Nguyen v Cao [2026] VCC 289

[2017] NSWCA 81Nguyen v Cao [2026] VCC 289 | Case summary | Zoe

[6]

The defendant gave evidence about meeting the plaintiff's father through his sister, Ms Pham, his subsequent transfer of money to the plaintiff's father in Vietnam and the purchase and funding of the Caulfield Property.
My initial opinion of the defendant's evidence in examination-in-chief, was that he was a mostly honest witness; however, as his evidence progressed, his evidence became less reliable. For instance when cross-examined, the defendant agreed that he submitted a loan application to the ANZ Bank in respect of the Caulfield Property which was incorrect in several fundamental respects. He conceded he lied about his asset and liability position to enhance the prospects of the bank granting him a loan. He also accepted he deliberately omitted providing certain information to the bank about two loans to him in respect of properties at Ringwood and Mitcham.
The defendant's evidence about his investment in a property in Vietnam with the plaintiff's father, was also confusing, at times conflicting and mostly self-serving. For instance the defendant said, on the one hand, immediately before he executed the Contract of Sale for the Caulfield Property, that he and the plaintiff's father discussed whether the plaintiff was interested in investing in a residential property near a river in Vietnam. On the other hand, the defendant later suggested that the property near the river was in fact not a residential development but was a supermarket property designated F2/21. This evidence was given despite the defendant's acknowledgement that no mention was specifically made in the conversation about the designation F2-21. Having asserted that the residential property was in fact designated as F2/21, the defendant then tried to tie the purchase of the Caulfield Property to the transfer of AUD 225,000 made by the defendant to the plaintiff's father in September 2009. The unreliability of the defendant's evidence, and the fact that it was not always given frankly, called into question the truthfulness of the defendant's overall account of his dealings with the plaintiff's father.

[17]

Ms Pham said that during a trip by the plaintiff's father to Australia, she introduced the plaintiff's father to the defendant.
Ms Pham said the introduction was likely to have occurred at her house around 23 December 2008. She said the plaintiff's father was present with six or seven other people.
During the initial conversation, Ms Pham said the plaintiff's father and the defendant discussed whether the defendant was interested in investing in property in Vietnam. Ms Pham suggested that during that initial conversation, the defendant agreed to transfer AUD 225,000 to the plaintiff's father for investment in property in Vietnam.
The defendant agreed that the first time he met the plaintiff's father was around 23 December 2008. He also recalled that the plaintiff's father was with his business associates.
The defendant's recollection of the initial conversation he had with the plaintiff's father differed from what Ms Pham recalled. The defendant described a general conversation in which the plaintiff's father informed the defendant that the plaintiff's father owned one or more Vietnamese property development companies which were developing land in multiple areas in Vietnam including Ho Chi Minh City, Vũng Tàu, and Long Hải. The defendant said he was impressed that the plaintiff's father had started his companies from scratch. He recalled the plaintiff's father came across as a successful and generous person. His business associates responded well to him, and he commanded respect from them.[4] He said he bonded with the plaintiff's father and thought he "sound[ed] impressive"[5].
