has given credit for all monies either held by him from all sources at the date of the advance or received subsequently is $115,839.
The arrangement, whatever it might be found to be, was not recorded in any formal documentation, eg acknowledgment of debt or deed of gift, nor was it secured, eg by way of mortgage, or otherwise protected, eg by way of caveat against the property. The advance made by the plaintiff was interest free to the defendant. There was no fixed term for the advance.

Preliminary issue – defendant's divorce settlement – legal professional privilege – issue as to drawing adverse inference

The plaintiff and the defendant first met in March 1997. The defendant, then known as Cheryl Anne Fooks, had been separated from her former husband for approximately four years. The defendant was given to understand that the plaintiff had been separated from his wife for approximately 12 months. After some months the plaintiff and defendant formed an intimate relationship.
The defendant was residing in her former matrimonial home at 17 Devon Road, Swanbourne. Title was registered in the joint names of her and her former husband. In May 2000 she was negotiating a divorce settlement in the Family Court of Western Australia with her former husband. In order to effect a settlement it would have been necessary for her to sell the property. The amount required for the divorce settlement was $240,000. There is no issue that the plaintiff did in fact provide for the benefit of the defendant a bank cheque to her divorce lawyers in the sum of $240,000. Upon settlement title in the property was transferred to the defendant as sole proprietor. The title was unencumbered.
The plaintiff subpoenaed the defendant's divorce lawyer, Mr Damien Bowen, to give evidence at trial. Through Mr Bowen evidence of the terms of the divorce settlement were put in evidence (exhibits 5‑10 inclusive). Mr Bowen indicated that he had a discussion with the defendant and had asked her "…how and where she was going to get the money from in order to pay for the house?". Plaintiff's counsel then asked the witness "Did she tell you whether it was a loan or a gift?" Defendant's counsel raised objection and claimed legal professional privilege. The proceedings were adjourned briefly in order that defence counsel might seek instructions from the defendant as to whether or not privilege might be waived. Upon resumption defence counsel indicated that his instructions were to claim the privilege. Without hearing further argument I then ruled the claim to privilege would be upheld.
In his closing submissions plaintiff's counsel urged upon me that because the defendant had refused to waive privilege I was entitled to draw an adverse inference against her, ie that the answer which the witness might have been given would be unfavourable to her case.
The answer to the question which the witness might have given may have been either, first that the defendant did not disclose what the arrangement was, secondly that the defendant had informed him that it had been received by her by way of gift, or thirdly, that the money had been received by her by way of a loan. Plaintiff's counsel urged that the inference which I should draw was the latter one. Had the witness's answer been that he had no knowledge then nothing would have been advanced. Had the witness's answer been a gift then that would clearly have supported the defendant's claim. If it were either of those two why would not the defendant waive privilege. Plaintiff's counsel submitted that it was clear that the refusal to waive privilege was because only an unfavourable response could be drawn. On the other hand defence counsel maintained that as the defendant was entitled to claim privilege no inference at all could be drawn.
At the conclusion of trial I reserved my decision. In the course of my deliberations two legal issues troubled me and I invited counsel back on 20 November 2003. Briefly stated those issues were:
(i)Whether a claim for legal professional privilege made by the defendant in respect of the evidence which Mr Bowen might have given was truly applicable, and
(ii)whether or not arising from the claim for privilege any inference could be drawn that the evidence which the witness might have given would have been adverse to the defendant.
I invited counsel's written submissions on each of these issues.
On 27 November 2003 I received written submissions from both counsel and heard oral argument.
On 21 January 2004 counsel were called back when I informed them that with the benefit of their submissions and having considered the issues further I had come to the view and acknowledged that I was in error in ruling as I had done in the course of trial that the claim for legal professional privilege made by the defendant was a valid or sustainable claim. Briefly stated my reasons for coming to that view was as follows:
Cross on Evidence (6^th Australian edition) at par 25210 states:
"In civil and criminal cases, confidential communications passing between a client and a legal adviser need not be given in evidence or otherwise disclosed by the client and, without the client's consent, may not be given in evidence or otherwise disclosed by the legal adviser if made either –
(i)to enable the client to obtain, or the adviser to give legal advice, or
(ii)with reference to litigation that is actually taking place or was in contemplation of the client."
That is, a communication between lawyer and client is protected by legal professional privilege where it is made for either of the stated purposes.
"The privilege does not attach to everything that the client says to his/her lawyer: the test is, whether the communication is necessary for the purpose of carrying on the proceedings in which the lawyer is employed…"; see Gillard v Bates (1840) 6 M & W 547 at 548.
The transcript of the trial records the particular circumstances of the communication relevant for the purpose of these proceedings as I have outlined above.
