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[2021] WASC 385
General information, not legal advice.
Supreme Court of WA
2022-01-31
Hill J
Original judgment source is linked above.
Austin v Keele (1987) 10 NSWLR 283
AVWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2) [2019] WASC 306
Bagot's Executor and Trustee Co Ltd v Fudge [1949] SAStRp 21; [1949] SASR 297
Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6] [2019] WASC 5
Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239; (2008) 39 WAR 1
Bijkerk Investments Pty Ltd v Bikic [2020] NSWSC 1336
Blacket v Barnett [2017] NSWSC 1032
Calverley v Green [1984] HCA 81; (1984) 155 CLR 242
Charles Marshall Pty Ltd v Grimsley [1956] HCA 28; (1956) 95 CLR 353
Conlan v Registrar of Titles [2001] WASC 201; (2001) 24 WAR 299
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226
Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1
Day v Couch [2000] NSWSC 230
Donis v Donis [2007] VSCA 89; (2007) 19 VR 577
Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599
Flack v Chairperson, National Crime Authority (1997) 80 FCR 137
Flinn v Flinn [1999] VSCA 109; [1999] 3 VR 712
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Gadsdon v Gadsdon [2003] WASC 48
George 218 Pty Ltd v Bank of Queensland Ltd (No 2) [2016] WASCA 182; (2016) 313 FLR 287
Hughes v St Barbara Mines Ltd (No 4) [2010] WASC 160
In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Unreported, FCA, 29 June 1995)
Lloyd v Tedesco [2002] WASCA 63; (2002) 25 WAR 360
Martin v Martin [1959] HCA 62; (1959) 110 CLR 297
Morley v Australian Securities and Investments Commission [2010] NSWCA 331; (2010) 247 FLR 140
Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583
Q (a pseudonym) v E Co (a pseudonym) [2020] NSWCA 220
Roberts v Burns Philp Trustee Co Ltd (1985) 5 NSWLR 72
Shephard v Cartwright [1954] UKHL 2; [1955] AC 431
Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505
Singh v Kaur Bal [No 2] [2014] WASCA 88
Sivritas v Sivritas [2008] VSC 374; (2008) 23 VR 349
Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291
Swettenham v Wild [2005] QCA 264
The Nominal Defendant v Cordin [2017] NSWCA 6
Walton Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 38
Watson v Foxman (1995) 49 NSWLR 315
Webb v Ryan [2012] VSC 377
Wilson v Arwon Finance Pty Ltd [2020] WASCA 137
Zekry v Zekry [2020] VSCA 336
1 Carmelo Marchese (Carmelo), Norman Nunzio Marchese (Norman) and Theodore Tindaro Marchese (Ted) are brothers and the adult children of Calogero Marchese (Calogero) and Maria Marchese (Maria), both of whom are deceased. Given the relevant parties all have the same surname, I will follow the course adopted at the trial of referring to the parties by their first names. In doing so, I intend no disrespect to anyone.
2 Each of Carmelo and Norman claim an interest in a property located at 12 Lansdale Road, Darch,[1] of which Ted is the sole registered proprietor, albeit on slightly different grounds. Carmelo and Norman both assert there were various agreements between members of the Marchese family both before and after the purchase of this property. During the trial, this property was variously referred to as the Landsdale property or the Darch property. In these reasons, I will refer to the property as the Darch property.
3 Relevantly, Carmelo contends there was an agreement that the registered proprietors of the Darch property would hold it beneficially for Calogero, Maria, Ted and himself. On this basis, he asserts that Ted holds the Darch property on trust for their joint benefit to the extent of a 50% beneficial interest for each of them. He also relies on representations said to have been made by Ted when the Darch property was transferred out of Carmelo's name, which he says Ted should not be entitled to depart from.
4 Norman alleges he made both financial and non-financial contributions to the purchase and improvement of the Darch property. On this basis, he says that Ted holds the Darch property subject to a resulting trust to the extent of his proportionate contribution to the Darch property. In the alternative, he contends it would be unconscionable for Ted to retain the benefit of his contributions without accounting to him for them.
5 In addition to this claim, Norman says he was told repeatedly by Calogero, both in Ted's presence and separately, that when he and Maria died, each of the brothers would receive one third of the family's properties, including the Darch property. He says it would be unconscionable for Ted to be allowed to resile from these representations and for Ted (and his family) to retain the entirety of what were the family assets and for him, effectively, to receive nothing.
6 Ted denies the claims of both Carmelo and Norman and says he is entitled to be registered as the sole proprietor of the Darch property.
7 For the reasons which follow, in relation to Carmelo's claim, I consider that:
(a) Ted holds the Darch property on trust for the benefit of him and Carmelo in equal shares, subject to a lien of $145,288.06 in favour of Ted;
(b) alternatively, Ted holds 50% of the Darch property on constructive trust for Carmelo, subject to a lien of $145,288.06 in favour of Ted;
(c) alternatively, it would unconscionable for Ted to deny Carmelo's beneficial interest in the Darch property and he should be estopped from doing so.
8 There was some evidence before me at trial that Ted had constructed a house on the Darch property. However no evidence was led at trial as to the costs that were incurred, whether this has increased the value of the Darch property or where the house is located on the property. For these reasons, I have not made any specific allowance for this. I will, however, hear from the parties as to whether this should be taken into account before making formal orders.
9 In relation to Norman's claim, I do not consider that Norman has established any of the claims made by him. For this reason, his claim should be dismissed and judgment entered for Ted.
10 Both Calogero and Maria were born in Italy in October 1924 and May 1916 respectively. They were married in December 1944 and had three sons: Ted born on 24 October 1946, Carmelo born on 18 April 1948, and Norman born on 23 February 1950. The family migrated to Australia in the 1950s with Calogero migrating first and the remainder of the family joining him approximately 3 years later.
11 It is common ground that the family was (at least historically) a 'traditional' family; that is, Calogero was the patriarch of the family and the primary breadwinner, while Maria took care of the home, the children and the tasks associated with these. Calogero primarily worked in the building industry until his retirement, although he was employed as a gardener at Kings Park for some time. Initially, he was employed by Plunkett Homes and from about September 1969, established and operated a building business, Omega Constructions.[2]
12 Both Carmelo and Norman left school at or before the end of year 10 and joined the workforce. In contrast, Ted completed his schooling in around 1964 or 1965 and went to university where he studied dentistry.[3] He was unable to complete his degree due to ongoing health issues arising out of an accident where he suffered a head injury. When Ted was about 20, he started work in real estate and held a real estate licence for a number of years. On any measure, Ted has been a successful businessman and has accumulated significant assets including both real estate and a share portfolio.
13 From about 1961, Calogero and Maria purchased and sold a large number of properties. Some were renovated and then sold; some were renovated and leased; and some were bought and sold within a short period of time. Each of Ted, Carmelo and Norman contend they were involved in this work.
14 In about 1972, Calogero and Maria purchased a block of land at 14 Frape Avenue in Yokine (Frape Avenue). A family home was built where Calogero and Maria lived until their deaths in July 2013 and July 2009 (respectively).
15 In about 1975, Calogero and Maria bought an investment property at 27 Knutsford Street, North Perth from the accumulated receipts from the sales of previous properties.[4] Initially, this property was rented out but in about 1980, was transferred by Calogero and Maria to Ted.
16 In about 1978, Calogero started thinking about retirement and started looking for a property where he and Maria could establish a market garden. The Darch property was identified and was ultimately purchased in October 1978 in the names of Calogero and Ted as joint tenants.
17 In July 1982, the ownership of the Darch property was transferred to Carmelo and Ted. In November 1993, the Darch property was transferred to Ted, who has remained the sole proprietor since this time.
18 Maria died in July 2009, leaving all of her assets to Calogero. Four years later, in July 2013, Calogero died. The Darch property was not referred to in Calogero's will.
19 Since Calogero's death, the brothers have been in dispute as to what, if any, interest each of Carmelo and Norman have in the Darch property and the basis for each of their claims.
20 Following the death of their father, Carmelo and Norman each lodged a caveat against the Darch property. At Ted's request, notices were issued by the Registrar of Titles for the removal of the caveats[5] and in September 2015 (in the case of Carmelo) and May 2016 (in the case of Norman) proceedings were commenced in this court.
21 At various stages throughout the proceedings, each of the brothers has been represented and at other times, each has acted for himself.
22 On 17 April 2019, at a time when each of the brothers was acting in person, both matters were listed for a five-day trial before me commencing 4 November 2019. Between July and November 2019, a significant number of disputes arose in relation to various matters concerning the preparation for trial. These matters were listed before me on seven separate occasions over this period to address these issues.
23 Between late August and mid-September 2019, each of the brothers appointed legal practitioners to act for them at trial. The late instruction of counsel impacted a number of matters which would usually occur in the lead up to trial, such as the preparation of a joint trial bundle. Ultimately, because of the inability of the brothers to agree the contents of the trial bundle or who would bear the cost of its preparation, each of the brothers filed their own trial bundle. As a consequence, there were numerous duplications in the bundles of documents prepared for the trial. Except where expressly noted, ultimately, only one copy of each document was tendered at trial.
24 In addition, the witness statements filed in accordance with the original trial directions were prepared by the parties personally and, as a result, did not comply with the Consolidated Practice Direction 4.5 (in its form prior to the amendments in January 2019) or the rules of evidence. Shortly prior to trial, amended or substituted witness statements were filed.
25 The matter ultimately ran for a total of 10 days. This was largely due to the significant time in cross-examining each of the brothers in relation to events that took place over more than 40 years. While this was a significant increase on the initial estimate, I did not consider this was disproportionate to the value of the Darch property. While there was no expert valuation evidence adduced at trial (as this was not relevant to any of the parties' claims), I accept that since its purchase in 1978, the Darch property has significantly increased in value.
26 The hearing of this matter took place towards the end of 2019. It has not been possible to complete the reasons for my decision as quickly as I would have liked.
27 I have taken the following steps to ensure that my ability to properly assess the parties' cases and the evidence given at trial has not been impaired by the delay between the hearing and the publication of these reasons. First, I continued to have a clear impression and recollection of the evidence given by each of the parties (Carmelo, Norman, and Ted). Each of them gave evidence in person over a number of days and were the subject of lengthy cross-examination. During the course of the trial, I made contemporaneous notes. My assessment of the witnesses has been assisted by my review of these notes, my review of the transcript as well as the documents that were tendered in evidence. Where the transcript is unclear or hard to follow, I have listened to the oral recording of the evidence.
28 Second, I had the benefit of both written and oral closing submissions from each of the parties. The parties made submissions on the evidence given by the witnesses, including as to the findings each contends should be made.
29 Third, while I have a strong recollection of the evidence given by Carmelo, Norman and Ted, my conclusions as to their credit and reliability are not based on the demeanour of the witnesses. Specifically, I have not drawn any adverse conclusion on the credibility of a witness based on their demeanour.
30 In these proceedings, Carmelo seeks orders against Ted in relation to the Darch property.
31 Carmelo pleads that prior to the settlement of the Darch property, Calogero, Maria, Carmelo and Ted agreed that Calogero would advance the entire funds for the purchase of the Darch property (of $52,751), which was to be used for a market garden business, and that it would be held by Calogero and Ted as joint tenants for the use and benefit of the entire family, including Norman.
32 Carmelo contends that Calogero paid instalments of $22,500 and the remainder of the purchase price was paid by Ted. He alleges the payments made by Ted were for his separate purchase of a property (Knutsford Street Property) from his parents for $30,000 and that Calogero directed Ted to pay this sum towards reduction of the purchase price of the Darch property. That is, Carmelo asserts Ted paid no consideration for the Darch property.
33 After the purchase of the Darch property, Carmelo says he contributed to its improvement, including by assisting in the building of sheds, installation of reticulation and in planting and harvesting crops for the market garden business conducted at the Darch property.
34 In July 1982, Carmelo pleads there was a meeting between the family members at Frape Avenue where it was agreed he would take a more active role in the family's affairs, Calogero would play a less active role, and Calogero would transfer his legal interest in the property to Carmelo. Carmelo alleges the original agreement was varied and it was agreed that he and Ted would hold the Darch property for the benefit of each of Maria, Calogero, Ted and Carmelo and that Norman would receive $20,000 when Calogero relinquished his beneficial interest in the Darch property or on his death, as well as the Frape Avenue property on the death of his parents.
35 In about November 1993, as a result of Carmelo's marital problems, further discussions took place between Calogero, Carmelo and Ted at Frape Avenue. Carmelo says it was agreed at this meeting that he would transfer his interest in the Darch property to Ted and that Ted would hold the Darch property for the benefit of Maria, Calogero, Carmelo and himself.
36 Carmelo pleads that Ted holds 50% of the Darch property on express trust for him. Carmelo also pleads a number of alternative grounds, namely a joint endeavour constructive trust, alternatively a common intention constructive trust, alternatively that Ted is estopped from denying the Darch property is beneficially owned 50% by Carmelo.
37 Carmelo seeks a declaration that Ted holds the title to the Darch property for the joint benefit of him and Ted to the extent of a 50% beneficial interest for each of them and orders for the vesting of the trust and for the transfer of the legal title into the name of Carmelo and Ted.
38 Ted denies each of the claims pleaded by Carmelo. Specifically, he denies any conversations took place between the family as to Carmelo receiving a share in the Darch property. In relation to the Darch property, Ted denies Calogero paid for the Darch property and pleads that he contributed most of the funds for the purchase of the Darch property.
39 In relation to the meeting in July 1982, Ted acknowledges a meeting took place but says it occurred in late 1981 and not July 1982. Ted says Carmelo did not take an active role in family affairs and shortly after receiving an interest in the Darch property from Calogero moved back to Queensland.
40 Ted admits the transfer of Carmelo's interest in the Darch property to him took place at about the time Carmelo was involved in divorce proceedings and admits Carmelo paid the stamp duty on the transfer. However, he says he purchased Carmelo's interest for $110,000.
41 Ted relies on the equitable defence of laches, alternatively says any claims are statute barred. He denies Carmelo is entitled to any relief at all.
42 In 2016, Norman commenced proceedings against Ted. Carmelo is a defendant to the proceedings as a necessary party. No relief is sought against him. Norman seeks orders in respect of both the Darch property and the Knutsford Street property.
43 Norman pleads that in or about 1968, the family formed a joint endeavour to carry out home renovations on properties acquired in the name of Calogero and Maria. The purpose of the joint endeavour was to combine their resources (both financial and non-financial) to enhance the family's financial position. Norman refers to eight properties that were bought and sold prior to 1968 and 13 properties that were purchased after the joint endeavour was formed. Norman alleges he received no remuneration or compensation for the work he did.
44 One of the properties Norman contends was purchased as part of the joint endeavour was the Knutsford Street property which was transferred to Ted in October 1980 for $30,000. Subsequently, this property was subdivided and sold by Ted for a significant profit. Norman pleads that Ted holds his interest in the remaining Knutsford Street properties for his benefit 'in accordance with his contributions to the home renovation business'.[6]
45 In relation to the Darch property, Norman contends that between late 1977 and July 1978, the family formed a joint endeavour to combine their resources (both financial and non-financial) to purchase the Darch property, develop it and operate a market gardening business on the Darch property.[7] Norman says he made both financial and non-financial contributions to the Darch property, including a financial contribution of $20,000 paid by way of a lump sum of $4,000 in July 1978, a lump sum of $5,000 in December 1978 and a contribution of $11,000 as remuneration for his earlier contribution to the home renovation business.
46 Norman pleads that meetings took place in November 1981 and November 1993 at which interests in the Darch property were transferred for no consideration between family members and that these meetings did not impact the joint endeavour agreed prior to the purchase of the Darch property.[8]
47 Norman says that as a result of his contributions, Ted holds his interest in the Darch property subject to a resulting trust in his favour which entitles him to a proportionate interest of 38.46%.
48 Norman also pleads a number of alternate claims, namely a joint endeavour constructive trust (arising from his financial and non‑financial contributions to the Darch property), as well as a claim based on estoppel (both promissory and estoppel by convention). Norman says that prior to him making the payments towards the purchase price of the Darch property, Calogero represented that the three brothers would receive an equal share in the properties owned by him and Maria, including the Darch property, on their death. Norman says he relied on this representation by providing the funds and working on the property without payment and without insisting he be registered as a joint proprietor of the Darch property. Norman says it would unconscionable for Ted to deny he is bound by the representation and to retain the entire beneficial interest in the Darch property.
49 In the alternative to these claims, Norman seeks equitable compensation.
50 Ted denies each of the claims made by Norman. Ted acknowledges there was a joint endeavour to renovate and sell properties but says the joint endeavour only involved him and Calogero and was for their mutual benefit and not for the benefit of the family as a whole.
51 In relation to the Knutsford Street property, Ted says he became the sole registered proprietor in 1980, used the property as his family home and only subdivided the property after holding it for about 30 years. He denies Norman has any legal or equitable interest in this property.
52 In relation to the Darch property, Ted denies there was any joint endeavour or that Norman made any financial or non-financial contribution to the Darch property for which he has not been paid.
53 Ted relies on the equitable defence of laches, alternatively says any claims are statute barred. He denies that Norman is entitled to any relief at all.
54 In closing submissions, Norman abandoned any claim in relation to the Knutsford property.[9] The claims that were maintained were:
(a) a claim for a constructive trust in relation to the acquisition and development of the Darch property;
(b) a resulting trust to recognise Norman's financial contributions to the purchase of the Darch property; and
(c) equitable estoppel (either by representation or by convention) to the effect that the three brothers would share equally in the assets of Calogero and Maria when they died, preventing Ted from denying he holds the legal interest in the Darch property for the benefit of the three brothers in equal proportions.
55 On the pleadings, the issues I am required to determine in this case are:
(a) What was the extent of work done by Norman (and the other brothers) on the multiple properties purchased and sold by Calogero and Maria? Were these contributions made by reason of a joint endeavour? If so, does this entitle Norman to any interest in the Darch property?
(b) What was the basis upon which the Darch property was purchased? Was there any agreement as to whether Calogero and Ted held their legal interest beneficially for others and if so, whom?
(c) Did Ted make any financial contribution to the purchase of the Darch property? If not, what was the basis on which he had a registered interest in the Darch property?
(d) Did Norman make any financial contribution to the purchase of the Darch property and, if so, does this give him an interest in the Darch property?
(e) On what basis did Calogero transfer his interest in the Darch property in July 1982?
(f) What was the agreement in relation to the transfer of the Darch property from Carmelo and Ted as joint tenants to Ted in November 1993? Does Ted hold a 50% interest in the Darch property on trust and if so, for whom?
(g) If Norman and/or Carmelo have any interest in the Darch property, should the court decline to make orders because of any alleged delay in prosecuting their claims?
56 Each of Carmelo and Norman accept they bear the onus of proving the claims they bring. These matters need to be proved on the balance of probabilities.
57 In this case, the evidence at trial concerned events that occurred over a period of more than 40 years and took place many years before the witnesses were called to give evidence. Critical elements of the case involved a consideration of what was said by various parties in conversations that occurred in 1978, 1981 or 1982, and 1993.
58 Recent authorities have discussed the approach that should be taken by the court where claims are made based on conversations said to have taken place with a deceased person that is said to give rise to equitable rights.[10] In considering the evidence in this case, I have applied the following principles.
(a) Evidence of conversations with a person who has subsequently died should be subjected to careful scrutiny. The court can never be certain it knows all the circumstances of the conversation. The deceased is not available at the hearing to admit or deny the specific allegations made by the witness giving evidence of any conversation and it is not possible to hear the deceased's evidence of the conversation. The need for careful scrutiny may be greater where the person giving evidence of the conversations has a self-interest in the outcome of the proceedings.
(b) The court will treat uncorroborated evidence of communications by a person who has subsequently died with considerable caution. While there is no absolute legal requirement for it, the court should look for some independent corroboration.[11]
(c) There is a significant risk of reconstruction of conversations. There are dangers in relying on evidence of what may have been a casual observation made to a person who had no reason to remember the exact words used at the time of the conversation. For this reason, a substantial evidentiary burden is on a party whose case relies upon such evidence.[12]
(d) The court must recognise that human memory of what was said in a conversation is fallible for a variety of reasons. Ordinarily, this will increase over time, particularly where disputes or litigation intervene. This is because 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.[13]
(e) The credibility of a witness and their veracity may also be tested by reference to the objective facts which can be proved independently, particularly by reference to documents. It is preferable to rely on contemporaneous documents in cases which involve events which occurred long before the litigation. Often the only safe course in such cases is to place primary emphasis on the objective factual surrounding material, the inherent commercial probabilities and the contemporaneous documents. Documents will often provide more valuable information than the attempted recollection of the facts by witnesses with an interest in the outcome of the litigation. This is particularly the case when the documents are accepted as genuine and were prepared by a person who had no reason to misstate the facts in these documents.[14]
(f) Contemporaneous statements and documents are likely to be a more accurate reflection of events than later statements. This is because false memories can intrude, especially when the person recalling events has tried to assemble recollections logically. In doing so, the person can attempt to have some rational explanation in the person's mind as to what has happened. It is important to keep in mind that memories are both fluid and malleable and are constantly rewritten whenever they are retrieved.[15]
(g) The court must be alive to the reality that words that are spoken are capable of bearing different and potentially opposed meanings depending on the nuance and emphasis given to particular words. A person's appreciation of the significance of these matters must necessarily be considerably diminished if there is a significant delay between the date when the conversation took place and the hearing at which the evidence of that conversation is given.[16]
(h) The court must recognise that:
Memory is a constructive and reconstructive process. What is remembered about an event is shaped by how that event was experienced, by conditions prevailing during attempts to remember, and by events occurring between the experience and the attempted remembering. Memories can be altered, deleted and created by events that occur during and after the time of encoding, during the period of storage, and during any attempts at retrieval.[17]
59 All of the material witnesses had difficulties in recalling the specifics of events, particularly in respect of the purchase of the Darch property in 1978 and the critical meetings in 1981 or 1982 and 1993. Given the length of time that has passed since these events, this is hardly surprising. In cross-examination of each of the brothers, conflicting evidence was given by each of them which emphasises the difficulty in accepting that the evidence of any of the brothers on these critical events was reliable.
60 In considering the evidence, I have assessed the oral evidence of each of the brothers in the context of the contemporaneous documents, objectively established facts and the apparent logic of the events.[18] The context and surrounding circumstances of each of the critical transactions are important.
61 All of the parties led evidence of statements said to have been made by their father, Calogero. The primary question was whether these statements were admissible only as evidence that the statements were made or whether they were admissible as to the truth of their contents.
62 It is trite that the general position at law is that statements that are made outside of the court are not admissible as to the truth of their contents; these statements are inadmissible hearsay evidence. The common law recognises a number of exceptions to this general rule. Relevantly, in the case of statements by a person who is now deceased, there are six recognised exceptions: declarations against interest; declarations in the course of duty; declarations as to public or general rights; pedigree declarations; dying declarations; and statements by testators concerning the contents of their wills.[19]
63 It is the first of these exceptions that is relied upon by the parties in this case. In Cross on Evidence, the exception is explained in the following terms:[20]
The oral or written declaration by a deceased person of a fact which the declarant knew to be against the declarant's pecuniary or proprietary interest when the declaration was made is admissible as evidence of that fact and of all collateral matters mentioned in the declaration provided the declarant had personal knowledge of the fact and matters.
64 In Roberts v Burns Philp Trustee Co Ltd, Hodgson J stated that: [21]
In my view, when a person who apparently owns property, or has a residuary interest in the estate of another person who apparently owns property, makes a statement asserting that there is something in the nature of a trust affecting that property, that statement is, prima facie, against the proprietary or pecuniary interests of the maker of that statement. One would readily also infer that the statement was in the belief of the declarant against his proprietary or pecuniary interest. In this case, the circumstance that the matters asserted might be such as to avoid any trust would not, I think, displace that prima facie position: it may be that I ultimately have to decide whether matters such as those asserted in the statement to avoid the trust, but this is a question of some legal technicality and one would not readily assume that the declarant had directed his mind to it. As regards the aspect that the declarant as an employee could share in distributions from the fund, I note that the statement was made not long before the death of the declarant, so that any interest he might have in receiving distributions of income would, in all probability, be small compared to the benefit which he would receive from a substantial share in the capital of the fund.
65 As noted by the author of Cross on Evidence at [33065], there is a question as to whether it is necessary for the declarant to know the statement is against their interest. The learned author submits this is part of the present law, notwithstanding the strong body of opinion to the contrary. This has not been consistently applied by the courts. I consider the better view, for the reasons expressed in Cross on Evidence, is that it is necessary for the declarant to know the statement is against their interest.
66 The onus of proof in establishing the declaration made by a deceased person was a statement of fact and not in their interest is on the party seeking to have the statement admitted in evidence.[22]
67 Specifically, in relation to the statutory declaration of 15 December 2009, this document is admissible under s 79C of the Evidence Act 1906 (WA). Ultimately, it was unnecessary for me to determine the basis upon which the statutory declaration could be used because of my reservations about the circumstances in which it was prepared and executed as set out below at [368].
68 At trial, a number of witnesses were called by the parties to advance their respective contentions. Evidence-in-chief was given by way of witness statements which were tendered at the trial and each of the witnesses was cross-examined.
69 Carmelo gave evidence at the trial and called Darryl McKie (a long-standing friend), his son Michael Marchese and Robyn Patterson, Carmelo's former partner. Carmelo, quite properly in my view, conceded none of these witnesses could be described as independent witnesses.
70 Norman also gave evidence at the trial. He called Ms Luciana Russo, a translator who translated a recording of a phone call between Norman and Calogero.
71 In relation to Ted, he gave evidence and called Tricia Wong, a solicitor at Slater and Gordon, and Andrea Hosie, a former neighbour at the Darch property.
72 Putting to one side the evidence of the parties (which I deal with below in the order in which they gave evidence), the remaining witnesses generally presented as doing their best to give an accurate account of the matters they were asked. However, the evidence of each of these witnesses was only of marginal relevance to the issues in dispute. I accept the evidence of each of these witnesses.
73 Generally, I have assessed the contemporaneous documentary evidence as being the most reliable evidence, save for the statutory declaration signed by Calogero on 15 December 2009 which I address below at [353] - [369].
74 Carmelo is the middle of the three brothers. He was 71 at the date of the hearing. Carmelo left school before finishing high school and worked in various occupations over his working life, including as an auto-electrician. He is now retired.
75 Carmelo's evidence-in-chief was given by way of witness statements that were filed shortly prior to the trial for the reasons I have set out above at [24]. As I have set out in more detail below, his evidence-in-chief suffered from being given in the most general of terms, particularly in relation to the critical conversations said to constitute the relevant agreements, the statements which he said were made to him by Calogero and what was said to constitute the terms of the joint endeavour. There were also inconsistencies between the matters pleaded in his statement of claim and his evidence at trial. This, however, was an issue common to all of the parties.
76 By way of example, the documentary evidence shows that more than 20 properties were bought and sold by Calogero or Calogero and Maria from 1956 until 1976. In his witness statement, Carmelo refers to only 3 properties in the most general of terms. As a result, these properties cannot be easily identified by reference to the documentary evidence.
77 More critically, in respect of his evidence in relation to why he said he undertook work at the Darch property, Carmelo's evidence-in-chief was that 'I did all this because my father had always told me that the purchase of any properties would be for the benefit of all members of the family'.[23]
78 In his oral evidence, Carmelo generally came across as being honest and endeavouring to answer questions truthfully. However, it was apparent that he was frustrated by the proceedings and some of the questions he was asked. At times, particularly under cross-examination by counsel for Ted, he was argumentative and his answers were non‑responsive. By way of example, when he was cross-examined about the documentation concerning the transfer of his legal interest in the Darch property to Ted, he disputed the documents were genuine despite having tendered these documents in examination in chief without raising any question about their legitimacy.[24] In some instances, I accept Carmelo was confused about the question he was being asked. However, this was not always the case. As a consequence, his cross-examination is, at places, hard to follow. I consider Carmelo's recollection of events has been influenced by his anger and frustration as to what has ultimately occurred and what he considers is a manifestly unfair outcome, namely that Ted and Ted's son have ended up with almost the entirety of the estate of Calogero and Maria and he has received very little.
79 In relation to critical conversations, Carmelo's evidence was unclear and often contradictory. By way of example, in respect of the circumstances in which an interest in the Darch property was transferred to him in 1982, Carmelo's pleadings contend that each of Calogero, Maria, Ted, Norman and he were present at this discussion. Under cross-examination from Norman's counsel, Carmelo agreed that Maria was in the kitchen and that Norman was excluded from the meeting. Under cross-examination from Ted's counsel, Carmelo reverted to his evidence-in-chief that all members of the family were present at this meeting.
80 Counsel for Ted did not make any submissions on the credit of Carmelo or the reliability of his evidence. Ted's primary submission was that Carmelo's evidence was vague and did not establish on the balance of probabilities the facts necessary to make out his claim.
81 Counsel for Carmelo submitted that his evidence should be given significant weight. He contended that his evidence was consistent with contemporaneous documents and, where his evidence conflicted with Ted's, should be accepted.
82 I accept that Carmelo was not able to identify with any precision the words that were said by Calogero or Ted that give rise to the alleged agreements or expectations at either of the critical meetings in 1981 or 1982 and 1993. This is not entirely surprising given the time that has elapsed since these meetings. It is also the case that Carmelo's recollection of the discussions that took place at these meetings is quite limited. However, particularly in respect of the 1982 meeting, Carmelo's evidence is consistent with the contents of the promissory note, a contemporaneous document.
83 While there were aspects of Carmelo's evidence on which limited weight can be given, which I address specifically below, I find that Carmelo was an honest witness. In general, Carmelo's evidence was more consistent with the contemporaneous documents. However, this does not mean that I am required to accept all of his evidence as honest witnesses can still be mistaken. In considering Carmelo's evidence, I have also considered the reliability of his evidence. However, where his evidence conflicts with Ted, I prefer the evidence of Carmelo.
