Sharkey v Nissi - [2015] NSWSC 1266

Supreme Court

New South Wales

Medium Neutral Citation: Sharkey v Nissi [2015] NSWSC 1266
Hearing dates: 16 – 20 February 2015 and 9 March 2015
Date of orders: 02 September 2015
Decision date: 02 September 2015
Jurisdiction: Equity
Before: Robb J
Decision:
(1) The plaintiff’s claim is dismissed.
(2) The first cross defendant is ordered to pay damages to the cross claimant in an amount to be determined in accordance with order (5).
(3) The first cross defendant is ordered to pay interest to the cross claimant in an amount to be determined in accordance with order (5).
(4) The cross claim against the second cross defendant is dismissed.
(5) The parties are directed to confer about the amount of damages and interest that the cross defendant should be ordered to pay to the cross claimant in accordance with these reasons for judgment (in particular par 406), and if agreement is not reached, the parties will be required to submit further submissions to the court at a time to be determined.
(6) The parties are directed to confer about the orders for costs that should be made, and if agreement is not reached, the parties will be required to submit submissions to the court at a time to be determined.
(7) The exhibits and any documents produced to the court on subpoena may be returned forthwith in accordance with the rules immediately upon the making of final orders in these proceedings.
Catchwords:
EQUITY – trusts and trustees – plaintiff and defendant engaged to be married and purchased first property as joint tenants and joint mortgagors in 2005 – plaintiff paid deposit, stamp duty, conveyancing fees, all mortgage repayments and repaid mortgage debt – parties’ relationship ended – plaintiff claims defendant orally agreed to hold her interest in the property on trust for him – whether an express trust arose – no oral agreement as alleged – express trust not established – whether resulting trust arose in favour of plaintiff –whether presumption of advancement because first property purchased in contemplation of marriage – first property not purchased in contemplation of marriage – defendant did not rebut presumption of resulting trust – defendant held her joint interest in first property on trust for plaintiff

EQUITY – trusts and trustees – plaintiff and defendant engaged to be married and plaintiff purchased second property in 2007 in sole name of defendant – purchase price paid by plaintiff – parties’ relationship ended – plaintiff claims defendant orally agreed to hold her interest in the property on trust for him – whether an express trust arose – no oral agreement as alleged – express trust not established – defendant claims that property was a gift – whether resulting trust arose in favour of plaintiff – whether presumption of advancement because second property purchased in contemplation of marriage – second property not purchased in contemplation of marriage – defendant bears onus of proving plaintiff’s intention at the time of purchase that she would hold beneficial ownership of the property– intention is the objective manifest intention of plaintiff – defendant successfully rebutted presumption of resulting trust – defendant not trustee of second property for plaintiff
CONTRACTS – agreement entered into in 2011 that plaintiff relinquish all claims against second property, repay all debts associated with it, and that defendant transfer her joint interest in first property to plaintiff – plaintiff subsequently sold and received net proceeds of sale of first property – whether defendant acted in breach of trust in entering into agreement – whether defendant acted unconscionably in taking advantage of plaintiff’s desperate financial circumstances in entering into agreement – defendant held interest in first property but not second property on trust for plaintiff – defendant did not take illegitimate advantage of the situation or act unconscionably – effect of agreement was that defendant kept the property gifted to her and plaintiff obtained the interest which defendant held on trust for plaintiff – parties understood that both parties had rights to apply for orders for redistribution of property rights following the end of a de facto relationship pursuant to the Property (Relationships) Act 1984 (NSW) – 2011 agreement a compromise of parties’ rights under that Act – 2011 agreement not vitiated by any breach of trust or unconscionable conduct by the defendant – defendant provided consideration to support 2011 agreement – 2011 agreement enforceable – plaintiff obliged not to challenge defendant’s beneficial ownership of second property – plaintiff obliged to repay mortgage on second property
Legislation Cited: Conveyancing Act 1919 (NSW)
Property (Relationships) Act 1984 (NSW)
Cases Cited: Anderson v McPherson (No 2) [2012] WASC 19; (2012) 8 ASTLR 321
Bertei v Feher [2000] WASCA 165
Brown v NSW Trustee and Guardian [2012] NSWCA 431; (2012) 10 ASTLR 164
Calverley v Green [1984] HCA 81; (1984) 155 CLR 242
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Davies v The National Trustees Executors and Agency Co of Australasia Ltd [1912] VLR 397
Gissing v Gissing [1971] AC 886
Ikeuchi v Liu [2001] QSC 54; (2001) 160 FLR 94
Jones v Dunkel (1959) 101 CLR 298
Martin v Martin (1959) 110 CLR 297
Moate v Moate [1948] 2 All ER 486
Neilson v Letch (No 2) [2006] NSWCA 254
Port of Brisbane Corporation v ANZ Securities Ltd (No 2) [2002] QCA 158; [2003] 2 Qd R 661
Russell v Scott (1936) 55 CLR 440
Ryan v Ryan [2012] NSWSC 636
Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121
Sidmouth v Sidmouth (1840) 2 Beav 447; 48 ER 1254
Tayles v Davis [2009] VSCA 304; (2009) 3 ASTLR 222
Watson v Foxman (1995) 49 NSWLR 315
Weige v Cupton Pty Ltd [2012] NSWCA 414; (2012) 8 ASTLR 229
Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669
Category: Principal judgment
Parties: Christopher James Sharkey (plaintiff/first cross defendant)
Donya Mayahi-Nissi (defendant/cross claimant)
Sharkey Family Trust Pty Ltd (ACN 122 270 286) (second cross defendant)
Representation:
Counsel: A Fernon (plaintiff/first cross defendant and second cross defendant)
D L Cook (defendant/cross claimant)
Solicitors: Swaabs (plaintiff/first cross defendant and second cross defendant)
Eakin McCaffery Cox (defendant/cross claimant)

File Number(s): 2013/383023
Publication restriction: None

Judgment

Introduction

The plaintiff in these proceedings is Mr Christopher James Sharkey. The defendant is Ms Donya Mayahi Nissi.
The dispute primarily concerns property at 98 Denison Street, Camperdown, New South Wales (“Number 98”), which was purchased on 27 October 2007 in the sole name of Ms Nissi, with money paid by Mr Sharkey, at a time when the parties were engaged to be married, and living together in a de facto relationship.

Mr Sharkey’s claim

By his amended statement of claim, Mr Sharkey pleads that Ms Nissi is the registered owner of Number 98. The contract of sale was entered into on 27 October 2007 following an auction. Mr Sharkey says that he was the successful bidder. The price was $886,000.
Mr Sharkey alleges that, although Ms Nissi was recorded on the contract as being the sole purchaser, that happened according to an agreement whereby Ms Nissi agreed to act as trustee for Mr Sharkey. That agreement is alleged to have been entered into on 27 October 2007, at about the time of the auction. The agreement was oral, and partly express and partly implied. Under the agreement, Mr Sharkey was to pay the whole of the purchase price, and Ms Nissi’s name was to be recorded on the contract as the purchaser of the property “(i) on behalf of [Mr Sharkey]; and (ii) to protect [Number 98] from being the subject of any recovery action commenced in respect of the businesses operated by [Mr Sharkey]” (par 7). Mr Sharkey says that it was implied from the conversation that Ms Nissi would be the registered owner of Number 98 as trustee for Mr Sharkey, who would be the sole beneficial owner of the property.
The deposit, the balance of the purchase price, adjustments on settlement, and conveyancing fees and other costs were paid by Mr Sharkey. Mr Sharkey says that Ms Nissi made no payments at all in respect of the purchase of Number 98. The total amount paid was $923,761.
The contract of sale was settled on 10 December 2007, and Ms Nissi became the registered proprietor of Number 98.
Mr Sharkey alleges that, at the time of the contract, the settlement, and at all times thereafter, it was his intention that he be the sole beneficial owner of Number 98, and it was Ms Nissi’s intention that she be the registered owner of the property as trustee for and on behalf of Mr Sharkey, who was to be the sole beneficial owner of the property. Accordingly, upon settlement Number 98 was held on trust by Ms Nissi for Mr Sharkey.
The trust was an express trust that arose out of the agreement made between Mr Sharkey and Ms Nissi at the time of the auction.
Alternatively, Mr Sharkey alleges that a resulting trust in his favour arose in respect of Number 98, by reason of the fact that he made all of the payments necessary for the purchase of the property.
Mr Sharkey claims that, by reason of the existence of the trust, and the fact that he is accordingly the sole beneficial owner of Number 98, he is entitled to have the legal title to the property transferred into his name.
Additionally, Mr Sharkey pleads that Ms Nissi owed to him the duty of a trustee, and that, from about August 2011, she collected rental income from tenants of the property, but in breach of trust did not pay the income to him. Mr Sharkey makes this claim on the basis of the trust, as a term of the agreement made at the time of the auction, and on the basis of restitution or unjust enrichment.
In her amended defence, Ms Nissi admits most of the basic facts alleged by Mr Sharkey in relation to the circumstances in which Number 98 was purchased. She does not admit that Mr Sharkey was personally the successful bidder at the auction. Ms Nissi denies that she made the agreement with Mr Sharkey that is the foundation of his claim that an express trust arose in his favour, by reason of the agreement made at the time of the auction. She denies that, at the times claimed by Mr Sharkey, it was both parties’ intention that Mr Sharkey would be the sole beneficial owner of Number 98. Accordingly, she denies that, from settlement, Number 98 has been held on trust for Mr Sharkey.
Ms Nissi not only denies that she made the agreement alleged by Mr Sharkey, but she says that, if the agreement was made, it did not comply with s 23C of the Conveyancing Act 1919 (NSW).
Ms Nissi alleges that, prior to and subsequent to the acquisition of Number 98, Mr Sharkey told her that the property was to be hers alone, and that the transfer of the property into her name was a gift.
Ms Nissi admits that she has not remitted any monies she received as rent from tenants of the property to Mr Sharkey, but denies that she owed the obligations of a trustee to him, or that she has breached those obligations. She denies the other grounds upon which Mr Sharkey asserts that she is obliged to pay to him the rent that she has received for the property.
By her defence, Ms Nissi also relies upon a number of matters that she pleaded in her cross claim.
Mr Sharkey filed a reply in which he responded to Ms Nissi’s reliance on s 23C of the Conveyancing Act, by alleging part performance of the agreement, being that the property was purchased pursuant to the agreement, and Mr Sharkey paid the whole of the price.

Ms Nissi’s claim

By her amended cross claim, Ms Nissi seeks relief to enforce a written agreement that she entered into with Mr Sharkey on 18 March 2011 (the “18 March 2011 agreement”). That agreement, in part, concerned the property at 96 Denison Street, Camperdown, which adjoins Number 98. I will call this property “Number 96”. Sometime before the acquisition of Number 98, Ms Nissi and Mr Sharkey purchased Number 96 as joint tenants.
The terms of the 18 March 2011 agreement alleged by Ms Nissi are that (par 3):

[Mr Sharkey] relinquished any interest in or claim to [Number 98] and agreed not to contest the ownership of [Number 98];
[Mr Sharkey] agreed to be responsible for the debt secured by a mortgage over [Number 98];
[Mr Sharkey] undertook not to incur any more debt under the mortgage over [Number 98];
[Mr Sharkey] would continue to pay the instalments under the mortgage as they fell due;
[Mr Sharkey] undertook to discharge the mortgage debt by 1 January 2013;
In consideration for [Mr Sharkey] relinquishing such interest and claims and giving such undertakings, [Ms Nissi] relinquished her interest, as a co-owner of [Number 96] in favour of [Mr Sharkey].