In my considered opinion the communication between the defendant and the witness, Mr Bowen, was not for the purpose of obtaining legal advice but rather, was simply by way of providing information (if indeed that was done) about how the defendant either proposed to obtain funds or had obtained funds so as to facilitate payment of the divorce settlement. Such information could not be said to have been conveyed (if it was) in connection with legal advice.
Furthermore, it was not information which related to the matrimonial proceedings in such a way as to give it special confidential status. To adopt the words from Gillard v Bates (supra) it was not necessary for Mr Bowen to know what the source of the funds was or what the defendant's arrangements were so far as having those funds to effect the divorce settlement. That is, the communication, if any, was not necessary for the purpose of carrying on the matrimonial proceedings in which Mr Bowen was employed.
Finally, such communication could not be said to have been in contemplation of these proceedings whereby the plaintiff now seeks repayment of the funds which he claims to have loaned the defendant so as to enable her to effect the divorce settlement.
In submissions to me the defendant contended that if it is doubtful whether the evidence was sufficient to give rise to a claim for legal professional privilege nothing in any event flows from this in that, so it is said, the plaintiff conceded that legal professional privilege applied.
The transcript records the discussion which I had with both counsel when the issue arose. It is the fact that I did not then give plaintiff's counsel an opportunity to develop any legally supportive argument in addressing the claim for privilege raised on behalf of the defendant. Rather, I indicated my view and gave my ruling accordingly. The circumstances do not admit of any concession having been made as defendant's counsel suggested. To the contrary, after the defendant had been invited to waive privilege, plaintiff's counsel, at my invitation pursued the question which was met with defendant's counsel claiming privilege before the witness was able to answer. Whilst I regret that I erred as I have indicated I nevertheless considered that it was in the interests of the administration of justice and justice as between the parties that I should revisit the issue with counsel.
On 27 November 2003, plaintiff's counsel had indicated that if I were to form the view that I was in error insofar as the claim for privilege was concerned he may seek leave to recall Mr Bowen. In light of my conclusions expressed on 21 January 2003 I invited plaintiff's counsel to seek such leave if he were still so minded. I expressed the view then that the evidence which Mr Bowen may have been able to give may go to the very core issue of these proceedings and that fairness and the interests of justice in these circumstances dictated that leave might be granted for his recall.
In the circumstances the second issue as to the drawing of an inference did not arise at that stage and I expressed no view on it.
Having taken instructions the plaintiff's solicitors subsequently advised the Court that it did not seek to reopen the plaintiff's case so as to recall Mr Bowen. In their communication they advised that:
"The plaintiff is content to rely upon previous submissions based on Jones v Dunkel (1959) 101 CLR 298."
In response to the plaintiff's reliance on Jones v Dunkel it was recognised that this is not a Jones v Dunkel case but rather that it was analogous to a Jones v Dunkel situation "and indeed is a stronger example of why an adverse inference should be drawn". Further, it was argued that as a matter of ordinary logical inference the Court could draw the conclusion that the defendant did not want Mr Bowen to give evidence upon the issue because that evidence would have been adverse to her case.
I do not accept the plaintiff's submission in that respect and conclude that it is not open to me to draw any inference whatsoever from the fact that the defendant declined to waive privilege. I adopt the submissions made on behalf of the defendant in this respect.
The rule in Jones v Dunkel does not permit an adverse inference to be drawn from the failure of a party to call a witness to give evidence which is the subject of legal professional privilege. If the evidence was given the privilege would be lost; a court will not permit a party to be placed under pressure to waive privilege by way of a threat of the drawing of an adverse inference against that party. See Cross (loose leaf) [25040]; Wentworth v Lloyd (1864) 10 HLC 589 at 590‑2; R v Wilmot (1988) 89 Cr App Rep 341 at 352; Giannarelli v Wraith (No 2) (1991) 171 CLR 592 at 605 per McHugh J; Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87 at 94.
It is not in general open to a court to draw an inference against a party refusing to waive legal professional privilege; such inference may not be drawn sub silentio by the tribunal of fact where privilege is relied upon. As Spender J remarked in Dolan v Australian & Overseas Telecommunications Corporation (1993) 42 FCR 206 at 215‑216:
"There is no doubt that no adverse inference can be derived from a claim to legal professional privilege: Wentworth v Lloyd; Giannarelli v Wraith (No 2). The reason given in Phipson as to why the position about inference is not different in relation to the self‑incrimination privilege from that in respect of other privileges is compelling: 'the privilege is intended to protect the innocent and the guilty alike'."
Although as I concluded legal professional privilege did not apply the plaintiff did not wish to reopen its case. Had it chosen to do so Mr Bowen may have been able to give definitive evidence as to what he was told concerning the $240,000. Be that as it may as the matter has been left, it is not open to me to drawn any inference whatsoever from the fact that the defendant declined to waive the claim for privilege. Were I to draw any such inference either expressly or sub silentio that would have the effect of destroying the privilege in that a choice to rely on the privilege would carry with it a threat of an adverse inference rendering the privilege nugatory.