The defendant said after he met the plaintiff's father, over the course of the next year there were many meals and interactions between them in Australia and in Vietnam, and several discussions about the defendant's desire to invest in property in Vietnam in which the plaintiff's father said the defendant would be given the opportunity to "get involved".[6] The defendant recalled that he and the plaintiff's father grew close; much closer than the defendant was anticipating. The defendant said the plaintiff's father was "like a brother to [the defendant]".[7]
In 2009, the defendant recalled a conversation between himself and the plaintiff's father in Vietnam. The defendant had travelled to Vũng Tàu with the plaintiff's father. During the drive back to Ho Chi Minh City, the plaintiff's father invited the defendant to dinner at his house. While the defendant was in the car, or at the plaintiff's father's house, or both, the plaintiff's father mentioned to the defendant that he was involved in a commercial project or contract reference for a supermarket development in District 2 in Ho Chi Minh City. The defendant understood from the conversation that the project was a joint venture between the plaintiff's father's company, Van Minh Company, and Ms Pham's company, Phuong Minh Khoa Company. The defendant said during that conversation, the plaintiff's father asked the defendant whether he would be interested in investing VND 3.5 billion in the project to secure a quarter share.[8]
The defendant said at the time there was a "booming market" in Vietnam, and he was keen to invest AUD 250,000 in property.[9] He did not have cash readily available but subsequently organised a line of credit with the ANZ Bank. The defendant said an agreement was then reached in 2009 between the defendant and the plaintiff's father whereby the defendant agreed to invest the sum of AUD 225,000 in property in Vietnam.
The transfer of AUD 225,000 by the defendant to the plaintiff's father's personal account in Vietnam then followed.
I accept that the defendant first met the plaintiff's father in Australia on or about 23 December 2008. I find that if there was a conversation about investment of funds by the defendant into property in Vietnam when the defendant first met the plaintiff's father, it was nothing more than a high-level general conversation. Nothing was discussed about the investment of a specific sum of money. Specifically, I find that there was no discussion about the defendant investing AUD 225,000 into property in Vietnam.
I further find that any conversation about the investment of AUD 225,000 by the defendant into property in Vietnam, occurred in 2009 before the defendant transferred the sum of AUD 225,000 to the plaintiff's father.
I make these findings for the following reasons.
First, the defendant did not say he discussed transferring AUD 225,000 to the plaintiff's father in their initial conversation. The description the defendant gave in his evidence was of a general initial conversation about investment with the plaintiff's father. There was no discussion about specific projects, contract references or investment amounts.
Secondly, the nature of the initial conversation between the plaintiff's father and the defendant, as described by the defendant, was consistent with the type of general conversation that would occur at an initial meeting.
Thirdly, the defendant's evidence of the conversations he had with the plaintiff's father in 2009 supports a finding that any agreement by the defendant to transfer AUD 225,000 to the plaintiff's father occurred in 2009 before the transfer occurred on 28 September 2009.
Fourthly, although Ms Pham's evidence suggested the conversation about the investment of AUD 225,000 by the defendant into property in Vietnam happened during the initial discussion between the plaintiff and the defendant on 23 December 2008, Ms Pham also referred to discussions which took place in 2009. Ms Pham's evidence was the plaintiff's father discussed "all of this project about land and supermarket" with the defendant.[10] She said she witnessed the defendant agree to "put money into the ah project of the supermarket land and Van Minh company and through Phuong Minh Khao company".[11]

