Made payable to A.C. No 04-707-353 St George"
30 In his affidavit of 16 April 1999, relatively late in preparation for the hearing, the plaintiff gave an account of the arrangements leading to these advances. He said that Mr Harry Barlow said to him to this effect: "I am in some difficulty with my mortgage. The interest rate is very high. I need some money to cool off the interest. Can you see your way clear to lending me some money?" He also says that Mr Harry Barlow said to him at a later point of the conversation, "Can you make the payee my St George Bank Mortgage Account" and gave him the mortgage account number. Mr Barlow requested that the cheques be in amounts of $9000 because he was concerned with new regulations affecting deposits greater than $10,000.
31 There is no evidence identifying whose account was account no. 04-707-353 at the St George Building Society, whether that account related to a mortgage or whether that account had any connection with Mr Harry Barlow. None of the properties which Mr Barlow is known to have had at the time was mortgaged to St George Building Society. A mortgage to St George Building Society over a property at Kincumber which was then owned by Mr Harry Barlow's former wife was discharged in September 1987, and it was suggested that this may be an explanation for Mr Harry Barlow's borrowings. There is no evidence which establishes any real connection. The suggestion is a speculation.
32 At about the time when the plaintiff claims that he advanced $55,000 to Mr Barlow in August and September 1987 Mrs Kathleen Mahoney, who had formerly been Mr Barlow's wife, obtained finance to pay off the balance of $59,900 which she had borrowed from the St George Building Society in December 1985. She regarded paying off that loan as bridging finance pending completion of her sale of the Kincumber property. In her understanding the bridging finance was provided by Mr Livingstone, whom she did not know and with whom she did not deal directly; she dealt with Mr Livingstone through Mr Barlow. (There followed some confusing transactions extending over some years between Mr Livingstone and Mrs Mahoney, which it is neither possible nor necessary to resolve). Mrs Mahoney's evidence does not tend to confirm that Mr Barlow had a need to pay or did pay any money to St George Building Society in September 1987. Her evidence seems to mean that she paid Mr Livingstone $120,000, that after some years and some difficulties Mr Livingstone paid her $60,000, and that these transactions were treated as in some way an acquittance of the bridging finance. It has not been established that Mr Barlow had a need for funds in the order of $55,000 in August and September 1987, for the purpose of paying off Mrs Mahoney's mortgage or for any purpose.
33 There is really no objective confirmation of the plaintiff's claim that there was an agreement for loan and that he made advances to Mr Harry Barlow by paying money into the St George Building Society.
34 The plaintiff's position is that the Certificate of Title, which records the interests of both himself and Mr Harry Barlow as tenants in common, was and is held by him as a security under an arrangement with Mr Harry Barlow. In an affidavit (21 July 1997 para 12) Mr Hunt said that prior to the settlement of the property loan (and that would refer to 1987), he said to Mr Harry Barlow, "I will take possession of the certificate of title to the Moorebank property as a form of security for the money you owe me" and Mr Barlow agreed. In November 1989, about two years after settlement, the solicitors who acted for them were given a written authority, signed by both of them, directing the solicitors to hand over the Certificate of Title, which was done accordingly. The written authority did not direct the solicitors to hand the Certificate of Title particularly to Mr Hunt, and did not refer to its being held as a security. Some years later Mr Hunt sent the Certificate of Title to Mr Livingstone for safekeeping, with a letter asserting that Mr Hunt held it as security (and that he had no other security). There was no objective confirmation of the plaintiff's claim that he had the agreement of Mr Harry Barlow to hold the Certificate of Title as a security. The circumstance that one of two co-owners held the Certificate of Title does not tend to confirm that it was held by way of security; that would be an ordinary event.