Ms Nissi says that, in accordance with the 18 March 2011 agreement, she relinquished her interest in Number 96, which was sold and the entire net proceeds, after deduction of the mortgage debt and sale expenses, were paid to Mr Sharkey. In breach of the agreement, Mr Sharkey has only paid the instalments under the mortgage up to the end of 2012, and failed to discharge the mortgage debt by 1 January 2013. Consequently, the mortgagee threatened to take proceedings to exercise its power of sale over Number 98, as a result of which Ms Nissi was forced to pay instalments under the mortgage of $22,090, and to refinance the mortgage by means of a loan to her of $524,888.63 from the Commonwealth Bank of Australia, which is secured by a new mortgage over Number 98. Ms Nissi alleges that she incurred fees and expenses of $35,875.54, because of the threats made by the prior mortgagee. She claims that Mr Sharkey is liable to pay damages to her in the total sum of $582,965.54.
Ms Nissi makes the following alternative claims. If it is found that she holds Number 98 on an express trust, or a resulting trust, for Mr Sharkey, she claims an entitlement to be indemnified as trustee for the $582,965.54 that she has paid in respect of the property. In addition, she claims a sum of $23,938.87 for carrying out necessary repairs to the property. She says that she is entitled to an equitable charge over Number 98 to support this claim.
Ms Nissi makes a number of other claims, which were not given prominence in the final submissions made on her behalf. She makes a claim for contribution on the basis that she repaid a substantial part of the debt secured by the mortgage over Number 98, and she and Mr Sharkey were co-guarantors. Ms Nissi claims that she is, alternatively, entitled to half the net proceeds of sale of Number 96, if it is found that Mr Sharkey is not bound by the 18 March 2011 agreement. Finally, she claims that she is entitled to be subrogated to the St George Bank mortgage that she discharged in the sum of $524,888.63.
Ms Nissi joined, as a second cross defendant to her amended cross claim, Sharkey Family Pty Ltd, as trustee for the Sharkey Family Trust (the “Trustee”). The Trustee was apparently joined because the Trustee was the borrower from St George Bank of the debt that was $524,888.63 at the time it was repaid by Ms Nissi. The claim for subrogation that is referred to above is made against the Trustee.
In his amended defence to Ms Nissi’s amended cross claim, Mr Sharkey admits the existence of the document dated 18 March 2011, which Ms Nissi claims gave rise to the agreement of that date. Mr Sharkey claims that the alleged agreement was not supported by any consideration that flowed from Ms Nissi, so that it does not constitute an enforceable contract. Alternatively, if the contract was made, the contract did not effect a transfer of Mr Sharkey’s interest in Number 98 to Ms Nissi.
Additionally, Mr Sharkey pleads that, if the 18 March 2011 agreement was made, it is unenforceable because Mr Sharkey was induced to create and sign the document by duress created by illegitimate pressure exerted by Ms Nissi. Mr Sharkey says that he avoided the 18 March 2011 agreement by refusing to abide by its terms, and contesting Ms Nissi’s alleged ownership of Number 98.
The basis of the duress and illegitimate pressure alleged by Mr Sharkey, in par 2(a)(iv) of his amended defence to amended cross claim, is that Ms Nissi threatened to breach the duties that she owed as trustee (as defined in par 31 of the amended statement of claim); and that Ms Nissi threatened to breach her fiduciary duties owed to him, as referred to below (and pleaded in par 15 of the amended defence to amended cross claim). The particulars given by Mr Sharkey for these allegations are paraphrased as follows:

(a)   In about February 2011 Ms Nissi orally threatened Mr Sharkey that she would not permit the sale of Number 96 registered in her name as trustee for Mr Sharkey, unless he agreed to enter into an agreement that he would not take Number 98 away from her;
(b)   Mr Sharkey required the sale of Number 96 to obtain funds to meet his business and personal expenses;
(c)   Ms Nissi was registered proprietor of Number 96 as joint tenant with Mr Sharkey.
(d)   Ms Nissi held her interest in Number 96 as trustee for Mr Sharkey;
(e)   Ms Nissi had a duty to agree to sell Numbers 98 and 96 at the request and direction of Mr Sharkey;
(f)   Ms Nissi breached her fiduciary duties to Mr Sharkey by failing and refusing to perform that duty;
(g)   Ms Nissi took illegitimate advantage of her position as trustee and registered proprietor of Number 96 and/or the financial difficulties of Mr Sharkey to place illegitimate pressure on Mr Sharkey to require him to create and sign the document;
(h)   by placing such illegitimate pressure on Mr Sharkey, Ms Nissi acted in a manner that was in all the circumstances unconscionable;
(i)   by placing such illegitimate pressure on Mr Sharkey, Ms Nissi acted unlawfully in that she breached her fiduciary duties to Mr Sharkey as trustee of Number 96.

The structure of the amended defence to the amended cross claim makes it inconvenient to attempt to paraphrase all of the allegations that are contained in the pleading. It may be noted that Mr Sharkey alleges that, during the period from 28 April 2008 to 28 December 2012, he paid a total of $149,599.77 to St George Bank in respect of the mortgage over Number 98. He admits that he did not discharge the mortgage by 1 January 2013, or at all. Mr Sharkey does not admit that Ms Nissi made payments under the mortgage totalling $22,090, but he does admit payments of $15,500. Mr Sharkey admits that Ms Nissi discharged the St George Bank mortgage, and further admits that, if he is found to be the beneficial owner of Number 98, he will be liable to pay to Ms Nissi the amount that she paid to discharge the St George mortgage. He denies that he is liable to pay Ms Nissi the sum of $35,875.54.
In response to Ms Nissi’s allegation that she provided consideration for the 18 March 2011 agreement, by means of her agreement that Number 96, which was jointly owned by them both, could be sold and the proceeds paid to Mr Sharkey, Mr Sharkey alleged in par 15 that the parties entered into a trust agreement in relation to Number 96. Mr Sharkey says that the agreement was oral, and was partly express and partly implied. It was an express term that Mr Sharkey was to pay the whole of the purchase price for Number 96. It was an implied term that Ms Nissi would be a joint registered owner of Number 96 as trustee for Mr Sharkey, who would be the sole beneficial owner of Number 96. The purchase price for Number 96 was $565,000. Mr Sharkey paid the whole of the price, as well as various other payments, including mortgage payments. Alternatively to the express trust, Mr Sharkey claims that Ms Nissi held her interest in Number 96 for him on a resulting trust.

Development of Mr Sharkey’s business

Mr Sharkey said that, since 1994, when he was 12 years old, he had been involved in computer programming and online businesses. In December 2000, when he was 18 years old, he became professionally involved in computer programming and online businesses.

In 2001, he became a director of two companies that owned an online business. Mr Sharkey co-founded the business with Mr Robert Hunt. The business (which was ultimately called “Stayz”) provided a platform for holiday home owners to list their holiday properties online. One of the companies operated the business, and the other owned the intellectual property relating to the business.
Stayz grew rapidly, and soon became the largest holiday accommodation website in Australia.
By the time Mr Sharkey met Ms Nissi, Stayz was already well established online, and was turning over in excess of $100,000 in gross profit per month on average; and the business was paying Mr Sharkey a salary of $70,000 per year (soon to be increased to $80,000).

The engagement

Mr Sharkey’s evidence was that he and Ms Nissi met in early 2004. She said that it was in about August 2003. At that time she was 17 years old, and in Year 12. Mr Sharkey was 20 years old. Ms Nissi’s evidence was that the couple began a live-in relationship in about February 2004. Mr Sharkey said that, after about three months, the couple moved to Orange, where Ms Nissi was a student at a campus operated by the University of Sydney. The couple lived together at Orange in rented accommodation.
There was a conflict of evidence as to whether the couple created a subterfuge that Ms Nissi was living separately at a dormitory at the University, to hide the fact that the couple were living together, because that arrangement would have been unacceptable to Ms Nissi’s parents, because of their Iranian heritage. Ms Nissi denied that the evidence given by Mr Sharkey to this effect was true.
In his primary affidavit, Mr Sharkey gave the following evidence concerning the engagement:

22. In about December 2004 I proposed to Donya. Donya was from an Iranian family and I recall having discussions with Donya at about the time that we started living together to the effect:
She said:   We’ll need to get engaged soon or my father will not be happy with us living together. When Corey and Samara [Donya’s elder sister] were dating, they weren’t allowed to live together until they got married. So for us to live together, we need to make our relationship more serious.
I said:   Okay. I definitely think we should get engaged in the future. I would need to save for a ring but I wouldn’t imagine us getting married any time soon.
She said:   I don’t want to get married soon either. This is just to keep my family happy and we can talk about actually getting married later.
23.   Apart from telling our parents of the engagement, Donya and I did not make a formal announcement of our engagement nor did we tell many friends. I bought Donya an engagement ring however she did not wear it when we (or she) went out. No plans were ever made for a wedding.

The apparent purpose of this evidence by Mr Sharkey was to downplay the significance of the couple’s engagement. Mr Sharkey, in effect, suggested that the engagement was a device to avoid Ms Nissi’s parents being unhappy with their living arrangements, and was not a genuine engagement.
That view of the evidence is reinforced by Mr Sharkey’s comment that Ms Nissi did not wear her engagement ring, which, if true, would suggest that she did not consider the engagement to be genuine. Ms Nissi, in her evidence, denied that she did not wear her engagement ring, and said that she always wore it.
Mr Sharkey said that the couple did not make a formal announcement of their engagement, and they did not tell many friends.
Ms Nissi denied that the conversation set out by Mr Sharkey in par 22 of his primary affidavit took place.
Mr Sharkey ultimately submitted that it was clear that the engagement occurred when it did due to Ms Nissi’s Iranian heritage, and the attempt to appease her father. The submission went so far as to say that because Ms Nissi failed to call her father and her mother to give evidence, a Jones v Dunkel inference should be drawn against Ms Nissi.
I reject that submission, both because it is contrary to principle, and because it is at odds with the evidence of the manner in which Mr Sharkey put his proposal of marriage to Ms Nissi, which I will discuss below.
So far as the absence of Ms Nissi’s parents from the witness box is concerned, the court should apply the principle which Gleeson CJ and McHugh J accepted in Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121 at [51]:

… But there was nothing which called on the defendant to lead evidence in respect of these matters: its failure to call evidence therefore had no probative significance and could not assist the drawing of any inference in favour of the plaintiff. In Cross on Evidence Mr Dyson Heydon QC declares that:
“[T]he rule [in Jones v Dunkel] only applies where a party is ‘required to explain or contradict’ something. What a party is required to explain or contradict depends upon the issues in the case as thrown up in the pleadings and by the course of evidence in the case. No inference can be drawn unless evidence is given of facts ‘requiring an answer’.” (Footnotes omitted)

The reasons why Mr Sharkey and Ms Nissi decided to get engaged are matters to which they alone were privy. Mr Sharkey did not give evidence that Ms Nissi’s parents, and in particular her father, were in any way, by word or deed, involved in the decision. There was nothing that Ms Nissi could explain or contradict by calling her parents. Their unexpressed feelings are irrelevant. It would not matter to a proper determination of the reasons for the engagement whether either parent gave evidence that they were in fact opposed to the couple living together in the absence of an engagement, or that they were indifferent.
Mr Sharkey filed an affidavit dated 9 October 2014 in reply to Ms Nissi’s affidavit. In par 10(b) Mr Sharkey listed a number of interactions that he had with Ms Nissi, and members of her family, about cultural sensitivities concerning the couple living together. It is not necessary to examine each of those matters in detail. I do not accept that, even if Mr Sharkey’s evidence in relation to those events is accepted without qualification, that would justify a finding that Mr Sharkey proposed to Ms Nissi, with her agreement, as a subterfuge, without any serious intention to marry her, just so that he could secure the benefit of living with Ms Nissi.
The additional evidence that Mr Sharkey gave in reply, which he could have given in chief, does not support a finding that Ms Nissi agreed to the engagement to placate her father. To the extent that the evidence supports the conclusion that Ms Nissi’s father may have had serious reservations about his daughter engaging in a live-in relationship, given that she was about 18 years old at the time, parental concern may have arisen without regard to her father’s Iranian origin.
Mr Sharkey criticised Ms Nissi, both in cross-examination and in submissions, about why she did not put on an affidavit to respond in detail to Mr Sharkey’s reply evidence. That attack is unwarranted. It was Mr Sharkey’s case from the outset that the couple only became engaged to placate Ms Nissi’s father. As I have noted, Mr Sharkey could have given his reply evidence in chief, and he should have done so. The court’s procedures do not encourage the parties to litigation to engage in a protracted series of allegations and counter allegations in their evidence. Ms Nissi, on the advice of her legal representatives, was entitled to be selective concerning the necessity of attempting to reply to Mr Sharkey’s reply evidence. This aspect of Mr Sharkey’s reply evidence was not of the significance that commanded a further response from Ms Nissi.
The parties agreed in their evidence that, when they returned to Sydney to live, they stayed with Ms Nissi’s parents. Mr Sharkey gave evidence that that arrangement lasted for 3 months, although he ultimately agreed that Ms Nissi’s evidence that they stayed with her parents for 9 months was correct. While the parties did not go into detail in their evidence as to their living arrangements with Ms Nissi’s parents, it would seem to have been relatively obvious to Ms Nissi’s parents by that stage that the couple were living together.
Mr Sharkey gave evidence, in his affidavit in reply, to the effect that he and Ms Nissi were obliged to sleep on a mattress in the lounge room in Ms Nissi’s parents’ home, even though there were spare bedrooms that they could have used. Mr Sharkey suggested that this arrangement was required because of the parents’ attitude. Even if this suggestion is true, its significance is unclear. Mr Sharkey gave the evidence to support his claim that he and Ms Nissi only became engaged to overcome her parents’ resistance to the couple living together in a de facto relationship, without their being engaged. It is not clear, however, why the mere fact of engagement would have made all the difference, rather than marriage. Furthermore, Mr Sharkey appears to accept that Ms Nissi’s parents were content to permit the couple to sleep together on the one mattress. Presumably, the lights were put out at night.
Mr Sharkey’s failure of memory in respect of whether the length of the couple’s stay with Ms Nissi’s parents was 3 months or 9 months is significant. Clearly, the more transient the stay, the less significance it would have in relation to that part of Mr Sharkey’s case theory, whereby he sought to downplay the seriousness of his engagement to Ms Nissi. This error justifies doubt as to the reliability of Mr Sharkey’s recollection, on issues of fact that have significance for Mr Sharkey’s entitlement to the relief that he claims. The event occurred about 10 years ago, but the circumstances in which Mr Sharkey found himself living in his girlfriend’s parents’ house, and having to sleep on a mattress on the lounge room floor every evening, were entirely out of the ordinary. Mr Sharkey ought to have remembered that event as having only lasted 9 months, rather than 3 months.
Mr Sharkey and Ms Nissi became engaged to be married when she accepted his proposal of marriage on 23 December 2004.
The evidence showed that Mr Sharkey went to exceptional lengths to orchestrate a dramatic, and even spectacular, setting for his proposal. At the time, one of Ms Nissi’s favourite bands was the group known as “The Whitlams”.
On 3 December 2014, Mr Sharkey sent an email to Mr Tim Freedman, the leading member of The Whitlams, about a forthcoming concert that the group was going to give in Newtown, which included the following:

… Anyway, I am writing to you on a purely selfish basis because I want to ask you an unprecedented and gigantic favour. I expect you to refuse, but I am asking anyway.
In short, I am about to propose to my girlfriend. We are coming to your concert on 23rd December in Newtown and her favourite “romantic” song is Lady in Red.
My favour is: at the concert on 23rd, would you be able to play and sing “Lady in Red” (or just a little part of it) and say something like “this is for Donya from Chris” after which I will propose to her?
The reason I chose that song and not one of yours is because if you sing one of yours she will probably want to marry you instead since she absolutely adores you (you actually spoke to her in Katoomba, she was the one who wanted to interview you).
In return I will do absolutely anything you want me to; however probably the best thing I could offer you is a free holiday at any of the accommodation you can find on or as this is my business. In fact even if you don’t sing I’m happy to help you out with free holidays.
A short response in your own time would be appreciated, even if it is a simple “no” just so I know to plan something else. I am willing to compromise on any aspect of my plan, so let me know!

After a number of email exchanges between Mr Sharkey and Mr Freedman, on 7 December 2014 Mr Sharkey sent a further email to Mr Freedman in the following terms:

She will definitely say yes (without trying to sound too cocky) I know this for a fact so the only thing I’m nervous about it pulling the whole thing off!
I guess I’ll talk to you closer to the day with the precise details of the night?

I may infer without fear of contradiction that, given the circumstances in which Mr Sharkey arranged to propose to Ms Nissi, Mr Sharkey must have been supremely confident of receiving a positive response. However else one might describe the manner of Mr Sharkey’s proposal to Ms Nissi, it was a grand gesture.
Mr Freedman agreed to make the necessary arrangements, and Mr Sharkey made his proposal on cue during the course of the concert, and Ms Nissi accepted.
Mr Sharkey sent the following message on 28 December 2004 to the recipients of emails with the following email address: [email protected]. Mr Sharkey gave evidence that only his parents and siblings were recipients of emails to this email address.

GOOD NEWS! On the 23rd of December I proposed to Donya and she said yes!!!. So we are engaged! I’ll write up a full little story of how I did it a bit later on and send it off, in short we went to see The Whitlams and Donya was called up on stage by Tim Freedman then I came out from stage left and proposed to her in front of 200 people! Went really well!.
I am exceptionally happy!
Website is coming along well should have something online by February.

Mr Sharkey was apparently a member of the West Pennant Hills Cherrybrook Cricket Club. He informed the Club of his engagement to Ms Nissi to enable the event to be publicised to members in the Club’s web-based newsletter for 15 January 2005, which contained the following item. Mr Sharkey said that he passed on the information concerning his engagement to the president of the Club, who was a member of the same cricket team as Mr Sharkey. Mr Sharkey claimed that he did not read the Club’s newsletter himself.

Wedding bells
Congratulations to Chris Sharkey (B1 Blue) that he is engaged to the lovely Donya. Chris organised the proposal at a Whitlam’s concert recently! He went up on stage and proposed over the microphone with Tim Friedman (lead singer of the Whitlam’s) singing a song in dedication to the couple! Congratulations Chris.

Mr Sharkey understated the publicity he gave to the couple’s engagement. The understatement is significant, as it must be inferred that Mr Sharkey appreciates that the court would be less likely to find that Mr Sharkey made any substantial gift to Ms Nissi, if it was persuaded by the evidence that the relationship between Mr Sharkey and Ms Nissi was, in reality, little more than one of living together, on a basis that did not involve any long-term commitment.

The Purchase of Number 96

Mr Sharkey’s evidence was that, in January 2005, he was interested in investing his money in real estate. He had not previously invested in real estate. He said that he decided to buy Number 96. A side benefit of buying the property as an investment was that he could live in the property after it was purchased.
Ms Nissi said that she and Mr Sharkey had been looking for properties for some months. She put into evidence a couple of emails that Mr Sharkey had caused to be forwarded to her from web-based real estate sites that provided information about available properties. She said that the couple inspected Number 96 in June 2005.
Mr Sharkey gave evidence of a conversation that he had, after he had decided to purchase Number 96, in which he advised Ms Nissi that he had saved some money, and would be taking additional drawings from his company, which would increase his chances of paying a large deposit on the property, and improve his prospects of getting a loan. The tenor of the evidence was that Mr Sharkey had made an independent decision to buy a property for himself.
He said that, in about January 2005, he had the following conversation with Ms Nissi:

I said:   I need to meet with a lawyer to discuss purchasing a property in my name. I found a lawyer called Tim Young who is based in Camperdown near Newtown.
She said:   I would like to come to the meeting with you because we are a couple. Whose name will the property be in?
I said:      I’m purchasing the property, so it’ll be in my name.
She said:   Is that because you don’t believe in our relationship? If you love me and plan on marrying me, why wouldn’t you want to put the property in our joint names?
I said:   This property is an investment for me with the money I’ve earned from Ozstays. It makes sense that it would only be put in my name.
She said    I can’t believe that you think so little of me that you don’t want the property in joint names. You obviously don’t see me in your future.
I said:   Okay if you feel that strongly about it, I’ll find out about putting the property in joint names.

Mr Sharkey claimed that, during the conversation, he felt that Ms Nissi was using their relationship to emotionally convince him to put Number 96 into both of their names, even though his intention was only to purchase the property as an investment.
Ms Nissi denied that a conversation occurred in these terms. She did not give evidence of any alternative conversations leading up to the purchase of Number 96 in joint names. She was pressed in cross-examination as to why she did not give positive evidence of alternative conversations. She said that she did not do so because Number 98 was the focus of the proceedings, not Number 96. However, if Ms Nissi’s evidence is looked at on an overall basis, her case was simply that the couple were engaged to be married, and were living together, and intended to make Number 96 their home, and that a natural thing to do was to put the property in their joint names. The part of Mr Sharkey’s evidence that she challenged was the stance that Mr Sharkey took that he made it clear that the property was to be his investment.
Mr Sharkey gave evidence of attending a meeting with Ms Nissi and his solicitor, Mr Young, and his business associate, Mr Hunt. He said that, prior to the meeting, he had intended to purchase Number 96 in his name only. However, he said he believed that, to appease Ms Nissi, he would have to raise the possibility of putting the property in joint names. He said that, when he raised this possibility at the meeting, Mr Hunt said: “I think you should put the property in just your name, so that you will not be exposed to having to deal with a claim by Donya if you break up”. He said that Mr Young advised that it would make sense for him to buy the property in his name, so that if, at a later time, a second property was bought, then Ms Nissi would be able to use the benefit of her first home owners grant.
Mr Sharkey said that the following conversation occurred between him and Ms Nissi after the meeting:

I said:   I’m paying for the property. It’s an investment for me. Plus, I don’t want to give up your chance of getting the home owners grant if I want to buy another property.
She said:   Well you mustn’t trust me very much. If we are going to get married, what difference to you is it if I’m also registered?
I said:   If it means a lot to you, even though you aren’t paying anything, I’ll register it in both of our names.
She said:   Okay, good.
I said:   I’m happy to register it in both of our names but this is still my investment. I’ll be using my money from OzStays to pay a large deposit and I’ll be making all of the loan repayments because the loan will be my responsibility.
She said:   Fine.

Mr Sharkey said that Ms Nissi was very emotional, and raised her voice at him during the conversation, and from the tone of her voice, he understood that she was angry.
Mr Sharkey relied upon this conversation as creating an express agreement between him and Ms Nissi that, although the property would be put in joint names, Mr Sharkey would be the sole owner.
There is an internal inconsistency in the version of this conversation given by Mr Sharkey, which tends to undermine the probability that it occurred, as stated by him. Mr Sharkey says that Ms Nissi was very emotional and effectively bullied him into agreeing to register Number 96 in both of their names. However, in the next breath, he reaffirmed that the property would nonetheless be his investment, and she simply responded: “Fine”. It is improbable that Ms Nissi would immediately have agreed to an arrangement that undermined her objective. If she bullied him as claimed, it must have been for some purpose. The evident purpose was that she would have a personal right in respect of the property. She can hardly have wanted the merely symbolic right of having her name on the title.

This is the very sort of evidence that McClelland CJ in Eq warned in Watson v Foxman (1995) 49 NSWLR 315 at 318, 319 warrants considerable scepticism, and should not too readily be accepted.
He also said that he did not, at any time, say to Ms Nissi before Number 96 was purchased, “I’m buying this property for us”, “This is a gift for you”, or “You will be an owner of the property”.
Ms Nissi denied that the conversation deposed to by Mr Sharkey occurred. She accepted, however, that Mr Sharkey did not say to her that he would put the title to Number 96 into her name jointly with his as a gift to her. She claimed that, essentially as a matter of course, the property was put into joint names as it was to be their first home, as a young engaged couple. Ms Nissi accepted that all of the money paid for the purchase of Number 96, and for the repayment of the mortgage, was Mr Sharkey’s money. She said that her circumstances, at the time, did not permit her to make any significant financial contribution. She claimed, however, that her liability jointly with Mr Sharkey under the mortgage was real, and at some time, in the future, it might have been necessary for her to make a financial contribution.
Ms Nissi’s position was that she and Mr Sharkey were a couple, who expected to get married, and that, for the present, Mr Sharkey was effectively the breadwinner, but that she was studying, and in due course would commence employment, so that in the future it remained a real possibility that, when she was able, she would contribute according to her ability to the financial needs of the relationship.
Mr Sharkey’s evidence of his conversations with Ms Nissi may be distilled to the following propositions: (a) at all times he intended that Number 96 would be purchased as an investment property for him, and he would be the sole owner; (b) Ms Nissi emotionally bullied him into agreeing to put the property into joint names; and (c) when he told Ms Nissi that the property was nonetheless to be his property alone, she simply said “Fine”. As I have said, that sequence of propositions is improbable. There is no reason why Ms Nissi should bully Mr Sharkey into putting the property into joint names, and then immediately accept without demur that the property remained solely his.
In his primary affidavit, Mr Sharkey gave an explanation of what he understood, following the meeting, and the later conversation with Ms Nissi. He said that he was not told in effect that, “By registering the property in Donya’s name, you are giving her the property”, or “Registering the property in Donya’s name transfers ownership of the property to her”. He said that, when he was told that he should put the property in his name alone “so that you will not be exposed to having to deal with a claim by Donya if you break up”, he understood that Ms Nissi would have a claim over the property under family law or de facto relationship law. He did not understand that he would be immediately giving up to Ms Nissi any of his ownership of the property, if he put the property equally into her name. Mr Sharkey said that, at the time, the relationship was strong, and he believed there was a likelihood that the couple would get married sometime in the future. If the couple married, Ms Nissi would eventually be able to make a claim against the property because of family law.
Mr Sharkey said, however, that he did not believe that Ms Nissi would be able to make a claim to the ownership of the property, by its simply being registered in her name. He said that, in his mind, there was a difference between in whose name the property was registered, and who owned the property. He said that he believed that a person could not become the owner of a property if the person did not contribute to paying for the property.
In essence, Mr Sharkey’s explanation of his understanding may be distilled to the proposition that he thought that a person who paid for a property would be the owner, and that the act of putting another person’s name on the title to the property would have no effect on the issue of ownership, if that person did not also pay for the property.
If Mr Sharkey, in fact, had the understanding that he claims that he had, the equitable principles that govern the creation of resulting trusts would suggest that his understanding may have been right. However, Mr Sharkey claimed that he was an ingénue concerning legal matters. It is hard to accept that a member of the public, without any legal training, and without legal advice, would naturally believe that placing another person’s name on the title to a property, particularly the name of a person with whom the person was living in a domestic relationship, would be irrelevant to the question of who owned the property. Most people, who were not lawyers, would have a strong suspicion that the act of placing another person’s name on the title could be very significant to the issue of who was intended to own the property. The ordinary person would probably expect that it might be a contentious exercise to establish that the act of placing another person’s name on the title to the property was intended to have no effect at all.
All Mr Young and Mr Hunt suggested to Mr Sharkey was that he should place the title to Number 96 in his own name, because that would minimise his family law risk, if his relationship with Ms Nissi broke down. Mr Sharkey did not give evidence that either gentleman advised him that he would be the sole owner of the property if he paid the entire purchase price, notwithstanding that the title was put in joint names. As will be seen, Mr Sharkey did not claim to have received advice to that effect until the purchase of Number 98, when his accountant gave him that advice. (Even then, the accountant did not give evidence of giving that advice). There is a strong appearance that, in his recollection, Mr Sharkey has backdated, so to speak, the understanding that he believes he had at the time Number 98 was purchased, to apply to the earlier time when Number 96 was acquired.
The contract to purchase Number 96 was entered into on 28 July 2005. Mr Sharkey and Ms Nissi were the purchasers. The price was $565,000. The deposit of $56,500 was paid by Mr Sharkey, as was the stamp duty of $14,618.50. The amount borrowed to complete the purchase was $452,000. The lender was the St George Bank. The mortgage was dated 3 August 2005. Mr Sharkey and Ms Nissi were the mortgagors. Settlement of the purchase of Number 96 took place on 7 September 2005. Ms Nissi makes no issue of the fact that Mr Sharkey paid the stamp duty and the conveyancing fees.