[21]

Initially in evidence, the defendant said that the payment of AUD 225,000 by him to the plaintiff's father in Vietnam was for a project with a contract reference. The defendant did not recall the specific name of the project, but he said the money was paid for investment in a commercial supermarket development project in District 2 in Ho Chi Minh City, Vietnam.[14]
Later in his evidence, when asked about conversations he had with the plaintiff's father before he signed the Contract of Sale for the Caulfield Property in May 2010, the defendant said there was a conversation where the topic of F2/21 was raised. The defendant said F2/21 was a reference to a residential block of land (as opposed to a commercial supermarket development) in District 2 in Ho Chi Minh City.
To support his contention, the defendant relied on a document titled "People's Court of District 2, Ho Chi Minh City, Socialist Republic of Vietnam, Record of Statement of the Person Concerned" dated 24 May 2018.[15] The document titled "People's Court of District 2, Ho Chi Minh City, Socialist Republic of Vietnam, Record of Statement of the Person Concerned" purported to be a statement of the plaintiff's father. The statement suggested the payment of AUD 225,000 was for the "purchase of another land plot in District 2 for Mr Nguyen Mai Tung (birth son of Mr Nguyen Van Tu) who is on the title of ownership"[16] and that the plaintiff's father "determined that the 225,000 Australian dollars [he] received was not related to the payment of Contract 323/HDKT dated 12/112008".[17]
I accept that the defendant transferred AUD 225,000 to the plaintiff's father for a supermarket development project. The defendant did not intend to transfer AUD 225,000 to the plaintiff for a residential project.
I make that finding, first, because that was the initial evidence given by the defendant. The defendant initially said his investment of AUD 225,000 was for a supermarket project. It was not until later in his evidence that the defendant suggested his investment was for a residential block of land in Vietnam and not a supermarket development. I formed the view that the defendant changed his evidence to bolster his contention that the Caulfield Property purchase was in some way linked to the transfer of AUD 225,000 by the defendant to the plaintiff's father. That was why the defendant sought to assign the code F2/21 to the residential land in Vietnam.
Secondly, if the AUD 225,000 payment had been made in September 2009 to purchase residential land in District 2 owned by the plaintiff, the plaintiff would have been expected to have some knowledge of it. The plaintiff had no knowledge of the payment or its intended purpose. The plaintiff did not know whether the defendant had transferred AUD 225,000 to the plaintiff's father and if the AUD 225,000 was transferred, why it was transferred or where the money was deposited. As the plaintiff had no knowledge, it renders it very unlikely that the money transferred to his father was related to the plaintiff.
Thirdly, the document titled "People's Court of District 2, Ho Chi Minh City, Socialist Republic of Vietnam, Record of Statement of the Person Concerned" dated 24 May 2018, which the defendant relied on to support his contention that the AUD 225,000 he transferred to the plaintiff's father was for investment in a residential block of land, was created almost ten years after the transfer of the AUD 225,000 from the defendant to the plaintiff's father had occurred. The document was created after the plaintiff's father had suffered a stroke in 2014. By the time the document was created, the plaintiff's father had lost his memory and was having difficulty with activities of daily living. He was unable to walk independently and needed a wheelchair. He talked very slowly and his kidney function had deteriorated. He was living in Vietnam with the plaintiff's mother, Ngoc Ha Chau. I did not consider the document to be reliable.
Fourthly, the sum of AUD 225,000 had been transferred by the defendant to the plaintiff's father on 28 September 2009. This was well before the defendant said there was a conversation between himself and the plaintiff's father during which the topic of F2/21 - said by the defendant to be a reference to a residential block of land in District 2 in Ho Chi Minh City - was raised. On the defendant's evidence, that conversation did not occur until at least early 2010.
Fifthly, the plaintiff only became the owner of land in District 2 in Ho Chi Minh City in July 2010, well after the AUD 225,000 was transferred on 28 September 2009. It is unlikely that the money transferred relates to the plaintiff and the Caulfield Property.

[22]

After the defendant transferred the sum of AUD 225,000 to the plaintiff's father, both Ms Pham and the defendant said there were discussions with the plaintiff's father about the possibility of the plaintiff's father purchasing a property in Australia and the terms upon which that might be achieved.
There was some dispute about when those discussions commenced and who was present.
The plaintiff said he was not present at any discussions between his father and the defendant and was not aware of the Caulfield Property until he was driven to inspect it by the defendant, Ms Pham and the plaintiff's father shortly before it was purchased. The plaintiff said he met the defendant and Ms Pham for the first time at the inspection of the Caulfield Property. The plaintiff suggested that meeting occurred sometime after 10 May 2010 when the plaintiff's father came to Australia to visit the plaintiff.
Ms Pham recalled meeting the plaintiff for the first time and having discussions with him in 2009. Ms Pham also recalled being present at discussions in 2010 between the plaintiff's father and the defendant during which the plaintiff's father discussed his need to purchase a house in Australia to provide somewhere for the plaintiff - who had come to Australia in 2009 to study - to live and for the plaintiff's father to use as an office. Ms Pham's recollection was she subsequently inspected properties with the plaintiff's father. She recalled the plaintiff and his father also looked for properties themselves. Ms Pham's evidence was that the Caulfield Property was identified by her as well as the plaintiff and the plaintiff's father.
The defendant thought the plaintiff's father had travelled to Australia in early 2010 because he was interested in buying a property to set up as an office and to use as accommodation for the plaintiff who was in Australia studying. The defendant said the plaintiff's father intended to fully fund the purchase himself. The defendant said he offered to assist the plaintiff's father to locate a suitable property in Australia.
It is unclear whether the plaintiff's father came to Australia in early 2010 or not. The plaintiff said he came after 10 May 2010. The defendant said he met the plaintiff's father in early 2010. I formed the view that even if the plaintiff's father met with the defendant in early 2010, the extent of the conversation between them was limited to the plaintiff's father expressing general interest in purchasing a property in Australia. The plaintiff's father intended to fully fund this purchase himself, to use as an office and as a residence for his son while he was studying. A property had not been identified in Australia and for that reason, it is unlikely that any discussions about the Caulfield Property took place between the defendant and the plaintiff's father at that time.