35 There is no document which bears out in any satisfactory way Mr Hunt's evidence to the effect that he deposited a further $130,000 with Mr Livingstone to be held in some way to back up or support an advance to Mr Hunt and Mr Barlow of the balance of purchase money for the Moorebank property. That arrangement would be strangely convoluted, because if Mr Hunt had enough money to pay for the Moorebank property a more direct arrangement would be for him to pay the purchase price, treat half the amount paid as a loan by Mr Hunt to Mr Harry Barlow and get Mr Barlow to acknowledge this by a mortgage, or in some other way which gave security over his half interest. The disadvantage of Mr Barlow knowing that Mr Hunt possessed that amount of money does not seem to justify the convolutions of the arrangement claimed. There is no deposit receipt, loan agreement or any like document in evidence. Mr Hunt's evidence was that he did not see Mr Livingtone's records and had no statements or records of the deposit from the Scott Family Trust, with whom the money was alleged to have been deposited, or from anyone else.
36 When explaining how he had raised $130,000 in 1987 Mr Hunt attributed the money to selling mining shares which he had bought in 1985 for $50,000 to $70,000 which came from severance pay in earlier employment and from Hi-Rel. At another point he gave a narration of share transactions which could be traced back much earlier. Mr Hunt could not name what companies he held shares in, or what stockbrokers he dealt with.
37 It is established in what I regard as a clear way that there was an advance of $130,000 in 1984 by some entity to Hi-Rel, and this fact has to be regarded when considering whether it is probable that there was another and different advance of $130,000 to Mr Hunt and Mr Barlow to purchase the Moorebank property.
38 The claim that there were two different transactions each involving $130,000 was supported by evidence of Mr Livingstone which referred to Annexure A to his affidavit, a copy of a ledger sheet Folio 99 which he says was "prepared by me for my own records". There are two ledger accounts on Folio 99, the first one headed "Dick Hunt". The entries open with the following under date 1985: Dept to SFT $130,000
Lent to Hi-Rel $130,000.
39 As explained by Mr Livingstone, according to my understanding although his explanation was not clear, this entry records a deposit by Mr Hunt, not in 1985 but earlier, of $130,000 to an account Mr Livingstone referred to as the Scott Family Trust, although it was no longer conducted in the interest of that trust, and then a loan out of that account to Hi-Rel.
40 The only other entry in this account is "1992 June 30 Harry & Dick advised taken 00 sales. Coy DR SFT $130,000 CR sales $130,000." This seems to mean that by 30 June 1992 Mr Hunt had received what was treated as repayment of his deposit with the Scott Family Trust by money taken out of the proceeds of Hi-Rel's sales. The entries cannot be understood. Whatever the entry is, it is not a ledger entry in accounts of the Scott Family Trust kept according to conventional double entry bookkeeping methods. I am unable to see that these entries record the discharge of the debt of $130,000 owed by Hi-Rel to the Scott Family Trust, being a discharge effected by Messrs Hunt and Barlow paying the Scott Family Trust $130,000 which they took out of the proceeds of Hi-Rel's sales. Mr Livingstone said (t137) to the effect that those were the events recorded; in my finding, the entries do not record those events. The transaction as narrated by Mr Livingstone is very improbable. The evidence of Mr Hunt says nothing to bear it out.
41 Reference to the advance to Messrs Hunt and Barlow to purchase the Moorebank property as being for $130,000 is anomalous because the full purchase price of the Moorebank property was $130,000 of which $13,000 was paid as a deposit by Hi-Rel and charged as $6,500 each to the loan accounts with the company of Mr Hunt and Mr Barlow. If the evidence relating to the cheque (Ex G) were accepted, that would bear out an advance of $119,897.21, and not of $130,000. There is a clear possibility that the transaction involving a loan of $130,000 by Ophix Finance to Messrs Hunt and Barlow, referred to in a letter of 1 July 1991 and subject to a Deed of Guarantee and loan agreement, was the borrowing which appears in Hi-Rel's accounts from 1984 onwards; this possibility has not been rebutted. The effect of Mr Livingstone's affidavit, his schedule and his explanation is not to establish any particular state of facts, but to make it doubtful whether his records should be relied on.
42 The second series of entries on Annexure A to Mr Livingstone's affidavit and their explanation in Annexure B are also extremely difficult to follow. Whatever else they show, they do not bear out that Mr Hunt made a deposit of or exceeding $130,000 to Mr Livingstone or some entity related to Mr Livingstone against which moneys were drawn.