The issue for determination

The defendant provided $240,000 to the defendant to facilitate her divorce settlement. It is common cause that had he not done so the defendant would have had to sell the property to pay out her former husband. Insofar as the arrangement is concerned it was common cause also that the defendant would pay to the plaintiff such monies as she received as a beneficiary from her deceased brother's estate.
Where the issue lies is whether or not on the plaintiff's case there was agreement that the sum would be repaid as soon as practicable but in any event no later than upon the sale of the defendant's property.
The onus is on the plaintiff to establish on the balance of probabilities that there was such agreement. When speaking of a degree of cogency which evidence must reach in order that it may discharge the legal burden in a civil case Denning J in Davies v Taylor [1974] AC 207 at 219 said:
"That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that the Tribunal can say: 'we think it more probable than not', the burden is discharged, but if the probabilities are equal it is not.

The relationship between the plaintiff and defendant

When the plaintiff and defendant first met they were each separated from their respective spouses. They each maintained their separate residences although they did stay over at each other's place with some regularity and would see each other most weekends. They socialised together and with friends. The plaintiff joined the defendant's tennis club. There is no doubting that the plaintiff was extremely generous towards the defendant. He provided her with substantial financial benefits over the period of their relationship. He did painting work and gardening at the property and engaged and paid for tradesmen to do work there. He paid fares for her to accompany him on several overseas and interstate trips or holidays. He bought an antique table and a painting for the property and jewellery for the defendant including a sapphire and diamond ring valued at $3,500‑$4,000. He estimated reluctantly and perhaps conservatively that the total benefits which he had provided to the defendant over the course of their relationship to be in the order of $30,000.
They attended social functions and other outings together. They were with each other on birthdays and at Christmas and attended together on birthdays and other occasions involving other members of their respective families. It was the defendant's evidence that on Christmas day 1999 whilst they were having lunch together that the plaintiff went down on one knee and proposed to her. The plaintiff emphatically denied any proposal of marriage. On that occasion he had a sapphire and from a jeweller friend had plastic ring sizers to fit the defendant's finger. The defendant was overwhelmed by this occasion and had every cause to remember it well. They subsequently went to the jeweller friend who made up a ring around the sapphire and with two diamonds inset. The defendant wore this ring on her left hand ring finger and proudly showed it off to her friends. Once such friend, Sandra June Henry, recalled an occasion when the plaintiff and defendant called into her business in Subiaco when she was shown the ring. The defendant told her that the plaintiff had gone down on bended knee and proposed to her. She recalled that the gist of what the defendant said was that the defendant had proposed marriage to her and that they had obtained the engagement ring some time after the proposal. She described the defendant as being very happy and emotional in telling her this news. The plaintiff was present and it would seem did not refute the information conveyed. Another witness, Robert Vyen Stick, had known both the defendant and plaintiff for a number of years and had socialised with them at the tennis club, at their respective homes, and on other occasions. He recalled an occasion when he and his wife were together with the plaintiff and the defendant when the defendant came in and showed them the new ring that she was wearing on her ring finger. He was told that the plaintiff had gone down on his knee to give her the ring. He recalled that the plaintiff "…looked a little bit embarrassed and probably a little bit bemused, but quite happy with the event."