[24]

After the Caulfield Property had been identified, there were further discussions between the plaintiff's father and Ms Pham before the Contract of Sale was executed.
An inspection of the Caulfield Property was arranged.
Ms Pham said the defendant was not present at the inspection of the Caulfield Property and was not involved in the purchase of the Caulfield Property until late July or early August 2010. She said the defendant did not pay the deposit for the purchase of the Caulfield Property. Rather, Ms Pham said she put in the 10 per cent deposit of AUD 85,000. Ms Pham said she "lent that money to Mr Tu. And the settlement would be ah in three months. After two months he ah cannot come up with the money (sic)."[18]
The defendant said he attended an inspection of the Caulfield Property about a week before he signed the Contract of Sale. This necessarily meant that if the Contract of Sale was signed on 27 May 2010, the defendant must have been involved in the transaction before that date. The defendant did not recall the inspection clearly or travelling to inspect the Caulfield Property with his sister, the plaintiff and the plaintiff's father. He recalled the condition of the Caulfield Property was poor but liveable but said he did not take much notice of the state of the property as he had not intended to purchase it.
The plaintiff said he recalled attending an inspection of the Caulfield Property before it was purchased. He had not met Ms Pham or the defendant previously and he recalled that he and his father were picked up by the defendant and the defendant's sister and were driven to the Caulfield Property for the inspection. The plaintiff's recollection was that he spent about 15 minutes at the inspection and then the defendant and Ms Pham drove the plaintiff and his father back to where they were staying.
I find the inspection of the Caulfield Property most likely occurred one week before the Contract of Sale was signed. The plaintiff only recalled attending one inspection about a week before the Contract of Sale was signed. The inspection the plaintiff attended, according to the evidence of all parties, was also the inspection attended by the defendant. This renders it probable that the plaintiff and the defendant attended the same inspection one week before the Contract of Sale was signed.

[57]

I formed the view that Ms Pham was mistaken about when the defendant first became involved in the purchase of the Caulfield Property and about when the Contract of Sale was signed, and the deposit paid.
I find that the Caulfield Property was purchased on 27 May 2010 and that the defendant became involved in the transaction for the purchase of the Caulfield Property shortly before 27 May 2010.
First, the defendant said he attended only one inspection of the Caulfield Property which was about a week before he signed the Contract of Sale. This necessarily meant that if the Contract of Sale was signed on 27 May 2010, the defendant must have been involved in the transaction before that date. What the defendant recounted was consistent with what the plaintiff also recalled, specifically, that an inspection of the Caulfield Property took place before the Caulfield Property was purchased. The plaintiff recalled that he and his father were collected by Ms Pham and the defendant and were driven to the Caulfield Property for the inspection. The plaintiff had not previously met either Ms Pham or the defendant.
Secondly, the Contract of Sale for the purchase of the Caulfield Property, which was signed by the defendant, was dated 27 May 2010. That was the date which appeared on the face of the Contract of Sale. The Contract of Sale for the Caulfield Property, which was signed by the defendant, did not bear a date in July 2010.
Thirdly, although Ms Pham's evidence was that there was an earlier version of the Contract of Sale, the only version of the Contract of Sale tendered at trial was the version signed by the defendant dated 27 May 2010.
Fourthly, according to the spreadsheet prepared by the defendant and attached to the defendant's email to the plaintiff's father dated 20 February 2014, the deposit was paid on 27 May 2010. Other than Ms Pham's evidence, there was no evidence that the deposit had been paid on any date other than 27 May 2010.
Fifthly, execution of the Contract of Sale on 27 May 2010 was consistent with the fact that on 28 May 2010, an application was made by the defendant to the National Australia Bank via a document titled "Customer Particulars Report - Customer Copy" for a loan facility with a "Requested amount" of AUD 600,000.[39] If the defendant did not become involved in the purchase of the Caulfield Property until late July or early August 2010, why would the defendant have made an application for a loan on 28 May 2010?