85 Norman's evidence-in-chief was also given by way of witness statements filed shortly prior to the trial for the reasons I have set out above at [24]. His witness statements were considerably more detailed than those of Carmelo, however, this was primarily in relation to his evidence of the sale and purchase of the properties comprising the home renovation business. In relation to the critical conversations and payment of funds on which he relies in support of his claim for a resulting trust, his evidence was given in more generalised terms. This, again, is not entirely surprising given these matters occurred more than 30 years ago.
86 In cross-examination, Norman appeared to be easily confused by some of the questions he was asked. In some instances, I accept that this was due to the questions he was asked which were in relatively general terms. In other instances, this was not the case and it appeared that Norman was distrustful of the questions he was asked, particularly by counsel for Ted, which affected the answers he gave. By way of example, at the commencement of his cross-examination by counsel for Carmelo, Norman was asked whether he knew whether Ted became a real estate agent. Norman gave various answers to what was quite a simple question including that Ted never presented any paperwork, he was not sure, and that he found a document that showed Ted had a licence to sell property in 1978.[27] To an extent, Norman realised this was the case as, in a non-responsive answer to a question from Carmelo's counsel, he stated:[28]
Can I just, sort of, say a bit about myself. I've very up - straightforward and heavy, like, in the sense when I say something so don't get me wrong. I've been brought up like this to defend myself so ... if I answer you back in a mad manner, can you let me know.
87 A further example is his responses to questions from counsel for Ted as to when the joint endeavour had come to an end. Initially, his evidence was that it hadn't come to an end and then that he was not sure. Ultimately, Norman accepted that no properties were purchased after 1978 and that it came to end at this point.[29]
88 Norman's evidence was clouded by his strong views as to the unfairness of what has occurred (namely that Ted and his family have received the bulk of Calogero and Maria's estate) and the financial impact both these proceedings and previous proceedings have had on him.[30] As a consequence, on occasions, his answers were akin to submissions rather than a recollection of events.
89 Each of the brothers claimed that they had a strong or special relationship with Calogero[31] and that they were told things the others were not. In the case of Norman, it was apparent that he was not a party to many of the conversations that occurred in respect of the Darch property or the transactions that had occurred over the years. In his evidence, Norman accepted that 'so much went on without [his] knowledge' and that he had learnt a lot about these matters after Calogero's death.[32]
90 On the basis of this evidence, I find that much of Norman's evidence is a reconstruction of events that has been undertaken from his review of documents that have either been discovered in these proceedings, or from investigations he has undertaken. For this reason, I consider the contemporaneous documents are the most reliable evidence.
91 Counsel for Ted did not make any specific submissions on the credit of Norman or the reliability of his evidence. Ted's primary submission was that Norman's evidence was vague and implausible and did not establish on the balance of probabilities the facts necessary to make out his claim. He drew attention to the fact that Norman's evidence was inconsistent with Carmelo's, particularly in relation to the 1978 meeting.
93 While I consider that Ted's criticisms are well founded, I accept that in his evidence, Norman was generally attempting to answer the questions asked of him honestly. I make no adverse credit finding against him. However, as a result of the matters that I have referred to, I am not satisfied that I can treat Norman's evidence as being generally reliable. Where his evidence conflicts with Carmelo, I prefer the evidence of Carmelo. On contested matters, I do not accept Norman's evidence without corroboration.
94 Ted is the eldest of the three brothers whose witness statement described his occupation as 'businessman'.[35] Ted is the only one of the three brothers who completed high school. On leaving school, he received a bursary from the government to study dentistry at the University of Western Australia.[36] Ted did not complete his degree because of ongoing medical problems arising from an accident when he was about 16.[37] From 1967, when he was about 20, Ted commenced work as a real estate agent.[38] Ultimately, the Real Estate Board terminated Ted's licence.[39] He worked for Bond Corporation for a period of time and subsequently, established Camelot Homes (with a business partner).[40]
95 Ted has a hearing difficulty so a 'hearing loop' was organised for him for the trial and for his evidence. On occasions during his evidence, he indicated there was an issue with the volume and that he had difficulty hearing the question asked of him. In assessing Ted's evidence, I have taken account of his hearing difficulties which I accept are genuine.
96 Ted's evidence-in-chief was also given by way of witness statements filed shortly prior to the trial for the reasons I have set out above at [24]. Ted also filed responsive statements to the statements of Carmelo and Norman. The responsive statements, in particular, demonstrate the issues that arise from the previous standard procedure in this court of filing witness statements and the preparation of witness statements in response. The responsive statements largely consist of denials of the evidence of Carmelo and Norman (or 'taking issue' with the contents of their statement) and a repetition of his witness statement (by reference to paragraphs of his witness statement).
97 As set out in the Best Practice Guide for the Preparation of Witness Statements for Use in Civil Cases (Best Practice Guide), published by the Western Australian Bar Association, a witness statement is not a pleading and, as a result, should not adopt the form of responding to particular paragraphs in other statements. A witness is not called to argue the case or dispute the evidence of other witnesses but to give his or her own version of the relevant events. Where the testimony is different to that of other witnesses, this is a matter for comment and submission.
98 The responsive statements filed by Ted do not comply with the Best Practice Guide or contain evidence. Rather, these statements seek to dispute the evidence of Carmelo and Norman without giving Ted's version of the events. For this reason, I have primarily treated these statements as comments or submissions made on Ted's behalf.
99 Counsel for Carmelo submitted that Ted was not a credible witness and that where his evidence conflicts with Carmelo, I should prefer the evidence of Carmelo.[41]
100 Much of Ted's denial of his brothers' claims was pleaded as arising from his close relationship with his father. In his defence to his brothers' claims, in response to many paragraphs, he pleads his father had not disclosed to him the matters or conversations asserted by them and his belief this would have happened had these matters or conversations occurred.
101 Ted's evidence spanned events that occurred over more than 40 years. He acknowledged that his recollection is based not only on his memory, but also on documents such as Land Title records. It is clear that in many parts, Ted's evidence has been reconstructed from these documents and that his recollection is not accurate.
102 While Ted maintained and emphasised throughout his evidence that he had a close relationship with his father, he stressed that he only provided assistance to Calogero and Maria whenever they needed help. He did not accept that he managed their financial affairs, which was the evidence of Carmelo. He denied that he had 'almost complete control' of their finances. He also did not accept that Calogero and Maria required assistance because they were 'relatively unsophisticated' but said that 'it [his assistance] came in handy'.[42] This evidence was inconsistent with his evidence-in-chief as well as contemporaneous documents. It was not disputed that Calogero had only limited education in Italy. Ted's evidence-in-chief was that while Calogero could speak English relatively well, he had a limited ability to read and write English.[43] Ted stated this was limited to reading basic newspaper articles.[44]
103 Like many other post-war immigrants, Calogero and Maria, on arrival in Australia, worked extremely hard over a long period of time to build a successful life for them and their family. However, I accept they had only relatively limited English written skills and relied on Ted to assist them with the numerous property transactions they undertook and, particularly later in life, to assist them with taxation returns and their financial affairs. Ted's denial of his involvement in Calogero's financial affairs was inconsistent with Calogero's banking records and his evidence under cross-examination when asked about these records, which I address in more detail below.
104 In other parts, Ted's evidence was disingenuous and not believable. For example, in his evidence-in-chief, Ted said that he was able to persuade the vendors of the Darch property to give them additional time to enable payments to be made over a 10 year period rather than the two year period stipulated in the offer and acceptance.[45] Ultimately, he accepted in cross-examination that the agreement was varied and a higher interest rate payable and that there was a legal dispute between him and the vendors in respect of payment of the outstanding balance (including interest) for the Darch property.[46]
105 Ted also sought to exaggerate the work he did or involvement he had and to downplay any work or involvement of his brothers. By way of example, in relation to the registration of Omega Constructions, Ted originally gave evidence that he arranged for the registration of the business name of the company.[47] When asked in cross-examination what this entailed, his evidence was that he organised the registration by making sure they met the licensing requirements and that he organised the registered builder.[48] Ultimately, his evidence was that he liaised with a law firm to lodge the papers.[49] Subsequently, in cross-examination, Ted accepted that solicitors acted for Calogero in registering Omega Constructions, including in drafting a deed of partnership and an agreement with Mr Watt, the registered builder.[50] A further example is that Ted's pleaded case in CIV 2521 of 2015 was that Omega Constructions was operated by Calogero and Ted for their benefit only. This pleading was in contrast to Ted's witness statement and his evidence to the effect that he did not have an interest in this business.[51] In cross-examination, Ted accepted that his defence was wrong and that Omega Constructions was a partnership between Calogero and Maria.[52]
106 Another example of Ted's exaggeration of his evidence was in relation to the costs that Ted claimed to have incurred in the purchase and maintenance of the Darch property. In his defence in CIV 2521 of 2015, Ted denied that Calogero contributed funds to purchase the property or paid instalments of $22,500 and said that he had paid most of the funds for the purchase of the property.[53] In a document he initially filed as his witness statement, Ted stated that 'all monies to purchase and maintain' the Darch property of $1,000,000 were paid by him.[54] In his evidence, Ted accepted that these statements were incorrect and agreed that Calogero had paid both the deposit for the Darch property and the amount that was due on settlement of $20,874.04. He also accepted he had not paid $1,000,000 in purchasing and maintaining the Darch property and that this amount included an allowance of approximately $400,000 which he thought was likely to be payable for capital gains tax on sale of the Darch property.[55]
107 Aspects of Ted's evidence were unsatisfactory in that he gave conflicting answers to the same question and when confronted with this position, tried to explain it away. An example was his evidence in answer to a question as to whether any of the brothers charged Calogero for the work that they did on the properties that were part of the home renovation business. Ted accepted that he 'never ever' charged for the administration work that he did but, as to whether Norman and Carmelo charged for the work they did, Ted's initial response was that they did. When he was asked whether he was mixing up his timeframes and that this only occurred with the Darch property, Ted accepted that he probably was. After asking for the question to be repeated, his answer was that 'they were hardly ever there' and then that 'in their younger age, of course not'.[56]
108 Ted's evidence in relation to the enduring power of attorney he held for Calogero was particularly unsatisfactory. In cross-examination, Ted's evidence initially was that the first power of attorney 'wasn't ever really used'. Ted was specifically asked whether it was used for 'financial assets or any of that nature' and his response was 'No. ... Never used.'[57] Subsequently, Ted was shown a series of banking documents, including documents evidencing Ted opening bank accounts in the name of Calogero.[58] When asked whether he used the enduring power of attorney to open these accounts, his answer was:[59]
well, it depended on the conditions of the bank whether they would require power of attorney or would not. I mean, if - if I was simply - if a - if their conditions were such that anyone can open an account on behalf of someone else and sign on their behalf, well, perhaps, a power of attorney would not be required. If they required a power of attorney, well, then I would have used the power of attorney.
109 When asked again whether he used the power of attorney, Ted's response was:[60]
I probably did. I probably - I'm not sure. I think I may have used it, but as a pre-qualification, I did say it but you disregarded that, I think. You simply said, "You used the power of attorney." I've said, "I probably did, probably didn't. I'm not sure." I would have to refer to the situation. The other thing is as far as gifts go, I don't think I said that was the only gift, but anyway, doesn't really matter, because if there were gifts to me, they were in consideration for something.
110 This evidence contradicted Ted's evidence in his responsive witness statement to Carmelo's statement that Calogero's financial affairs were not complicated and consisted of a savings passbook in which his pension was credited each fortnight as well his evidence that if any payments were required to be made or if Calogero needed money, Calogero would attend to it himself.[61] In cross-examination by counsel for Norman, Ted accepted that a number of bank accounts were opened in Calogero's name from 2006 until 2009 and that he had authority to operate these accounts.[62] Ted was asked about a number of sizeable withdrawals from these accounts (amounts of approximately $52,000 and $87,000) but could not recall whether he was responsible for these transactions or what they were for.[63] His evidence was that 'we were chasing interest rates' and that he was helping Calogero 'to get a better interest rate at that time'.[64] Subsequently, his evidence was that it could have been that some of the money was allotted to him in consideration for the work he helped his father with[65] and then:[66]
Alternatively, we were chasing a high interest rate or combination of either or, or both. Or, perhaps, even for paying me back some of the money that I had lent for them.
111 When asked whether these amounts ever went back to his parents' bank account, Ted responded that 'my parents were alive and well, and everything that was done, was done with their authority.'[67]
112 Under cross-examination by counsel for Carmelo, Ted was also asked about various withdrawals from Calogero's bank account shortly prior to his death. Ted's evidence was that he recalled assisting his father and withdrawing some money and that the withdrawals were for the benefit of both Calogero and himself.[68] Ted was also asked about withdrawals that occurred after Calogero's death. Initially, his evidence was that these withdrawals occurred on Calogero's instructions.[69] After it was put to him that this could not have been the case because his father was dead, Ted responded that it did not make sense as he 'wouldn't have the authority to operate [the bank account] after he passed away' before querying whether the document was accurate as he found it 'improbable and difficult to understand'.[70] Ted also said that Calogero had told him to take money to pay his hospital expenses.[71] The Public Trustee queried a number of these withdrawals and in January 2014 requested that Ted repay to Calogero's estate the sum of $23,700,[72] which he did.[73]
113 Ted also accepted in cross-examination that he continued to handle the affairs of Calogero after his death until on or about 23 September 2013 when probate was granted, even though he knew, or at least thought, the enduring power of attorney was void.[74] This included receiving the benefit of an insurance claim that had been made and continuing to provide instructions on the asbestosis claim.[75]
114 During his evidence, Ted gave various answers as to whether he paid Calogero and Maria for the Knutsford Street property. In his evidence-in-chief, his evidence was that this was a gift from his father. This was consistent with the basis upon which his counsel opened the case, namely that this was a gift and was the only gift he received from Calogero.[76] However, in cross-examination, Ted gave various answers. Initially, his evidence was that he obtained finance from Home Building Society and that this had been paid to his father. When asked about the discrepancy between his evidence, Ted response was:[77]
[M]y memory fails me. Look, I'm so sorry. I - I can't rely on my memory unfortunately. I think it's because of my damage.
Look, I cannot rely on my memory unfortunately, because due to my accident I suffered from atrophy of the brain and I did have some memory loss unfortunately. I thought it was quite good, but looks as if it's letting me down badly.
115 Later in cross-examination, his evidence was that Calogero and Maria 'may have gifted the difference between $40,000 [the amount on the offer and acceptance] and $30,000 [the amount on the transfer of land]'[78] and that the amount he had obtained from Home Building Society had been used for improvements at the Darch property.[79] Ted accepted he had not included this evidence in his witness statement or responsive statement and then said:
Well, once I think about the whole thing and once other information is brought to the fore and if I analyse those documents more fully, well, then it comes - it - it becomes a little bit more - more realistic and tangible.
116 Finally, when asked to clarify why he had said in his witness statement that it was a gift, Ted's evidence was that 'it was a gift to us', which he accepted was different to the money being used for improvements on the Darch property.[80]
117 It is apparent from Ted's answers that his evidence on these matters were a reconstruction of events undertaken from his review of documents that have either been discovered in these proceedings or from investigations he has undertaken.
118 While I accept Ted suffered from a head injury in his teenage years, there was no evidence from a doctor as to whether this impacted his memory and if so, how and to what extent. In his evidence-in-chief, Ted did not suggest the accident affected his memory. This was only raised in answer to a question in cross-examination when he was asked about inconsistencies in the evidence he had given. My observation of Ted in the witness box was that, apart from specific instances when his hearing loop was not working, he was able to understand and respond to questions that were put to him. However, on critical aspects, when compared to contemporaneous documents, Ted's evidence was unreliable.
119 Ted struck me as an astute businessman who extracted commercial advantage from the transactions he entered into and was willing to take advantage of the comparative lack of sophistication of his brothers. For the reasons set out above, I consider that Ted was an unsatisfactory witness. It is not possible to accept Ted's evidence as generally reliable. Accordingly, I do not place any weight on his oral evidence unless it has independent corroboration.
120 Ted did not call his wife, Yvonne, to give evidence at trial. This gave rise to the question as to whether I should draw a Jones v Dunkel inference from this decision.[81]
121 Before considering whether and what inference should be drawn from this decision, it is important to set out the limits of the inference that can be drawn. These were usefully summarised by Vaughan J in AVWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2).[82] As his Honour noted, the rule in Jones v Dunkel:
(a) does not mean that an adverse inference should be drawn that the evidence that has not been called would be positively damaging to that party's case. As was stated by Menzies J in Jones v Dunkel, the absence of a witness cannot be used to make up any deficiency in the evidence;[83] and
(b) does not prevent a favourable inference being drawn in favour of Ted if other evidence justifies this inference.[84]
122 If matters of fact which are pleaded in the defence are otherwise established by the evidence, the failure to call a witness does not prevent a finding of fact being made.[85]
123 There are two consequences which may flow from the unexplained failure to call a witness. First, it may enable the court to draw an inference that the evidence of the witness would not assist the party's case. Second, the court may draw with greater confidence an inference which is unfavourable to that party.[86] However, that inference must be available on the evidence. The relevant witness must be one who may be able to 'cast light on the fact relied on as the ground for the inference'.[87]
124 In every form of trust, there are four essential elements: the trustee, trust property, a beneficiary or beneficiaries, and the personal obligations of the trustee to deal with the trust property for the benefit of the beneficiaries.[88]
125 In this case, a number of different types of trusts are pleaded by Carmelo and Norman, namely: an express trust, a resulting trust, a common intention constructive trust and a joint endeavour constructive trust.
126 An express trust arises where a person expresses the intention, orally or in writing, to create a trust. No formal language is required to create a trust and it can be inferred from the conduct of the person. However, certainty is required on three matters: first, the intention to create a trust; second, the persons to be benefited are ascertainable; and third, specified property is to be the subject of the trust.
127 An express trust which creates an interest in land is required to be evidenced in writing.[89]
128 In Jacobs' Law of Trusts in Australia, the learned authors state:[90]
A court cannot hold that an express trust exists unless it is satisfied that there was the intention to create such a trust. The question will be whether there is language or conduct which shows a sufficiently clear intention to create such a trust. No formal or technical words are required; any apt expression of intention will do. The conclusion that the intention existed may be drawn as an inference from the available evidence. In order to infer intention the court may look to the nature of the transaction and the whole of the circumstances attending the relationship between the parties and known to them, including commercial necessity. If the inference to be drawn is that the parties intended to create or protect an interest in a third party, and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then an intention to create a trust may be inferred. Such a trust is an express, not a constructive, trust and the earlier reluctance to infer such a trust no longer obtains, at least in Australia.
The overall question is whether in the circumstances of the case, and on the true construction of what was said and written, a sufficient intention to create a trust has been manifested. It is not necessary that the creator of the trust should know that the particular relationship intended to be created is in law a trust. A trust will be created, whether or not the creator thereof is precisely aware that he is so doing, provided that in substance the creator intends that his or her actions should have the legal effect of creating the relationship which is known in law as a trust.
129 In Bahr v Nicolay (No 2), Mason CJ and Dawson J stated that: [91]
If the inference to be drawn is that the parties intended to create or protect an interest in a third party and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then there is no reason why in a given case an intention to create a trust should not be inferred. ... The trust is an express, not a constructive, trust.
130 A resulting trust is a trust that arises in favour of the settlor or parties claiming through the settlor. A resulting trust generally arises in two different circumstances. First, where a person transfers property to another but has not disposed of their beneficial interest in the property. Second, where the purchase price is provided by a person other than the person holding the legal interest without intending the third party to have beneficial ownership of the property.[92]
131 Where a property is purchased or funds are provided to a third party who a person is under an obligation to support, traditionally considered to include a wife or child, the presumption of a resulting trust in favour of the third party does not arise. In these circumstances, there is a presumption the funds were provided as a gift or an advancement. The presumption of advancement, like the presumption of resulting trust, may be rebutted by evidence that at the time of the transfer, the transferor did not intend it to be a gift. The burden of rebutting the presumption of advancement lies upon the person asserting the existence of a trust.[93] The circumstances surrounding the relationship between the parties may be used to rebut the presumption of advancement. An inference of advancement can also be displaced where the common intention of the parties, which was consistent with a presumption of advancement, depended on a continuing state of affairs. If the continuing state of affairs ceases, the presumption of advancement may no longer apply.[94]
132 In Calverley v Green, Gibbs CJ summarised the relevant principles in the following terms: [95]
Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, ie, a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such - not, for example, as a loan. Consistently with these principles it has been held that if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money.
133 Evidence of the relationship between the parties - both legal and factual - is admissible on the hearing of any claim.[96] The acts and declarations of the person or persons who contributed to the purchase price of the property both before and at the time of the purchase of the property in question or immediately afterwards are also relevant and admissible.[97] Any subsequent declarations by a party are only admissible as admissions against interest.[98] If the common intention of parties is in issue, evidence of what the parties did or said is admissible. It is not usually found in 'an uncommunicated state of mind'.[99]
134 The extent of the beneficial interests of the respective parties is determined at the time the property was purchased and the trust created. Acts after the purchase of the property, such as the repayment of any mortgage in relation to the property, are not relevant to the determination of the parties' interests in the land or the extent of the interests. These matters may, however, be relevant on an equitable accounting between the parties.[100] As was noted by Mason and Brennan JJ in Calverley v Green:[101]
The defendant's payment of the instalments due under the memorandum of mortgage, in accordance with the arrangement made between the parties, may be thought to be, or to be the equivalent of, the provision pro tanto of the purchase price of the property. After all, the only moneys which were actually paid out of what the parties had owned before settlement of the contract for the purchase of the Baulkham Hills property or out of what they had earned thereafter had come out of the defendant's pocket. The property was purchased on the basis that the purchasers should pay it off over 20 years, a basis familiar to many home buyers. It is understandable but erroneous to regard the payment of mortgage instalments as payment of the purchase price of a home. The purchase price is what is paid in order to acquire the property; the mortgage instalments are paid to the lender from whom the money to pay some or all of the purchase price is borrowed. In this case, the price was $27,250, of which $18,000 was borrowed from the mortgagee by the plaintiff and defendant jointly. The balance was paid by the defendant out of his own funds, being part of the proceeds of the sale of the Mt Pritchard property. Thus the plaintiff and defendant both contributed to the purchase price of the Baulkham Hills property. They mortgaged that property to secure the performance of their joint and several obligation to repay principal and to pay interest. The payment of instalments under the mortgage was not a payment of the purchase price but a payment towards securing the release of the charge which the parties created over the property purchased.
135 Constructive trusts arise by operation of law and independently of the parties' intentions. A constructive trust is a remedy imposed by the court irrespective of the parties' actual or presumed agreement or intent because, in certain circumstances, the court considers it is appropriate to impose on a person the duties of a trustee in respect of particular property.[102]
136 However, as Deane J in Muschinski v Dodds noted:[103]
The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice. As an equitable remedy, it is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundation of such principles.
The mere fact that it would be unjust or unfair in a situation of discord for the owner of a legal estate to assert his ownership against another provides, of itself, no mandate for a judicial declaration that the ownership in whole or in part lies, in equity, in that other. Such equitable relief by way of constructive trust will only properly be available if applicable principles of the law of equity require that the person in whom the ownership of property is vested should hold it to the use, or for the benefit, of another. That is not to say that general notions of fairness and justice have become irrelevant to the content and application of equity. They remain relevant to the traditional equitable notion of unconscionable conduct which persists as an operative component of some fundamental rules or principles of modern equity. (citations omitted)
137 The basis for the imposition of a constructive trust is that an equity is owed by the registered proprietor to the party who is claiming an interest in the land. For this reason, the critical focus is on the knowledge and conduct of the registered proprietor. This includes the context in which the person became the registered proprietor and whether they did so as a volunteer.[104]
138 Carmelo and Norman's claims plead alternative grounds as to the basis on which a constructive trust should be imposed. The first was on the basis of a common intention constructive trust. As was noted by Leeming JA in Bijkerk Investments Pty Ltd v Bikic, these are relatively rare in Australia, there is little Australian authority in support of them and there remains a question as to whether these survive in Australia separate to the doctrine of proprietary estoppel.[105] This question has not yet been decided in Australia and no party submitted that this form of trust no longer existed. For that reason, I have considered the case on the basis pleaded by the parties and as it was run at trial.
139 In order to establish a common intention constructive trust, it is necessary to establish the following. First, there is an actual or inferred common intention that the claimant has or will have a beneficial interest in the property. Second, there has been detrimental reliance on the common intention by the claimant. Third, there is conduct by the trustee which would make it unconscionable to allow the trustee to resile from the common intention.[106] In many cases, this is by way of contribution to the purchase price of the property. [107] However, it can include non-financial considerations.
140 In Lloyd v Tedesco, Murray J (with whom Hasluck J agreed) expressed the view that:[108]
The important consideration where a claim for equitable relief is based upon unconscionability said to arise in the context of non-material contributions by one de facto spouse is that such contributions be related, where a declaration of trust is sought, to the particular items of property over which it is said the trust should be declared. It may be that one party to a relationship makes an important contribution to the relationship by performing a role of support, a role as caregiver, homemaker and the like. No doubt contributions of that kind will be referable to the mutual affection and concern for each other which the parties have.
But unless the purposes of the provision of a contribution of that kind go further and the court concludes that it is intended to enhance the material wellbeing of both parties, or to provide the contributing party with an interest in specific property, or that it is made upon the basis that that party would have an interest in such property, then it seems to me that equity will not hold to be unconscionable the retention of property in the beneficial ownership of the other party who has directly contributed to the acquisition, maintenance and enhancement of that material wealth or property. (citations omitted)
141 A joint endeavour constructive trust originates in the judgment of the High Court in Muschinski v Dodds. In that case, Deane J (with whom Mason J agreed) held that:[109]
[T]he principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do. (citations omitted)
142 In order to establish a joint endeavour constructive trust, the following must be established. First, at the time of acquisition of the property in question, the parties must have a common intention as to the terms on which they will hold an interest in the property. Second, valuable contributions have been made to the joint endeavour by the plaintiff. Third, as a result of the joint endeavour, the defendant has accrued a benefit. Fourth, the joint endeavour has failed for which neither party is at fault and it would be unconscionable for a party to retain their legal interest without giving credit to the other for the contributions made by the other to the acquisition and improvement of the property.[110]
143 There is a range of matters the court will take into account in determining whether to impose a joint endeavour constructive trust. These include direct financial contributions to the purchase price and costs associated with the purchase, the pooling of financial resources, other financial contributions, contributions through labour and other non-financial contributions. The court can also take into account events that occur after the purchase of the property. Where a person who is asserting a constructive trust has made contributions to the repair and renovation of the property and the legal owner of the property has accepted the contribution with knowledge it will improve the property and add to its value, this can be considered by the court in determining the extent of the person's equitable interest in the property.[111] Where non-financial contributions are relied upon, it is necessary for a party to show more than the performance of the 'valuable role of the provision of love, care and support'. This contribution will only be sufficient where it is related to the generation of wealth as part of a joint effort or endeavour.[112]
144 In determining what constitutes unconscionability, the court does not 'indulge random notions of what is fair and just as a matter of abstract morality'.[113]
145 Two forms of estoppel are relevant to the issues in these proceedings; promissory or equitable estoppel, and common law estoppel by convention.
146 In relation to promissory estoppel or estoppel by representation, it is accepted that the plaintiffs need to establish six elements:[114]
(a) party A assumed that a particular legal relationship existed or would exist between them and party B from which party B would not be free to withdraw from;
(b) party B induced party A to adopt the assumption;
(c) party A has acted in reliance on the assumption;
(d) party B knew or intended party A to do so;
(e) party A will suffer detriment if the assumption is not fulfilled;
(f) party B has failed to act to avoid that detriment.
147 As was stated by French CJ, Kiefel and Bell JJ in Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd:[115]
It has long been recognised that for a representation to found an estoppel it must be clear. In Low v Bouverie, it was said that the language used must be precise and unambiguous. This does not mean that the words used may not be open to different constructions, but rather that they must be able to be understood in a particular sense by the person to whom the words are addressed. The sense in which they may be understood provides the basis for the assumption or expectation upon which the person to whom they are addressed acts. The words must be capable of misleading a reasonable person in the way that the person relying on the estoppel claims he or she has been misled. (citations omitted)
148 The representation need not be express but may be implied wholly or partly from conduct or inferred from silence or inaction. Whether a representation has been made is to be judged objectively.[116]
149 The party relying on the estoppel bears the legal burden of establishing on the balance of probabilities that they were induced to rely on the promises or representations and would have acted differently in the absence of the representations.[117]
150 In Flinn v Flinn, the Victorian Court of Appeal summarised the position where the representation is said to concern the intended contents of a will as follows:[118]
In Gillett v Holt, Carnwath J said of proprietary estoppel:
Further, in the application of the principle to statements about the intended contents of a will, the facts must be looked at against the ordinary presumption that such intentions are subject to change. It may be easier to infer a fixed intent when the subject matter is a particular property, which the plaintiff has been allowed to enjoy in return for services, than in relation to a whole estate. In any event, the plaintiff needs to show words or conduct by the prospective testator which go beyond mere statements of intention, and which, having regard to all the circumstances, he can reasonably claim to have regarded as amounting to an irrevocable promise by the prospective testator as to how his estate would be disposed of.
A similar approach was taken in Taylor v Dickens, where the plaintiff failed to establish a proprietary estoppel in relation to a promise of a legacy of residue on the ground that it was not enough for the estoppel claimant to believe that he was going to be given a right over the legal owner's property if he knew that the latter had reserved the right to change his mind. The decision in Taylor v Dickens is discussed in a note in (1998) 114 L.Q.R. 351, where it is said that in cases of promises of a gift by will that the imposition of an additional requirement that there should be a specific assurance of "non-revocability" seems unduly restrictive and technical. Neither of these decisions was cited to us, nor was any proposition advanced that might have been supported by reference to these decisions.