43 Mr Livingstone produced what he said were copies of ledger sheets relating to moneys deposited by Mr Harry Barlow with Mr Scott: Annexures E, F, G and H to Mr Livingstone's affidavit. Annexures E and F appear to show that significant sums of money were held by Mr Scott to Mr Barlow's credit from 31 May 1988 to 31 January 1991. Annexure G appears to record debits against Mr Barlow of $96,000 apparently debited as of 13 September 1988 and treated as "B to B" (meaning back to back) with the account for which he was in credit, and then resolved on 31 January 1991 by offsetting $124,196 against Mr Barlow's credit in the other account, leaving him still with the significant credit of $47,431. It could be thought of as a difficulty for Mr Hunt's case if Mr Barlow actually had significant funds available to him during this period, but only if I had confidence in Mr Livingstone's records. What are apparently records of dealings with Mr Barlow are continued in the Blue Book (Ex J), no more than rough notes in an exercise book, in which I have no confidence. It is very unlikely that the Blue Book is an original record, or was ever relied on for any serious business purpose.
44 Annexure A, whether or not supplemented by Mr Livingstone's explanation in Ex K, does not bear out the proposition that the purchase of the Moorebank property was financed with an advance of $130,000 by Ophix Finance, or by any other entity. Nor do the ledger entries provide corroboration that Mr Hunt was the source of the deposits against which moneys were drawn to settle the purchase. Both those propositions depend on acceptance of oral evidence of Mr Hunt and Mr Livingstone. I find it remarkable that there is no corroboration in written records of these two propositions; in view of the amounts involved, it is highly likely that records would exist, and the fact that none are produced in evidence is a difficulty for accepting the evidence.
45 I referred earlier to the ledger sheet (Annexure G) which appears to show that Mr Barlow borrowed $96,000 on 13 September 1988. The opening entry "Advance to friend" does nothing to assist credibility. Mr Livingstone refers to this ledger sheet in his affidavit (para 12) and says that the borrowing was repaid on 3 April 1989. However Annexure E shows a deposit of $96,000 on 3 April 1989 being credited to the other ledger sheet headed "Harry Barlow", while the borrowing of $96,000 on Annexure G continued to incur interest until 31 January 1991 when the total of the debt and interest of $124,196 was set off against the other account. I do not find these entries comprehensible. It is not consistent with the pattern of Mr Barlow's affairs suggested by the plaintiff's case that Mr Barlow should have had varying but significant sums of money held for him in the account under Mr Livingstone's control for some years, and there is no place in that pattern for Mr Barlow to have needed to borrow $96,000 in September 1988 or having been able to repay it in April 1989; let alone his being prepared to be charged interest on it for several years after he had repaid it.
46 Mr Livingstone maintained another ledger, referred to as the Chinese Ledger, which shows that as at 30 September 1987 Hi-Rel had $144,414.06 to its credit in the Scott & Slattery Clearing Account. If this were the whole position it could not be understood why those moneys were not used for the purchase of the Moorebank premises, either by Hi-Rel itself becoming the purchaser or by Hi-Rel advancing the moneys to its own principals. Mr Livingstone maintained that this is not the whole position, that Hi-Rel had another account with the Scott Family Trust which was recorded in a different account book, now missing, and was in debit in a way which should be offset against the amount shown to credit. Mr Livingstone's evidence that there was another ledger book was challenged. It cannot be said that it has been clearly proved that there was no other ledger book. However his evidence that there are two offsetting accounts but that they are not recorded in the same ledger book is anomalous and difficult to accept. It is doubly anomalous because it is difficult to see why there would be two offsetting accounts, and it is difficult to see why, if there were, they would be in different ledger books.