[59]

I find that the plaintiff's father's initial intention was to purchase a property in Australia from his own funds. That finding is consistent with the recollections of both Ms Pham and the defendant. However, I further find, that soon after the Caulfield Property had been identified, the plaintiff's father informed Ms Pham that he was unlikely to be able to fully fund the purchase of the Caulfield Property. Perhaps Ms Pham suggested to the plaintiff's father that if he were to be able to raise AUD 250,000 (which she considered to be equivalent to the sum which the plaintiff's father was holding on behalf of the defendant for the development in Vietnam of AUD 225,000 together with accrued interest), she could lend the plaintiff's father the deposit and they could approach the defendant to assist the plaintiff's father to obtain a loan for the balance of the purchase price.
Consistent with these findings, I find that a conversation then occurred between the plaintiff's father and the defendant with respect to funding the purchase of the Caulfield Property. The plaintiff's father told the defendant he had been unable to raise all the funds he needed to purchase the Caulfield Property and asked the defendant if he would be able to assist the plaintiff's father to obtain a loan in Australia. I find that the defendant said he was willing to assist the plaintiff's father to obtain a loan. This was because Ms Pham and the plaintiff's father were close at the time. Secondly, the defendant was somewhat awestruck by the plaintiff's father and the respect he commanded. Thirdly, the defendant remained interested and was motivated to assist the plaintiff's father and wanted the plaintiff's father to assist the defendant to become involved in investing further in Vietnam.
During the conversation between the plaintiff's father and the defendant, there was a discussion about who would be responsible for the costs of repairs and maintenance to the Caulfield Property, noting that the defendant's name was to be on the title, but the plaintiff was to be living at the Caulfield Property.
I find the plaintiff's father and the defendant agreed that they would share the costs of repairs and maintenance to the Caulfield Property in accordance with their respective percentage interests in the Caulfield Property. This is consistent with the evidence of the plaintiff. As outlined, the defendant's recollection was he had to "look after the property with Anthony".

[61]

In the same conversation, the plaintiff's father informed the defendant about a residential property in Vietnam which was valued at AUD 500,000. That was consistent with the defendant's initial evidence. It was also supported by Ms Pham's evidence, which, although somewhat confused, referred to an amount of AUD 250,000 being the amount the plaintiff's father had to "come up with".[40] The sum of AUD 250,000 was half of AUD 500,000, being the amount the defendant said the residential property in Vietnam was worth.
I find the plaintiff's father likely informed the defendant that the residential property might be available for the defendant to invest in and suggested that if the defendant could arrange a loan in Australia in the defendant's name, with the defendant's name on the title, the plaintiff's father would contribute AUD 250,000 to the purchase price and pay the deposit. Both the plaintiff and the defendant would be jointly responsible for the upkeep of the Caulfield Property in accordance with the respective contributions.
I find that although the defendant and Ms Pham tried to suggest that there was a discussion before the Contract of Sale was signed in which the plaintiff's father agreed to "offer up" the supermarket property, or the property at F2/21 as security for the defendant's agreement to arrange the loan with respect to the purchase of the Caulfield Property in the defendant's name, that was not discussed before the Contract of Sale was signed.
I formed this view for the following reasons.
First, the defendant's evidence was not consistent about which property in Vietnam was being discussed by the plaintiff's father in the conversation before the Contract of Sale was executed. Specifically, the defendant's evidence was inconsistent and varied about whether the property was a residential or a supermarket property, the location of the property or its designation.
Initially the defendant said the discussion related to a residential property. He later tried to suggest the property discussed was designated with the code F2/21:

[70]