Most people, I suppose, know that the maker of a will can revoke it at any time before death. How is a promise to leave property by will to be understood? Surely it will ordinarily be regarded by the promisee as a promise, not merely to make a will which can be revoked at any time before death, but to make a gift by means of an instrument which will take effect upon the donor's death. In other words, the promise of a gift by will is ordinarily to be understood as meaning just that - an effective gift by will, taking effect on death, not an ineffective, because revoked, disposition. Of course it all depends on the circumstances. If a woman says to her niece, "It's time I made a new will. I'll see the solicitor soon. I'm going to leave you my house. But don't forget that I might change my mind again and leave it to your brother next year", any claim to an equity by proprietary estoppel would very likely break down at the start. This would be on the basis there had never been a promise to leave property by will, only an intimation of intention to make a will coupled with a disclaimer of an intention not to revoke it. (citations omitted)
151 Where the representation concerns an acquisition of an interest in property, prima facie, the estopped party can only fulfil their equitable obligation by making good the representation. As Nettle JA stated in Donis v Donis:[119]
The estopped party, having promised to confer a proprietary interest on the party entitled to the benefit of the estoppel, and the latter having acted upon the promise to his or her detriment, is bound in conscience to make good the expectation. It follows that the detrimental reliance that supports the estoppel need not constitute in any sense a consideration moving to the party bound. It is a unilateral element of the estoppel and not the price paid for it.
The prima facie position will yield to individual circumstances. Principle and authority compel the view that where a plaintiff's expectation or assumption is uncertain or extravagant or out of all proportion to the detriment which the plaintiff has suffered, the court should recognise that the claimant's equity may be better satisfied in another and possibly more limited way. Thus, as was also said in Giumelli, before granting relief the court is required to consider all of the circumstances of the case, including the possible effects on third parties, and to avoid going beyond what is required for conscientious conduct or would do injustice to others. But that does not mean that the court is required to be "constitutionally parsimonious" or that it is necessary for there to be substantial correspondence between expectation and the monetary value of the detriment suffered, or which but for the relief to be accorded would be suffered. The object of the exercise is to do equity and for that purpose "detriment" is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances. (citations omitted)
152 The High Court in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd summarised the requirements of an estoppel by convention in the following terms:[120]
Estoppel by convention is a form of estoppel founded not on a representation of fact made by a representor and acted on by a representee to his detriment, but on the conduct of relations between the parties on the basis of an agreed or assumed state of facts, which both will be estopped from denying. The existence of an estoppel based on a convention between the parties has often been recognised: ... [J]ust as estoppel by representation requires a representation of fact, so too estoppel by convention requires the assumed state of affairs to be an assumed state of fact.
153 An assumption of mixed fact and law may, for the purposes of an estoppel by convention, be regarded as an assumption of fact.[121]
154 A defence of laches is a discretionary defence that may provide a reason to refuse equitable relief. The defence operates to prevent the occurrence of an unjust result. The burden of proof of establishing laches is with the defendant.
155 In Streeter v Western Areas Exploration Pty Ltd (No 2), Murphy JA summarised the authorities discussing the defence of laches. As Murphy JA noted:[122]
The doctrine of laches comprehends two themes. One is delay implying not just quiescence, but rather acquiescence and assent, and the other is delay involving prejudicial change of circumstances. (citations omitted)
156 That is, the questions to be answered are first, whether a plaintiff by delaying the institution or prosecution of their case has either acquiesced in the defendant's conduct or caused the defendant to alter their position in reasonable reliance on the plaintiff's acceptance of the status quo and second, whether the plaintiff has otherwise permitted a situation to arise which it would be unjust to disturb. In considering these questions, it is necessary to consider the length of the delay and the nature of any acts done during the interval. Mere delay by itself is insufficient to constitute the defences of laches or acquiescence.
157 The point of time from which the delay is assessed is, prima facie, the time when the plaintiff became aware of the facts that give rise to the availability of equitable relief.[123]
158 At trial, each of Carmelo, Norman and Ted gave evidence that a significant number of properties were purchased and sold by members of the family from in or about 1961 (see Attachment A to these reasons). At trial, these purchases and sales were referred to as the 'home renovation business'.[124] It was not in dispute that work was done on the majority of these properties to renovate or otherwise improve them before each was either leased or sold.
159 It was also not in dispute that each of Carmelo, Norman and Ted purchased and sold other properties, either jointly with another family member or individually.
160 The primary differences between the brothers were first, when this work for each brother (and thereby any joint endeavour) commenced; second, the extent of the contributions made by each of them; third, how long the work continued for; and fourth, whether there was an actual or inferred common intention between the family members about the work being done, its purpose and whether this gave the brothers any beneficial interest in the properties.
161 It is clear from Attachment A that Calogero and Maria purchased their first property in 1956 when the brothers were 10 (Ted), 8 (Carmelo) and 6 (Norman). Each of the brothers accept that this property, 12 Roy Street, Mount Lawley, was their family home although there is some contention as to whether this or 367 Stirling Street, Perth, was the first family home. A further four properties were purchased between 1957 and 1964, two of which were used as their family home[125] and two as investment properties.[126]
163 The majority of the properties were purchased between 1967 and 1976. In 1967, the brothers were 21 (Ted), 19 (Carmelo) and 17 (Norman).
164 A number of the properties purchased were used as their family home, namely 367 Stirling Street, Perth; 12 Roy Street, Mount Lawley; 25 Second Avenue, Mount Lawley; 47 Fourth Avenue, Mount Lawley; and finally, 14 Frape Avenue, Yokine.[129] Apart from these properties and the Darch property, a further 16 properties were purchased by Calogero or Calogero and Maria, with one property purchased in the names of Calogero, Maria and Ted, and one property in the name of Calogero and Ted. Excluding the Darch property, the last property was purchased in 1976 and the final property sold in 1985. I accept and find that the properties were sold for a gross profit, although I make no findings as to the extent or amount of any gross profit.
165 Neither Carmelo nor Norman disputed that each of the brothers, including Ted, participated in the purchase, renovation and sale of the properties. Each gave evidence that Ted assisted Calogero with the administrative functions involved in the purchase and sale of these houses, including preparing transfer and other documents, but did not carry out any of the physical work.[130] Ted's evidence was that he would:[131]
locate most of these properties, arrange the finance, administer the contracts, organise the accounts, marketing and sales where required and assist my father with carrying out the works programme.
166 Carmelo's explanation was that Ted did this work because Ted was more academic than him or Norman.[132]
167 Carmelo, in his evidence-in-chief, did not give evidence as to when he first commenced work on the properties. His evidence was that after the acquisition of a property in Stirling Street, Perth and two properties in Mount Lawley, he assisted Calogero on site with the renovations to a greater extent than Norman, who was still relatively young at the time the first properties were purchased, and Ted, who was more academic.[133]
168 Under cross-examination, Carmelo's evidence was that Norman did similar tasks to him in the renovation of the properties, namely cleaning, washing, painting, small renovation jobs and assisting Calogero with the work that was done.[134] Carmelo's evidence was that Maria was also actively involved in the renovation work[135] and assisted with the cleaning of the property, gardening and whatever she was asked to do by Calogero.[136]
170 In cross-examination, Carmelo's evidence was that after Omega Constructions was established, the nature of the work that he did on the houses changed. After this, he was asked to assist only when the project had achieved practical completion. He assisted to prepare houses by removing debris, scraping paint, gardening and tidying up the house and block.[139] It was not clear from his evidence whether this evidence concerned properties built by Omega Constructions for third parties or the properties owned by Calogero and Maria.
171 It is not in dispute that in 1969 Calogero established Omega Constructions, a partnership between Calogero and Maria.[140] On 12 September 1969, Omega Constructions was registered as a builder under the Builders' Registration Act 1939 (WA).[141] Calogero was not a registered builder but the work that was carried out by Omega Constructions was supervised by a registered builder.[142] At this time, the brothers were 23 (Ted), 21 (Carmelo) and 19 (Norman).
172 Norman's recollection is that he worked with his family on renovating houses from when he was about 12 years old until he was '20 - 30 years old'.[143] In cross-examination, his evidence was that this work started from about 1961, when he was 11 years old.[144] His evidence was that each of the brothers worked on these houses one or two afternoons a week after school and significantly longer hours on weekends and school holidays.[145] Norman's recollection was that Ted did considerably less work on the houses than he and Carmelo, initially because Ted was at high school and university and then from about 1968, because he was working in real estate.[146] Norman recalled that Ted gave Calogero advice about properties to purchase through his connections in the real estate industry.[147]
173 Norman recalled that the work done by the family included cleaning bricks, scraping and preparing the walls for painting, general cleaning, removal of any items from the house, repairing and mending fences, laying slabs, repairing timber and skirting boards, landscaping, repairs around the house and any other work that could reduce the labour to be carried out by contractors.[148] Calogero gave directions as to the work to be carried out. Maria assisted with the work occasionally but would attend regularly to bring home cooked food for lunches and other meals.[149]
174 Norman gave specific evidence about the work that he did on various properties.[150] It was clear from his evidence-in-chief that Norman had refreshed his memory of the details of these properties from title searches of the properties, discussions he had with other people and from visiting the properties.[151]
176 In his evidence-in-chief, Ted accepted that during their teenage years, each of the brothers helped Calogero on the weekends 'from time to time' on his projects. Ted's evidence was that they did so 'out of our loyalty to our parents as members of the family'.[154] Under cross-examination by counsel for Carmelo, Ted initially responded that he didn't recall Carmelo assisting with 'various renovations and other matters', then that he didn't agree and finally that it was possible.[155] When asked why he had given various responses to this, Ted said that he did not recall Carmelo doing 'renovations'. Ted then agreed that Carmelo occasionally assisted Calogero on various building sites after school.[156] Ultimately, Ted agreed that all the brothers provided assistance because they lived 'under the same roof' and it was normal practice in a 'European family' to 'help the family'.[157]
177 Apart from this general statement, Ted sought to minimise the contributions of his brothers. Ted did not recall his brothers doing any work at the properties that were purchased by Calogero or by Calogero and Maria.[158] His evidence was that Carmelo and Norman were 'hardly ever home' and were 'gallivanting'.[159] In cross-examination, Ted accepted that he did not personally attend the properties to check whether Norman or Carmelo were assisting but that this was what Calogero 'would tell [him]' and that because he was in constant contact with his father '[he] would know'. [160]
178 In relation to the contributions made by his brothers, Ted's evidence was primarily based on what Calogero told him, or more relevantly, did not tell him. His evidence was that Calogero 'would have' told him if Carmelo and Norman were working at the properties in the manner they contended. In cross-examination, it was put to Ted that he did not have an opportunity to observe for himself what was occurring as he was busy with his dentistry studies. Ted denied this was the case for two primary reasons. First, because Calogero was working at Kings Park at the time and 'very little renovations were done' at this time. Second because Calogero used to drop him at university and, in addition, he had a lot of medical problems at this time.[161] The objective evidence of the purchase and sale of the properties is that most of the properties were purchased after 1967, after Ted had ceased his studies and commenced work as a real estate agent. For this reason, this evidence does not assist to resolve the issue as to what work was done by Carmelo and Norman.
179 In his evidence-in-chief, Ted said that he loaned funds to Calogero for 'many projects' on the understanding that a share of the funds or properties would be transferred to him in due course 'when financially prudent by way of repayment of [his] loans'.[162] No banking or other records were tendered to support this statement.
180 From the evidence summarised in Attachment A, I find that Calogero bought the first investment property in 1961. This property was sold in 1964. While I accept that the brothers assisted their parents in working to renovate this property, I do not consider that the renovation of one property is evidence of the commencement of a joint endeavour. It is also clear from Attachment A that from about March 1967, a significant number of properties were purchased and sold by Calogero and Maria. On this basis, I accept and find that if there is a joint endeavour, which I address at [465] - [476] below, it commenced from in or about March 1967.
181 For the following reasons, I accept the evidence of Carmelo and Norman and find that each of Ted, Carmelo and Norman contributed to the renovation or improvement of the properties on which Carmelo and Norman have given specific evidence.[163] Specifically, I find that Ted contributed through undertaking work largely of an administrative nature and Carmelo and Norman through undertaking manual work in assisting Calogero, although Carmelo to a more limited extent.
182 First, the evidence of Carmelo and Norman is largely consistent with each other as to the nature of the work that was done. Second, this evidence is consistent with Ted's evidence that each of them helped Calogero on his projects when they were teenagers, they were expected to contribute while they were living at home, and this was usual for a European family. Third, given Carmelo and Norman are less academic but the nature of their occupations requires they are good with their hands, I consider them undertaking the tasks they refer to, of general labouring, is more consistent with the objective facts.
183 In relation to Carmelo, it was not in dispute that from the end of 1969, Carmelo did not live in Perth on a permanent basis. At this time, he moved to Sydney for about 2 years before returning to Perth in about 1972.[164] During that year, in about March 1972, the three brothers travelled to Europe on holidays for approximately nine months before returning to Perth.[165] In 1974, Carmelo first travelled to Queensland and spent 1974 and 1975 living between Perth and Queensland. He returned to Perth in 1976 and 1977 before returning to Queensland in 1978. It is consistent with this timeframe that Carmelo worked on the specific properties on which he gave evidence.
184 In addition to the work done on the properties, each of Carmelo, Norman and Ted gave evidence that they assisted with the collection of rental payments. Carmelo's evidence was that each of them, together with Calogero, was involved in collecting rent from the tenants. Carmelo recalled they would go to the properties to collect the rent in cash and issue a receipt to the tenant.[166] Norman similarly gave evidence that he collected rent on occasions, although he accepted this was not his usual responsibility.[167]
185 Receipt books for three of the rental properties were tendered in evidence.[168] The receipt books covered the periods June 1964 until June 1965 (for 526 William Street, Perth), June 1963 until May 1965 (for 524 William Street, Perth) and July 1964 until June 1965 (for 47 Fourth Avenue, Mount Lawley). Ted's evidence was the majority of the signatures in these books were his and that the signatures of both Calogero and Carmelo were also there but Norman's was not.[169] In cross-examination, Ted accepted that Norman collected the rent on occasions if he, Carmelo, or Calogero were not available.[170]
186 I have reviewed the receipt books. These receipt books support the evidence given by Ted, namely that in relation to these properties over this time period each of Carmelo, Ted and Calogero collected rental payments but Norman did not.[171] This is not surprising given that Norman was only 13 to 15 years old at the time and, on the evidence before me, still at school. However, these receipt books only cover a relatively limited period. I accept the evidence of Carmelo and Norman (which was ultimately accepted by Ted in cross-examination) and find that each of Ted, Carmelo and Norman assisted Calogero and Maria by collecting rental payments when asked to do so.
187 In addition to the work done on the properties, both Carmelo and Norman gave evidence that Calogero required them to give him a portion of their wages when they commenced working. Carmelo's evidence was that from the time he began to earn money, Calogero required him to pay board and lodging and 'would then take most of my earnings for the benefit of the family'.[172] He agreed in cross-examination that this applied to each of Ted and Norman as well.[173] Norman gave similar evidence, namely that from the time he started working, he gave Calogero a portion of his wages. Under cross-examination, he accepted this payment was for board.[174]
188 Ted denied this was the case and said Carmelo was entitled to keep all of his earnings.[175]
189 I accept the evidence of both Carmelo and Norman that when they commenced working, Calogero required each of them to give him a portion of their wages. However, I do not accept these amounts were taken for the benefit of the family as part of a joint endeavour and find they were payments for board and lodging.
190 In 1974, Carmelo moved to Queensland and from that time, until 2000, moved between Queensland and Western Australia. His evidence was that over this time he spent approximately 11 years in Perth.[176] Carmelo accepted that when he was in Queensland, he did not assist his father in renovating any houses that were purchased by Calogero and Maria.[177]
191 Initially, Norman did not accept the joint endeavour had ever come to an end and then said that he did not know when it came to an end.[178] Ultimately, under cross-examination from counsel for Ted, he accepted that no additional properties were purchased after 1978 and that the joint endeavour came to an end when Calogero decided he wanted to semi-retire and go into a market garden business.[179]
192 It is clear from Annexure A that, apart from the Darch property, no further investment properties were purchased by Calogero and Maria after June 1976 and the remaining properties were sold in an orderly fashion from 1975. I accept and find that any joint endeavour, if one existed, came to an end in about 1976, after the purchase of the Darch property.
193 At [3(c)] of his statement of claim, Carmelo pleaded that prior to the purchase of the Darch property, he had a discussion with Calogero about the purchase of a property which would be for the benefit of him and his parents which he would receive a share in to reward him for the work he had done. In his evidence-in-chief, Carmelo did not address this aspect of his pleading in any detail. The only evidence he gave was in the context of describing the work he did on the Darch property, namely that:[180]
Because of all the unpaid work and other contributions I had made since the age of 10, I believed that I would ultimately have an interest in the properties and other assets acquired over the years for the benefit of the family.
194 Carmelo's evidence was that Calogero asked him to come and help if he had any spare time 'for the family'.[181]
195 In cross-examination, Carmelo agreed that as at 1974, a property had not been identified or purchased.[182] He accepted he had an expectation that at some time in the future, Calogero would purchase a property and reward him for the work he had done.[183] He also agreed the work he did on these properties was done in the expectation that Calogero would look after him in his will.[184] Carmelo's evidence was that he was not paid for the work he carried out on the properties and he was told '[r]ight through our life' that 'eventually it would come to us and get passed on and be part of the family accumulation of funds'.[185]
196 Norman's evidence was also that he was never paid for the work he did on the properties. He agreed he never charged Calogero for the work he did at the properties, including after he had left school and was running his own business doing bathroom renovations. His evidence was that:[186]
I didn't mind helping my father with our family projects. At that time, I believed I was going to receive a substantial benefit in the long-term. I could see that our family's assets were being built up from all the land and properties we were buying or selling. My father had also told me that we would be paid when he died, or words to that effect.
197 Norman's evidence was that on a number of occasions between 1965 until about 1972, he asked Calogero if he could be paid for the work he was doing. His evidence was that his father's response was similar on each occasion, namely that:[187]
He said to me words to the effect that 'How dare you ask me now?'. He then said 'You'll get the money when we die'. Based on our discussions, I believed he was referring to when he and my mother died.
198 Under cross-examination from counsel for Ted, Norman accepted he was a dutiful son and that when Calogero or Maria asked him to do something, he would do it willingly, both because of a sense of duty[188] as well as his love and respect for his parents.[189] Norman also accepted that Calogero did not promise him a share in the two family homes he worked on.[190]
199 Norman agreed he did not contribute financially to the purchase price of the properties purchased by Calogero and Maria, the costs associated with the sale or purchase of these properties or the costs of buying materials for use in the renovation of these properties.[191] He also accepted that after they left school and commenced working, each of the brothers were 'conducting [their] own affairs', including buying and selling properties.[192]
200 Norman recalled a number of discussions about these matters which usually occurred at the family home at Frape Avenue. If there was a discussion about what would happen when Calogero and Maria died, his evidence was that 'My parents would state 'We wrote our wills together ... what is left will be split 3 ways ... to be shared between you'.[193]
201 He also recalled a specific discussion with his parents at Frape Avenue when he complained about not receiving any money from them, as he believed this was not the case for his brothers. Norman recalls his mother saying (in Calogero's presence) 'Don't worry, Nunzio. When we die, we've put in our will that what is left will be split 3 ways' and that his father said words to the effect 'Nunzio, how many times do we have to say it?'.[194] Norman's recollection was that these conversations took place in the Italian or Sicilian dialect his parents spoke, some occurred in the presence of both Ted and Carmelo, and Ted responded to these comments by saying words to the effect 'Okay, if that's what you want'.[195]
202 Norman says that because of the work he undertook for the family in renovating these houses, he found it difficult to allocate time for study in order to qualify as a registered builder. His evidence is that:[196]
I firmly believe that I would have passed enough subjects to become qualified as a registered builder if I had enough time during those years to study, rather than helping our family complete renovation projects and other family work.
203 Ted's evidence was that Calogero and Maria gave each of Carmelo and Norman a property or profits from the sale of a property. In relation to Carmelo, Ted's evidence was that he was told by his parents that 256 Warwick Road, Duncraig, which was originally purchased by Calogero and Maria, was transferred by them to Carmelo and subsequently sold for a profit. Calogero told Ted he was repaid the original purchase money but that Carmelo kept the profit.[197] Carmelo denied this version of events was correct. His evidence was that he purchased this property from his parents and subsequently sold it.[198]
204 In respect of Norman, Ted's evidence-in-chief was that Calogero told him that if Norman renovated the house at 96 Salisbury Street, Bedford, he and Maria intended to transfer the title to Norman (if Norman agreed). His evidence was that Calogero told him that when the property was sold, Calogero received the purchase price but Norman retained the profit.[199] In cross-examination, Ted gave various answers about this property. Initially, his evidence was that Calogero told him he had helped Norman, Norman had fixed up the property and it was a good profit.[200] Subsequently, Ted accepted he wasn't part of the discussions but understood the profits were split and he was told by Calogero that they 'got a lot of money out of it'.[201] Norman agreed he supervised the renovation of this property but denied he received the net profits when it was sold.[202]
205 Ted accepted that, on occasions, there were discussions between the family about Calogero and Maria's wills. Ted's evidence was that Calogero and Maria said to him 'whatever we leave in the world is what you will get' and that no other promises were made.[203] He denied that they said that what was left would be split three ways between the brothers. Ted's evidence was that this was not specifically explained, although he agreed it was the accepted situation.[204]
206 I accept the evidence of Carmelo and Norman and find that neither received payment for the work they did on the properties. Their evidence is consistent with each other as well as the objectual factual surrounding circumstances set out at [182] that each of the sons were expected to assist in these projects while they were living at home in order to assist the family.
207 For the following reasons, I also accept the evidence of Carmelo and Norman that on more than one occasion, Calogero and Maria told their sons they would get their money when they (Calogero and Maria) died, and that what was left would be split three ways between their sons. First, the evidence of Carmelo and Norman is broadly consistent with each other and is in accordance with what Ted agreed was the accepted situation by the brothers. Second, this is consistent with the mutual wills made by Calogero and Maria and Maria's will. Third, it is clear from the evidence of each of Ted, Carmelo and Norman, that Calogero and Maria held strong and traditional family values and worked extremely hard to build up their financial assets over their lifetime. It is more consistent with these values that on their death, the financial assets of the family would be left to their family and divided equally between their sons.
208 In cross-examination by counsel for Ted, both Carmelo and Norman were asked about other properties they purchased, either together or with other members of the family. This included a property that Carmelo and Norman purchased at 136 Central Avenue, Inglewood in September 1975 for $17,500 and sold at the end of October 1975 for $20,000[205] and a property Norman purchased with Ted at 54 Elsegood Street, Dianella in July 1976.[206]
209 Norman accepted, under cross-examination, that these transactions were similar to what Calogero did in purchasing and selling properties but said that his transactions did not fall within the joint endeavour as he was 'allowed to do other things' besides working with the family.[207] Norman agreed he purchased six properties either by himself or with one of his brothers[208] and he did not share any of the profit he made on these properties with other members of the family (unless they were part of the transaction) as he 'was never asked to share'. He accepted he had not asked his parents to share the profits they made from renovating the houses and his parents had never volunteered to share these profits.[209]
210 Carmelo also agreed that over the same timeframe as what was contended to be the home renovation business, he bought and sold a number of properties in Western Australia. He also maintained these were not part of the joint endeavour. His explanation was that he purchased these properties using his own funds and they were not purchased with the 'family funds'.[210]
211 I accept and find that over the same timeframe as what is said to constitute the 'home renovation business', each of Carmelo and Norman purchased and sold a number of properties and that each retained any profits made from these sales for themselves.
212 It was not in dispute that for some time prior to June 1978, Calogero was considering retirement and looking to purchase an appropriate property where he could plant olive trees and various other fruit and vegetables, which reflected his experience growing up in Sicily. At that time, Maria was approaching 65 when she would qualify for an aged pension.[211]
213 Norman's evidence was that Calogero told him he wanted to buy some land for him and Maria to work on 'on behalf of the family'.[212] Because Maria was approaching pensionable age, Calogero considered the purchase of the block should not be in her name as it might affect her eligibility for the aged pension.[213]
214 Carmelo and Norman each gave evidence that they assisted Calogero in his search for a suitable property. They recall considering properties in Kalamunda, Roleystone and Wanneroo.[214] Ted denied that either of his brothers had looked for appropriate properties.[215] For the following reasons, I do not accept Ted's evidence and find, to the extent it is relevant, that each of the brothers assisted in the search for a suitable property. First, each of the brothers gave evidence consistent with each other that Calogero told them he wanted to purchase a property to be used as a market garden. Second, Ted's denial is primarily based on his belief that Calogero would have asked his opinion if Carmelo or Norman had identified a property. While I accept that Calogero would have asked Ted his opinion if he was giving serious consideration to the purchase of any of these properties, this is not the evidence of Norman or Carmelo. Norman's evidence is that he suggested an area in Wanneroo which Calogero dismissed as being too expensive. Carmelo's evidence is that he drove around with Calogero while on his visits to Perth and looked at a variety of properties. Neither Carmelo nor Norman gave evidence that any serious consideration was given to the purchase of a specific property, which I accept would have been discussed by Calogero with Ted.
215 In his evidence-in-chief, Ted said that in or about 'the middle of 1978', he found the Darch property.[216] In cross-examination, Ted accepted he was appointed by the vendors to sell the Darch property,[217] and that the vendors initially wanted $55,000 but he negotiated with them to accept $52,000.[218]
216 On 13 June 1978, Calogero and Ted signed a contract to purchase the Darch property as joint tenants.[219] It was not in dispute that Ted prepared the paperwork for the purchase of the Darch property. The contract was in the form of the standard offer and acceptance approved by the Law Society of Western Australia and the Real Estate Institute of Western Australia. Under the contract, Calogero and Ted offered to purchase the land for $52,000. A deposit of $1,000 was paid on acceptance of the offer on 14 June 1978. The balance of the purchase price was to be paid as follows: $21,000 at settlement on 30 September 1978, $15,000 on or before 30 September 1979 with interest of 9.5% calculated on a daily basis on the balance outstanding as at 1 October 1978, and a final payment of $15,000 on or before 30 September 1980 with interest of 9.5% calculated on a daily basis on the balance outstanding as at 1 October 1978.
217 The signatures of Calogero and Ted were witnessed by Norman in the office at the family home in Frape Avenue, although Norman does not recall whether this happened on 13 June 1978 or on a different date.[220]
218 At this time, Carmelo was living in Queensland. His evidence was that he was told about the purchase of the Darch property by Calogero during a phone conversation but was not offered the opportunity to buy into the property.[221] Calogero told Carmelo that he (Calogero) paid the deposit of $1,000 and the amount due at settlement, which Carmelo recalled was about $20,000 or $22,000, and that the rest was to be paid by Ted 'from Knutsford Street that he had bought'.[222] While I accept that Calogero told Carmelo about the purchase of the Darch property, I do not accept that in the same conversation Calogero told him about the agreement for the payment of the purchase price. There is no evidence that Calogero planned to sell the Knutsford Street property to Ted in June 1978. This did not occur until October 1980.
219 Carmelo, in his statement of claim, refers to a verbal agreement shortly prior to registration of the transfer of the Darch property to Calogero and Ted. He pleads there was an agreement that Calogero and Ted would hold the Darch property for the benefit of the family, it would be used for a market garden and Calogero would contribute all of the funds for the purchase.[223] In cross-examination, Carmelo could not recall any details of the conversation[224] and agreed there was no discussion about what share each member would have; the 'division was left to [Calogero]'.[225]
220 Norman's evidence is that at some time prior to the purchase of the Darch property, when he was living at the family home, Calogero told him he and Ted were going to put an offer in on the Darch property and that Calogero told him 'The land would be bought on behalf of the family for all to work on.'[226] Norman recalls he had two or three similar conversations at Frape Avenue with Calogero before the Darch property was bought.[227]
My two (2) brothers were also told by my father of his intentions also and we were all asked if we were interested in buying the freehold with him and to help him set it up as it involved a lot of work and money to turn a bush block into a cleared, reticulated market garden with sheds and related buildings.
Both Carmelo and [Norman] were not interested. Carmelo was a resident of Queensland and [Norman] just showed no interest in the project and the work that was required to be done. The land was not part of the metro area and 40 years ago did not present as an investment opportunity at all that we understood it was a lifestyle choice made by our father and mother.
I had located the block, I was heavily involved in property investments of my own, and was willing to go halves with my dad for him to realize his dream of working on the land. My father grew up in Sicily working on the land.
Financial contributions to the purchase of the Darch property
223 It is not in dispute that Carmelo did not make any financial contribution to the purchase of the Darch property.
224 Prior to the settlement of the purchase of the Darch property, Norman says Calogero asked him whether he wanted to 'help out' to buy the block or to 'put some money into [it]'.[232] Norman recalls these conversations taking place at the family home and that they were in the Sicilian dialect spoken by the family. His evidence is that Calogero did not ask him to contribute a specific amount of money. In response, Norman said he would 'look into it' and subsequently decided he did want to contribute.[233]
225 Norman's evidence-in-chief was that: [234]
I don't have a strong recollection of the amounts of money that I gave to my father, but I do remember there were at least two payments of money to him. One payment was made before we bought the block and one payment was made after we had bought the block (ie around late 1978).
After looking again at the Esanda loan document, I remember the amount of $4,000 (as stated in that document) was one of the amounts that I handed over to my father to help buy the [Darch property].
I'm reminded by this paperwork that I had to write out a cheque to myself so I could withdraw the money, which was $5,000. The money was also paid in cash to my father within days of my drawing the money out.