The plaintiff's response to the suggestion that he had proposed to the defendant was to deny it. He said "That would rather have been her interpretation of it. It was not mine." He could not however recall the Christmas day occasion but acknowledged that he may have gone down on one knee. Asked about the Henry and Stick occasions his response was that he did not recall those events but acknowledged that he was not saying that they did not happen. Asked in re‑examination "What, from your point of view, was the significance of that ring?" he responded: "Up until that time I had gone with several women and the significance of the ring in my opinion was that that was – I would go with nobody else while I was going with Cheryl." That is, to say the least, a most improbable explanation and one which I reject. On his account there was no discussion as to the significance of going down on bended knee and subsequently having an expensive ring made up. He had his understanding and let the defendant believe something totally different. Whilst his recall of the claimed proposal was not good the fact that he had allowed the defendant to show off the ring publicly without apparently remonstrating as to its significance in their relationship would suggest a reluctance on the part of the plaintiff to be truthful as to its significance. On that issue I prefer the defendant's evidence as she is supported by independent evidence and thus I conclude that the plaintiff did in fact propose to her. Thus, at the time when the $240,000 was advanced by the defendant they were, in the public eye at least, an engaged couple.

Subsequently, the relationship deteriorated. On the plaintiff's evidence it was end 2001/early 2002 that he walked away. On the defendant's evidence it was in about July 2001 at about the same time as the business she was managing went into liquidation and before she went to visit her sister in the USA in August 2001. Clearly the defendant's evidence in this respect is to be preferred given that she can relate it to other significant events. Each of the parties gave evidence as to the reasons which led to the deterioration of the relationship. For the purpose of my decision it does not need me to go into the whys or wherefores or make any findings so far as that issue is concerned. They have not spoken to each other since the relationship ended.

The pleadings

"The plaintiff pleads his claim as follows:
1.In or about June 2000 the defendant requested the plaintiff and the plaintiff agreed to advance to the defendant that (sic) sum of $240,000 by way of loan ('the Loan Agreement').
2.Pursuant to the Loan Agreement on 8 June 2000 the plaintiff advanced to the defendant the sum of $240,000.
3.It was a term of the Loan Agreement that the defendant would repay to the plaintiff the sum of $240,000 as soon as practicable, but in any event no later than upon the sale of the defendant's property situated at 17 Devon Road, Swanbourne in the State of Western Australia ('the Property')."
In defence the defendant pleads:
"1.During or about May 2000 the plaintiff and the defendant made an oral agreement ('the Agreement') pursuant to which:
(a)the plaintiff was to advance to the defendant the sum of $240,000;
(b)the defendant was to pay to the plaintiff those moneys she had and was from time to time to receive from the estate of her deceased brother ('the Estate')
11.…the plaintiff intended to give to the defendant and the defendant intended to receive as a gift the difference between the sum of $240,000 and the sum (received from the Estate).
Particulars
Pursuant to the Agreement the defendant was to repay to the plaintiff only those moneys she received from the Estate net of tax. If these moneys were less than the sum of $240,000 there was no obligation on the defendant to repay the difference. It is to be inferred from these facts that the plaintiff intended to give to the defendant and the defendant intended to accept as a gift the difference, if any, between the sum of $240,000 and the monies the defendant received from the Estate."
The defendant counterclaims for the sum of $9,457.28 which was money received by the plaintiff in September/October 1998 to be held on behalf of the defendant. It is common cause that this money was not received by the defendant from the Estate.