Thirdly, any discussion between the plaintiff's father and the defendant about the defendant's investment in the supermarket land in Vietnam occurred in 2009, well before the Contract of Sale was signed by the defendant. At the time of the conversation about the defendant's investment in the supermarket land, the defendant said the plaintiff's father asked for assistance in locating a property in Australia. If the conversation between the plaintiff's father and the defendant did not occur until immediately before the Contract of Sale was signed, there would have been no need for the plaintiff's father to ask for help to locate a property in Australia because by that time, the property would have already been identified. Further, the defendant said after that conversation, the plaintiff's father came back to Australia and attended auctions with Ms Pham. This suggested some time passed between the conversation about investment in land to be used for a supermarket and the signing of the Contract of Sale.
Fourthly, even if there was a later discussion about the supermarket land, the discussion did not involve, and did not bind, the plaintiff. There was no agreement for the defendant to hold a beneficial interest in a property owned by the plaintiff in Vietnam. This is because, at the date the Contract of Sale for the Caulfield Property was signed, there was no property owned by the plaintiff in Vietnam in which the defendant could have held a beneficial interest. The plaintiff did not own the supermarket land at F2/21. Van Minh Company was the owner of the supermarket land and had been since 2008. The plaintiff also did not own residential land in Vietnam. The red book title showed that the plaintiff only became the owner of residential land in Vietnam in July 2010. For those reasons, I do not accept that the plaintiff's father requested that his staff prepare legal documentation pursuant to which the supermarket property, or any other land at F2/21, owned by the plaintiff, was to be held beneficially by the defendant.
In any event, no legal documentation was tendered which supported a conclusion that the supermarket property, or any other land at F2/21, was to have been held beneficially for the defendant. There was certainly no evidence such documentation existed before the Contract of Sale was signed on 27 May 2010. At most, as the defendant said, any arrangement between the defendant and the plaintiff's father, was "a gentlemen conversation".[47]
Finally, even if there was some discussion between the plaintiff's father and the defendant in which the suggestion was made that the plaintiff's father could "offer up" the supermarket property in Vietnam as some form of collateral security for the defendant's agreement to take out the loan and put the defendant's name on the title, nothing was ever agreed between the defendant and the plaintiff's father to that effect. As the defendant said, he considered the price quoted by the plaintiff's father for investment in the land discussed shortly before the Contract of Sale was signed, was too expensive and the conversation stopped.
It follows from the above, that there was no agreement by the plaintiff's father to "offer up F2/21" - the supermarket property - by way of security, thereby there was nothing to tie the Caulfield transaction to the earlier transfer of AUD 225,000 from the defendant to the plaintiff's father for investment in the supermarket property in Vietnam.[48]
Having made the finding that the property under discussion between the plaintiff's father and the defendant immediately before the Contract of Sale was signed was a residential property in Vietnam, I find that the plaintiff's father asked the defendant to arrange a loan. The amount of the loan was to be AUD 600,000 and the loan and title to the Caulfield Property were to be put into the defendant's name.
I make that finding because, first, the plaintiff's father said he would contribute AUD 250,000. This was equivalent to half of the value of the residential property the plaintiff's father discussed with the defendant. Together, AUD 600,000 plus AUD 250,000 equalled the purchase price for the Caulfield Property of AUD 850,000.
Secondly, on 28 May 2010 - the day after the Contract of Sale was signed - the defendant applied for a AUD 600,000 loan from the National Australia Bank. The loan application was only in the name of the defendant. The amount requested was AUD 600,000 not AUD 500,000, which was the amount the plaintiff said the defendant had originally agreed to contribute. The defendant said the AUD 600,000 was:

[112]

On 11 August 2010, a loan in the amount of AUD 600,000 in the defendant's name financed by the National Australia Bank and secured by mortgage AH499244B was drawn down. According to the drawdown letter,[63] the amount required to complete the purchase, after deduction of the AUD 85,000 deposit, was AUD 812,531.94. That amount, according to the loan contract, included stamp duty of AUD 46,070 and government and other fees of AUD 1,461.94, giving a total outlay for the purchase of AUD 897,531.94. It did not include the adjustments which were going to be necessary at settlement; however, I find that the estimated percentage contributions were intended to include an allowance in case there were additional costs at settlement.
The settlement of the purchase of the Caulfield Property ultimately occurred on 25 August 2010,[64] after which the plaintiff began occupying the property. The balance of the purchase costs of AUD 812,531.94 was paid by the defendant as to AUD 600,000 from the defendant's account number 17-732-8271 and as to AUD 212,531.94 from account number 671157869, which the defendant said was another account held by him.[65]
From the AUD 812,531.94 disbursed at settlement, the sum of AUD 767,870.32 was paid to Lachlan Nguyen of Willocks Lawyers. That was disbursed according to the vendor's instructions as detailed in a letter dated 24 August 2010 from Willocks Lawyers to the National Australia Bank.[66]
On 25 August 2010, according to the spreadsheet prepared by the defendant and attached to the defendant's email to plaintiff's father dated 20 February 2014,[67] the plaintiff's father paid AUD 370,000 to the defendant in cash.
After the settlement of the Caulfield Property, but before the Deed of Trust was executed, the defendant said he recalled the plaintiff's father reconfirming his commitment and reminding the plaintiff to honour his side of the arrangement. The defendant said the plaintiff's father and the plaintiff again confirmed they would honour their side of the deal.