227 The contract for the loan from Esanda was in evidence before me.[237] On the basis of this document I accept that on 28 July 1978, Norman entered into a loan contract for $4,000, repayable over 4 years at an interest rate of 19%. Further security for repayment of the loan and interest was provided by a caveat over certificate of title Vol 353, Fol 194A. The contract describes Norman's occupation as 'Builders Assistant' and his address as 14 Frape Avenue, Yokine.
228 In support of his evidence that he paid Calogero cash towards the purchase of the Darch property, Norman relied upon a handwritten note he made on a document, which is an offer to purchase a motor vehicle from City Motors dated 16 July 1978.[238] In his evidence-in-chief, Norman said he often kept papers on the dashboard of his car and that he wrote notes on them of things he had to do.[239] At the bottom of this document is the notation:
Note meet Mr C Marchese on 18 July 78 as to $5,000 cash to give on Lot 43 block/land Landsdale.
229 Norman did not have a positive recollection of meeting his father on 18 July 1978 but believes, on the basis of this note, that he:[240]
may have given cash to [Calogero] in an amount of about $5,000 on or about 18 July 1978, or at least discussed a payment to him of about that amount for the block. Refreshing my memory from the earlier Esanda document, we would have discussed the amount that I was able to pay to him at our meeting on 18 July 1978, whether from my own savings, or by my borrowing the monies to pay towards the Landsdale block.
230 In cross-examination, Norman agreed he did not give Calogero $5,000 in cash as he did not have that amount but maintained he had given Calogero $4,000.[241] He could not explain why the note recorded an amount of $5,000. Norman also agreed he had no documentary evidence to support his oral evidence that he gave this money ($4,000) to his father. He explained he gave the money to Calogero in cash 'because he specifically asked that he wanted to pay some tradesmen, so he asked me if I could give it - the money in cash'[242] and that 'He wanted to pay tradesmen and he wanted ... to use it for his own benefit'.[243] Norman also agreed his father did not ask him for any specific amount but asked whether he wanted to contribute or get involved in the purchase of the Darch property[244] and that he had not told Ted he gave money to Calogero for the purchase of the Darch property.[245]
231 Norman's evidence is that a few months after this, Calogero asked if he would make a further payment to help with the purchase of the Darch property. Norman's evidence is that he obtained a personal loan from Rural Industries Bank of WA (R&I) in the amount of $5,000.[246] From his banking records, he was reminded that he wrote a cheque out to himself to withdraw the $5,000 in cash which he then paid to his father 'within days of drawing the money out'.[247] He believes this occurred on 20 or 21 December 1978.[248]
232 The documents with the R&I bank were also in evidence before me, being a letter Norman received from R&I on 19 December 1978,[249] a copy of his cheque book,[250] and bank statements.[251] The letter confirms that Norman applied for a personal loan and on 19 December 1978, the sum of $6,216.80 was credited to Norman's account. The bank statements confirm that on 19 December 1978, $6,016.80 was credited to Norman's account.[252] Nothing turns on the discrepancy in these amounts. On 20 December 1978, cheque 871204 for $5,000 was debited from Norman's account.[253] The cheque butt states that it was to 'self loan' for 'T&C'.[254]
233 In his evidence-in-chief, Norman explained he wrote 'self loan' because he borrowed the amount from R&I as a personal loan and the notation of 'T&C' is a reference to Theodore and Calogero.[255] In cross-examination, Norman agreed he did not record anywhere else that he had given this money to his father in December 1978.[256]
234 Ted denied that Norman made any financial contribution to the purchase of the Darch property. He said this evidence was 'fabricated' on the basis he was not aware of the payments[257] and Norman had fabricated this recently to try and earn an interest in the Darch property.[258] There were two primary reasons for this. First, the first amount was said to have come from Esanda which, at the time, primarily lent money for car purchases and second, Calogero would have told him about Norman's contribution.[259] Subsequently, Ted gave evidence that Calogero told him he had made an offer to both Carmelo and Norman to be involved in the Darch property as he wanted 'us all to be together'.[260]
235 While I accept that Calogero offered each of his sons the opportunity to contribute to the purchase of the Darch property, for the following reasons, I do not consider that Norman has established on the balance of probabilities that he gave Calogero $4,000 in cash for the purchase of the Darch property in July 1978 or $5,000 in December 1978.
236 First, in his evidence-in-chief, Norman accepts he does not have a clear recollection of what amounts he gave to Calogero or when the payments occurred. None of the objective factual surrounding circumstances, the inherent commercial probabilities or contemporaneous documents assist Norman's recollection. The objective facts are that the contract for the purchase of the Darch property was entered into in June 1978 and that settlement occurred on 18 October 1978. Payments which are alleged to have occurred in mid July 1978 and December 1978 are not consistent with these objective facts. In relation to the contemporaneous documents, the only contemporaneous document that support's Norman's evidence that any payment was made is the handwritten note on the document dated 16 July 1978. However, the handwritten note refers to an amount of $5,000 and not $4,000. No satisfactory explanation was provided for this inconsistency. There are no contemporaneous documents which refer to or relate to the second payment.
237 Second, it is clear from Norman's evidence-in-chief that his recollection that he paid the $4,000 to Calogero is a reconstruction based on his review of the loan documentation from Esanda together with his handwritten note on the document dated 16 July 1978. In relation to the second amount of $5,000, it is clear that his recollection that he paid this amount to Calogero is also a reconstruction based on his review of his banking records.
238 Third, neither of these payments were referred to or relied upon by Norman in the caveats or statutory declarations lodged by him in July 2014 or January 2016 with respect to his interest in the Darch property (which I address below at [400] and [401]) or in his affidavit sworn in support of his claim under the Family Provision Act. The documents lodged in 2014 relied on the work that Norman did on the property as giving rise to his claimed interest in the land. The documents lodged in 2016 referred to the promissory note as being proof of his '$20,000 contribution to the purchase of land'. None of these documents refer to the payments which are now relied on. If these payments had been made, I consider it is more likely that Norman would have referred to them, even though these documents were prepared without the benefit of legal advice.
239 Fourth, in his evidence-in-chief, Norman confirmed that he witnessed the signatures of both Calogero and Ted, although he did not recollect whether this occurred on 13 June 1978 or on a different date.[261] His evidence was that prior to witnessing their signatures, he said to both of them 'Shouldn't my name be on the title' or words to that effect and that Calogero responded 'Don't worry about it, I'll look after your share' or words to that effect.[262] Norman's evidence was that there was a big argument about this at the time as he did not want to sign the document as a witness because they didn't want to put his name on the title. However, after Calogero said he would look after his share, Norman accepted what he'd been told and witnessed their signatures.[263] Ted denied this conversation took place. His evidence was that nothing was said at the time Norman witnessed the signatures.[264]
240 I do not accept Norman's evidence that this conversation occurred. The offer and acceptance is dated 13 June 1978. While Norman's evidence is that he did not recall whether it was signed on this date, the vendors have dated their signature as 14 June 1978 which is the same date that possession of the property is said to have occurred. For this reason, I find the offer and acceptance was signed on the date it bears, namely 13 June 1978. Even if I were to accept Norman's evidence about the payments said to have been made, as at 13 June 1978, Norman had not obtained the loan from Esanda or given any money to Calogero. For this reason, there was no reason for him to ask whether his name should be on the title or for Calogero to say he would look after his share.
241 Fifth, in his evidence-in-chief, Norman said he had two other discussions with Calogero about his share in the Darch property,[265] although he only gave specific evidence about one discussion. He did not specifically recall when these discussions occurred but believed they were after the Darch property was purchased.[266] In cross-examination, Norman estimated one conversation took place in about 1980.[267] His recollection was the discussion took place in either the office or the kitchen at Frape Avenue.[268] His father said to him words to the effect that his (Norman's) share was one third of the value of the block and that a figure of about $20,000 was mentioned as the value of his share in the property. He recalled that Calogero said to him in Sicilian dialect 'One third belongs to you'.[269] Norman asked how this amount had been calculated and Calogero told him that some of it was for the other work he had done for the family throughout the years. Norman understood this to be a reference to his work on the family renovation business.[270] In cross-examination, Norman's evidence was that he raised the matter with his father because his name hadn't gone on the title and he wanted to know what 'he [Calogero] had in mind'.[271] For this reason, he asked Calogero what he (Calogero) thought his (Norman's) share in the property was.[272] I do not consider this evidence is only consistent with the contention that Norman made a financial contribution to the Darch property or that it is a declaration against interest. Calogero's statement is also consistent with what was undeniably the position at that time, namely that Calogero and Maria intended to leave their properties, including the Darch property, to their sons in equal shares.
242 Sixth, Norman did not suggest in either his evidence-in-chief or cross‑examination that he told Ted or Carmelo he had paid Calogero any money towards the Darch property. In fact, in cross-examination, Norman agreed he hadn't spoken to Ted.[273] This was only raised by Norman after Calogero's death.
243 Ted, in his evidence-in-chief, denied that prior to Calogero's death Norman had ever spoken to him about any understanding or family arrangement that the Darch property was held in trust for him.[274] He also denied there had ever been a discussion about Norman's share in the Darch property being $20,000.[275] His evidence, in cross-examination, was that 'This is all brand new that just came up now in the last couple of years after my father passed on.'[276]
244 I accept and find that prior to the registration of the transfer of the Darch property to Calogero and Ted, Norman did not have any conversation with Ted during which he told Ted he had given Calogero any sum for the purchase of the Darch property. If the payments had been made as contended by Norman, it is more likely that he or Calogero would have disclosed this to Ted (and Carmelo). There was no satisfactory explanation as to why this had not been raised previously. The fact that no such conversation took place supports a conclusion that these payments were not made.
245 In cross-examination, Ted was asked about the reasons the property was initially registered in the names of him and Calogero as joint tenants. Ted's evidence was that Calogero did not have enough money to buy the Darch property himself so he 'went in to help him'.[277] Ted was asked on a number of occasions whether the reason that Maria's name was not on the title was because she was at retirement age and at or very near eligibility for the retirement age pension. Ted did not accept this was the case although ultimately he accepted this would have been 'a consideration or a thought'.[278]
246 For the following reasons, I find that at the time the Darch property was purchased:
(a) Calogero paid the entirety of the deposit and the amounts due at settlement. At that time, there was no specific agreement as to who would pay the remainder of the purchase price;
(b) it was registered in the name of Calogero and Ted as joint tenants rather than Calogero and Maria because Maria was approaching pensionable age and Calogero did not want the purchase to impact Maria's access to the pension;
(c) prior to the purchase, there was no specific discussion about the basis on which the Darch property was being purchased or what rights each of the family members would have in the Darch property;
(d) it was the common intention of Calogero, Maria and their sons that the Darch property would be purchased, developed and used as a market garden for the benefit of the whole family.
247 First, each of these matters are broadly consistent with the evidence given by each of the brothers and the objective facts, namely that Calogero wanted to develop the Darch property as a market garden, Maria was approaching pensionable age, and Calogero paid all of the sums that were due at settlement. Second, at that time, the mutual wills provided that the three brothers would share equally in the estate of their parents, which was consistent with the discussions between the members of the family or, at a minimum, the assumptions of each of them. Third, shortly prior to the settlement of the Darch property, Calogero and Maria sold a property for $25,000. On this basis, I am satisfied that Calogero had funds to pay the amount due at settlement in cash and did not need to obtain a contribution from any of his sons. Fourth, Ted did not contribute any money to the deposit or the amount due at settlement. If, as he contended, he purchased a 50% interest in the Darch property, it would be more likely that he would have contributed to the payment of these amounts. Fifth, Ted did not give any evidence as to any discussions or agreement with Calogero prior to settlement as to who was responsible for paying the balance of the instalments for the Darch property. Ted relied on the fact of his payments of the instalments which I address below.
248 While the contract provided that the Darch property was to be paid off by way of two instalment payments of $15,000, to be paid on or before 30 September 1978 and 30 September 1979, this did not occur.
249 In his evidence-in-chief, Ted said that he was 'able to persuade' the vendors to give him additional time to pay off the Darch property over a 10 year period.[279] In cross-examination, Ted accepted the agreement was varied on the basis that a higher interest rate was payable[280] and there was a legal dispute as to the amount of the final payment.[281]
251 On 30 May 1989, Barrington Partners summarised the payments that had been made, calculated the interest payable under the agreement and expressed the opinion that as at 1 June 1989, the sum of $25,100.12 remained outstanding. In or about June 1990, Ted accepted an offer from the vendors to settle the outstanding balance for the sum of $10,000.[284] I accept this amount was paid on 16 July 1990.[285]
Transfer of the Knutsford Street property by Calogero and Maria to Ted
252 It was not in dispute that Calogero and Maria purchased 27 Knutsford Street, North Perth in November 1975 or that the property was subsequently transferred to Ted in 1980. The certificate of title records the transfer to Ted was registered on 21 October 1980.[286] The transfer of land records the consideration for the sale as $30,000.[287] What was in dispute between the parties was whether Ted paid any amount to Calogero and Maria for the Knutsford Street property or whether the consideration was gifted to him.
253 Carmelo's evidence was that Calogero told him he was planning on selling the Knutsford Street Property to Ted for $30,000 and that this amount, rather than being paid to Calogero and Maria, would be paid to the vendor of the Darch property to pay off the balance due on this property.[288]
254 Norman's evidence was that he did not know whether Ted paid Calogero for this property.[289]
255 In his witness statement, Ted stated Calogero sold the Knutsford Street property to him for $30,000 and that he was gifted the consideration 'for the years of assistance I had provided to him in his business activities'.[290] In his evidence-in-chief, Ted corrected this evidence and said the offer and acceptance was for $40,000, of which $10,000 was for chattels.[291] In cross-examination, Ted accepted this was an error and that the original offer and acceptance was for a purchase price of $40,000 of which an allowance of only $2,000 was for chattels.[292] His evidence was that he 'saw the difference of 30,000 ... on the transfer and 40,000 [in the offer and acceptance] and consequently I automatically assumed' this was the difference.[293]
256 Ted then gave evidence that it was a term of the agreement that it was subject to finance, specifically a Home Building Society loan of $35,000.[294] When asked to explain the discrepancy between the consideration on the transfer of land ($30,000) and the amount in the offer and acceptance ($40,000), Ted's evidence was that:[295]
the chattels would have been the ... contributing factor for that.
ARISTEI, MR: I thought you withdrew that explanation. I may have misunderstood you? --- Well, it appears I made an error.
Another error?‑‑‑No. What I'm saying is that on the document it says 2000. That should really have been 10,000, perhaps.
257 The certificate of title records that mortgage C11150 to Home Building Society was registered on 21 October 1980.[296] The mortgage was not in evidence before me. Under cross-examination, Ted's evidence was that the amount he received from the mortgage was used to 'build, improve, create improvements' on the Darch property and then 'a gift to ... us'. He accepted he had not included this in his witness statement or responsive witness statement but explained he 'didn't think it was relevant'. [297]
258 In re-examination, Ted was asked to explain why his evidence about the mortgage differed from his witness statement. His response was:[298]
I looked around and assessed it, and then I recalled, "My God, I did pay", because I obtained a loan I have actually come across previously, but I told them all about it. And it just slipped my mind completely.
259 I accept and find that Ted obtained a loan from Home Building Society in October 1980 which was secured by mortgage registered against the title of the Knutsford Street property. However, for the following reasons, I do not accept he paid the funds he obtained from Home Building Society to Calogero and Maria for the purchase of the Knutsford Street property. First, this is consistent with Ted's pleaded case, which has been his case since the commencement of these proceedings. Second, this finding is also consistent with his evidence‑in-chief. Third, it is clear from Ted's evidence in re-examination that his evidence that he paid the monies received from Home Building Society to Calogero and Maria was based on his reconstruction of events following his observation that a mortgage was registered against the title rather than a recollection of the events that occurred at that time.
260 For the following reasons, I accept Carmelo's evidence and find that Ted agreed with Calogero that he would not pay to Calogero and Maria the agreed consideration for the Knutsford Street property but would instead use this money to pay the instalments that were then due on the purchase of the Darch property. First, this is consistent with both Carmelo's evidence and Ted's evidence-in-chief that he was gifted the Knutsford Street property. Second, the contract for the purchase of the Darch property required the sum of $30,000 to be paid after settlement. This is the amount referred to in the evidence of both Carmelo and Ted as well as and the transfer of land form for the Knutsford Street property. Third, no satisfactory explanation was given by Ted for the reduction in consideration for the Knutsford Street property from the offer and acceptance to the transfer of land form. I infer from these documents and the evidence of Carmelo and Ted that this reduction occurred to reflect the agreement that the consideration would be used to pay the instalments on the Darch property.
261 The effect of this finding is that while I accept Ted paid the remaining instalments of the Darch property from October 1979 until September 1988, I find that these payments were for the purchase of the Knutsford Street property and not the Darch property. As a consequence, I accept and find that the entirety of the purchase price of the Darch property was paid by or on behalf of Calogero.
262 It is not in dispute that at the time of its acquisition, the Darch property was a bush block. After its acquisition, approximately one third of the land was cleared, a bore sunk, reticulation installed, and planting of fruit and vegetables completed. What was in dispute between the parties was the extent of the work done by each of the brothers (both in establishing the market garden and afterwards), whether they were paid for the work they did and why they did the work.
263 Carmelo's evidence was that whenever he was in Perth, he worked on the Darch property. This work included the establishment of fire breaks, laying down reticulation over two and a half acres, planting vines and fruit trees, and harvesting fruit and vegetables for market.[299] In addition, he attested that, at his own cost, he built the storage shed (where the tractors and other equipment were stored), maintained the double brick garage and replaced tiles when they were damaged by a storm.[300]
264 Ted denied that Carmelo had built the shed by himself and said the shed was built by him (Ted) and Carmelo from 'old/rust tin sheets' given to Ted by the neighbour. He also denied that Carmelo did any repairs on the garage.[301] In cross-examination, Ted accepted he did not know what work Carmelo did on the Darch property and agreed that on at least one occasion, Carmelo helped establish the firebreaks around the perimeter of the property.[302]
265 Norman also gave evidence as to the work he did on the Darch property after its purchase. This work included removing trees, dead logs, plants and debris, putting in firebreaks, and planting trees and vegetables. On his estimate, he worked an average of two to four hours each week on the block from when it was purchased until Calogero's death in July 2013. In cross-examination, Norman accepted that professionals were paid by Calogero and Maria to clear 'a couple of acres', to sink a bore for water and install the reticulation but maintained he assisted with the reticulation by digging trenches.[303]
266 Ted's evidence-in-chief was that the costs of all improvements on the Darch property were paid by Calogero and him and that neither Carmelo nor Norman contributed to these costs.[304] The improvements included a large double brick and tile building, a bore, pump, reticulation, water storage tanks, sheds, a tractor, and various tools.[305] In cross-examination, Ted said he used the money from the mortgage he obtained on the purchase of the Knutsford property for these improvements.[306] I do not accept this evidence. Settlement of the transfer of the Knutsford Street property did not occur until October 1980. For this reason, Ted could not have received these funds until that date. The financial statements in evidence before me of the C&T Marchese partnership show that many of these improvements were undertaken prior to this time. Specifically, installation of the bore, reticulation and the shed occurred in July 1979.[307] No major improvements were done to the Darch property between October 1980 and June 1983. For these reasons, Ted's oral evidence is not supported by the contemporaneous documents and I do not accept it.
267 Ted's evidence was that the work on the Darch property was done by him and Calogero. After settlement, work commenced to clear the block, sink bores, lay reticulation and build sheds. Within two years, one third of the block was cleared and vegetables were planted.[308] In his evidence-in-chief, Ted said Calogero and Maria worked at the Darch property full time and that he assisted when he could to attend to the sub-contractors, bookwork and tax.[309]
268 In his evidence-in-chief, Ted disputed that either Carmelo or Norman had made any significant contribution to the work on or value of the Darch property. His evidence was that Carmelo was a resident of Queensland and the only interest Norman showed was to 'help himself to produce' and to write invoices for work carried out.[310] Ted's evidence was the amount of work Norman did 'was so minuscule you wouldn't count it on the back of your hand'.[311] In cross-examination, Ted accepted he was not as involved in the work on the Darch property as Calogero and Maria and conceded Norman and Carmelo 'probably did help out a little bit, but in a small capacity'.[312] Ted said he 'never saw them there hardly ever' and maintained he would have been told by Maria and Calogero if they did work as he 'lived there under the same roof'.[313] It was not clear what timeframe this answer was given in response to. In this regard, I note that Ted is married, has an adult son and did not live at the Frape Avenue property with his parents prior to their death. There was no evidence as to when Ted left the family home.
269 I accept the evidence of Carmelo and Norman that each of them assisted Calogero and Maria with the work at the Darch property required to establish and operate the market garden, although Carmelo to a lesser extent. At the time the Darch property was purchased, Carmelo was living in Queensland and did not return to Perth to live until 1981. By that time, the market garden had been established. For that reason, I accept and find that when Carmelo came to Perth between 1978 and 1980, his family stayed with Calogero and Maria and during this time, he assisted Calogero and Maria with the work that needed to be undertaken at the Darch property. In relation to Norman, I accept that he assisted Calogero and Maria at the Darch property to establish the market garden.
270 This evidence is consistent with Ted's concession under cross‑examination that they 'probably did help a bit'. Ted's evidence as to why he rejected the work done by his brothers was not persuasive. His evidence was essentially that he had not seen his brothers at the Darch property and his parents had not told him they did any work. It is clear from Ted's evidence that between 1978 and 1980, he was working full-time as a real estate agent. Ted did not suggest that he was at the Darch property on a full-time basis. For this reason, Carmelo and Norman could have attended the Darch property without him knowing.
271 The evidence of both Carmelo and Norman was that after vegetables were planted on the block, they were sold at markets in Wellington Street. Carmelo gave evidence that he assisted his father by driving him to the markets and believed Norman and Ted did this as well.[314]
272 Norman also gave evidence that he assisted with picking fruit and vegetables at the Darch property as well as general maintenance, including weeding, cutting the grass, fixing broken windows and doors on the shed, setting up vines, fixing the sprinklers, helping to build the chicken shed and getting fertiliser.[315] He assisted Calogero by packing the fruit and vegetables to take to the markets (including sorting the fruit and vegetables), loading cartons on to the family's ute and going with him to the markets (initially the Wellington Street markets and then the Canning Vale markets) on occasions.[316] His evidence was that he would often go to the Darch property to help out - either voluntarily or in response to a request from Calogero.[317]
273 In cross-examination, Ted accepted produce from the Darch property was sold at the Wellington Street and Canning Vale markets but said he 'never saw' Norman or Carmelo assist Calogero in delivering fruit and vegetables from the Darch property to the markets.[318]
274 The sale of the fruit and vegetables from the Darch property was formally conducted as a partnership. The name of the partnership was 'C & T Marchese', with the partners being Calogero and Ted.[319] It was not in dispute that there was no written partnership agreement. Each financial year, the partnership filed income tax returns. The first tax return was lodged in the financial year ending 30 June 1980. In the partnership return for the financial year ending 30 June 1983, Ted made handwritten annotations on the partnership return to strike through Calogero as one of the partners and insert Carmelo.[320] Ted's evidence was that he made these annotations after the event as he realised that Carmelo now owned the property and not Calogero and that it was done for internal accounting purposes.[321] At that time, Calogero was running the market garden and so 'it was only right that the profits and the expenses were attributed to my father, not to Carmelo'.[322]
275 The only independent evidence that was given in relation to the Darch property was the evidence of Andrea Hosie. Mrs Hosie lived at the neighbouring property to the Darch property from 2003 until 2015. The house on her property was about 5 metres from the working shed and parking area on the Darch property. Her evidence was that Calogero and Maria would visit the Darch property most days, Ted, Yvonne and their son Jonathan would regularly help, she only saw Norman 'a handful of times' and that she met Carmelo when he visited from Brisbane 'on occasion'.[323] After Maria's death, she saw Ted and Calogero regularly at the Darch property and usually spoke to them when they visited. In cross-examination, Mrs Hosie accepted she had no knowledge of what had happened at the Darch property prior to 2003. She also accepted that the Darch property was a 'very, very big piece of land' and that there were very few houses in the neighbourhood when she moved in.[324] Her evidence was that if Ted came to the Darch property, he would either drive past her house to enter their block or would park in front of her house. On occasions, she saw them and otherwise, would hear them.[325] She accepted that if someone entered the property from Landsdale Road, she wouldn't necessarily see them unless she was driving past and that she wasn't always at home.[326]
276 For the following reasons, I accept the evidence of Norman and Carmelo as to the assistance they gave Calogero in the market garden. First, from 1981 until 1987, Carmelo and his family primarily lived in Perth. For this reason, Carmelo's evidence of the assistance he provided was consistent with his family being in Perth. In particular, at various stages over this time, Carmelo and his family lived with Calogero and Maria at the Frape Avenue home. I consider it is more likely than not that while he was there, he assisted his parents in the manner he describes. Second, Mrs Hosie accepted she could not give evidence of what occurred prior to 2003. Given the market garden at the Darch property was established in 1979 or 1980, there is a period of 23 years over which Mrs Hosie cannot give evidence. Mrs Hosie's evidence, which I accept, is consistent with Carmelo's evidence that he was not living in Perth after 2000 as well as the evidence that well prior to Maria's death in 2009, the market garden was wound down due to the advancing years of Maria and Calogero and Maria's declining health.[327] Third, Ted's evidence that produce was sold at the Wellington Street and Canning Vale markets is consistent with the evidence of Carmelo and Norman. Ted's evidence that he assisted Calogero in delivering fruit and vegetables is also consistent with Carmelo's evidence.
Were Carmelo and Norman paid for the work they did?
277 Both Carmelo and Norman gave evidence that they were not paid for the work they did at the Darch property.
278 In answer to a question in cross-examination as to whether he was paid for the work, Carmelo responded 'I didn't accept payment. I didn't need vegetables. I had a good job'.[328]
279 On occasions, Calogero gave Norman money for petrol.[329] Norman accepted that over the years he had written out a few invoices to Calogero for the work he had done. He says he did this because Calogero asked him to issue the invoices. Norman recalled asking Ted 'a few times' whether he (Norman) was going to get paid. He was told on one occasion by Ted he would not be paid because Calogero had said not to pay him.[330] On another occasion, Norman says Ted told him the money (for the work that had been invoiced) would be put towards the rates for the Darch property.[331] Norman estimated the cost of materials and equipment that he used for the Darch property over this time was approximately $2,000 - $3,000[332] and that he had never been paid for any of his work on the block or an amount to reimburse him for the costs he incurred. Under cross-examination by counsel for Ted, Norman accepted he issued an invoice to the Public Trustee for the work he had done on 'the house'. His evidence was that he did not receive payment for this invoice but accepted he subsequently settled his claims for $75,000.[333]
280 I accept that neither Carmelo nor Norman were paid for the work they did on the Darch property. The evidence of Carmelo and Norman is consistent with each other. It is also consistent with the type of work they undertook for their parents in renovating homes over the years without payment. Given their respective occupations, I consider it is more likely than not that each would have assisted their parents in undertaking manual labour at the Darch property.
281 Carmelo's evidence-in-chief was that he did all of this 'because [his] father had always told me that the purchase of any properties would be for the benefit of all members of the family'.[334] In contrast, Ted said that to the extent any work was done, it was because Carmelo and his family received free board and lodging from Calogero and Maria when they came to Western Australia to visit.[335]
282 Norman's evidence-in-chief was that he recalled his father saying 'The land would be bought on behalf of the family for all to work on'[336] and asking if he wanted to 'help out' to buy the block or 'put some money into this'.[337] Norman believed it was another of his family's projects.[338] He would sometimes go out to the block on his own to do work there, though it was usually at his father's request.[339] Norman evidence was that he was told by his father words to the effect that 'one third belongs to you'.[340]
283 I am satisfied there were at least two reasons that both Carmelo and Norman did work at the Darch property. First, both were dutiful sons who provided assistance to their parents when asked. This is consistent with the values of a traditional European family. Second, both Carmelo and Norman believed the Darch property had been purchased for the benefit of the entire family and, consistent with what they had been told by their parents, would ultimately be shared between the brothers on their parents' death.
Transfer of Calogero's legal interest in the Darch Property to Carmelo
284 Carmelo's evidence-in-chief was that in 1981 and 1982, he returned with his family to live in Perth. While he was living in Perth, Calogero repeatedly asked him to return to Perth on a permanent basis and become more involved in the family's affairs. On a date which he does not recall, the entire family was present at Calogero and Maria's home in Frape Avenue. While they were all there, a meeting was held in the office which was conducted in both English and Italian as Maria was not fluent in English. Carmelo's evidence-in-chief was that Maria was present at the meeting, although in his responsive statement he agreed she was not in the meeting but was at home when the meeting occurred.[341]
285 Specifically, in his witness statement, Carmelo's evidence was that:[342]
One of the first things said at the meeting was by my father who said words in Italian to the effect that his interest in the [Darch] Property was to be transferred out of his name into my name. As was usually the case my father stated bluntly that he was in charge and he could determine what should happen with the [Darch] Property which, he said, was for the benefit of the family.
My father continued by saying words to the effect that I was a responsible person who he had worked with for many years and he felt comfortable working with me.
My brother Norman then enquired what was to happen to him to which my father replied that he had problems with his wife, and it was for this reason that my father was not prepared to put any property in Norman's name.
It was at this stage that my mother complained about Norman being left out of the arrangements to which my father responded that there was no need to worry about Norman because, as a member of the family, he would be looked after. It was only when my mother insisted that Norman should have something now that my father stated that Norman should be given $20,000.
Because my mother was obviously distressed by what was happening, I suggested that an agreement to pay Norman $20,000 should be prepared and my father then instructed me to type up a document to that effect which I then did. The document which was headed 'Promissory Note' was then signed by Ted, my father and myself.
