McCulloch v. Fern and Anor [2001] NSWSC 406

3 Mrs McCulloch died intestate in February 1990. Mr McCulloch has not obtained a grant of administration of her estate.

4 In late 1988 or early 1989, Mr McCulloch began to suggest to Mr and Mrs Fern that he was unhappy about the July payment and wanted his name on the title to the Wapengo property. On a number of occasions between 1990 and November 1998, Mr Fern acknowledged a moral obligation to Mr McCulloch to repay the money or to transfer to him part of the property, upon conditions. These discussions came to nothing, and in April 1999 Mr McCulloch commenced these proceedings.

5 Mr McCulloch claims that because the payment of $93,325 was applied in almost extinguishing the mortgage over Mr and Mrs Fern's Wapengo property, and there was no consideration provided by the Ferns for that payment, a resulting trust arose whereby an interest in the property was held by Mr and Mrs Fern for Mr and Mrs McCulloch jointly. Mr McCulloch says that Mrs McCulloch's joint interest in that resulting trust passed to him by survivorship upon her death, so that he is now solely entitled to enforce that trust.

6 Alternatively, Mr McCulloch claims that the July 1988 payment should be set aside by reason of undue influence exercised over Mrs McCulloch by Mrs Fern and that, by survivorship, he is now solely entitled to seek that relief. Alternatively, he claims that Mr and Mrs Fern's conduct amounted to unconscionable conduct or unconscientious dealing, or otherwise procured their unjust enrichment, whereby they hold a proportionate part of their interest in the Wapengo property on a constructive trust for him.

7 Mr and Mrs Fern assert that the July 1988 payment was an absolute and unconditional gift to them. They say that the correct analysis of what happened is that Mr McCulloch made a gift of his joint interest in the sum of $93,325 to Mrs McCulloch and that Mrs McCulloch, then being solely entitled to the whole of that amount, made an absolute gift of it to them. It follows, they say, that even if that gift could be set aside for undue influence exerted over Mrs McCulloch, only Mrs McCulloch or her legal personal representative has standing to bring the claim. They say that Mr McCulloch, not being the legal personal representative of Mrs McCulloch, has no standing.

8 Alternatively, Mr and Mrs Fern say that they furnished consideration for the July 1988 payment in that for several months during 1986, 1987 and 1988 they provided Mrs McCulloch and her three children with accommodation, food and education.

9 Finally, Mr and Mrs Fern say that even if Mr McCulloch would otherwise have been entitled to relief, he has been guilty of laches, acquiescence and delay in failing to commence these proceedings until almost 11 years after the July 1988 payment, whereby relief should be refused.

10 Mr and Mrs McCulloch were married on 23 December 1967 and had three children, Melissa, born in 1968, David, born in 1970 and Maree, born in 1972. There is no evidence that the marriage was unhappy. There were short periods of separation in 1988 when Mrs McCulloch lived on the Wapengo property in order to pursue her religious activities, in the circumstances recounted in more detail later.

11 Mr and Mrs McCulloch met Mr and Mrs Fern in 1977, when Mrs McCulloch contracted breast cancer and was treated by Mr Milan Brych. Mr and Mrs McCulloch met Mr and Mrs Fern as mutual supporters of the work of Mr Brych. Both families lived in Melbourne at that time.

12 In 1985, at the invitation of Mrs Fern, Mr and Mrs McCulloch and their three children attended a conference given by Elisabeth Clare Prophet, one of the founders of the Church Universal and Triumphant. Thereafter Mrs McCulloch began to attend prayer meetings of that Church conducted by Mrs Fern.

13 It is now necessary to explain something of the history and teachings of the Church Universal and Triumphant ("the Church"). According to Humphreys and Ward "Religious Bodies in Australia" (1988 Melbourne), the Church is an offshoot of the "I AM" religious movement which was founded in the United States by Guy Ballard. The followers of the I AM movement believe that each human being has an individualised Presence (which is a pure resource of energy) stationed some metres above one's head. Power can be drawn from it at will. Between the "I AM" Presence (God) and human beings are Ascended Masters, who were at some time human beings and who through a process of life purification were able to transcend the physical world. This is called Ascension. A person ascends to join the Ascended Masters and participates with them in a state of joy and service. Ascension may be attained after death, providing the correct preparation has been made during life. Members engage in the repetition of decrees (affirmations repeated at a fast tempo), concentrated thought and visualisation through which evil influences and desires can be eliminated.

14 The Church Universal and Triumphant was formed in 1958 by Mark and Elisabeth Prophet to be, it is said, a channel for all Ascended Masters but especially for one Master, El Morya. Its members believe that the USA has a crucial role to play in the cosmic purpose of the Great White Brotherhood. All members are known as "Keepers of the Flame". The Summit University in California offers courses in the teachings of the Ascended Masters.

15 It appears that in 1985 Mrs Fern and a group of her followers were excommunicated from the Church Universal and Triumphant, and she established what may be described as a sect of her own. In 1985 she began giving "dictations" to her group. Mrs Fern explains that "dictations" are revelations from God given through a Messenger. According to Mrs Fern, a Messenger is one who has a "Mantle", that is, who is anointed by God to receive dictations. Mrs Fern believes that she had been a Messenger for a long time before her first dictation. Mrs Fern says that the Church Universal and Triumphant believes that there is only one Messenger, and that is Elisabeth Clare Prophet. The Church would not recognise Mrs Fern's Mantle of Messengership, but she did not have any doubt about it herself. That, no doubt, explains why she was excommunicated from the Church, together with her group of followers, from 1985 to 1992.

16 In April 1986 Mr and Mrs Fern moved from Melbourne and leased a farm of 100 acres at Wapengo from Mr John Hankinson. Mrs Fern wished to set up a religious community on the property. About that time she drew up a document which she called "Tenets". It was headed "the Outer Order of the Ruby Ray Cross of White Fire" . Its purpose was to give members of the community who might wish to live on the property "an idea of the disciplines and what would be expected and what would be happening. They were only invited to come if they agreed with what was sent out" . The Tenets included the following statement: "People coming to this Church must know that it is run by the Order of Melchizedek and that it requires much sacrifice, surrender and total commitment as well as constant devotion to be a member of this Order."

17 The Tenets contain detailed instructions as to the conduct of the community.

18 In July 1986 Mr and Mrs Fern sent two letters to the members of Mrs Fern's group, including Mr and Mrs McCulloch. One of these letters was drafted by Mr Fern. He described the Wapengo property as comprising 100 acres, divided by an access road into one section of 25 acres and another section of 75 acres. He said that he and his wife lived on the 25 acre section and that that area was to be used "for the business side of things" . He continued: "the 75 acres is earmarked as Church property and there will be no development there except that associated with the Church" . After putting forward for consideration the acquisition by members of the group of another 100 acre block adjoining the property occupied by himself and Mrs Fern, he wrote: "Anna wants to conclude by bringing to your attention that once the original property of 100 acres has been purchased, the members of the Church must make it their responsibility to see that the 75 acre portion earmarked as Church property is paid for by them. This aspect must also be discussed at a meeting, to be held hopefully on 29 July. She will be in touch with you all prior to that date."

19 Accompanying that letter was a letter dated 9 July 1986 drafted by Mrs Fern but typed by Mr Fern. After referring to the Tenets of the Order, which she had enclosed, Mrs Fern continued: "We all know the reason why we had to have such a place [i.e. the Wapengo property] . I am here only for the reason that you all know so well and for no other. There is nothing to gain at this point of my life by taking on such a task from scratch, when E.C.Prophet already has everything going that one needs to ascend in this life. We have been told that this is beyond the ascension and beyond this world. My experiences testify to this, although it is difficult to express such revelations in words.

You have been told many things and I know this to be the Word of God. Those of you who have known me personally over the years know that I only had one thing in mind and that was to be obedient and fulfill the Will of God upon Earth. I had no idea I would become a messenger, nor do I consider myself any different from you, for the Messenger is the Christ, not me, as he is in you.

If you doubt the authenticity of this Order and its foundations I see no reason why you should sacrifice your life as you know it, and embark upon something which is nothing but bush and paddocks at the moment. It requires total dedication on all levels and the belief that you are absolutely doing the right thing, at all times.

If we are not able to come together as one family in God, fulfilling His Divine Plan upon Earth, then we have very little hope of success. If I could do it by myself, I would, and save you physically a lot of discomfort. However I am only one cell in this body and I can only do that which is mine to do. Your Victory and that of the Planets is doing what you have to do.

If you want to become One with the Will of God and I AM presence without the constant gnawing of the Dweller in your life, I suggest you either surrender yourself to the disciplines of this Order or set your sights on doing Level at Summit University…

This land [the Wapengo property] must be kept Holy and all those making the decision to commit themselves must be willing to be obedient to the Will of the Master regarding the running of this organisation. There cannot be an Order if one person cannot be trusted as the instrument of God. No organisation can function without a leader. I AM not a leader, but an instrument of The Word. If you cannot believe this, your vibrations here would only tamper with the work to be done on inner levels. This you must understand. The minute you come here you step into the Womb of the Mother, and any human vibration not checked makes life extremely difficult, for both Don and I. Pure motive, Heart and mind are the requirements of the hour; otherwise you become the Wedge, whereby the Planetary Dweller prohibits any advancement of your lifestream to take place through wise counsel of the Mother, and I have to sped 24 hours a day battling to get through, instead of flowing with that Light given daily by Almighty God.

You are not obligated to be a part of the Inner, as that requires total surrender of Self and the complete annihilation of the Human.

As you will see upon reading the Tenets the Outer requires certain disciplines and obedience, but not a life removed from the world or its people. Not a lot is asked for the privilege of living in the Light and having the counsel of the Masters when needed.

I trust that what has been said has cleared the air for some of you. For I cannot start something dedicated to the Will of God in compromise to the human wishes of the people involved. I must make sure that all who are to follow are able to see Pure motive all the way from top to bottom, otherwise it will not survive the next step, and that is to the Golden Age.

A great responsibility is given to us to fulfil. Can we do it together? If not, I would rather know now, before purchase of this place in September, as I can fulfill my end of the bargain in less strenuous surroundings."

20 Mrs Fern conceded that the letter was soliciting money to assist in the purchase of the Wapengo property and that she was seeking to encourage members of the group to make contributions.

21 Apparently none of the members of Mrs Fern's group was interested in proceeding with a proposal to acquire an interest in land adjoining the Ferns' property at Wapengo or, at that stage, to make contributions for the purchase of the 75 acre portion of the farm earmarked as Church property. A meeting to discuss the proposal was convened to take place in July 1988 but no one, apart from Mrs Fern, came.

22 Nevertheless, on 28 November 1986 Mr and Mrs Fern, having exercised an option contained in their lease, purchased the Wapengo property from Mr Hankinson for $115,000. $20,000 was paid by Mr and Mrs Fern, the balance of $95,000 being left outstanding on a mortgage back to Mr Hankinson. The mortgage provided for payment only of interest during the mortgage term of five years.

23 In December 1986 Mr and Mrs McCulloch and their family moved from their family home at Rosanna in Victoria and rented a house at Cann River, also in Victoria.

24 In March 1987 Mr and Mrs McCulloch's youngest child, Maree, moved to the Wapengo property to live with Mr and Mrs Fern.

25 In December 1987 or January 1988 the McCullochs' other two children, David and Melissa, moved to the property at Wapengo to live. Mrs McCulloch went with them, but returned to her home at Cann River shortly afterwards.

26 By December 1987 a small business which Mr and Mrs Fern were operating on the Wapengo property had exhausted their funds. Mr Fern decided to wind down the business and in February 1988 he got a job with a real estate agent in nearby Tathra. The business was shut down in June 1988. It is clear that it had caused a considerable loss to Mr and Mrs Fern. 27 In March 1988 Mr and Mrs McCulloch sold their home at Rosanna for $126,000. The property had been owned by them as joint tenants. The net proceeds of sale of $120,000 were placed in a joint bank account in both their names.

28 In June 1988 Mrs McCulloch went to live on the Wapengo property. How long she stayed there is a matter of contention, to which I will return shortly. It is clear that Mrs McCulloch went to live on the property in order to dedicate herself more intensely to the practice of her devotions in the sect led by Mrs Fern. She told Mr McCulloch that she wanted to go to live on the property with her children because, according to Mrs Fern, there was a "special dispensation coming on the land that's God's divine plan" . Mrs McCulloch said that there would be a "special life" on the property and they were there "for God's will" . She wanted the whole family to go and live there, but Mr McCulloch decided not to go because he had 12 months remaining before he could take early retirement from the Department of Education. His superannuation would then become available. He decided that he should keep working until he could take early retirement.

29 When Mrs McCulloch went to live on the property she told Mr McCulloch that it was a requirement of Mrs Fern that he should not contact her; she would contact him. He gave her a cheque book, at her request, so that she could pay money to Mr and Mrs Fern towards the cost of food and accommodation for herself and her children.

30 Mrs Fern acknowledges that she received some hundreds of dollars from Mrs McCulloch for food and other living expenses while she was living on the property. Cheque butts from Mrs McCulloch's cheque book show payments of $400 to Mrs Fern on 16 July 1988, 30 July and 13 August and cash payments of $400 on 26 August, 12 and 26 September, which indicate that Mrs McCulloch was making contributions to the living expenses of her children and herself of $400 per fortnight throughout July, August and September, 1988.

31 According to the evidence of Mr McCulloch, his children David and Melissa and Mrs Doherty (who was living on the Wapengo property at the time), Mrs McCulloch and her children left the property at the direction of Mrs Fern at the end of September 1988.

32 Mr McCulloch says that Mrs McCulloch telephoned him from the Wapengo property on the evening of 24 July 1988. She said that she wanted to "put in $93,000 for the [Wapengo] property" and she said that she had written out a cheque a few days prior to that, but that it was not accepted by Mrs Fern because Mrs McCulloch was not spiritually ready. Mrs McCulloch said, "I am going to write another cheque out tomorrow" . She said "it's for God and the children" . Mr McCulloch said in response: "You can have it because I love you" . He says that he believed that his wife had already made the decision about using the money to pay for the property and he did not wish to prevent her from doing it.

33 Mr McCulloch has described the way he felt at the time of this telephone conversation with his wife. He says that he did not raise any objection to what she wanted to do because he loved her, and did not want to create any impediment to his relationship with her. He felt that he was in a vulnerable position. He was living alone at Cann River, separated from his family. His contact with his family was limited to rare telephone calls which he received from his wife. He did not want to do anything that would separate him from his wife and children any further. He felt that if he objected to what his wife wanted to do then he might lose his family. I accept that evidence.

34 Mr McCulloch says, however, that at the time he consented to the payment he believed that it would not be an outright gift to Mr and Mrs Fern. He says that he intended that he and Mrs McCulloch would obtain some sort of interest in the property in consideration of the payment. He did not discuss that matter with his wife or with Mr and Mrs Fern before consenting to the payment. There had been no discussions between Mr and Mrs Fern and Mr and Mrs McCulloch about the proposal contained in the letter which Mr Fern had drafted in July 1986 for about two years. I cannot accept that Mr McCulloch believed on the evening of 24 July 1988 that the payment to which he was consenting would secure some interest in the Wapengo property, even if such uncommunicated belief be relevant. 35 In her affidavit evidence, Mrs Fern said that Mrs McCulloch came to the Wapengo property in June 1988. She asked Mrs Fern how much money was needed to "pay the farm off" . Mrs Fern said that her husband told her the exact amount of money that they needed to pay to Mr Hankinson. Mrs Fern said: "I gave the details to Maureen. Maureen wrote out the cheque for that amount and gave it to me. … I gave the cheque to Maree [Mrs McCulloch's youngest daughter who was living on the property at the time] . My husband subsequently banked it into the account of Mr and Mrs Hankinson."

36 The date of the cheque is 25 July 1988. Melissa McCulloch, who was living on the property at the time, says that the day after her mother had paid the money owed to Mr Hankinson, her mother came out of the house and said to her "the money has been paid, it was a requirement of the Masters" . Her mother also said "I must be obedient to the Guru … by paying the $93,000 Anna and Don can continue to live on this property and raise this child [referring to a child with which Mrs Fern was then pregnant] . You, David and Maree are destined to live on this property where a Church will be built one day."

37 David McCulloch, who was living on the property at the time, gave evidence that he had a number of conversations with his mother in July 1988 about payment of money for the purchase of the farm. I will return to those conversations shortly.

38 It was not put to David McCulloch or Melissa McCulloch in cross examination that Mrs McCulloch was not living on the property during July 1988.

39 Mr and Mrs McCulloch's youngest child, Maree gave evidence in her affidavit sworn 8 December 1999 that her mother stayed on the property from June 1988 until August 1988. In the same affidavit she said: "I remember the cheque that my mother drew. It was a personal cheque on an account of the ANZ Bank. I remember that it was in mum's handwriting. It only had mum's signature on it. Anna Fern gave that cheque to me; I gave the cheque to Don Fern and he banked it. At the time that the cheque was written out, my late mother was living at the Fern's household at Wapengo."

40 In the witness box Mrs Fern gave evidence that the cheque for $93,325 was posted to her in the mail in July 1988. She said that Mrs McCulloch was not living on the property in July. She said that Mrs McCulloch was only on the property in June for two weeks and then went back to her home at Cann River. Her communications with Mrs McCulloch about the cheque were, she said, by telephone. She said that she had a clear recollection of this and that "I have always said it came in the mail" .

41 Mrs Fern was then directed to paragraph 28 of her affidavit sworn 8 December 1999 in which she said: "Before Maureen McCulloch gave me a cheque for $93,325 I had many conversations with her about the gift. Those conversations occurred at home" . She was also confronted with paragraph 41 of her affidavit in which she said "Maureen wrote out the cheque for that amount and gave it to me. … I gave the cheque to Maree" . She admitted that what she said in her affidavit was totally inconsistent with the evidence she had given in the witness box, but she insisted that the cheque had been posted to her in the mail and not given to her personally by Mrs McCulloch. When pressed as to the inconsistency in her evidence she could give no explanation. Her demeanour in the witness box satisfied me that she had been deliberately telling an untruth when she had said that Mrs McCulloch was not on the property in July 1988 and did not write out the cheque and give it to her personally at that time. I am satisfied that Mrs Fern gave this false evidence because she thought that an allegation of undue influence by her over Mrs McCulloch might be defeated if it were established that Mrs McCulloch was not actually on the property and subject to the personal influence of Mrs Fern at the time that the cheque was paid.

42 Mrs Fern was confronted with the change in her evidence before the luncheon adjournment. Upon resumption, Maree McCulloch was called to give evidence on behalf of Mr and Mrs Fern. She had married the son of Mr and Mrs Fern, Michael, in 1991. It is clear that her allegiances now lie with Mr and Mrs Fern and not with her father or with her brother and sister. As soon as she was sworn, Maree sought to correct the evidence which she had given in her affidavit of 8 December 1999. She now said that her mother had not been living on the Wapengo property in July 1988 at the time that the cheque was written out by her. She said that she had made up her mind to change her affidavit in this respect a few weeks after she had sworn it. She could give no explanation at all as to why she had not corrected her affidavit between December 1999 and the time that she was called into the witness box. She denied that anyone had told her that day that Mrs Fern had given evidence that the cheque arrived in the mail. Her demeanour in the witness box satisfied me that she was deliberately giving false evidence and that she was doing so in order to advance the case of Mr and Mrs Fern.

43 I am strengthened in this conviction by the extraordinary admission made by Maree in cross examination that in July 2000 she had telephoned Mr McCulloch's solicitor, pretended that she was her sister, Melissa, and said that she (Melissa) wanted to withdraw her affidavit in support of her father in these proceedings. I cannot accept Maree as a witness of credit.

44 I am satisfied that at the time that the cheque dated 25 July 1988 was written by Mrs McCulloch she was living on the Wapengo property and that she had, the previous evening, telephoned Mr McCulloch and had the conversation recounted by him in his evidence. Was there consideration for the payment? 45 Mrs and Mrs Fern contend that the July 1988 payment of $93,325 was in consideration for food, accommodation and education provided by them to Mrs McCulloch and her children for a number of months during 1986, 1987 and 1988. 46 There is no evidence to support that contention. As discussed below, the payment was explicitly for another purpose. Further, as noted above, Mrs McCulloch paid regular contributions to Mrs Fern for food and accommodation from June to September 1988. 47 I reject this contention. Was the payment a gift or subject to conditions?

48 Mr McCulloch said that he had no intention of making a gift of the money in the joint account to Mr and Mrs Fern. He asserted that it was his intention that he and Mrs McCulloch retain some sort of interest in the Wapengo property in consideration of the payment.

49 As I have said, I do not accept that that was Mr McCulloch's intention at the time that he assented to Mrs McCulloch making the payment. However, even if it was, he did not by words or conduct express that intention either to Mrs McCulloch or to Mr and Mrs Fern prior to the payment being made. He had had no conversation with Mr or Mrs Fern about any proposed investment in the Wapengo property since the proposal which had been put forward by Mr and Mrs Fern in 1986.

50 I do not see anything in the circumstances surrounding the payment which would reasonably have led Mr and Mrs Fern to understand that Mr and Mrs McCulloch were paying the money to them upon some condition as to an interest in the property. On the contrary, for the reasons I will come to shortly, I am satisfied that Mrs Fern had solicited the payment from Mrs McCulloch as a gift and, as far as anything said by Mrs McCulloch to Mrs Fern was concerned, there was nothing to indicate that the payment was made otherwise than as a gift "in accordance with God's will" . These circumstances operate to rebut the presumption of a resulting trust.

51 It is clear that during July 1988, and probably for some considerable time before, Mrs Fern told Mrs McCulloch on a number of occasions that it was part of the divine plan that the property at Wapengo should be paid for in full from money provided by Mrs McCulloch. I accept the evidence of Mr McCulloch to the effect that in 1987 Mrs McCulloch said to him that Mr and Mrs Fern needed $95,000 to pay off the mortgage on their property, and that several times during 1987 she told him that Mr and Mrs Fern "are paying off the land and they need money to pay it off."

52 I accept the evidence of David McCulloch that while he was on the Wapengo property during July his mother told him what the monthly interest owing on the mortgage over the property was and that Mr and Mrs Fern did not have enough money to pay it. Further, I accept his evidence that in or about July 1988 Mrs Fern said to Mrs McCulloch words to the effect "the payment of the money is part of the divine plan. The payment is necessary in order to anchor the light on the farm. It is a requirement of the Master. Without the payment of the money the Ruby Ray Order could not be anchored here at the farm … All our divine plans will fail without the payment of this money. Some people have missed their mission in life because they have refused to give money in the past" . Further, I accept his evidence that in July his mother said to him: "Anna said that the money is for the anchoring of the light and that the money will help create the Church and bring the next generation of light bearers" and that at this time he observed his mother to be worried and distressed.

53 I accept the evidence of Melissa McCulloch to the effect that prior to June 1988 Mrs Fern said to Mrs McCulloch in Melissa's presence, words to the effect: "I have been impressed that the light cannot be fully anchored here [i.e. on the Wapengo property] until the money has been paid … When I am impressed I am receiving a message from God" . Mrs McCulloch said words to the effect: "I want to please God and I will do what Anna says" .

54 Further, I accept the evidence of Melissa that the day following the payment of the cheque to Mrs Fern, Mrs McCulloch said to Melissa words to the effect: "the money has been paid, it was a requirement of the Masters … I must be obedient to the Guru … By paying the $93,000 Anna and Don can continue to live on the property and raise this child" .

55 Mrs Fern did not dispute the evidence which Melissa McCulloch had given. She admitted that it was her belief that paying off the mortgage on the Wapengo property "would have achieved greater anchoring of the light" on the property.

56 Mrs Fern did not deny saying to Mrs Doherty at the time of Mrs McCulloch's "initiation" in July 1988 words to the effect: "it is Maureen's initiation to surrender her money for the purchase of the property so that the light for the Church can be fully anchored" .

57 I am satisfied that in July 1988 and for some time previously, Mrs Fern had caused Mrs McCulloch to believe strongly that it was God's will that Mrs McCulloch use her own money to pay off the mortgage on the Wapengo property. Mrs Fern said in cross examination: "Maureen felt that by giving [the money] to me, she was giving it to the Masters because we were, she felt we were doing, the community was a community of where we ascended, where we worked with the Ascended Masters and that was her feeling."

58 Mr and Mrs Fern contend that Mrs Fern exercised no spiritual dominance or influence over Mrs McCulloch at the time that the payment was made. The evidence is overwhelmingly to the contrary. Mrs Fern had frequently described herself as a Messenger, that is, one who through dictation spoke the words of God, or of the Ascended Masters, to her followers. She agreed that she had described herself to her followers as "the twin flame of El Morya" , meaning that she was the female spiritual counterpart of one of the highest Ascended Masters of the Church.

59 The degree of Mrs McCulloch's subservience to the will and influence of Mrs Fern is amply demonstrated in a document written in Mrs McCulloch's own handwriting in April 1987. The document deserves to be set out in full:

I have been impressed, that there is a very great disrespect by some members of the Order for the sacred office Anna holds as Messenger.

The privilege, we all enjoy being close to Anna has made us all take for granted what she really stands for. Her only desire is to do the Will of God.

We should realise how close we come to Our Creator in listening carefully to what she says and being lovingly obedient.

Do we give her the love and respect her mantle as Mother deserves? Any instruction she gives is for our spiritual progress and alignment with our Divine Plan.

She should not have to be subject to non acceptance of her authority as Messenger. There is no difference between her mantle and the one Elizabeth Clare holds, in that both are sponsored by the Ascended Masters. Anna is at all times a Channel for the Word even though she may not be dictating.

It would be better if she were to stay in the White Fire Core and have an intermediary deliver messages. This is not possible at present because of the work which has to be done. Maureen "

60 There is nothing in the evidence to suggest that Mrs McCulloch's attitude of complete obedience to Mrs Fern, as demonstrated by this document, was in the slightest degree diminished by July 1988. On the contrary, the evidence suggests that her obedience to Mrs Fern was even more committed.

61 I am supported in this conclusion by my observations of Mrs Fern's character while she gave evidence. It is clear that she is an intense and forceful person, capable of demonstrating charm as well as severity. She speaks fluently and with conviction. It is easy to understand how such a personality would dominate a person as vulnerable as Mrs McCulloch. Despite her religious principles, Mrs Fern struck me as well aware of the value of money and the financial advantages to herself and her family to be derived from Mrs McCulloch's payment.

62 The evidence shows that at the time of the payment, Mrs McCulloch was frail and in poor health. She had had breast cancer, she had an ongoing heart condition, she was suffering from shingles. She was under strain from a physically taxing "initiation" which involved her making fourteen "stations of the cross" on the property. She was isolated from her husband; she was not permitted free communication with her children or anyone else inside or outside the small community of Mrs Fern's followers living on the property. She was of nervous disposition and appeared to be worried and distressed. The payment of $93,325 which she was asked to make for the benefit of Mr and Mrs Fern represented over three-quarters of the net proceeds of her matrimonial home. There is no evidence to suggest that Mr and Mrs McCulloch had any other substantial asset. The July payment was, prima facie, improvident. Mrs McCulloch did not have the benefit of legal advice.

63 The principles upon which a disposition may be set aside in Equity for undue influence are well settled. A presumption of undue influence will arise where there is a substantial disposition in favour of one who is the spiritual adviser or supervisor of the disponor. The disponee then has the burden of satisfying the Court that the disposition is fair, just and reasonable, and does not have as its source any improper influence over the disponor: Allcard v. Skinner (1887) 36 Ch D 145, at 171; Commercial Bank of Australia Ltd v. Amadio (1983) 151 CLR 447, at 474; Louth v. Diprose (1992) 175 CLR 621, at 637.

64 In the present case, that Mrs Fern stood in the special relationship of a spiritual superior to Mrs McCulloch is clearly proved. The presumption arises that the July 1988 payment was procured by Mrs Fern's undue influence over her. The disposition was improvident. Mrs Fern was frail, she was incapable of exercising her own judgment freely and independently and she did not have the benefit of legal advice. In my opinion, Mr and Mrs Fern have failed to rebut the presumption. Further, I am satisfied that Mrs Fern exercised actual undue influence over Mrs McCulloch in procuring the payment.

65 Mrs McCulloch alone could not have procured an outright gift of the July payment to Mr and Mrs Fern. The payment was to be made from a joint bank account from the joint monies of Mr and Mrs McCulloch. Although Mrs McCulloch had a cheque book for that account and could have drawn a cheque and given it to Mrs Fern without telling Mr McCulloch, Mrs Fern must have recognised as a real possibility that Mrs McCulloch would tell her husband what she intended to do. If Mr McCulloch did not consent, then Mrs McCulloch might not have drawn the cheque at all and, if she did, Mr McCulloch might have stopped payment before the cheque could be presented and honoured. 66 It was obviously highly desirable, therefore, that Mr McCulloch's consent to the payment be obtained. His consent was obtained in the circumstances which I have recounted. I accept that neither Mr nor Mrs Fern spoke to Mr McCulloch about the proposed payment prior to 24 July 1988, when Mrs McCulloch rang him. In these circumstances, Mr McCulloch does not claim that his consent to the payment was made as a result of any undue influence exercised over him by Mr or Mrs Fern. He claims, however, that in all the circumstances of the case the payment was procured by unconscionable conduct by Mr and Mrs Fern, or one of them. 67 The distinction between unconscionable conduct and undue influence as a ground upon which equity will intervene has been explained by Mason J. (as his Honour then was) in Amadio . At 461, his Honour said: "Although unconscionable conduct … bears some resemblance to the doctrine of undue influence, there is a difference between the two. In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position."

See also at 474 per Deane J. 68 Equity intervenes on the ground of unconscionable conduct whenever, by reason of circumstances affecting his or her ability to conserve his or her own interest, one party to a transaction is at a special disadvantage in dealing with the other party, and that other party conscientiously takes advantage of the opportunity thus placed in his or her hands: see Blomley v. Ryan (1956) 99 CLR 362, at 415; Louth v. Diprose (supra) at 630; Commercial Bank of Australia Ltd v Amadio (supra) at 489. 69 The circumstances by which a party may be placed at a special disadvantage in the ability to conserve his or her own interest are as infinitely various as human relationships: Commercial Bank of Australia Ltd v Amadio (supra) at 461, 474; Garcia v National Australia Bank Ltd (1998) 72 ALJR 1243, at 1249. What is necessary for the intervention of equity is exploitation by one party of another's position of special disadvantage in such a manner that the former cannot, in good conscience, retain the benefit of the bargain: Commercial Bank of Australia Ltd v Amadio (supra) at 489. The doctrine applies just as much to a gift as to a commercial transaction: Louth v. Diprose (supra) at 630.

70 I am satisfied that Mrs Fern deliberately took advantage of her spiritual domination over Mrs McCulloch to procure Mr McCulloch's consent to the July payment. Mrs Fern must have known that the money would have to come from Mr and Mrs McCulloch's joint account. She had received from Mrs McCulloch at least one cheque dated 16 July 1988 drawn upon that account for food and other purposes. She had apparently refused to accept a cheque drawn by Mrs McCulloch on that account for $95,000 on 21 July, 1988, on the basis that Mrs McCulloch was not yet "spiritually ready".

71 Mrs Fern must have known that Mr McCulloch was likely to object to the payment. He was not nearly as devoted to Mrs Fern as was Mrs McCulloch. Indeed, he had called Mrs Fern a charlatan in late 1986 or early 1987, but had tempered his attitude in order to preserve harmony with his wife and children who were upset by what he had said.

72 Mrs Fern must have known and intended that Mrs McCulloch would endeavour to persuade Mr McCulloch to consent to her making the July payment. She must have known and intended that all of the ties of natural love and affection between Mr and Mrs McCulloch, as a married couple of twenty years by that time, would be drawn upon by Mrs McCulloch in persuading her husband to agree to what she wanted. She must have known and intended that Mr McCulloch feel the vulnerability of his own position if he refused: he would jeopardise his relationship with his wife and children, all of whom were then living with Mrs Fern on the Wapengo property and appeared to be under the domination of Mrs Fern. 73 Mrs Fern exploited for her own advantage Mr McCulloch's vulnerability to persuasion by Mrs McCulloch. I accept Mr McCulloch's evidence as to his attitude at the time of the payment to the extent that I am satisfied that he would certainly have refused to consent to an outright gift of the money if Mrs Fern herself had asked him directly in July 1988. But Mrs Fern placed Mr McCulloch in a position of special disadvantage by conveying her request through the medium of Mrs McCulloch, whose request she must have known and intended Mr McCulloch would find very difficult to refuse. As I have found, Mrs Fern procured Mrs McCulloch's request through undue influence. In those circumstances, Mrs Fern could not conscientiously retain the benefit of the payment as against either Mr McCulloch or Mrs McCulloch. Subject to the questions as to laches and the standing of Mr McCulloch, the July payment is liable to be set aside in equity as against Mrs Fern. Mr Fern's position 74 Mr Fern's business experience up to 1985 was as a real estate agent. It was, therefore, he who assumed responsibility, at his wife's request, for preparing the letter to Mrs Fern's followers, sent out in July 1986, which broadly suggested a means whereby the followers could acquire land adjoining the Wapengo property. It was he who drafted the statement in that letter that Mrs Fern wanted to bring to her followers' attention that "the members of the church must make it their responsibility to see that the 75 acre portion [of the Wapengo property] earmarked as church property is paid for by them" . 75 Mr Fern also typed the letter of solicitation from Mrs Fern which accompanied his own letter. He said that he had no part in its composition but merely typed it from a document prepared by Mrs Fern. 76 Mr Fern does not describe himself as a believer in the Church Universal and Triumphant. He says: "I couldn't form an opinion but I couldn't find fault and I looked for 25 years" . In my view Mr Fern, while probably not a professed adherent of Mrs Fern's group, was familiar with its tenets and was sympathetic with his wife's beliefs and with what she was trying to achieve in the form of a religious community resident on the Wapengo property. 77 Mr Fern was living on the property during the whole time that Mrs McCulloch, her children and other followers of Mrs Fern were living there. Although he says that he did not participate in prayer meetings and other religious devotions of the group, it would have been impossible for him not to observe the influence that his wife had over her group of followers, particularly Mrs McCulloch. He knew Mrs McCulloch well. By July 1988 the McCulloch and Fern families had been good friends for some eleven years. Mrs McCulloch had been to prayer meetings in the Ferns' home before they moved from Melbourne. The McCullochs' youngest daughter, Maree, had been living with the Ferns on the Wapengo property for more than a year. It is inconceivable that Mr Fern was unaware that Mrs McCulloch was obedient to the will of Mrs Fern. 78 Mr Fern knew that his wife had obtained the cheque for $93,325 from Mrs McCulloch. The cheque was signed by her, given to Mrs Fern, who gave it to Maree who, in turn, gave it to Mr Fern to bank. Mr Fern must have seen that the cheque was drawn on the joint bank account of Mr and Mrs McCulloch. 79 As at July 1988, the financial affairs of Mr and Mrs Fern were not flourishing. As I have noted above, in June 1988 they had closed down at a loss the small business that they had been conducting on the property. Mr Fern had taken a job in a real estate office in Tathra. I infer that money was tight. 80 I am satisfied that Mr Fern was content to take the benefit of the July payment knowing that it had been procured by his wife from Mr and Mrs McCulloch while Mrs McCulloch was obedient to Mrs Fern's will. He must have been aware that, in obtaining Mr McCulloch's consent to the payment, Mrs McCulloch would have been doing so at Mrs Fern's request He must have appreciated that Mr McCulloch would have found it much more difficult to refuse Mrs McCulloch's request for the money than if he or Mrs Fern had asked Mr McCulloch for it directly. Indeed, I am satisfied that Mr Fern himself would never have dreamed of asking Mr McCulloch directly for $93,000 to pay off the mortgage on his property. Yet he was content to take that money when it was procured for that purpose by his wife through the medium of Mrs McCulloch. 81 In my opinion, subject to the questions of laches and standing, it would be unconscionable for Mr McCulloch to retain the benefit of the July payment. Mr McCulloch's standing 82 Mr and Mrs Fern say that the true analysis in law of what happened on 24 and 25 July 1988 is that on the evening of 24 July Mr McCulloch made an unconditional gift to Mrs McCulloch of his interest in the jointly owned money the subject of the payment. When Mrs McCulloch came to draw a cheque for the payment and gave it to Mrs Fern the next day, Mrs McCulloch was dealing exclusively with her own property. This is because the gift by Mr McCulloch of his interest in the joint property to Mrs McCulloch had severed the joint tenancy in the property. If the gift by Mrs McCulloch is liable to be set aside in equity, say Mr and Mrs Fern, the only person who can properly make that claim now is an administrator of Mrs McCulloch's estate. 83 That is not the only way in which the transaction can be analysed. Mr McCulloch's consent to the payment which his wife proposed may simply have been the act whereby both joint tenants, by agreement, made a payment of joint property to third parties. The fact that Mrs McCulloch alone signed the cheque is immaterial. Clearly, a signature of either joint tenant was authorised to operate the joint bank account. If joint tenants of property jointly agree to dispose of it in a certain way, but only one of them signs the relevant documentation with the consent of the other, that cannot without more bring about a severance of the joint tenancy by way of a gift to the signing party so that the rights inherent in the transaction thereafter are held exclusively for the benefit of the signing party. 84 In the present case, it is highly arguable whether what was said between Mr and Mrs McCulloch in their telephone conversation of 24 July 1988 evidenced an intention on Mr McCulloch's part to make a gift of the money to Mrs McCulloch. What was clearly in the contemplation of both parties was a payment out of their joint property to Mr and Mrs Fern; they obviously never addressed their minds to the nice question whether Mr McCulloch was giving his interest in the money to his wife so that she could, in turn, make a gift of it to Mr and Mrs Fern. 85 The words which Mr McCulloch says he used when his wife said that she was going to write out a cheque - "you can have it because I love you" - are quite consistent with an intention on his part to let her have her way in a disposition of joint property. Those words might unequivocally have evidenced an intention to make a gift to Mrs McCulloch if Mr McCulloch had used them on an occasion upon which he was clearly referring to property which was exclusively his own - for example, if he had bought a piece of jewellery from his own money and had spoken the words while handing it to his wife. 86 In the end, it probably does not matter how one categorises in law the process by which the money left the joint account of Mr and Mrs McCulloch and was applied for the benefit of Mr and Mrs Fern. To borrow the pithy words of Lord Denning MR in another context: 'Fraud or collusion unravels everything" : Campbell v Edwards [1976] 1 WLR 403 at 407. 87 Mr McCulloch's consent as joint owner to a payment of joint property to Mr and Mrs Fern or, alternatively, Mr McCulloch's gift of his interest in the joint property to his wife, was procured by unconscionable conduct in which both Mr and Mrs Fern were implicated in different ways. Thus, whatever Mr and Mrs McCulloch did in effecting the payment was tainted by the equitable fraud of Mr and Mrs Fern. Subject to the question of laches, the whole transaction is liable to be set aside and the parties restored as far as possible to their positions before the payment. If that were done, Mr and Mrs McCulloch must be treated as never having disposed of their joint interest in the money. Mr McCulloch would now be entitled by survivorship to the whole of the money. 88 In my opinion, Mr McCulloch has standing to bring proceedings seeking the aid of equity to restore him to that position in so far as it is just and equitable to do so. Laches, acquiescence and delay 89 Mr and Mrs Fern contend that it is now too late for Mr McCulloch to seek equitable relief. They say that the causes of action which Mr McCulloch now endeavours to prosecute arose on 25 July 1988, that Mr McCulloch was fully aware at that time of all relevant facts and circumstances, and that he stood by for eleven years before commencing these proceedings in 1999. During that time, they say, they have expended money in improvements to the Wapengo property, they have mortgaged their property to Westpac Banking Corporation on two occasions, and they have expended the proceeds of the loans for their own purposes. 90 Further, they say, because of the lapse of time they have been prejudiced in the conduct of their defence in that Mrs McCulloch died in 1990 and they have been deprived of the benefit of her evidence. In addition, they claim, medical evidence in relation to Mrs McCulloch has been lost, a letter from Mr Fern to Mr McCulloch in about 1990 referring to repayment of the money has been lost as has, probably, other relevant documentary evidence. 91 Mr and Mrs Fern say that Mr McCulloch's delay in commencing proceedings has caused them to alter their position in reasonable reliance on Mr McCulloch's acceptance of the status quo, so that he should now be refused relief. 92 I am unable to accept the suggestion that, from the time of the July payment in 1988 to the commencement of these proceedings in 1999, Mr and Mrs Fern were unaware that Mr McCulloch was seeking either repayment of the money or else some corresponding interest in the Wapengo property, and that they conducted themselves and dealt with the property on that basis. The evidence is overwhelmingly to the effect that shortly after Mrs McCulloch returned to live with him in late 1988, Mr McCulloch began to express regrets at having permitted the payment, not only to his wife but to Mr and Mrs Fern. Mr and Mrs Fern assured him on a number of occasions over the following years that the money would be repaid, or that he would be given a portion of the property after Mr Fern had obtained approval for a subdivision. Nothing came of those assurances. Relations between Mr McCulloch and Mr and Mrs Fern were at first cordial, especially as Mr McCulloch's daughter, Maree, had married Mr and Mrs Fern's son, Michael. But as Mr McCulloch's requests for payment went unsatisfied, it seems that the relationship soured and the two families became estranged. 93 It is necessary to recount some of the particulars of this history. 94 Mrs Fern says that in about January 1989 she had a conversation with Mr McCulloch in which he told her that he was unhappy about the payment of the money and that he wanted his name on the title to the Wapengo property. According to Mrs Fern, Mr McCulloch acquiesced when reminded by Mrs Fern that the payment was a gift with no strings attached. Mr McCulloch denies having acquiesced. 95 According to Mrs Fern, some months after Mrs McCulloch's death in February 1990, she had a telephone conversation with Mr McCulloch in which he said that if he could not get his name on the title to the Wapengo property, then he wanted a document confirming that he would get his money back when the property was sold. She says that she reminded him that the money was a gift, but said that she would talk it over with her husband. She says that she discussed the matter with Mr Fern, who said that he would write to Mr McCulloch promising to repay the money, as a gift, when the Wapengo property was sold. 96 It seems clear that Mr Fern did write to Mr McCulloch in 1990. The letter has been lost and there is some disagreement about its terms. Mr McCulloch says that the letter was in accordance with what Mrs Fern said she discussed with Mr Fern, that is, that Mr McCulloch would be repaid when the Wapengo property was sold. 97 Mr Fern says that he wrote that he and his wife had received the money as a gift, but that he considered that he had some moral obligation to Mr McCulloch. He says that he did not say anything in the letter about repaying the money when the property was sold. 98 I am satisfied that in the 1990 letter and the conversation between Mr McCulloch and Mrs Fern which had preceded it, Mr and Mrs Fern acknowledged that Mr McCulloch had a claim to repayment of the money. They were aware thereafter that Mr McCulloch was seeking to enforce that claim. For their part, they were not willing to honour the claim unless and until it was convenient for them to do so, as the following circumstances show. 99 On a number of separate occasions between 1991 and 1996, Mr McCulloch's daughter, Maree, who was living on the Wapengo property, told Mr McCulloch that Mr Fern would either repay the money or give him some of the Wapengo property if he obtained permission to subdivide it. No doubt Maree wished to prevent her father from taking action against her parents-in-law. It appears that during this time Mr Fern was indeed making efforts to procure Council approval to a subdivision of the Wapengo property. 100 In 1996, Mr McCulloch visited the real estate agency in Tathra which Mr Fern then owned. Mr and Mrs Fern and their children were present at the time. Mr McCulloch asked: "When am I going to get the money you owe?" According to Mrs Fern, she and her husband offered to pay Mr McCulloch back at the rate of $250 per week, but Mr McCulloch wanted to be repaid in a lump sum. Mrs Fern says that she did not want to repay Mr McCulloch anything, but her husband had "continued to make these promises to Mr McCulloch [to repay] and then I was subject to that … there was nothing I could do" . 101 Mrs Fern also accepts that she had had a conversation with Mr McCulloch in 1996 about a possible transfer of 50 acres of the Wapengo property to Mr McCulloch. She says that she knew that Maree had relayed to Mr McCulloch an offer from Mr Fern of 50 acres. Mrs Fern told Mr McCulloch that there would be conditions attached to the offer. There is disagreement about what the conditions were. 102 Mr Fern agrees that, on a number of occasions in 1996, 1997 and 1998, he discussed with Mr McCulloch repaying him the money by transferring 50 acres of the Wapengo property when it was subdivided. He agrees that that proposal was something that he was holding out to Mr McCulloch as a way of discharging his "moral obligation". He says that in September 1998 he had a conversation with Mr McCulloch and his second wife in the street at Bega, in which he said: "When I have the land subdivided, I would give you fifty acres of that subdivision." Mr McCulloch's second wife said: "Are you serious about that?" . Mr Fern says that he responded: "I have given my word. Yes." 103 On 19 September 1998, Mr McCulloch wrote to Mr and Mrs Fern referring to the offer to transfer 50 acres. He wrote again on 25 September, saying that he awaited advice as to how Mr and Mrs Fern intended to fulfil their "moral obligations". On 9 November 1998 he wrote a letter, clearly on legal advice, in which he sought a transfer of 75 acres on the basis of a valuation of $110,000 for that parcel, as compared with a valuation of $150,000 for the 25 acres upon which Mr and Mrs Fern lived. 104 On 16 November 1998, Mr Fern responded: "Dear Kevin, I am deeply troubled by your conduct. The gift made to Anna had no strings attached at all. It could be said that Anna did provide appropriate reward. In any event, I have acknowledged that I have a moral obligation. Any intervention by you can only lead to a repudiation of previous arrangements. Your conduct and actions may have adverse effects upon us all. With kindest regards, Don" 105 -On 25 November 1998, Mr McCulloch caused a caveat to be lodged on the title to the Wapengo property, claiming an interest in the land. These proceedings were commenced by Summons filed on 23 April 1999. 106 Other relevant matters to note are that in June 1993 Mr and Mrs Fern borrowed in excess of $40,000 from Westpac Banking Corporation on the security of a registered mortgage over the Wapengo property. In January 1996, a further sum of money was borrowed from the Bank upon the security of a second registered mortgage over the property. The proceeds of the second loan were used to repay the first loan, a personal loan and another overdraft. It does not appear from the evidence what is the balance, if any, now owing to the Bank by Mr and Mrs Fern upon the security of a mortgage over the property. 107 There is some scant evidence that Mr and Mrs Fern have expended some of their own money in improving the property. The improvements seem to consist of repainting the house which they occupy. There is no evidence of substantial expenditure for pasture improvement or the carrying on of any farming or grazing activity. It appears that the property has not been used for farming to any material extent. 108 I am satisfied on the evidence that at all times from early 1989 to the present Mr and Mrs Fern have been fully aware that Mr McCulloch has been claiming the return of the July 1988 payment. They have frequently recognised a "moral obligation" to repay the money. The mortgages of the property to Westpac and the incurring of liability to the Bank for the secured loans have been undertaken with full appreciation of an overriding commitment either to repay Mr McCulloch or to provide him with title to at least half of the Wapengo property. 109 I note in this regard that Mr Fern says in his affidavit that he acknowledges that he has a moral obligation to repay $93,000 to Mr McCulloch. He says that that money can only come from the sale of the Wapengo property and, in the meantime, it is the only place where his extended family can reside. He continues: "Accordingly, after taking advice from my solicitor, I offer the plaintiff a third mortgage over the land at no interest and repayable on the sale of the land with the proviso that if the land is rezoned to permit subdivision and is subdivided beforehand, then the mortgage may be discharged by transferring to the plaintiff the equivalent of 50 acres of land. The other terms of the mortgage will be the usual terms of a mortgage." 110 Mrs Fern also offers a third mortgage over the property on the same terms. 111 Mr McCulloch's delay of eleven years in commencing these proceedings is, in my opinion, excusable in light of the repeated assurances which he was receiving over that period from people who were not only related to him by marriage, but had been his friends. In those circumstances, a reluctance to commence legal proceedings until all else had failed is very understandable. Mr McCulloch has not slept on his rights; he has been lulled into inactivity by the promises of Mr and Mrs Fern. 112 In my opinion, there is in this case no injustice in requiring Mr and Mrs Fern to honour an obligation which they themselves have acknowledged for the last thirteen years. The possible loss of evidence in the meantime through Mrs McCulloch's death, and the loss of other documents, is not a sufficient countervailing consideration given that the facts and circumstances of the case are very clear even without such evidence. 113 Accordingly, in my judgment, the defence of laches, acquiescence and delay fails. Orders 114 The gift of $93,325 to Mr and Mrs Fern out of the joint property of Mr and Mrs McCulloch should be set aside. Mr McCulloch is now entitled, by survivorship, to the whole of that money and interest thereon. The money has been applied towards the acquisition by Mr and Mrs Fern of their beneficial interest in the Wapengo property in circumstances in which it is appropriate that equity imposes a constructive trust. 115 It is true that Mr and Mrs Fern have themselves paid part of the purchase price of the property and have paid interest on the mortgage to Mr Hankinson until that mortgage was substantially discharged in July 1988 by the payment from Mr and Mrs McCulloch. On the other hand, Mr and Mrs Fern have had the benefit of $93,325 interest free for some thirteen years as well as the capital appreciation of the Wapengo property. 116 In those circumstances it is appropriate to declare that Mr and Mrs Fern hold the whole of their unencumbered interest in the Wapengo property upon a constructive trust for Mr McCulloch in the proportion that $93,325 bears to an amount being the sum of the purchase price of the property, the costs of acquisition and the interest paid by Mr and Mrs Fern from their own money under the mortgage to Mr Hankinson. 117 However, I note that the plaintiff's Summons makes various prayers for relief in the alternative, including a prayer for the sale of the property under Div.6 of Pt.IV of the Conveyancing Act 1919 (NSW). It may be that a forced sale of the property is not in the interests of all parties and that a better solution can be found by sensible agreement. I think that the parties should have some little time to consider these reasons and to discuss the best means whereby they can be given effect. 118 The orders I make are as follows: 1. Order that the gift of $93,325 by the plaintiff and the late Maureen McCulloch to the defendants be set aside. 2. Declare that the defendants hold the whole of their unencumbered interest in the property comprising Lot 87 in DP 880417 at Wapengo in the Shire of Bega Valley, being the land in Folio Identifier 87/880417, upon a constructive trust for the plaintiff in that proportion which $93,325 bears to an amount being the sum of the purchase price of the said property, the costs of acquisition of the said property and interest paid by the defendants from their own money under a mortgage to Mr John Hankinson.

3. Order that the defendants -pay the plaintiff's costs of these proceedings. 4. Stand the matter over to a date to be fixed for the bringing in of short minutes providing for further relief or, if no agreement on the terms of the orders can be reached, for argument as to the appropriate relief and consequential orders.

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