Alexei Poezd & Ors v Evgueni Poezd

Supreme Court of NSW|2005-09-09|Before: Nicholas J

CITATION : Alexei Poezd & Ors v Evgueni Poezd [2005] NSWSC 899

HEARING DATE(S) : 22.03.04; 23.03.04; 24.03.04; 25.03.04; 26.03.04; 27.09.04; 28.09.04; 29.09.04; 30.09.04; 01.10.04; 07.03.05; 08.03.05; 09.03.05; 10.03.05

CATCHWORDS : TRUSTS - constructive trusts - parents and brother overseas sent money to defendant in Australia to buy family home - property purchased and registered in name of defendant only - parents and brother emigrated to Australia and resided together with defendant in the home - subsequent breakdown in family relations - whether property held on trust by defendant for the parties as tenants in common - whether common intention to give money to defendant for purpose of purchasing property for the family, or as unconditional payment for services rendered by him to family company - property held on constructive trust by defendant for the parties as tenants in common in equal shares - no question of principle - turns on own facts

Baumgartner v Baumgartner (1987) 164 CLR 137 Bhana v Bhana [2002] NSWSC 117 CASES CITED : Green v Green (1989) 17 NSWLR 343 Watson v Foxman (1995) 49 NSWLR 315

Alexei Poezd - first plaintiff Dmitri Poezd - second plaintiff PARTIES : Nina Poezd - third plaintiff Evgueni Poezd - defendant

D E Baran - plaintiffs COUNSEL : P Menadue - defendant

Zelden Solicitors - plaintiffs SOLICITORS : Shields Lawyers - defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2424/02 Alexei Poezd & Ors v Evgueni Poezd JUDGMENT 1 His Honour: In these proceedings the plaintiffs claim to be beneficially entitled to the property at No. 29 Eurimbla Avenue, Randwick (the property) as tenants in common in equal shares with the defendant. The defendant is the registered proprietor of the property. They also claim an interest of 75% of the proceeds of sale of the unit No. 29/37 Dangar Place, Chippendale (Chippendale unit) of which the defendant was the registered proprietor, such proceeds being presently held in trust to abide the outcome of these proceedings. 2 The plaintiffs seek a declaration that the property is held on a constructive trust for the plaintiffs and defendant as tenants in common in equal shares, an order that trustees for sale of the property be appointed, and an order that 75% of the proceeds of sale be divided equally between the plaintiffs. Similar relief is sought in respect of the proceeds of sale of the Chippendale unit. 3 Alternatively, the plaintiffs seek restitution for unjust enrichment, or such other equitable relief as the court considers appropriate in the circumstances. 4 The defendant denies the claims and says that the property and the Chippendale unit were bought by him with his own money. 5 The first plaintiff (Alexei) and the defendant are the sons of the second plaintiff (Dmitri) and the third plaintiff (Nina). All were born and lived in Russia for a long time. From 1969 they lived together as a family in Moscow in a unit of which they became joint owners. In July 1993 the defendant migrated to Australia to live in Sydney, later to be joined by his brother and parents. 6 In summary, the plaintiffs claim that in about January 1995 the parties agreed that the plaintiffs would transfer money to the defendant from time to time for use by him in the purchase of a property in Sydney to be owned by the family in equal shares and in which the family would reside together when the plaintiffs migrated there. They claim that between 6 February 1995 and 15 September 1995 they transferred money to the defendant in varying sums which was used by him to pay for the purchase in his name of the Chippendale unit on about 18 September 1995. They claim that until 7 July 1998 the plaintiffs continued to transfer money to the defendant which was used by him to pay for the purchase in his name of the property on about 5 September 1997, and to meet payments under the related mortgage. A total amount of $594,897.76 was transferred. 7 On 7 July 1995 Alexei arrived in Sydney on a permanent visa and stayed with the defendant until 23 November 1995 when he returned to Moscow. On 26 July 1996 Dmitri and Nina arrived in Sydney on a permanent visa and stayed with the defendant until 28 August 1996 when they returned to Moscow. On 23 September 1998 all plaintiffs came to Sydney to reside permanently and went to live with the defendant at the property. There they remained until 27 November 2001 when, following a dispute with the defendant, they moved out. The defendant has refused to acknowledge any interest of the plaintiffs in the property or in the proceeds of the sale of the Chippendale unit. 8 The defendant admits that he received the money transferred by the plaintiffs. He denies the existence of an agreement or arrangement pursuant to which the plaintiffs' claim that the money was sent. He says, in effect, that in about December 1992, in contemplation of his departure to Australia he reached agreement with the plaintiffs whereby, in consideration for his involvement in the company MNVP Technology (MNVP) in which family members were involved, and for his assistance in establishing its re-registration as TOO NVP Technology (TOO), they agreed to pay him 50% of the entire after-tax income which the plaintiffs would receive from TOO. He says that the money transferred to him was money to which he was entitled under this agreement and, accordingly, the plaintiffs have no claim upon properties purchased with it. Introduction 9 In about January 1991 MNVP was incorporated. Its founders and owners were Alexei, Dmitri, the defendant, and Professor Nikolai Tikhomonov. Until it was re-registered in May 1993 MNVP undertook what was described as scientific innovation measures, and also traded in chemical material. It owned no assets. It provided scientific and research services usually for oil plants and state laboratories. 10 Dmitri holds a PhD in chemistry and is an expert in oil refinery technology and was the head scientist in a state laboratory. He was engaged by the company to negotiate and perform contracts for the provision of scientific services. Alexei is a scientist and was engaged to provide services in the fields of applied mathematics and computer simulation. Nina holds a PhD in chemistry and is an expert in oil refinery technology and the polymer production chemical industry, and was an employee of the company. The defendant is a scientist, and was a director of the company and responsible for its accounting. He was also involved in setting up software systems, the processing of contracts, and the preparation of necessary documents. 11 Until about June 1993 the total pre-tax income of the company was about $10,000.00. 