Ms Nissi’s first home owners grant

There is an issue in the proceedings as to whether Ms Nissi applied her entitlement to the New South Wales government First Home Owner’s Grant towards payment of the price of Number 96. There was in evidence an application form for payment of that grant, which had been completed in the names of both Ms Nissi and Mr Sharkey. The copy that was in evidence was only signed by Mr Sharkey. As I understand the evidence, Mr Sharkey in the first instance paid all of the costs of purchasing Number 96 that were not paid out of the money borrowed on mortgage. If any money was received by either Ms Nissi or Mr Sharkey, it is not clear what was done with the money. The evidence is inconclusive as to whether Ms Nissi in fact contributed her grant towards the purchase of Number 96, and she has not carried the burden of proving that it was.

Sale of the Stayz business

On 4 January 2006, Mr Sharkey and Mr Hunt sold their interest in the Stayz business for $12.7 million, and Mr Sharkey received half of that amount. Mr Sharkey was 23 years old at the time.
On 2 February 2006, Mr Sharkey used part of the proceeds to repay the mortgage over Number 96 by two payments of $392,394.96 and $59,183.85.
On 20 January 2006, Mr Sharkey paid $275,284 to his father to assist him in paying off his home loan and two credit cards.
Mr Sharkey also paid $304,066.95 to Ms Nissi’s parents on 2 February 2006, to enable them to pay off their home loan. Mr Sharkey said that he made the payment to Ms Nissi’s parents because she said to him that it was only fair to give money to both of their parents. Mr Sharkey specifically said that, when he gave the money to Ms Nissi’s parents, he said to them that the money was a gift.
On any view of things, the gifts that Mr Sharkey made to his and Ms Nissi’s parents were very generous, even allowing for the substantial wealth that Mr Sharkey then enjoyed as a result of the sale of the business.
This is an appropriate point to interpolate that there was very little evidence about what happened with the balance of the proceeds of sale of the business, save for the initial purchase of Number 96, and the subsequent purchase of Number 98. The evidence does not establish what Mr Sharkey’s wealth was from time to time. In particular, Mr Sharkey’s wealth at the time Number 98 was purchased is not known.
Mr Sharkey gave evidence that, in 2007, he lost approximately $200,000 because of a fall in the value of shares held by him because, as he described it, of the onset of the global financial crisis.
I infer from the evidence that Mr Sharkey invested his money in shares and a number of new businesses that he established after the sale of Stayz.
It appears that Mr Sharkey needed access to an amount of funds, shortly after Number 98 was purchased, in part for the need to spend money on improving his office. That was part of the reason why, as will be seen, Mr Sharkey secured Ms Nissi’s agreement to enable him to borrow a substantial amount secured by mortgages over Number 96 and Number 98.
The evidence also includes a statement of Mr Sharkey’s assets and liabilities as at 23 May 2010:

Assets
23k Term Deposit Held w/ St George Bank
Own 96 Denison St Newtown (bought for $565k in 2003)
Own 98 Denison St Newtown (bought for $860k in 2006)
Own 25% of property development in Maroubra
Own 25% of restaurant in Carramar
30k Cash in Family Trust
2009 Audi A6 Sedan
Liabilities
Mortgage on 96 & 98 Denison St in form of line of credit for business and other investments (500k)

This statement of assets and liabilities does not place any value on the property development or the interest in the restaurant. It also does not place any value on Mr Sharkey’s interest in the businesses in which he was then engaged.
The fate of the balance of the proceeds of sale of the Stayz business is, on the evidence, unexplained. Mr Sharkey may have sunk much of that money into the various businesses that he attempted to establish.
It also appears that, by early 2011, when Mr Sharkey and his two brothers were living in San Francisco, and trying to establish a new business there, it became necessary for Mr Sharkey to raise money from the sale of Number 96 for the purposes of the new business.
The paucity of the evidence concerning Mr Sharkey’s wealth at relevant times is significant. The primary issue in these proceedings is whether, when Mr Sharkey caused the contract for the purchase of Number 98 to be put in the name of Ms Nissi as purchaser on 27 October 2007, he did so for the purpose of making a gift to her. There is a stark contrast between the evidence of the parties on this issue. Evidence of Mr Sharkey’s wealth at that time could be significant in assisting the court to make a judgment concerning the probability that Mr Sharkey made the gift, as Ms Nissi has claimed. Everything else being equal, the more wealthy a person is, the more likely that person may be to make a gift to the object of that person’s love, more particularly when that gift has a substantial value.
Number 98 was purchased less than two years after Mr Sharkey received his share of the proceeds of sale of the Stayz business. He has not led evidence to establish that the wealth generated by that sale had substantially been dissipated by the time of the purchase of the property. It was within Mr Sharkey’s power to lead that evidence, if he had wished to put an argument that his financial position was such that it was unlikely that he would have made a gift of the value of Number 98 to Ms Nissi at that time. As I understand the submissions that have been made on his behalf, Mr Sharkey does not make that submission.
Accordingly, I should approach the task of deciding whether or not Mr Sharkey told Ms Nissi that he was putting the title to Number 98 in her name, as a gift, so that it would be her home, on the basis that at that time Mr Sharkey, at the age of about 25, had been exceptionally successful in business, and still retained a substantial portion of the $6.35 million that he received from the sale of Stayz.

Decision to purchase Number 98

According to Mr Sharkey, in about October 2007, he decided to purchase Number 98, which was the property immediately next door to Number 96, in which the couple were living. He said that he did so because he had lost about $200,000 through various share investments, because of the GFC, and he believed that he could not go wrong by investing in real estate, particularly as the value of properties in the Camperdown area was increasing. He said that the purchase of property was a secure investment, compared to purchasing shares which, at the time, had caused him to lose a lot of money.

Strength of the relationship

Mr Sharkey said that, by this stage, his relationship with Ms Nissi was not good. They were fighting a lot, and not spending as much time together, as they previously had done. His attitude to Ms Nissi began to change, and he began to question whether it was the right decision for him to marry her. Although his relationship with Ms Nissi was on troubled and insecure, and he did not trust her to the extent that he had early on in the relationship, he still had not made the decision to break up with her. In the back of his mind, he was still hoping that the relationship would work out.
Ms Nissi’s response to this evidence was that, if that was what Mr Sharkey actually believed at the time, he did not disclose it to Ms Nissi.
In an email to Ms Nissi dated 19 October 2007, Mr Sharkey made a number of comments concerning an article that Ms Nissi was preparing. Leaving out the comments concerning the article, Mr Sharkey said:

Hi Bubs,
I’ve come up with some research for you for your article. The best idea I could come up with is the cosmetic surgery one, it just seems easier because…
Love Chris.
P.S. You have a beautiful face, I was admiring your sexy lips this morning. Thanks for the cuddles, you made me feel better after my whole ATM-robbery dream!

One affectionate communication of this nature does not, of course, disprove the assertion that the relationship was unstable at the time. However, it would at least have encouraged Ms Nissi in her belief that the relationship remained strong.
As I have recorded above, Mr Sharkey gave evidence that, at the time of the purchase of Number 98, he did not trust Ms Nissi to the extent that he had early on in the relationship. After this evidence was given, it became apparent that there was a forensic issue in the proceedings as to whether or not both parties had been unfaithful to the other. Mr Sharkey admitted in evidence that Ms Nissi had caught him cheating on her (T 47.40). He denied that one of the reasons why he told Ms Nissi at the time of the inspection of Number 98 that the house would be hers was that he felt guilty about that matter.
In cross-examination Ms Nissi denied that she had not been faithful to Mr Sharkey during their relationship (T 228.35). Nonetheless, Mr Sharkey put a submission that they had both been unfaithful (plaintiff’s closing submissions part 71). That submission is unfortunate and entirely unsupported by the evidence in so far as it relates to Ms Nissi.
Mr Sharkey additionally submitted that Ms Nissi did not deny in her affidavit the evidence given by Mr Sharkey in his primary affidavit, where he described their relationship at the time as “… not good. We were fighting a lot and not spending as much time together as we had previously done”. He suggested that Ms Nissi’s denial in cross-examination did not reflect well on her credit.
This led to a submission by Mr Sharkey that such a state of mind on his part was inconsistent with an intention to wholly divest himself of substantial assets in favour of Ms Nissi.
There is force in the proposition that, if one party to a relationship believes, that the relationship will not last, the first party will be unlikely to make a substantial gift to the other. However, if one party to the relationship is seriously doubtful that it will continue the last thing the party would rationally do is to put a valuable property solely into the name of the other party, when relying upon a belief that the first party would retain ownership because of the payment of the price.

Discovery that Number 98 was on the market

Mr Sharkey gave evidence of a discussion with Ms Nissi that took place shortly after he decided to buy Number 98:

I said: The house next door is on the market for sale. Given the state of the share market at the moment, I think it’ll be a good investment for me to sell my shares and buy the property. I think property values in this area will rise, as there seems to be a shift away from students to young families.
She said: True. I’ve noticed similar things in this area.

According to Mr Sharkey, he discovered that Number 98 was on the market by himself; he decided to buy it so that he could reduce his exposure to the share market; he informed Ms Nissi of his proposal; and she nonchalantly observed that she had noticed the same movements in the real estate market as had Mr Sharkey.
Mr Sharkey was cross-examined about this conversation (T55.45):

Q. You say she says, "True, I've noticed similar things in this area". The impression your evidence tends to give his Honour, if it's to be accepted, is that this was an almost an idle chat over the paper at the breakfast table about a potential investment you might make. That's the impression that this evidence seems to give, would you agree?
A. Yes.
Q. At least as far as Ms Nissi was concerned, it wasn't a matter of great importance to her?
A. Correct.
Q. You just happened to mention to the person you were living with that you might switch your investment portfolio around?
A. Yes.
Q. That's all she took from it?
A. Yes.
Q. There was no excitement on her part whatsoever about buying the house next door?
A. I think it was a matter of interest but I wouldn't say excitement.
Q. Minor interest?
A. Yeah.

It is hard to accept that any woman in Ms Nissi’s position would react so dispassionately to the proposal that the more attractive property next door would be purchased for her to live in, even if there was no suggestion that she would personally acquire any interest in the new property. I should add that the position would be no different if it was the woman proposing to purchase the house, and the man was learning of the proposal. The reaction of almost all persons to the prospect of new and better accommodation being what it is, Mr Sharkey’s version of events is hardly credible. It is an example of his propensity to go too far in his portrayal of events in a way intended to support his case.
Another stark contrast in the evidence between the two parties arose on this issue. Ms Nissi said that, on around 16 October 2007, Mr Sharkey and she were walking home from a late dinner and saw a huge auction sign outside Number 98. They had discussions that same night, and the following morning they decided to inspect the property on the weekend. Ms Nissi denies that the conversation occurred as deposed to by Mr Sharkey.

Mr Sharkey’s preparation for auction

On Monday 22 October 2007, Mr Sharkey sent an email to Mr Young to inform him: “It’s that time of year again when I decide to buy a property a few days before the auction”. Mr Sharkey asked for Mr Young’s legal assistance, and advised that he had arranged for the finance.

Mr Sharkey gave evidence that, on 23 October 2007, he had a telephone conversation with Mr Gurney, his accountant. Mr Gurney said:

With the auction happening so soon, I doubt you can sell your shares quick enough to have the cash in time for the auction. I’m also concerned about the CGT implications of selling the Trust’s investments. Because I trust you, my wife and I can provide you with a temporary loan so that you can pay for the deposit. Let’s meet to talk about this more as soon as possible.

