Stavrianakos v The State of Western Australia - [2016] WASC 64

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: STAVRIANAKOS -v- THE STATE OF WESTERN AUSTRALIA [2016] WASC 64

CORAM: TOTTLE J

HEARD: 14-16 & 30 SEPTEMBER 2015 AND
ON THE PAPERS 7 & 14 OCTOBER 2015

DELIVERED : 3 MARCH 2016

FILE NO/S: CPCA 82 of 2009

MATTER :The Criminal Property Confiscation Act 2000
Freezing Notice No WAPFN090138

BETWEEN: ANDONIOS STAVRIANAKOS
First Plaintiff
SERENA HERMAN
Second Plaintiff
ANGIE CRAVEN
Third Plaintiff
LESLEY ANNE MAXFIELD
Fourth Plaintiff
NICK ANTHONY STAVRIANAKOS
Fifth Plaintiff
JONATHAN STAVRIANAKOS
Sixth Plaintiff
AND
THE STATE OF WESTERN AUSTRALIA
Defendant

Catchwords:

Criminal Property Confiscation Act - Objection to confiscation - s 82(4) Criminal Property Confiscation Act - Whether equitable interest in property - Where one owner is not innocent party - s 82(5) Criminal Property Confiscation Act - Entitlement to proceeds of sale

Trusts - Equitable trust - Intention to create trust inferred from circumstances - Lotto win - Family lotto syndicate - Common intention that lotto prize money to be held on trust - Whether intention to create legal relations - Whether intention to rely on moral obligations - Whether mere expectation of inheritance - No intention to create contractual relations - Intention to create trust distinct from intention to create contractual relations - Intention to be inferred not imputed - Intention to create trust can exist without contract

Property Law Act - s 34 - Declaration of trust over land to be in writing - Where trust created before land acquired - Trust property was cash - Property bought with cash impressed with same trusts - Corpus of trust changed to land - Trust not extinguished

Trusts - Constructive trust - Joint endeavour - Muschinski v Dodds - Baumgartner v Baumgartner - Windfall equity - Family lotto syndicate - Whether lotto tickets bought as part of joint endeavour - Where joint endeavour fails without attributable blame - Remedy other than constructive trust not appropriate

Equity - Defences - Laches - Required delay coupled with prejudice - No prejudice

Equity - Defences - Acquiescence - Requires deliberate and informed inaction - No deliberate or informed decision not to act

Criminal Property Confiscation Act - s 82(5) - Entitlement to share in proceeds - Five co-owners of property - Property subject to mortgage - Whether one share should bear burden of mortgage - s 152 Criminal Property Confiscation Act - Value in s 82(5) means net value after charges - Cannot subtract mortgage from one share - Mortgage must be borne equally by all co-owners

Legislation:

Criminal Property Confiscation Act 2000 (WA)
Misuse of Drugs Act 1981 (WA)
Property Law Act 1969 (WA)
Social Security (Administration) Act 1999 (Cth)
Transfer of Land Act 1893 (WA)

Result:

Confiscation of property allowed
Payments out of proceeds of sale of property to be made to third to sixth plaintiffs

Category: B

Representation:

Counsel:

First Plaintiff                  :     In person
Second Plaintiff             :     Mr C E Chenu
Third Plaintiff                :     Mr C E Chenu
Fourth Plaintiff              :     Mr C E Chenu
Fifth Plaintiff                 :     Mr C E Chenu
Sixth Plaintiff                 :     Mr C E Chenu
Defendant:     Mr S W O'Sullivan

Solicitors:

First Plaintiff                  :     In person
Second Plaintiff             :     Bennett + Co
Third Plaintiff                :     Bennett + Co
Fourth Plaintiff              :     Bennett + Co
Fifth Plaintiff                 :     Bennett + Co
Sixth Plaintiff                 :     Bennett + Co
Defendant:     Director of Public Prosecutions (WA)

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

Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6
Baumgartner v Baumgartner (1987) 164 CLR 137
Brennan v Duncan [2006] NSWSC 674
D'Souza v Auguste [2001] WASC 310
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95
Green v Green (1989) 17 NSWLR 343
Henderson v Miles (No 2) [2005] NSWSC 867
Jones v Dunkel (1959) 101 CLR 298
Mickelberg v Director of the Perth Mint [1986] WAR 365
Muschinski v Dodds (1985) 160 CLR 583
Parsons v McBain [2001] FCA 376; (2001) 109 FCR 120
Smith v McDonnell (Unreported, NSWSC, Library No 4166, 30 March 1995)
Stowe and Devereaux Holdings Pty Ltd v Stowe (1995) 15 WAR 363
Van Rassel v Kroon (1953) 87 CLR 298
Voulis v Kozary (1975) 180 CLR 177
Willis v The State of Western Australia [No 3] [2010] WASCA 56

TOTTLE J: In early 1999 the first plaintiff, Mr Tony Stavrianakos, was the holder of a ticket for the Saturday lotto draw numbered 1837. On presentation of the ticket he became entitled to a division 1 prize payment of $869,444.99. Mr Stavrianakos' former de facto partner, Ms Lesley Maxfield (the third plaintiff) and their children, Ms Angie Craven, Mr Nick Stavrianakos and Mr Jonathan Stavrianakos (the fourth to sixth plaintiffs respectively) contend that Mr Tony Stavrianakos purchased the ticket with contributions made by them all and that he held the ticket and, thereafter, the prize money, on trust for them all.
In June 1999 $550,000 of the prize money was used to purchase a beachside property at 113 Castlecrag Drive, Kallaroo (the Property). Title to the Property was registered in the first plaintiff’s name and he lived there until September 2010.
The central issue is whether the third to sixth plaintiffs have equitable interests in the Property that entitle them to an order that a proportion of the proceeds of sale be paid to each of them pursuant to s 82(5) of the Criminal Property Confiscation Act 2000 (WA) (the CPCA). In the paragraphs that follow I will outline the events giving rise to this issue. In doing so I will adopt the practice followed at the hearing and in submissions of referring to the first and third to sixth plaintiffs individually by their first names. I intend no disrespect by doing so.
On 23 July 2009 the Property was searched by police officers, who discovered items suspected of being used in connection with the manufacture of methylamphetamine.
On 24 July 2009 a freezing notice (the Freezing Notice) numbered WAPFN090138 was issued and served on Tony pursuant to s 34(2) and (3)(b) of the CPCA. The Freezing Notice prevented Tony from dealing with the Property on the grounds that it was 'crime used property' and that Tony was a potential drug trafficker. On the same day a memorial in respect of the Freezing Notice was registered against the title of the Property.
Tony was charged with one count of manufacturing methylamphetamine, contrary to s 6(1)(b) of the Misuse of Drugs Act 1981 (WA), and one count of attempting to manufacture methylamphetamine, contrary to s 6(1)(b) of the Misuse of Drugs Act 1981 (the confiscation offences). He pleaded not guilty.
On 2 September 2010, after a two-day trial in the District Court before Keen DCJ and a jury, Tony was convicted of the confiscation offences and was sentenced to imprisonment for 18 months. The application for a declaration that Tony was a drug trafficker was withdrawn.
These proceedings involve the determination of the plaintiffs' objections to the confiscation of the Property pursuant to the CPCA.
The defendant accepts that none of the third to sixth plaintiffs had any involvement in Tony's criminal conduct.

Procedural matters

These proceedings were commenced by an originating summons issued on 18 August 2009 by Tony and the second plaintiff, Ms Serena Herman. In the originating summons it was alleged that Ms Herman was Tony's de facto spouse, that she lived in the Property with Tony, and that she was an innocent person within the meaning of the CPCA. On this basis, she sought to invoke the 'hardship' ground set out in s 82(3) of the CPCA as a basis for objecting to the confiscation of the property.
At the commencement of the hearing I was informed that Ms Herman had withdrawn from the proceedings. It appears, however, that a formal order has not been made in respect of her application. I will order that her objection be dismissed.
In the balance of these reasons, when I refer to 'the plaintiffs' I am referring to the first plaintiff and the third to sixth plaintiffs.
A number of affidavits were filed and served by the parties and accepted into evidence at the hearing. All of the plaintiffs gave evidence and were cross‑examined at the hearing. Tony represented himself. He was called as a witness by the third to sixth plaintiffs as part of their case. The only witness who was not a party was Ms Michelle Greening, a friend of Lesley.
There was no cross‑examination of the deponents of the affidavits relied upon by the defendant.
The Australia and New Zealand Banking Group Ltd (the ANZ Bank) commenced separate objection proceedings. It has a mortgage over the Property, granted in circumstances I describe in more detail below. I was informed by Mr O'Sullivan, counsel for the defendant, that the defendant has undertaken to honour the ANZ Bank's security.

Undisputed factual background

In the following paragraphs I set out my findings about those aspects of the background which were not the subject of any material dispute.

Family history

Tony and Lesley met in 1969 in Melbourne. He was 19 and she was 16. Over the course of the next few years they became close but they did not marry. A child, Angie, was born in 1974. Another child, Nick, was born in 1978. Between 1974 and 1979 Lesley and Tony lived apart from time to time. At those times Lesley lived in Melbourne with the children and Tony lived in Perth.
In 1979 Tony purchased a house in Frederick Street, Belmont (Frederick Street) with the aid of a deposit provided by his parents and a mortgage from a bank. Frederick Street was registered in Tony's name. At the time Frederick Street was purchased, Lesley was living in Melbourne with Tony's parents. She was happy for the property to be registered in Tony's name, as she trusted Tony. Tony, Lesley and the children subsequently moved in and Frederick Street became their family home.
When they lived together Tony and Lesley maintained separate bank accounts, although they shared expenses and supported each other as husband and wife. Lesley provided most of the non‑financial support. Tony would give most of his pay to Lesley but would retain some for gambling. When Tony and Lesley lived apart at the times to which I refer below, Tony provided Lesley with financial support in the form of weekly payments.
In February 1988 Tony and Lesley had a third child, Jonathan.
In 1989 Lesley insisted that Frederick Street be transferred into joint names as tenants in common in equal shares. She did so because her relationship with Tony was breaking down and she was considering moving to the Eastern States. She knew Tony had a gambling problem. He was also involved with other women. Lesley wanted her own money. On 14 August 1989 Frederick Street was transferred into joint names.
Starting when she was 13, Angie had various part‑time jobs: she had a paper round and worked at Hungry Jack's. When Nick was 13 years old he started working at Hungry Jack's on a part‑time basis, too.
In about 1993 Lesley, Angie, Nick and Jonathan moved out of Frederick Street into a rental property in Morley, whilst Tony continued to live in Frederick Street. Tony's gambling and his involvement with other women bedevilled his relationship with Lesley and this behaviour contributed to the separation and the breakdown in their relationship.
In 1994 Tony transferred his half‑interest in Frederick Street to Angie.
In January 1997 Lesley and Angie sold Frederick Street for $118,000. Lesley gave Tony $20,000 from the proceeds of the sale and applied the balance towards the purchase of a block of land in Ellenbrook, on which she built a house (the Ellenbrook house). After the sale of Frederick Street, Tony rented a room in Embleton and thereafter lived in his parents' house in Beechboro.
In November 1998 Lesley, Angie, Nick and Jonathan moved to the Ellenbrook house.
After Lesley and Tony separated Tony remained involved in raising the children with Lesley. He attended family events and outings and took Jonathan to and from school and after‑school activities.
After Lesley moved into the Ellenbrook house in late 1998 her relationship with Tony improved. Lesley described the state of the relationship at that time in the following way:
At that point, we were in the process of trying to give our relationship a good go and get back to being officially together on a permanent basis.
See par 31 of the affidavit sworn on 30 October 2012 ‑ exhibit P3(a).
In 1999 Tony was working as a plasterer and Lesley was working part‑time at a bowling alley in Morley. Her shifts included a Saturday evening shift. Tony looked after Jonathan while Lesley was at work on Saturday evenings.

The lotto win

The circumstances in which Tony bought the winning lotto ticket are the focus of findings required to resolve the disputed issues. I deal with those matters in a later section of these reasons.

Events following the lotto win

Tony had put his parents' Beechboro address on the ticket. He collected the cheque for the prize money from Lotterywest on his own. Lesley was upset that Tony did not take her with him to collect the cheque. The cheque was made out in Tony's name because he presented the winning lotto ticket to Lotterywest. Tony deposited the cheque for the prize money into his Challenge Bank Basic Account. On 18 March 1999 he then transferred $800,000 of the prize money into his AGC Money Market Access Account.
The plaintiffs celebrated the lotto win with a night out at a restaurant. Lesley attached photographs taken on that occasion to her affidavit sworn on 12 January 2015 (exhibit P3(b)).
Some of the prize money was used to buy new cars for Lesley, Tony and Angie. Nick received a payment of $20,000 (there was some suggestion in the evidence that Nick did not buy a new car because he was disqualified from driving at the time, but nothing turns on this). At the time Jonathan was 11 years old and he received a new BMX bicycle.
The balance of the prize money was used to make two investments in property. A real estate agent found two adjoining properties in Bayswater with development potential. One property had a house on it and the other was a vacant block. Unless necessary to distinguish between them, I will refer to these properties as 'the Bayswater properties'. The same agent found a beachside property. This was the Property.
The Bayswater properties were purchased for $210,000. Settlement took place on 24 May 1999 and the titles were registered in Tony's name.
Tony and Lesley viewed the Property and then took Angie, Nick and Jonathan to view it.
On or about 31 May 1999 Tony transferred $550,000 of the prize money in the AGC Money Market Access Account into his Challenge Bank Basic Account to fund the purchase of the Property.
On 10 June 1999 the purchase of the Property was settled.
In July or August 1999 Lesley, Tony and Jonathan moved into the Property. Angie and Nick continued to live in the Ellenbrook house.
Tony and Lesley spent some of the prize money on furnishings for the Property, which they chose together. All the plaintiffs had their own rooms in, and their own keys to, the Property.
In late 1999 or early 2000 Tony and Lesley separated again. This was due to Tony's relationship with another woman. Lesley moved back into the Ellenbrook house. Lesley considered this breakdown in her relationship with Tony to be irreversible. Jonathan lived with Tony in the Property for a while before moving back to Ellenbrook. The plaintiffs continued to use the Property for family events. Each of Angie, Nick and Jonathan stayed there with Tony from time to time.
In September 2001 Tony sold the Bayswater house for $140,000. In 2005 he borrowed money from the ANZ Bank, secured by a mortgage over the Property, to develop the vacant block. The amount borrowed on the security of the mortgage was $60,000. Two units were constructed on the vacant block, and these were sold in January and March 2006 for $380,000 and $390,000 respectively. Tony did not tell Lesley or his children about the sale of the Bayswater properties. He lost the money gambling.
At some stage, Tony formed a relationship with Ms Herman. Ms Herman lived in the Property from time to time up to mid‑2009.

Tony's arrest and events leading to this application

The police search of the Property began late in the evening of 23 July 2009. The search and subsequent investigative interview with Tony lasted most of the night. At the conclusion of the search and interview Tony was complaining of feeling unwell and was taken to Joondalup Hospital.
On 24 July 2009 the Freezing Notice was served on Tony. Schedule 2 of the Freezing Notice was entitled 'Property Frozen under this Freezing Notice'. The schedule took the form of a table. Row 3 of column 1 of the table described the Property as property which was frozen on the grounds that it was both 'crime used' and the property of a person who might be the subject of a drug trafficker declaration. The other property specifically described in Schedule 2 comprised three motor vehicles.
On 24 July 2009 Detective Sergeant Harmer conducted an interview with Tony at the Property in the presence of another police officer, First Class Constable Paterson.
In response to the Freezing Notice Tony made a statutory declaration. Paragraph 2 of the declaration addressed the question of who might have an interest in the Property and read:
The property in the column numbered 3 in Schedule 2 of the Notice is registered in my sole name. However, my dependant spouse, Lesley Maxfield, residing at the above address, my sons Nick Anthony Stavrianakos and Jonathon Anthony Stavrianakos, both of 5 Tanami Circle, Ellenbrook, WA and my daughter, Angela Stavrianakos residing in Margaret River, WA at an address I now cannot recall, may each have an equitable interest in the property. I am unable to verify this or the extent of any such interests without being given adequate opportunity to obtain legal advice.
The Freezing Notice was subsequently served on Lesley, Angie, Nick, Jonathan and Ms Herman. Each of them made statutory declarations in response to it. I will set out the relevant parts of the statutory declarations made by each of the third to sixth plaintiffs.
Lesley made a statutory declaration on 27 August 2009 (exhibit P4). The material part of the declaration read as follows:
Apart from myself, there are three other people that I am aware of who have a vested interest in the property referred to in schedule 2 they would be: Angie, Nick & Jonathan Stavrianakos.
Angie made her statutory declaration on 1 September 2009 (exhibit D4). The material part of the declaration read as follows:
1.I am the daughter of Andonios Stavrianakos born on the 27th June 1950.
2.I received a Freezing Notice dated the 24th July 2009 from the Police on the 25th August 2009 addressed to my father.
3.I advanced to my father various amounts over the last ten (10) years to assist him in his day to day living expenses. I have not yet been able to collate the total amount concerned but I believe it is in the order of $40,000.00. The amounts were advanced by way of unsecured loan and there was no formal arrangement concerning repayment of the amounts concerned.
4.In addition I advanced approximately $30,000.00 to my father utilising funds owned by my mother over the same time period.
5.I am unaware of one other person who is or may be or claims to be an interested party in the meaning term [sic] as described in Section 47 of the Criminal Property Confiscation Act 2000 that is my mother Lesley Anne Maxfield for the reason stated in paragraph 4 hereof.
Nick made a statutory declaration on 27 August 2009 (exhibit D7), the material part of which read:
Yes, I have an interest in schedual two [sic] as it belongs to me Nick Anthony Stavrianakos my sister Angie Elizabeth Stavrianakos and my brother Jonathan Anthony Stavrianakos.

Jonathan made a statutory declaration on 27 August 2009 (exhibit D8), the material part of which read:
I have a major vested interest in all of the property in schedual two [sic], as far as I know 1/3 of the property in schedual two already belongs to me. The other 2/3 of the property in schedual two belongs to my brother & sister, Nick Anthony Stavrianakos and Angie Elizabeth Stavrianakos period.

Credibility and reliability issues

General observations

In this case, the witnesses gave evidence about events which occurred before and in 1999 and between 1999 and 2009; that is, 13 years and more before the principal affidavits were sworn and 16 years and more before the parties were cross‑examined.
I am mindful of the corrosive effects that the passage of time and self‑interest have on human memory.
In relation to the first of these factors, over 10 years elapsed between the lotto win and the earliest occasion on which the witnesses might have been expected to turn their minds to the circumstances leading up to the lotto win and what they did in the weeks and months that followed.
In relation to the effect of self-interest on memory, I accept there is a risk that witnesses who are also parties may reconstruct events, consciously or subconsciously, in accordance with their perception of where their interests lie. The risk of self‑serving reconstruction is considerable when witnesses, who are alive to the issues in their case, are questioned about their motives for acting or not acting in a certain way at a material time when, in all probability, at the time they gave no thought as to the motivations for their action or inaction.
The matters to which I have referred all point to the need to scrutinise the evidence of the witnesses very carefully.
Counsel for the defendant advanced three specific reasons why reliance should not be placed on the plaintiffs' evidence.
First, it was submitted that each of the plaintiffs was present in court when each of the other plaintiffs gave evidence, creating the risk that the evidence of later witnesses was contaminated by the evidence of the earlier witnesses.
Counsel for the defendant did not identify any particular aspects of evidence he contended were contaminated in this way. None of the parties was cross‑examined on the basis that his or her evidence had been influenced by what he or she had heard in the course of the earlier evidence. Having observed the witnesses giving evidence, and having considered the transcript carefully, I am satisfied that each witness gave evidence which was not influenced or tailored to accord with the evidence of prior witnesses to any material extent.
Secondly, it was submitted that as each of the plaintiffs had a financial stake in the proceedings, the evidence of none of them should be accepted as truthful and reliable unless it was corroborated by other witnesses or by facts established independently. A refinement of this submission was the contention that the plaintiffs could not corroborate each other's evidence. I have adverted to the need to scrutinise carefully the evidence of a witness who has a stake in the outcome of litigation, but I do not accept that the evidence of such a witness should only be received as truthful and reliable if it is corroborated by an independent witness.
Thirdly, it was submitted that the credibility of the plaintiffs might most fruitfully be tested by assessing their present claims against what they said and did before and immediately after Tony's arrest. Whilst there is force in the submission, it is subject to a qualification, namely, that in assessing the credibility of the plaintiffs' evidence against their conduct, regard must be had to the fact that the conduct occurred in a unique domestic setting. It is not possible to assess the plaintiffs' conduct against the kind of conduct one might expect from parties who have no familial connection or against criteria distilled from a consideration of how members of a hypothetical 'typical' family might have conducted themselves in a similar situation.
I will conclude these general observations on credibility with two remarks.
First, the evidence was largely concerned with events within a domestic setting. It was not readily capable of contradiction. Tony was the only witness to whom it was suggested in cross‑examination that he had manufactured evidence of participation in the purchase of tickets for the Saturday draw on a weekly basis (ts 126.3). In his closing submissions counsel for the defendant did not contend that the evidence of the participation in the purchase of lotto tickets was invented by the plaintiffs. Moreover, it was not suggested to any of the witnesses that they had colluded in the preparation of their evidence.
Secondly, it would undoubtedly be preferable to decide the critical factual issues in this case by reference to probabilities arising from undisputed facts or incontrovertible facts established by evidence from sources independent of the plaintiffs. This is not possible, however, because, at the risk of repetition, the critical facts concern what took place between the plaintiffs in relation to their purchase of lotto tickets and only they could give evidence of those arrangements.
I will now set out my views on the credibility of each of the witnesses.

Tony

A report from a clinical psychologist whom Tony had consulted for therapy in May and June 2014 was produced at the commencement of Tony's evidence. The psychologist's report recorded that tests administered to Tony suggested that he was suffering from extreme depression and anxiety and severe stress and severe psychological distress. The report was subsequently tendered by counsel for the defendant and became exhibit D1. When Tony gave his evidence he presented as a person who, in lay terms, appeared to be subject to a considerable amount of stress.
Whatever his psychological difficulties, Tony's history and the substance of much of his evidence meant he was not a witness in whose evidence I could place any confidence. I do not rely on his evidence unless it is corroborated by other cogent and reliable evidence.
Tony admitted to a history of deceit: he admitted to lying to the police about the offences with which he was convicted (ts 40.2); he admitted to lying to police officers from the Proceeds of Crime squad (ts 48.2); he volunteered that he told them a pack of lies (ts 78.7); he also admitted to lying in the (misconceived) hope that he and Ms Herman might be able to realise some funds from the Property and 'buy a little love nest somewhere', even though, as he put it, this would do his family out of their shares in the property (ts 56.4 and ts 125.5); and he admitted to lying to the ANZ Bank by holding out that he was the sole owner of the Property by not disclosing the interests held by his family in the property (ts 76 - 77). Counsel for the third to sixth plaintiffs submitted that Tony's readiness to admit that he had lied in the past was an indication that his evidence to the court should be accepted as credible. In light of Tony's admissions as to his past propensity to lie, I am driven to the conclusion that Tony would lie if he thought that it would assist him.
Tony was cross‑examined about the offence of attempting to manufacture methylamphetamine, one of the two offences of which he was convicted. Tony was unwilling to make a frank admission about the offence. He gave a series of equivocal answers (ts 37.3, ts 38.5). He accused the police of orchestrating the offence (ts 38.6). He asserted that his initial admission of guilt was a lie (ts 40.2). Finally, however, he admitted that 'maybe' he had been attempting to manufacture methylamphetamine (ts 42.3). This was a most unimpressive passage of evidence and it reinforces my conclusion about the unreliability of Tony's evidence.
Tony admitted that he was a user of methylamphetamine in 2009 and that was why he was experimenting with its manufacture (ts 37.5).
When Tony was interviewed by DS Harmer on 24 July 2009 and asked who else had a claim to the Property, the only third party he identified was the ANZ Bank. He did not identify the third to sixth plaintiffs as persons who had interests in the property. This was relied upon by the defendant both as a basis to attack Tony's credit and as conduct which was inconsistent with the case being advanced by the third to sixth plaintiffs.
Mr Chenu, who appeared for the third to the sixth plaintiffs, advanced detailed submissions as to why Tony's answers in the interview and his failure to mention the interests of his family could not be relied upon by the defendant as prior inconsistent statements, admissions against interest, or an implied admission by silence.
In light of the view of I have formed of Tony's evidence, it is not necessary for me to consider these submissions in detail for the purposes of making an assessment of the reliability of Tony's evidence. For reasons unrelated to what Tony said and did not say in the course of his interview with DS Harmer on 24 July 2009, I have reached the conclusion that Tony's evidence is unreliable. I return to the question of what conclusions may be drawn from Tony's failure to mention the interests of his family in the Property later in my reasons.

Lesley

In my assessment, Lesley gave truthful evidence. In the course of a long cross-examination, Lesley answered the questions put to her calmly and responsively. She did not try to avoid any of the questions, she did not prevaricate and she was not argumentative. It was not suggested to Lesley that she was lying or that she had embellished any aspect of her evidence.
Lesley's evidence of a practice of buying a ticket for the Saturday lotto draw on a weekly basis, with her and Tony and each of the children contributing to the price of the ticket, was not challenged. The cross‑examination on this topic was directed to establishing that the practice was no more than a family game in which all the family participated for fun, and that the arrangements as to participation were loose.
Lesley was cross‑examined as to whether she had declared her interest in the Property to Centrelink when applying for social security benefits. The defendant produced a certificate of disclosure (exhibit D2), prepared by the Department of Human Services, pursuant to s 208(1)(a) of the Social Security (Administration) Act 1999 (Cth). Pursuant to s 240(1)(b) of that Act, such a certificate is to be received as prima facie evidence of the matters stated in the certificate. Against the heading 'Assets Declared', the certificate recorded the following information:
Financial Investment $404 Household & Personal effects $10,000 2001 Toyota RAV 4 $15,000.
It was put to Lesley that she did not declare that she had an investment in the Property because, in truth, she had no such interest (ts 170 ‑ 171). Lesley denied this was so and said in evidence that she was 'fairly sure' but,
I am not 100 per cent sure that I mentioned about the house and because it wasn't in my name they wouldn't accept that fact (ts 171.3).
I have given close consideration to the transcript of Lesley's evidence on this issue. I accept Lesley's explanation. It had the ring of truth. It was an explanation provided within moments of the certificate of disclosure being put to her. My impression was that it was not an explanation that was invented by Lesley. The cross‑examination on the information provided to Centrelink does not alter my assessment of Lesley as a witness of truth upon whose evidence I can rely with confidence.

Angie

I assess Angie as a reliable and truthful witness. She was understandably nervous when she gave her evidence but she answered the questions put to her fully and without hesitation. In her answers she did not represent that she remembered matters that she could not reasonably be expected to remember, for example, the circumstances surrounding the purchase of the winning lotto ticket, and accepted without hesitation that she assumed she had given Lesley her contribution to the price of the ticket because that was what she did normally (ts 234.3).
Angie was cross‑examined in a similar way to Lesley as to whether she had ever declared to Centrelink that she had an interest in the Property. Her evidence was that she could not recall ever making any declaration of assets to Centrelink (ts 245.1). A certificate of disclosure was produced and put to Angie (exhibit D5). The certificate was in the same form as exhibit D2 and recorded disclosure of an interest in the Frederick Street house. Angie could not remember making any declaration to Centrelink whether of an interest in the Property or any other property (ts 248.7). As I have recorded in my findings on the undisputed facts, Frederick Street was sold by Lesley and Angie on 20 January 1997. The Property was purchased in 1999. There was no evidence that Angie made any declaration to Centrelink after the acquisition of the Property. I attach no evidentiary significance to the certificate of disclosure in respect of Angie or to the cross‑examination in respect of it.
In my findings on the undisputed facts I have set out the terms of the statutory declaration made by Angie (exhibit D5). It is troubling that in the statutory declaration Angie did not identify Nick and Jonathan as persons who may have an interest in the Property. Although Angie identified Lesley as being 'an interested party', the basis of the interest was the advancement of funds by way of an unsecured loan and not that the Property had been purchased with lotto prize money in which Lesley had an interest.
Angie was cross-examined about this issue (ts 200 – 201 and 211 – 219). Angie's explanation is that she relied upon the advice of her solicitor as to what should be included in the statutory declaration (ts 200.10). Angie denied that the reason why she had not mentioned the Property in the statutory declaration was that she did not have an interest in it (ts 219.8).
Whilst the fact that Angie did not include in her statutory declaration any reference to the Property or the basis upon which she now contends that she, Lesley and her siblings have an interest in it is surprising, I am not prepared to draw an adverse inference as to Angie's credit or as to the basis of the present claim from that omission for the following reasons.
First, in my assessment, Angie was an honest witness whose evidence I find otherwise persuasive.
Secondly, Angie received the Freezing Notice from Tony on 25 August 2009 and made the statutory declaration seven days later, on 1 September 2009. This did not allow much time to provide full instructions to a solicitor and obtain advice on an informed basis.
Thirdly, the omission from Angie's statutory declaration of the facts relied upon by her to advance her claim in these proceedings and the significance to be attached to that omission, must be considered against the background of the evidence as a whole. The essential elements of Angie's evidence were corroborated by Lesley and to a lesser extent by the evidence of Jonathan and Nick.

Nick

In his affidavit sworn on 30 October 2012 (exhibit P7) Nick deposed that he tried to forget 'this period of his life' as it makes him angry to think about it, and it makes his behaviour and emotions unpredictable. Although his answers in cross-examination about the period in his life to which he was referring were somewhat obscure, it was clear that in his affidavit he was referring to the period which followed the lotto win. When he gave evidence Nick presented with a troubled and agitated demeanour that was consistent with what he had said in his affidavit about his emotions in relation to the events which were the focus of his evidence.
In the early part of his cross-examination, which began at 12.40 pm on the third day of the hearing, his responses to counsel for the defendant were characterised by anger and disrespect (ts 250 and 260.2). Whilst he apologised and provided an explanation for his behaviour, and whilst his demeanour did improve after the lunch adjournment, my overall assessment is that he was not a witness upon whose evidence I can rely with any confidence. This assessment is based on Nick's demeanour and his attitude when he gave evidence, his answers to a number of questions, and his admitted history of extensive drug use at the time of the relevant events.
By way of example, Nick was asked whether he had a specific memory of paying cash for his share of the winning ticket and he said that he did (ts 259.3). When asked how much the winning lotto ticket cost, Nick said first that it had cost more than a 'six pack of beer', then that he could not remember, then that he thought that it was about '200 bucks'. He then said that the ticket cost $466. He maintained that this was a serious answer (ts 260 - 261). I cannot accept that Nick was even attempting to give truthful evidence.
On several occasions Nick referred to himself as a drug user and an alcoholic. He said that at the time of the win he was a constant user of cannabis (ts 264.2). He said that subsequently he became a heroin addict (ts 273.2). In light of his admitted extensive drug use, I cannot regard Nick as someone who is likely to have a reliable recollection of events.
Nick was cross‑examined as to why he had not referred to his mother, Lesley, in his statutory declaration made in response to the Freezing Notice (exhibit D7). His response was that he forgot to add his mother into the document because he was upset or mad (ts 268.4) or because he was 'probably intoxicated' (ts 269.6). I did not find Nick's explanation convincing.
Nick was also cross‑examined as to whether he had declared his interest in the Property to Centrelink when applying for social security benefits. His answer was that he tried to do so but that the officials at Centrelink Morley laughed at him because they knew he was a heroin addict (ts 276.1). In a subsequent passage of evidence, Nick said that he assaulted the officer at Centrelink with whom he was dealing and had his benefits suspended. The defendant produced a certificate of disclosure. The certificate did not record any interest in the Property as an asset declared by Nick. I cannot make a finding either way as to whether Nick disclosed, or tried to disclose, to Centrelink that he had an interest in the Property. It is possible that he tried to do so. I am not assisted in making an assessment of the reliability of Nick's evidence by the certificate of disclosure or by Nick's evidence in relation to the disclosure. Nor do I consider that the evidence gives rise to an inference which bears upon the underlying basis of his claim.

Jonathan

Because of Jonathan's young age, the evidence that he was able to give about the purchase of weekly lotto tickets and the events which followed the win was limited. In cross-examination Jonathan claimed to remember contributing to the purchase of the winning lotto ticket because he had received less pocket money that week (ts 286), though he added that the reason why he remembered was because of the win (ts 286.3). I had the impression that this was reconstruction on Jonathan's part rather than genuine recollection. I would not be prepared to rely on Jonathan's evidence in respect of the purchase of lotto tickets if it had not been corroborated in its essential respects by Lesley's evidence.
At one point in his cross‑examination Jonathan appeared to suggest that he was on the title of the Property (ts 284.2). When his attention was drawn to the fact that the property had always been registered in his father's name, Jonathan responded by saying, 'I see it differently. My second name is Anthony, you know.' Moments later Jonathan accepted that his name was not on the title. This was a passage of the evidence which did reflect well on Jonathan. I do not think Jonathan was being dishonest. Rather, I attribute this evidence to a level of immaturity on his part, perhaps exacerbated by nervousness about giving evidence.

Jonathan was cross‑examined as to his statutory declaration (exhibit D8), made in response to the Freezing Notice. He was asked a series of questions which explored why he had claimed a one‑third interest in the Property when he was now only claiming a one‑fifth interest. The substance of his response was that he did so because his parents had told him that the Property belonged to him, Angie and Nick (ts 302 ‑ 304). I consider this explanation to be plausible.
Jonathan was also asked whether he had declared his interest in the Property when applying for social security benefits from Centrelink. Jonathan denied that he had ever been asked to make a declaration of his assets for any purposes to Centrelink (ts 296 ‑ 297). A certificate of disclosure was produced to him but not tendered.
Overall, whilst I do not think that Jonathan gave untruthful evidence, I regard his evidence with a degree of caution.

Ms Greening

There was nothing about Ms Greening's evidence or the way in which she presented as a witness that gives me cause to doubt that she gave her evidence truthfully.

Evidence about the purchase of lotto tickets, the spending of the prize money and subsequent events

In his cross-examination of the plaintiffs and in submissions, Mr O'Sullivan, for the defendant, developed three inter-related propositions. First, the plaintiffs' purchase of lotto tickets for the Saturday draw on a weekly basis was no more than family fun which could not be taken to have been intended to give rise to any legal consequences. Secondly, the third to sixth plaintiffs accepted that decisions as to how the prize money should be spent were decisions for Tony to make, in his capacity as head of the family, and that they were dependent on his benevolence for anything they might receive from the prize money. Thirdly, between 1999 and 2009 the third to sixth plaintiffs conducted themselves in relation to Tony in a way which reflected an acceptance on their part that the prize money and the properties bought with it belonged to Tony and that, other than any gifts that he was prepared to make, their interests were limited to an expectation that they would inherit Tony's property when he died.
To provide a foundation for the evaluation of those propositions it is necessary to refer to the plaintiffs' evidence in some detail. Unfortunately this will involve some unavoidable repetition of some of the facts and some evidence.

Tony's evidence

The substance of his evidence-in-chief in relation to the purchase of lotto tickets was as follows. He and Lesley started buying lotto tickets around the time Angie was born. Tony used to buy the tickets. He said that he used to get a Slikpick Systems 9 ticket, which cost about $42 a ticket and that he would watch the draw on television with Lesley or any of the children who were home at the time. He deposed that as Angie and Nick got older they started 'chipping in' for the weekly lotto ticket using their pay from their casual jobs, although he could not remember whether at first Nick's contribution came from pocket money that he received. Tony's evidence was that Angie, Nick and Lesley would give him cash each week, he would deduct some of Jonathan's pocket money and he would go and buy a ticket every Saturday.
In cross-examination Tony insisted that he bought the lotto ticket for the family (ts 58.1). When asked whether there were any discussions about what might be done if they won lotto, Tony said:
Well, to be ‑ to be honest with you, who thinks they are going to win lotto? That's the honest answer, sir. We never thought we would win lotto. We just played like a family (ts 105.3).
Tony deposed that on one Friday or Saturday in March 1999 Lesley, Angie, Nick and Jonathan gave him money towards the price of a lotto ticket. In cross-examination he said that he never put in all the money for the ticket but he put in a little more the week of the win and he thought that he was entitled to a little more than the rest of the family (ts 109.8) and that was why he thought he could purchase the Bayswater properties on his own account (ts 113.5). Tony said he found out the ticket was a winning ticket either that evening or the next day and told Lesley, 'We have won division 1 lotto! We aren't going to split the money up between everyone; we should invest it together and buy a property'. He said he needed a place to live as he and Lesley were not getting on well living in the Ellenbrook house.
Tony said that he and Lesley went to the Lotteries Commission to collect the cheque. He had a vague recollection that one of the children went with them but he did not recall who it was. Tony banked the cheque into his bank account with the Challenge Bank in Morley. He did so for three reasons: first, because he and Lesley never had a joint account; secondly, because it was convenient; and thirdly, because he had organised the lotto ticket. Tony said that he never believed that all the money belonged to him but believed that it belonged to all of the family, and that the family trusted him to invest it for all of them. He said that he took charge because that is the way Greek families operate.
In cross-examination Tony expanded on his view of his role in the family. When asked about being the sole owner of the Property, Tony said:
Of course I was, I'm Greek. We're very chauvinistic. We don't give women many rights, you know. That's how I was brought up. I don't know. You know, that's my father. (indistinct) And it's not a nice thing to be (ts 54.1).
By way of further explanation Tony said:
What I'm saying is that I was brought up to put everything in my name and to answer to no one in my family. That's what I'm saying.
And:
I regard myself as the boss.
When asked whether he was saying that the prize money was not his money, Tony said:
Everything is my money in my tradition (ts 119.5).
Tony said that his family did not object to any of his decisions (ts 120.2).
In his affidavit evidence Tony deposed that he did consult Lesley before transferring $800,000 of the money from his bank account into an AGC Money Market Access Account. He said that he suggested to Lesley that they should try and get a higher rate of interest on the money and she said, 'I agree'.
Tony said that he sat down with the family after the win and said that he thought that it would be best to invest the winnings in a house which would be an investment for them all, in particular for the children's future. Tony said that they all agreed and gave him the go‑ahead to find a house.
Tony said it did not occur to him to register the Property in the names of each family member as the family operated on trust and he believed that Lesley and the children trusted him to hold onto the property for everyone.
Tony described the Property as an investment for his children's future; he said that he had an agreement that he was to live in the house but he was not allowed to sell it (ts 61).
He said that he did not think that Lesley was ever going to get anything as the children were going to get everything (ts 61.10). He said that Lesley got what she (and he) wanted, an investment for the children (ts 62). At a later stage in his evidence, Tony said that he believed Lesley had a one‑fifth interest in the property (ts 98). He said that the house was not the children's inheritance because they were already owners (ts 62.5‑9). When asked what he meant in his statutory declaration by the statement that each of his family members might have an equitable interest in the property, Tony said:
I'm saying that we've all put money in together to buy the property (ts 88.10).
Tony's evidence was that he considered that the remaining $200,000 of the lotto prize money (that is, the balance after buying new cars, giving some funds to Nick and purchasing the Property) was his share of the win as the Property was a property investment for the children in which he would live, and he said he had contributed a bit extra towards the price of the winning lotto ticket ([44] of affidavit sworn on 18 December 2012, exhibit P1(a)).
Tony borrowed $60,000 from a friend and $60,000 from the ANZ Bank, secured by a mortgage over the Property, to build on the vacant Bayswater block. Tony said that he repaid his friend and the ANZ Bank after the sale of the Bayswater properties but, despite a request from him to do so, the ANZ Bank did not close the facility. Ultimately, Tony drew down on that facility again to the full amount of $60,000.
Tony said that Lesley asked him to transfer the Property into joint names, but he said he would not have bothered to transfer the property because of the fees (ts 123.3).

Lesley's evidence

In her affidavit evidence Lesley deposed that she and Tony had been buying lotto tickets since the 1980s. In cross-examination she said she and Tony were buying lotto tickets together when they lived in Frederick Street in 1979, but could have been doing that before then (ts 140.10). She was unable to remember the exact amount that she and Tony each contributed (ts 141.2). She said they always had an entry in the Saturday draw and sometimes played during the week.
Lesley said that she would collect the money from the children for the lotto ticket (ts 145.1). Lesley kept the lotto money separate from the housekeeping (ts 146.7). She said that when they lived in Frederick Street the lotto money was kept in a saucepan, and when they lived in Ellenbrook the money was kept in a cookie jar (ts 145.5) before being given to Tony to purchase the tickets. Lesley attached a photograph taken in the kitchen of Frederick Street to her affidavit sworn on 12 January 2015 (exhibit P3(b)) showing the saucepan in which the lotto money was kept.
Lesley said that the ticket price 'would have been between $20 and $40' (ts 147.7). She was firm in her evidence that each member of the family contributed the same amount although the ticket price varied depending on the size of the draw (ts 147.8). She said Tony would buy the ticket and would sometimes either put the ticket in the saucepan or keep it in his wallet. Lesley said she usually worked on Saturday nights and so would not watch the draw but she would generally ask Tony if they had won and the usual answer was, 'No, nothing this week'.
Lesley said that when Angie was about 16 and Nick was 13 they wanted to be involved with the lotto. They each had casual jobs and wanted to be involved in the purchase of lotto tickets. They started putting in equal amounts of money (ts 141.4), so the contributions made by her and Tony reduced (ts 142.4).
Lesley said that buying the weekly lotto tickets 'became quite a ritual' ([44] of Lesley's affidavit sworn on 30 October 2012, exhibit P3(a)) and when Jonathan was 10 years old he wanted to be involved by contributing his share of the cost from his pocket money. She said that the 'family lotto' continued even when she and Tony were living separately. She said that when she and the children moved to the Ellenbrook house Tony would sometimes put the lotto ticket on the fridge door with a fridge magnet and sometimes he would keep it himself.
Lesley said that over the years when they had discussed what they would do if they won lotto they said they would buy a house on the beach. In cross‑examination she confirmed this saying:
It was always our dream to buy a house on the beach (ts 142.5).
The children had been told of that dream (ts 148.2).
Lesley said that they had occasional small wins and on a few occasions won about $200. On one occasion, they won enough to take the children to the Royal Show. She said that if they won small amounts, the winnings would either be put in a saucepan for future ticket purchases or the family would go on an outing. Decisions about outings were made as a family (ts 143.1).
Lesley recalls that one evening in 1999, when she was working at the AMF Morley bowling centre, she was told that Tony was on the phone. She was busy and did not speak to him. Tony was looking after Jonathan at the Ellenbrook house. When Lesley returned home, Tony said words to the effect, 'I told you one day we would do it'. She understood him to mean that they had won lotto. She said she did not believe him at first but he showed her the ticket and she realised they had won.
Lesley said that Tony said they had to go the Lotteries Commission to collect the money. She expected that she and Tony would go together and share the excitement, but Tony went on his own. He came home with a bottle of champagne and the cheque. The cheque was made out to Tony. This upset Lesley, though she worked out that, as he had gone to the Lotteries Commission, the cheque had to be made out in his name. In cross-examination Lesley said that she was not bothered that Tony was the sole payee of the cheque (ts 149.4). She accepted that the money was paid into his bank account because he was the head of the family; she said it did not matter that he had put it in his name because they were 'a family unit' (ts 150.2). She understood Tony's desire to be in control as a reflection of his Greek heritage. She had no concerns at the time that Tony would do anything wrong by her and the children (ts 150.4). There was a degree of inconsistency between Lesley's evidence-in-chief and her evidence in cross-examination about her attitude to Tony taking control of the prize money. I do not attach significance to this. I do not consider it a sign of dishonesty or unreliability. Lesley was giving evidence about how she felt in 1999. It is not surprising that she may have rationalised her emotions on this topic both between 1999 and 2012 (when her first affidavit was sworn) and between 2012 and the hearing.
Lesley described how Tony took it upon himself to find a house by the beach. She said that one day he came home with a flyer for the Property. Lesley recalled a conversation with the children in which she and Tony said that they wanted to buy the Property with the lotto winnings. She and Tony told the children it would be a good investment and that 'you never lose in property'. Lesley recalled that Angie and Nick agreed. Jonathan was too young to comment. All he wanted was a BMX bike, which he was given. Lesley was asked why a sum similar to the amount of money spent on the purchase of cars for other family members was not put into Jonathan's bank account, and Lesley said that they wanted to keep the money together and that Jonathan would get a car when he was old enough (ts 152).
Lesley said that the purchase of the Bayswater properties was discussed as a family (ts 154.1).
Lesley did not argue with Tony putting the Property in his own name. She knew he had done that (ts 55 ‑ 156).
Lesley said that following her return to Ellenbrook the Property was used as a venue to celebrate family events and for family barbeques after the relationship between she and Tony had ceased.
Lesley said she was not worried about the fact that the Property was in Tony's name and thought that her investment in the property would be safe and he would not do the wrong thing. She thought that Tony had overcome his gambling addictions. Lesley did not press Tony to transfer the property into her name as she had done in relation to Frederick Street. She said that the Property was different as it was a family home bought as an investment for all of the family (ts 158.1). She also said that the circumstances in which she pressed Tony to transfer Frederick Street into her name were different, as she was contemplating moving to the Eastern States and wanted to take her own money to live there (ts 161.5).
When Leslie found out that Tony had sold the Bayswater units, she made enquiries about getting the Property transferred into her name or the children's names. Lesley said that she looked into the cost of transferring the property out of Tony's name but could not afford the stamp duty (ts 158.3). She did not look at other options, but denied that the reason she did not do so was because she considered the Property to be Tony's (ts 159.5).
She said she did not think Tony would do the wrong thing by his children or her, and that the property was a family property investment. She was cross‑examined as to when the investment was going to deliver value to her, and her response to this line of questioning was that it was already of value and that one never lost on a property investment (ts 160).
When Lesley learned that Tony had sold the Bayswater properties and gambled away the proceeds, she lost trust in him and broke off contact.
Lesley was cross‑examined about what she knew about Tony's dealings with the Property. She said that she did not know that he had mortgaged the property (ts 163.8). She said she was aware that another woman was living at the Property, though she was not aware that the other woman was living with Tony. Lesley said she went to the property and removed the other woman a few times (ts 162.4).

Angie's evidence

Angie gave evidence about the nature of the relationship between her parents which corroborated the evidence of Tony and Lesley. She said that as she got older she understood that her father's drinking and gambling had caused problems. She described her parents' relationship as volatile, but that they remained close even during their periods of separation. She always saw her father as the head of the family and the one who had the final word on decisions that needed to be made. She described her father as having a very bad temper and that, until recently, none of the family would confront him or seriously disagree with him.
In cross‑examination Angie gave the following evidence about participating in the purchase of weekly lotto tickets. She explained that she had played lotto with her grandmother (ts 220.8) and enjoyed it, and wanted to do the same with her family. She said that she started contributing to the cost of the ticket when she was 15 (ts 220.3) and that she contributed up to $5 per week. She said that, so far as she could remember, one ticket a week was bought with her parents (ts 221). Angie did not remember the value of the ticket that was bought and did not know exactly what each of her parents contributed (ts 222.4). Her evidence was to the effect that she was not concerned with the value of the ticket but the excitement of being involved (ts 222.8) and 'if we won, what we could do with the money' (ts 223.1). Angie's evidence was that 'we always talked about buying a new family home' (ts 223.2).
She said that the lotto money was always kept in the kitchen in each of the houses in which the family lived.
Angie recalled that Nick started to participate in the purchase of the lotto ticket not long after she did (ts 229.7). She could not recall whether the value of her contribution went down or the value of the ticket purchased went up (ts 229 - 230). Angie said that for the following week she always put money in, even if there had been a small win. She thought a larger ticket may have been bought in the following week, (ts 230.8). On the occasion on which the prize money was such that the family could go to the Royal Show, Angie said 'we all decided' to go to the Royal Show (ts 231.2).
Angie said when she was a teenager, if she was at home on a Saturday night, she would sit down and watch the lotto draw with whichever family members were also there and make jokes about what they would do if they won.
When she was 18 she started paying her mother board, and gave her mother money for her board and the lotto money at the same time. She started travelling overseas to do modelling work when she was 19, and that work continued until she was about 23. Her work overseas involved trips of between one and eight weeks. When she was overseas Angie would not contribute on a weekly basis to the cost of a lotto ticket, but Lesley would tell Angie what she owed for board and other expenses, including her share of the cost of a lotto ticket and Angie would reimburse Lesley. Sometimes Lesley would deduct the expenses from cash that Angie sent home by post.

Angie was the first of the children to contribute to the price of the weekly lotto ticket. Angie said that when she started to contribute to the price of the weekly lotto ticket with Tony and Lesley, she did not really think about how any winnings might be divided, though looking back on things now, she assumes that any winnings would have been divided into thirds (ts 225 - 226), although she said that it was her father who made decisions about what would and would not happen (ts 227.10).
Angie agreed that her father 'pretty much' had the final word and that was the way it was up until his arrest (ts 228.3).
Angie said that there were occasions on which she put the money in for the weekly ticket after the ticket had been purchased. She said she would have shared in the prize money even though she had not contributed to the purchase of the winning ticket
Because that's ‑ that's the agreement that we had at ‑ that was a weekly thing so if I didn't put the money in that week, I was still always going to add the money ‑ pay the money (ts 233.3).
She was asked how she knew that was the agreement and she answered:
Because my mum ‑ if I wasn't at home, my mum would keep track of everything that I owed and I would always pay it (ts 233.5).
Angie described a weekend in 1999 she was staying with a friend over the weekend and did not return home until Sunday afternoon. She said Lesley and Tony wanted the family to sit down for dinner and Tony said words to the effect, 'We have won the lotto … I told you it would happen one day'. She recalled being shocked and excited at the news and her and Nick asking questions about the exact amount.
Angie was unable to remember how much she put in for the purchase of the winning ticket (ts 233.6). She assumed she had paid her contribution to her mother in cash (ts 234.3).
In cross-examination Angie said that she asked her father how much had been won, but he did not tell her initially. She said, in effect, that this reflected the relationship which existed between her and her father at the time (ts 236). Angie recalled phoning her friend, Beata, and telling her that the family had won lotto and that there was enough to buy new cars, but that her parents had said that they should take some time to think about what to do with the rest. Angie told Beata that she hoped that they would get a new house (ts 237.6).
She recalls Tony saying that it was a lot of money and that they would all have to think about what they wanted to do with it.
She and Nick asked whether there was enough money to buy new cars, and her father said there would definitely be enough to buy new cars. Angie did not agree that all she was entitled to at the time of the win was money for a new car (ts 237.5 and ts 238.4).
She recalls Jonathan asking whether he could get a new BMX bike.
Angie described going to Portofino's restaurant at Hillarys to celebrate. She said they all talked about what they should do with the money and all agreed that investing the money in a house would be a good idea.
Angie said that a few months later Tony came home to the Ellenbrook house and showed Nick, Jonathan and her a magazine with a picture of the Property on the front, and asked whether they liked the house. Tony said that he and Lesley had been to see the house and wanted the three of them to come and have a look at the house before deciding whether to buy it. She described going to look at the Property from outside. She was excited that it was so close to the beach. She said that they all agreed to buy the Property (ts 237.9).
Angie said it did not occur to her to ask in whose name the house would be registered. She said she did not know anything about property titles at the time but that even if she had known the property was registered in Tony's name, she would not have objected. She said both she and other members of her family have always referred to the Property as 'our house', 'our place', 'our home' or 'the family house'.
Angie said that she and Nick did not move into the Property with Tony, Lesley and Jonathan. She said that she decided to continue living in the Ellenbrook house, and that she was excited to be living independently.
Angie met her husband, Brodie, in 2004. After they were married, they would visit Tony at the Property and Tony would often say to Brodie, in her presence, 'You're part of the family now, Brodie, so this is your place now too'.
Angie deposed that she could recall Jonathan talking to Tony and Lesley about his wish to leave high school in year 10, and they responded by telling him that he should stay at school and get a better job, and that he did not need to be in such a hurry to get a job as he already had a 'head start'. Later, when Jonathan was at TAFE, Angie recalls encouraging him to continue with his studies because he could afford to do so.
Angie said that Tony and Lesley told her they had bought a block of land and a house in Bayswater with the money left over from the lotto win.
Angie discussed the idea of building a couple of units on the vacant block with Tony and Lesley. She recalls Lesley saying, 'If we build two units the boys can maybe have one each and you can have the house, so that you all have something for now'. She visited the Bayswater block with Tony and saw two units being built on it. She said that she could not remember how she found out that Tony had sold the Bayswater properties. She recalled Tony saying, 'My gambling has cost us a lot of money'.
Angie deposed to discussions about what should happen to the Property in the event that Tony passed away. She said that Tony had told her he wanted the property to stay in the family. She said that Nick and she disagreed. Angie thought the property should be sold and the money split equally, whilst Nick thought the property should be retained for sentimental reasons.
Angie also deposed to conversations she had with Nick and Lesley in the period between 2006 and 2008 about the possibility of having Tony transfer the Property into Angie's name so that Tony could not sell it. Angie said that she was giving Tony a lot of money at the time and he had said that he would sell his boat to repay $10,000 that she had given him, but he did not do so.
Angie was worried that Tony was making rash decisions and that he might sell the Property without the rest of the family knowing, as he had done with the Bayswater properties. Angie said that Lesley thought it best if the Property was transferred into Angie's name, as she was the most neutral person in the family. When cross‑examined as to the steps she took to investigate whether the Property could be transferred out of her father's name, Angie explained that she discussed this possibility with her husband and her mother. Angie said she thought that she was the likely person to go on the title if it were transferred because she was the eldest and was pretty neutral (ts 241.7) and the purpose was to secure her interest in the property (ts 241.8).
In her affidavit at pars 55 - 56 Angie deposed that Lesley told her that she had done a bit of research and that the stamp duty to transfer the Property would cost over $100,000. Her husband also told her the stamp duty would be really expensive. He raised the possibility of he and Angie coming up with the money and, if the house was sold, being reimbursed from the proceeds. Shortly after these discussions, Tony was arrested and charged and the Property was frozen.
In cross-examination Angie said that she did not consider other options to protect her interest in the Property (ts 204.5 and 220.1). She said that because her father was living in the Property, she was not overly concerned by the fact that the property was in his sole name. The fact that Tony lived in the property was the difference between the Property and the Bayswater properties (ts 206). She said that she would never have said to her father that she did not trust him (ts 207).
Angie supported Tony financially. She provided him with about $40,000 in total. She said that this was on the basis that she would be entitled to some of Tony's share of the proceeds of the Property if it was ever sold or when Tony passed away. Angie said that Lesley and her brothers thought this was fair as they could not help Tony out financially themselves.
Angie did not agree with the proposition that she was hoping to get her interest in the Property by way of an inheritance (ts 242.7). She was asked about the possibility of taking legal action against her father, and said she was not interested, in taking legal action but had she needed to, she would have done so. She said everyone was happy with the arrangement that Tony would live in the property until his death (ts 243.9).

Nick's evidence

Nick said that he started putting in money for the lotto ticket when he was 12. He said he was paid in cash for doing a milk run job, and he would contribute the coins which were in his weekly pay packet. He said that once he started work at Hungry Jack's he would draw his pay out of the bank and put cash into the lotto dish. Nick described how Tony would take the money out of the dish every Friday and spend it on lotto tickets. He said that his father would say things like, 'One day you're gonna be rich boy. I can feel it in my bones, we're gonna win the draw'.
In cross-examination, Nick said that all his contributions to the price of lotto tickets were paid in cash (ts 258.9). His evidence was that at the time of the win he was living in the Ellenbrook house and that he put his cash contributions into a saucepan which his mother kept above the stove or on top of the fridge (ts 259.4).
He said the family had discussed what they would do in the event of a win and in that respect said:
My mother and father's dream was always to buy a big house on a mansion ‑ buy a mansion, a big house on the beach. It was always my mother's dream to have a big kitchen. So, yes, I knew we were going to buy a mansion (ts 264.9).
Nick left school and began an apprenticeship as a tiler. He did not complete his apprenticeship but went on to do other jobs.
Nick described a weekend when he was about 21. He said he was staying at a friend's house that weekend and had been drinking heavily and smoking cannabis. Lesley arrived at his friend's house at approximately 10.00 pm in the evening and told Nick that they had won lotto. Sometime later, Nick drove home and went to bed. In cross-examination he confirmed his mother called at his friend's house where he had been staying for a few days, 'because of my alcoholism and constant smoking of cannabis' (ts 264.3). He said that the next evening, after he returned home from work, all the family sat down together and Tony said, 'We're going to invest all this money' and Lesley said, 'You'd better, as long as it is in real estate'.
Nick said that he received $20,000 in cash from the winnings, which he used to buy jewellery and gifts for his girlfriend.
Nick also described viewing the Property. He said that all the family got into Tony's car and he drove them to Kallaroo and pointed to the house and said, 'That's ours'.
Nick said that the Property was not the sole property of his father, 'because we won lotto and I put an equal share into that lotto as well as my brother, my sister, my mother and my father. That's what makes it mine' (ts 258.3).
Nick said that he did not know that the Property was in his father's name until about six years ago. He said that until then he thought that the property was in his name and the names of brother and sister (ts 266.4). He said that he understood that was the case
From everything my father had told me. You know, he has told me since I was a small boy everything he has done, he done for his family' (ts 266.5)
and that was the reason he thought the Property was in his name and his siblings' names.
A moment later, Nick gave a different answer as to why he thought the property was in his name and his brother and sister's names. He said:
Yes. I ‑ I thought it was in my name, my ‑ my brother and sister and my mother's name because we ‑ I had been playing Lotto since I was 10 years old and I just presumed, because of the winnings that we got, that it was done in equal lots (ts 266.9).
Nick then gave this evidence:
My father told me he bought the house for all of us, including my mother, and that he would probably pass away before all of us because of his large consumption of alcohol, gambling and womanising and it would be left to me, and my brother, my sister, my mother (ts 267.3).
Nick said Tony and Lesley told him that they had bought a house in Bayswater and an adjoining vacant block. He said he subsequently found out that Tony had sold the Bayswater properties and spent the proceeds on gambling.
Nick was then taken to his statutory declaration, exhibit D7. Counsel pointed out to him that he had not mentioned his mother as a person who had an interest in the property. He replied that he was probably intoxicated at the time and then added:
It goes without saying, whatever, you know, any houses we owned belong to my mother and father, as far as I am concerned, and whatever belongs to my mother and father belongs to me, my brother and my sister so far as I am concerned (ts 269.5).
Following this answer it was put to him that what he was talking about was his:
… expectation that, when your father died, the property would – whatever property he had when he died – would come to you children. Isn't that the way it worked?
To which Nick responded, 'Yes, sir' (ts 269.7).
Nick said in his affidavit that he recalled a heated conversation with the family about transferring the Property into 'our names' but that this did not proceed because 'we didn't have the funds'.
When asked about this incident in cross‑examination he said that he had argued with his father about the transfer of the property. Nick said that he told his father that he wanted the property transferred, but his father told him that they could not afford the stamp duty and that he was concerned that Nick was trying to 'rip him off'. The argument developed into a physical altercation (ts 272.5 - 8). Nick went on to say that he did not go to see a lawyer to get the matter sorted out but started using heroin instead (ts 273.2). Nick did not press his father for his share of the value of the Property.
Towards the end of his cross‑examination it was put to Nick that he never had any interest in the Property at all. Nick's response was:
Of course I did. It was my money that bought the house (ts 275.3).
and in answer to a subsequent question about whether he said it was his money that bought the house added:
Well, my share of the winnings, yes.
He was then asked this question:
All right. Well, I will perhaps rephrase it. The arrangement in relation to any Lotto win was simply that it would be your father's money and the hope was that he would look after the family, including you, wasn't it?
To which Nick responded:
Of course, sir (ts 275.6).

Jonathan's evidence

Jonathan gave evidence about his parents' relationship and the family history which was consistent in general terms with the evidence given by Lesley and Angie. He deposed that Lesley often appeared quite frightened of Tony, and that when they were together she used to ask his permission to do certain things. He said that Lesley would get upset with Tony and tell him to stop gambling as the family did not have much money (exhibit P8 par 8). He deposed that he always considered Tony to be 'the boss of the house and the family'. Jonathan referred to his father as being 'a very hard man to be around' (ts 282.8).
Jonathan deposed that for as long as he could remember the family played lotto together.
Jonathan's answer to the question 'when did you start [playing lotto]' provides some explanation as to how he became involved. His answer was:
I used to play bingo with mum not even out, like, she bought me my own bingo kit and we would play it at home. So I guess it kind of stemmed from there, really. And then, yes, it was scratchies and lottery – you know, just anything like that, sort of – that was fun for me (ts 285.2).
He said that each family member would chip in and that Tony or Lesley would buy the ticket.
In cross‑examination Jonathan said that he was involved in the family's purchase of weekly lotto tickets by the time of the 'big win' (ts 284.7). In his affidavit (exhibit P8) he said that when he was younger Lesley would put in money for him (par 11). In cross-examination he gave a slightly different account. He said he became involved when his father started deducting a contribution for the price of the ticket from his pocket money. He said the amount deducted varied each week as the family didn't have a 'strict regime' (ts 285.6). He said the amount of pocket money he received varied between $10 and $20 per week, but he described $20 per week as the normal amount (ts 286). He said that if he got $10 pocket money for a week, he had either 'done something bad or I was putting in for the lotto' (ts 287.1).
Jonathan was sure that he had contributed to the price of the winning ticket because he remembered receiving less pocket money that week (ts 286.3). He said that he was living with his mother in Ellenbrook:
And I think I got a little bit less pocket money that week and I ‑ yes, that ‑ that was it. I remember I ‑ some weeks I would get 20. Some weeks I would get 10 (ts 268.4).
He said he remembered this because of the win (ts 288.9). He was not sure whether there was a system for choosing the numbers, though sometimes 'we would use our birthdates and sometimes we would just use numbers' (ts 289.5). Jonathan said that some weeks he did not make a contribution but that did not mean that he would not share in any winnings. It meant that another family member would put in more but the winnings would be 'divvied up just as equal' (ts 291.8).
Jonathan said when he was a child Tony looked after him on Saturday nights as Lesley went to work. Jonathan said that he and Tony would watch the lotto draw together and if Angie and Nick were home they would watch as well.
Jonathan recalls the whole family going to see the Property. He said that Tony had seen the house on the cover of a magazine. Jonathan said that the whole family said they liked the house and that they should use the lotto money to buy it.
Jonathan said that all the family referred to the Property as 'the family house' or 'our house' and that they treated it as their own and went their whenever they wanted.
Jonathan remembers that Tony and Lesley told him that they had purchased a couple of blocks of land in Bayswater with funds left over from the lotto prize money. He was told that one block had a house on it and one was vacant. Lesley told him that she and Tony were planning to build two townhouses on the vacant block, and asked him whether he wanted to live in one when it was built, to which he replied, 'Yes'. Jonathan went to see the townhouses being built. He was told later that the properties had been sold as Tony needed the money. In his affidavit Jonathan said that he was told about the purchase of the properties in Bayswater when he was 19. When called to give his evidence‑in‑chief, Jonathan said that he was mistaken when he deposed that he was told about the purchase when he was 19 and that this occurred when he was 16.
Jonathan said that his parents, Angie and Nick encouraged him to stay at school, even though he hated school and wanted to leave and get a tradesman's qualification. He said that his parents, Angie and Nick told him that he should stay at school as he never needed to worry about money because he had a great investment in the form of the Property. Jonathan stayed at school and went to TAFE and obtained a Diploma in Film and Television. He deposed that if he did not have the 'nest egg', in the form of his interest in the Property, he would have obtained a trade in order to secure a reliable income instead of pursuing a career in the fields of television and music.

Thus the ability of the third to sixth plaintiffs to obtain an order pursuant to the provisions of s 82(5) is dependent upon whether they can establish that they had equitable interests in the Property. They seek to establish those interests on a number of grounds.
First, they contend that Tony held the winning ticket and thereafter the prize money and the Property as their fiduciary agent or trustee in accordance with the reasoning of Dixon CJ in Van Rassel v Kroon (1953) 87 CLR 298, 302 - 304, that is an express trust was created when the winning ticket was purchased.
Secondly, they contend that the practice pursuant to which the winning ticket was bought gave rise to a 'common intention constructive trust' in accordance with the principles summarised in Stowe and Devereaux Holdings Pty Ltd v Stowe (1995) 15 WAR 363.
Thirdly, they contend that their equitable interests are established by the invocation of the principles set out in Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137 which reflect the basic concern of equity to interpose and prevent the assertion and exercise of a legal right in circumstances where this would constitute unconscientious conduct. I will refer to this as the Baumgartner principle.
The relevant principles are to be considered in the unusual circumstance that it is not Tony as the legal owner who is denying the third to sixth plaintiffs' interests but the defendant. The defendant effectively stands in Tony's shoes.
I have concluded that each of the third to sixth plaintiffs has an equitable interest in the Property. In the paragraphs which follow I set out my reasoning to this conclusion.

Application of the reasoning in Van Rassel v Kroon – the express trust

In Van Rassel v Kroon, at 302 ‑ 304, Dixon CJ outlined the principles which govern the situation where a person buys a lotto ticket with his own money and money contributed by others as follows:
When one man agrees with another that he will obtain a lottery ticket for the latter or for the latter and himself jointly the identification of the lottery ticket he acquires in pursuance of the arrangement is likely to present difficulties. The person in whose name the lottery ticket issues obtains the legal title to what is a chose in action. If he is the applicant he obtains the custody of the ticket and is in a position to exercise whatever rights the ticket confers and deal with it as he chooses. If the application is or must be taken to be for the benefit of another or others or of himself and another or others he has the legal title unless the ticket issues in the names of the person or persons beneficially entitled. Otherwise they have nothing but an equitable interest in the ticket and its proceeds if it wins a prize. In other words he becomes a fiduciary agent or trustee. It is not a trust or a fiduciary agency involving many duties or burdens. It is of the simplest kind and the fiduciary obligations flowing from it are few and for the most part negative, that is to say he must do nothing to impair the rights of the persons for whom he holds the ticket. …
A ready means of identifying the lottery ticket as that applied for in the interests of others is furnished by the space in the form of application for the name or title of a syndicate. If it is part of the arrangement between the contributors that a given syndicate name should be used then of course all that need be done by the person to apply for a ticket on their behalf is to use that name in the application. If a claim is made against him on the footing that some winning ticket he has purchased is that which he holds as a fiduciary he will discharge the burden of proof thrown upon him by proving that he used the syndicate name in his application for some other ticket. But in reference to the burden of proof, it is important to distinguish between the terms of the arrangement and the identification of the ticket acquired on behalf of the joint contributors. Where a joint contributor relies upon the terms of the arrangement in support of his title to a share or interest in the winning ticket which he asserts was bought on the joint account, the burden is upon him of establishing the terms in question. That is part of the contract or mandate and it is for the plaintiff to prove what the contract or mandate was insofar as it forms part of the title which he asserts. (emphasis added).
It was submitted on the defendant's behalf that the third to sixth plaintiffs' claim based on this reasoning fails because they are unable to establish the existence of a binding contract. I have already recorded my finding that there was no intention to create contractual relations.
The third to sixth plaintiffs' response to the submission that a binding contract was required was to submit that the existence of the fiduciary or trust obligations identified by Dixon CJ did not depend on the existence of a binding contract. I agree with that submission. As is apparent from the words and phrases italicised in the passage I have cited, his Honour referred variously to: the circumstance of an application 'being taken to be for the benefit of another'; to 'the arrangement'; and to a 'contract or mandate'. In my view, nothing in the passage of Dixon CJ's judgment in Van Rassel justifies the conclusion that a binding contract must exist before the obligations identified are imposed. Nor, indeed, is there any legal principle of general application that requires the existence of a contract before fiduciary or trust obligations may arise.
It was submitted on the defendant's behalf that even if (as I have found) the plaintiffs are to be taken as having intended that their practice of buying a weekly lotto ticket was to have legal consequences, the Property was not the subject of a trust as contended for by them because of the provisions of s 34 of the Property Law Act 1969 (WA). Section 34 of the Property Law Act 1969 provides:
34. Instruments required to be in writing
(1)Subject to the provisions hereinafter contained in this Act with respect to the creation of interests in land by parol -
(a)no interest in land is capable of being created or disposed of except by writing signed by the person creating or conveying the interest, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;
(b)a declaration of trust respecting any land or any interest therein shall be manifested and proved by writing signed by a person who is able to declare the trust or by his will;
(c)a disposition of an equitable interest or trust subsisting at the time of the disposition shall be in writing signed by the person disposing of the interest, or by his agent thereunto lawfully authorised in writing or by will.
(2)This section does not affect the creation or operation of resulting, implied or constructive trusts.
A trust of the nature described by Dixon CJ in Van Rassel v Kroon is an express trust, the intention to create a trust being inferred from the nature of the transaction and the relationship between the parties: Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6; (2015) 317 ALR 225 [3] - [11] (French CJ).
I do not accept the defendant's submission that s 34 of the Property Law Act stands in the way of the existence of an express trust in favour of the third to sixth plaintiffs in respect of the Property. The trust was created before the Property was acquired. In Tony's hands, the ticket and, thereafter, the prize money was impressed with a trust in favour of the third to sixth plaintiffs. When part of the prize money was used to buy the Property it became subject to the same trusts. The corpus of the trust changed from cash, (to describe the asset in lay terms), to real property. If Tony had denied the third to the sixth plaintiffs' interests, they would have been able to trace their interest in the prize money into the Property. Section 34 of the Property Law Act 1969 did not operate to extinguish the trust on the acquisition of the Property.
In my opinion, the third to sixth plaintiffs have succeeded in establishing that Tony held the Property on trust for them and him, and that they each held a one‑fifth interest in it.

Common intention constructive trust

Before a constructive trust based on the common intention of the parties may be found, two matters must be established: first, the existence of a common intention that the relevant parties should have a beneficial interest; and secondly, that the claimant acted to his or her detriment on the basis of that common intention: Green v Green (1989) 17 NSWLR 343, 355 (Gleeson CJ), Stowe v Stowe.
In Smith v McDonnell (Unreported, NSWSC, Library No 4166, 30 March 1995) Hodgson J was required to consider whether lotto prize money was held on constructive trust. His Honour found that the required common intention existed between a young man and a young woman who were in a sexual relationship that had lasted three or four months, but which they had agreed would not be a close emotional relationship. Hodgson J inferred the intention, that had not been expressed, from, amongst other things, the facts that: the couple had a practice of sharing expenses for food, cigarettes, scratch lotto tickets and other small expenses comparable with lotto tickets; they checked lotto tickets together; and, finally, as his Honour found, uncertainty as to the contributions made by each of them to the winning ticket.
In D'Souza v Auguste [2001] WASC 310 the plaintiff claimed an interest in a lotto ticket in the possession of his de facto partner. The ticket had won a first division prize. One of the grounds on which the claim was advanced was that the plaintiff and his partner had a common intention to share the proceeds. The claim failed on the basis of a factual finding by Pullin J, as his Honour then was, that the requisite common intention did not exist.
I have found that there was a common intention held by Tony and the third to sixth plaintiffs that any lotto prize money won on a ticket bought in accordance with the practice I have described earlier in these reasons would belong to them all and be shared equally between them.
The question that then arises is: did the third to sixth defendants act to their detriment on the basis of the common intention? I consider that they did so act by allowing Tony to live in the Property rent free and to treat it as his home from late 1999/early 2000 when Lesley left the Property. If Tony had ever asserted that the third to sixth plaintiffs had no interest in the Property, notwithstanding their reluctance to confront him, I am sure that they would have taken steps to have him acknowledge their interests.
Accordingly, in my judgment, the third to sixth plaintiffs have succeeded in establishing the existence of a common intention constructive trust pursuant to which Tony held the Property on trust for each of the third to sixth plaintiffs and him. Tony and each of the third to sixth plaintiffs held a one‑fifth equitable interest in the Property.
A common intention constructive trust creates substantive rights and is not merely an equitable remedy that comes into existence when a court makes a declaration to that effect: Parsons v McBain [2001] FCA 376; (2001) 109 FCR 120 [9] - [16] (Black CJ, Kiefel & Finkelstein JJ) and the authorities there cited, in particular the observations of Deane J in Muschinski at 614. The third to sixth plaintiffs' equitable interests were thus created before the Freezing Notice was served.

Constructive trust based on unconscientious reliance on legal title: the Baumgartner principle

The essential principle was summarised by Deane J in Muschinski at 620 as follows:
Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do.
This passage was cited with approval and applied in Baumgartner by Mason CJ, Wilson and Deane JJ at 148.
In Willis v The State of Western Australia[No 3] [2010] WASCA 56, Buss JA (with whose reasons McLure P and Owen JA agreed) reviewed the leading authorities and set out the principles. Those are the principles that have guided my consideration of this basis of the third to sixth plaintiffs’ claim.
In Henderson v Miles(No 2) [2005] NSWSC 867 [19] Young CJ in Eq referred to the equity identified by Deane J in Muschinski as 'the Windfall Equity' (see also Young, Croft, Smith, On Equity (2009) at [6.750 ‑ 6.800]). The third to sixth plaintiffs submit, in effect, that it would be unconscionable to permit Tony to retain the prize money and the Property to the exclusion of them as this would provide him with an unexpected gain or windfall.
Counsel for the defendant reminded me that a constructive trust is not to be imposed in accordance with idiosyncratic notions of what is just and fair but only if the imposition of the trust can be sustained by applicable principles of equity (see Deane J in Muschinski at 615 ‑ 616 and Mason CJ, Wilson and Deane JJ in Baumgartner at 148).
I interpolate, however, that in Muschinski Deane J stated that:
That is not to say that general notions of fairness and justice have become irrelevant to the content and application of equity. They remain relevant to the traditional equitable notion of unconscionable conduct which persists as an operative component of some fundamental rules or principles of modern equity (616).
This passage was cited with approval by Mason CJ, Wilson and Deane JJ in Baumgartner at 148, and their Honours observed that the concept of the constructive trust was one of the concepts of equity to which the notions of fairness and justice remain relevant.
Mr O'Sullivan, for the defendants, made three submissions as to why a constructive trust on the basis of the Baumgartner principle should not be found: first, it was submitted that the purchase on a weekly basis of a lotto ticket could not constitute a 'joint endeavour for the enhancement of the parties' which might attract the application of the Baumgartner principle. It was argued that the parties were involved in no more than a game of chance in which their prospects of winning were very small and, by way of example, that was to be contrasted with a joint investment in shares or other property.
Secondly, it was submitted that such a constructive trust fails because there was no clear evidence of the contributions made by the parties.
Thirdly, it was submitted that Tony had not acted unconscionably because he had done what was expected of him by distributing at least some of prize money to the rest of the family.
To ensure that I consider this basis of the third to sixth plaintiffs' claim from the perspective of principle, and to guard against determining the matter on the basis of the application of any idiosyncratic notions of what is just and fair that I might harbour, I will consider each of the requirements that must be satisfied before such a constructive trust will be recognised in turn.

Was there a joint endeavour?

Within the context of constructive trusts of the Baumgartner variety the facts of this case are unusual. The principle has been applied most commonly in cases concerning the division of residential property between former de facto partners or in family disputes between parents and children.
Unusual though the situation may be, I see no reason in principle why the purchase of a lotto ticket by a (family) syndicate should not be capable of amounting to a joint endeavour that is the foundation for the application of the Baumgartner principle, especially if the syndicate has a practice of purchasing lotto tickets on a regular basis. The fact that the chances of a win are small is not a rationale for saying the principle should not apply. A cynic might say the same about investments in the share market. As cases such as Van Rassel v Kroon and Smith v McDonnell demonstrate, the law of trusts has been applied to the purchase of lotto tickets. Indeed Smith v McDonnell is an example of the imposition of a constructive trust over lotto prize money.
Accordingly, I conclude that the practice of purchasing a weekly lotto ticket by the plaintiffs and the purchase of the ticket that won the first division prize in 1999 was a joint endeavour capable of attracting the application of the Baumgartner principle.

What did the parties contribute?

In Baumgartner, Mason CJ, Wilson and Deane JJ observed at 150 that when considering the contributions made to a joint endeavour:
The court should, where possible, strive to give effect to the notion of practical equality, rather than pursue complicated factual inquiries which will result in relatively insignificant differences in contributions and consequential beneficial interest.
Subject to the two qualifications stated in my factual findings, I have found as a fact that it was more likely than not that the family members contributed to the purchase of the winning lotto ticket equally. There is no necessity for a detailed factual finding as to precisely what each family member contributed to the price of the winning ticket.

On what basis were the contributions made?

It is not sufficient to attract the Baumgartner principle that the family members pooled their resources to purchase lotto tickets; they must have done so for the advancement of their mutual security and benefit: see Baumgartner at 149 (Mason CJ, Wilson & Deane JJ).
I have found that the common intention was that any prize money would be for the joint benefit of the plaintiffs, and that they were each entitled to an equal share of it. On that basis of that finding, I hold that the contributions were made with the intention advancing the mutual security and benefit of all of the plaintiffs.

Was the substratum of the joint endeavour removed without attributable blame?

It is the absence of attributable blame on the part of the third to sixth plaintiffs which is relevant: Brennan v Duncan [2006] NSWSC 674 [51] (White J).
On the facts, no question of attributable blame on the part of the third to sixth plaintiffs arises.

Is there an appropriate equitable remedy falling short of the imposition of a constructive trust?

In the particular circumstances of this case, I have concluded that there is no equitable remedy falling short of the imposition of a constructive trust which would constitute an appropriate recognition of the third to sixth plaintiffs’ interest.

Conclusion on the application of the Baumgartner principle

I hold that Tony held the Property on constructive trust for each of the third to sixth plaintiffs and him on the basis that they each held a one‑fifth equitable interest. Although this is a different form of constructive trust from that considered in Parsons v McBain (and perhaps one whose remedial character is more apparent) on the basis of the reasoning in that case, I hold that the constructive trust existed from the moment Tony acquired the legal title to the Property.

The defences of laches and acquiescence

It was submitted on the defendant's behalf that the delay on the part of the third to sixth plaintiffs in asserting their equitable claims was a delay over some 10 years, 1999 to 2009, and that the equitable defence of laches operates as a complete defence to their claims.
It was also submitted that the third to sixth plaintiffs had acquiesced in a situation in which Tony had conducted himself as the absolute owner of the prize money, the Bayswater properties and the Property.

I will proceed on the basis that the defence of laches consists of delay coupled with prejudice and that acquiescence requires calculated (deliberate and informed) inaction on the part of a claimant which has encouraged the other party to reasonably believe that his conduct was accepted or not opposed by the claimant, Meagher Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, 2015) [38-010] ‑ [38-020].
The defence of laches does not operate to defeat the third to sixth plaintiffs' claims. The defendant has not identified any prejudice that, combined with the delay to which it points, would give rise to the defence of laches.
I am not satisfied that acquiescence of the kind contemplated in the passage from Meagher Gummow & Lehane to which I have referred is made out by the defendant. First, the third to sixth plaintiffs did not make a deliberate and informed decision to take no action. Secondly, there is no evidence that any inaction on the part of the third to sixth plaintiffs encouraged Tony to any belief, let alone a belief that the third to sixth plaintiffs accepted that he was the absolute owner of the Property.

The debt to the ANZ Bank

In closing submissions counsel for the third to sixth plaintiffs submitted that 'in determining the proportion that is the objectors' share of the property, the share of the proceeds of sale which represents the first objector's share should be applied to the satisfaction of the mortgage encumbrance of the ANZ Bank' [150].
This submission was predicated on the proposition that to the extent to which Tony encumbered the Property for his own benefit, the encumbrance must be taken to diminish his own equitable entitlement before it diminishes the equitable entitlement of the other beneficial owners.
In oral closing submissions, Mr Chenu, for the third to sixth plaintiffs, accepted that the ANZ Bank should be paid out in full from the proceeds of sale of the property. He argued, however, that:
the true measure of the value of the property that is proportional to the objectors' share of the property is not diminished by the fact that Tony has borrowed against the property and applied those borrowings for his own use (ts 383.3).
He contended that the order that should be made is that each of the third to sixth plaintiffs is entitled to one fifth of the proceeds of sale, net of sale expenses, and to the extent to which Tony's share is capable of satisfying the debt to the ANZ Bank it should be so applied; but if the debt due to the ANZ Bank exceeds the value of what was notionally Tony's share, then the balance of the debt should be borne by the third to sixth defendants in equal proportions.
I have concluded that the statutory regime does not permit me to make an order based on the 'true measure of the value of the property' as contended for by the third to sixth plaintiffs.
The term 'value' in relation to property sold by or for the State is defined by s 152 of the CPCA as follows:
(1)If property is sold by or for the State under this Act, the value of the property is taken to be equal to the proceeds of the sale after taking account of the following -
(a)costs, charges and expenses arising from the sale;
(b)if a freezing notice or freezing order is or was in force for the property — expenses incurred by the State or a person appointed to manage the property while the notice or order was in force;
(c)if the property has been confiscated — any expenses incurred by the State or a person appointed to manage the property after it was confiscated;
(d)any charges on the property.
(2)If the property is subject to a mortgage which is also security against other property then, despite any other enactment and any inconsistent term of the mortgage, the extent of the security over the sold property is the proportion that the value of the sold property bore to the total value of all the secured property at the time that the security over the sold property was given.
In my view, the word 'charges' in s 152(1)(d) is intended to include statutory charges created by mortgages of land pursuant to s 106 of the Transfer of Land Act 1893 (WA). This conclusion is reinforced by the reference to 'a mortgage' in s 152(2).
In calculating the value of a property for the purposes of determining the amount to be paid to an objector pursuant to s 82(5) of the CPCA, the statutory definition of value dictates the conclusion that the entirety of the debt secured by a mortgage over the property must be deducted from the proceeds of sale. The court does not have the power to direct that the debt be discharged out of the proceeds of sale notionally allocated to one owner's share. In short, in my view s 82(5) of the CPCA does not permit the court to take the course contended for by the third to sixth plaintiffs.

Orders

For the reasons given above I consider that orders should be made as follows:
(i)The objections of the first plaintiff and the second plaintiff to the confiscation of frozen property made by notice of originating summons dated 18 August 2009 be dismissed.
(ii)The land situated at and known as Lot 64 on Diagram 70358, being the whole of the land comprised on Certificate of Title Vol 1739, Folio 90, commonly known as 113 Castlecrag Drive, Kallaroo, Western Australia, (the Property), has been confiscated to the State of Western Australia.
(iii)Pursuant to s 82(4) and s 82(5) of the Criminal Property Confiscation Act 2000 (WA), when the Property is sold after confiscation
(a)the ANZ Bank is to be paid an amount due and owing to it as at the date of settlement, pursuant to the rights and entitlements under the registered mortgage J451533, and
(b)subject to the interests of the ANZ Bank as mortgagee, each of the third, fourth, fifth and sixth plaintiffs, is to be paid an amount equal to one fifth of the net proceeds of sale of the Property.
I will hear the parties as to the precise terms of the orders and in relation to costs.