47 It remains obscure who it is said lent Mr Hunt and Mr Barlow money with which to complete the purchase of the Moorebank property: whether it was the Scott Family Trust (and it is obscure what entity is represented by that name) or whether it was Ophix Finance. There may be some confirmation in the letter of 1 July 1991 from Mr Scott to Mr Hunt, a copy of which is Annexure C to Mr Hunt's affidavit of 21 July 1997. The letter is headed "Re Loan by Ophix Finance to Barlow and Hunt" and in it Mr Scott purportedly states "… I have transferred an amount of $130,000 of money you have on account into the loan account of Barlow and Hunt." According to the terms of the letter a Deed of Guarantee and Loan Agreement were then returned; there is however nothing in evidence which could establish the dates or contents of those documents, or identify the guarantor. The letter was prepared by Mr Livingstone, and the defendant disputed its authenticity.
48 According to accounts of Hi-Rel a loan by Ophix Finance to Hi-Rel of $130,000 existed from 1984, well before the alleged borrowing for the Moorebank purchase. The loan is reflected in Hi-Rel's 1985 accounts, and continued until the 1991 accounts to appear as a debt of Hi-Rel to Ophix of $130,000. In the 1992 accounts there is no such liability. It seems anomalous and unlikely that that loan should have already existed before the mortgage transaction, yet that, as he claims, Mr Hunt should have made a deposit of $130,000 in 1987 to back another advance of the same amount. The terms of the letter of 1 July 1991 show a loan of $130,000 being paid by setting it off against $130,000 held on account on behalf of Mr Hunt. I regard it as very unlikely that this refers to a debt arising from an advance in 1987 for the Moorebank purchase. There is no objective support for the proposition that Mr Harry Barlow joined in borrowing $130,000 for the Moorebank purchase, and to my mind it is very unlikely that a transaction of that size would be entered into with no written acknowledgment or record of Mr Barlow's liability. I do not find it possible to accept as credible Mr Hunt's explanation in terms of that being the nature of the relationship between them in view of the size of the obligation.
49 The cheque (Ex G), drawn to cash on 10 November 1987 on a bank account called "J Scott and J Slattery Clearing Account" for $125,697.61 could very well, according to notes on the back of it, have been used to obtain bank cheques totalling $119,889.21 for the settlement of the Moorebank purchase, and to pay bank fees of $8.40, but does nothing to confirm that there was an advance or loan of the total of those amounts by any identifiable entity, or by way of loan to Messrs Hunt and Barlow. If it did show that, it would show an advance of $119,897.61, not of $130,000.
50 If there was a loan by some entity to Mr Hunt and Mr Barlow to complete the Moorebank purchase, the proposition that Mr Barlow was indebted to Mr Hunt would have to be supported by proving in a satisfactory way that Mr Hunt paid the debt or bore the burden of its payment in circumstances which created a debt by Mr Barlow to him. The letter of 1 July 1991 does not give any real support to such a proposition because its contents are consistent with its dealing with the borrowing attributed in the company's accounts to Hi-Rel as borrower.
51 Evidence which dealt with Mr Hunt's interest and dealings in a house property in Davidson was injurious to his credibility. Rent from that house was treated as income of Mr Hunt in his income tax returns for some years. Mr Hunt's evidence was to the effect that this property was bought on trust for him in 1989 for $400,000, that the trustees were Mr Livingstone's son and daughter-in-law, that there was no trust deed, and that he sold the property to the trustees for $400,000, in about 1998, and received the sale price through Mr Livingstone. Mr Hunt said that he raised $400,000 from "the remains of my share sales" or partly from the sales of shares; he did not give any manner of detail about such shares or sales. I take this with Mr Hunt's explanations of raising the $55,000 which he says he was able to advance to Mr Barlow; these explanations were difficult to accept, appear to be not always consistent, and included, at least at one point, attributing part of the $55,000 to share sales. I also have regard to his explanation how he raised $130,000 which he says be deposited with Mr Livingstone. Mr Hunt had recurring difficulties in explaining how he was able to raise significant sums of money, and in explaining the strange nature of his transactions.