Mr Sharkey’s evidence was that, in about November 2007, he took steps to have his Trust sell shares for approximately $900,000, to partly fund the purchase of Number 98, and also to cover some of the costs of his business.
Mr Sharkey borrowed the deposit money from Mr Gurney’s wife, and repaid her from his own funds some time afterwards.
On 23 October 2007, Mr Sharkey met with Mr Gurney and Mr Sharkey’s financial planner, Mr Andrew Brisbane. He said in his affidavit that, at that time, he was reluctant to register Ms Nissi’s name on the title to another property. He repeated his evidence that the relationship with Ms Nissi was much less stable than in previous years, and he did not want there to be a problem if the relationship broke down. He specifically said that he had not had any prior discussion with Ms Nissi about registering the property in her name, and she had not asked him to do that.
Mr Sharkey’s evidence in his primary affidavit, concerning the issue of asset protection, in his meeting with Mr Gurney and Mr Brisbane on 23 October 2007 was:

David said:   Asset protection is what I’m concerned about. So far we’ve helped you reduce your direct asset ownership. This protects you with your start-up business. Andrew and I believe that you shouldn’t buy the property in your name. Whilst there are family planning risks you should consider if you’re going to marry Donya, we believe you should buy the property in Donya’s name or in the Trust. If the property is not registered in your name, it will protect the property against creditors if they come after you personally.
I said:   Okay. Tell me more about purchasing the property in Donya’s name.
David said:   Well, you could give Donya an interest-free loan and take a charge to secure repayment of the loan. Putting the property in her name will give you tax concessions and the charge secures your interest in the property if you break up. As you’re paying the whole purchase price, you will own the property. It doesn’t matter that her name is registered on the title.
I said:      Okay. What about buying it through the Trust?
David said:   Whilst you would have the advantage of the property not being in your name, the Trust buying the property is expensive. You will also not be entitled to any GST or land tax exemptions.
I said:   I’d prefer to buy the property through the Trust but it sounds like I should put the property in Donya’s name. I’ll have to think about it. Can you come to the auction with me on Saturday?
David said:   Sure, I’m free on Saturday. I’ll come with you.

It must be noted that, on Mr Sharkey’s recollection of this conversation, Mr Gurney’s advice that the property should be put in the name of Ms Nissi was predicated on the express assumption that Mr Sharkey intended to marry her. However, Mr Sharkey’s evidence was that, by this stage, the relationship was unstable, and Mr Sharkey had doubts about whether the couple would get married. It must also be noted that Mr Sharkey apparently allowed Mr Gurney to give his advice under this mistaken assumption, and did not disclose his reservations. Whilst those reservations may have been private to Mr Sharkey, he could easily have told his adviser, Mr Gurney, of the real position in an appropriate way, to ensure that Mr Gurney did not give advice on a false premise.
A further matter to note is that Mr Gurney did not simply advise Mr Sharkey to put the title to the property in Ms Nissi’s name. He advised Mr Sharkey, as one possible approach, to give Ms Nissi an interest-free loan and take a charge to secure repayment of the loan. That was a material component of the proposal, if indeed Mr Sharkey wanted to ensure that the ultimate legal position would be that Ms Nissi was the sole owner of the property, but Mr Sharkey, through the Trust, would enjoy the effective ownership.
Mr Sharkey attributed to Mr Gurney the statement: “As you’re paying the whole purchase price, you will own the property. It doesn’t matter that her name is registered on the title”.
As will be seen, Mr Gurney did not corroborate this aspect of Mr Sharkey’s evidence, although Mr Gurney’s evidence was otherwise substantially consistent with that given by Mr Sharkey.
Mr Sharkey gave the following evidence, in cross-examination, concerning his conference with Mr Gurney and Mr Brisbane (T 49.45):

Q. Mr Gurney, I apologise in relation to this property, he mentioned to you that there were risks about putting the house in Donya's name; correct?
A. Yes, he said that there were family planning risks, yes.
Q. Did you understand what he meant by that?
A. I believed it to be the de facto laws.
Q. Exactly what was your understanding of how this all worked? What was he warning you about the risks?
A. I guess he was indirectly asking me if things were okay.
Q. That was obvious to you, Mr Sharkey, because if you put the property in Ms Nissi's name and your relationship broke down, you would have a problem that she was the owner of the property?
A. I would have a problem that I would have to enforce the ownership or somehow fight for the property, yes.
Q. Why would you have to fight for the property?
A. Because it's registered in her name.
…
Q. Did you discuss with him further what he meant by family law risks, or did you understand what he told you at the time?
A. I don't remember.
Q. If you had had any uncertainty as to what he meant at the time would you have asked him?
A. It depends on the situation. I can't predict what I would have done. I don't know.
Q. Mr Gurney was your adviser; you went to get advice from him?
A. But I also trusted him, so I don't I can't answer that question.
…
Q. Did you tell Mr Gurney that you were thinking about breaking up with Ms Nissi at that stage?
A. No, I didn't.
Q. Did you think it was perhaps something worth raising with Mr Gurney, given your concerns?
A. Yes, I did, but I was sort of scared to face that reality.
Q. Just explain that. You were scared to face that reality that you didn't ask Mr Gurney about what happens if I do split up with her?
A. Exactly. I didn't.
Q. I don't understand that. Could you explain it to me?
A. I'm saying that I guess I didn't know what was going to happen and I just thought it would be easier to just proceed.

Mr Sharkey’s evidence is difficult to fathom. His evidence was that his relationship with Ms Nissi was unstable by this stage, and he had doubts about whether he could trust her. In fact he had been unfaithful himself. It appears that he entertained doubts about Ms Nissi. Yet it must have been clear to Mr Sharkey that Mr Gurney was only entertaining the possibility that the title to Number 98 would be put in Ms Nissi’s name on the basis that Mr Sharkey was confident that the marriage would go ahead. That is plain from what Mr Gurney said. It is also plain as a matter of common sense. I do not find Mr Sharkey’s response, that his failure to inform Mr Gurney of his true belief as to the prospects of the marriage going ahead, because he “was sort of scared to face that reality”, to be persuasive.

Mr Gurney’s evidence

Mr David Bryan Gurney gave evidence in Mr Sharkey’s case. Mr Gurney is a chartered accountant, who has provided financial advice to Mr Sharkey in respect of his tax affairs since 2002. He has acted as the accountant and financial adviser to the Trust from about 2006.
Mr Gurney gave evidence that was relevant to two issues. He gave advice to Mr Sharkey concerning the purchase of Number 98 in the days before the purchase, and he also attended the auction on 27 October 2007.
Mr Gurney said that, from the time that he started working for Mr Sharkey, he regularly advised Mr Sharkey in relation to the structure of asset ownership, that it was important that any director or person exposed to business risk keep their asset level to a minimum where possible. He said that he gave this advice because, in his experience, many start-up businesses fail, and that can be extremely expensive for directors with assets in their own names.
Mr Sharkey telephoned Mr Gurney on about 23 October 2007, and told him that he was thinking of buying Number 98 at an auction the next Saturday. Mr Sharkey wanted advice about funding. Mr Gurney responded that it was extremely unlikely that funding could be obtained before the auction, and that it was not likely that selling shares would result in funds being cleared by Saturday. He said there were tax implications in selling shares. He advised that Mr Sharkey should have a conference with himself and Mr Andrew Brisbane, who was a financial planner, who had provided investment advice to Mr Sharkey and the Trust, and managed the listed investments.
The conference took place on 23 October 2007. Mr Gurney told Mr Sharkey that his two main concerns were asset protection, and funding the deposit. He said: “We have reduced your direct asset ownership to protect you.” Mr Brisbane said that there would be a capital gains tax liability in selling shares. The following conversation occurred on the issue of asset protection:

I said:   We believe that you shouldn’t buy the property in your name due to the asset protection risks. There are family planning risks you also need to consider before you make the decision about ownership, particularly because you have been with Donya for quite some time. As a result, we think you should buy the property in either the Trust or in Donya’s name – not in your name. As Donya isn’t working and not taking any business risk, if the property became your home it would be secure from your business risk and you would also save yourself from having to pay land tax and capital gains tax.
Chris said:   That sounds great. What if I buy the house in Donya’s name?
I said:   Because Donya isn’t working, it might be hard for her to get any sort of finance if you buy the property in her name. One suggestion is that the trust provides a loan to her at nil interest and takes a charge over the property. This has the benefit of providing the tax concessions and maintaining the current asset protection. As the trust will be paying for the whole of the purchase of the property, it will retain the wealth despite not being recorded as the registered proprietor. There is also the opportunity that should future borrowings be obtained via this trust, if applied to replace the investment sold, the interest would be tax-deductible.
Chris said:   Do you think buying the property under the Trust is the better option?
I said:   No. The Trust buying the property will be very costly, despite the advantage that the property is not in your name, you would miss out on capital gains tax main residence exemption and the land tax free threshold. The holding costs would increase by more than $5000 per annum and net proceeds from sale after tax would be diminished. In my opinion and subject to family planning risks, purchasing the property in Donya’s name is the most cost-effective and prudent form of asset protection for you.
Chris said:   From what you say, it seems that my best option is for me to buy the property in Donya’s name. But how can I get the funds out of the Trust or a loan for the deposit?

Mr Gurney prepared a file note, which materially said:

Borrow from Trust with 0% interest. To consider charge over house. Consider buying in Donya’s name for asset protection.

Mr Gurney apparently did not recall advising Mr Sharkey, that if he paid the whole purchase price, he would own the property, and it would not matter that her name was registered on the title. An accountant would ordinarily be expected to take care before giving that legal advice.
In cross-examination, Mr Gurney gave the following evidence on the issue of how the proposal that Mr Sharkey would put the title to Number 98 solely in the name of Ms Nissi would protect the asset from creditors (T 159.45):

Q. This is just the point I'm trying to grapple with, with the advice that Mr Sharkey says he received. If Mr Sharkey were to say, yes, the property's in Donya's name but I remain the true and beneficial owner of the property, if that was the arrangement he reached with Ms Nissi, that wouldn't protect him from his predators, as you call them, would it?
A. I believe it would. There's the fact that the asset is isolated in a different name. The initial position of a creditor looking to sue Chris would be to look at what assets he's got and that would not come up on the radar.
Q. Chris would have to say to his creditors "I don't have a house and I don't have any interest in the house", wouldn't he?
A. That's right.
Q. If he was interrogated by his trustee in bankruptcy he'd have to say the same thing?
A. Correct.
Q. He certainly couldn't say to his bankruptcy trustee "There is a house, it's in my wife's name but it's actually my house and you can't touch it", could he?
A. Well he could say that.
Q. But he'd lose his house?
A. That's right.
Q. There are two ways that this could be asset protection. One is and I'm sure you're not suggesting it, is just an outright fraud on creditors to say, "The house belongs to my wife, it's in her name. I have no interest in it" and some side arrangement that his wife, maybe a little letter in the drawer of his desk to say, "You record that I own the property". That would be just an outright fraud on his creditors or he puts it in his wife's name and trusts that the relationship is going to last?
A. Correct.
Q. You didn't advise Mr Sharkey to do anything fraudulent did you?
A. No.

Mr Gurney said in re-examination on this issue (T 163.10):

Q. Mr Gurney, you were asked questions about the concept of asset protection and you were asked how putting the property in Donya's name could amount to asset protection. One of the answers that you gave is that if a creditor was to do a property search they might not find the property in Chris's name. How did you view that aspect as amounting to asset protection?
A. If we had a creditor that was reasonably smart about what they were doing they would see if it was worthwhile to take an action against someone. If there's no assets to ensue one would expect that they would back off.
Q. Was that part of your thinking in relation to asset protection for Chris?
A. Yes, it is.

Mr Gurney’s evidence substantially supported that given by Mr Sharkey on the issue of how it was expected that putting the title to Number 98 solely in the name of Ms Nissi would provide protection to Mr Sharkey from his creditors. However, Mr Gurney gave no explanation as to why his suggestion that the purchase price be provided by the Trust by way of a loan to Ms Nissi, supported by a mortgage over the property, was not pursued. At least superficially, that arrangement would have improved the prospect that any future creditors, who were stalking Mr Sharkey, would not identify Number 98 as being Mr Sharkey’s property. Mr Sharkey might enjoy the advantage, assuming he married Ms Nissi, of living in a property that would not have disadvantageous capital gains tax and land tax consequences. Furthermore, Mr Sharkey could exercise a substantial measure of control over the title to the property through the debt and mortgage given to the Trust.
It is notable that Mr Sharkey and his advisers did not pursue that aspect of the proposal or any alternative structure that would have given Mr Sharkey some real control over the title to the property.
Placing the title to the property solely in the name of Ms Nissi may have had the potential benefit of shielding Mr Sharkey’s ownership of Number 98 from the prying eyes of creditors. However, that would provide a very uncertain benefit, if Mr Sharkey fell into significant debt by reason of the failure of his business. It would be unlikely to protect him in the event of his bankruptcy, because of the laws that oblige bankrupts to disclose their property. That is at least so, if Mr Sharkey intended to be honest. If Mr Sharkey’s debts to his creditors were sufficiently substantial, they would be likely to sue him on his debts, even in the face of uncertainty as to his assets, and even if they only saw proceedings to obtain a judgment on their debts as an avenue to securing Mr Sharkey’s bankruptcy.
Just as it has been an easy matter for Mr Sharkey to prove in the present case that he made all of the payments necessary to purchase Number 98, it would not ultimately have been difficult for his creditors, or trustee in bankruptcy, to do the same. The fact that Mr Sharkey paid the whole of the purchase price, and placed the title solely in the name of Ms Nissi, was obvious, provided only that creditors would be sufficiently motivated to pursue recovery against Mr Sharkey.
Mr Gurney must at least have believed that Mr Sharkey would marry Ms Nissi. That distinguishes his position from that of Mr Sharkey. Although Mr Gurney did not put it this way, if the marriage had taken place, the issue of who owned Number 96 would have been governed by the principles of family law, rather than solely by the equitable principles that give rise to resulting trusts. Whatever subjective intention Mr Sharkey may have had as to what he would say to his creditors, placing the title to the property in Ms Nissi’s name would make some commercial common sense, provided however that the marriage took place. It was Mr Sharkey who undermined the adequacy of Mr Gurney’s advice, by not disclosing his doubts as to whether the marriage would go ahead.

Discussions between Mr Sharkey and Ms Nissi

Mr Sharkey said that, after he had spoken with Mr Gurney and Mr Brisbane, he made the following statement to Ms Nissi: “I think I can spend up to $900,000 for the property next door. I think I’m going to proceed with it”. He further said that, during this conversation, he did not discuss with Ms Nissi in whose name the property was to be purchased, as he was still intending to purchase the property only in his name, and he did not want to involve himself in any argument with her about it.
Ms Nissi’s evidence was diametrically opposed to that given by Mr Sharkey on this subject. She said that, during the couple’s inspection of Number 98, Mr Sharkey said: “Why don’t I get this house for you?” Following the inspection, when the couple returned to their home next door at Number 96, Mr Sharkey said:

I will put this house completely in your name. You’ve put up with so much. I want to get this house for you to show my appreciation.
I want to buy this house for you. If anything goes wrong with my business, they won’t be able to touch this house because it will be your property… It will be yours.

Although, according to Ms Nissi, Mr Sharkey did not use the word “gift”, saying that the property “will be yours” has the same meaning.

The auction

According to Mr Sharkey’s principal affidavit, Mr Gurney, his wife Cheryl and their son, Bryan, attended the auction with Ms Nissi and himself at Number 98.
Mr Sharkey said that he registered himself as a bidder. He personally made at least four bids, the highest of which was $886,000. He did not refer to Ms Nissi at any stage throughout the auction, or ask her before he made any bid.
After the final bid was made by Mr Sharkey, he had a conversation with Mr Gurney, with Ms Nissi standing next to him, as follows:

He said: You should put this contract in Donya’s name to protect the property in case you’re sued through your business.
I said: Okay. That makes sense.

Mr Sharkey said that he made the decision to put the contract in Ms Nissi’s name on the spot at the auction. Prior to making that decision on the day of the auction he had not spoken to Ms Nissi about putting her name on the sale contract or registering the property in her name, nor had she asked him to do that.

The mortgages over Numbers 96 and 98

Ms Nissi readily accepted that, shortly after the transfer of the title to Number 98 into her name, and notwithstanding that she had been told by Mr Sharkey that he had bought the property for her, she signed at his request the documents necessary to enable the Trust to borrow a substantial amount of money on the security of both properties.
That fact obviously has a significant bearing on the true nature of the couple’s understanding as to the ownership of both properties.
Mr Sharkey’s contention is that Ms Nissi’s conduct simply reflected a recognition by her that she had agreed to hold her interests in both of the properties on trust for him; so that it followed that she was obliged to act in accordance with his directions.
That contention does not survive my finding, in respect of the ownership of Number 96 that, whatever the true legal position may have been, Ms Nissi had a genuine and reasonable belief that she was truly a half owner of the property.
Separately, it does not survive my finding that, as a result of the statements made by Mr Sharkey, and the fact that he put the title to the property in her name, Ms Nissi genuinely and reasonably believed that Number 98 was to be her property.
Why then did Ms Nissi readily cooperate in both properties being mortgaged for the benefit of the Trust? I accept the evidence given by Ms Nissi that, at that time, she regarded herself as being part of a loving and long-term relationship, so that, just as Mr Sharkey had been generous with her, it was incumbent upon her to be generous with her property for the mutual benefit of the couple.
That finding may introduce subtleties into the question of the exact nature of Ms Nissi’s belief that she was the owner of Number 98. I have concluded that she genuinely believed that she was the owner, but that ownership was subject to the qualification that she was as much obliged to apply her property to the common good, as was Mr Sharkey.

18 March 2011 agreement

I prefer Ms Nissi’s evidence of the manner in which, in February 2011, she and Mr Sharkey sat down to reach a mutual agreement concerning the future of the two properties. I do not accept that the agreement was reached as a result of a rancorous exchange in which Ms Nissi bullied Mr Sharkey into entering into the 18 March 2011 agreement.
There is no objective evidence of the meeting that took place in February, save to some extent for the terms of the 18 March 2011 email that Ms Nissi sent to Mr Sharkey. The terms of that email do not, however, rule out the possibility that Ms Nissi varied what the parties had earlier agreed to, although the fact that Mr Sharkey prepared the agreement in the terms that he did, without overt complaint, suggests that Ms Nissi’s email did not depart greatly from what had earlier been agreed.
I have concluded that it is appropriate to accept Ms Nissi’s version, and reject Mr Sharkey’s, because I have found his evidence concerning the manner in which the 18 March 2011 agreement was prepared to be incredible. Mr Sharkey’s evidence about what was agreed in February suggests that the terms of the agreement were quite different to those contained in the 18 March 2011 agreement. Yet Mr Sharkey insisted that he set about drafting the agreement immediately after the meeting, and that he somehow anticipated terms that Ms Nissi would insist upon, that were entirely in her interest, and were not included in the terms that were agreed in February. The 18 March 2011 agreement is clearly rudimentary, and I find that it was prepared by Mr Sharkey in response to Ms Nissi’s 18 March 2011 email.
A further reason to prefer Ms Nissi’s version of the circumstances in which the 18 March 2011 agreement was entered into, arises out of a consideration of Mr Sharkey’s claims as to how he was overborne. On Mr Sharkey’s version, after his confrontation with Ms Nissi, he had three weeks or so to get advice concerning his legal position. He did nothing but meekly prepare and sign the agreement. Faced with a choice between whether Mr Sharkey did nothing, because there was nothing to do, and that he did nothing, because he was desperate, I would prefer the former. I simply do not accept, from my assessment of Mr Sharkey’s character, and the manner in which he gave his evidence in cross-examination, that if he genuinely thought he was the only true owner of both properties, he would not at the least have sought advice from the sources that he agreed in cross-examination were readily available to him.
Mr Sharkey said that he was in pressing need of funds to invest in his business in California, and for that purpose he needed to sell Number 96 as soon as possible. He was cross-examined on behalf of Ms Nissi on a basis that accepted that he had a real need to raise money. However, as I have observed above, Mr Sharkey did not lead evidence to show what his overall financial position was. Plainly, even a person with substantial assets may find from time to time that those assets are tied up, and the person can be stretched for funds. I do not accept that Mr Sharkey has shown that his need for funds was truly desperate; in the sense that his position was that he was overborne and compelled to accept whatever conditions Ms Nissi imposed on her agreement to sign the documents necessary to sell Number 96. Rather, I infer from the terms of the 29 December 2010 email that Mr Sharkey sent to his brothers, that Mr Sharkey had made a decision to go it alone with the financing of some important aspect of the business, rather than to deal with other parties who had been involved to that date. That may well have created a real need for Mr Sharkey to raise funds from the sale of an asset, but I do not accept that the need was so great that the problem could not be resolved by other means.
I have not ignored the evidence Ms Nissi gave in cross-examination, that she appreciated that she was in a strong bargaining position, and took advantage of that position to gain the best outcome for herself that she could in the settlement of the property arrangements, following the end of the relationship. However, I find that she did not unconscionably take advantage of some abject weakness that she perceived Mr Sharkey to suffer from.
I find that, albeit in an inchoate way, during the course of the negotiations and on 18 March 2011, Ms Nissi and Mr Sharkey both understood that their relationship had lasted for a period that was long enough to attract the operation of laws that governed property adjustments of de facto couples after the end of the relationship. In cross-examination, Mr Sharkey spoke of “family planning risks” (T 32.24). They did not have any detailed understanding of what those laws were, or how they would operate, but they believed that each party probably had a right to go to court to seek relief to ensure that the property that had been acquired during the currency of the relationship was divided appropriately between them.
In signing the 18 March 2011 agreement, both parties understood that one consequence of their actions was to settle whatever claims each may have had against the other concerning the property that had been acquired, as a result of the laws that govern the distribution of property after the end of de facto relationships.

Consideration

The parties delivered a comprehensive agreed statement of the issues to the court shortly before the hearing began.
As a result of the findings of fact that I have set out above, the issues that need to be addressed for the purposes of determining the dispute between the parties can be dealt with in a relatively straightforward way, on the basis of uncontroversial principles of law.
It will not be necessary to determine all of the issues raised by the parties, as the resolution of a number of the principal issues leads others to fall away.
It will be convenient to address the issues in an order that is generally chronological.

Was there an express trust for Number 96?

The first issue is whether, at the time Number 96 was purchased, Ms Nissi expressly agreed that she would hold her interest in the property on trust for Mr Sharkey. As stated above, I have found as a fact that she did not.

Was there a resulting trust for Number 96?

The second issue is whether, by reason of the circumstances in which Number 96 was purchased, and paid for, Ms Nissi held her interest in the property on a resulting trust for Mr Sharkey.
Ms Nissi did not contest an affirmative answer to this question in any real way. Indeed, when cross-examined about why she did not give comprehensive evidence about the circumstances in which Number 96 was acquired, she defended her position by saying that she understood that the case was really only about Number 98. Be that as it may, at the time the contract to purchase Number 96 was entered into in the joint names of Ms Nissi and Mr Sharkey, both understood that Mr Sharkey would, in due course, pay all of the costs of purchase, and all mortgage repayments. The only qualification to that proposal for payment of the acquisition price for Number 96 was an improbable contingency that, at some time in the future Ms Nissi might be called upon to contribute to mortgage repayments. I am satisfied that, in these circumstances, a resulting trust arose in respect of Ms Nissi’s interest in Number 96 in favour of Mr Sharkey, upon the principle in Calverley v Green.
Ms Nissi, rightly, did not submit that a presumption of advancement arose in her favour because of the existence of the de facto relationship: see Calverley v Green at 250, 260 and 268-9. She did submit in her written opening before the commencement of the hearing, that a presumption of advancement arose because the couple were engaged to be married, relying upon Moate v Moate [1948] 2 All ER 486. With respect, this submission ultimately appeared to be but faintly pressed.
While it is true that the couple were engaged at the time of the purchase of Number 96, I have found that in fact the property was not purchased in contemplation of marriage. At that time there was, in no real sense, an expectation that marriage would actually occur, and the property was not purchased for any reason that was connected with an impending marriage. As Wheeler J said in Bertei v Feher [2000] WASCA 165:

[38] Without positive evidence from either party pointing to a contemplation of marriage at the time of purchase of the property, and in the light of the respondent's evidence which points to a contrary conclusion, it seems to me that it was not open to his Honour to assume that because of the engagement in 1988, apparently entered into with no very definite idea of when or how a marriage might take place, the events of 1991 occurred "in contemplation of" marriage.

In any event, I am satisfied that the principles of law that govern purchases of properties that are in contemplation of marriage are as stated by Kennedy J (with whom Ipp J agreed) in Bertei v Feher:

[13] Although it was not pleaded, the learned trial Judge gave consideration to there having been a presumption of advancement, on the basis that the transfer of the Duncraig house into the names of both parties was made in contemplation of marriage. Jenkins J in Moate v Moate [1948] 2 All ER 486, at 487, indicated that the presumption was that the prospective husband in such cases intended there to be provision by way of gift to his prospective wife, provided that the marriage was duly solemnised. In Wirth v Wirth (1956) 98 CLR 228, at 237 - 238, Dixon J described the transfer in that case as being made "so to speak in preparation for the marriage and on the footing that the transferee became the transferor's wife but in advance of her doing so". In each of those cases, the marriage was in fact solemnised. See also Ulrich v Ulrich (1968) 1 WLR 180, per Lord Denning MR at 45. In the South Australian case of Davies v Messner (1975) 12 SASR 333, Mitchell J treated the transaction as a conditional gift, this being the manner in which the case had been pleaded. The same approach was adopted in Kais v Turvey (1994) 11 WAR 357. See also the judgment of McPherson SPJ in Jenkins v Wynen [1992] 1 Qd R 40, at 40 - 47.

See also the judgment of Wheeler J in that case at [30]; and Ikeuchi v Liu [2001] QSC 54 at [108], [109]. Compare Tayles v Davis [2009] VSCA 304 at [40].
As no marriage took place, reliance by Ms Nissi on any presumption of advancement based upon Number 96 being purchased in contemplation of marriage would not have sustained her beneficial interest in the property.
Ms Nissi had a genuine and reasonable expectation that she would enjoy joint beneficial ownership of Number 96, but the applicable legal principles lead to that expectation being disappointed.
Accordingly, the effect of the application of the relevant principles of Equity is that Ms Nissi held her joint interest in Number 96 on trust for Mr Sharkey.
It is important to remember, however, that the legal principles that were pertinent to the ownership of Number 96 were not limited to the principles of Equity. As I have said, both parties understood that their legal entitlement to properties purchased during the currency of their relationship was likely to be affected by laws governing the entitlement to property of de facto couples. There is no evidence that they had any clear or detailed understanding of what those legal principles were. I will return to this issue when I consider Mr Sharkey’s submissions concerning the legal effectiveness of the 18 March 2011 agreement.

Was there an express trust for Number 98?

The third issue is whether Ms Nissi expressly agreed to hold the title to Number 98 on trust for Mr Sharkey. I have held as a matter of fact that she did not.

Was there a resulting trust for Number 98?

The fourth issue is whether, by reason of the circumstances in which Number 98 was purchased and the title put solely in the name of Ms Nissi, she held the title to that property on a resulting trust for Mr Sharkey.
A presumption of advancement does not arise in relation to the purchase of Number 98, out of the circumstance that the parties were engaged and were living in a de facto relationship, for essentially the same reasons that applied to the purchase of Number 96. I have found that the property was not purchased in contemplation of marriage.
It was always the intention of the parties that Mr Sharkey would pay the whole of the purchase price for Number 98, notwithstanding that it was proposed that the title to the property would be put in the sole name of Ms Nissi.
Accordingly, the presumption arose that Ms Nissi would hold the title to Number 98 on a resulting trust for Mr Sharkey; and that will be the legal result unless Ms Nissi carries the burden of proving that it was Mr Sharkey’s intention at the time of the purchase that she would not hold the property on trust for him.
In the circumstances of this case, the question arises as to the nature of the intention on Mr Sharkey’s part that must be proved by Ms Nissi, before the court can find that the presumption of a resulting trust has been rebutted.
I have already set out above an extract from the judgment of Mason P in Nielsen v Letch (No 2) at [28], where his Honour referred to the citation by Mason and Brennan JJ (as their Honours then were) in Calverley v Green (at 261), with approval, of Lord Diplock’s statement in Gissing v Gissing [1971] AC 886 at 906 that “…the relevant intention of each party is the intention which was reasonably understood by the other to be manifested by that other party’s words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party”.
In Anderson v McPherson (No 2) [2012] WASC 19; (2012) 8 ASTLR 321 Edelman J said:

[155] The presumption of resulting trust can be rebutted by evidence which shows that the intention of Bruce and Carol at the time of the purchase of the Anstey Road property was that Troy and Stephannie would be entitled to the use and enjoyment of their legal title for their own benefit: Calverley v Green (251) (Gibbs CJ), (269) (Deane J).
[156] The references to “intention” in the paragraph above, and generally in this judgment, are references to objective, or manifest, intention. As I have explained at [98], the intention is not a subjective, uncommunicated intention but it “is to be inferred from what the parties do or say”: Calverley v Green (261) (Mason & Brennan JJ), (270) (Deane J).

Further, in Ryan v Ryan [2012] NSWSC 636 Ward J (as her Honour then was) said:

75] As to the possibility in the present case that the presumption of resulting trust might be rebutted by evidence as to the objective intentions of the parties at the time of the acquisition of the property, in Calverley v Green, Deane J noted that “[r]egardless of whether the circumstances are such as to bring the case into one of the categories of advancement, evidence of the relationship — both legal and factual — between the parties will always be admissible” and went on to say:
More importantly, the subsequent judgment of Dixon CJ, McTiernan, Fullagar and Windeyer JJ in Martin (at 303–5) accepted, as correct, statements of Stuart VC and Cussen J to the effect that, in a case where the subjective intention of a person is relevant, the evidence of that person of his intention at the time of the purchase is admissible notwithstanding that “it must in every case be liable to observations which tend to diminish its weight” (see also Devoy v Devoy (1857) 3 Sm & G 403 at 406 ; 65 ER 713 at 714; Fowkes v Pascoe (1875) 10 Ch App 343 at 349).

[76] In Anderson, Edelman J noted at [98] that the intention to be discerned in a resulting trust is an objective, manifest intention (not an unexpressed subjective intention) referring to Calverley v Green; Byrnes v Kendle [2011] HCA 26 ; (2011) 243 CLR 253; and Re Vandervell’s Trusts (No 2) [1974] Ch 269 at 294.

These authorities establish that the relevant intention of the purchaser in Mr Sharkey’s position is “an objective, manifest intention (not an unexpressed subjective intention)”.
On that basis, the finding that I have made that Mr Sharkey made statements to Ms Nissi that reasonably and objectively caused her to believe that Mr Sharkey intended to make a gift of Number 98, when he caused the title to the property to be put solely in her name, is sufficient to permit Ms Nissi to carry the burden of rebutting the presumption that Mr Sharkey’s intention was that she would hold the title to the property on trust for him.
Accordingly, the investigation that I have made above concerning Mr Sharkey’s subjective, unexpressed intention is not material to the determination of who is entitled to the beneficial ownership of Number 98.
However, I would note in any event that I have not found on the evidence that Mr Sharkey had, at the time of the purchase, a single subjective intention that Ms Nissi would hold the title to the property on trust for him. The ascertainment of Mr Sharkey’s real intention is elusive. The best that I could do on the evidence is to conclude that he entertained, at the one time, a multifaceted and inconclusive view of how the title to Number 98 would be held, depending upon the development of presently unknown contingencies, and how future events could benefit Mr Sharkey’s own interests.
It remains to consider the consequences of Ms Nissi’s having agreed to mortgage Number 98 to provide a third-party security for borrowings made by the Trustee. The parties did not address any detailed submissions to this question. There was no evidence that the parties addressed their attention to the issue, or came to any agreement as to the consequences, at the time the mortgage was granted. The issue is not ultimately significant, because of the agreement that the parties entered into on 18 March 2011. However, the better view is that, as Ms Nissi agreed to encumber her title to Number 98 with a mortgage to benefit Mr Sharkey’s trust, she in effect permitted him to have the benefit of the existence of that security, in much the same circumstances and effect as Mr Sharkey had put the title to Number 98 into Ms Nissi’s sole name.

What was the effect of the 18 March 2011 agreement?

As I understand Mr Sharkey’s case concerning the effectiveness of the 18 March 2011 agreement, it was predicated upon the court’s finding; first, that Ms Nissi held her interests in Number 96 and Number 98 on resulting trusts for Mr Sharkey; and secondly, that Ms Nissi acted unconscionably in taking advantage of Mr Sharkey’s desperate financial circumstances in insisting upon his entering into the 18 March 2011 agreement on terms dictated by her.
As it has happened, I have found that Ms Nissi did hold her joint interest in Number 96 on a constructive trust for Mr Sharkey at the time of the 18 March 2011 agreement, but she was not a trustee of Number 98 for Mr Sharkey. Further, in negotiating the terms of the agreement she did no more than take legitimate advantage of the bargaining position that she found herself in, and did not take unconscionable advantage of any desperate financial position on Mr Sharkey’s part.
Mr Sharkey put the argument that it was a breach of Ms Nissi’s obligations, as trustee for Mr Sharkey of her interests in the two properties, for her to act in her interests, rather than in his, when she insisted upon him entering into the 18 March 2011 agreement. As Mr Sharkey was beneficially entitled to the entirety of the ownership of the two properties, the only legitimate course open to Ms Nissi was to comply with his request to transfer her interest in Number 96 to him; and if he asked, to do likewise in respect of the title to Number 98.
In putting this argument Mr Sharkey relied upon various authorities including dicta of Lord Goff and Lord Brown-Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669, at 690 and 705-706, where their Lordships made observations to the effect that, where a resulting trust over property is found to exist, at least from the time where the trustee “become[s] aware of the facts which give rise to a resulting trust”, the trustee may be bound by all of the duties of a trustee.
On the facts that I have found Ms Nissi was bound, because of the resulting trust over her interest in Number 96, to transfer that interest to Mr Sharkey upon request by him. She did so under the 18 March 2011 agreement. Because of the absence of a resulting trust over her interest in Number 98, she was entitled to retain ownership of that property; and that was the effect of the agreement.
As at 18 March 2011, the parties had been parties to a domestic relationship, within the meaning of the Property (Relationships) Act for longer than the 2 years required by s 17(1). They were resident within New South Wales for the whole of the period of the domestic relationship, as required by s 15. Although more than two years had expired after the relationship ceased in mid-2008, it was possible for the court to make an order under s 18(2) granting leave to the parties to apply to the court for an adjustment order under s 20.
The rights of the parties concerning the repayment of the outstanding mortgage on Number 98 were not solely to be determined by the application of the principles of trust law at that time. Ms Nissi had agreed to grant the mortgage, and that may have had the result that, as a matter of equitable principle, she had to suffer the consequences of its continued existence. I do not make any findings on that question, as it was not addressed by the parties.
I am satisfied, however, that the parties intended the 18 March 2011 agreement to take effect as a final settlement of their property rights, following the end of their de facto relationship, and the termination of their engagement. They were aware, albeit indefinitely, that they each probably had a right to institute proceedings to achieve an appropriate distribution of the properties between them, and they intended that the agreement would take effect as a final compromise of those rights. The prospects of success of any application that Ms Nissi may have been entitled to make are not material. Ms Nissi had rights that were compromised in the 18 March 2011 agreement.
In my view, the 18 March 2011 agreement was not vitiated by any breach of trust by Ms Nissi, or any unconscionable conduct on her part, arising out of her taking advantage of any desperate financial position of Mr Sharkey.
It is therefore not necessary for me to explore any further the validity of Mr Sharkey’s argument that, if it had been found by the court that Ms Nissi held her interests in both Number 96 and Number 98 on trust for Mr Sharkey, then it would necessarily follow that it would have been a breach of trust for her to require Mr Sharkey to enter into the 18 March 2011 agreement.
In the present case, Ms Nissi had a belief and expectation, on reasonable grounds, that she jointly owned Number 96 with Mr Sharkey. She also believed that a gift had been made to her of Number 98. The validity of her beliefs was genuinely and reasonably contestable. She also correctly understood that both she and Mr Sharkey had real, but unidentified, rights to commence proceedings to seek an appropriate distribution of the properties following the end of their relationship.
It seems to be inherent in the argument put by Mr Sharkey that if, at the end of a court case, it is found that one party held his or her interests in a property on trust for the other, that other party could secure an order setting aside an earlier compromise agreement between the parties of their respective rights over the relevant property, on the ground that the first party should not have negotiated to enter into the compromise, but should simply have agreed to give the property to the other party.
The essence of the argument appears to be that, at least from the time the party found to be a trustee knows the facts that give rise to the resulting trust, that party cannot compromise the dispute with the party ultimately found to be the beneficiary, because that ultimate finding carries with it the consequence that the trustee’s negotiation of the compromise agreement in his or her own interests was a breach of trust.
If it had been necessary for me to decide this case on the basis that Ms Nissi held her interest in Number 98 on a resulting trust for Mr Sharkey, as well as her interest in Number 96, it would have been necessary for me to decide the validity of this argument. I do not think it is valid, at least in the present case. The argument leaves out of account the fact that the rights of the parties to the two properties were not governed solely by equitable principles concerning the creation of resulting trusts. The equitable title to the property was subject to orders being made by the court under the Property (Relationships) Act, which might alter the ownership that would otherwise have applied. In my view, even if Ms Nissi had the obligations of a trustee to Mr Sharkey, because she held her interests in both properties on a resulting trust, that would not have prevented her from entering into a genuine settlement of the parties’ property rights in respect of the claim she was entitled to make under the statute.
Furthermore, in my view, the argument that a trustee under resulting trust cannot enter into a settlement agreement with his or her beneficiary of competing claims to the subject property, because that will necessarily involve a breach of trust, should not be accepted as being necessarily true in all cases.
As it is not necessary for me to decide this question, I will merely point to the following extract from the judgment of McPherson JA (with whom Davies JA and Mullins J agreed) in Port of Brisbane Corporation v ANZ Securities Ltd (No 2) [2002] QCA 158; [2003] 2 Qd R 661:

[31] … In terms of legal theory, this analysis may be justified by saying, like Lord Browne-Wilkinson in Westdeutsche Bank v. Islington London Borough Council [1996] A.C. 669, 705, that:
Since the equitable jurisdiction to enforce trusts depends upon the conscience of the holder of the legal interest being affected, he cannot be a trustee of the property if and so long as he is ignorant of the facts alleged to affect his conscience, i.e. until he is aware that he is intended to hold the property for the benefit of others in the case of an express or implied trust, or, in the case of a constructive trust, of the factors which are alleged to affect his conscience.