12 On 7 December 1992 the defendant was issued with a permanent visa to Australia and shortly afterwards made arrangements to fly to Sydney. Nevertheless during the next few months he supervised his mother in the preparation of the company's quarterly financial reports as required, so as to enable her to take over the accounting work after his departure. 13 In May 1993 MNVP was re-registered as TOO. The defendant and Professor Tikhomonov were removed as founders and shareholders. Nina became a founder, shareholder, and its director. Nina was the director of TOO from 16 June 1993 to 10 March 1995, and Dmitri was its director from 11 March 1995 to 12 September 1997. The business was substantially similar to that carried on by MNVP. 14 The defendant departed for Sydney on 4 July 1993 and thereafter had no involvement in the operations of TOO. On about 12 September 1997 the plaintiffs' interests in the company ceased, and it was transferred to a Mr Sinev. Chronology of events between 1994 and 2001 15 The following narrative is of events which provide some background for the better understanding of the plaintiffs' claim. Most of these matters were not in dispute and, in any event, there was ample evidence for the finding that each took place. 16 On 12 October 1994 Alexei was advised by the Australian Embassy in Moscow that his application for permanent entry to Australia was likely to be granted. It was granted on 17 February 1995. 17 On 6 February 1995 Dmitri transferred the sum of $666.22 from his bank account in Moscow to the defendant's ANZ bank savings account No. 534703587 in Sydney (the ANZ account). This was the first of the transfers from Russia, the details of which, and of other relevant banking transactions, are set out in the agreed schedule of transfers which is Annexure "A" to this judgment. It is common ground that the plaintiffs in fact transferred the monies from Russia as set out in the schedule and these monies were used by defendant to purchase the Chippendale unit and, later, the property. 18 On 20 March 1995 the defendant sent an e-mail to the plaintiffs in which he informed them of his research into the property market, including price ranges in various localities for units and houses, and matters to be taken into account in deciding to purchase a property. Relevant passages included the following: "Now, the fact that the prices have stabilized is very good as there is no point in rushing along; at the same time, responsibility is lifted off me: when Alexei comes here, he will figure everything for himself. If I get a home loan up to my ears from a bank, then, considering my salary, the maximum loan amount would be about $250,000 … If you are afraid that I will sell myself to the bank and then fall sick or even kick the bucket, leaving you with debts, then there is an insurance in case the borrower becomes incapacitated, etc … A problem may arise suddenly when seemingly stabilized prices begin to change again, no matter whether going up or down (God forbid). If this happens, one should act quickly and have a developed policy already in place. Well, it is up to you to develop such a policy. Need to have answers to every important question. The questions listed below may appear strange to you but they are very natural ones for any real estate agent: 1. The main thing is what suburb. Incidentally, some time ago I sent you a photocopy of Randwick and adjacent suburbs map. Have a look around, there should be one or two maps. I think, there should be two covering all the suburbs I am talking about here. 2. A house or a unit. 3. Price range. 4. How many bedrooms. 5. Whether views are important for you (usually, for a unit), for me it is not important. 6. Whether it is important for you that the unit gets plenty of sun (I would prefer a unit that does not, I think it is cheaper to get warm in winter than to cool down in summer). 7. Property condition (whether we prefer a cheaper property that is not in a very good condition, or even a decrepit one - so that our Dad could find a way to spend his inexhaustible energy - or a property advertised as "just move in and enjoy without spending a cent"). One should take into account, though, and as I wrote to you many times, that it does not make financial sense to sell or change property within 5 or 6 years. In short, mistakes are expensive. If you are buying a property, you must pay at least $10,000, mainly, in stamp duties. Another obvious rule is that buying one thing here is much cheaper than buying two". 19 On 6 July 1995 Alexei transferred the amounts of $703.14 and $24,561.95, and on 7 July 1995 the amount of $59,584.73 of his money from Moscow to the defendant's ANZ account. These transfers brought the total amount transferred to $174,035.26. 20 On 7 July 1995 Alexei arrived in Sydney and opened account No. 117339-81 in his name with State Bank of NSW (the State account). 21 On 10 July 1995 Alexei opened an investment account with Esanda Finance Corporation Ltd (the Esanda account). On the same day the defendant transferred from his ANZ account the sum of $100,000.00 to the Esanda account. 22 On 1 August 1995 the defendant transferred the sum of $13,000.00 from his ANZ account to Alexei's State account. 23 On 28 July and 10 August 1995 Nina transferred sums to the total of $22,582.14 from Moscow to the defendant's ANZ account. 24 On 31 July 1995 the defendant completed an application for sponsorship of his parents for migration to Australia. To the question "What accommodation do you propose for your sponsored relatives?" he answered, "We'll buy an apartment". 25 During July and August 1995 Alexei and the defendant inspected and decided on the purchase of the Chippendale unit. A deposit of $2,000.00 was paid on 26 July 1995 to the agent. 26 On 29 August 1995 Dmitri and Nina lodged a joint application for migration to Australia. 27 Between 14 August and 30 October 1995 Nina transferred amounts in the total sum of $104,572.28 from Moscow to Alexei's State account. The defendant also transferred to this account a total sum of $46,000.00 from his ANZ account on 14 August and 6 September 1995. 28 On 18 September 1995 the contract for the purchase of the Chippendale unit for the price of $185,000.00 was signed by the defendant. It provided for settlement in six weeks. The contract originally described Alexei as the purchaser but, after discussion, the defendant's name was substituted for his. 29 On 16 October 1995 the sum of $4,976.50, and on 1 November 1995 the sum of $166,656.67, were withdrawn from Alexei's State account to fund the purchase of the Chippendale unit. 30 During November 1995 the defendant transferred the sum of $29,000.00 from his ANZ account to Alexei's State account. 31 On 23 November 1995 Alexei returned to Moscow.

32 On 4 January 1996 the defendant transferred from his account the sum of $15,000.00 to Alexei's State account. 33 On 3 March 1996 Dmitri and Nina's joint application for migration to Australia was approved. 34 On 26 July 1996 Dmitri and Nina arrived in Australia on a permanent visa. On the same day they opened a joint account with State Bank of NSW, account No. 126294-81. They also authorised the defendant to operate this account. 35 On 28 August 1996 Dmitri and Nina returned to Moscow to attend to business matters. 36 During August and October 1996 the defendant transferred from his accounts the total amount of $72,730.00 to his parents' joint account. 37 As the schedule shows there were no transfers by the plaintiffs between 18 July 1996 until 30 May 1997 when the amount of $23,000.00 was transferred to the defendant's account from the State bank account of Dmitri and Nina. 38 On 19 May 1997 the defendant sent an e-mail to the plaintiffs in which he referred to his enquiries for a property in terms of participating in a game of draughts. His reference to points as in a draughts championship were intended to be understood as units of $1,000.00 so that, for example, "500 points" meant $500,000.00. He informed the plaintiffs to the effect that he had available to spend the amount of $500,000.00 "… Plus 20 points for taking part in the tournament gives a total number of 520 …" which was a reference to stamp duty and expenses of $20,000.00. The e-mail included the following: "… If you could transfer to me about 50 from mine, then it would be possible to count on a quite mean statistical result of 550, after which I could (for a long time) give up draughts … PS If my draughts allocation of 500-550 points (or points alone of 500-550 dioptres) is OK with you (that, of course, means the absolute maximum, the actual number of dioptres will depend on how the game goes), write to me and I'll commence working out the opening moves and preparing the endplay". 39 On 2 June 1997 Alexei sent an e-mail to the defendant. It included the following: "… I'll repeat briefly what was talked about on the phone. (1) Basically, you have enough money for any reasonable house (up to 550).

(2) You need to choose, of course, what suits you (a good nearby suburb, or a far away not so good one). No doubt, a bad one nearby isn't needed. (3) It's better (like all Australians) to take out a loan, because interest is unusually low. Take out the maximum loan, but with an attached account. And compensate as much as possible. (4) It's better for you not to sell the apartment in Chippendale because prices for real estate will go up sharply (it will probably be better to sell it in year's time or so)". 40 On 27 June 1997 the defendant sent an e-mail to the plaintiffs in which he referred to options for dealing with the Chippendale unit including retaining and renting it after the purchase of a house. On the same day he sent a second e-mail to the plaintiffs concerning the possible purchase of a property at No. 45 Arthur Street, Randwick. He referred to discussions with the agent about price, and commented on costs of repairs. The e-mail included the following: "Generally, Arthur should be taken for 380 (without fight) … So far my intention is - up to 400. You also use your brains, for the last time this week. I will call you again today, and you will tell me your figure. Then I will just go and march to the approved figure, like a soldier. But not higher. There is 354 sq metres of land there. If within 400, then we have the best result, and it is probably impossible to jump higher than that. VERY close proximity to shops, bus. This may come handy for the problems with my leg. Again, I don't think one should fight for this option. There is still some fish in our margins, and I still have hope of catching something having not just a tail, scale and gills, but having them all. Good bye, my dear family. Waiting for a definite figure from you, approved by your "Triangle"". 41 On 11 July 1997 the defendant sent an e-mail to the plaintiffs advising of property inspections he had made. It contained an account of his discussion with the agent and a detailed description of the house at No. 29 Eurimbla Avenue, Randwick, and of its advantages and disadvantages. He described a number of other properties as comparable options. The e-mail included the following: "Well, guys, for $400,000 (or $420,000 - $450,000) it is a cinch … I did not sketch the position of rooms and do not remember it either, but it is not bad. I think all four of us would be able to settle there without a problem. It is a single-storey house (it is a plus for me). If you compare it to, for example, 45 Arthur, then the house is clearly larger. I would estimate its living area as, say, 100 sq. metres. I would not be surprised if it was bigger. The house condition is quite satisfactory. Of course, it should be renovated in the future. In the meantime, however, it would be quite acceptable. Sure, the carpet needs to be replaced but for now I would have them cleaned, so that we could live there, and later we would figure things out. You can't compare its condition to that of Arthur. It seems there is no smell in the house".

After referring to comparable properties and price ranges for them he said: "As far as figures are concerned, I think $450,000 should not be a problem. I would set up the price to $480,000 for now but (taking into account your opinion), I can easily bring it up to $500,000. Now, if Mum's wise one percent is taken into consideration, the figure would be $505,000. So, what would you prefer, $484,000 or $505,000?"

He concluded as follows: "When discussing the figures, take into account the fact that a good property is advertised almost every week. Sure, one property differs from another, but on the whole why not. So, there is no point in "getting attached" to Yurimbla in particular. Now, the degree of "attachment" is determined by the figures. On the other hand, if it is considered calmly, then it is possible that this is the most suitable property out of them all, without any hang-ups, so that you do not need to plan to live in the basement while the house is being renovated, and if the house does need renovation then it is going to be a small one. There is garage, there is no swimming pool, which no one needs and it would be a drain on the pocket anyway; instead, there is pergola, which is a good thing. Good-bye, my dear relatives, I am looking forward to clear instruction from the Triangle (sealed by a triangular stamp) in relation to the inspection and figures". 42 On 14 July 1997 the plaintiffs sent an e-mail to the defendant in reply to the last mentioned. It says: "Alyosha [Alexei] brought your latest letters to the dacha [country cottage] for us. We have studied the plan of the bungalow. We liked it a lot. In size the house is quite suitable. Although the living area is something about 77 square metres, overall it is more than 140. So it's enough. And the disposition of the rooms is normal, and the awning [Translator: or "undercover area"], so that overall it's the height of [one's] dreams. The narrow driveway for the car is, of course, a shortcoming, but not such a one to reject such a wonderful house. The main thing is that there shouldn't be any noise there and that the house itself should be in a more or less normal condition. So, darling, we give you the OK for its purchase. Dad also liked everything, so the whole triangle signs under this "OK". [Translator's note: the Russian word for "OK" can also be translated "go-ahead"] Well, and what is the price? We have already written up to which limits can be counted on. You yourself understand, see according to circumstances. Without doubt, the less the better. And the fact that houses on this street previously were sold cheaply, well perhaps because real estate was cheaper then and now has increased in price. Perhaps it will be possible to buy this one too for 450 thousand". 43 On 15 July 1997 the plaintiffs sent an e-mail to the defendant in which they expressed approval of the property as being generally suitable and appropriate for their requirements. For example they said: "As to bungalow, we like it more and more. Especially its size and internal planning. If the latest addition is lighter than the rest of the house, perhaps, in terms of strength, it's not so bad. The whole house in Chippendale is made half a brick thick - and it is standing OK. As to the warmth, if it really becomes hot we will think of something".

They raised questions arising from a study of the plan of the property. The e-mail concluded as follows: "You wrote several times that low price makes you suspicious there may be a trap there. We decided here that a "trap" may be present where the price is higher as well. If you buy with a "trap", then it's better to buy cheaper. We have already informed you of the figures, but will repeat them: - Very good price: less than 430 - Acceptable: 430-470 - Close to maximum: 480-490 - Absolute maximum: 500 So long, our dear. Be healthy and have success". 44 On 16 July 1997 the defendant, as purchaser, entered into a contract for the purchase of the property for the price of $497,000.00, and on 21 July 1997 applied for a home loan from the ANZ bank. He was offered a mortgage loan of $300,000.00 on 24 July which he accepted on 30 July 1997. 45 On 1 September 1997 the defendant sent an e-mail to the plaintiffs in which he provided a further description of the house and garden, the neighbourhood, and future neighbours. He raised the prospect of renovations.

He concluded: "In all, I generally await for my parents who will come in a few months and who will have nothing else to do but to learn hated English, to do plastering and especially painting. By the way, my dad, for example, can tear off all that silly plaster stuck by him [by Adam - A.B.] for a very reasonable fee, and his house will again sparkle with its naked bricks like a newborn …" 46 On 5 September 1997 the purchase of the property in the defendant's name was settled, in part funded by the $300,000.00 secured by mortgage to the ANZ bank. The defendant became liable for the mortgage payments. 47 On 12 September 1997 the interests in TOO ceased on the transfer of the company to Mr Sinev. 48 On 24 October and 31 October 1997 Alexei transferred to the defendant's ANZ home loan account a total amount of $102,698.87 of his money. 49 In December 1997 Dmitri sold his dacha which was situated near Moscow. 50 On 9 January 1998 Dmitri transferred to the defendant's ANZ home loan account the sum of $74,810.75 of his money. 51 On 7 July 1998 Alexei transferred to the defendant's ANZ account the sum of $57,595.51. 52 During August 1998 the plaintiffs' flights to Sydney were arranged by the defendant. 53 On 23 September 1998 the plaintiffs arrived in Sydney to live permanently. They commenced living at the property with the defendant. 54 On 11 November 2001 there was a dispute between the parties. 55 On 27 November 2001 the plaintiffs moved away from the property to live elsewhere. The principles 56 The circumstances in which a court of equity will intervene to declare the existence of a beneficial interest in property were considered in Green v Green (1989) 17 NSWLR 343. With reference to Baumgartner v Baumgartner (1987) 164 CLR 137 Gleeson, CJ, p 353 said: "The most common case of intervention of that kind to be found in the law reports is the case where the person in whose favour a constructive trust is found has, directly or indirectly, made a financial contribution towards the cost of acquiring, improving, or maintaining the property in question".

and (p 354D): "Further, as the decision of the High Court in Baumgartner shows, circumstances may well exist which justify the imposition of a constructive trust, not to give effect to the actual and specific intention of the parties, but on the basis of a pooling of resources for the purposes of a joint relationship which has come to an end".

His Honour continued (p 355): "In the judgment of Vice-Chancellor Browne-Wilkinson in Grant v Edwards his Lordship identified as two matters to be demonstrated when a party seeks to establish a constructive trust based on actual intention, first, that there was a common intention that both should have a beneficial interest, and secondly, that the claimant acted to his or her detriment on the basis of that common intention. His Lordship pointed out that proof of such common intention can be direct, as for example, by evidence of express agreement or the making of admissions, or such common intention can be inferred from the making of contributions to the cost of a property, or meeting expenses in maintaining it. That, however, is merely one of the ways, but not the only way, in which the evidentiary basis for inferring a common intention can be laid. As was earlier observed, such conduct may also be of considerable factual importance in establishing an acting to detriment, but once again, in that respect its status is evidentiary and it is not a matter of legal necessity. Addressing the question of the quantification of the plaintiff's right, his Lordship pointed out that even after it has been established that the parties had a common intention that both should have a beneficial interest in the said property and that the claimant has acted to his or her detriment there will still remain a question as to the extent of the claimant's beneficial interest. Here again, if contributions have been made they may be of importance in the resolution of that question. Even in a case where a court can infer an actual intention to share ownership of real estate it is, of course, extremely rare that the parties will be people of such sophistication that they advert to or contemplate some particular form of legal title. Thus the court may have to resort to the application of such principles as that expressed in the maxim "equality is equity"".

Thus it is recognised that although evidence of an express agreement may be lacking, a common intention that the parties would share the beneficial ownership of the property may be inferred from words or conduct of a less explicit kind. The plaintiffs' case 57 The plaintiffs' case is that the defendant holds the property on a constructive trust for the parties beneficially in equal shares. They say that the trust arises under an arrangement whereby the plaintiffs would provide money to the defendant for the purchase of a property in which all would have a beneficial interest and in which the family would live together upon migration to Sydney. They say they acted to their detriment in giving effect to that intention. The following is a summary of the essential matters which the plaintiffs submit are established on the evidence. 58 The intention of the parties to buy a property in Sydney was first declared in January 1995 in a telephone conversation between Nina and the defendant in which Alexei and Dmitri participated. The plaintiffs were at home in Moscow and the defendant was in Sydney. The conversation was as follows: "Nina "Our business in Russia is successful, so we think that we can buy a property in Sydney and later, all become tenants in common just like our Moscow flat. When we all migrate to Sydney we will live there together. We will send our money to Australia and it will be used for purchasing the property. If you agree, we will start to send money to your account whenever we are able to do so." Defendant "I agree"."

Alexei and Dmitri participated in the conversation and confirmed this evidence. 59 The plaintiffs say that by that time the decision had been made to come to Australia to live as Nina said (T p 336): "We were going to live all together just the way we lived in Moscow". They were certain they would be allowed to do so. Dmitri and Nina said that they formed the intention to go to Australia to join the children in about October 1994 when Alexei's application for a visa was approved (T pp 235, 350). This evidence was neither challenged nor contradicted. I accept it. 60 Shortly thereafter the first transfer was made by Dmitri. An issue in the trial was the source or ownership of the money transferred by each plaintiff. It is convenient to resolve that now. The affidavit of each plaintiff of 2 June 2004 detailed the source of money which he and she caused to be transferred. In each case it was said to have been drawn from his or her personal funds derived from salaries or investments. The result of the limited cross-examination on this issue confirmed their evidence, and there was none to contradict it. Accordingly, I find that each was the owner of the money which he or she transferred to the accounts identified in the schedule, including those of the defendant. The following table adapted from the schedule and to be read with it identifies the sources of the transfers from Russia:

No Date of Amount Transferred Source Receipt of Transfer 1. 6 Feb 1995 $666.22 Russia, Dmitri's account 2. 13 Feb 1995 $6,696.91 Russia, Dmitri's account 3. 20 Feb 1995 $13,441.09 Russia, Dmitri's account 4. 1 Mar 1995 $13,384.31 Russia, Dmitri's account 5. 27 Apr 1995 $13,476.23 Russia, Dmitri's account 6. 26 May 1995 $13,808.06 Russia, Dmitri's account 7. 15 Jun 1995 $13,817.66 Russia, Dmitri's account 8. 29 Jun 1995 $13,894.96 Russia, Dmitri's account 9. 6 Jul 1995 $703.14 Russia Alexei's account 10. 6 Jul 1995 $24,561.95 Russia Alexei's account 11. 7 Jul 1995 $59,584.73 Russia Alexei's account 13. 28 Jul 1995 $13,958.56 Russia Nina's account 15. 10 Aug 1995 $8,623.58 Russia Nina's account 16. 14 Aug 1995 $19,970.41 Russia Nina's account 18. 23 Aug 1995 $56,632.89 Russia Nina's account 20. 13 Sep 1995 $5,182.51 Russia Nina's account 21. 15 Sep 1995 $9,742.99 Russia Nina's account 22. 30 Oct 1995 $13,043.48 Russia Nina's account 27. 27 Dec 1995 $13,207.55 Russia Nina's account 29. 6 Jun 1996 $11,230.28 Russia Nina's account 30. 19 Jun 1996 $12,020.24 Russia, Dmitri's account 31. 24 Jun 1996 $10,775.13 Russia Nina's account 32. 18 Jul 1996 $11,369.75 Russia, Dmitri's account 39. 24 Oct 1997 $699.72 Russia Alexei's account 40. 31 Oct 1997 $101,999.15 Russia Alexei's account 41. 9 Jan 1998 $74,810.75 Russia Dmitri's account 41. 7 Jul 1998 $57,595.51 Russia Alexei's account

61 As evidenced by his e-mail of 20 March 1995, the defendant began searching for a property. He sought the plaintiffs' answers to questions as to the price, location, and features of a house suitable for them, and requested their policy to guide him. By the time Alexei arrived in Sydney on 7 July 1995 an amount of $174,035.26 had been transferred to the defendant's ANZ account. Alexei said that a purpose of his visit was to find and purchase a unit for the family pending opportunity to acquire a larger property. 62 On 10 July 1995 the defendant transferred $100,000.00 into Alexei's Esanda account to take advantage of its interest rate. 63 Alexei says that in about July 1995 he and the defendant agreed to inspect units together and inform their parents accordingly. On 31 July 1995 the defendant represented in his application to sponsor his parents for migration to Australia that together they would buy an apartment for their accommodation. In August 1995 Alexei had a telephone conversation with Nina in the defendant's presence in which she agreed to the purchase of the Chippendale unit with their money in Australia. He also deposed to a conversation with Nina in which she left it to him and the defendant to decide whose name to put on the title, as it would be put into all their names when they migrated to Australia. She agreed with his proposal to leave the defendant with a blank cheque on his account to simplify matters when a suitable property was found. Alexei said he then had the following conversation with the defendant (affidavit 11 June 2003, para 25): "Defendant: "Whoever's name would be put on the title of the Unit the Unit will be the joint property of the whole of the family". Alexei: "I agree, it will be our joint property the same as our Moscow flat. When we all migrate to Australia it will be registered in the proper way as a Unit belonging to all of us". Defendant: "I think that it is better to buy it in my name now, because you are going to leave Australia soon". Alexei: "I agree. You will pay the initial deposit for the Unit, I will pay the Stamp Duty and the bulk sum of the purchase price. Probably this Unit is not enough for the whole our family, so moneys remaining after the purchase of the Unit will stay in Australia and would be used for purchasing a house in the future. To make it easy to operate this money here in Australia I'll leave a signed blank cheque with you. This cheque may be used only for buying a property approved by all of us". Defendant: "I agree."" 64 On 18 September 1995 Alexei and the defendant attended their solicitor, Mrs Janet Leary, when the contract for the purchase of the Chippendale unit was signed. On that occasion the defendant's name as purchaser was substituted for Alexei's, consistent with their discussion. The defendant denies these conversations. The extent of the challenge was limited to the suggestion that they did not occur. Alexei confirmed that they did. 65 It is common ground that the total sum of $171,633.17 was drawn from Alexei's State account to pay for the Chippendale unit. Sometime after settlement on about 1 November 1995 the defendant went to live in the unit of which he had become the registered proprietor. 66 On 23 November 1995 Alexei returned to Moscow as planned. He says he left a signed blank cheque with the defendant to be used to draw on his State account for the purchase of another property for the family when the opportunity arose. 67 During June and July 1996 there were more transfers to the defendant's account. Dmitri and Nina arrived in Sydney on a permanent visa. They opened a joint account with State Bank of NSW and authorised the defendant to operate it. They stayed with him in the Chippendale unit. Transfers from Russia stopped on 18 July 1996 for the time being. They returned to Moscow for business reasons on 28 August 1996. 68 On 19 May 1997 the defendant sent the plaintiffs the e-mail referred to in para 38 above in which he invited approval to commence enquiries for property within a price range of $500,000.00 to $550,000.00. Also in this month Nina had a telephone conversation with the defendant in which Alexei and Dmitri participated. The plaintiffs were at home in Moscow and the defendant was in Sydney. In her affidavit of 11 June 2003 (para 33) Nina said to the defendant: "We think that we can all buy a house for our family now. If you agree with that then could you find a suitable 4 BR house not far from the sea. The upper limit of the purchase price should be about $500,000-$550,000 AUS. You can use all money from our savings and deposit accounts and more funds will be transferred from Russia. If this is not enough, we can always sell the Unit to make up the difference. When we arrive in Australia we will live in the house and transfer its ownership into all our names".

The defendant replied: "I agree with that. I will start searching for a house".