Evidence as to the agreement

The precursor to the advancement of the moneys were ongoing negotiations as between the defendant and her former husband to arrive at a divorce settlement. There was an issue over the valuation of a business which the former husband had purchased. It transpired that the business was worthless. Since her separation from her former husband the defendant had continued to reside in what had been their matrimonial home at Swanbourne. She was always desirous of keeping the home. However, with the former husband's business being valueless the defendant was confronted with the situation that in all likelihood the property would have to be sold. Settlement around $350,000‑$320,000 was initially proposed. The defendant discussed progress of these negotiations with the plaintiff. His profession is that of an accountant and he looked after her tax returns and other business related matters for her. He was fully aware of her financial circumstances. He was a person of some wealth albeit describing himself as asset rich but cash poor. Nevertheless he continued to provide as well for his former wife and children. In the course of discussions the plaintiff was aware that the defendant was trying to come to a settlement figure in the order of $250,000‑$300,000. The defendant enquired of him whether he could help her in advancing that money so she could come to a settlement. The plaintiff's response was, on his evidence:
"I said that was possible but my facilities were such that I would have to try and keep it as low as possible as quickly as possible; that she had some funds coming from her brother's estate which would have obviously kept that down low, which is what I would be trying to do because these facilities are used in the course of my several businesses and they go up and down quite regularly and dramatically."
In about April 2000 the defendant informed her former husband that she wished to retain the property and advised him that she would pay $230,000 in settlement. It follows as a matter of logic that that advice was conveyed after the plaintiff had indicated to the defendant that he would help her out to ensure that she could keep the property. That proposal was recorded in a letter from the former husband's solicitors to the defendant's matrimonial solicitors dated 27 April 2000 (exhibit 7). That letter proposed a counter offer in the sum of $250,000. From there it would seem that the parties agreed to split the difference at $240,000. A consent order was made in the Family Court proceedings on 23 May 2000 (exhibit 8). And so it was that the plaintiff paid $240,000 to the defendant's matrimonial lawyers on 8 June 2000. On that same day the property was transferred into the sole name of the defendant as registered proprietor.
The arrangement as between the plaintiff and defendant was not reduced to writing. Asked whether there was any discussion as to how the defendant would repay the money it was the plaintiff's evidence:
"There were some proceeds coming from the brother's estate which wouldn't have been sufficient to repay the $240,000, that was evident, and the balance would be paid when she ultimately sold the house.
Is that something she told you or‑‑‑?‑‑‑That's what we said."
The plaintiff had no recollection as to the occasion when or where this conversation took place.
The plaintiff was aware at that time that the defendant was to receive about $100,000 from her brother's estate. Asked if there was any specific date set for the sale of the property his response was "No, there was no date set."
Asked was anything reduced to writing in relation to the advance of the $240,000 and the repayment his evidence was:
"No, I didn't. I made this loan as an act of love, good faith – whatever you want to call it – and it was not, as I say it, a financial arrangement. It was helping Cheryl achieve what she wanted to achieve and get in the house; and I had little doubt that when the house was properly done up and renovated it would have fetched a lot more than $640,000." (The latter sum was the valuation attributed to the property in the divorce proceedings).
To the plaintiff's mind the property would be sold "in the medium term" which, when pressed in cross‑examination, he conceded might be up to 12 months. On his evidence he never asked the defendant when the property would be sold and nor did she at any time tell him when she might sell the property. After the money was paid the defendant continued to reside at the property. They continued to see each other regularly and to socialise. It was not until some 12 months later that the relationship deteriorated which led to the plaintiff walking out on the defendant.
On the plaintiff's own evidence it was not said (as pleaded) that the moneys would be repaid "as soon as practicable". He conceded also that nothing was said to him by the defendant about paying the money back as soon as practicable. That seemed to be his interpretation of the arrangement.
On the other hand, the defendant was equivocal in her evidence as to the discussion concerning the $240,000. She did not wish to sell the house. She acknowledged that there were a number of conversations with the plaintiff regarding the divorce settlement and progress in the negotiations. This all came down then to one conversation which took place whilst they were travelling in the plaintiff's car south down the Kwinana Freeway. Her evidence was:
"What did you say to Mr Porter initially in that conversation?‑‑‑That I needed $240,000 to settle with my husband so I wouldn't lose the house.
What did Mr Porter say in reply to that?‑‑‑He offered to give me the $240,000 because he didn't want to see me lose the house, and I replied that that was very generous and I had some estate money – inheritance money coming through from my brother's estate and I would give that to him.
What was Mr Porter's reply to that?‑‑‑He was happy with that."
She was consistent in cross‑examination as to the content of that conversation. She said the topic was raised by her by saying "that it looks like I'm going to have to sell the home." It was her evidence that the plaintiff's response was:
"I don't want you to lose the home. It means so much to you. Let me help you. Let me give you the money.
And what did you say to that?‑‑‑My response was that it was a very generous offer, but I knew I had the inheritance from my brother's estate coming through and I told him that I would give him what was coming through from my brother's estate.
Yes – anything else?‑‑‑Not that I recall.
Was the amount of $240,000 actually mentioned in that conversation?‑‑‑Yes.
What was said about the $240,000?‑‑‑That he would give me the $240,000 so I wouldn't lose the home.
You said you needed $240,000 did you?‑‑‑I said I needed the $240,000 so I wouldn't lose the home.
What did he say in response to that?‑‑‑He said I cannot see you lose the home; it means so much to you."
The defendant denied that there was any discussion that any shortfall as between the amount advanced and the amount she received from her brother's estate would be paid from the sale of the home. At that stage she would be retaining the home and it was not her intention to sell it in any event.