His Lordship’s formulation has been the target of a good deal of criticism by commentators for the reason that it is well settled by authority that a person may be subject to a resulting trust even though ignorant of its existence; for example, in the case of an infant, as in Re Vinogradoff [1935] W.N. 68. It is, however, reminiscent of what was said by Barwick C.J. in argument with counsel in Consul Development Pty Ltd v. D.P.C. Estates Pty Ltd (1975) 132 C.L.R. 373, 375:
To whom did Consul become bound in conscience? … How can a person be bound in conscience to someone whose existence is not known at the date of purchase?

[32] A preferable view is said to be that the resulting trust arises as soon as the property is transferred, but the transferee does not become subject to a fiduciary duty, or liable for breach of trust, until he is aware of his position: see Hanbury & Martin, Modern Equity (16th ed.; 2001) at 239. This rationalisation has the support of Sir Peter Millett, and, indeed, may have been originated by him in a paper published in (1998) 114 L.Q.R. 399, 405, where he said that:
“If the trustee is to be treated as a fiduciary, this must be because he has knowingly subjected himself to fiduciary obligations. These are not created by the separation of the legal and equitable titles, though they may be created by the same circumstances which give rise to the separation. But where the only relationship between the parties, who may not even know of each other’s existence, is that one holds the legal title and the other is the equitable owner, there can be no fiduciary relationship.”

A resulting trust, according to Sir Peter Millett, is not a fiduciary relation (114 L.Q.R. 399, 405). Whatever may be the correct resolution of these questions, it is in my opinion offensive to notions of equity and common sense to hold ANZ Securities liable for a supposed breach of trust as trustee for Port Corporation at a time when it had never undertaken and was not aware that any such obligation existed, but knew only that it had accepted appointment as express trustee for Windermere. As has been recognised by both Lord Browne-Wilkinson and Sir Peter Millett, the question is essentially one of semantics.

Difficult questions would have arisen if Ms Nissi held her interest in both properties on a resulting trust for Mr Sharkey, and the issue of the validity of the 18 March 2011 agreement had not been affected by the compromise of the parties’ claims under the Property (Relationships) Act. The public interest in parties being able to avoid litigation by settling disputes should, in appropriate cases, extend to disputes between alleged trustees and beneficiaries. Great care would have to be given to addressing the question of when a compromise by an alleged trustee is unconscionable because of the trustee’s knowledge, and the compromise is in the interests of the trustee rather than the beneficiary. The argument that a person who claims to be a beneficiary, but compromises his or her claim with the alleged trustee, is entitled to an order setting aside the compromise by proving in subsequent proceedings that, in fact, a trust existed, may require careful consideration in a case in which it arises, and may be contrary to principle.
Mr Sharkey put a submission that the 18 March 2011 agreement was not supported by consideration, but that argument also depended upon a finding that Ms Nissi held her interest in both properties on trust for Mr Sharkey at the time of the agreement.
In any event, in my view, the compromise that both parties understood that they were making concerning their rights to institute proceedings for something in the nature of a fair distribution of the properties between them constituted good consideration for the agreement.
Mr Sharkey also put a submission that, on the proper construction of the agreement, the use of the words “will not contest” the ownership of Number 98 were not words of transfer of a beneficial interest in that property. As I have found that Ms Nissi held Number 98 beneficially, she does not need to rely upon any transfer of the property effected by the agreement.
It will be convenient to repeat the terms of the 18 March 2013 agreement.

18/3/2011
Chris Sharkey agrees that he (or Sharkey Family Trust P/L) will not contest the ownership of 98 Denison Street Camperdown and will be responsible for the debt associated with that property. He will not take on any more debt to do with the property. This will be paid off and the loan extinguished by January 1, 2013
[Signed Mr Sharkey and witnessed]
Donya Nissi, agree to that the proceeds of the sale of 96 Denison Street Camperdown will go to Chris Sharkey.
[Signed Ms Nissi and witnessed]

The words: “Chris Sharkey agrees that he…will not contest the ownership of 98 Denison Street Camperdown” are straightforward. Mr Sharkey bound himself not to institute the proceedings that he has instituted to recover the title to that property.
Further, the words: “…and will be responsible for the debt associated with that property… This will be paid off and the loan extinguished by January 1 2013” also have a clear meaning. As part of the compromise, Mr Sharkey bound himself to pay all mortgage payments in respect of the mortgage over Number 98, and to extinguish the loan by 1 January 2013. While Mr Sharkey made some mortgage repayments, he failed to make others, and he failed to repay the balance of the debt by 1 January 2013. That was a breach of the 18 March 2011 agreement.

Conclusion and orders

It follows that Mr Sharkey has failed to establish the claim that he makes in his amended statement of claim, which must be dismissed.
Ms Nissi has succeeded on her amended cross claim, in so far as she seeks damages from Mr Sharkey for breach of the 18 March 2011 agreement, by reason of his failure to make a number of mortgage repayments, and his failure to repay, or procure the Trustee to repay, the mortgage over Number 98, by 1 January 2013.
The amount that Ms Nissi claimed as damages was the total of the $525,000 that she borrowed from the Commonwealth Bank of Australia to repay the mortgage debt; plus instalments of $22,090 that she paid to the Trustee’s mortgagee; plus an amount of $35,875.54, being legal fees and expenses as a result of the Mortgagee’s threat to exercise the power of sale over Number 98. The damages should include the sum of $525,000 referred to above. Mr Sharkey disputes the additional amounts of damages claimed by Ms Nissi. Ms Nissi failed in her attempt to tender into evidence certain evidence upon which she wished to rely to quantify part of her damages claim. The parties did not deal, in their final submissions, with the evidence concerning the quantification of the balance of Ms Nissi’s damages claim in sufficient detail to enable me conveniently to determine the appropriate amount (other than the amount paid for a discharge of the mortgage over Number 98). I propose in these circumstances to require the parties to address this issue in further submissions, if they cannot agree to the quantum of damages.
Ms Nissi also claimed interest on the amount of the damages, and it will be necessary for the parties to address the quantification of the interest that is payable.
Ms Nissi’s claim against the second cross defendant, the company that I have called the Trustee, fails.
In principle, Mr Sharkey should be ordered to pay Ms Nissi’s costs on the ordinary basis. However, I will invite further submissions from the parties on the issue of costs, including in respect of the position of the Trustee.
I make the following orders:

The plaintiff’s claim is dismissed.

The first cross defendant is ordered to pay damages to the cross claimant in an amount to be determined in accordance with order (5).

The first cross defendant is ordered to pay interest to the cross claimant in an amount to be determined in accordance with order (5).

The cross claim against the second cross defendant is dismissed.

The parties are directed to confer about the amount of damages and interest that the cross defendant should be ordered to pay to the cross claimant in accordance with these reasons for judgment (in particular par 406), and if agreement is not reached, the parties will be required to submit further submissions to the court at a time to be determined.

The parties are directed to confer about the orders for costs that should be made, and if agreement is not reached, the parties will be required to submit submissions to the court at a time to be determined.

The exhibits and any documents produced to the court on subpoena may be returned forthwith in accordance with the rules immediately upon the making of final orders in these proceedings.

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Decision last updated: 02 September 2015

Medium Neutral Citation:	Sharkey v Nissi [2015] NSWSC 1266
Hearing dates:	16 – 20 February 2015 and 9 March 2015
Date of orders:	02 September 2015
Decision date:	02 September 2015
Jurisdiction:	Equity
Before:	Robb J
Decision:	(1) The plaintiff’s claim is dismissed. (2) The first cross defendant is ordered to pay damages to the cross claimant in an amount to be determined in accordance with order (5). (3) The first cross defendant is ordered to pay interest to the cross claimant in an amount to be determined in accordance with order (5). (4) The cross claim against the second cross defendant is dismissed. (5) The parties are directed to confer about the amount of damages and interest that the cross defendant should be ordered to pay to the cross claimant in accordance with these reasons for judgment (in particular par 406), and if agreement is not reached, the parties will be required to submit further submissions to the court at a time to be determined. (6) The parties are directed to confer about the orders for costs that should be made, and if agreement is not reached, the parties will be required to submit submissions to the court at a time to be determined. (7) The exhibits and any documents produced to the court on subpoena may be returned forthwith in accordance with the rules immediately upon the making of final orders in these proceedings.
Catchwords:	EQUITY – trusts and trustees – plaintiff and defendant engaged to be married and purchased first property as joint tenants and joint mortgagors in 2005 – plaintiff paid deposit, stamp duty, conveyancing fees, all mortgage repayments and repaid mortgage debt – parties’ relationship ended – plaintiff claims defendant orally agreed to hold her interest in the property on trust for him – whether an express trust arose – no oral agreement as alleged – express trust not established – whether resulting trust arose in favour of plaintiff –whether presumption of advancement because first property purchased in contemplation of marriage – first property not purchased in contemplation of marriage – defendant did not rebut presumption of resulting trust – defendant held her joint interest in first property on trust for plaintiff EQUITY – trusts and trustees – plaintiff and defendant engaged to be married and plaintiff purchased second property in 2007 in sole name of defendant – purchase price paid by plaintiff – parties’ relationship ended – plaintiff claims defendant orally agreed to hold her interest in the property on trust for him – whether an express trust arose – no oral agreement as alleged – express trust not established – defendant claims that property was a gift – whether resulting trust arose in favour of plaintiff – whether presumption of advancement because second property purchased in contemplation of marriage – second property not purchased in contemplation of marriage – defendant bears onus of proving plaintiff’s intention at the time of purchase that she would hold beneficial ownership of the property– intention is the objective manifest intention of plaintiff – defendant successfully rebutted presumption of resulting trust – defendant not trustee of second property for plaintiff CONTRACTS – agreement entered into in 2011 that plaintiff relinquish all claims against second property, repay all debts associated with it, and that defendant transfer her joint interest in first property to plaintiff – plaintiff subsequently sold and received net proceeds of sale of first property – whether defendant acted in breach of trust in entering into agreement – whether defendant acted unconscionably in taking advantage of plaintiff’s desperate financial circumstances in entering into agreement – defendant held interest in first property but not second property on trust for plaintiff – defendant did not take illegitimate advantage of the situation or act unconscionably – effect of agreement was that defendant kept the property gifted to her and plaintiff obtained the interest which defendant held on trust for plaintiff – parties understood that both parties had rights to apply for orders for redistribution of property rights following the end of a de facto relationship pursuant to the Property (Relationships) Act 1984 (NSW) – 2011 agreement a compromise of parties’ rights under that Act – 2011 agreement not vitiated by any breach of trust or unconscionable conduct by the defendant – defendant provided consideration to support 2011 agreement – 2011 agreement enforceable – plaintiff obliged not to challenge defendant’s beneficial ownership of second property – plaintiff obliged to repay mortgage on second property
Legislation Cited:	Conveyancing Act 1919 (NSW) Property (Relationships) Act 1984 (NSW)
Cases Cited:	Anderson v McPherson (No 2) [2012] WASC 19; (2012) 8 ASTLR 321 Bertei v Feher [2000] WASCA 165 Brown v NSW Trustee and Guardian [2012] NSWCA 431; (2012) 10 ASTLR 164 Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Davies v The National Trustees Executors and Agency Co of Australasia Ltd [1912] VLR 397 Gissing v Gissing [1971] AC 886 Ikeuchi v Liu [2001] QSC 54; (2001) 160 FLR 94 Jones v Dunkel (1959) 101 CLR 298 Martin v Martin (1959) 110 CLR 297 Moate v Moate [1948] 2 All ER 486 Neilson v Letch (No 2) [2006] NSWCA 254 Port of Brisbane Corporation v ANZ Securities Ltd (No 2) [2002] QCA 158; [2003] 2 Qd R 661 Russell v Scott (1936) 55 CLR 440 Ryan v Ryan [2012] NSWSC 636 Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121 Sidmouth v Sidmouth (1840) 2 Beav 447; 48 ER 1254 Tayles v Davis [2009] VSCA 304; (2009) 3 ASTLR 222 Watson v Foxman (1995) 49 NSWLR 315 Weige v Cupton Pty Ltd [2012] NSWCA 414; (2012) 8 ASTLR 229 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669
Category:	Principal judgment
Parties:	Christopher James Sharkey (plaintiff/first cross defendant) Donya Mayahi-Nissi (defendant/cross claimant) Sharkey Family Trust Pty Ltd (ACN 122 270 286) (second cross defendant)
Representation:	Counsel: A Fernon (plaintiff/first cross defendant and second cross defendant) D L Cook (defendant/cross claimant) Solicitors: Swaabs (plaintiff/first cross defendant and second cross defendant) Eakin McCaffery Cox (defendant/cross claimant)
File Number(s):	2013/383023
Publication restriction:	None