She was not cross-examined on this evidence except to suggest that the defendant was already searching for a house. She adhered to her evidence. The conversation was confirmed by Alexei and Dmitri. 69 Alexei's e-mail of 2 June 1997 (para 39 above) confirmed instructions to spend up to $550,000.00. In his e-mail to the plaintiffs of 27 June 1997 the defendant advised of the property at No. 45 Arthur Street, Randwick, and invited their instructions as to a definite figure to pay for it. 70 In his affidavit of 11 June 2003 (para 41) Alexei deposed to a telephone conversation in July 1997 in which his brother told him that he had found No. 29 Eurimbla Avenue, Randwick and thought it was "… a great property for all of us". Alexei replied that he and his parents agreed, and stated a maximum price of $500,000.00. He authorised the defendant to use the blank cheque that he had left with him. Cross-examination resulted in the reinforcement of Alexei's assertion that the defendant needed the agreement of all members of the family to the purchase. 71 The conversation probably took place at about the time the e-mails of 11, 14, and 15 July 1997 were sent. The plaintiffs say that this correspondence evidences the defendant's clear acknowledgement of the necessity to obtain their approval for the expenditure of their money on the purchase of a house to be shared by all members of the house. The e-mail of 15 July 1997 conveyed the plaintiffs' approval of the property and instructions as to price, the absolute maximum being $500,000.00. Next day the defendant entered into a contract to purchase the property for $497,000.00. On 18 July 1997 he utilised the blank cheque to transfer to his account the sum of $142,000.00 from Alexei's State account. In the next few days he arranged a loan of $300,000.00 with ANZ bank to assist the purchase. During May, July, and August 1997 funds to the amount of $218,700.00 were transferred from the plaintiffs' Australian accounts to the defendant's accounts. Settlement took place on 5 September 1997. 72 Alexei transferred money from Russia to the defendant's ANZ home loan account on 24 October and 31 October 1997 and 7 July 1998 as payments under the mortgage. On 9 January 1998 Dmitri transferred the sum of $74,810.75 to the same account as a payment under the mortgage. These payments totalled $160,294.38. 73 On 12 September 1997 the plaintiffs' interests in TOO ceased, and in December 1997 Dmitri sold his dacha. 74 The plaintiffs arrived in Sydney on 23 September 1998. They lived at the property with the defendant until 27 November 2001. They say that all household and living expenses were paid from rent collected from the Chippendale unit, and from funds available from time to time from the mortgage account and Dmitri and Nina's pensions. During this period Nina underwent a major operation, and extensive renovations were carried out by the parties themselves. The plaintiffs say that the renovations were paid for from the monies transferred from Russia, as were the mortgage instalments. 75 They say that in September 1998, April - May 1999, and June 2000 they raised the question of arranging for the registration of their interest in the property with the defendant. On these occasions he remained silent which was understood to mean consent. They say the matter was not considered urgent as all were comfortable in the belief that it was accepted that the property was owned by all. 76 The plaintiffs denied that all of the family's income in Russia came from TOO (T p 309), and that the monies transferred during 1995 were the defendant's share from TOO (T p 337). They deny the matters relied upon by the defendant to establish his claim to sole ownership of the property. The defendant's case 77 The defendant's case is that all money transferred from Russia to his accounts and used by him for the purchase of the Chippendale unit and the property was his. He says that the money was sent to him for his sole use and benefit in fulfilment of an agreement made with the plaintiffs in Moscow in about December 1992. He denied every element of the plaintiffs' claim including conversations consistent with a common intention as to ownership. 78 He says that the background to the agreement was the extent of his contribution to the foundation of MNVP in January 1991 and his involvement in its operation. In effect, he was the driving force behind the company, developed its policies, and set up a software system for the processing of contracts and conducted its accounting system. He said that the success of the company from which his family profited was principally attributable to him. 79 In August 1992 he decided to leave the company and emigrate to Australia, and on 7 December 1992 received an Australian visa. He says that on receiving the visa he had a conversation with Nina (affidavit 5 July 2004, para 34). With reference to MNVP he asked how much she would pay for "this money making machine?" Relevantly, the conversation continued as follows: "Nina: "Then, how much do you want?" Defendant: "I want half" Nina: "Half of profit?" Defendant: "No, half of all money. You know very well that profits mean nothing. It is very easy to hide profit or just cash money aside altogether. I want half of all crisp cash that members of our family will get by means of Technology. After you pay all taxes. When you finally get crisp cash in your pockets. Half of all this money is price of Technology. I think this is fair. In return you get a semi-automated money-making machine". Nina: "Will you teach me all aspects of running the Company, answer all my questions, improve software, simplify its interface, re-register the Company and pass all necessary audits for re registration? If you will, I agree that you will get half". Defendant: "If I am getting half of Technology then I have to cancel my December ticket. No welfare from my first day in Australia … By the way, a few months of delay of immigration will cost me 10-20 thousand dollars because the later I go to Australia the later I find job and miss thousands in Australian salary … So be sure that I have half not only if you earn zero but also half if you earn a billion dollars". Nina: "What do you mean, you want half a billion?" Defendant: "Of course, this a lottery for me. Half a billion's earning is half a billion". Nina: "Ah, yes. Billion's earning. Sweet dreams. Ten thousand would be nice … Of course we will give you a half a billion. But only we get a billion. Anyway, Technology. Stays. Let's make a list of what we have to do before your departure"". 80 A few days later he says he had the following conversation with his parents: "Nina: "You know, Eugene wants half". Dmitri: "But its all my contracts". Defendant: "You worked on your contracts since 1980s or even 1970s. And all you had was just your salary and small bonuses. Without Technology you would not get anything significant out of these contracts. All money would go to your Institute and disappear there". Nina: "You know, we sat for a few days. I had no idea that this is such huge job, it is so advanced and so complicated. We could not have done anything without Eugene". Dmitri: "OK then"". 81 The defendant says that in February 1993 he complied with Nina's request for assistance in preparation of the company's quarterly reports, and on occasions she reminded him that he would be receiving half of its earnings. He postponed his flight in order to assist his mother. He arrived in Sydney on 4 July 1993. 82 The defendant says that in about October - November 1994 he had a telephone conversation with Nina in which she informed him that the company was starting to generate income and she expected much more money from it. He told her that he would not return to Russia, and would obtain information about transferring money to Australia. He says that after receiving the first transfers of money from Russia he considered buying a unit, and discussed the subject with the plaintiffs in telephone conversations and e-mails. 83 The defendant says that when Alexei arrived in Sydney on 7 July 1995 he requested his help in finding a unit as he was too busy at work. He offered to transfer his money to Alexei's interest bearing account to provide income for Alexei, which Alexei accepted as a loan to be repaid upon demand. Under this arrangement he transferred $100,000.00 to Alexei's Esanda account. He became satisfied that he could trust Alexei and so decided to lend him more, and on 1 August 1995 transferred to Alexei's State account $13,000.00 as a loan. With regard to the transfers from Russia to Alexei's State account between 14 August and 30 October 1995 the defendant explained that they followed his request to Nina to make them, and after Alexei agreed to treat them as loans. 84 The defendant says that in November 1995, prior to Alexei's departure to Moscow, he obtained signed blank cheques on the State account for the purpose of recovering his money whenever necessary. Thereafter, he says, he requested his parents to resume transferring his money into his account. 85 With reference to the purchase of the Chippendale unit, the defendant referred to the meeting on 18 September 1995 with the solicitor when the contract was altered to record him as the purchaser. He says that Alexei said to them that the unit "… will certainly belong to my brother alone". 86 The defendant gave evidence of the circumstances which resulted in the purchase of the property. In short, he says he needed another place because the Chippendale unit was too noisy, and that by April 1997 he decided to buy a big house as small houses were rare, using as much of his money as possible and taking out a big loan. Thereafter he had telephone conversations, and exchanged e-mails, with the plaintiffs to inform them of his progress. He says he used his own money for the purchase and all mortgage payments. He denies that the transfers from 24 October 1997 were for the purpose of reducing the mortgage and says they were part of his share of the company's income. 87 The defendant says that he persuaded the plaintiffs to move permanently to Sydney, and offered to let them live with him for a reasonable rent. He says that after they came to live with him his parents paid him rent and other expenses from their pensions, but Alexei lived on his account. This arrangement continued until the plaintiffs left the property. 88 Mr Adam Krimatat gave evidence of conversations he had with the plaintiffs on a number of occasions in late 1998 and 1999. He was then their neighbour at Randwick and spoke Russian. The effect of his evidence was that in these conversations the plaintiffs told him that the defendant was the owner of the property. Evaluation of witnesses 89 From the above summary it is plain that the case of the plaintiffs is in stark conflict with that of the defendant. The resolution of the conflict involves an assessment of the reliability of each party as witness, taking into account evidence in corroboration of his or her version as well as evidence which indicates it is inherently unlikely or implausible. However, it is unnecessary to deal separately with each of the many points in conflict. I have winnowed them down to those essential to the outcome. For example, I do not refer to evidence concerning the defendant's letter of 9 November 2001 to the plaintiffs or the dispute on 11 November 2001 as I did not consider it to be of assistance in determining the issues under the competing claims. 90 The overall impression of each plaintiff gained during the hearing was that each was a truthful witness whose evidence was given honestly to the extent that recollection permitted. The cross-examination was lengthy and wide-ranging but none was shaken by it. Indeed, my assessment was that much of the evidence given under cross-examination served only to reinforce their evidence in chief. In particular, the parents impressed with the dignity and care with which they responded to questions. There was ample corroboration for the version of the plaintiffs which, in any event, was inherently probable. I accept the evidence of each plaintiff in preference to that of the defendant whenever it is in conflict. 91 For the defendant it was submitted that the evidence of the plaintiffs should be entirely rejected as without credibility. A principal basis for the submission was that the affidavits of the plaintiffs, particularly those of 11 June 2003, were substantially identical in terms. Reliance was placed on Bhana v Bhana [2002] NSWSC 117 in which Hamilton, J rejected the evidence of witnesses contained in identical affidavits for which no explanation was given. In my opinion it was an extreme submission which should be rejected. Bhana provides no general principle for dealing with affidavit evidence. Importantly, however, the plaintiffs were not cross-examined to obtain an explanation or to suggest that they had improperly colluded to give untrue evidence. Nevertheless, it was a factor taken into account in the overall assessment of the quality of their evidence, but in the circumstances I drew no adverse inference from it. 92 I have come to a different view about the defendant. I found him to be a witness upon whose evidence no reliance should be placed where it was contested unless it was corroborated by, or is consistent with, independent and accepted documentary or other evidence. However, there was no such support for his evidence. 93 I observed him under cross-examination for some days. On occasions he became visibly upset, sometimes prevaricated, and many times endeavoured to avoid answering a question directly when he perceived that to do so might be harmful to his case. Furthermore, with regard to a number of issues the defendant gave, and vigorously adhered, to evidence which was patently implausible or simply improbable which generated grave doubts about the truthfulness of his evidence generally. 94 The defendant's case in answer to the plaintiffs' claim depended upon proving to the reasonable satisfaction of the court conversations said to have taken place in December 1992 which established the agreement whereby he would be paid 50% of the after-tax income received by the plaintiffs from MNVP and TOO. The difficulties of proof for a party relying upon spoken words to establish, for example, an agreement intended to be binding in the absence of some reliable contemporaneous record or other satisfactory corroboration are well recognised. The following passage from Watson v Foxman (1995) 49 NSWLR 315 p 319 is apt:

"Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not ¼ attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712". 95 Absent corroboration, in my opinion the difficulties confronting the defendant were insurmountable. The version of the conversations ultimately relied upon in chief are in his affidavit of 5 July 2004, and in his oral evidence given 29 September 2004, over 11 years afterwards. The defendant explained that the affidavit versions were selected from a conversation with his mother which continued for about a day and ranged over a number of subjects, and from a conversation some days later with both his parents. The oral evidence under cross-examination is at T pp 407-423. Analysis of it supports the finding, which I make, that it is unconvincing, confusing, and, of itself, insufficient to establish the agreement he claimed. 96 There are additional considerations which compel the finding, which I make, that there never was the agreement alleged by the defendant. 97 The defendant is experienced in accounting and is highly qualified in computer technology. He was much involved with the plaintiffs in the operations of MNVP and did its accounting. Before leaving Moscow he assisted Nina with MNVP's audit and prepared her for attending to the accounting for TOO upon re-registration. He would have been aware of TOO's potential earning capacity. He impressed me as a person who is meticulous and careful to ensure the protection and advancement of his own financial interests. 98 If, in truth, an agreement had been made whereby he was to receive monies derived from the company's profits it is highly probable in my opinion that he would have made a record of it, but there was none. 99 If there was an agreement the defendant would have been acutely aware that his entitlements depended upon the profitable conduct of TOO for as long as the plaintiffs continued to operate it. Thus, in my opinion, it would be probable that the defendant would have made enquiries relevant to his entitlements e.g. as to the financial health of TOO, or for an explanation of the irregular timings and amounts of payments received, or of the lengthy periods which sometimes occurred between them. It would also be probable that the defendant would have sought an accounting from time to time to satisfy him that he was receiving his due. I found it astonishing that no attempt was made, either in challenge to the plaintiffs' case or to advance his, to demonstrate that the amounts were calculated with reference to the company's post-tax income and/or to income distributed to the plaintiffs, or were otherwise linked to the earnings of the company. The plaintiffs were not cross-examined on these matters. It is reasonable to expect that there would have been evidence of this kind. Its absence provides powerful support for the finding that there was no such agreement. 100 Another significant parcel of evidence concerned the e-mails. For some weeks prior to the contract for the purchase of the property e-mails were exchanged between the parties, relevantly commencing with the defendant's e-mail of 19 May 1997. The position taken by the defendant in respect of this correspondence was that his purpose was to inform the plaintiffs of his proposal to buy a house for himself to be funded by his own monies which included the amounts transferred and a mortgage borrowing. 101 He denied that a purpose was to seek the plaintiffs' authorisation of the amount to be paid or their approval as to its suitability for their requirements. The thrust of the defendant's evidence as I understood it was that he wanted their opinion as to the wisdom of a purchase, he considered Alexei as a financial advisor, and sought their approval in the expectation that they would live with him on their arrival, at least temporarily. He explained that as at July 1997 the plaintiffs did not wish to come to Australia and a reason for buying a house larger than he required was to persuade them to do so. He said that his mother's opinion was valuable to him even though he was using his own monies for a purchase. I reject the defendant's evidence on these matters as being implausible and untrue. 102 The true purpose of each e-mail is evident upon its face. The relevant e-mails are those of 19 May, 2 June, 27 June, 11 July, 14 July and 15 July 1997, extracts from which are set out in paras 38, 39, 40, 41, 42, and 43 respectively. When read in sequence they demonstrate, and I find, that the common purpose of the correspondence was to provide the defendant with instructions for the purchase of a house to be owned by all members of the family and suitable for them all to live in. This is clear, for example, from the e-mail of 19 May 1997 in which the defendant seeks agreement as to a price range whereupon he will commence the search. In the e-mail of 27 June 1997 he says: "I will call you again today, and you will tell me your figure. Then I will just go and march to the approved figure, like a soldier. But not higher … Waiting for a definite figure from you, approved by your "Triangle"". 103 To the same effect was the defendant's e-mail of 11 July 1997 in which he concluded by saying "… I am looking forward to clear instructions from the Triangle (sealed by a triangular stamp) in relation to the inspection and figures". The final instructions were forthcoming in the plaintiffs' e-mail of 15 July 1997 in which a range of figures to the "absolute maximum: 500" was stated with the exhortation: "Be healthy and have success". 104 The underlying purpose of these e-mails I find to be consistent with that evidenced by the defendant's e-mail of 20 March 1995 (para 18) in which he referred to being relieved of responsibility when Alexei arrived and emphasised the need for the plaintiffs to develop a purchasing policy. It is also consistent with the defendant's representation in the sponsorship application of 31 July 1995 that he and his parents would buy an apartment for their joint use. In my opinion it cannot reasonably be suggested that the terms of the e-mails reflect a situation in which it was contemplated that the property would be bought and owned by the defendant alone. 105 I find that the effect of the e-mail correspondence negates the defendant's case. In cross-examination he stubbornly refused to acknowledge the plain import of what he himself had written probably because he perceived it would damage his case to accept the obvious. The evidence he gave in the teeth of these documents served to undermine any standing he might have had as a credible and reliable witness on matters about which there was a contest. 106 Mr Krimatat's evidence of conversations with the plaintiffs on occasions in late 1998 and during 1999 was denied. He was their next door neighbour until he moved away on 8 October 1999. He was requested by the defendant in April 2003 to recall for the purpose of giving evidence the conversations which were said to refer to the ownership of the property. Under cross-examination he demonstrated a lack of memory of the details of the conversations and the circumstances in which they took place which I found to be so poor as to render his evidence unreliable. In the circumstances this result is unsurprising (see Watson p 319). In my assessment Mr Krimatat's account of the conversations should not be accepted. I prefer the plaintiffs' denials to his evidence, and find that it is unlikely that the conversations took place. Findings 107 The foundation upon which the whole of the defence was erected was the agreement said to have been made between the defendant and his parents in December 1992. I have found there was no such agreement. It follows that without its foundation the edifice which was the defendant's answer to the plaintiffs' claim collapses entirely. 108 With regard to the plaintiffs' case I have earlier summarised the evidence upon which they rely. I have held the plaintiffs to be truthful witnesses and accept their evidence. Taking into account the whole of the evidence I find that the facts and matters identified in support of the plaintiffs' case in each of paras 57-76 inclusive above are established. These matters are in addition to those set out in the chronology (paras 15-55 inclusive). 109 I turn now to the question whether the plaintiffs have established entitlement to the relief claimed. Although not exhaustive, the following matters provide corroboration of acts and conduct from which the court should infer that the parties had an actual intention that each was to have a beneficial interest in the property upon which the plaintiffs acted to their detriment. 110 In her telephone conversation with the defendant in January 1995 Nina stated the intention to send money to his account to purchase a property to be jointly owned, just as they owned the unit in Moscow. She proposed to send money whenever the plaintiffs were able to do so. The defendant agreed. The arrangement was consistent with the decision of Dmitri and Nina to come to Australia to join the children made in about October 1994 when Alexei's visa application was approved. 111 Effect was given to the proposal without delay with the first transfer on 6 February 1995. The irregularity of the timings and amounts of subsequent transfers suggest they were made whenever the plaintiffs were able to do so as foreshadowed in the conversation. 112 The defendant's e-mail of 20 March 1995 manifests the intention that the parties would share responsibility for a decision to purchase a property for the joint use and ownership of the family. It foreshadows the arrival of Alexei and his involvement in the search for a suitable place. On 6 and 7 July 1995 Alexei transferred money from Russia to the defendant's ANZ account. A purpose of Alexei's visit to Sydney in mid-1995 was to find and purchase a unit for the family pending the opportunity to acquire a larger property. There was a conversation between Alexei and the defendant in about July 1995 in which it was agreed that, irrespective of the name of the titleholder, the unit would be owned equally by the parties. It was also agreed that the unit would be bought in the defendant's name and paid for from funds in Alexei's account. It was in these circumstances that the defendant stated in the sponsorship application of 31 July 1995 for his parents that an apartment would be bought for their accommodation. Accordingly, the purchase of the Chippendale unit was completed on about 1 November 1995 with funds from Alexei's State account and the defendant became its registered proprietor. 113 After the purchase of the Chippendale unit money was transferred from Russia sporadically between 27 December 1995 and June and July 1996. 114 Between 19 May and 15 July 1997 the parties exchanged the e-mails earlier referred to. These documents evidence the close consultation between, and direct involvement of, all the parties in relation to the purchase of the property. They also show that the plaintiffs were in control of the process and that the defendant willingly acted upon their instructions. Thus it came about that the defendant entered into the contract for the purchase of the property on 16 July, and on 18 July 1997 utilised Alexei's cheque to transfer to his account the sum of $142,000.00, and subsequently arranged a mortgage loan. 115 Settlement took place on 5 September 1997. On 24 October and 31 October 1997 Alexei transferred from Russia a total amount of $102,698.87 to meet mortgage payments. Further transfers for this purpose were made by Dmitri on 9 January, and Alexei on 7 July 1998. 116 It should be inferred that the transfer of TOO to Mr Sinev on 12 September 1997 and the sale of Dmitri's dacha in December 1997 were actions taken in preparation for the plaintiffs' permanent residency in Australia, and in the expectation that the property was theirs to live in. 117 Upon their migration to Sydney on 23 September 1998 the plaintiffs lived together with the defendant at the property in fulfilment of the intention agreed in the conversation of January 1995. In various ways living and household expenses were shared. Until the dispute of 11 November 2001 there appears to be no evidence that the defendant would have excluded the plaintiffs from the property or asserted that he believed he was entitled to do so. Conclusion 118 In my opinion the evidence establishes that the plaintiffs are entitled to a declaration as claimed by them, to the effect that the defendant holds the property upon trust for the plaintiffs and the defendant as tenants in common in equal shares, and to an order to the effect that 75% of the proceeds of sale of the Chippendale unit be paid equally to the plaintiffs forthwith, and to consequential relief. 119 In the circumstances it is appropriate to direct the plaintiffs to bring in short minutes to give effect to these reasons. As to the question of costs, my present view is that there should be an order that the defendant pay the plaintiffs' costs of the proceedings. However, failing agreement, I will afford the parties the opportunity to address me in relation to costs. Arrangements should be made with my associate by 19 September 2005 for the re-listing of the matter. **********

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Judgment (25 paragraphs)

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Cases Cited (5)