Issues as to credibility

Clearly, there is a conflict between the evidence of the plaintiff on the one hand, and the defendant on the other, as to the terms of the advance of $240,000. As I have indicated earlier there was also conflict regarding the circumstances of the ring given by the plaintiff to the defendant. At the time when the money was advanced however the parties were on good terms and the relationship seemed to be going along quite nicely. Was this another act of extreme generosity on the part of the plaintiff, or was it a loan as he contended?
The credibility of both parties was both supported by and called into question by other evidence. Whether anything can be drawn from those issues renders it necessary that some consideration be given to them.
In support of his loan assertion the plaintiff produced extracts from what he described as his cash book wherein he recorded payment of the money as a loan. Likewise, when he received money from the brother's estate they were entered as credits in repayment of the loan (exhibit 4). The plaintiff contended that that record was consistent with his evidence that the moneys advanced were by way of a loan. It need only be said that the document is self‑serving and does not lend any weight so far as the terms of the advance are concerned.
The first communication between the parties after the breakdown of their relationship was a letter which the plaintiff wrote to the defendant dated 5 February 2002. Coincidentally, that letter was written at about the time of settlement after sale of the property by the defendant. That letter reads:
"Dear Cheryl,
I have at long last finalised the accounts and as promised supply details of the loan on the house.
Paid 8.6.00  $240,000.00
Received   2.6.00        $22,857.82
14.6.00        $38,142.18
19.6.01        $35,000.00
Tax refund, etc       $ 9,457.28          $105,457.28
$134,542.72
Love,
Ian"
It was the plaintiff's evidence that the defendant had enquired of him a number of times prior to their separation as to the balance of the loan. He had never previously supplied any information in response for the reason he said that the defendant did not have the means to pay the outstanding amount until such time as the house was sold. There was never any discussion that the defendant might take out a mortgage.
For the defendant's part this was the first intimation to her that the advance was a loan. She did not reply to the letter her explanation being that:
"Initial shock that he had sent a demand for money and made the gift that he had given me now a loan and listed amounts that I didn't relate to and I really was waiting for him to contact me to apologise for his behaviour and I suppose thought that he might come back and this was a shock to me."
The plaintiff wrote a second letter dated 5 March 2002 to similar effect. Again, the defendant did not reply feeling that it would be useless to contact him about it as he obviously had another idea about the agreement which they had. Even if she had responded to the correspondence denying the claimed loan that would not have taken the matter any further. I cannot draw any inference adverse to her by reason that she did not respond.
It is common cause that the plaintiff did receive the whole of the moneys which came to the defendant from her brother's estate save for an amount of approximately $7,000 which the defendant had to contribute towards tax on the estate. The net amount received from the estate was paid to the plaintiff.
It is the fact also that the defendant did not immediately on forward moneys received to her account to the plaintiff. Her explanation was that as the account for her entitlement was in the name of her brother as executor of the estate she did not, after receiving earlier statements, receive further statements until the estate was finalised. Since the issue of the writ in these proceedings and following an application by the plaintiff for summary judgment a reconciliation of moneys received was done and the balance of moneys from the estate was paid to the plaintiff. The plaintiff also gave credit for the $9,457.28 held by him.
As mentioned earlier the plaintiff had received on behalf of the defendant in August/September 1998 the sum of $9,457.28. It was the plaintiff's evidence that the defendant wished him to hold that money so that it would not be brought to account in her divorce settlement. It is the fact that on 16 March 1999 she signed a "Form 17 – Financial Statement" in the Family Court proceedings which did not include that amount as an asset. Clearly that was untruthful of her. It is to be recognised however that at that time the plaintiff was advising her in respect to financial matters and apparently condoned the withholding of disclosure of this money. Accordingly, I do not consider that it can be said that such dishonesty weighs solely against the defendant's credibility.
There were a number of lesser issues reflecting on the character and credibility of each party. Upon my analysis however they do not take the matter any further.