286 In cross-examination, Carmelo agreed the reason Calogero gave for wanting to transfer his interest in the Darch property at that stage was he was getting close to retirement age and did not want to have his name on the title.[343] He also agreed that while Norman was at the house, he was not present at the meeting when the transfer of Calogero's interest was discussed. He agreed Calogero called him and Ted into his office and Norman objected to being excluded as did Maria on Norman's behalf.[344]
287 Under cross-examination from Ted's counsel, Carmelo gave conflicting evidence about what was discussed in relation to Norman as well as whether there was one meeting or more than one meeting and who was present at the meeting or meetings.[345] Initially, his evidence was that he understood from Calogero that Norman would be left the Frape Avenue house, although he could not be specific about what Calogero said to create that impression. Carmelo also said that he and Ted had the discretion whether to give Norman any portion of the Darch property.[346] Subsequently, he agreed there was no specific discussion about what Norman would get although his father mentioned there were other assets which Norman would share in.[347] Carmelo agreed the fundamental change to the previous understanding he had was that Norman was to receive no interest in the Darch property but would receive a sum of $20,000.[348]
288 Under cross-examination from Norman's counsel, Carmelo confirmed Calogero said that he was worried about Norman's name being on the title as it might then be able to be 'taken' by Norman's wife.[349] Carmelo agreed that at this time, Norman was married or about to be married to Jackie. In cross-examination from Ted's counsel, Carmelo confirmed that at the time he wasn't aware Norman was having problems with his wife.
289 In relation to the question as to why Carmelo was claiming a 50% share in the Darch property, his evidence was:[350]
Well, why - tells us why you're claiming 50 per cent. Remember, your father never said the percentages. So why are you claiming 50 per cent?‑‑‑Ted was holding half.
We know that‑‑‑I was holding the other half for the family with Ted.
Tell us why you're claiming 50 per cent?‑‑‑That is 50 per cent.
No. No. That's - that's the registered interest on title. We're now talking about some form of trust or representational promise that your father made?‑‑‑No, no promise.
Okay. So you're then saying you're claiming 50 per cent because at one stage you were registered on title as 50 per cent?‑‑‑Yes.
That's the long and the short of it?‑‑‑Because he didn't make a will. This was done outside the will. The will he made was for the other stuff - the other properties, etcetera.
290 Ted's evidence was that at the end of 1981, in October or November 1981,[351] Carmelo 'was visiting Perth' and staying at the Frape Avenue house.[352] During this visit, Calogero rang him and asked him to come over to 'talk with him and Carmelo'. Ted says the meeting took place in Calogero's office between Calogero, Carmelo and himself. Maria was at home and in the kitchen.[353] Calogero told him that Carmelo wanted to return to live in Perth and to work full time on the Darch property with him and Maria. Calogero said he was selling his interest in the Darch property to Carmelo on the basis of Carmelo's promise to come back to Perth with his partner and child to live in Perth permanently. Carmelo confirmed this. Ted was asked to prepare the necessary paperwork.[354] Calogero said he wanted to have the right to work on the Darch property for as long as he wanted.[355] Ted denied that during the time Carmelo was the registered proprietor of a half share of the Darch property, Carmelo told him he was holding the interest for or on behalf of the family.[356]
291 Under cross-examination by Carmelo's counsel, Ted agreed he couldn't remember the exact words used during the discussion and whether Calogero said 'transfer' or 'sold' with respect to the interest in the Darch property.[357] Ted's evidence was that Calogero asked him to come to the Frape Avenue house to have a talk and told him what he wanted to do.[358] He could not recall whether the offer and acceptance was signed then.[359] Ted denied Norman was at home when this occurred.[360]
292 A document prepared and typed by Carmelo and signed by each of Ted, Carmelo and Calogero was tendered in evidence. This document is in the following terms:[361]
It is here by [sic] agreed that THEODORE TINDARO MARCHESE, CARMELO MARCHESE will pay to NUNZIO MARCHESE the sum of TWENTY THOUSAND DOLLARS ($20,000) when MR CALOGERO MARCHESE relinquish his interest in the property LOT 43, DIAGRAM 19427, VOLUME 1232, FOLIO 490 at Landsdale Road, Wanneroo.
It is further agreed that he is in complete control on this property until his death or he dissolves this agreement.
293 Carmelo's evidence was that Calogero asked him to draw this document up and it was based on what Calogero told him. He agreed the reference to 'he' in the second paragraph was a reference to Calogero.[362] Carmelo agreed that when this document was first prepared, it was undated and that he retained the document.[363] At some later date, Carmelo added the numbers '5-7-1982' to the document.[364] Carmelo did not recall when this was done. A second version of the document containing the date '18-11-1978' was also tendered in evidence in the 2016 proceedings.[365] This version was also annexed to the statutory declaration of Norman in support of the caveat he lodged with Landgate.[366]
294 It was put to Carmelo in cross-examination that this document contained some 'legalese' and he was asked how this document was created. Carmelo's evidence was that it was drafted at the meeting at Frape Avenue collectively by Ted, him and Calogero and he obtained the details of the description of the land by copying them from another document.[367]
295 In cross-examination, Carmelo agreed that Norman was not provided with a copy of this document until after Calogero's death.[368] Carmelo could not recall which one he provided to Norman.[369] His evidence was 'the deal was done in 1982' and could not explain why there was a date of November 1978 on one copy.[370]
296 Ted accepted he signed this document but said he had not seen it again until after Calogero's death.[371] Ted's evidence was that at the meeting with him, Calogero and Carmelo, Carmelo took out a piece of paper titled 'promissory note' and asked that Calogero and Ted sign it which they did. At the time, the document was undated. He says he had no prior notice or knowledge of the document and that it was prepared by Carmelo.[372] In cross-examination, Ted's evidence was he wasn't 'aware of exactly the mechanics of that document' and that '[i]t was presented to [him] by Carmelo for signature when my father approved'. His evidence was that he was not privy to the document[373] but accepted the document was signed at the meeting at Frape Avenue.[374] Ted agreed he has never paid Norman any part of this amount.[375] Ted could not recall asking any questions about the document because it was what Calogero wanted 'and that was fine with [him]'.[376] In relation to the last paragraph, that Calogero remained in complete control of the Darch property, Ted's evidence initially was that 'I agreed with that. It's what my father wanted and that was fine with me'. His evidence then was that it was 'both [our] property' and, subsequently, that this was a reference to the market garden operations on the Darch property and not the Darch property.[377]
297 In re-examination, Ted explained that he understood the purpose of the promissory note was to confirm Norman was not to get any share of the land, because Calogero's interest was being sold to Carmelo and '[t]hat would keep everybody happy'.[378]
298 Norman's evidence was that he was not aware of the existence of the promissory note until a number of years afterwards.[379] He recalled discussions between Calogero, Ted and Carmelo about placing Carmelo's name on the title instead of Calogero. He recalled several meetings in the office at the Frape Avenue house although he believed one or two may have taken place in the kitchen.[380] In his evidence‑in‑chief, Norman recalled he said to them (Calogero, Ted and Carmelo) words to the effect that he was upset that Carmelo's name was being put on the title when all of their names (ie Ted, Carmelo and Norman) should be on the title and that some heated discussions followed.[381] In response, Calogero said words the effect 'It has nothing to do with you' or 'It's none of your business, this doesn't concern you' and either at that time or at another point during the discussions said he (Calogero) was looking after his (Norman's) share.[382] Norman's evidence was that he was shut out of the office while the discussions continued although he overheard his father saying 'The less [Norman] knows about these things, the better'.[383] Norman's evidence was that he:[384]
did not argue too much with my father as I knew he kept two firearms (which were a rifle and a shot gun) in the house somewhere. My father had a bad temper and I was afraid he would use them.
299 Norman's evidence was that neither his father nor his brothers discussed the promissory note with him and that he would not have agreed to its contents. This was because his father had previously told him he would get a one third share of the Darch property.[385]
300 It was not in dispute that Ted prepared the transfer of land documents and attended to the settlement.[386] The registration of the transfer of the Darch property from Calogero and Ted as joint tenants to Carmelo and Ted as joint tenants occurred on 22 July 1982.[387] The formal transfer of land document is dated 7 November 1981 and records the consideration for the transfer of the land from Calogero and Ted to Ted and Carmelo as $52,000.[388] Carmelo could not explain why there was a delay between the signing of the formal transfer of land and the registration of the transfer. Ted's evidence was that the Valuer-General had to value the property because this was a transfer between family members. This, together with the Christmas period, caused the delay although he acknowledged this was 'hypothesising'.[389]
301 Initially, Carmelo's evidence in cross-examination was that the transfer of land document was prepared by Ted, not at the time of the meeting in the office at Frape Avenue, but subsequently.[390] He recalled a document was prepared and signed at the meeting but that it was not this document. Subsequently, he agreed the transfer of land document was signed and witnessed at this meeting by Gail Fitzpatrick (who subsequently became Carmelo's wife).[391] His evidence was there was never a discussion that he should pay for the transfer of this interest to him and he did not do so.
302 For the reasons that follow, I make the following findings of fact:
(a) in late 1981, Carmelo and his family were living in Perth;
(b) in about October 1981, a discussion took place at the Frape Avenue house. All members of the Marchese family were present. An initial discussion occurred between all members of the family. Calogero informed the family he was transferring the Darch property out of his name into Carmelo's. Both Maria and Norman complained about Norman being left out of this arrangement, to which Calogero responded that Norman, as a member of the family, would be looked after;
(c) at this point, Calogero, Carmelo and Ted went to the study and had a more detailed discussion. Norman was excluded from this discussion. Calogero said he wanted to transfer his interest in the Darch property as he was getting close to retirement age. He told them he wanted to transfer his interest to Carmelo as he was not prepared to put any property in Norman's name. Instead, Norman would receive $20,000 from Ted and Carmelo;
(d) there was no discussion of any sale of the interest in the Darch property or that any amount that would be paid or payable by Carmelo to Calogero. It was an intra-family transfer;
(e) Carmelo suggested a document be prepared to reflect this and, with the assistance of Ted, typed up the promissory note which was then signed by Calogero, Ted and Carmelo;
(f) Ted prepared the transfer of land documents which were signed on or about the date of the discussion;
(g) registration of the transfer occurred in July 1982.
303 First, Carmelo's evidence is more consistent with both the objective facts and Norman's evidence. Ted's version of events is inconsistent with both the objective facts and the evidence of his brothers. For example, Ted's evidence was that Carmelo was visiting Perth and not living here at the time of the discussion. This is inconsistent with the transfer of land which was witnessed by Carmelo's partner, Gail Fitzpatrick and records her address as an address in Nollamarra, Perth. This objective evidence is consistent with Carmelo's evidence that he and his family were living in Perth and the evidence that Carmelo and Gail's daughter was born in March 1982 in Perth, approximately five months later.
304 Second, Ted's evidence of the explanation given by Calogero, namely that he was selling his interest in the Darch property to Carmelo on the basis that Carmelo would come back to Perth permanently, is inconsistent with the objective fact that Carmelo and his family were living in Perth at this time.
305 Third, the evidence of both Carmelo and Norman is broadly consistent with each other in relation to the initial discussion, namely that Calogero raised in the presence of the entire family his intention to transfer his interest to Carmelo, that Maria and Norman protested about Norman's exclusion and that they were then excluded from the subsequent conversation.
306 Fourth, Carmelo's evidence of the discussion between him, Calogero and Ted is consistent with the contents of the promissory note. Carmelo's evidence of how the promissory note was drafted, namely that Ted supplied the relevant title details and assisted with its drafting, is consistent with the conduct of the family members over the years whereby Ted would prepare all of the relevant documents.
307 Fifth, Ted did not have a satisfactory explanation as to why he signed the promissory note. His explanation that he signed the document without being aware of its mechanics is not consistent with his background as a commercial real estate agent who prepared documents or as an experienced businessman. I do not accept that he only signed it after Calogero approved its contents. Consistent with my earlier findings as to the limitations of Calogero's written English, I consider it is more likely that Ted and Carmelo prepared the document and discussed it with Calogero before they all signed it.
Transfer of Carmelo's interest in the Darch property to Ted
308 Between 1982 and 1993, there is no evidence of any discussions between the brothers or their parents as to the ownership of the Darch property or whose names were or should be on the title.
309 In 1986, Carmelo and his family moved in with Calogero and Maria at Frape Avenue, following the sale of his family home. Carmelo's evidence was this was a mistake as Calogero and his wife Gail did not have a good relationship.[392] In 1987, Carmelo's wife Gail moved back to Queensland with their children and 'gave [him] an ultimatum'.[393] As a result, Carmelo moved back to Queensland to be with his family.
310 In 1992 or 1993, Carmelo's marriage started to break down. In September or October 1993, he travelled back to Perth with the intention of informing his parents of this and stayed with his parents at Frape Avenue. Within a few days of his arrival, Carmelo told his parents he might be getting divorced. During this trip, he also told his brothers he might be getting divorced.
311 Carmelo's evidence-in-chief was that:[394]
When he heard this, my father immediately became alarmed and upset and asked what was going to happen to the [Darch] Property as my name was on the title and a marriage breakdown might compromise the [Darch] Property as far as the family was concerned. I then said to my father that I would return the [Darch] Property to him. My father immediately said that that was not possible because his circumstances had changed.
My father then suggested that my interest in the [Darch] Property be transferred to Ted for safekeeping and that, at a later stage, when it was safe to do so, the [Darch] Property would be retransferred back to me.
Ted, who had been present during this discussion, agreed to the proposal. It was then agreed that, given the circumstances, I would pay the stamp duty.
312 Under cross-examination, Carmelo's evidence was that his initial discussion was with his father and that after Calogero suggested his interest be transferred to Ted, 'we approached Ted, and Ted was, "sure"'.[395] He agreed Calogero 'mainly' raised this with Ted and Ted was happy for this to occur.[396] He also agreed that Calogero did not want to put the interest back in his name because he was receiving the aged care pension and did not want this reduced or put at risk.[397] Under cross-examination from counsel for Ted, Carmelo's evidence was that Maria was also at this meeting.[398]
313 In re-examination, Carmelo again said that Ted was present at the meeting with his father. His evidence was:[399]
[LENHOFF, MR:] Was Ted present when that discussion took place?‑‑‑Yes.
Now, what was his response to this proposition?‑‑‑Yes. That's okay with me to transfer and put the property in his name and to - was asked to put it - turn it back when the risk, if any - to return the property back to him.
314 Carmelo's evidence was that he believed he would eventually inherit the half-interest in the Darch property but that this was up to his father, Calogero, who was the 'true owner'.[400]
315 Carmelo denied that he offered to sell his half-interest in the Darch property to Ted for $80,000 subject to a valuation determined by the Valuer-General.[401]
316 Ted's evidence-in-chief was that sometime in 1992 or 1993, Calogero told him Carmelo wanted to sell his half interest in the Darch property and asked whether he was interested in purchasing it. Ted recalls he then spoke to Carmelo who confirmed he intended to sell his interest. Ted told Carmelo that he would be prepared to buy him out and that he considered $80,000 was a fair price. In response, Carmelo said he thought it could be worth more. As a result, Ted says he agreed that once stamp duty had been assessed by State Revenue, he would pay to him the valuation sum as assessed if this was greater than the initial amount he had offered.[402] Ted says Carmelo agreed to this. Ted denies he ever met with Carmelo to discuss the sale of his interest in the Darch property.
317 In cross-examination, Ted accepted he was aware Carmelo was experiencing marital problems at about this time[403] and that there were discussions between Calogero and Carmelo about a concern that Carmelo's wife may try to claim a share in the Darch property.[404] Ted accepted Carmelo was transferring his interest to make sure the Darch property would not be part of Carmelo's property settlement with his wife.[405] Ted's evidence was that he was approached by his father, but denied there was any meeting at the Frape Avenue home.[406] Subsequently, Ted, in answer to a question as to how he became aware of the proposal to transfer the interest to him said:[407]
My father talked - mentioned it, because I was interested in buying his share, and Carmelo agreed and then we sent - I prepared the documents and sent them off.
318 Ted, in denying there was any meeting, said Calogero mentioned it to him and he then spoke to Carmelo. He believed this was all done by phone. His recollection was that Calogero told him 'Carmelo wants to sell his property to you'.[408]
319 It was not in dispute that Ted, who was, at the time, a real estate agent, prepared the offer and acceptance and the transfer of land documents.[409] This included a contract for sale dated 26 October 1993[410] and a transfer of land document dated 24 November 1993.[411] The consideration for the transfer is different in each of these documents. In the contract for sale, the consideration is noted as $80,000 whereas in the transfer of land document, it is $110,000. Carmelo could not explain or recall why this was the case.[412]
320 Carmelo's evidence-in-chief was that at a date he could not recall, Ted told him that a sum of $2,225 was required for stamp duty on the transfer and that he immediately paid this amount to Ted.[413] Under cross-examination, Carmelo accepted Ted told him this amount was based on a value of $110,000.[414] Stamp duty of $2,225 was paid on 24 November 1993 and a receipt for this amount issued to Ted.[415] Ted accepted that Carmelo gave him this money to pay the stamp duty.[416] He also accepted that it was usual for the purchaser of property to pay the stamp duty. His explanation for this was that Carmelo paid the stamp duty 'as part of negotiations overall'. When asked about the negotiations, Ted responded:[417]
Well, the negotiations were that he still owed my father $52,000, which he never paid for it. Plus, all other outgoings on the property my father paid for and myself.
I offered $80,000. So the amount that I thought was reasonable was $80,000. But, however, he wasn't happy with that. He wanted more. I said, 'Okay. You pay the stamp duty, etcetera, and help out towards the costs and we will give you the valuation figure ‑ ‑ ‑ that comes in from the Valuer-General'.
322 When it was put to Ted that he had given different reasons as to why Carmelo paid the stamp duty, he denied making it up and said that '[I]t was so long ago that I can't recall the exact reason'.[420]
323 A copy of the cheque payable to Carmelo from Ted for $110,000 and dated 24 November 1993 was tendered in evidence.[421] Carmelo's evidence-in-chief was that he was never given this cheque and was not aware of its existence until the copy was shown to him by his former solicitor in about 2017.[422] He said it was never intended that Ted pay him $110,000 because 'he was never meant to become the sole legal owner of the [Darch] Property when my interest was transferred to him.'[423]
324 In his evidence-in-chief, Ted said that when Carmelo came to Perth on a visit, he met with Carmelo and gave him a personal cheque. Ted said this would have been about the date of the cheque which was 24 November 1993 and that this occurred at Frape Avenue. His evidence was that no-one else was there when this happened.[424] Carmelo did not want a bank cheque and accepted the personal cheque, which he then kept (and did not bank). Carmelo told him he was having 'domestic or separation issues'. Ted told Carmelo to give him notice before depositing the cheque so he could ensure it would be honoured.[425] Ted said that on several occasions when he saw Carmelo on his visits to Perth, he asked Carmleo when he intended to give notice for payment and that Carmelo told him the value of the land had increased and he wanted either half the land back or $500,000 which Ted did not agree to.[426] Ted accepted that no amount was ever debited from his bank accounts.[427]
325 Under cross-examination from counsel for Carmelo, Ted was asked about [16(c)] of his defence which pleads that the valuation from the State Revenue department was $110,000 for the whole of the Darch property and not for Carmelo's half interest. Ted's evidence initially was that this was a mistake.[428] Under further cross-examination, Ted said the valuation for the whole of the land was $220,000 and that Carmelo 'owed $52,000 [to Calogero]. If you double that, that's 104'.[429] He then gave evidence that Carmelo owed Calogero $52,000, that this should have been deducted from the $110,000 and that Carmelo should only have been paid $58,000, with the intention that he (Ted) was going to pay the outstanding $52,000 to Calogero.[430]
326 Norman was not present during any discussions about this transfer and, in cross-examination, agreed he was not aware of this transaction until much later.[431] Norman recalled a discussion in the kitchen of the Frape Avenue home at about this time, where Calogero said to him words to the effect 'That's why I didn't put your name on the title ... because Jackie [Norman's ex-wife] would have claimed your share in the property'. He recalled that this comment was made during discussions about a possible claim by Carmelo's wife, Gail, against the property.[432] In his responsive witness statement, Norman acknowledged that Calogero had said in his presence on one or two occasions that Carmelo owned a 'half-share' in the Darch property. His evidence was that Calogero did not consider Norman to be as 'smart' as Carmelo or Ted and that he might allow a third party to take his interest in the Darch property if he was named on the title.[433]
327 Subsequently, in the early 1990s, Carmelo told his friend Darryl McKie he had been removed temporarily from the title of the Darch property to 'shelter' or quarantine it during his separation from his wife so she could not make a claim on it.[434]
328 For the reasons that follow, I accept Carmelo's evidence as to the transfer of the Darch property from Carmelo and Ted as joint tenants to Ted as sole registered proprietor and make the following findings of fact:
(a) in or about 1993, Carmelo travelled to Perth from Brisbane to inform his parents that his marriage was breaking down;
(b) when Carmelo told Calogero of his marriage problems, Calogero was concerned that Carmelo's wife may make a claim on the Darch property as part of any divorce settlement;
(c) Calogero had retired and was in receipt of a pension. For this reason, Calogero did not want to have any legal interest transferred back to him and said it should be transferred to Ted;
(d) Calogero called Ted who came to the Frape Avenue house where a discussion took place between Calogero, Ted and Carmelo. During this conversation, Ted was told by either Calogero or Carmelo that Carmelo was having marriage difficulties and it was necessary for Carmelo to transfer the interest in the Darch property out of his name to Ted;
(e) Ted agreed to the transfer on the basis that Carmelo paid the stamp duty and he was not out of pocket;
(f) following this conversation, Ted prepared the transfer of land form to transfer the Darch property from Carmelo and Ted as joint tenants to Ted as sole registered proprietor, had the Darch property valued, received the money to pay the stamp duty from Carmelo and paid the stamp duty on the transfer.
329 I do not accept that Ted gave Carmelo a cheque for $110,000 or he has ever tendered any payment of this amount or paid Carmelo any amount for Carmelo's legal interest in the Darch property.
330 In my view, Carmelo's evidence is more consistent with the following objective facts. First, from about 1992, Carmelo was having marriage difficulties and subsequently separated from his wife. Second, Calogero considered and treated the Darch property as his and Maria's property and did not want it to be at risk from a claim by Carmelo's wife. Third, at this time, Calogero was in receipt of an aged pension. If he became a legal owner of the Darch property, it was possible this could impact on his pension. Fourth, Carmelo paid the stamp duty on the transaction. Without agreement to the contrary, stamp duty is paid by the purchaser and not the seller of property. Ted agreed it was most unusual for stamp duty to be paid by a seller. On the basis of these objective facts, the inherent commercial probability of the transaction was that it was not a sale of any interest in the Darch property to Ted but a transfer to attempt to prevent any claim being made by Carmelo's wife in any divorce proceedings.
331 It was not in dispute that neither Carmelo nor Norman have contributed to the payment of rates and taxes for the Darch property.[435] Carmelo's evidence was that Ted asked him on a number of occasions about paying 'a share' but that Ted had paid these amounts. He was not sure whether the money came from Ted's accounts or from the family's accounts.[436] The evidence of Michael Marchese (Carmelo's son) was that he heard Ted complaining about paying the rates and taxes for the Darch property on a number of occasions.[437]
332 Norman's evidence was that he recalled there were a couple of discussions at the Darch property about the payment of rates and taxes and that Ted suggested he and Carmelo contribute to the rates. Norman says Calogero said to Ted 'don't worry, we'll pay for it'. He understood this to mean that Calogero and Maria would pay the rates and taxes on behalf of him and Carmelo.[438] In his responsive witness statement, Norman gave evidence that Ted raised the question of contribution to the rates and taxes 'a few years' after the purchase of the Darch property and that Calogero said he would pay half the rates and taxes on behalf of the family.[439] It was not clear from Norman's evidence whether this was the same or a different conversation. In his responsive statement, Norman also recalled offering to pay Ted his share of the costs for the property on several occasions and that he said to Ted on one occasion he would pay his share if Ted put his (Norman's) name on the title.[440] His evidence was that Ted would avoid responding and on one occasion told him that:[441]
he (Ted) would 'hold' my interest until after the [Darch] property had been sub-divided, and then us brothers could share in the proceeds of sale.
333 Ted estimated his holding costs of the Darch property have been 'in excess of $500,000', comprising land tax, water, electricity and rates.[442] Ted's evidence is that neither Carmelo nor Noman ever offered to assist or pay any of these costs and that he had never asked them 'as at all times I considered it my sole property after 1993, sale of Carmelo's title interest to myself'.[443] Ted says that if he considered they had any interest in the Darch property, he would have insisted they pay their share of the outgoings.[444]
334 In cross-examination, Ted agreed there were discussions about rates and taxes and that his view was that Carmelo should be contributing as he was a half-owner although 'he never did'. Ted accepted that 'where possible' Calogero paid half the rates and taxes on the Darch property but that he (Ted) 'paid more than he (Calogero) did'.[445] He subsequently gave evidence that his father contributed to the rates and taxes until about 1993.[446]
335 After his marriage breakdown and prior to the death of his parents, Carmelo made regular trips back to Perth. During one of these trips, Carmelo visited a number of display homes with Ted. Carmelo's evidence was that this was done at the instigation of Ted who wanted to show him what could be built on the Darch property if it was developed.[447]
336 Under cross-examination, Carmelo agreed there were discussions between all members of the family about subdividing the Darch property. At that stage, the area had become increasingly urbanised and there was an opportunity to subdivide the block. In addition, Calogero was getting older and wanted to look at alternatives.[448] Carmelo recalled he had discussions with Calogero about subdividing the land and building a house for his family on the Darch property.[449]
337 Carmelo also recalled he had discussions with Ted about subdividing the Darch property and that they went to the Wanneroo council to discuss what was required. During these discussions, Ted did not say to him this was none of his business as Ted was the sole owner of the Darch property.[450]
338 Robyn Patterson, Carmelo's former partner, gave evidence of a conversation she had with Calogero when she visited Perth with Carmelo towards the end of 1999. Her evidence was that on her last day in Perth, she went to Calogero and Maria's home at Frape Avenue for lunch. During this visit Calogero asked whether she and Carmelo could move to Perth, build a house on the Darch property and assist him and Maria.[451] She said that Calogero told her that when he died, the Darch Property would be inherited by Carmelo and Ted.[452]
339 In or about 1999, Darryl McKie, a friend of Carmelo's, visited Perth and went to the Darch property with Calogero. His evidence was that Calogero showed him around the property and said to him that 'Carmelo had to return to Perth one day and build a house for his family on his half of the [Darch] Property.'[453] Under cross-examination, Mr McKie agreed this was said in the context of Calogero saying he was keen to have Carmelo come back to Perth permanently.[454] He also agreed Calogero did not expressly tell him that he (Calogero) owned the property[455] or that Carmelo had a half share in the property.[456]
340 Norman also gave evidence about a number of discussions between members of the family about the subdivision of the Darch property and the possibility that all three brothers would build homes on the property for their families as well as a home for Calogero and Maria. Norman says it was suggested that each of them could live on the Darch property and subsequently sell the land for a profit.[457] He said the family discussed a number of ideas over the years, including building a shop front to sell fruit and vegetables directly. However, there was disagreement about the terms of contracts to subdivide the land and the management of the proposed project, as well as how it would be financed.[458] In addition, each of the brothers (and their wives) were against the idea of living on the Darch property as it was too far away from Perth.[459]
341 Norman's evidence was that in or about 2006, a few years before Maria died, Calogero tried to convince his sons to subdivide the land. Norman says that Calogero said to him that if Ted and Carmelo did not want to help, they (he and Norman) could do it and he would 'see to it that [Norman] got a half-share in the land'.[460] He also recalled offering to contribute $200,000 to the subdivision costs if [Calogero] 'put [Norman's] name back on the title.'[461]
342 Norman recalled that in about 2007, the local council wanted to put a road through the Darch property as the area was being developed for residential subdivision. Norman's evidence was that he was present at a meeting held on the Darch property.[462] In cross-examination, Ted initially denied that the City of Wanneroo had discussed the possibility of putting a road through the block.[463] Subsequently, he accepted there was a road which 'comes towards the block and stops where the block is and then continues on the other side' and the structure or cell plan of the City of Wanneroo provided for a road to run through the property.[464]
343 Carmelo's son Michael also gave evidence of a discussion between Ted and Carmelo about the Darch property in about 2009. His evidence‑in‑chief was in very general terms. He recalled the discussion 'revolved' around building a residential house on the property for each of Carmelo's family and Ted's family[465] as well as the number of blocks that could be derived from a subdivision of the Darch property.[466] His evidence was that the 'reason' for the discussion was that the Property needed to be occupied as a principal place of residence to avoid land tax.[467] He does not recall Ted or anyone else raising during that discussion or at any other time that the Darch property only belonged to Ted.[468] Michael accepted, under cross-examination, that Ted never said in his presence that the Darch property, or any portion of it, belonged to Carmelo.[469]
344 Ted's evidence-in-chief was that he was told by Calogero that Carmelo had spoken to him on several occasions about relocating to Perth with his children and obtaining half of the Darch property and that he (Calogero) wanted Carmelo to return to live in Perth. Ted spoke to Carmelo on several occasions and recalled Carmelo offering to build a large home on the Darch property at his cost. Carmelo said he would live on the Darch property which would have the advantage that the land tax Ted was paying would no longer need to be paid. Ted says he was prepared to consider the proposal as the land tax was progressively increasing. Ted agreed that in the mid to late 1990s, he, Yvonne and Carmelo, and possibly Carmelo's son Michael visited a number of display home sites over a one-month period for this reason. Ultimately, Carmelo returned to Queensland. Ted says that Calogero was greatly disappointed that Carmelo was not 'following through on a promise' and Calogero and Maria's wish for Carmelo and his children to move back to Perth was never discussed again.[470]
345 In cross-examination, Ted agreed that discussions about subdividing the property occurred over many years but denied Norman was part of these discussions. He accepted that one of the problems with the proposed subdivision was that the wives were not interested in moving out to the Darch property to set up a family home.[471]
346 In about 2003, Calogero paid into Carmelo's family trust bank account the sum of $30,000.[472] Carmelo denied this payment was in relation to the Darch property.[473] His evidence was that this was for him and his children for their birthdays and was the maximum legal amount Calogero could pay as a gift.[474] In cross-examination, Carmelo denied that he was paid this amount because he was complaining to Calogero about not receiving 'his dues' regarding the Darch property.[475]
[Calogero] wanted to settle the matter for the land for once and for once and for all. He was sick of it. He was being harassed. I was being harassed. Everybody was a little bit uncomfortable and ‑ ‑ ‑
How was your father being harassed and by who was he being harassed?‑‑‑He was probably saying, "Ted hasn't paid me yet and I want some money from Ted," that sort of thing. But he wanted more money. Every time we tried to settle, he wanted more money. Went to half a million dollars. The land (indistinct) wasn't even worth that much. Plus, he forgot about the fact that we carried him - or my father carried him. He never put a blood cent - excuse me, a cent into it.