52 The evidence relating to the form of share transfer to Mr Gordon Hunt presents anomalies. Although Mr Gordon Hunt's evidence was obviously not correct in all details, it is probably true in a broad way that, as he narrates, he was called to the Moorebank premises and signed a form of share transfer as transferee. However those events and the share transfer itself have no force as confirmation of the plaintiff's claims. The share transfer was not completed with a date on the occasion when it was signed, and it is not altogether clear that it was completed with any other details such as the parties' names when Mr Gordon Hunt signed it. The transfer is for one share but Mr Barlow had 5000 shares. There are anomalies about what was done with the form of transfer; the original is not forthcoming, but it does seem clear that nothing was done to stamp or register the transfer. At some time the date 30 June 1995, which is certainly not the date of the transfer, was written into it. Mr Livingstone's evidence is that he realised in January 1995 that the share transfer referred to the wrong number of shares, but he did not take any action; he left everything until 30 June. Mr Livingstone's evidence was that he put the date 30 June 1995 on the share transfer after Mr Barlow had died. If one follows the terms of the letter of 2 December 1994 the transfer was not to be required until completion which was to happen after preparation of the 1994/1995 accounts. Mr Gordon Hunt's evidence does not in any way confirm that the agreement in the letter of 2 December 1994 was made.
53 Nothing was done to carry forward the project of transferring Mr Barlow's interest in the land to Mr Hunt. The explanation offered was to the effect that Mr Livingstone advised that the next step should be taken when the accounts for the year to 30 June 1995 were available, as they would be required for valuation of the shares for stamp duty purposes. This is a possible explanation but I do not find it a convincing explanation for leaving valuable rights without any real protection, and without taking any steps to establish legal title to them.
54 In some instances Mr Hunt could not furnish confirmation for his assertions and explanations for reasons which should be regarded as unfortunate. It could well be that significant documents were lost as a result of a burglary at the factory premises in mid-December 1994 and disposal of documents by Mr Harry Barlow while cleaning up after the burglary. I do not regard that as an altogether clear and satisfactory explanation for the absence of significant documents, because if they were or were possibly significant it is hard to understand why Mr Hunt and his sister, who was present while Mr Barlow was cleaning up papers, allowed many documents to be thrown away without examining them.
55 There were some aspects of Mr Hunt's admitted behaviour which should disturb confidence in his credibility. One is his use of assumed names to conduct bank accounts; this is not an indication of reliability. Another is his behaviour in the conflict with the defendant, Mr Peter Barlow. Each accused the other of acts of harassment in relation to the occupation of the premises at Moorebank; both denied the allegations, but I was left with a strong impression that there may well be some substance in the complaints of both of them. Mr Hunt's evidence included acknowledgment that he burst in on Mr Peter Barlow in his office with a camera and took photographs of him engaged in compromising sexual activity, and his evidence showed that Mr Hunt contemplated and intended using the availability of the photographs to influence Mr Peter Barlow's behaviour. No doubt the influence Mr Hunt says he contemplated was an influence for the better. Taking the photographs is one of the things which Mr Hunt explained by saying that it seemed a good idea at the time, an expression which acknowledges that it was not a good idea. It does appear to me that Mr Hunt was contemplating using the photographs for blackmail, perhaps only in a mild form, and that this behaviour is adverse to his credit and credibility.
56 The cross-examiner challenged all the facts which are pillars of Mr Hunt's case. In the course of making these challenges various alternative interpretations of the events were put forward which cannot be regarded as established. One was that the money used as purchase money for the Moorebank property was money owned by Mr Hunt and Mr Barlow and held in the Scott & Slattery Clearing Account. Another was that the copy of the letter of 2 December 1994 and the copy of the share transfer had been concocted by using cut and paste methods to put a copy of Mr Barlow's signature on a form of the document and then making photocopies of the result. Although these suggestions were not established, or made to seem probable, it must always be remembered that the defendant does not bear an onus of proof on the plaintiff's claim.