Findings as to credibility

In a number of important instances the plaintiff's recollection of events was lacking, eg when and where the discussion regarding the advance of $240,000 took place, when the relationship ended, whether he went down on one knee at the Christmas lunch and whether he was present on the occasions of which Ms Henry and Mr Stick gave evidence.
There are instances also where, so it seems, the plaintiff made his own assumptions or at least had his own understanding of things which are not supported. His explanation concerning the ring is, as I have said, most improbable. If that was his understanding he certainly did not convey that to the defendant. Also his pleading that the moneys would be "repaid as soon as practicable" was not in fact even said in any discussion. Again that was his interpretation. Then there is his understanding that the property would be sold in the "medium" term. That was not the defendant's intention once she knew that she could pay out her former husband without having to sell the house. In fact there was no mention by either party of selling the house in the 12 months between the advance being made and the breakdown in the relationship. The fact that the property was not sold as soon as possible and there was no discussion about selling it weighs against the plaintiff's contention that the advance was to be repaid in this way as quickly as possible.
There was no discussion or agreement between the parties that the sum of $9,457.28 held by the plaintiff was to be credited against the $240,000. His evidence was that this money was to ultimately go towards the defendant's purchase of the property. However, until agreement was reached for the divorce settlement the very real prospect was that the property would have to be sold. It seems to have been the plaintiff's assumption, without discussion with the defendant, that is where the funds were destined even though she might not have ultimately retained the property. Further, the plaintiff saw fit to unilaterally credit that amount in reduction of the sum advanced. He seemed to assume that it was appropriate that he should, again without discussion, deal with those funds in that way. That was presumptuous of him and perhaps reflects a lack of communication by the plaintiff with the defendant insofar as detail in relation to financial matters is concerned.
In many respects the plaintiff's evidence was vague and his recollections not good or were unreliable. In his evidence as to the relevant discussion there was no reference to the word "loan". That he could recall with the certainty, which he purported to do, an agreement that the balance of moneys was to be paid when the property was sold is at best questionable. Rather, it is more probable than not that that was what he may have had in mind and not what in fact was the agreement with the defendant. That conclusion is consistent with the foregoing findings.
In all the circumstances I am not satisfied to the requisite standard that there was agreement as to repayment of the balance of the moneys as alleged by the plaintiff. I conclude that the plaintiff has failed to satisfy the burden of proof which rests upon him.
Accordingly, the plaintiff's claim must be dismissed.

Counterclaim

The defendant counterclaims for the sum of $9,457.28 being the moneys received by the plaintiff and held on behalf of the defendant in August/September 1998. They were not moneys received by the defendant from her late brother's estate. Only the estate moneys were to be paid over to the plaintiff in reduction of the $240,000.
I am satisfied that the defendant is entitled to repayment of the $9,457.28 and judgment will be entered for the defendant against the plaintiff in that sum.

[2004] WADC 156

23 July 2004