Wysockyj v Szarmach

Case •

[2011] QDC 128

•

9 June 2011

DISTRICT COURT OF QUEENSLAND

CITATION:

Wysockyj v Szarmach [2011] QDC 128

PARTIES:

Ivan Wysockyj
(Applicant)

v

Hanna Iwona Szarmach
(Respondent)

FILE NO/S:

0587/10

DIVISION:

Civil

PROCEEDING:

ORIGINATING COURT:

District Court, Southport

DELIVERED ON:

9 June 2011

DELIVERED AT:

BRISBANE

HEARING DATE:

03/05/11, 09/05/11 and 10/05/11

JUDGE:

Searles DCJ

ORDER:

Application dismissed

CATCHWORDS:

Property purchased in Respondent’s name- Applicant provided funds-presumption of Resulting Trust

COUNSEL:

Applicant: G Smart

Respondent: J Otto

SOLICITORS:

Ransden Lawyers          - Applicant

DA Harris & Associates  -Respondent

Relief sought

  1. By his original application dated 8 December 2010 as amended in his Points of Claim filed 24 January 2011 the Applicant seeks the following relief:-

1.          A declaration that the Respondent holds one half of the estate in fee simple of property known as 21 Agymea Crescent, Varsity Lakes in the state of Queensland and more particularly described as Lot 38 on SP125574, County of Ward, Parish of Gilston on trust for the Applicant.

2. That trustees be appointed for the sale of the said property pursuant to s 38 of the Property Law Act 1974.

3.          That the costs of the trustees so appointed be paid from the Respondent’s share of the proceeds of sale.

4.          That any mortgage or encumbrance over the property be paid from the Respondent’s share of the proceeds of sale.

5.          In the alternative, an Order that the Respondent pay restitution to the Applicant in the sum of $185,000 (or such other sum as determined by the court).

6.          In the further alternative, damages in the sum of $160,000 for breach of contract.

7. Interest on any monies payable pursuant to s 41 of the Supreme Court Act 1995.

8.          Such further or other relief as to the court may seem meet .

9.          That the Respondent pay the Applicants costs of and incidental to the application on the indemnity basis.

  1. The basis of the Applicant’s claim is a resulting trust arising in his favour as a result of his contribution of $160,000 to the purchase of the property at 21 Agymea Crescent, Varsity Lakes on the Gold Coast (the property) to a total purchase price of $375,000[1].  In addition he claims 6.5 per cent of the property on constructive trust by reason of his further contribution of $25,000 towards its improvement[2].

    [1] Applicant affidavit 28 March 2010, para 21; Respondent affidavit 4 January 2011, Exhibit his2 (copy contract)

    [2] Points of Claim, paras 14-17

  1. The Respondent denies the claim and says the monies were a gift.  She says the agreement reached with the Applicant is reflected in a Deed of Agreement (Agreement) dated 7 September 2007 signed by them both.  That document[3] is schedule A to this judgment.  Its operative provisions are in these terms:-

    [3] Affidavit D Brown 29 April 2011

“1.Hanna acknowledges having received from Ivan the sum of $185,000 which has been applied towards the purchase and improvement of the Residence.

2.Hanna covenants and agrees that Ivan shall be entitled to reside in the residence for as long as he may choose throughout his natural life.

3.Hanna agrees to make provision in her Will for Ivan to have a life estate together with her mother Teresa Zaorska in the residence following her death.

Further, in execution of cl 3 above, the Respondent says that she executed a Will dated 13 July 2007[4] which she has not revoked.  Clause 4 relevantly provides:-

“I Give all my estate and interests in the land and residence located at 21 Agymea Crescent, Varsity Lakes in the state of Queensland and in all the furniture and other articles and effects of domestic, household and garden use or ornaments in or about the same at the date of my death (other than my motor car and other than items otherwise specifically bequeathed by this Will or any codicil) unto my trustees UPON TRUST for the use and benefit of my mother TERESA ZAORSKA and her friend IVAN WYSOCKYJ during their lifetime free of all duties but subject to the payment by them during such life estate of all rates, levies, taxes, insurance premiums, repairs and other outgoings in respect thereof and from and after the death of my mother TERESA ZAORSKA and her friend IVAN WYSOCKYJ or on prior termination of the life interest to hold the same in its then state and condition whether original or otherwise upon the same trusts in all respects as applied to my residuary estate.”

The Applicant denies that the Agreement coupled with the Respondents Will truly reflects the agreement reached with the Respondent.  On his primary case, the agreement reached was that he would be, upon payment of his contribution, entitled to a one half interest in the property.

[4] Affidavit D Brown 29 April 2011, Exhibit db4

Background to relationship between the parties

  1. It is apparent from the voluminous affidavit material filed that the Applicant and the Respondent’s mother Teresa Zaorska (Mrs Zaorska) enjoyed an on and off relationship from in our about 1992 until Mrs Zaorska died on 26 September 2009.  The Applicant is 86 years of age, born in Poland on 15 June 1925.  The Respondent is, and her late mother was, also of Polish origin.  The Applicant set out in his affidavit of 23 March 2010[5] a brief account of that relationship.  Having met Mrs Zaorska in 1992 she moved in to his home in Christchurch, New Zealand where he was then living.  In about 1993 Mrs Zaorska moved out of that home into a Council flat in Christchurch but returned to the Applicant’s home about 12 months later.  The Applicant, at that point, was careful to protect his proprietary interests and arranged for a Co-Habitation Agreement dated 22 April 1997 to be signed by him and Mrs Zaorska[6].  That agreement recorded that the parties were in a de facto marriage relationship and was structured to protect the Applicant against any property claims by Mrs Zaorska which may have arisen in equity or common law under the Property Law Act 1952 (New Zealand) or any other statutory enactment or otherwise howsoever.

    [5] Exhibit 6

    [6] Applicant affidavit 23 March 2010, Exhibit A

  1. On 7 August 1997 the Applicant and Mrs Zaorska moved to Australia and the Applicant purchased a home in Bracken Ridge, Brisbane selling it two years later.  They both then returned to New Zealand in or about 1999 and lived for some time with the Respondent.

  1. The Applicant and Mrs Zaorska then fell out with the result that between 1999 and 2006 his residence was 22 Boo Street, Beckinham, Christchurch.  In 2001 he visited the Respondent and her mother who by then had moved from New Zealand to the Gold Coast, Queensland.  He returned to New Zealand in late 2001 to have open heart surgery and after that returned to Australia where he lived with the Respondent and her mother, as a tenant only, for a period of two years at 11 Rainbird Place, Burleigh Waters.  In 2006 he sold his New Zealand property and returned to the Gold Coast in July 2006.  The proceeds of that sale amounted to $AUD198,000[7].

    [7] Applicant affidavit 23 March 2010, para 17

  1. In his affidavit of 4 April 2011[8] the Applicant said that Centrelink staff had told him he would not be able to receive a full pension unless he spent all his money but that he was later informed that if he bought a property he would be able to claim the full pension.  In cross examination[9] he refined that statement by suggesting that he could not give his money away and then, being empty handed, ask the Government for a pension.  On his case, he realised he could not afford to buy a property on his own so he approached the Respondent to see if she wanted to join with him in a purchase.  According to the Applicant, the Respondent was agreeable. About two weeks after that conversation, they found the subject property and pursuant to a contract of sale dated 19 August 2006, the property was purchased in her name.  The Respondent’s signature was, according to her ,  witnessed by the Applicant.  At the trial he denied he witnessed her signature but conceded that the signature did look like his[10].  The Applicant says[11] that he has no recollection of having seen or read the contract prior to it being disclosed to his solicitors in these proceedings.

    [8] Paragraph 22

    [9] T 2.28.8-17

    [10] T2.11.13-32

    [11] Exhibit 4, para 36A

Centrelink

  1. He says that on or about 16 September 2006, about a month after the contract was signed, he sent a letter to Centrelink[12] informing Centrelink of his contribution to the purchase of the property and requesting that his pension be revised upwards from the $147.79 per fortnight he was then receiving.  Relevantly that letter provides:-

    [12] Exhibit 4 –IW2A

“I sold my flat in New Zealand for $237,000, exchanged the money to Australia currency $198,574.41.  For this cash I didn’t even have a chance to look and purchase a house or flat.  I can’t have a mortgage because I’m a pensioner.

In this situation I decided to buy property like joint tenants.  I transferred from my account to Mrs Hanna Szarmach as a deposit $150,028 for the property 21 Agymea Cres, Varsity Lakes Qld 4227.”

He then set out further expenses relating to the property.

  1. If one turns to the Applicant’s statement of Income and Assets as at 20 October 2009 provided to Centrelink[13] there is no record of any interest in the property.  That document is a letter to the Applicant of 20 October 2009 from Centrelink to the Applicant seeking details of any change, relevantly, in his asset position.  There are hand written notations of updates to the Applicant’s bank deposits on the front page.  On page 2 of that letter is a hand written notation in these words:-

    [13] Applicant affidavit 23 March 2010, para 39, Exhibit H

“Home owner at

·21 Agymea Crescent Varsity Lakes Qld 4227

·This was purchased using lump sum bought over from New Zealand

(Centrelink stamp dated 28 October 2009)
No rent assistance”.

  1. In cross examination[14] the Applicant said that the notation came about because he asked Centrelink to check if he was the owner of the property and that Centrelink gave him the 20 October 2009 Income and Asset letter with the hand written notation and stamp which he took as confirmation he was still the owner of the property.  .

    [14] T2.56.39-46

  1. That explanation of the Applicant is inherently implausible and I reject it.  It is significant that a relevant visit to Centrelink on 28 October 2009 was a month after the passing of the Respondent’s mother and seven days after the Applicant first raised a claim to a legal and equitable interest in the property by his solicitor Mr Wright’s letter to the Respondent dated 21 October 2009[15].

    [15] Exhibit 4, page 76

  1. On the face of that letter and notation, the obvious inference is that the Applicant attended Centrelink on 28 October 2009 and advised of his updated asset situation..  The irresistible inference is that the Centrelink employee wrote that hand written notation and stamped it after being provided with that information by the Applicant. 

Applicant’s letter to Centrelink 16 September 2006

  1. This leads me to the Applicant’s letter of 16 September 2006 to Centrelink.  The first time this letter was disclosed was in the Applicant’s affidavit of 4 April 2011, he having sworn two earlier affidavits of 23 March 2010 and 8 December 2010.  The Respondent says that it is suspicious that the Applicant, who normally corresponded in hand writing, had sent a typed letter.  That, in itself, is not conclusive but the Applicant said in evidence[16] that he was assisted in having the letter typed. He did not identify his assistant who might well have been able to give evidence of when it was typed.  In all the circumstances I am not prepared to accept that the Applicant sent that letter to Centrelink.  Rather, consistent with his explanation of the hand written notation on the Centrelink letter of 20 October 2009,  I regard it as a recent creation and an attempt by him to bolster his case after the event.

    [16] T2.61.50

Payment to Respondent

  1. On 28 August 2006 the Applicant transferred $150,000 in to the Respondent’s bank account which he says was part payment of his share of the purchase funds[17].  The Respondent sought and obtained a loan from ING Bank for $268,000[18], of which $266,665.40[19] was available for settlement.

    [17] Exhibit 4, para 38

    [18] Respondent affidavit 4 January 2011, Exhibit his4

    [19] Ibid para 27

  1. Settlement of the purchase was effected on 28 September 2006[20].  Prior to settlement, the Applicant says he visited the Respondent’s solicitors Wockner Lawyers which appears to have been in or about late August 2006[21].

    [20] Ibid para 26

    [21] Affidavit N Wockner 29 April 2011, para 5

Meeting with Mr Wockner

  1. The principal of Wockner Lawyers, Mr Nelson Wockner, swore an affidavit dated 29 April 2011.  He was not required by the Applicant for cross examination and the Applicant agrees with the Respondent that his evidence should be accepted.[22]  In his first affidavit of 23 March 2010[23] the Applicant said that Mr Wockner told him and the Respondent that, as the Applicant was contributing $185,000 to the purchase, he should be on the title, and that he could protect his interest by having a Loan Agreement drawn up by an independent solicitor.  According to the Applicant Mr Wockner said – “Hanna will be the borrower and you will be the lender.  I will send you a letter about this.”  In his second affidavit dated 8 December 2010, the Applicant said[24] Mr Wockner's opinion was that the property should be placed solely in the name of the Respondent and that the Applicant would be the lender of the balance moneys required.  Mr Wockner told the Applicant that a letter would be sent out to him explaining his advice further.

    [22] Applicant’s written submissions, para 38

    [23]Para 22

    [24]Para 41

  1. In his next affidavit dated 4 April 2011 the Applicant made amendments to his affidavit of 8 December 2010.  When dealing with the meeting with Mr Wockner, he said[25] he was told by Mr Wockner that the property should be placed in the name of the Respondent because her name was on the contract and that his investment would be recorded as a lender of the money.  In the same affidavit[26] he said that, despite what he had been told during the visit to Wockner Lawyers, his understanding was that his name would be included on the title of the property. The basis of that belief was what he said had been previously agreed between him and the Respondent, namely that they would both make a 50/50 contribution to the purchase.  On the Applicant’s own case, as reflected in the two affidavits of 8 December 2010 and 4 April 2011, there was nothing said by Mr Wockner in that meeting which would have founded any understanding that his name would be on the title. I proceed on the basis that those later affidavits set out his present case, as  his 23 March 2010 affidavit deposing that he was told the property should be in his name, cannot stand with them. In his affidavit of 4 April 2011 he changed the timing of his understanding that he would have his name on the title by saying that, rather than having that understanding despite the visit to Mr Wockner, he had that understanding prior to the visit[27].  He gave no explanation for the change. One may well wonder, if he had the belief prior to the meeting, why he did not raise the issue with Mr.Wockner.

    [25]Para 41A

    [26]Para 42

    [27]Para 42

  1. As will be seen later, Mr Wockner gave uncontroverted evidence that the Applicant did not tell him at that meeting that he was a 50 per cent partner in the property.  When asked in cross examination whether he had told that to Mr Wockner he initially avoided the question but eventually said that he did not but, rather, Mr Wockner told that to him[28].

    [28] Transcript 2.17.40-55; T 2.18.1-10

  1. The Applicant denies ever having received the promised letter from Mr Wockner, although, Mr Wockner deposes to sending him a letter dated 22 September 2006[29].  That letter is set out in full in paragraph 30.

    [29] Wockner affidavit, 29 April 2011, para 13, Exhibit NW1

  1. According to the Applicant, although he said he had never received that letter, he was not concerned because, due to his discussions with Mr Wockner and the Respondent during the above meeting, he believed his position as 50 per cent investor in the property was legally protected even though the Respondent's name was on the title[30].  He said he was not concerned about being described by Mr Wockner as an investor as he believed he was making an investment by purchasing one half of the property. Again, on his own case, his belief that his 50 per cent ownership of the property was somehow protected by something said by Mr Wockner lacks factual foundation. 

    [30] Exhibit 4, para 44A

  1. According to the Applicant, it was not until three years later, in or about 2009, that he discovered the letter of 22 September 2006 from Mr Wockner amongst the Respondent's papers at the  property. 

  1. Respondent's evidence re purchase of property

  1. The Respondent's version of events is quite different to that of the Applicant's.  She said that in mid 2006 she was living with her mother in a rental property at 11 Gainsborough Drive, Varsity Lakes when the Applicant was living in New Zealand[31].  In or about July 2006 the Applicant moved from New Zealand and lived with her and her mother at that property.  She said that on a walk one day around the neighbourhood she and the Applicant saw a "for sale" sign on the subject property and arranged an inspection of it.  After a discussion amongst the Applicant, her mother and her, she said the Applicant suggested she buy it.  She responded by saying that she and her mother were on the Queensland Housing Commission waiting list, had been so for three years, and were hopeful of obtaining a house through the Commission.  She also told him, according to the Respondent, that due to her financial position she could not afford to buy a property as she would not get finance at her age (53) and with her level of income.  She said the Applicant's response was words to the effect of "don't worry about those things.  You will be able to buy your own house in Australia".  According to the Respondent, the Applicant went on to say that he would give her the money to buy the property and that all he wanted was a place to live his days out, that he knew the Respondent's mother and the Respondent loved and cared for him and that he also loved and cared for them.  He then asked the Respondent for her bank details.

    [31] Affidavit 4 January 2011, para 5

  1. The Respondent also said[32] that the Applicant had told her mother and her many times that he did not have a close relationship with his three children who lived in New Zealand and as he was over 80 years of age, he was concerned for his future as to who would look after or care for him in his elderly years.  According to the Respondent she and her mother had, over the course of the Applicant's relationship with her mother, always provided care and assistance for the Applicant when he lived with them.

    [32] Ibid para 12

  1. The Respondent deposed to discussions about the purchase of the house resulting in what she described as an arrangement and understanding reached amongst the three of them that:

(a)        the Applicant would give the Respondent an amount of money so that she could purchase a house and she would borrow the remaining funds;

(b)        the Applicant and her mother would live in the house for the rest of their lives; and

(c)        that they would all live together as a family unit in the house to be acquired and she and her mother would provide care and assistance to the Applicant[33].

[33] Ibid para 13

  1. The Respondent said that on 19 August 2006 she and the Applicant met with a real estate agent to consider the contents of the contract for the purchase of the property and, as they were both satisfied with the terms, she signed the contract as buyer and the Applicant witnessed her signature[34].  She said that she had paid the initial deposit of $500, although that is contested by the Applicant.  The trust account receipt issued by the real estate agent is in the name of the Respondent, but nothing turns on that.  The Respondent acknowledges that the Applicant paid the balance deposit of $9,500.

    [34] Ibid paras 14-16

  1. According to the Respondent[35], six days later in August 2008, the Applicant gifted her $150,000 by transferring that to her National Australia Bank savings account.  She said the Applicant made his own decision as to the amount gifted.

    [35] Ibid para 19

Respondent's account of meeting with Mr Wockner

  1. The Respondent says that, because of her limited commercial business or property experience, she asked the Applicant to accompany her to her solicitor, Wockner Legal Services.[36]  She thought, because the Applicant had bought and sold properties in New Zealand and Australia before, he would be more familiar with the proceedings and could assist her.  The Respondent said that, during that meeting, the Applicant told Mr Wockner that he had given her an amount of money which would cover the balance required to effect settlement.

    [36] The late August 2006 meeting.

  1. According to the Respondent[37], the Applicant was fully aware that she was the sole buyer under the contract and there were never any discussions between them about the Applicant being a purchaser.  The arrangement was that the Applicant would give her money so she could buy the property and he and her mother could live in it for the rest of their lives. 

    [37] Affidavit 11 April 2011, para 28

  1. The purchase transaction settled on 28 September 2006 and according to the Respondent, the Applicant, her mother and her moved into the house on 10 October 2006 where they all lived together until her mother died on 26 September 2009[38].

    [38] Ibid paras 26-28

Mr Wockner's evidence

  1. Both parties agree that the evidence of Mr Wockner should be accepted[39].  He deposed to his recollection of the meeting with the parties at his office in late August 2006.[40]  He said he was informed by the Applicant that he was intending to contribute a substantial amount of money to partly finance the purchase of the property but that he could not have his name on the title deed as it would impact upon his Centrelink benefits.  He said he had issues concerning his Centrelink benefits as a result of having the proceeds of sale of his New Zealand property.  Mr Wockner told both the Applicant and the Respondent that they needed to obtain financial advice and legal advice about the Applicant's financial affairs on the question of Centrelink benefits because he did not practice in that area of the law.  He said that, once they had obtained financial and legal advice, they could then decide how to protect the Applicant's interests in relation to his financial contribution to the purchase of the property.  He told them that he would not provide any advice or act on their behalf regarding their financial contribution to the acquisition of the property.  Significantly, he said that the Applicant and Respondent did not discuss any details of their arrangements concerning the financing of the property when with him. 

    [39] Applicants written submissions, para 38; Respondents submissions, para 17(h)

    [40] Wockner affidavit 29 April 2011

  1. Mr.Wockner said he did not discuss with either of them how the transfer of funds from the Applicant to the Respondent was to be recorded other than to tell the Applicant he should seek his own legal advice.  He further said the Applicant did not mention to him that he was a 50% partner and investor in the property[41].  He had no further discussions with the Applicant after that meeting but wrote him a letter dated 22 September 2006[42].  It was in these terms:-

    [41] Ibid para 17

    [42] Ibid para 13

“We refer to our previous meetings together with Ms Hanna Szarmach regarding the purchase of the above property by her.
We note your comments that you are contributing a substantial amount of money from your own funds towards the purchase monies being paid by Ms Hanna Szarmach to the Seller.  We also note your comments that you have a dispute with the Australian Government (Centrelink) concerning a reduction in the amount of the ‘Aged Pension’ being paid to you following the completion of the sale of a New Zealand property. 
Having regard to the circumstances of this matter, we need to state clearly that we are acting on behalf of Ms Hanna Szarmach in this matter.  We confirm our previous advice to you that you should obtain independent legal advice regarding your financial affairs immediately.  We are unable to provide that advice to you. 
We also advise that in relation to the loan of funds to Ms Hanna Szarmach you must also obtain independent legal and financial advice in relation to this transaction.  As we act on behalf of Ms Hanna Szarmach in relation to this transaction, we are unable to also act on your behalf due to the conflict of interest. 
The conflict of interest relates to the fact that you are the lender of funds, whilst Ms Hanna Szarmach is the borrower, and as such it is not possible for one law firm to act on behalf of both parties to the one transaction.  As such each of you must be separately legally represented.  We are therefore unable to act on your behalf to provide legal or financial advice to you.
There are strict laws preventing lawyers acting for both parties to such a transaction, and these are enforced by the Qld Law Society.

Yours faithfully

Wockner Legal Services
Nelson Wockner”.

Involvement of solicitor, Mr David Brown

Respondent's Will

  1. The first involvement of Mr Brown of the firm, ABKJ Lawyers, was in relation to the preparation of the Respondent's first ever Will[43].  According to the Respondent, she was planning a trip to Poland in July 2007.  She had never had a Will and, in the early part of 2007 had surgery to remove her gall bladder.  She wanted to be prepared in the event that her health deteriorated or she died overseas and to protect the agreed life interest of the Applicant and her mother.  To those ends she contacted Mr Brown and arranged an appointment on 10 July 2007 to provide instructions for a Will.  She signed that Will on 13 July 2007[44].  It has not been revoked.  I have already set out the relevant section of the Will granting a life estate to the Applicant.

July 2007 meeting with Mr Brown in relation to the Deed of Agreement and the Applicant's Will both dated 7 September 2007

[43] Respondent affidavit, 4 January 2011, para 33

[44] Ibid para 35

Applicant's version

  1. According to the Applicant in his affidavit dated 4 April 2011[45], in or about July 2007 he was requested by the Respondent to go to Mr Brown, a solicitor recommended by her, to have an agreement drawn up to record the arrangement reached with the Respondent.  According to him on the day of the appointment, he asked her which lawyer he should see and she told him Mr Brown was recommended by a friend and that he was very good.

    [45] Exhibit 4, paras 46E-T,A-L

  1. He deposed in the same affidavit to driving the Respondent to the meeting with Mr Brown. Of the meeting he recollects that - "I told Brown my story about how we had come to purchase the Varsity Lakes property as partners.  He told me he would draft a document to record my story and send me a draft to review"[46].  However, in his earlier affidavit of 8 December 2010[47], the Applicant deposed to the contrary, in these words:-

"at no time did I give direct instructions to ABKJ Lawyers as they were instructed by Hanna and I was not advised that I did not have to sign the agreement or that I could seek independent legal advice."

These words formed para 49 of his earlier affidavit of 8 December 2010 deleted in his 4 April 2011 affidavit.

[46] Exhibit 4, para 46B

[47] Applicant's Affidavit dated 8 December 2010, para 49

  1. In any event, the Applicant said that on 1 August 2007 he received a letter from Mr Brown[48] enclosing a draft agreement.  The letter was in these terms:-

    [48] Exhibit 4, para 46D

"We refer to recent discussions with you in relation to the above mentioned matters, and we enclose herein a copy of a draft Agreement which we have prepared for execution by yourself and Hanna recording your investment of $185,000 in purchase of the property at 21 Agymea Crescent. 
We have also prepared a Will in accordance with your instructions, and we enclose herein a copy of that draft document for your consideration.
Please advise as to whether the terms of the draft documents are in order, and if so, we invite you to contact the writer’s secretary to arrange a mutually convenient appointment when you may attend to sign these documents.
Yours faithfully
David Brown
Adamson Bernays Kyle & Joans.”

The Applicant said this covering letter recorded his investment of $185,000 in the purchase of the property and because of that he said he did not read the enclosed draft agreement.  He said he did not read it because he had told his story to Mr Brown and assumed he, Brown, had recorded his investment as 50 per cent partner in a proper legal way.  Contrary to this, in the Applicants earlier affidavit of 23 March 2010 he swore that he did read the draft agreement[49].

[49]Para 28

  1. In his 4 April 2011 affidavit, the Applicant further said that his documents evidencing his provision of the funds had gone missing from his room some time prior to his visit to Mr Brown and that he held three concerns[50]:-

    [50] Affidavit 4 April 2011, paras 47, 48 and 50

(a)        that if he did not sign the agreement prepared by Mr Brown he would be evicted by Hanna and have nowhere to go[51];

[51] Exhibit 4, para 47

(b)        if he did not sign the agreement then he would have no evidence of his interest in the property at all[52]; and 

(c)        he believed he had no choice but to sign the agreement otherwise he would have no evidence that he had paid an amount of $185,000[53].

[52] Exhibit 4, para 50

[53] Exhibit 4, para 48

  1. The Applicant provides no factual foundation for his fear of eviction by the Respondent as at 1 August 2007.  In his affidavit of 23 March 2010[54], he deposes to the fact that after the Respondent's mother died on 26 September 2009 the Respondent then became very assertive in the house and he became concerned that she would evict him.  But that was more than two years after 1 August 2007.

    [54] Exhibit 4, para 34

Applicant's Will

  1. According to the Applicant, a short time after the meeting with Mr Brown the Respondent told him that he needed to get a Will prepared.  He asked her why, and according to him, she explained that all property owners in Australia needed to have a Will to avoid complications when they die.  Because of that he said he telephoned Mr Brown and asked him if he could do a Will for him.  He said Mr Brown did not ask any questions but said "that's fine.  I'll get that drawn up".  The Applicant said he did not tell Mr Brown what to write in the Will[55].  He received a draft Will on 1 August 2007 under cover of the same letter that he received the draft agreement and both documents were signed on 7 September 2007.

    [55] Exhibit 4, para 46

Applicant's version of the execution of the Agreement and his Will

  1. According to the Applicant, he drove the Respondent to Mr Brown's office to sign the Agreement and his Will.  He said Mr Brown, the Respondent and he were all in the room together for the signing.  He says nobody read the documents to him or explained them to him.  He said, before the commencement of these proceedings, he did not know what a "life interest" or a "life estate" meant.

Respondent's version of meetings with Mr Brown

  1. I have already dealt with the Respondent's execution of her Will on 13 July 2007.  Focusing for the moment on the Applicant's evidence that the first meeting with Mr Brown and the Respondent was in July 2007, Mr Brown in his first affidavit[56] deposes to meeting with the Applicant on 17 July 2007 for the purpose of obtaining instructions and providing legal advice.  In his later affidavit[57] Mr Brown, in reference to that 17 July 2007 meeting, said that he could not clearly recall whether the Respondent was also present at this meeting.  However the Respondent has deposed to being overseas from 16 July 2007 until 26 August 2007[58] and has put before the Court independent corroborative evidence from her travel agents in the form of her itinerary[59].  That document shows, consistent with the Respondent's evidence, that she departed Brisbane for Singapore on Emirates flight EK0433 at 20.05hrs on Monday July 16 so she could not have been at the meeting with Mr Brown and the Applicant the following day, Tuesday 17 July 2007.  The only year appearing  on that itinerary is in the bottom right hand corner which, I infer, is the date it was printed. However, July 16 2007 was a Monday so it is clear that the itinerary was for 2007 travel.

    [56] Affidavit dated 29 April 2011, para 9

    [57] Affidavit dated 6 May 2011, para 2

    [58] Her affidavit 4 January 2011, para 36; Affidavit 11 April 2011, para 35

    [59] Her affidavit 11 April 2011, para 35, ex HIS14

The signing of the Agreement and the Applicant’s Will on 7 October 2007

  1. According to the Respondent, on 7 September 2007 she travelled with the Applicant to Mr Brown's office.  They waited in the reception area until Mr Brown came out and invited the Applicant to go with him.  The Respondent remained in the reception area[60].  She said that about 15 minutes later, Mr Brown again came out and asked her to go into the room with him and the Applicant.  Mr Brown then handed her the Agreement and asked her to read it.  She noted the figure of $185,000 as being the amount recorded as contributed by the Applicant and asked the Applicant where that figure came from given that he had only given her $150,000 plus the balance deposit of $9,500 ($159,500).  According to the Respondent the Applicant replied that it was interest.  Both of them signed the Deed of Agreement and Mr Brown witnessed both signatures.

    [60] Affidavit 11 April 2011, para 36

Mr Brown's account of meetings with the Applicant and Respondent

  1. In relation to the preparation of the Agreement and the Applicant's Will, Mr Brown met with the Applicant on 17 July 2007 to obtain instructions and provide legal advice[61]. He deposes to the Applicant giving him instructions on that day to prepare the Agreement recording the arrangement with the Respondent[62].  He also gave instructions to Mr Brown in relation to his Will on 17 July 2007.  Mr Brown said that the Agreement and the Will were linked in that the Applicant told him he was disappointed in his children and was concerned about the trouble they might cause for the Respondent after his death.  Mr Brown swore to forming the impression that the Applicant was distressed about being abandoned by his children.  The Applicant said he had already given his money to the Respondent and that one of his reasons for doing that was so that there would be nothing left in his estate and therefore nothing that his children could really do to make trouble for the Respondent.  It was against that background that he gave Mr Brown instructions to prepare the Will appointing the Respondent his executor and sole beneficiary.

    [61] His affidavit 29 April 2011, para 9

    [62] His affidavit 6 May 2011, para 5

  1. By letter dated 1 August 2007 he sent a draft of the Agreement and the Will to the Applicant, importantly asking the Applicant to advise whether the terms of the draft documents were in order and if so, to contact his secretary to arrange a time to sign them.  He sent a follow up letter on 13 August 2007.  On 7 September 2007 he met with the Applicant and the Respondent when the documents were signed. 

  1. Mr Brown recalls having a private conversation with the Applicant but said he is unclear as to whether that conversation was on that day, 7 September 2007 or on 17 July 2007 when he took instructions.  Given that the Respondent could not have been at the 17 July 2007 meeting as she was out of the country, clearly Mr Brown must have seen the Applicant alone on that day. That is consistent with the terms of his abovementioned letter to the Applicant enclosing the draft documents in which he refers to a conference with him and no one else.  According to the evidence of the Respondent, which I accept, Mr Brown also saw the Applicant on his own on the day of execution of the Agreement and the Applicant's Will on 7 September 2007.

  1. Mr Brown refutes the Applicant’s allegation[63] that - "I rang Mr Brown and asked him if he could do a Will for me.  He did not ask me any questions but said that's fine, I'll get that drawn up.  I did not tell Mr Brown what to write in the Will".  Mr Brown says that he had a discussion with the Applicant about the contents of his Will and his reasons for leaving his estate to the Respondent and that the Will he prepared reflected those instructions. He refers particularly to cl.3 of the Applicant's Will which is in these terms[64]:-

"I DECLARE that I have not may [sic] any provision in my Will for any of my children as I have not had any communication with them for a considerable period of time and I do not believe that they are in need of any."

[63] Applicant's affidavit, exhibit 4, para 46C

[64]Brown affidavit 29 April 2001, exhibit IW5

  1. In relation to the discussion with the Applicant alone, Mr Brown said that he told him that his interest under the Agreement was vulnerable if things did not work out between him and the Respondent[65].  He says it is untrue, as the Applicant alleges[66], that "Brown, Hanna and I were all in the room together for the signing.  Nobody read the documents to me or explained them to me".  Mr Brown’s evidence is unequivocal that he did have a private discussion with the Applicant in the absence of the Respondent to explain the documents to him. 

    [65]Affidavit 6 May 2011, para 8

    [66]Exhibit 4, para 50A

Applicant’s Power of Attorney

  1. Subsequently, some 9 months later, in June 2008 Mr Brown received a telephone message from the Respondent asking that Mr Brown prepare a Power of Attorney for the Applicant appointing her as his attorney[67].  Mr Brown said he subsequently met with the Applicant to discuss the Power of Attorney and satisfied himself that the Applicant wished to make the Power of Attorney in favour of the Respondent.  To the best of Mr Brown's recollection, it was during that meeting that the Applicant raised with him the prospect of amending his Will to include a lengthy statement about why he had given everything to the Respondent.  He told Mr Brown that he was still concerned about his children making things difficult for the Respondent and their reaction to the fact that his Will gave everything to her.  Mr Brown's advice to him was that it would be more suitable to prepare an explanatory letter that could be kept with the Will rather than incorporating his explanation into the Will itself.

    [67]Brown affidavit 6 May 2011, para 10

  1. Subsequently on 28 October 2008 Mr Brown received a handwritten letter from the Applicant dated 20 October 2008 enclosing a further 6 page handwritten letter.  The shorter covering letter was in these terms:-

"Dear Sir
Please attached [sic] additional letter to my Will.  It may help latter [sic] to resolve some problems and misunderstanding. 
Yours sincerely
Ivan Wysockyj"

  1. The 6 page letter enclosed detailed the difficult relationship he had experienced with his children.  Relevantly on the last page are the following words:-

"… I loved my children but never told them how much they hurt me.
I have been waiting for from my children honest reply if they need me, but I have, had no answer.
Three times I left New Zealand and three times I went to Australia and try to settle there.
In this time I started thinking about myself.  Finally I contacted with my ladies in Australia and return to them.  And this time I found out that strange peoples show me more heart and respect than my own children.
I gave my money to Mrs Hanna Szarmach to help her to perchesed [sic] a house.  In a house which I found love, respect, peace and rest to the end of my life.  My children have nothing to receive after my death.  I wrote this letter by my own hand and healthy mind…"

Applicant changes solicitors to Mr Wright

  1. The Respondent's mother passed away on 26 September 2009 and some 25 days later the Respondent received a letter from the Applicant's new solicitor, Mr Wright of Wrightway Legal dated 21 October 2009[68] advising that the Applicant had instructed that firm to pursue what the Applicant had instructed were rights to a legal and equitable interest in the property.  That initiated the sequence of events leading to this trial.  Mr Wright acted for the Applicant from November 2009 until October 2010[69].  Mr Wright said[70] that he had a meeting with the Applicant on 1 October 2010 having received from Mr Brown a copy of the abovementioned handwritten letter of 20 October 2008 to be put with the Applicant's Will.  His file note of that conference evidenced his concern that the Applicant had not been telling him the truth in relation to the life tenancy agreement with the Respondent.

    [68]Exhibit 4, pg 76

    [69]Affidavit M Wright, 6 May 2011, para 2

    [70]Ibid para 6

  1. Apart from the typed memo of the conference Mr Wright deposed to an independent recollection of his discussions with the Applicant on that day.  He said that the Applicant apologised to him immediately on coming into the office and said he was very sorry and could understand why Mr Wright would be upset as he, the Applicant, had not told him the truth about the situation with the Respondent.  Mr Wright told him he was very disappointed that he had been misled and the Applicant again apologised to him.  Mr Wright described the Applicant's demeanour as "sheepish".  He told the Applicant he could no longer act for him in the proposed Court action as, in his view, it was pointless and the Applicant had no prospect of winning.  It is clear Mr Wright realised that the Applicant was not entitled to the one half share of the property he had previously asserted entitlement to.

  1. The Applicant then asked Mr Wright if it was still possible to have his life tenancy or interest recorded on the title as had been suggested some time ago by the Respondent's solicitor.  He then instructed to Mr Wright to put the matter back on track by having his interest noted or recorded on the title. 

  1. Mr Wright said that, shortly after the Applicant left his office, he dictated a letter to the Respondent's solicitors, sent by facsimile transmission on 5 October 2010[71].  That letter was in these terms:-

    [71]Affidavit M Wright 6 May 2011, para 8

Mr Wysockyj's complete file was obtained from ABKJ Lawyers last week. 
The file contained correspondence from Mr Wysockyj giving reasons for providing the moneys to your client to purchase the property at 21 Agymea Crescent Varsity Lakes.  Mr Wysockyj attended our office on Friday 1 October 2010.  He then recalled the correspondence to David Brown at ABKJ Lawyers.  The last paragraph reads:
'I gave my money to Hannah [sic] Szarmach to help her purchase a house in which I found love, respect, peace and rest to the end of my life'
Mr Wysockyj now concedes the $185,000 advanced to Ms Szarmach was for a life interest in the Varsity Lakes property.
Your client previously offered to draft documents for registration of the life interest recorded in the Agreement dated 7 September 2007.  Mr Wysockyj instructs that the documents should be prepared as soon as possible.
Yours faithfully
Wrightway Legal."

  1. As to that letter, the Applicant says[72] that, never at any stage, did he give Mr Wright instructions that he conceded a life interest in the Varsity Lakes property.  He said he was not aware that Mr Wright had sent that letter until he retained his current solicitors, Ramsden Lawyers, in respect of this litigation.  Mr Wright’s unequivocal evidence is that the letter was written in accordance with the Applicant's instructions.

    [72] Exhibit 4, para 57D

Evidence of Ms Yvonne Kasprzak

  1. Ms Kasprzak gave evidence for the applicant[73] who she first met in February 2005.  She became friends with the respondent and said she visited her, her mother and the Applicant frequently.  She said further that when the Applicant returned to New Zealand shortly after she met him she was present while the Respondent was speaking to him on the telephone.  She observed that the Respondent spoke very nicely to him encouraging him to return to Australia to live with her and her mother.  According to Ms Kasprzak when she asked the Respondent why she wanted the Applicant to return to Australia the Respondent replied that she was going to make him buy her a house. 

    [73] Affidavit 6 January 2011 – Exhibit 12

  1. In early 2006 Kasprzak fell out with the Respondent for some seven months, then resumed their close friendship.  She deposed[74] to the Respondent telling her that the Applicant had moved back to Australia after she promised him she would look after him until he died, that he had contributed to the purchase price of the property as a gift to her, that it was very difficult to live with him as he would argue with her and steal from her and that she did not feel safe living with him as he had dementia and would kill her.  There is no question on the evidence that subsequent to the loss of the Respondent’s mother on 26 September 2009 her relationship with the Applicant deteriorated. 

    [74] Ibid para 12

  1. In February 2010 Ms Kasprzak and her daughter moved in with the Respondent.  She then detailed[75] conduct by the Respondent she characterised as mistreatment of the Applicant.  Her affidavit has the flavour of allegations to be found in a matrimonial dispute upon breakdown of a relationship.  None of the evidence goes to the issue of what I have to determine namely the intention of the Applicant at the time of payment of the monies in dispute. 

    [75] Paras 14-16

Credibility of witnesses

Allowing for the Applicant’s advanced years and the possible concomitant lapse in memory, I nevertheless found him to be a most unimpressive and unreliable witness. He was evasive and sought at every opportunity to put a gloss on his evidence to bolster his case I do not regard him as a witness of truth.

Given the evidence of his previous property transactions in Australia and New Zealand,[76]and his astuteness in protecting his  interests  by a Co-Habitation agreement with Mrs. Zaorska in 1997, I found his presentation in the witness box  as  seemingly naïve and gullible throughout the relevant events singularly unconvincing.
I have sought to illustrate the inconsistencies in his evidence.  They are such as to give me no confidence that I could rely upon his evidence.

As against  that, I found the Respondent and Messrs Brown and Wright (Mr Wockner did not give oral evidence)  to be witnesses of truth. To the extent of any inconsistencies between their evidence and that  of the  Applicant I prefer the evidence of those three.

[76] T2.16.20-30

  1. As to the evidence of Ms Kasprzak I found it of little assistance in resolving the issues in this matter.  She clearly is a friend of the Applicant and has fallen out with the Respondent.  Also, she seemed to me, at times, to assume the role of advocate of the Applicant’s case. I do not accept her evidence[77] to the effect that the Respondent set out to make the Applicant buy her a house if he ever returned to Australia which is contrary to the Applicants own case.  As with the evidence of the Applicant, to the extent that the evidence of Ms Kasprzak conflicts with that of the Respondent I prefer that of the Respondent.

    [77] Her affidavit, para 8

The Law

  1. The Applicant submits that by virtue of his payment of the monies to or on behalf of the Respondent, a presumption of a resulting trust arises.  The effect of that is that the Applicant is presumed to have retained a beneficial interest in the property to the extent of his contribution notwithstanding the current state of the legal title.  That presumption can be rebutted by evidence that the Applicant as donor had a different intention at the time of providing the purchase money.  The Applicant relies on Calverley v Green[78] where Mason and Brennan JJ said:-

“Once it was found that both parties contributed to the purchase price, the conclusion had to conform to the relevant equitable presumption unless it was displaced, rebutted or qualified.”

[78] (1984) 155 CLR 242 at p 258

  1. In Charles Marshall Pty Ltd v Grimsley[79] the High Court held that:-

“Apart from admissions the only evidence that is relevant and admissible comprises the acts and declarations of the parties before or at the time of the purchase…or so immediately thereafter as to constitute a part of the transaction.  If that evidence is insufficient to rebut the presumption the beneficial gift, absolute or subject only to qualifications imposed upon it at the time, is complete and no subsequent changes of mind or dealings with the property inconsistent with the trust by the donor can as between himself and the donee’s alter the beneficial interest.”

[79] (1956) 95 CLR 353 at p 365

Admissibility of Agreement date 7 September 2007

  1. The Applicant submits that the agreement was not created so immediately after the purchase as to constitute a part of the transaction and is therefore only relevant and admissible evidence of the Applicant’s intentions if it is an admission against interest[80].  He says that it cannot be an admission against interest because it is not his document.  He says it is not his document because, although he signed it he did so in ignorance of, or a misunderstanding of, its contents and thereby cannot be said to have adopted its contents as his own.  He further says that the Deed could not be an admission against interest because it does not state the intentions of the parties contemporaneously with the purchase of the property but rather is a record of a subsequent change of mind on the part of the parties as to the dealing with the property inconsistent with the resulting trust asserted.  But as to that latter point Mr Brown gave evidence[81] that the instructions received from the Applicant was to record the existing Agreement not to re-write it.  Further , I do not accept that he did not read and understand the documents he signed.

    [80]Charles Marshall Pty Ltd v Grimsley

    [81] Brown affidavit 6 May 2011, para 5

  1. The Applicant points to the expressions in the Agreement such as “contributing funds in the sum of $185,000 to the purchase and improvement of the Residence[82]” and the “aforementioned contribution to the purchase and improvement of the Residence[83]” and the acknowledgment by the Respondent that she received the $185,000 from the Applicant which “has been applied towards the purchase and improvement of the Residence.”[84]  All of those expressions the Applicant submits fall short of the language of a gift and accordingly the Agreement cannot be used to shore up the Respondent’s assertion of a gift.

    [82] Agreement recital B

    [83] Recital D

    [84] Clause 1

  1. The Respondent argues that the Agreement is indeed against the Applicants interest and that although the above expressions relied upon by the Applicant were used, none of them were inconsistent with the making of a gift.  She further says that nowhere in the Agreement is there reference to the Applicant being a 50 per cent owner or partner in the property which is his primary claim.  The Respondent says a careful reading of the Agreement will show the language of cl 2 and Recital D is consistent with the Agreement asserted by the Respondent namely that the Applicant was entitled to a contractual and personal right to reside in the home for the term of his life but not the grant of a life estate.  Contrast that with cl 3 where the Respondent agreed “to make provision in her Will for (the Applicant) to have a life estate together with her mother Teresa Zaorska in the Residence following her death.”  She says the drafting was precise and correctly reflected the Agreement between the parties.

  1. The Respondent pointed to the distinction between a life estate and a mere personal right to reside in the house.  As explained in Butt, Land Law 6th Ed, p 147 at para 1006 where it is stated:-

“A life estate differs from a mere personal right to reside on land for life.  But which of the two a testator or settlor intends to create is sometimes difficult to discern.  The effect of a provision in a Will or settlement is a question of construction, turning on the words of the provision read in the context of the document as a whole.  So far as any general proposition can be stated in an area where so much turns on context, it is that a right ‘to reside’ or ‘to live’ on land confers a personal right only, since it must be exercised in person, while a right to ‘use and occupy’ a property points to a life interest, since ‘use’ or ‘occupation’ may be exercised in person or through another (such as a tenant).  In proof, this general proposition is no more than a ‘broad generalisation’.  But it is a useful guide.  Thus, a provision in a Will permitting the testator’s widow to ‘continue to reside’ in the family home created a mere personal right; while a provision allowing a beneficiary to have ‘full use and enjoyment’ of a property ‘during her lifetime’, or ‘to be used by him as long as he wishes’, created a life estate.  But since context may colour sense, the generalisation must yield to a contrary meaning in appropriate circumstances.  And so, depending on context, a right to ‘use, occupy and enjoy’ a property may confer only a right of residence and not an estate in the land.”

  1. I am satisfied that the Agreement signed by the parties is against the Applicant’s interest, and is admissible against him.  I have no hesitation in concluding that all monies paid by the Applicant to, or on behalf of, the Respondent were by way of a gift pursuant to the agreement reached with the Respondent that the Applicant would, as a result, be entitled to live in the property for the rest of his natural life and in the event that the Respondent pre-deceased him he would be entitled, in terms of her Will, to a life estate in the property.  Any presumption of a resulting trust has been rebutted.

  1. It is clear to me that all documents prepared by Mr Brown, namely the Agreement, the Applicant's Will and the Power of Attorney were all prepared in accordance with the instructions of the Respondent.  In my view the Agreement correctly reflects the agreement reached between the Applicant and the Respondent.  The Respondent has satisfied all of her obligations.

  1. The reality of the situation, as I see it, is that the Applicant, at a time when he was estranged from his family in New Zealand, concerned about his health and seeking some security for the rest of his life, gave the subject monies to the Respondent upon the terms I have found.  The reason for his change of heart about the arrangement with the Respondent became apparent to me from his evidence that he had reconciled with his daughter in New Zealand and, depending on the amount of money he received from this case, he may well return to her in New Zealand[85].  That, to my mind, is the nub of this case.  He has now changed his mind and wants his money back.

    [85] T2.67.1-11

  1. The application is dismissed.  I shall hear the parties on the issue of costs. 


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Calverley v Green [1984] HCA 81
Charles Marshall Pty Ltd v Grimsley [1956] HCA 28