But are you saying after wanting half a million dollars, he eventually took $30,000 and went home? Is that what you're telling the court?‑‑‑That was really, if you ask me, a gift. He wasn't entitled to anything at all.
Not even the $110,000 that you say you should have paid him?‑‑‑I was prepared to pay - I was prepared to pay it.
Then why do you say he wasn't entitled to anything?‑‑‑Because of the way he treated my father.
The way he treated your father?‑‑‑ (indistinct) the way he led him on for so many years.
348 For the following reasons, I accept Carmelo's evidence that the $30,000 paid to him by Calogero was a gift to him and his children and was not connected to the Darch property. First, consistent with my earlier finding, I do not accept that Carmelo sold any interest in the Darch property to Ted or that any amount was due to be paid to Carmelo in relation to the Darch property. Second, apart from a general statement that both Calogero and he (Ted) were being harassed, Ted gave no evidence about any discussion between him and Carmelo about payment for the Darch property. Third, Ted's defence does not plead the fact of this payment or that it was paid to settle any claim in relation to the Darch property.
349 On 28 December 2006, Calogero executed an enduring power of attorney appointing Ted as his sole attorney.[478] It is clear from the face of the document that the handwriting on the document is Ted's. Calogero's signature is witnessed by two pharmacists.
350 Ted's evidence was that the power of attorney was drawn up because Calogero 'needed assistance and help'. Maria didn't have one because she had nothing in her sole name; anything she owned was as a joint tenant with Calogero.[479]
352 In December 2009, Calogero had a heart attack and had surgery to insert a pacemaker.[482] Carmelo's evidence is that Calogero was a very sick man at this time.[483] His evidence was that for a number of years prior to the death of Calogero and Maria, they were reliant on Ted and that Ted managed their financial affairs.[484] Ted denied this. I have summarised his evidence in relation to this at [108] - [113] of these reasons.
353 On 15 December 2009, Calogero signed a statutory declaration witnessed by Ms Callie Fleay, the local pharmacist.[485] The declaration stated that:
The land at Lot 43 (House No. 12) Landsdale Road, Darch. W.A. is fully owned by Theodore Tindaro Marchese and he may do whatever he wishes with the land.
Carmelo Marchese, Nunzio Marchese or any other person is not entitled to any part of the above property or chattels thereon.
354 It was not in dispute that the declaration is not in Calogero's handwriting.[486]
356 Norman gave no evidence about the statutory declaration nor was he asked any questions about it in cross-examination.
357 In cross-examination, Ted's evidence was that the statutory declaration was written out by his wife at the request of Calogero because 'he was being harassed by my brothers'.[489] Ted accepted this was not in his witness statement, that Norman and Carmelo were not aware of the statutory declaration until 'various discussions later on'[490] and that it was probable that he 'held onto this'.[491] Subsequently, Ted accepted he had only shown the statutory declaration to Norman and Carmelo after they commenced court proceedings.[492] In re-examination, Ted was asked what he meant by his father being harassed. His evidence was that:[493]
[Carmelo and Norman] realised that I was the owner of the land, and they wanted a share. They wanted some land given to them so they kept harassing my father for some of the land.
358 When asked why he got Calogero to sign this statement, Ted denied that it was his (Ted's) idea. Specifically, his evidence was:[494]
Your father just came up with the idea that he wanted to write down this particular statement?‑‑‑Well, he rang my wife while I was dropping my son off at school, and when I got home, my wife said, "Your father rang, he wants to talk to us."
I see‑‑‑So we went up there, and my father said, "I want to get something off my mind. There's something that has been worrying me." Something to this effect from what I can recall. "I would like to clarify matters because I want peace and quiet, and I would like you to write this." He says to my wife, "Because your hand writing's neat - is clear and neat."
I'm suggesting to you that that wasn't the reason - it was you that wrote up the document‑‑‑No.
It wasn't your father that was suggesting that he wanted this statement made ‑ ‑ ‑‑‑It was him.
‑ ‑ ‑ on the same date that you also wrote up the enduring power of attorney?‑‑‑Yes, it was done together.
359 When asked about the wording of the document, Ted's evidence was:[495]
So you wrote - well, I think your wife wrote out the document, but you provided the wording, didn't you, that was used in this document?‑‑‑No.
So ‑ ‑ ‑?‑‑‑Told my wife, "This is what I would like you to write." And from memory, I think there was a - a draft prepared and so forth, and amendments probably made there too. And my wife said, "Is this what you want?" and he said, "Yes, that's - that is right." And away we go. And he said, "I have come" - then it was arranged that we go down to the pharmacy for it to be witnessed.
So they were the instructions given by your father?‑‑‑Yes.
All right‑‑‑I had nothing to do with it whatsoever.
Well, you were there, weren't you, with your wife when it was written up?‑‑‑Yes, I was, I was sitting down reading the paper.
‑ ‑ ‑ you were closely involved in terms of preparation of this document, weren't you ‑ ‑ ‑?‑‑‑No.
‑ ‑ ‑ Theodore. Well, you went down with - you took your father down to the usual chemist, Mrs Fleay, to have it signed up?‑‑‑I didn't take him down. We walked down. It was only 50 metres away.
You were both there, weren't you, at the chemist?‑‑‑Yes, we were.
Right. And did you get both documents done at the same time? Because the power of attorney we just looked at is also dated the same date?‑‑‑From memory I think we did.
360 Under cross-examination by counsel for Carmelo, Ted denied the contents of the statutory declaration were a complete departure from what had been previously intended, namely that the property be shared between the brothers. Ted's evidence was that in the presence of both Norman and Carmelo, Calogero said the Darch property was Ted's and he could do with it as he pleased.[496]
361 Under cross-examination by counsel for Ted, Carmelo agreed he had seen the statutory declaration but that he did not recognise the handwriting and further denied that the signature was his father's.[497] It was not made clear as to whether this was before or after his father's death. In re-examination, Carmelo agreed that it was usual for Ted to prepare all transfer documents and present them to Calogero to sign and subsequently to witnesses to sign 'if they were there later on'.[498] He stated 'it was at Ted's discretion, he (Ted) was in total control of all paperwork etcetera.' When asked whether his father ever said anything in his presence until the time he died, about the Darch property only belonging to Ted, Carmelo's response was 'No, never'.[499] His evidence was:[500]
Well you say betray his family, what do you mean by that --- All through his life, in front of mum, in front of Ted, in front of all the kids, we were to inherit not have things taken away from us.
362 I do not accept Ted's evidence that Calogero told Norman and Carmelo that the Darch property was Ted's. Ted did not give any details of the conversation or conversations or when it occurred. Carmelo denied this was said.
363 On the same date, a second power of attorney was drawn up by Calogero appointing Ted as his attorney. In cross-examination, Ted was asked why this occurred. His evidence was that he:[501]
[c]ouldn't locate the first one and I wasn't aware whether there was a statute of limitations on power of attorney anyway. So to cover the unforeseen, we thought it was [a] good idea and my father actually thought it was [an] excellent idea and was really his incentive, or his motivation to get one organised.
364 Ted accepted that Calogero did not obtain any independent legal advice before executing the power of attorney and that he had suffered a heart attack earlier that month. Ted also agreed there was no interpreter present when the document was signed.[502]
365 In cross-examination, Ted was shown another statutory declaration of Calogero made on 15 December 2009.[503] This statutory declaration concerned the application for survivorship in relation to the property at 24 Second Avenue, Mount Lawley following Maria's death.[504] Ted's evidence was that he believed this document was also prepared by his wife and agreed he arranged to lodge this document at Landgate.[505] Ted also agreed he 'would have' helped to prepare this document and that 'this would have been a difficult one' for Calogero to prepare without his assistance.[506]
366 In cross-examination, Ted denied his father could not read English and said 'he was quite competent'[507] and read the paper every day.[508] This contrasted with his witness statement where Ted's evidence was that he 'virtually ran his office as [his] father's writing and reading skills were limited to basic newspaper articles'.[509] When he was asked about this discrepancy, Ted's evidence was that he 'was referring to legal matters there and documents of importance'.[510] Ted accepted Calogero would have insufficient comprehension of documents of importance and legal matters.[511]
367 I accept and find that Calogero's work did not require him to have significant proficiency in reading English. Calogero only had very limited opportunity for formal schooling and when he arrived in Australia had not learnt English, nor did he do any formal courses to learn English.[512]
368 Because of the failure to call Yvonne Marchese, there was no direct evidence of what Calogero told Ted's wife and whether the statutory declaration in relation to the Darch property was read to Calogero in Sicilian or explained to him prior to its execution. There are a number of facts which give rise to a suspicion about the execution of this document, namely:
(a) the document is in the handwriting of Ted's wife, who stood to receive a benefit under it, namely that her husband Ted would have beneficial title to the entirety of the Darch property;
(b) as at 15 December 2009, Calogero had suffered a heart attack earlier that month and had recently lost his wife of more than 65 years. I accept that Calogero was devastated by the death of Maria;
(c) at the same time as signing this document, Calogero also signed a new power of attorney and a statutory declaration to be lodged at the Land Titles office in respect of a different property;
(d) there is no independent evidence that Calogero understood the contents of the statutory declaration and that this reflected his intention at the time;
(e) Calogero was not fluent in English and had only basic written English skills. I do not accept that Calogero would have dictated the contents of a statutory declaration in English or would have understood its terms unless it was explained to him in Sicilian; and
(f) less than one year later, the Public Trustee, in preparing a new will for Calogero, required the will to be translated before it was signed by Calogero because he was unable to read or understand English.
369 In these circumstances, in accordance with the rule in Jones v Dunkel, I draw an inference that the evidence of Yvonne Marchese would not have assisted Ted's case that the contents of the statutory declaration reflected Calogero's views or were a declaration by Calogero against his interest. For the reasons set out above [368], I do not accept that the statutory declaration was a document which reflected Calogero's views as at 15 December 2009. On this basis, I find that the contents of this document cannot be relied upon as a declaration against Calogero's interest.
370 Shortly after Maria's death, Calogero asked Ted whether he knew where his will and other documents were as they were missing.[513] Calogero also rang Norman to ask whether he had gone into the office and taken the wills. Norman's recollection was that he said he did not know where they were but that he (Calogero) should check with Ted and Carmelo.[514]
371 In November 2010, following the death of Maria, Calogero made a new will. Prior to this, both Maria and Calogero left their estate to each other and, in the event the surviving spouse did not live for more than another 30 days, to Ted, Carmelo and Norman in equal shares.[515]
372 Ted's evidence was that on the recommendation of Carmelo, Calogero went to the Public Trustee to draw up his will. Ted drove his father to these appointments but said he was not permitted to attend any of these appointments. At least one of these appointments was for an independent interpreter to 'dictate his will'.[516] Ted accepted that he was aware from this time what the contents of the will were and that he never told Carmelo or Norman of its contents. His explanation was that Carmelo and Norman were upset they hadn't received anything from Maria in her will and that this 'created a very unhealthy environment for everyone'.[517]
373 In his new will, Calogero appointed the Public Trustee as executor. He gave $100,000 to the Trustee to invest and pay the income to Carmelo during his lifetime and on his death to be paid to the National Heart Foundation of Australia. A further $50,000 was given to the Trustee on similar terms save that the income was to be paid to Norman during his lifetime. The remainder of Calogero's estate went to Jonathan Marchese, Ted's son. The will was witnessed by a member of the Public Trust Office. The will expressly states that it was interpreted into Italian prior to Calogero signing the will because Calogero was unable to read or understand English.[518]
374 On 6 June 2012, Norman received a call from Calogero on his home phone. Norman's evidence was that Calogero told him he had an argument with Ted.[519] Norman taped this phone call using a prepaid mobile phone.[520] His evidence was that he did this as it 'sounded quite important' and he 'didn't want to miss anything important' that Calogero was telling him.[521] He recalled asking Calogero if he could record the conversation and that his father said (in Italian dialect) words the effect of 'I don't care'.[522] Norman's evidence of this conversation was that:[523]
I remember my father saying to me that he 'never signed the transfer' or words like that. At the time of our phone conversation, he was talking about the [Darch property]. He also said words to the effect of 'I never signed anything... He put the contract in his name, that's all...'. I understood from what he was saying to me (over the phone) that (sic) Ted was the nominee owner of the [Darch property] for the family.
375 The audio recording of the conversation was subsequently downloaded on to a USB.[524] The USB was provided to an interpreter, Ms Luciana Russo for interpretation.
376 Norman's evidence was that he provided Ms Russo 'with assistance' in listening to the USB and translating it. He explained that this was done because Ms Russo was not able to translate all of the conversation due to Calogero using a Sicilian dialect which Ms Russo could not understand.[525] In relation to these sections, Norman listened to the recording and translated what he heard into English with some Italian. Ms Russo wrote these words down in Italian.[526]
377 Ms Russo was called to give evidence at the trial. Ms Russo is a NAATI qualified translator and interpreter of the Italian language into English. On 18 October 2019, she attended the offices of Norman's solicitors to listen to the recording of the conversation. Her evidence was that the conversation was recorded on an MP3 file which she listened to on a computer with the assistance of headphones. Apart from occasional words, she was unable to hear most of the specific words used during the conversation because the recording was not very clear and the speaker(s) spoke very quickly. As a result, she confirmed that Norman listened to the recording and told her the Sicilian words he believed were used and whether the words were used by his father or him. Ms Russo wrote down what she was told by Norman and then translated them into English.
378 Ms Russo's translation of the conversation was annexed to an affidavit sworn by her on 25 October 2019 as 'LR3'.[527] Two USBs were tendered in evidence: one marked 'original' and the other marked 'copy'. The phone on which the conversation was recorded was also tendered at trial.
379 In cross-examination, Norman acknowledged that he had previously engaged another organisation (ONCALL Interpreters and Translators) to interpret this recording and that it had also been interpreted by Maria Antonietta Schiavone.[528] Neither of these documents were provided to Ms Russo. Both of these documents were tendered at trial[529] although neither of the interpreters were called to give evidence.
380 There are a number of differences between the interpretations of this conversation, particularly as between Ms Russo and the other interpreters. The interpretations of Ms Schiavone and ONCALL are virtually identical. Relevantly, the three translations include the following:[530]
'I did not sign the offer there is no signature of mine. He will go to prison, I say, and the property will come back to me.'
'I didn't even sign it (inaudible) otherwise I'll go to jail (inaudible)? That's why he wanted me to sign now (inaudible)? Your brother (inaudible).
'I didn't even sign it ... otherwise I'll go to jail ...? That's why he wanted me to sign now ...? Your brother ....
'I have signed nothing. I did a contract and he put his name and that he was the nominee! Now he says that the property went directly to him'
He took the contract and he put his name and surname that's all and now this why Carmelo ended up there?
He took the contract and he put his name and surname that's all and now this why Carmelo ? ended up there
If there is something to talk about, they will do a search, he cannot take possession of the property. He can say what he wants, I say you and Carmelo are with me, you help me, because the property comes to me, so he will loose. [sic] Now if his son comes he would like some of the property ... there is a fire, there is a fire, there is a fire ... [it is a hot situation]
Because Zio Calogero is dad's name and so if something happens (inaudible) he comes forward, (inaudible) the property. He can say what he likes when I say you and Carmelo are with me. You thought of me because the property is mine. If his son comes here there will be fire/trouble. His son comes here he wants a share. There will be fire/trouble.
Because Zio Calogero is dad's name and so if something happens ... he comes forward, ... He can say what he likes when I say you and Carmelo are with me. You thought of me because the property is mine. If his son comes here there will be fire/trouble. His son comes here he wants a share. There will be fire/trouble.
Because the wives are gone, I thought about you (sons) because the things are yours, because the wives would take them ... Gayla (Gayle) and also Jacca (Jachie), if the property was under your names. Gayla did not do much because she thought that it was under my name and that the property was mine.
The wives left and I (inaudible) they took it. Took it dry. They did so much because (inaudible) it was my fault.
What did I do? The wives left and I [? Yourselves] they already took theirs. Took it dry.
'So you call and say: I am the owner. I am the owner and we are selling the property!'
No, no. Why not? You're the owner, you tell them to sell and that's it.
No, no. Why not? You're the owner, you tell them to sell and that's it.
'So we can call Charlie and all of us three will tell Tinnaro (Ted): look, we are selling the property, He will not be able to do anything'
Ok, then we call Charlie and we say to him look that's it, we're selling and he can't do anything.
Ok, then we call Charlie and we say to him look that's it, we're selling and he can't do anything.
Now, do you think there's something missing there? And if you look at the other one, same thing. It says inaudible at the beginning. That's the bit they keep leaving out. I don't know why.
LACARENZA, MR: Why would they want to keep leaving something out?---Because it concerns the reason why my father told them he left my name off the title.
382 In answer to a question why he thought ONCALL and Ms Schiavone would want to leave something out, Norman responded 'Because they couldn't understand it' and 'It's a deliberate section they want to leave out'.[533] Counsel for Ted asked whether Ms Russo also left it out, to which Norman responded 'No. Well, she sort of half-understood it. She didn't put it down till she got the whole sentence.'[534]
383 Norman then explained that the 'bit that was left out' was the reference to the wives, that they would take the property and that's 'the reason why Carmelo's name went off the title and why he didn't put mine on. He had a reason.'[535] Norman's evidence was that during this conversation, 19 years after Carmelo's name came off the title, his father explained the reason that Carmelo's name came off the title and why his name was not put on. He agreed the interpretations done by Ms Schiavone and ONCALL don't mention Zio[536] or the wives and then said 'That's why I'm correcting it.'[537]
384 Norman did not have any other conversations with Calogero about the Darch property before his death. In his evidence-in-chief, Norman said he spoke to Ted about this conversation a few months after it had occurred and that Ted said words to the effect 'I don't know anything about it'.[538]
385 I have listened to the recordings on both USBs as well as the phone.[539] The recordings on the USBs have three versions of the conversation: the original recording, enhanced sound and a 'slow' version. I have listened to all three. It is not possible to discern what the recording says as the conversation is not in English, the recording is not clear and the speakers speak very quickly. In particular, I focussed on whether it was possible to discern the use of the names of Gayla and Jacca by Calogero, as this was the part of the conversation relied upon by Norman. I was unable to determine whether these names were used.
386 For the following reasons, I do not accept that Calogero said to Norman during the conversation the words attributed to him by Ms Russo in the sixth response as set out at [380] above. First, it is clear from the evidence of both Ms Russo and Norman that Ms Russo did not interpret what she heard on the recording. She interpreted what Norman said he heard on the recording. Second, the other interpretations are largely consistent with each other. Given that ONCALL was retained by Norman (and Ms Schiavone was retained by Carmelo), there is no satisfactory explanation as to why they would both leave this section out of their interpretation. I have listened to the recording and consider the most likely explanation is that they were unable to discern what was said. Third, it is not clear why, some 19 years after the transfer of the Darch property from Carmelo and Ted as joint tenants to Ted as sole proprietor, Calogero had a conversation with Norman about this. No satisfactory explanation was given by Norman in relation to this.
387 I do not accept that 'LR3' is an accurate interpretation of the conversation between Calogero and Norman. I give no weight to the evidence of Ms Russo as to the contents of this conversation. I do not consider this is evidence of a declaration against interest by Calogero.
388 In 2013, Calogero became unwell and, ultimately following advice from his solicitors, commenced proceedings, being an asbestosis claim. As part of that claim, on 28 May 2013, a witness statement was prepared by his solicitors, Slater & Gordon.[540] This statement set out Calogero's background and addressed the potential exposure that Calogero may have had to asbestos.
389 The solicitor who prepared the statement, Ms Tricia Wong, gave evidence at trial. Ms Wong had only a limited recollection of her meeting with Calogero. She recalled he was elderly at the time of their meeting but had no independent recollection of the detail of the meeting.[541] She did not recall whether Italian was his first language[542] or that communicating with him in English was an issue. From her review of her notes of the meeting, she believed Ted initially contacted Slater & Gordon to retain them to act on behalf of Calogero,[543] and that the meeting took place at Sir Charles Gairdner Hospital. Ted and his wife Yvonne were present during this meeting.[544] Ms Wong did not have an independent recollection as to whether Ted and Yvonne contributed to the information contained in the statement but said this 'would be usual'.[545]
390 Ted relied on this witness statement for three reasons: first, as evidence there was no joint endeavour in respect of the 'home renovation' business; second, as evidence that Ted is the only son who is identified as assisting with the renovation of houses and neither Carmelo nor Norman are referred to; and third, the witness statement does not refer to any promises or representations made by Calogero.[546]
391 I accept the witness statement of Calogero does not address the joint endeavour or the purchase of the Darch property and whether any representations were made at this time. However, I do not consider this assists Ted in the manner contended. In considering the contents of the witness statement, it is important to put it in context. First, the witness statement was prepared as part of Calogero's asbestosis claim and, accordingly, the focus of the witness statement is on Calogero's exposure to asbestos and his general health and lifestyle prior to his illness at the beginning of 2009. Second, the witness statement was taken on 28 May 2013, approximately seven weeks prior to Calogero's death. In these circumstances, I do not consider this statement represents Calogero's evidence on the involvement of each of his sons in the renovation of properties or the basis upon which the Darch property was purchased and held which are matters the subject of these proceedings.
392 Norman recalled having a conversation with Calogero about his will prior to his death in July 2013. At this time, Calogero was at St Rita's Nursing Home.[547] Norman recalled asking Calogero who would look after his house and his belongings after he died. Norman's evidence was that his father said to him 'don't bother me with this now... I told you before... It is as your mother and I agreed as we wrote in the will'. He also said 'ask Ted, he has all the papers and documents... he knows all about it and what to do... you go to him and sort it all out'.[548] Norman also recalls that Calogero said to him during these discussions:[549]
leave me alone, I've had enough of all this fighting and shouting. I cannot be bothered with this anymore... I am dying... and I don't care. I've had my time with you lot. Go and sort it out with Ted.
394 After Calogero's death, Norman and Carmelo discovered that the will was different to what they had expected.[552] Norman's evidence was that he confronted Ted about the will as the Frape Avenue property was left to Jonathan, Ted's son, and no provision was made for Norman's child or Carmelo's children.[553]
395 In April 2014, Carmelo lodged a caveat over the Darch property. The caveat claimed a constructive trust in the Darch property. The basis for the claim is described as:[554]
A verbal family agreement between the caveator, his brother the Registered Proprietor, and their father whereby the land was to [be] held in trust by the Registered Proprietor to the extent of a 50% interest for the benefit of the caveator, and a repudiation of the agreement by the Registered Proprietor as set out in the statutory declaration sworn the 4th day of April 2014.
396 The statutory declaration sworn in support of the caveat is a one page document containing nine paragraphs. Relevantly, the statutory declaration states:[555]
2. The land was originally owned by my father, Calogero Marchese, and my mother who acquired the land prior to 1978 as an investment for the family. My mother transferred her interest in the land to my brother on 18 October 1978.
3. In July 1982 my father transferred his interest in the land to me and I became joint tenant with my brother to hold for the family's future interests. Although my father was no longer on the title, as head of the family he effectively controlled what we could do with the land through the force of his personality and status within the family.
4. In late 1993 I was experiencing marital problems and my father was worried that the family might lose its interest in the land in any property settlement there might be with my ex-wife.
5. It was agreed between my father, myself and my brother that to ensure that the land remained in the family I would transfer my interest back to the Registered Proprietor. This transfer occurred on 24 November 1993. Now produced and annexed hereto marked Annexure 'A' is a copy of the certificate of title showing the succession of ownership of the land since my parents acquired it.
6. It was expressly agreed that my brother would hold the land to the extent of a 50% beneficial interest on trust for me and in reliance upon that undertaking I agreed to transfer the land as I was asked to do, and I also paid all stamp duties on the land at the then assessed valuation.
7. Whilst my father was alive this situation was accepted by all the family including my brother and there was no issue.
8. My father died on 20 July 2013 and following his death my brother has reneged on the agreement maintaining that he owns the land legally and beneficially to the extent of 100% and he refuses to recognise my interest.
397 In his evidence-in-chief, Carmelo said he made a 'number of mistakes' when he completed the form.[556] I accept the statutory declaration contains some errors, most notably in relation to the original purchase of the Darch property. It is clear from the certificate of title that Maria never owned a legal interest in the Darch property and that Ted always had a legal interest in the Darch property.[557] In cross-examination, Carmelo accepted this was an error and the statement was based on his belief at the time that the property had been originally purchased by his father and mother.[558]
398 Carmelo's evidence-in-chief was that he did not receive legal assistance in completing these documents.[559] The caveat lodged by Carmelo was witnessed by Peter Bates, who originally acted for Carmelo in these proceedings. The documents prepared for lodgement at Landgate contained typewritten entries which have been amended or supplemented by Carmelo in handwriting. I do not accept Carmelo did not receive legal advice or assistance in preparing these documents for three reasons. First, his signature is witnessed by his solicitor. Second, the wording of the typewritten entries is more consistent with these entries having been prepared by a solicitor than by Carmelo as the use of words such as 'whereby' and 'repudiation' are generally only used by legal practitioners. Third, under cross-examination, Carmelo accepted the statutory declaration had been prepared by his solicitor.[560]
399 Notwithstanding these discrepancies, in my view, the contents of the statutory declaration are broadly consistent with Carmelo's evidence in these proceedings. That is, Carmelo contends that in July 1982, Calogero transferred his interest in the Darch property to him (Carmelo) to hold on behalf of the family and that in late 1993, he transferred his interest to Ted because of the concerns that Carmelo's wife might make a claim on the Darch property as part of family court proceedings.
400 In July 2014 Norman also lodged a caveat over the Darch property. The caveat noted that the interest claimed was 'an equitable interest as co-owner in fee simple'.[561] In his statutory declaration sworn in support of the caveat, Norman stated he had an 'agreement and interest' with Calogero and Ted as owners of the Darch property.[562] The caveat specifically referred to the promissory note that had been signed by Ted. In cross-examination, Norman agreed the word 'agreement' should be replaced with 'understanding' as it was based on the understanding he had with his father[563] and that he included Ted as Ted was the registered owner of the Darch property.[564] Norman was also asked in cross-examination why he attached to the statutory declaration a copy of the promissory note. His evidence was that:[565]
it was just a binding agreement which would connect me financially because I gave my father some money towards purchasing the property.
401 Norman withdrew this caveat as part of the settlement discussions in relation to the Family Provision Act proceedings, which I address at [403] below. In January 2016, Norman lodged another caveat over the Darch property claiming 'an equitable one third interest as co-owner in fee simple'. This caveat also specifically referred to the promissory note signed by Ted,[566] which Norman relies on as proof of his one third interest because of a $20,000 contribution to the purchase of the Darch property.[567] In cross-examination, Norman accepted the promissory note does not say that he has a one third interest in the Darch property.[568]
402 I have addressed the impact of these applications and the caveats in my reasons at [238] above.
403 Norman also brought an application under the Family Provision Act 1972 (WA) being proceedings CIV 1387 of 2014.[569] Carmelo was a defendant to the proceedings as a beneficiary of Calogero's estate, as was Ted's son Jonathan. Ted was not a defendant.
404 Norman accepted in cross-examination that in his affidavit sworn in support of the originating summons, he did not refer to the work he did on his parents' properties as a 'home renovation business'.[570] He also accepted that in this affidavit, he did not state that Calogero had promised him an equitable interest in the Darch property or that he would receive one third of it.[571]
405 In these proceedings, Carmelo claimed that Calogero's will did not make adequate provision for him.[572] In cross-examination about these proceedings, Carmelo gave evidence he had been told that on Calogero's death, he would get a share of the family assets.[573] He expected the Darch property 'was put in my name for a reason [so] that when he passed away it would remain in my name'.[574]
406 Between November 2014 and January 2015, there was an exchange of correspondence between the solicitors who acted for Carmelo and the solicitors for Jonathan Marchese, Ted's son regarding these proceedings, ahead of a mediation scheduled for 12 December 2014.[575] Jonathan's solicitors queried why Carmelo's claim to a 50% beneficial interest in the Darch property did not appear in Carmelo's affidavit in those proceedings as an asset, as well as what action Carmelo was taking or had taken to pursue his claimed interest. Following the mediation, Carmelo's solicitors wrote to the then solicitors for Jonathon in response to their queries. The letter stated:[576]
We do not consider that our client has a quantifiable interest in the Darch Property, or indeed, on the basis of the information set out in the statutory declaration dated 4th April 2014 enclosed with your letter of the 25th November 2014 (and of which we were previously unaware) that he is likely to be successful in any claim in relation to that property.
407 In cross-examination, Carmelo was asked whether this was a 'fair statement, based on your instructions or advice you received from your lawyer at the time?' In response, Carmelo said that:[577]
At the time none of this had been to Court to be tested. I couldn't tell you what the outcome was going to be, it was just something - discussed, open discussion.
408 He then said that he was told 'You got a hard case here'.[578]
409 I have considered this correspondence in assessing the credibility and reliability of Carmelo's evidence. However, for two primary reasons, I do not consider that this letter causes me to draw a different conclusion on his evidence. First, the letter makes plain that it is the view of the solicitors that is being expressed rather than it being Carmelo's view or evidence that he did not have a claim. Second, the evidence that he was told he had a hard case is, in my view, a correct summation of the position. As is apparent from the length of these reasons, this is a difficult case that requires the evidence of parties over a long period of time to be carefully analysed to determine what legal consequences flow from the factual findings.
410 Ultimately, those proceedings were settled on the basis that Carmelo was paid $125,000[579] and Norman $75,000[580] out of Calogero's estate. As at the date of Calogero's death, his estate had assets of $851,579.10 and liabilities of less than $25,000. The majority of the value of the estate was in the Frape Avenue house.[581] After Calogero died, his estate received $199,893.85 from the settlement of the asbestosis claim that was run by Slater & Gordon, after deduction for legal costs.[582]
411 In cross-examination, Ted was asked whether the money that was received from the asbestosis claim was used to pay out Norman and Carmelo. Ted's evidence was that he did not know where that money came from as the negotiations were done by the Public Trustee.[583] This was in contrast to his original witness statement where he stated that he negotiated the settlement.[584] To the extent that it is relevant, I find that the settlement of the asbestosis claim was used to pay the settlement amounts to Carmelo and Norman and that Ted was aware of this.
Does Carmelo have an interest in the Darch property and if so, what is the interest?
412 Carmelo seeks orders from the Court that recognises what he contends is his 50% interest in the Darch property. Counsel for Carmelo advanced this claim on five alternate grounds: first, an express trust, second, a constructive trust; third, on the basis that Carmelo earned an interest in the Darch property from his contributions of labour over the years; fourth, a common intention constructive trust; and fifth, equitable estoppel.
413 Before turning to consider each of these grounds, it is necessary to make some preliminary observations.
414 First, Calogero and Ted and then Carmelo and Ted held their interests in the Darch property as joint tenants. Despite this, all parties at trial referred to the respective interests of the parties as a 50% interest or half interest in the Darch property which reflects the position that would arise if they were tenants in common. The legal distinction between tenancy in common and joint tenancy and what flows from this was summarised by Murphy JA in Singh v Kaur Bal [No 2].[585] Relevantly:[586]
(a) unlike a tenancy in common, in the case of joint tenancy each joint tenant, along with each other joint tenant, has possession of the whole estate or interest in land;
(b) where a joint tenant wants to 'transfer' their share to another joint tenant, strictly speaking there is nothing to convey and, at common law, the appropriate way to effect this result is by way of 'release';
(c) joint tenants are not confined to joint transfer of their interest. During their lifetime, a joint tenant can separately convey their interest which results in a new relationship of tenancy in common arising;
(d) where parties hold as joint tenants and there is nothing in equity to regard their interests as tenants in common, the equitable title follows the legal title.
415 Second, Ted did not become the sole registered proprietor of the Darch property until 24 November 1993. A significant portion of both Carmelo's pleading and the evidence at trial focussed on the conduct and representations made by Calogero at the time the Darch property was purchased in 1978. However, even if this conduct is established, this will not bind Ted as a subsequent registered proprietor. As registered proprietor, Ted has indefeasible title in the Darch property 'except in the case of fraud' pursuant to s 68 of the Transfer of Land Act 1893 (WA) (TLA). Section 68 of the TLA provides that, except in the case of fraud, the registered proprietor of land holds the land subject only to the encumbrances notified on the registered certificate of title for the land. A volunteer who becomes a registered proprietor of an estate or interest in land gains the benefit of s 68 of the TLA.[587]
416 Section 134 of the TLA provides that except in the case of fraud, no person taking a transfer of land is affected by actual or constructive notice of any trust or unregistered interest and that knowledge of any such trust or unregistered interest shall not of itself be imputed as fraud.
417 The fraud that is referred to in both s 68 and s 134 is actual fraud. This requires that there be an act of dishonesty on the part of the person whose title is sought to be impeached. The acquisition of land with notice of an unregistered interest and then the refusal to acknowledge existence of the interest is not of itself fraud; more is needed before a registered proprietor's title can be breached.[588]
418 Carmelo has not pleaded any fraud on Ted's part in relation to the registration of the Darch property. However, if Carmelo can establish that he has an equitable interest in the Darch property, the court can enforce that equity against Ted. This will only occur where Carmelo can bring his claim within established equitable or legal principles. In order to bring it within these established principles, it is necessary to consider Ted's knowledge and conduct at the time he became the sole registered proprietor to determine whether it would be unconscionable for Ted to hold the title free of the interest claimed by Carmelo.
Does Ted hold the Darch property on express trust for Carmelo?
419 The closing submissions of Carmelo focussed on the transfer of the legal interest in the Darch property from Carmelo and Ted as joint tenants to Ted as sole registered proprietor. Counsel for Carmelo contended that the factual circumstances which gave rise to the transfer weigh heavily in favour of a finding that 'Carmelo's half interest in the [Darch] Property is held in trust by Ted'.[589] Carmelo also contended that it was open to find that 'an express trust was created in 1982 when Calogero's half interest in the [Darch] property was transferred to Carmelo on the basis that he would hold his interest in trust for the family, except, perhaps for Norman who was to be paid $20,000 in lieu of any claim for the Property.'[590] This submission is consistent with Carmelo's pleading at [11] of his statement of claim.
420 Counsel for Ted submitted that in respect of the initial purchase of the property, the evidence 'clearly shows that Ted purchased and paid his share of the purchase costs and interest'.[591] On this basis, he submitted that Calogero's interest in the Darch property was only ever 50% and not 100% as contended by Carmelo. Ted contended that Calogero retained his beneficial interest in the Darch property and was the only party who could have exercised a right to recover a share in the Darch property.[592]
421 In order to consider whether Carmelo has a claim, it is necessary to consider each of the transactions in respect of the Darch property, in light of the factual findings I have made, to determine the basis on which the registered proprietors held their interest at the relevant times.
422 I turn first to consider the initial purchase of the Darch property in 1978.
423 For the reasons set out above at [246] - [247], I do not accept Ted's submission that he paid 50% of the purchase price of the Darch property. While I accept that Ted paid the instalments to the Bowmans (the previous owners of the Darch property) after settlement, these payments were made by Ted as payment for the Knutsford Street property. In any event, these payments occurred after registration of the transfer. The relevant time for consideration of the intention of the parties is the time the transfer was registered. At the time of the purchase of the Darch property, the only person who contributed any money to the purchase was Calogero. I do not accept that it was the intention of Calogero and Ted that they would jointly purchase the Darch property.
424 As a matter of law, the presumption of advancement applies to the purchase of the Darch property. Unless this presumption is rebutted, the law presumes that Calogero intended to gift Ted both a legal and beneficial interest in the Darch property. The question then is whether, as at the date of registration of the Darch property, Calogero intended to advance Ted a legal and beneficial interest in the Darch property or whether he intended that Ted only have a legal interest.
425 No direct evidence was given by any of the witnesses as to Calogero's intention at this time. However, in my view, for two main reasons, it can be inferred from the factual circumstances surrounding the purchase of the Darch property that Calogero did not intend to advance Ted a beneficial interest in the Darch property. First, the reason the property was purchased in the name of Calogero and Ted rather than Calogero and Maria was that Maria was approaching pensionable age and Calogero did not want the purchase to impact her access to the pension. Second, the purpose of the purchase was so that Calogero and Maria could establish a market garden at the Darch property.
426 In this case, Carmelo did not contend that there was any express declaration of trust at the time the Darch property was purchased. Rather, Carmelo contended that the court should infer from all of the circumstances surrounding the purchase that Calogero intended to create a trust whereby the Darch property was purchased for the benefit of all members of the Marchese family.
427 Given the relationship between the members of the family, it is not surprising there is no express declaration of trust. No party suggested there should be the precision that would be expected in an arms-length commercial transaction.
428 In my view, for the following reasons, the inference to be drawn from the circumstances surrounding the purchase of the Darch property was that on the purchase of the Darch property from the Bowmans, Calogero and Ted held the Darch property on trust for Calogero and Maria subject to the direction of Calogero. First, in holding the Darch property as joint tenant with Ted, on Calogero's death, the whole of the legal interest in the Darch property would pass to Ted automatically. If Calogero had died before Maria, if the legal interest reflected the beneficial interest, Maria would have had no interest in the Darch property. As at the date of the purchase of the Darch property, there is no evidence that this is what was intended. In fact, all the evidence is to the contrary. Second, this is consistent with my finding that the Darch property was purchased with the intention that it be developed by Calogero and Maria as a market garden. Third, there is nothing in the evidence before me or the surrounding circumstances which supports a conclusion that this intention should give rise to legally enforceable obligations as compared to the moral obligations that existed between the members of the family. I accept that prior to the purchase of the Darch property, Calogero (and Maria) told their sons on numerous occasions that they would share equally in their assets, which was reflected in their wills at that date. However, this, of itself, is not sufficient to infer an express trust or an interest in the Darch property. It was simply an expectation that the sons would inherit an equal portion of the Darch property on the death of their parents. Fourth, each of Carmelo, Norman and Ted agreed Calogero retained control of the Darch property, they did what he wanted and accepted this to be the case.
429 My assessment is that each of the sons accepted that the Darch property was Calogero's to deal with as he pleased and that they were dependent on his benevolence for any benefits they might receive from him in relation to the Darch property. It is clear from the evidence of all of the brothers that Calogero was head of the family and all of them accepted this to be the case. They trusted their parents and wanted to avoid any confrontation with Calogero. While I accept that it was natural for Carmelo and Norman to think of the Darch property as 'our property' without further thought, I do not consider this thought reflected the legal position.
430 If I am wrong in this analysis, given my factual findings that Calogero paid the entirety of the consideration for the Darch property and that he did not intend to convey a beneficial interest in the Darch property to Ted, I consider that Ted held his interest in the Darch property on resulting trust for Calogero.
431 I turn then to consider the transfer of the Darch property from Calogero and Ted as joint tenants to Carmelo and Ted as joint tenants.
432 It is not in dispute that Carmelo did not pay for the interest in the Darch property he received in 1982 and held until 1993.
433 Counsel for Ted submitted that during this period, Carmelo held his interest in the Darch property on resulting or implied trust for Calogero.[593] On this basis, he submitted that Calogero was the only party who could exercise a claim to recover an interest in the Darch property or the consideration for the sale. Counsel for Ted contended that any issue as to whether consideration was paid to Calogero and subsequently Carmelo was 'no longer relevant to the outcome of this case'.[594]
434 I do not accept these submissions. First, as a joint tenant, Calogero did not have a separate interest in the Darch property to Ted. There was no suggestion that by Calogero transferring his interest in the Darch property to Carmelo, the joint tenancy was severed and the parties then held their interests as tenants in common. This is confirmed by the transfer which reflects that Ted and Carmelo held the legal title to the Darch property as joint tenants. Second, I reject Ted's submission that Calogero sold his interest in the Darch property to Carmelo or that there was any intention by Calogero that Carmelo pay him for this transaction. As set out above at [302], I find that this transfer was motivated by Calogero approaching retirement age and Calogero's desire to obtain the pension.
435 In relation to the question as to whether Carmelo and Ted held the Darch property on trust, once again, as a matter of law, the presumption of advancement applies to this transfer. Unless this presumption is rebutted, the law presumes that Calogero intended to gift Carmelo and Ted a legal and beneficial interest in the Darch property. In this case, neither Carmelo nor Ted contended that Calogero transferred a beneficial interest in the Darch property by way of this transaction. Carmelo accepted that any legal interest he had in the Darch property was held on trust. The primary question that arises on this transfer is who the property was held on trust for.
436 While I accept there was no express declaration of trust at the time the Darch property was transferred to Carmelo and Ted, the promissory note that was signed is significant. The promissory note records two things. First, Calogero remained in control of the Darch property and would continue to be until his death or dissolution of the agreement recorded in the document. Second, on Calogero relinquishing his interest in the Darch property, Ted and Carmelo (rather than Calogero) were liable to pay Norman $20,000.
437 The promissory note, which is admissible as a declaration against interest, is strong evidence of Calogero's intention that on his relinquishing of his interest in the Darch property, the beneficial interest would then be held by Ted and Carmelo. The statements he made to Ms Patterson and Mr McKie referred to at [338] and [339] are consistent with this intention.
438 The promissory note, together with the findings of fact referred to at [302], support an inference that it was the common intention of Calogero, Ted and Carmelo that on registration of the transfer of the title, Ted and Carmelo would hold the Darch property on trust for Calogero for his lifetime and that on his death or relinquishing of his interest in the Darch property, the beneficial interest in the Darch property would revert to Carmelo and Ted and they would be obliged to pay to Norman $20,000. By signing the promissory note, Ted and Carmelo agreed to accept the transfer of the Darch property on this basis.
439 While I accept that these matters can be inferred from the promissory note and other factual matters, there is no written declaration of trust nor does the promissory note provide that Ted and Carmelo are trustees and that Calogero is a beneficiary on the basis set out above. As a consequence, s 34(1) of the Property Law Act has not been satisfied. However, it is well settled that a statute can never be used as a cloak for a fraud. As the learned authors of Jacobs' Law of Trusts in Australia state:[595]
... equity considers it a fraud for a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust; in such cases, parol evidence of the trust may be adduced to establish the trust, and a declaration obtained.
440 Accordingly, the registration of the transfer of the Darch property from Calogero and Ted to Carmelo and Ted did not give Carmelo and Ted indefeasible title. Carmelo and Ted accepted they would become the registered proprietors of the Darch property for the benefit of Calogero during his lifetime on the basis set out at [438].
441 Finally, I turn to the transfer of the Darch property from Carmelo and Ted to Ted. In considering whether this transfer gives Ted indefeasible title, the relevant findings of fact are as follows. First, prior to the registration of this transfer, Ted knew that Carmelo was having marriage difficulties. Second, following discussions between Calogero and Carmelo, he agreed with Calogero and Carmelo that Carmelo's legal interest in the Darch property should be transferred so that it could not be the subject of a claim by Carmelo's wife and Ted accepted the transfer of the interest in the Darch property on this basis. That is, Ted agreed to the transfer of the interest and that he would hold the legal interest in the Darch property on the same basis as previously, namely subject to the direction of Calogero and on the basis set out at [438]. Third, Carmelo's payment of the stamp duty on the registration of the transfer and the absence of any consideration being paid for the transfer of the interest is evidence that the transfer was not a sale of Carmelo's legal interest in the Darch property but that Ted was registered as the legal owner of the whole of the Darch property on the basis that he was not 'out-of-pocket' for the transfer.
442 By agreeing to the transfer of title in the Darch property on this basis, Ted continued to hold the Darch property on trust on the same basis as set out in [438]. There is no evidence that the common intention of Calogero, Carmelo or Ted changed prior to registration of the transfer or that Calogero had dissolved the agreement set out in the promissory note. This is consistent with the statements Calogero made to Ms Patterson and Mr McKie, referred to at [338] and [339] which are made after Ted became the sole registered proprietor and while Calogero maintained his beneficial interest in the Darch property.
443 After this date and prior to the death of Maria and then Calogero, Calogero did not alter this agreement or give any direction which removed the beneficial interest in the Darch property that Carmelo would be entitled to on the death of Calogero. In this regard, as set out above at [368], I do not accept that the statutory declaration is evidence of Calogero's intention or agreement in respect of the Darch property. For this reason, on Calogero's death, Ted and Carmelo each became entitled to a 50% beneficial interest in the Darch property and were obliged, jointly and severally, to pay Norman $20,000.
444 I accept there was still no written declaration of trust and s 34(1) of the Property Law Act has not been satisfied. However, as set out at [439], this section does not assist Ted. Ted accepted transfer of the interest in the Darch property on the basis set out at [438]. It would not be proper for him to deny the trust and regard himself as the sole beneficial owner of the Darch property.
445 Neither s 68 nor s 134 of the TLA precludes the enforcement of the interest claimed by Carmelo. This is because the interest arises not because Ted had notice of the trust but because he accepted a transfer of the legal interest in the Darch property from Carmelo on the basis that he would continue to be bound by the trust. For this reason, I find that Ted holds the Darch property on trust for the benefit of him and Carmelo in equal shares, subject to the adjustments that I address below at [501]. In my view, the subject matter of the trust, the trustee and the beneficiaries are sufficiently certain so as to found an express trust.
446 I also consider that, on the facts I have found, an alternative analysis is arguably open, namely that Ted holds 50% of the Darch property on constructive trust for Carmelo, subject to the adjustments that I address below. However, in my view, the better view is that an express trust was intended by Calogero, Carmelo and Ted.
447 On either analysis, I consider that Carmelo is entitled to registration with Ted as tenants in common as to 50% of the estate in fee simple of the Darch property.
448 Given this finding, it is strictly not necessary for me to consider the alternate claims advanced by Carmelo. However, given these claims took up much of the evidence and time at trial, I will address briefly each of these alternative claims.
449 In his statement of claim, as well as his closing submissions, Carmelo contended it was the express or inferred common intention of him, Ted, Calogero, and Maria that Carmelo would acquire a beneficial interest in the Darch property from his work on the property. Carmelo says that he acted to his detriment by providing his labour. Specifically, Carmelo relied on his evidence that he did unpaid work on the Darch property because Calogero told him that the purchase of the Darch property was for the benefit of the family.[596] In these circumstances, he contends it would be unconscionable for Ted to hold the Darch property as his sole property.
450 Ted submitted there was no evidence the parties had a common intention to pool their financial and non-financial resources for the benefit of all of them and that the claim should be dismissed.
451 As noted above at [139], it is necessary for a common intention constructive trust that Carmelo establish on the balance of probabilities that at the time of the purchase of the Darch property, there was an actual or inferred common intention that he have a 50% beneficial interest in it.
452 For the following reasons, Carmelo has not established on the balance of probabilities that there was a common intention at the time the Darch property was purchased that he would acquire a beneficial interest in it or that 50% of the Darch property would be owned beneficially by him. First, consistent with my findings at [428], in my view, the implied common intention at the time of purchase of the Darch property was that it be held on trust for the benefit of Calogero and Maria, subject to the direction of Calogero. That is, until Calogero gave any direction, no other member of the Marchese family had any beneficial interest in the Darch property. Second, Carmelo did not make any financial contributions to the Darch property which would be consistent with the beneficial interest he claims. Third, at the time the Darch property was purchased, Carmelo was living in Queensland. There is no evidence that at the time the Darch property was purchased, there was a common intention that Carmelo would return to Perth and make significant non-financial contributions to the Darch property.
453 Further and in any event, I am not satisfied that Carmelo has established on the balance of probabilities that he acted to his detriment on the basis of this common intention. The detriment which is pleaded and relied upon by Carmelo in this regard is the work that he contributed to the establishment of the market garden and at the Darch property. I am not satisfied that Carmelo has established he would not have undertaken this work without this common intention. As set out above, I consider Carmelo would have undertaken work at the Darch property as requested by Calogero for at least two reasons. First, because I accept he was a dutiful son to his parents, and second, because he had an expectation that he would ultimately inherit a portion of the Darch property on the death of his parents.
454 Carmelo contended 'there was more than sufficient evidence pointing to the fact' that the Darch property was purchased as part of a joint endeavour in respect of which all family members would contribute either money or labour for the benefit of the family.[597] Carmelo submitted it would be unconscionable for Ted to hold the Darch property to the exclusion of Carmelo and possibly Norman, which was 'compounded' by the fact that Ted paid nothing for 'Carmelo's interest'.[598]
455 Counsel for Ted denied there was a joint endeavour in relation to the Darch property. In relation to the work Carmelo and Norman said they did on the Darch property, Ted submitted this work was done because they were dutiful sons. He also contended the work did not result in any appreciable increase in the value of the Darch property; at its highest, the labour contributed to the market garden business carried out at the Darch property.[599]
456 In considering Carmelo's claim, it is important to consider it on the basis of the legal principles which I have summarised above and to guard against 'idiosyncratic notions of what is just and fair'.
457 In this case, while I accept that both Carmelo and Norman undertook work at the Darch property, the fact of this work, by itself, is insufficient to give rise to a joint endeavour. As the authorities have made clear, as summarised at [141] - [143] above, it is necessary that there be a pooling of resources (both financial and non-financial) for the purposes of the joint endeavour. There is no suggestion that Carmelo made any financial contribution to the purchase of the Darch property. Accordingly, the only contribution that is relied upon is his contribution of labour on the Darch property. I am not persuaded that these non-financial contributions were made for the purpose of the alleged joint endeavour for the advancement of the family's mutual security and benefit. In my view, these contributions are more consistent with the work of a dutiful son with an expectation that the work is building the family's financial assets which would be left to their sons in equal proportions than a joint endeavour in the terms pleaded.
Is Ted estopped from asserting the Darch property is legally and beneficially owned by him?
458 Carmelo advanced his equitable estoppel claim on the following basis:[600]
(a) Ted was present at the discussion between Carmelo and Calogero concerning the breakdown of his marriage and the proposal to transfer Carmelo's 50% legal interest in the Darch property to Ted;
(b) Ted induced Carmelo to proceed with this transaction by agreeing to the proposal;
(c) Ted prepared the necessary documents to give effect to the transfer, had the 50% interest in the property valued and ensured the stamp duty was paid and the transfer lodged;
(d) by the conduct referred to in (c), Ted knowingly induced Carmelo to rely on this conduct and act to his detriment by transferring the legal interest in the property to Ted and to assume the 50% legal interest would be transferred back to Carmelo in the future and that pending such transfer he would hold the 50% interest in the Darch property on trust for Carmelo;
(e) Ted should be estopped from denying the Darch property is legally and beneficially owned by Carmelo as to 50%.
459 Counsel for Ted denied he made any promise to Carmelo and that Carmelo has not acted to his detriment.
460 I have summarised the relevant findings of fact at [441]. On the basis of these findings of fact, I am satisfied that Ted agreed with Calogero and Carmelo to accept the legal interest of the Darch property on the basis that that he would hold the property on trust for Calogero for his lifetime and that on his death or relinquishing of the title, the beneficial title would pass to Carmelo and Ted in equal portions, and thereby represented he would accept the transfer on this basis. I am also satisfied that Carmelo relied on this to his detriment by transferring the legal interest in the Darch property to Ted and not seeking for it to be transferred back to him during Calogero's lifetime. In implementing the changes to the legal ownership of the Darch property, Ted was not simply a bystander. Ted was involved in these changes which could not have occurred without the agreement of both him and Calogero. On this basis, I am satisfied that it would be unconscionable for Ted to resile from the representations.
461 Given the representations concern an interest in land, there is no evidence before me to justify a departure from the prima facie position that Ted can only fulfil his equitable obligation by making good the representations. On this basis, I consider that it would be unconscionable for Ted to deny that Carmelo has a 50% interest in the Darch property and he should be estopped from doing so.
Does Norman have an interest in the Darch property and if so, what interest?
462 In closing submissions, counsel for Norman limited his claims in the Darch property to three alternative causes of action:[601]
(a) a remedial constructive trust based on the joint endeavour by the Marchese family in the purchase, renovation and sale of various properties which extended to the acquisition and development of the Darch property;
(b) a resulting trust based on what was contended to be Norman's financial contributions to the Darch property;
(c) equitable estoppel, whether by representation or convention.
463 In considering Norman's claims, I again observe that Calogero only held a legal interest in the Darch property until 1982 and Ted did not become the sole registered proprietor of the Darch property until 1993. Notwithstanding this, both the pleadings and Norman's case at trial focussed on payments which Norman said were made to Calogero, the common intention of the members of the family at the date the Darch property was purchased and representations said to have been made by Calogero after he ceased to be the registered owner of the Darch property.
464 Prior to 22 July 1982, to the extent that Norman had any equitable interest in the Darch property, it was a right that was enforceable against Calogero. Establishing such a claim, without more, will not bind Carmelo and Ted and then Ted as a subsequent registered proprietor. When Carmelo and Ted and then Ted ultimately became the registered proprietor of the Darch property, they acquired title on registration. Even though I accept that Carmelo and then Ted both acquired their title as a volunteer, their title was indefeasible except in the case of fraud. Norman has not pleaded any fraud in the registration of these transfers. Accordingly, the knowledge and conduct of Carmelo and subsequently Ted at the time each became registered proprietor of a legal interest in the Darch property is relevant as to whether it would be unconscionable for Ted to now hold the title to 100% of the Darch property without recognition of any equitable interest claimed by Norman.
465 Counsel for Norman submitted that there was a joint endeavour between all members of the Marchese family to buy and sell properties 'with the common aim of building wealth for the mutual benefit of the family as a whole'.[602] He submitted that the joint endeavour commenced in about September 1969, at the time Omega Constructions was registered. He submitted that each of Carmelo and Norman made three forms of contributions to the joint endeavour. First, non-financial contributions in labour carried out by them on a 'substantial number' of the properties that were bought, renovated, improved and sold between 1968 and 1978. Second, indirect financial contributions being labour and collection of rent which contributed to the generation of income or capital gains from these properties which were used to purchase further properties. Third, direct financial contributions being monies which were paid by the brothers to purchase any of these properties or by incurring expenses for carrying out labour or improvements to the properties, including the Darch property.
466 Norman contended the 'culmination of the joint endeavour would have been' the joint sharing of the legal title to the Darch property which was consistent with the wills of Calogero and Maria in 1987. [603]
467 Norman contends that the common substratum of the joint endeavour irretrievably broke down shortly after Calogero's death when Ted was no longer willing to abide by the terms of the joint endeavour and has retained the Darch property without accounting to Norman for his contributions (both financial and non-financial). Norman contends this has occurred without attributable blame on his part.
468 Counsel for Ted denied there was a joint endeavour in relation to the home renovation business. Counsel for Ted submitted that Norman had not established to the requisite standard there was a joint endeavour to share in the profits made from the purchase, renovation and sale of properties.[604] He emphasised that Calogero, in his statement dated 28 May 2013, referred to Ted as providing assistance with the renovations of various homes but did not refer to or mention either Carmelo or Norman.[605] Ted also referred to the various properties that were purchased and sold by Norman and Carmelo (either individually or with other members of the family) during the same period as the alleged joint endeavour. Counsel for Ted submitted that neither Carmelo nor Norman had provided a satisfactory explanation as to why they contended any profits from these transactions fell outside the joint endeavour pleaded by each of them.[606]
469 Counsel for Ted submitted that Norman's failure to make any claim against Calogero for the value of his labour or contribution to the joint endeavour over a 40 year period 'defeats the claim' as against Ted.[607] It was not clear from the submissions as to the legal basis for this submission.
470 As set out above, Norman did not give evidence of any specific discussions that he would obtain an interest in the properties from the work that was done on the properties. I readily accept, on the basis of the authorities I have summarised above, it is not necessary for the members of the Marchese family to have used any specific words or language to give rise to the requisite common intention; it can be inferred from the circumstances.
471 In this case, for the following reasons, I am not persuaded that Norman has established there was a common intention (either express or implied) between him and other members of the family, but more particularly Calogero, that he would obtain a beneficial interest in the Darch property from his work on the properties set out in Attachment A.
472 First, the work that was done on these properties was consistent with the evidence given by each of Ted, Carmelo and Norman that they were expected to contribute to this work while they were living at home, in order to build up the family's assets which would ultimately be left to them equally in their parents' wills. It was not suggested that this work gave Norman a beneficial interest in any specific property or properties.
473 Second, as both Norman and Carmelo stated, each believed that by doing this work to build up the assets of the family, each would benefit in the long-run by receiving one third of his parents' estate when they died.
474 Third, each of the brothers bought and sold a number of properties either by themselves or with each other over this same time period. Both Carmelo and Norman denied these properties formed part of the home renovation business but did not give a satisfactory explanation as to why these were excluded but the properties owned by Calogero and Maria were included. If in fact, there was a common intention that all properties owned by members of the family would give the brothers a beneficial interest in each of the properties, there is no satisfactory explanation as to why these properties would be treated differently.
475 Fourth, Norman did not give evidence or make submissions as to what portion of the Darch property would reflect the contributions made by him or how any inference can be drawn that this was the common intention of the parties.
476 For these reasons, I find that Norman has not established that in September 1978 when the Darch property was acquired, there was an express or implied common intention that a portion of it be held on trust for Norman.
477 Counsel for Norman submitted that he contributed two sums to the purchase of the Darch property: a cash payment of $4,000 in or about July 1978 and a second cash payment of $5,000 in December 1978.
478 On the evidence, counsel for Norman submitted there were three alternative findings open to the court. First, Norman's financial contribution was $20,000 as stated by Calogero to Norman. Second, Norman's financial contribution was $9,000. Third, Noman's financial contribution was $4,000 and the additional $5,000 was used for 'expenditure applied towards the [Darch property] shortly after its purchase'.[608] Norman accepted the sum of $5,000 could not have been contributed to the payment by Calogero on settlement but contended it 'could have been used by [Ted]' to pay the settlement instalment on 5 October 1979.[609]
479 Counsel for Norman said the only evidence which could rebut the inference of a resulting trust was the promissory note. Norman submitted this should be rejected as there was no express or implicit statement that the $20,000 was a repayable loan; this amount was payable without any accrued interest; it was inherently improbable that Norman would have agreed to accept an interest-free lump sum payment in return for the payments he had made; and Norman was not party to the promissory note and was not aware of it until years after.[610] Norman contended the promissory note was evidence of an acknowledgement by Calogero and Ted of 'a financial liability to Norman which related specifically to the block' which could be enforced in equity.[611]
480 Counsel for Ted submitted there were no documents, including any banking documents, which provided objective evidence that any sum was transferred from Norman to Calogero and used for the purchase of the Darch property.[612]
481 As set out above at [236] - [242], I am not satisfied that Norman made the payments alleged or made any financial contribution to the purchase of the Darch property. For this reason, there is no basis upon which it can be contended that Calogero held any interest in the Darch property on resulting trust for Norman. All of the submissions made by Norman in relation to the promissory note proceeded on the basis that the payments had been made by him. Given my findings in relation to the payments, these submissions do not assist Norman's case.
482 However, even if I am wrong in my factual findings as to the payments, these payments do not mean that he has any present interest in the Darch property. There is no evidence that at any stage prior to the transfer from Calogero and Ted to Ted and Carmelo that either Ted or Carmelo had been told by Norman or Calogero that Norman had contributed to the purchase price or Calogero held a portion of his interest in the Darch property on resulting trust for Norman. More importantly, there is no evidence Ted and Carmelo accepted the transfer on the basis they would continue to hold the property on this same basis. Without this evidence, the effect of s 68 and s 134 of the TLA is that on registration, Carmelo and Ted had indefeasible title and, in so far as it concerns any claim by Norman, they did not take the Darch property subject to the resulting trust.
483 Norman's claim of equitable estoppel was advanced on a different basis to that contended by Carmelo. Norman contended that the effect of the representation was that the three brothers would share equally in the assets of Calogero and Maria when they died, including the Darch property. He says that based on this representation, he contributed to the development and maintenance of the Darch property without insisting he be registered as a joint proprietor and that Ted was prevented from denying he holds the legal title of the Darch property for the benefit of the three brothers in equal proportions.[613]
484 Counsel for Ted raised a number of matters in defence to this claim. First, Ted denied that any representations were made. Second, even if the representations were made, the claim was against Calogero's estate and not Ted. Finally, Ted pointed to the significant period of time that had passed since the representations were made and the fact that Norman did not act on the representations until after Calogero died.[614]
485 I accept that prior to the promissory note, representations were made by Calogero and Maria that the three brothers would share equally in the properties that had been purchased by Calogero and Maria on their death, including the Darch property. It was not clear from Norman's evidence whether any specific representations in relation to the Darch property were made after the promissory note was signed. Counsel for Norman submitted that, on the evidence, it was clear that Norman was not aware of the existence of the promissory note until after Calogero's death. In these circumstances, he contended there was no reason for Norman to believe anything had changed or the representations made by Calogero to him (that Calogero held his interest in the Darch property on trust for him and he would receive a one third share of his parents' properties on their death) did not continue.[615]
486 While I accept that Norman was not aware of the existence of the promissory note until after Calogero's death, in my view, this does not advance the matter. The fact that Norman expected based on representations made to him that on Calogero's death, his estate, including the Darch Property, would be split three ways does not elevate this representation into a promise on which equity will intervene. There is no evidence that Calogero made any statements which amount to an irrevocable promise in relation to the Darch property that Norman would receive one third of the Darch property on Calogero's death.
487 In any event, I am not persuaded that Norman has established that he suffered any detriment in reliance on any representations. In this regard, I note that previous authorities have spoken of 'life altering' conduct. There was no evidence before the court that could sustain a finding that Norman's contribution to the Darch property has been life altering. I am not satisfied on the balance of probabilities that the reason Norman was unable to obtain his builder's registration was because of the work he undertook for Calogero and Maria. Apart from a broad statement in his evidence-in-chief, no specific evidence was given by Norman which would enable a positive finding to be made in this regard. While I accept that Norman undertook work on the various properties purchased by Calogero and Maria as well as the Darch property, in my view, this work is consistent with the type of work that would be carried out by a dutiful son, which I accept he was. Specifically, I do not accept that he would not have done this work on the Darch property without the representation having been made. In addition, even on his own evidence, the actual costs he incurred in respect of the work were relatively minimal and there is no evidence that the work he has done at the Darch property has substantially increased its value. The evidence before the court is more consistent with an inference that any increase in value of the Darch property is because of its rezoning and the spread of the metropolitan area of Perth since 1978 rather than its development.
488 Part of the detriment relied upon by Norman is that he did not insist on being registered as joint proprietor of the Darch property. This is not established on the evidence, which is, in fact, all to the contrary. Norman's evidence was that he raised on a number of occasions an objection that his name was not on the title. This objection did not result in Norman's name being included on the title and there is no evidence that Calogero would have directed this to occur.
489 For these reasons, I do not accept that Ted has taken unconscionable advantage of Norman by encouraging him to continue to do work at the Darch property on the basis of any representation made by him or Calogero.
490 In relation to the alternate estoppel claim based on estoppel by convention, counsel for Norman contended that the assumed state of affairs was that the three brothers would equally share in the assets of Calogero and Maria when they died, including the Darch property, and that the parties conducted themselves on that basis.
491 While I accept that Norman assumed that Calogero would leave all of his assets including the Darch property to the three brothers, there is no evidence that this assumption was shared by Ted, particularly after the promissory note was signed, or that the parties conducted themselves on that basis. As stated at [487], while I accept Norman undertook work on the Darch property, this work is consistent with the work carried out by a dutiful son.
492 For these reasons, the estoppel by convention argument must also fail.
493 In his statement of claim, Norman sought equitable compensation for the value of his contributions. No specific evidence was led in support of this claim although a number of documents were tendered as to the award wages that applied over the relevant periods.
494 Consistent with my finding that the work done by Norman on the properties and the Darch property was consistent with the work of a dutiful son and in the expectation he would ultimately receive something on the death of his parents, I do not consider Norman has established an entitlement to equitable compensation and dismiss this claim.
495 Ted, in answer to the claims of both Carmelo and Norman, pleaded a defence of laches. At trial, no submissions were made by Ted as to the basis upon which he contended that this defence applied.
496 Ted's only submission was that the failure of both Carmelo and Norman to make any claim against Calogero over a more than 40 year time period defeats the claim brought against Ted.[616] He also contended that any claim either of them had was a claim against Calogero and could only be made against his estate.[617]
497 In closing submissions, in response to a question from the court, counsel for Ted confirmed that this defence was pleaded and relied upon and that the detriment relied upon was the cost to Ted of maintaining the Darch property. He submitted that the relevant period of delay was from 1993, at the time the legal interest in the Darch property was transferred to Ted, and not 2013 when Calogero died. Ted contended that by failing to raise their claim prior to Calogero's death, Ted lost the opportunity to discuss the claim with Calogero and for it to be resolved.
498 In relation to the claim by Carmelo, it is my view that the defence of laches does not operate to defeat Carmelo's claim. Ted did not identify any prejudice that, combined with the delay, would give rise to a defence of laches. In my view, Carmelo did not make a deliberate and informed decision not to take action against Ted. Until Calogero died, the beneficial interest in the Darch property did not vest. It was only after this occurred that Carmelo had a right to call for the beneficial interest in the Darch property to be transferred to him. In addition, there is no evidence that any inaction on the part of Carmelo encouraged Ted to have any belief that he accepted Ted was the absolute owner of the Darch property.
499 If I am wrong in my assessment of Norman's claim, I would hold for similar reasons that the defence of laches does not defeat Norman's claim.
500 There was no dispute that Ted had paid the rates and taxes for the Darch property and that Carmelo has not contributed to these.
501 It is necessary that an adjustment be made to reflect 50% of these payments. On the evidence before the Court, I accept that these amounts comprise $145,288.06.[618]
502 I have set out in Attachment B to these reasons the breakdown of these calculations. In his closing submissions, Ted sought significantly higher amounts for these matters. I do not accept the amounts set out in the submissions reflect the evidence. In relation to the land tax, the amounts claimed are the total amounts paid by Ted for land tax, including on other properties unrelated to the Darch property. In addition, there was no evidence before me as to the amounts paid after 30 June 2015 for the Darch property and therefore no allowance is made for this. In relation to rates, there was no evidence before me as to the amounts paid after 2016 and therefore no allowance is made for this. Finally, in relation to the amounts sought for Synergy and water rates, these amounts appear to be claimed for usage. Given Carmelo was not using the Darch property, it is not clear as to the basis upon which it is contended he should be liable for these amounts. In my view, these amounts are payable by the occupier of the property and not the owner.
503 On this basis, Ted is entitled to a lien over the Darch property to secure payment of the amount of $145,288.06.
504 There was some evidence before me at trial that a house had been constructed on the Darch property however no evidence was led at trial as to the costs that were incurred, whether this increased the value of the Darch property or where the house is located on the property. For these reasons, I have not made any specific allowance for this but will hear from the parties before making orders.
505 For these reasons, in relation to the claim by Carmelo, I consider that Ted holds the Darch property on trust for the benefit of him and Carmelo in equal shares, subject to a lien of $145,288.06 in favour of Ted.
506 In relation to Norman's claim, I do not consider that Norman has established any of the claims made by him. For this reason, his claim should be dismissed and judgment entered for Ted.
507 I will hear from the parties as to the appropriate orders that should be made to reflect these reasons, including what, if any adjustment should be made for the house constructed on the Darch property as well as in respect of the costs of the action.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CITATION : MARCHESE -v- MARCHESE [2021] WASC 385 (S)
Costs - Applications for costs - Question of apportionment of costs between matters - Turns on own facts
Supreme Court Act 1935 (WA), s 37
Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602
Frigger v Lean [2012] WASCA 66
Marchese v Marchese [2021] WASC 385
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388
509 On 8 November 2021, I delivered my reasons for decision following the trial in this matter.[619] Orders were made for the parties to file submissions in support of the costs orders they contended should be made. These reasons should be read with my earlier reasons for decision.
510 The primary dispute between the parties was how the costs of the trial should be apportioned between the parties.
511 In my view, for the reasons that follow, I consider that the costs of the trial should be apportioned equally between CIV 2521 of 2015 (2015 proceedings) and CIV 1821 of 2016 (2016 proceedings). In relation to the remaining costs of each of the proceedings, I consider that there is no good reason to depart from the usual order and these costs (including reserved costs) should be paid by the unsuccessful party.
512 Under s 37 of the Supreme Court Act 1935 (WA), the court has a wide discretion to award costs. However, the discretion is not unfettered and must be exercised judicially.[620]
513 The general rule is that costs should follow the event; that is, the successful party should recover their costs from the opposing party. It is incumbent on an unsuccessful party to satisfy the court that there are good reasons it should not pay the successful party's costs.[621]
514 As was noted by the Court of Appeal in Strzelecki Holdings Pty Ltd v Jorgensen:[622]
What constitutes 'success' in proceedings is to be determined by the reality of the circumstances involved in the case. The Court may depart from the general rule that costs follow the event and modify a costs order to take into account matters such as any unreasonable conduct of a generally successful party, or to the failure of that party on one or more specific issues. The exercise of the discretion in that way is recognised by a number of rules in the [Rules of the Supreme Court], together with the practice of the Court, and authority. So, for example, if the Court is of the opinion that the conduct of a successful party - either before or after the commencement of the litigation - has resulted in costs being unnecessarily or unreasonably incurred, the Court may deprive that party of costs, either wholly or in part, and it may further order that party to pay the costs of an unsuccessful party, either wholly or in part....
Under O 66 r 1(3) RSC, where a party, though generally successful in an action, has, by the introduction of some issue or issues on which it has failed, increased the costs, the Court may order such party to pay the costs of such issue or issues. It is well-recognised that an order that a successful party recover only a portion of its costs, where it has not been wholly successful, should not be made as a matter of course, for at least two reasons. First, it is often the case that a successful party will not succeed on every issue raised. Secondly, to attempt, in every case, an analysis of which party was successful on which issue would add uncertainty and complexity to the outcome of litigation, and add to the time and cost of costs arguments. Consequently, the power to apportion costs in this way should only be exercised where there are discrete and severable issues on which the generally successful party failed, and which added to the cost of the proceedings in a significant and readily discernible way. Furthermore, while parties should be encouraged to consider carefully what matters they put in issue, justice may not be served if, by too ready a resort to deciding questions of costs according to success on particular issues, parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case.
Where the Court decides, in the exercise of its discretion, to modify the usual costs orders to reflect the limited success of the successful party, that power will be exercised broadly, and as a matter of impression, and without any attempt at mathematical precision (which is likely to prove illusory in any event). That approach reflects the fact that it may be difficult to separate the factual and evidentiary substratum of different issues, the fact that some issues are more important than others, and the fact that some issues are subsidiary to others. (footnotes omitted)
515 In relation to costs where the proceedings are heard together, as Goldberg J stated in Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2):[623]
[W]here a respondent participates in a hearing of multiple proceedings at the same time, it is not unreasonable for an unsuccessful respondent to expect that it will obtain a savings in costs where it is unsuccessful and it is ordered to pay the successful applicant's costs. The price to be paid for having multiple proceedings heard at the same time is for all parties to acknowledge that certain costs consequences may follow. The applicant achieves a saving in relation to the presentation of its cases against the respondents at the expense of all respondents having to be present throughout the whole hearing. The respondents have to be present throughout the whole hearing but it is not unreasonable for them to expect an allowance in respect of any costs ordered against them, if they are unsuccessful, in relation to costs incurred by the applicant in presenting a case against all respondents.
Such an allowance to the unsuccessful respondents in respect of the costs of the applicants which they are ordered to pay ought to reflect the nature of the proceedings, their complexity, their length, the number of separate groups of respondents involved, the range of issues raised and the extent of the unsuccessful respondents' participation in the hearing relative to the participation of the successful respondents.
516 Carmelo (the plaintiff in the 2015 proceedings and second defendant in the 2016 proceedings) sought an order that Ted (the unsuccessful first defendant in the 2015 proceedings and successful first defendant in the 2016 proceedings) pay his costs of the action in the 2015 proceedings, including any reserved costs. Carmelo did not seek any order as to his costs of the 2016 proceedings, notwithstanding the fact he was named as a defendant in those proceedings.
517 Carmelo contended there should be no apportionment of the costs of the trial between the 2015 proceedings and the 2016 proceedings. He submitted that because the evidence in the 2016 proceedings stood as evidence in the 2015 proceedings, it was necessary for Carmelo's counsel to attend the entirety of the trial. Further, because there was substantial overlap between the issues and evidence in each of the proceedings, it was difficult to determine what evidence was led in relation to each matter. In this regard, Carmelo emphasised that the central question for determination at trial in each of the proceedings was whether either or both of Carmelo and Norman had an interest in the Darch property.
518 In support of his application for costs, Carmelo referred me to a Calderbank offer made in April 2017 which offered to settle the proceedings on the basis that Ted pay to Carmelo the sum of $800,000.[624] While Carmelo did not rely upon this letter in support of an application for indemnity costs, he submitted it was relevant to the question of what costs orders should be made. Specifically, he contended that had the offer been accepted by Ted, the trial in the 2015 proceedings would have been avoided.
519 Ted acknowledged he was liable to pay Carmelo's costs of the 2015 proceedings but contended Carmelo's costs should be reduced for two reasons. First, Carmelo did not succeed on all of the issues at trial and should not receive the costs of the issues on which he was unsuccessful. Second, the costs of the trial should be apportioned equally between the actions on a 50/50 basis and the costs of the remaining items as agreed by the parties or determined by the taxing officer. In respect of the 2016 proceedings, Ted sought an order that Norman pay his costs of the proceedings. Consistent with the position taken in respect of the 2015 proceedings, Ted contended the costs of the trial in the 2016 proceedings should be apportioned equally between the matters.
520 Norman did not dispute that he was liable to pay Ted's costs of the 2016 proceedings but contended the appropriate apportionment of the trial was at least 55% and up to 65% as to the 2015 proceedings. This was on the basis that a greater number of witnesses were called in the 2015 proceedings and more of the time in both submissions and evidence at trial concerned the 2015 proceedings.
521 In considering the appropriate order as to costs, it is important to note that while the two proceedings were heard together, the plaintiffs, Carmelo and Norman, were represented by different counsel and solicitors and the primary defendant in both proceedings, Ted, was represented by the same counsel and solicitors.
522 On 9 September 2019, an order was made that the 2015 proceedings and the 2016 proceedings be listed and heard together with the evidence in the 2016 proceedings standing as evidence in the 2015 proceedings. The 2015 proceedings was ordered to be the lead action.
523 The effect of this order was that Ted did not have to give evidence in each of the proceedings, although he was cross-examined by both counsel for Carmelo and Norman. It also meant that all parties could rely on the evidence of the witnesses in the other proceedings. This had two primary consequences which are relevant to costs. First, all parties saved time and costs in relation to the evidence of witnesses. This was because witnesses only needed to give evidence in chief once and cross-examination of the witnesses was not duplicated. Second, each of the parties needed to participate in the whole of the trial in both proceedings. This primarily impacted Norman, who was not a defendant in the 2015 proceedings, and Carmelo, who was a defendant in the 2016 proceedings as a necessary party, but otherwise may not have fully participated in that trial. However, the effect of these orders was that there was a substantial saving of court time.
524 At the trial, the case of each of the parties (including both opening and closing submissions) took approximately three days. That is, at trial the time was divided equally between the 2015 proceedings and the 2016 proceedings.
525 Norman was unsuccessful in respect of his claim in its entirety. In the 2015 proceedings, Carmelo was unsuccessful on his claims based on a joint endeavour constructive trust. As noted at [448] of my reasons for decision, the evidence on this issue took up a significant portion of the time at trial. For this reason, it is my view that the costs orders in the 2015 proceedings need to reflect the position that Carmelo was not entirely successful on all of the issues at trial and that, at least in so far as this issue is concerned, this evidence concerned a discrete and severable issue.
526 In my view, there are two other factors relevant to the exercise of my discretion. First, the joint endeavour constructive trust and the common intention constructive trust pleaded by Carmelo was of a significantly narrower scope than that pleaded by Norman. The additional evidence required to be led by the parties to address Carmelo's claims was less significant than the evidence required on the broader claim made by Norman. Second, Carmelo was a defendant in the 2016 proceedings and, as a successful defendant, is entitled to seek an order for costs against Norman. The fact that he has chosen not to do so does not mean that Ted should pay the costs incurred by Carmelo in participating in the hearing concerning the 2016 proceedings.
527 While I accept that a mathematical apportionment is arbitrary, to some extent, I consider that in the circumstances of this case, it is an appropriate manner in which to resolve the issue. This approach reflects the fact that it is difficult to separate with any precision the evidence and submissions of the parties on each discrete issue.
528 Taking into account the legal principles that I have summarised above and the factual circumstances of this case including the matters referred to at [16] - [18], it is my view that Ted should pay 50% of Carmelo's costs of the trial. In relation to the other costs of the 2015 proceedings, I do not consider there is any reason to depart from the usual order in respect of these costs. Many of the steps required in the 2015 proceedings were incurred prior to the order of 9 September 2019 that both proceedings be heard together. In respect of these costs, I consider it is more difficult to separate with any precision the costs of the issues on which Carmelo was not successful. For this reason, I consider that Ted should pay Carmelo's costs of the 2015 proceedings, including reserved costs.
529 In respect of the 2016 proceedings, I consider that similar orders for costs should be made. That is, I consider the appropriate order for costs is that Norman pay 50% of Ted's costs of the trial and otherwise pay all of Ted's costs of the 2016 proceedings, including reserved costs. As noted above at [18], the evidence that was led at trial by the parties to address the joint endeavour constructive trust pleaded by Norman was significant. While I accept that a mathematical apportionment is arbitrary, in my view as set out at [16], the time spent at trial dealing with the 2016 proceedings was approximately 50% of the total trial length.
530 For the reasons set out above, it is my view that the appropriate costs orders in the 2015 proceedings are:
(a) The first defendant pay the plaintiff's costs of the proceedings, including reserved costs, to be assessed if not agreed subject to the following.
(b) The first defendant pay 50% of the plaintiff's costs of the trial.
531 In the 2016 proceedings, the appropriate costs orders are that:
(a) The plaintiff pay the first defendant's costs of the proceedings, including reserved costs, to be assessed if not agreed subject to the following.
(b) The plaintiff pay 50% of the first defendant's costs of the trial.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[1] Lot 43 on Diagram 19427 being the whole of the land comprised in Certificate of Title Volume 1232 Folio 490.
[5] Exhibit 2.16 (in respect of Carmelo).
[10] Blacket v Barnett [2017] NSWSC 1032 [243] - [257] (Hallen J). See also Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6] [2019] WASC 5 [26] (Tottle J).
[11] Day v Couch [2000] NSWSC 230 [9].
[12] Webb v Ryan [2012] VSC 377 [22] (Whelan J).
[13] Watson v Foxman (1995) 49 NSWLR 315, 318 - 319 (McLelland CJ in Eq).
[14] In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 [7] (Black J); Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 [15]; Hughes v St Barbara Mines Ltd (No 4) [2010] WASC 160 [157] (Martin J).
[15] The Nominal Defendant v Cordin [2017] NSWCA 6 [171] (Davies J, with whom Emmett AJA agreed).
[16] Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Unreported, FCA, 29 June 1995), 122 - 123 (Tamberlin J).
[17] McClellan P, 'Who Is Telling the Truth? Psychology, Common Sense and the Law' (2006) 80 Australian Law Journal 655, 665 quoting a passage from Australian Psychological Society, Guidelines Relating to Recovered Memories (2000).
[18] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [31].
[19] Heydon J D, Cross on Evidence (12th ed) [33005].
[20] Heydon J D, Cross on Evidence (12th ed) [33010].
[21] Roberts v Burns Philp Trustee Co Ltd (1985) 5 NSWLR 72, 78.
[22] Bagot's Executor and Trustee Co Ltd v Fudge [1949] SAStRp 21; [1949] SASR 297 (Paine AJ).
[34] Norman's closing address [38] - [39].
[41] Carmelo's closing submissions [4] - [9].
[81] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298, 308, 312, 320 - 321.
[82] AVWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2) [2019] WASC 306 [145].
[84] Flack v Chairperson, National Crime Authority (1997) 80 FCR 137, 148 - 149.
[85] Morley v Australian Securities and Investments Commission [2010] NSWCA 331; (2010) 247 FLR 140 [634].
[86] Morley v Australian Securities and Investments Commission [634].
[87] AVWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2) [146].
[88] Heydon J D and Leeming M J, Jacobs' Law of Trusts in Australia (8th ed) [1-10].
[89] Property Law Act 1969 (WA), s 34.
[90] Heydon J D and Leeming M J, Jacobs' Law of Trusts in Australia (8th ed) [5-02].
[91] Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604, 618 - 619.
[92] Heydon J D and Leeming M J, Jacobs' Law of Trusts in Australia (8th ed) [12-01].
[93] Martin v Martin [1959] HCA 62; (1959) 110 CLR 297, 304.
[94] Swettenham v Wild [2005] QCA 264 [35].
[95] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242, 246 (Gibbs CJ).
[97] Charles Marshall Pty Ltd v Grimsley [1956] HCA 28; (1956) 95 CLR 353, 365.
[98] Calverley v Green, 262 (Mason and Brennan JJ) citing with approval Shephard v Cartwright [1954] UKHL 2; [1955] AC 431, 445; Charles Marshall Pty Ltd v Grimsley 365.
[99] Calverley v Green, 261 (Mason and Brennan JJ).
[100] Calverley v Green, 252 (Gibbs CJ).
[101] Calverley v Green, 257 (Mason and Brennan JJ).
[102] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, 613 - 614.
[103] Muschinski v Dodds 615 - 616 (Deane J).
[104] Zekry v Zekry [2020] VSCA 336 [71].
[105] Bijkerk Investments Pty Ltd v Bikic [2020] NSWSC 1336 [13], [111].
[107] Austin v Keele (1987) 10 NSWLR 283, 291.
[108] Lloyd v Tedesco [2002] WASCA 63; (2002) 25 WAR 360 [15] - [16] (Murray J).
[109] Muschinski v Dodds 620 (Deane J).
[111] Sivritas v Sivritas [2008] VSC 374; (2008) 23 VR 349; cited with approval in Zekry v Zekry [83].
[114] Walton Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, 428 - 429 (Brennan J); see Wilson v Arwon Finance Pty Ltd [2020] WASCA 137 [88] (Quinlan CJ and Vaughan JA).
[115] Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1 [35].
[116] Q (a pseudonym) v E Co (a pseudonym) [2020] NSWCA 220 [15] (Leeming JA).
[117] Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 [61], [66], [69] (French CJ, Kiefel, Bell and Keane JJ), [91] (Gageler J).
[118] Flinn v Flinn [1999] VSCA 109; [1999] 3 VR 712 [73] - [75].
[119] Donis v Donis [2007] VSCA 89; (2007) 19 VR 577 [19] - [20].
[120] Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226, 244-245.
[121] George 218 Pty Ltd v Bank of Queensland Ltd (No 2) [2016] WASCA 182; (2016) 313 FLR 287 [123].
[122] Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291 [635] (Murphy JA).
[123] Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239; (2008) 39 WAR 1 [9306]
[125] 367 Stirling Street, Perth and 47 Fourth Avenue, Mount Lawley.
[126] 202 Bulwer Street, Highgate; 524 and 526 William Street, Highgate.
[129] ts 99; Exhibit 9A [42]; Exhibit 20A [7], [10]. Exhibit 9A [42]; cf Exhibit 20A [10] although in his responsive statement Ted conceded it was used as a family home (Exhibit 20C [18]).
[137] 202 Bulwer Street, Highgate; 47 Fourth Avenue, Mount Lawley; 36 Clarence Street, Highgate; 44 Jervois Street, Dianella; 326-328 Stirling Street, Highgate.
[138] Exhibit 1B [2], [7] - [9], [12].
[150] 12 Roy Street, Mt Lawley (1956); 202 Bulwer Street, Highgate (1961); 524 and 526 William Street, Highgate (1962); 47 Fourth Avenue, Mount Lawley (1964); 115 Oswald Street, Innaloo (1967); 410 Wanneroo Road, Westminster (1967); 408 Wanneroo Road, Westminster (1967); 44 Jervois Street, Dianella (1969); 36 Clarence Street, North Perth (1969); 40 Jervois Street, Dianella (1970); 25 Second Avenue, Mt Lawley (1971); 26 Lewin Way, Scarborough (1971); Lots 1 and 2 Light Street, Dianella (1971); Lot 571 Seventh Avenue, Inglewood (1972); Lots 258 and 321 Warwick Road, Duncraig (1972 and 1973); 326-328 Stirling Street, Highgate (1975); 27 Knutsford Street, North Perth (1975); Lot 136 Salisbury Street, Inglewood (1975); 5 Bayview Street, Bayswater (1976); 14 Frape Avenue, Yokine (1972); Hepburn Avenue, Duncraig.
[158] Exhibit 20A [30] - [32], [34] - [35], [40], [49] - [50], [56].
[168] 524 William Street, Perth; 526 William Street, Perth; and 47 Fourth Avenue, Mount Lawley; Exhibit 14.1.
[234] Exhibit 9A [118], [119], [124].
[236] Exhibit 9A [120]; Exhibit 14.2.
[315] Exhibit 9A [161], [168], [175].
[316] Exhibit 9A [164] - [165], [168].
[327] ts 625; Ted's final submissions [8].
[371] ts 1012; Exhibit 20A [80] - [81].
[386] Exhibit 20A [79]; Exhibit 20B [17]; ts 722.
[409] ts 338; Exhibit 20A [90]; ts 1021.
[438] Exhibit 9A [178] - [180]; ts 625.
[515] Exhibit 2.6. In CIV 1821 of 2016, this is an admitted fact pursuant to consent orders of 25 October 2019.
[519] Exhibit 9A [200] as amended (ts 382).
[539] I listened to the recordings on both the phone and the USBs in my chambers during the course of the trial and took some limited notes. In the production of these reasons, I have listened to the recordings on the USBs.
[585] Singh v Kaur Bal [No 2] [2014] WASCA 88.
[586] Singh v Kaur Bal [No 2] [30] - [44].
[587] Gadsdon v Gadsdon [2003] WASC 48 [43]; Conlan v Registrar of Titles [2001] WASC 201; (2001) 24 WAR 299 [177] - [200].
[588] Bahr v Nicolay (No 2) 630 - 631 (Wilson and Toohey JJ).
[589] Carmelo's closing submissions [18].
[590] Carmelo's closing submissions [21].
[591] Ted's final submissions [6(c)].
[595] Heydon J D and Leeming M J, Jacobs' Law of Trusts in Australia [7-09].
[596] Carmelo's closing submissions [26].
[597] Carmelo's closing submissions [25].
[598] Carmelo's closing submissions [30].
[600] Carmelo's closing submissions [36] - [38].
[603] Norman's closing address [10].
[608] Norman's closing address [32].
[609] Norman's closing address [33].
[610] Norman's closing address [38] - [40].
[611] Norman's closing address [41] - [42].
[613] Norman's closing address [1.C].
[618] Exhibit 4.11.31; Exhibit 4.1.11.
[619] Marchese v Marchese [2021] WASC 385.
[620] Frigger v Lean [2012] WASCA 66 [53].
[621] Rules of the Supreme Court 1971 (WA) O 66 r 1(1).
[622] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 [50] - [52].
[623] Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 [100] - [101].
[624] Affidavit of David Lenhoff filed 13 December 2021 'DL3'.
(1987) 10 NSWLR 283
(2008) 39 WAR 1
(1956) 95 CLR 353
(1986) 160 CLR 226
(2007) 19 VR 577
(1999) 161 ALR 599
(1997) 80 FCR 137
(2003) 214 CLR 118
(2016) 313 FLR 287
(2002) 25 WAR 360
(2010) 247 FLR 140
(1985) 5 NSWLR 72
(1988) 164 CLR 38
(1959) 101 CLR 298
(2014) 251 CLR 505
(2011) 278 ALR 291
(1988) 164 CLR 604
(1984) 155 CLR 242
(2001) 24 WAR 299
(2016) 260 CLR 1
(1959) 110 CLR 297
(1985) 160 CLR 583
(2008) 23 VR 349
(1995) 49 NSWLR 315
(2019) 54 WAR 388
(1988) 164 CLR 387