57 Mr Livingstone was in a sea of difficulties throughout his cross examination in explaining his accounts and records. In her closing submissions the defendant's counsel described Mr Livingstone's accounts as ludicrous and this expression, although severe, was appropriate. Taken in whole, the records cannot be understood. They do not have any of the authority usually attributed to business records kept in a business-like fashion. It is not possible to be confident that transactions and dealings attributed to Mr Hunt or to Mr Barlow in these records in truth have any reference to those persons. The knowledge that Mr Livingstone has recently been convicted of giving false evidence hangs over all consideration of his evidence.
58 The plaintiff's counsel contended that it should be found that Mr Barlow was in need of funds at all material times, meaning 1987 to 1994. In my view it is not objectively clear that this is correct, and an inference that this was the position would depend, first, on the plaintiff's case generally being accepted.
59 The facts relating to the plaintiff's claim cannot be decided on the basis of certainty. I see a clear possibility that the plaintiff's claim is correct; it has not been demonstrated in a convincing way that it is false. However that is not the direction from which findings of facts should be approached. When I ask myself, reminding myself of the plaintiff's need to establish a reasonably clear case, whether I feel an actual persuasion of the existence of the facts on which the claim is based, my conclusion is that I do not. They could well be true, but the plaintiff has not carried my mind to the conclusion that they probably are. There are aspects of Mr Hunt's evidence and of his behaviour which significantly qualify his credibility. Whenever I look for corroboration it is not available or not satisfactory. The evidence is not clear and satisfactory, and the plaintiff has not established a reasonably clear case.
60 The defendant produced in evidence a copy of what purported to be minutes of an extraordinary general meeting of the members of Hi-Rel Pty Ltd held on 26 March 1996. The minute records that Mr Peter Barlow and the plaintiff were present and also that Helen Margaret Barlow was present. The meeting records a number of resolutions; a resolution agreeing to short notice of the meeting, a resolution electing Mr Peter Barlow to be Chairman of the meeting, a resolution declaring that Mr Peter Barlow was entitled to the rights formerly held by Mr Harry Barlow, a resolution approving transfer of his shares, and a resolution appointing Mr Peter Barlow as a director. The records of resolutions are entirely false; no such resolutions were passed and the plaintiff who was the only person in a position to cast a vote did not vote for or support any of them. The events of 26 March 1996 did not make Mr Peter Barlow a director; they did not confer on him any entitlement to represent the company, as he purported to do thereafter in a number of ways, although without the authorisation of the company or of the plaintiff. Mr Peter Barlow, who is an accountant, cannot possibly have believed that the purported resolutions were effective. He referred to the provisions of Table A, meaning Table A in the fourth schedule to the Companies Act 1961, and counsel referred to Arts 24 and 25; these articles do not contain any possible justification for his behaviour. Although it was very difficult to obtain responsive answers from him, in substance his evidence confirms that he always knew that there were no such resolutions as the minute purports to record. His production of this false document and his reliance on it establish that he is a person of poor credibility, but in the result his credibility is of little significance in disposing of the case.
61 The claims in the Amended Statement of Claim under heading A relate to the Moorebank property. Claims under A1 seek to establish that the plaintiff is the equitable owner of the interest of which Mr Barlow is the registered proprietor, with specific performance of the agreement to transfer it. Claim A2 seeks removal of the defendant's caveat. Claim A3 is a claim for judgment for possession and related relief arising out of the defendant's occupation. Claim A4 claims a charge over the land in respect of an alleged debt owing by the deceased and his estate; the debt has not been proved and there is no basis for the charge. These claims fail. Claim A5 is a claim for consequential orders including orders under s.66G of the (NSW) Conveyancing Act 1919. In my opinion the plaintiff should recover an order under s.66G for appointment of trustees for sale, and distribution of the proceeds on the basis that the plaintiff and the defendant as administrator are each entitled to one half.
62 Claims under heading B relate to Hi-Rel Pty Ltd. Claims under B1 relate to ownership of the 5000 shares held by the deceased. The plaintiff and Mr Gordon Hunt have no interest in those shares and these claims fail. Claims under heading B2 relate to directorships in the company. The defendant's claims and purported acts as director are quite ineffectual and these claims should succeed.
63 I have not yet considered questions of costs.
64 The orders are: