Walton v Walton
[2009] VCC 295
•3 April 2009
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
Case No. CI-07-04843
| KAY ELIZABETH WALTON | Plaintiff |
| v | |
| CRAIG WALTON | Defendant |
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| JUDGE: | HIS HONOUR JUDGE MISSO |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 12, 13, 16, 17 and 18 March 2009 |
| DATE OF JUDGMENT: | 3 April 2009 |
| CASE MAY BE CITED AS: | Walton v Walton |
| MEDIUM NEUTRAL CITATION: | [2009] VCC 0295 |
REASONS FOR JUDGMENT
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Catchwords: CONTRACT – oral agreement for the sale of land – identification of the agreement and its terms – acts of part performance required to negate the requirement for the disposition of an interest in land to be in writing – whether the plaintiff did acts of part performance: section 126 of the Instruments Act 1958 and sections 53(1)(a) and 55(d) of the Property Law Act 1958.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L Armstrong | Maddens |
| For the Defendant | Mr W Gillies | Sewells Larkins McCarthy |
| HIS HONOUR: |
Introduction
1 The plaintiff presently occupies 18 Murray Street East, Colac (“Murray Street”) with her daughter, Allisha Thornton, and Allisha's daughter.
2 The plaintiff has two daughters, Belinda Thornton and Allisha Thornton. Both are the half sisters of the defendant.
3 The defendant is the son of the plaintiff and the registered proprietor of Murray Street.
4 In essence the plaintiff says that she entered into an agreement with the defendant by which the defendant agreed to sell Murray Street to the plaintiff for $76,000.
5 The plaintiff says that she paid the defendant $76,000 and is entitled to specific performance of the agreement and a transfer of the title to Murray Street into her name, and alternatively, in the absence of an enforceable agreement, that the defendant holds Murray Street on trust for the plaintiff.
6 The defendant denies the plaintiff's claim. He admits that the plaintiff has been in occupation of Murray Street since about January 1998, but pursuant to a licence and on no other basis.
7 Mr L Armstrong of counsel appeared for the plaintiff and Mr W Gillies of counsel appeared for the defendant.
8 Mr Armstrong's instructing solicitor prepared a Court Book (“CB”). A copy was provided to Mr Gillies and a copy was provided for my use. During the course of the evidence of the witnesses called by the plaintiff and the defendant, reference was made to documents in the CB for convenience sake.
9 Also for convenience sake, rather than have the documents tendered separately, I permitted Mr Armstrong and Mr Gillies to tender documents by reference to the page numbers in the CB. I will henceforth refer to exhibits by their exhibit number and page number in the CB.
10 The plaintiff gave evidence and called her daughters, Allisha Thornton and Belinda Thornton.
11 The defendant gave evidence and called Mr Adam Prigg and Mr Liam Buchanan.
12 The plaintiff and the defendant tendered a large number of documents. A schedule of those documents is attached to these Reasons for Judgment.
The Beeac Property
13 The plaintiff and a Mr Mackay were the registered proprietors of a property at Beeac. They lived as domestic partners in a domestic relationship.
14 Some time in 1997, or thereabouts, the relationship between the plaintiff and Mr Mackay broke down. Mr Mackay made a claim against the plaintiff for adjustment of property interests which he and the plaintiff settled by the plaintiff paying him the sum of $9,500.
15 The plaintiff retained Larkins McCarthy, solicitors, to act on her behalf in relation to the claim made against her by Mr Mackay. A letter of Larkins McCarthy to the plaintiff was tendered in evidence which demonstrates the basis of the settlement.[1]
[1] Exhibit F - CB 42
16 The plaintiff said that the defendant advised her to have the Beeac property transferred into her name. She said that the cost of doing so was $1800, comprising bank charges and fees. She said the defendant also advised her to pay interest only on a mortgage secured over the Beeac property and to then sell it.
17 The plaintiff sold the Beeac property on 11 February 1998 for $120,000, and after paying out the mortgage and what legal fees were incurred, she was left with a net balance of $57,000.
18 The plaintiff was interested in purchasing an alternative place of abode rather than paying rent. The plaintiff looked at a property at Christies Road, Colac ("Christies Road"). She was accompanied by her daughter, Allisha. The plaintiff said that her daughter, Belinda, owned a horse. The Christies Road property was large enough to allow the horse to be retained.
The Move to Murray Street
19 The plaintiff said that the defendant accompanied her on one occasion when she looked at Christies Road. She said that the defendant told her that Christies Road required too much work. It was then that she said that the plaintiff offered to sell her Murray Street. She said this conversation occurred in late November at the Beeac property, and there were a lot of conversations subsequently which occurred between her and the defendant over the telephone and in person.
20 Additionally, the plaintiff said that the defendant told her that he had purchased Murray Street for $66,000 and that if she added on a further $10,000 he would sell Murray Street to her. She said the defendant told her that he had undertaken work on Murray Street estimated at $10,000.
21 The plaintiff agreed to purchase Murray Street from the defendant. She said that the defendant told her that he would keep the title in his name and keep the property in trust for her. She said that he specifically used the word "trust" during that conversation, and he added that Murray Street would be the plaintiff's property.
22 Allisha Thornton was called to give evidence by the plaintiff. She was born in 1983.
23 In about mid 1997, she said she was living at the Beeac property with the plaintiff.
24 She said she recalled looking at a property at Christies Road with the plaintiff. She said that the defendant had purchased a horse for Belinda. She said that the purchase of Christies Road would enable the horse to be retained.
25 She said that she recalled a conversation with the plaintiff during which the plaintiff said that she was buying the defendant's house. She believed the conversation occurred while she and the plaintiff were living at the Beeac property and that the conversation occurred some time in late 1997 or in early 1998.[2]
[2] Mr Gillies objected to Allisha Thornton giving evidence of the conversation with the plaintiff; however, I permitted her to give that evidence based upon a submission made by Mr Armstrong that evidence of that kind has been permitted in Lollis v Loulatzis [2007] VSC 547, per Kaye J, to establish the plaintiff's state of mind in a not dissimilar proceeding, but not to prove the truth of the content of the conversation: paragraph 157
26 She said she also recalled a conversation with the defendant in late 1997 or in early 1998 which was provoked by Belinda Thornton visiting the Beeac property to obtain some of her belongings. She said that the defendant was unhappy about Belinda Thornton making that visit and said something to the effect that Belinda would be screwed and that she and the defendant would get half of Murray Street.
27 This conversation was intended to convey that the defendant was acknowledging that he had sold Murray Street to the plaintiff and that upon the death of the plaintiff the estate of the plaintiff would go to Allisha Thornton and himself.
28 She said that she otherwise did not witness any other conversations between the plaintiff and the defendant because she was quite young, being about fourteen to fifteen years of age when the agreement alleged by the plaintiff occurred, and was often ushered out of the room occupied by the plaintiff and the defendant when they had discussions concerning financial matters.
29 Belinda Thornton was called to give evidence by the plaintiff. She was born in 1981.
30 She moved out of the Beeac property and went to live in Colac in late 1997. At the time when the Beeac property was sold she was living in Murray Street East, Colac, across the road from Murray Street.
31 She said that the plaintiff and Allisha told her that the plaintiff had agreed to purchase Murray Street from the defendant. She said that conversation occurred after the plaintiff and Allisha had moved into Murray Street and that it occurred in the lounge room of Murray Street.[3]
[3] I permitted Belinda Thornton to give that evidence on the same basis as the evidence of her sister, Allisha Thornton, on the subject of the conversation with the plaintiff regarding her purchase of Murray Street
32 The foregoing is the setting in which the plaintiff said she sold the Beeac property and took up occupation of Murray Street in about January 1998.
33 The plaintiff said that she had a very close relationship with the defendant consistent with them being the best of friends. She said that the defendant was her financial adviser; a father to his two sisters; the man of the house and someone whose advice she trusted.
34 When the defendant was cross-examined about the nature of his relationship with the plaintiff, he gave me the impression he was being coy about accepting that his relationship with the plaintiff was somewhat consistent with her description of it.
35 Both the plaintiff and the defendant said that the plaintiff did not get on well with the defendant's first and second wives and that from about 2002, and certainly by 2006, the occasions when they saw each other reduced from the defendant visiting the plaintiff for dinner on Monday nights and on other nights, to seeing her on formal occasions, such as birthdays, Mother's Day and Christmas Day, and then reduced to no contact at all.
36 It was in the context of the relationship which the plaintiff said she had with the defendant that she said that he had prepared handwritten notes regarding the proposed sale of the Beeac property.[4] It transpired that the handwritten notes were in fact those of a Mr Flynn, solicitor, of Larkins McCarthy.
[4] Exhibit E - CB 41
The Pleaded Agreement
37 The plaintiff pleaded in her Statement of Claim that the agreement was made in January 1998 and that the purchase price was $76,000.
38 Furthermore, she pleaded that a loan made by her to the defendant of $10,000 in about January 1997 was treated as part of the purchase price, as was a further payment of $6,000 made by the plaintiff to the defendant.
39 The further terms of the agreement were that the plaintiff would pay the balance of the purchase moneys by instalments in amounts and at times requested by the defendant, or as agreed between the plaintiff and the defendant, and that the defendant would vacate Murray Street and give up possession and use of it to the plaintiff and would retain the title to Murray Street until the purchase price had been paid in full and when the plaintiff requested a transfer of the title into her name.[5]
[5] Paragraphs 1 and 2 of the Statement of Claim
40 Pursuant to the agreement, the plaintiff says that she paid a total sum of $61,000 to the defendant by payments made on or about the following dates:
16 February 1998 - $28,000 16 February 1998
- $2,000[6] [6] The first of the payments of $2000 and $28,000 were made on 12 February 1998. Mr Armstrong sought my leave to amend paragraph 3 of the Statement of Claim to read that each of the payments was made on "16" February 1998. I granted leave to amend to accord with the date upon which the plaintiff said she actually gave the moneys to the defendant as opposed to the date upon which the
20 February 1998
- $5,000 23 February 1998
- $5,000 27 February 1998
- $5,000 8 April 1998
- $5,000 16 March 2000
- $1,000 24 March 2000
- $5,000
The Source of the Moneys
41 Mr Gillies made a sustained attack upon the plaintiff that, given the income earned by the plaintiff as against her expenses, she could only have survived financially by drawing down on her capital, and therefore she could not possibly have had the available funds to make the payments she alleges she made in paying the purchase price of $76,000.
42 The plaintiff said that she obtained moneys from a number of sources which were used by her to pay the purchase price of $76,000.
43 In about January 1997, the plaintiff was employed as a district nurse by the Colac Community Health Service. She applied for and obtained a voluntary departure package which entitled her to various statutory benefits, all of which amounted to a total payout of $47,000.
44 She said the sum of $47,000 was applied by her as follows:
• $10,000 was loaned to the defendant. • $6,000 was applied against a Visa card debt. •
$30,000 was transferred from her Commonwealth Bank account to a National Australia Bank account.7
• $9,500 was applied to the settlement reached with Mr Mackay.
moneys were withdrawn from her banking account.
An account operated by the defendant
•
About $3,000 went to legal fees relevant to the settlement reached with Mr Mackay.
• $6,000 was loaned to the defendant. •
The balance was left in the National Australia Bank account and, by agreement with the defendant, sums were paid to her by the defendant as she required the same. Some was applied by her to purchase furniture at the time when she moved into Murray Street.
45 The plaintiff said that the proceeds of sale of the Beeac property were deposited in a Commonwealth Bank account. She referred to a Streamline account number 10098368.[8]
[8] Exhibit G - CB 76. Mr Gillies called for the original bank statements which were tendered in evidence. I have referred to the reproduction of the bank statements in the CB hereafter simply for convenience sake because the individual pages of the bank statements are paginated in the CB
46 This account shows that on 11 February 1998, a sum of $59,874.48 was deposited, described as “SETTLEMENT PROCEEDS”.[9] On 12 February 1998, the plaintiff withdrew two amounts. The first was $2000 and the second was $28,000. The sum of $2000 was withdrawn in cash and was given to the defendant, and the second was withdrawn and paid to the defendant by bank cheque.
[9] Although the plaintiff gave evidence that the net proceeds to her of the sale of the Beeac property was $57,000, it is clear from the bank statement that she received a greater sum
47 The plaintiff said that she kept records of the movement of money in and out of her banking accounts by applying a tick to transactions evidenced on the bank statements and, for example, in relation to the two withdrawals on 12 February 1998, she drew a bracket around both figures in handwriting and wrote to the right side of the bracket the word "Craig", which is a reference to the defendant.
48 The plaintiff also said that she was in the habit of recording transactions on a part of her bank book which provided space for a record of transactions. She pointed to a page of the record of transactions which she headed in her own handwriting “"Payments Craig” which records a previous amount of cash given to the defendant of $6,000 and an amount of $30,000 given to the defendant on 16 February 1998 which is the aggregate of the two sums withdrawn by the plaintiff on 12 February 1998.[10]
[10] Exhibit D - CB 336. The record of transaction also refers to other moneys given to the defendant which I will refer to later
49 In addition to the sums of money given to the defendant already referred to, the plaintiff verified the payments of the balance of the purchase moneys as follows:
•
$5,000 withdrawn from the Streamline account on 20 February 1998. A withdrawal for that amount is referred to in the bank statement of the Streamline account, and against that amount the plaintiff has handwritten "Craig".[11]
•
$5,000 withdrawn from the Streamline account on 23 February 1998. A withdrawal for that amount is referred to in the bank statement of the Streamline account, and against that amount the plaintiff has handwritten "Craig".[12]
•
$7,500 withdrawn from the Streamline account on 27 February 1998. A withdrawal for that amount is referred to in the bank statement of the Streamline account, and against that amount the plaintiff has handwritten "$5000 Craig".[13]
•
$5,500 withdrawn from the Streamline account on 8 April 1998. A withdrawal for that amount is referred to in the bank statement of the Streamline account, and against that amount the plaintiff has handwritten "Craig $5,000 Bills 500".[14]
•
$5,300 withdrawn from the Streamline account on 6 May 1999. A withdrawal for that amount is referred to in the bank statement of the Streamline account, and against that amount the plaintiff has handwritten "Craig $5,000 Me $300".[15]
•
$1,000 withdrawn from the Streamline account on 16 March 2000. A withdrawal for that amount is referred to in the bank statement of the Streamline account, and against that amount the plaintiff has handwritten "Craig".[16]
•
$5,000 withdrawn from the Streamline account on 24 March 2000. A withdrawal for that amount is referred to in the bank statement of the Streamline account, and against that amount the plaintiff has handwritten "Craig".[17]
[11] Exhibit G - CB 77
[12] Exhibit G - CB 78
[13] Exhibit G - CB 78
[14] Exhibit G - CB 80
[15] Exhibit G - CB 83
[16] Exhibit G - CB 84
[17] Exhibit G - CB 84
50 The plaintiff said that when she received a bank statement she would note, by various handwritten notations, the party to whom the money was paid or the purpose to which the money was put.
51 I have examined all of the bank statements of the Streamline account[18] for the purpose of determining whether there are other handwritten notations which suggest that the plaintiff probably made notations at the time when she received the bank statements.
[18] Exhibit G - CB 76-85
52 Mr Gillies cross-examined the plaintiff at some length about the bank statements and challenged her very seriously by suggesting that the notations were a concoction made by the plaintiff in order to support her case that she had paid the consideration for the purchase of Murray Street. I will deal with his cross-examination in greater length later.
53 It is clear from my examination of the bank statements that not every withdrawal has a notation. The notations of 19, 21, 29 January 1998 and 2 and 6 February 1998 have ticks against them associated with a debit relevant to the plaintiff shopping at supermarkets.
54 There are notations against debits on 19 February 1998, and four against debits on 20 February 1998. There is a notation against a debit on 6, 18 and 31 March 1998 and 1 April 1998, and ticks against debits on 19, 24, 31 March 1998 and 1 April 1998, again relevant to the plaintiff shopping at supermarkets.
55 However, the trend of notations ceases for the balance of the bank statements through April and into May 1998 except for notations against credits on 7 and 13 May 1998.
56 The relevance of my close examination of the bank statements is because Mr Gillies not only cross-examined the plaintiff at great length in an endeavour to show that the plaintiff's evidence of the movements of money into and from the Streamline account was unreliable and unlikely to have involved withdrawals for the purpose of giving money to the defendant, but that the notations were a concoction where they referred to the defendant.
57 Mr Gillies spent some time cross-examining the plaintiff on the handwritten notations at the bottom of one page of the bank statements.[19]
[19] Exhibit G - CB 77
58 Mr Gillies submitted that the notations were an attempt by the plaintiff to review the movement of money out of the Streamline account in an attempt to find withdrawals which, when added up, equated to the purchase price of Murray Street.
59 It is difficult in the body of this judgment to replicate the handwritten notations, but they seem to be as follows:
"23/2 Craig 5,000
Pd 35,000
Cash $6,000 $46,000
15,000
$61,000
26/2 Cash 5,000 $51,000"[20]
[20] It is difficult to determine whether the last figure is $51,000 or $61,000
60 A long swirling line was run through all of the figures with a more concentrated series of swirling lines around the figures of 15,000 and $61,000.
61 On the far right-hand side of the same page there are other calculations which were not the subject of cross-examination.
62 The plaintiff denied that she had made an attempt to reconstruct a case against the defendant and that the figures on that page are a concoction consistent with such an attempt.
63 Further, Mr Gillies engaged in a financial analysis of the plaintiff's income against expenditure in order to show that the plaintiff did not have the income available to pay the defendant. In arriving at these figures used by Mr Gillies he calculated the plaintiff's expenditure obtained from discovered documents, estimates made by the plaintiff of her weekly grocery bill and what she spent on gambling, and her taxable income from discovered documents.
64 The figures essentially worked out as follows:[21]
[21] A copy of documents provided by Mr Gillies headed "Summary of Totals on Discovered Documents 3" and "FINANCIAL DETAILS" and "EXPENDITURE" are attached to these Reasons for Judgment. The calculations contained in the document headed "EXPENDITURE" were taken from Exhibits H - AC
98/99 99/00 01/02 02/03 03/04 04/05 05/06
Expenditure $22,366.69 $20,571.71 $21,191.40 $17,527.62 $21,956.53 $19,731.50 $17,113.73
Income $9,065.70 $9,122.69 $9,465.12 $9,743.22 ? $11,092.20 $11,825.00 65 Mr Gillies calculated the total of the plaintiff's expenses to be $112,207.65 from 1 July 1998 to 30 June 2006 before taking into account an estimate of the plaintiff's weekly household expenditure and weekly gambling expenditure.
66 Mr Gillies also calculated the plaintiff's expenditure, not included in the table subjoined to the preceding paragraph, based upon documents tendered by the plaintiff to be $41,417.64.
67 The plaintiff was provided with each of the documents prepared by Mr Gillies containing the foregoing calculations. Whilst it was clear that she had not herself undertaken calculations of that sort and to that degree, she did not disagree with those figures; nor did Mr Armstrong on her behalf.
68 Although an interesting exercise, I am not convinced that it demonstrated the point which Mr Gillies set out to establish. Mr Armstrong submitted that the figures failed to take into account a number of sources of capital and income obtained by the plaintiff, and I think Mr Armstrong's submission is to be preferred.
69 Firstly, on 11 February 1998, the plaintiff deposited the proceeds of sale of the Beeac property, being $59,871.48, from which she says all of the moneys given to the defendant were derived, as summarised in paragraph 44 above. From that date it is clear that the balance of the bank statements, until the last entry on 24 May 2000, shows a credit balance all the way through, with the final balance being $601.91 in credit.
70 Secondly, Mr Armstrong submitted that Mr Gillies' analysis also ignores:
•
Lump sums which were paid to the plaintiff by way of superannuation on 27 April 1999 of $6,000.21 and on 16 March 2000 of $6,000.
•
Periodic payments of the plaintiff's pension from the Department of Social Security.
•
Periodic payments of rental assistance obtained by the plaintiff from the Department of Social Security.[22]
•
$28,000 which the plaintiff won at a casino in Perth which was deposited in a St George Bank pensioner account on 24 September 2004.[23]
•
The balance available to the plaintiff after moneys were applied in the various ways referred to in paragraph 39 above, which was estimated by the plaintiff to be as much as $12,500.
•
The use by the plaintiff of a Visa credit card which the plaintiff said stood at about $6,000 in debit ten years ago (1999) and now stands at $30,000 in debit, meaning that the plaintiff has used some $24,000 credit over the last ten years.
•
The plaintiff has done odd jobs since she retired which she said had not exceeded permissible earnings set by the Department of Social Security of $60 per fortnight, although the evidence given by the plaintiff of the odd jobs she had performed was vague, and left me with the impression that whatever odd jobs she had undertaken were few and far between.
•
The estimate made by Mr Gillies of the plaintiff's attendance at gaming venues must be seen in the light of the plaintiff's evidence that she rarely now attends those venues, which means that the money she extends on gambling is significantly less than the estimate made by Mr Gillies.
[22] Exhibit 6
[23] Exhibit X
71 An addition to the principal capital sums of the voluntary departure package; the sale of the Beeac property; the gambling win; lump sums by way of superannuation and the use of the credit card is about $158,000, without taking into account the receipt by the plaintiff of a pension and rental assistance.
72 It follows that I do not accept the evidence of Mr Prigg that he gave two envelopes to the plaintiff in October 1998, or Mr Buchanan that he saw an envelope given to the plaintiff by the defendant.
73 Mr Gillies cross-examined the plaintiff about a number of documents which were discovered by the plaintiff relevant to an application which the plaintiff made to the Department of Social Security for rental assistance.
74 The plaintiff candidly admitted that she falsely declared that she was renting Murray Street and received the rental assistance referred to in Exhibits 5 and 6. She was referred to a receipt dated 31 January 1998 directed to her for the receipt of $440 rent for the period from 31 January 1998 to 28 February 1998.[24] She said it was the defendant's idea to generate the receipt for his tax purposes, and that he was a willing co-conspirator with her in making a false application for rental assistance, and furthermore, that in conspiring with her he was required to fill out documents representing to the Department of Social Security that in fact he was renting Murray Street to the plaintiff.
[24] Exhibit 10 - CB 37
75 The defendant said that the receipt is in his handwriting and was evidence of an agreement to lease Murray Street to the plaintiff. He was uncertain whether he received the sum of $440 or not, and said that he did not collect any rent subsequently from the plaintiff, saying words to the effect “How could I collect rent from my mother?”
76 Mr Armstrong cross-examined the defendant about his knowledge that the plaintiff was receiving rental assistance. He was coy when giving evidence on that subject, but admitted that he was aware that she was receiving rental assistance from the Department of Social Security.
77 The evidence of the receipt of rental assistance is in Exhibits 5 and 6. Exhibits show the plaintiff's receipt of rental assistance commencing on 12 February 1998 and ceasing on 9 February 2007, demonstrating the receipt of weekly rental assistance of $87.40 in December 1998 and as much as $103.20 in February 2007. The plaintiff received rental assistance for about nine years. The figures were not added up, but as a yardstick, averaging $87.40 and $103.20, is $95.30, and over nine years is $44,600.40.
78 I was invited to undertake the exercise of adding up these figures by Mr Armstrong, who submitted that when all of these sources of capital and income derived by the plaintiff over the years are brought together, a very different picture emerges from that painted by Mr Gillies on behalf of the defendant.
79 I reject the submission made by Mr Gillies that the plaintiff did not have the capital or the income to be capable of paying a total sum of $76,000 to the defendant and still be able to pay her way on a weekly basis and for the improvements which she says she undertook at Murray Street which Mr Gillies calculated as being in the order of $41,417.64.
Did the Defendant Repay the Moneys?
80 From the evidence of the plaintiff, Allisha Thornton, the defendant, and Mr Buchanan, it became very clear to me that dealing in large sums of cash was a very commonplace event for each of them.
81 The bank statements of the plaintiff's Streamline account are replete with examples of withdrawals of moderate sums of cash by the plaintiff.[25] In addition to the withdrawals of sums of cash which the plaintiff says were withdrawn for the purpose of paying the purchase price of Murray Street, there are many other withdrawals of $200 or more.[26]
[25] Exhibit G - CB 76-85
[26] Exhibit G - CB 76-85, and particularly 21 January 1998 $500; 20 February 1998 - $3000; 6 March 1998 - $2000; 31 March 1998 - $800; 8 April 1998 - $5,500, of which $500 was withdrawn to pay bills; 16 April 1998 - $650; 30 April 1998 - $800; 20 May 1998 - $500; 11 March 1999 - $280; 27 April 1999 - $500; 6 May 1999 - $5,300, of which $300 was withdrawn for her own use; 8 March 2000 - $640; 22 March 2000 - $400 and 20 April 2000 - $300, and a further withdrawal of $300.
82 The plaintiff said that it was her habit to pay bills using cash. She even said that when she had cash in her possession she would put it into her freezer for safekeeping. Allisha Thornton gave evidence of doing the same thing; that is, when she had an amount of cash which she intended to use to buy a car, the plaintiff suggested that she put it in the freezer for safe keeping, which is what she did.
83 The plaintiff gave evidence at considerable length of not only the withdrawals of cash which I have already referred to, but payment of general household living expenses and maintenance, renovation and beautification work at Murray Street by cash.[27]
[27] Exhibits H - AD. Exhibits L and M were described by the plaintiff as her handwritten recording of payment of expenses, with Exhibit L comprising a daily planner which the plaintiff kept between 2 April 1998 and 16 March 2005 and with Exhibit M comprising a cash account ledger kept by the plaintiff between 18 February 1999 and 25 February 2002
84 Transactions in cash were not just limited to the plaintiff and Allisha Thornton. The defendant was also in the habit of handling large amounts of cash.
85 He admitted that of the $30,000 given to him by the plaintiff from the proceeds of her voluntary departure package, $2000 was given to him in cash. He admitted that the balance of about $12,500, referred to in paragraph 39 above, was repaid to the plaintiff in cash.
86 A central part of the defence of the defendant was that he admitted receiving a total of $40,000 from the plaintiff, comprising three payments of $30,000 on 13 February 1998;[28] $5,000 on 20 February 1998; and a further sum of $5,000 on 2 March 1998.[29] However, the defendant said that he repaid the whole of those moneys to the plaintiff by intermittent payments between 16 March 1998 and 14 December 1998.
[28] The sum of $30,000 referred to by the defendant is the same sum of $30,000 withdrawn by the plaintiff on 12 February 1998: Exhibit G - CB 76
[29] Exhibit 11
87 Indeed, the defendant's habit of dealing in large amounts of cash was demonstrated by the evidence of Mr Buchanan. He said that the defendant loaned him $10,000 which was paid to him in cash. He said that he repaid the defendant in cash by instalments, and on each occasion that such a repayment occurred it was noted in either the same or a similar spirex notebook which the defendant tendered in evidence as proof that he had not only received $40,000 from the plaintiff but had repaid it.
88 Mr Buchanan said that the spirex notebook was kept in a desk drawer at the defendant's place of employment where both the defendant and Mr Buchanan were employed. Mr Buchanan said that he had seen the spirex notebook and had seen a page which referred to a loan from the plaintiff to the defendant.
89 The impression I obtained from the evidence of Mr Buchanan was not of a positive identification of a page in the spirex notebook referable to the plaintiff, but of something he had seen which left him with that impression.
90 Mr Buchanan said, when shown the spirex notebook, that it was a similar spirex notebook, and I infer that what he meant was that it was the same type and size, but not necessarily the same spirex notebook.
91 Mr Buchanan also said that he went to dinner at the plaintiff's home with the defendant on one occasion when he saw an envelope handed by the defendant to the plaintiff. The inference that I was asked to draw from that evidence was that the envelope contained cash money.
92 Mr Adam Prigg was called to give evidence by the defendant. He said that when the defendant went overseas, coinciding with the birth of Mr Prigg's daughter on 13 October 1998, he was given two envelopes by the defendant, who asked him to hand them to the plaintiff. He said he did as the plaintiff instructed him on two separate occasions separated by one or two weeks. Mr Prigg said he was not aware of what was in the envelopes. The inference I was asked to draw from that evidence was that the envelopes contained cash money.
93 The defendant said that the plaintiff had given him lump sums of money which he presumed was her attempt to reduce amounts of capital in her possession to secure payment of a pension, and that it was at her behest that he repaid her lump sums intermittently to avoid the appearance of the plaintiff having amounts of capital which might disentitle her to a pension.
94 Furthermore, the defendant said that one other reason why he was given the lump sums of money by the plaintiff was because she was concerned not to have it in her possession because she would spend it, and I assume, spend it unwisely. The defendant did not advance any other reason why the plaintiff gave him those sums of money.
95 What is unusual about this evidence is that the three sums making up $40,000 were given to the defendant by the plaintiff on 13 February 1998 ($30,000); 20 February 1998 ($5,000) and 2 March 1998 ($5,000), and subsequently the first repayment made to the plaintiff was for $2000 on 16 March 1998, after which eighteen further payments were made, with the last being made on 14 December 1998.
96 Therefore, the plaintiff received $40,000 over a nine-month period from the defendant, none of which is reflected in any of her bank statements as deposits, nor in any of her other financial material which was tendered in evidence which demonstrated her spending habits. The only conclusion to be reached from the defendant's evidence is that the plaintiff either spent the $40,000 in addition to other moneys which she withdrew from her Streamline account over the same period or salted it away.
97 The only hypothesis advanced by the defendant of the use to which the plaintiff put her money was that she admitted to a gambling habit, but the cross-examination of her led to her admitting that she probably spent about $75 per week on gambling. I accept the plaintiff's evidence that she was a person who enjoyed gambling and that she engaged in gambling regularly, but I do not accept that she gambled much more than about $75 per week.
98 I do not accept the defendant's evidence that the schedule of repayments of $40,000 represents repayments of moneys given to him by the plaintiff. The spirex notebook has only one page still attached to the spirex binder. No explanation was given by the defendant of the whereabouts of the other pages. No documents were produced to verify where the money was deposited from, which amounts ranging between $1000 and $3000 were withdrawn for the purpose of repayment to the plaintiff.
99 The defendant said that he does not have any banking records and that it is his practice to dispose of bank statements because he has undertaken his banking through internet banking over the last ten years; however, that is not to say that no banking records exist which he could obtain from the banking institution from which those withdrawals were allegedly made.
Was there an Agreement?
100 It was the plaintiff's case that there was an agreement evidenced by the following:
•
An oral agreement that she would purchase Murray Street from the defendant.
• The payment of the agreed purchase moneys. • Her entry into occupation of Murray Street. •
The assumption by her of responsibility to pay the relevant rates and taxes levied on Murray Street.
•
The undertaking of maintenance, renovation and beautification work at Murray Street.
101 It was the defendant's defence:
• That there was never an agreement by which the plaintiff would purchase Murray Street from him. • That any amounts of capital which he received from the plaintiff were received by him as a result of the plaintiff wanting to avoid being disentitled to the receipt of a pension. • That he repaid to the plaintiff all of the amounts of capital which she had given to him. 102 I do not accept that the plaintiff and the defendant entered into a rental agreement evidenced by the receipt.[30] I accept the plaintiff's evidence that the application for rental assistance was based upon a false representation to the Department of Social Security that she was renting Murray Street, and in order to prove that she was renting Murray Street she required the complicity of the defendant which I find he gave willingly.
[30] Exhibit 10 - CB 37
103 I accept the plaintiff's evidence and that of Allisha Thornton and Belinda Thornton that the plaintiff had a close relationship with the defendant and that he was an adviser to her in relation to many aspects of her life, including, and importantly, matters of finance.
104 When the defendant was cross-examined by Mr Armstrong about his relationship with his mother before it soured, he was not only coy about admitting to the nature of their relationship, but he denied that he provided the plaintiff with any financial advice or guidance of any kind, and said that he was essentially unaware of the sale of the Beeac property and the plaintiff's settlement of the claim made against her by Mr Mackay.
105 However, I find that to be implausible. If he did not provide the plaintiff with any financial advice or guidance of any kind, and did not know much about the sale of the Beeac property and the claim made by Mr Mackay, he certainly knew that the plaintiff was not in a financial position to purchase an alternative dwelling, and was sufficiently knowledgeable of the plaintiff's financial state of affairs to acknowledge her need for an alternative dwelling by, on his account, offering the plaintiff to live at Murray Street rent free.
106 Furthermore, I find it implausible that he did not know that the plaintiff was undertaking maintenance, renovation and beautification work at Murray Street. He admitted that there were occasions when he commented on work which the plaintiff had undertaken on Murray Street, but that was in the context of the plaintiff spending money which he considered was ill spent, rather than asserting at any time that it was his house and that she was not to undertake maintenance, renovation or beautification work.
107 The substance of the evidence given by the plaintiff of the maintenance, renovation and beautification work she undertook is depicted in a number of colour photographs with captions relevant to each photograph[31] and payments made by the plaintiff for work done by a number of tradesmen and materials purchased by her.[32] The plaintiff said that she also paid the rates levied on Murray Street.
[31] Exhibit AF - CB 359-377
[32] Exhibits N - AF
108 The plaintiff's evidence of the work she undertook at Murray Street was confirmed in part by the evidence of Allisha Thornton and Belinda Thornton by reference to the photographs.
109 I also find it implausible that the defendant realistically considered that the degree of the maintenance, renovation and beautification work amounted to rent paid by the plaintiff. At one point in his evidence, when cross-examined by Mr Armstrong, he said he was really not aware of what maintenance, renovation and beautification work the plaintiff had performed on Murray Street, so to say that the work was in lieu of the rent when he did not know what work was being undertaken is odd and, in my opinion, implausible.
110 I do not accept the defendant's evidence that after purchasing Murray Street for $64,000 he then expended something in the order of $30,000 undertaking his own maintenance, renovation and beautification work prior to the plaintiff occupying Murray Street. The defendant did not produce any documentary evidence to support the claims be made that he expended money of that order, and in the course of giving that evidence he seemed to be guessing at what he spent money on.
111 The estimates given by the defendant were as follows:
• $2,000 to build a pergola • $3,500 for his share of the replacement of fencing • $1,000-$1,500 for plastering
• $500-$600 for skirting boards • $5,000-$6,000 to build a front fence • $5,000 to renovate the kitchen • $2,000 for drapes and venetian blinds. 112 The total expended, taking the upper estimates, is $20,600. After giving the foregoing estimates, the defendant said that he thought he had spent closer to $30,000 and not $10,000 which was what the plaintiff said the defendant told him he had spent on Murray Street.
113 Clearly the defendant was guessing at what he had spent on Murray Street, because to give the estimates but to then say that he had spent close to $30,000 is a very significant disparity, indeed, a disparity of close to $10,000. If he spent $30,000 it was half of the purchase price of Murray Street, which makes his estimate all the more implausible.
114 Furthermore, the defendant characterised himself as being a very careful businessman and one who kept receipts for work done at Murray Street, yet there were none relevant to the work he referred to, which on any view must have been significant work when the amount spent is compared with the purchase price of Murray Street.
115 The conclusions I have reached after analysing the evidence of the plaintiff and the defendant and their witnesses is that the plaintiff and the defendant did have a reasonably close relationship more consistent with the description of that relationship given by the plaintiff.
116 The closeness of the relationship of the plaintiff and the defendant was the background setting in which they discussed the plaintiff's future after she sold the Beeac property.
117 The defendant offered to sell Murray Street to the plaintiff on terms which were favourable to the plaintiff and represented a value not inconsistent with the purchase price, with the addition of the value of the work the defendant says he undertook on Murray Street before entering into the agreement with the plaintiff. The plaintiff and the defendant reached a concluded agreement consistent with the terms pleaded by the plaintiff in the Statement of Claim.
118 The favourable terms upon which the plaintiff and the defendant agreed gave the plaintiff time to use the lump sums available to her, the income she obtained through the pension, the receipt of rental assistance and lump sums of superannuation, to pay the plaintiff the sum of $76,000.
119 I accept the evidence of the plaintiff that she told her daughters, Allisha Thornton and Belinda Thornton, at a time contemporaneous with the agreement that she entered into with the defendant to purchase Murray Street that she had reached that agreement with the defendant; however, the limited reliance I make of that evidence is to the plaintiff's state of mind and not as to proof that the plaintiff and the defendant had reached that agreement.
120 The plaintiff entered into occupation pursuant to that agreement and exercised dominion over Murray Street consistent with a purchaser in possession.
121 I accept that the plaintiff set about the maintenance, renovation and beautification work of Murray Street, expending significant sums of money on it, because she had reached a concluded agreement.
Part Performance
122 Mr Gillies submitted that even if I found that there was a concluded agreement, the acts of part performance were insufficient to overcome section 126 of the Instruments Act 1958 which is in the following terms:
“(1) An action must not be brought to charge a person upon a special promise to answer for the debt, default or miscarriage of another person or upon a contract for the sale or other disposition of an interest in land unless the agreement on which the action is brought, or a memorandum or note of the agreement, is in writing signed by the person to be charged or by a person lawfully authorised in writing by that person to sign such an agreement, memorandum or note.”
123 Section 53(1)(a) is in the following terms:
"(1) Subject to the provisions hereinafter contained with respect to the
creation of an interest in land by parol–
(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by the operation of law; . . . "
124 Section 55(d) provides that nothing in section 53 shall affect the operation of the law relating to part performance.
125 Therefore, it is clear that acts of part performance are sufficient to overcome the effect of section 126.
126 Mr Gillies provided me with an extract of Voumard’s ‘The Sale of Land’[33] relevant to part performance. The author made the following general observations:
"In such cases the basis of the jurisdiction is the fraud of the defendant in refusing to carry out her or his part of the bargain when the plaintiff, on the face of the existence of the contract, has either wholly or in part carried out her or his obligations thereunder."[34]
[33] Fifth edition (Lawbook Co.)
[34] at 3-363
127 The author then referred to Riley v Osborne[35] in which Kaye J set out the principles relating to part performance:
“To come within the doctrine the act must be one from which the party seeking relief would suffer such detriment as would amount to fraud on the part of the other party by gaining benefit from the non-enforcement of the contract, if relief were not granted.”[36]
[35] [1986] VR 193
[36] 201
128 The author added:
"It is important to remember that in order to invoke the equitable doctrine of part performance the party seeking to rely on the doctrine of part performance must establish that there was either a concluded oral contract between the parties or alternatively that the concluded contract between the parties was oral and partly in writing."[37]
[37] at 3-363
129 Mr Armstrong referred me to Thwaites v Ryan,[38] in which Fullager J made the following observations relevant to the test whether part performance could be established:
“As I apprehend the law in Victoria at present, it is wrong first to postulate the contract pleaded and then to ask if the alleged acts were a part performance of it, or of a contract of its general nature: see the joint judgment of Isaacs and Rich JJ in McBride v Sandland (1918) 25 CLR 69, at pp. 77-9. One must first seek to find such a performance as must imply a contract, and then proceed to ascertain the general nature of such contract as the performance implies, and then to compare that result, if one gets to it, with the general nature of the contract pleaded. Their Honours, with whom Powers J agreed, said: ‘No harm can arise from reversing the order as a matter of convenience in taking evidence, provided the necessary elements of part performance are borne in mind and properly applied to the circumstances when the facts come under consideration. But if the terms of the oral bargain are first ascertained, and then the alleged acts of part performance are judged of merely by their consistency with or applicability to that bargain, grievous error may result.’"[39]
[38] [1984] VR 65
[39] at 77. I was also referred to Richardson v Armisted [2000] VSC 551, at paragraphs 119–123, where Hansen J reviewed a number of authorities, including Thwaites v Ryan (supra) and the dictum of Fullager J, which he applied at paragraph 119
130 Therefore, it is for the plaintiff to establish:
• Were the acts of part performance actually done by the plaintiff? • With respect to each act said to be acts of part performance, whether, on the balance of probabilities, they were unequivocally referable to the agreement between the plaintiff and the defendant, that is, were such acts of part performance done with a view to performing the agreement? • If so, what was the general nature of the agreement to which the acts of part performance pointed, that is to say, to which they were unequivocally referable? • If so, then has the point then been reached at which it must be considered whether there was in fact an agreement which was of itself of the general character established by the answer to the preceding question?[40] [40] Richardson v Armistead (supra), at paragraph 122
131 Answering each of those questions in order, firstly, I find that the acts of part performance were actually done by the plaintiff, and I think that is very clear on the evidence, that is, the act on the part of the plaintiff by entering into possession and then exercising dominion over Murray Street in such a way and to the extent that she treated Murray Street as her property.
132 Next, on the balance of probabilities, each of the acts of part performance as summarised in the preceding paragraph were unequivocally referable to the agreement between the plaintiff and the defendant and each of the acts of part performance were done with a view to the plaintiff performing the agreement.
133 Next, the general nature of the agreement to which the acts of part performance pointed, that is to say, to which those acts were unequivocally referable, was the agreement entered into by the plaintiff and defendant for the sale of Murray Street to the plaintiff.
134 Lastly, given the answer to the third question referred to in the preceding paragraph, that a point was reached where I consider that there was an agreement entered into between the plaintiff and defendant for the sale of Murray Street to the plaintiff of that character.
135 In summary, I find that the plaintiff and the defendant entered into an agreement in January 1998 by which the defendant agreed to sell Murray Street to the plaintiff for $76,000 and that the terms were as pleaded by the plaintiff in her Statement of Claim and I find that the plaintiff paid the whole of the purchase moneys to the defendant.
136 I find that the acts of part performance done by the plaintiff are sufficient to negate the requirement for the disposition of an interest in land to be in writing.
Conclusion
137 Therefore, I find for the plaintiff and I order that the defendant specifically perform the agreement by transferring his right title and interest in 86 Murray Street East, Colac, being the property more particularly described in Certificate of Title volume 8118, folio 492.
138 I will now hear the parties on the formal orders sought and on the question of costs.
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