[118]

On about 28 September 2010,[71] Mr Davidson[72] was engaged to perform building work at the Caulfield Property.
Mr Davidson said he was introduced to the project by Ms Pham[73] who told him she had a friend who needed work done on a house where his son was to live during his university studies.
Ms Pham denied any involvement in the renovation works, except for one instance involving the installation of a sink. She maintained that any agreement about the renovations was between the plaintiff, the plaintiff's father and Mr Davidson. Ms Pham said neither she, nor the defendant, had anything to do with the work. When taken to documents evidencing her involvement in the process regarding the variations and payments, she said that she had "become very angry that [Mr] Davidson and Mr Tu using my name, my credibility to settle between them".[74] Ms Pham considered she had nothing to do with the property and had no reason to speak to Mr Davidson about it. She said that she was telling the "sincere truth".[75]
The defendant said that after the Caulfield Property was purchased, he was not aware that his sister had arranged a builder to undertake renovations or that his sister had been liaising with the plaintiff's father in relation to the renovations. He recounted that he went to the property in late 2010 to fix the home's internet issues. He said he only went into the front room to check the connection and then left. He did not recall seeing any building works being done then. The defendant's evidence was he only found out about the renovation works in 2012 when he was completing his tax returns. He sent an email to the plaintiff's father asking if there had been any repairs done to the property and requested that he be provided with any invoices for repairs.
When Mr Davidson first became involved in the renovation of the Caulfield Property, he undertook an inspection. Upon inspection, Mr Davidson saw that the property was a Californian bungalow which had become rundown. The weatherboards were in bad condition; the soil settlement, the foundations and floorboards were uneven. Mr Davidson found the bathroom to be barely habitable, and he said that the kitchen needed to be redone. Mr Davidson also noticed that water damage had caused the floor to buckle. The floor had to be re-sanded and re-laid.
After inspecting the property, Mr Davidson documented the initial work to be undertaken and presented a quote to Ms Pham.
Mr Davidson said he then had a meeting with the plaintiff's father at Ms Pham's house. He and the plaintiff's father agreed on a scope of renovation and refurbishment works for Mr Davidson to perform. The scope of works was based on the quotation provided by Mr Davidson which included work such as re-wiring and re-plumbing.
Mr Davidson began work on 28 September 2010 whilst the plaintiff was living at the property.
Mr Davidson's evidence was that the work he did on the Caulfield Property was:

[124]

The plaintiff was unable to remember exactly what work Mr Davidson did, but he agreed he did a lot.
For any work that needed to be done which had not previously been quoted, Mr Davidson said he spoke with Ms Pham. He understood Ms Pham spoke with the plaintiff's father about the work to be done. Ms Pham then came back to Mr Davidson and, on behalf of the plaintiff's father, authorised whatever action needed to be taken.[77]
Throughout the building works, Mr Davidson submitted invoices addressed to the plaintiff's father, with whom he believed he was dealing.[78] The invoices supported the work done by Mr Davidson.[79] They detailed the works completed and identified the variation works that Mr Davidson agreed upon with Ms Pham.
The invoices were usually three-pages long. The first page was a statement of work completed up to the date of the invoice, and the second page listed the variations agreed with Ms Pham. The final page contained a breakdown of all the components that made up the invoice, together with their quoted prices. Mr Davidson adjusted the final page with every invoice to show the status of the works compared with the quotation he had previously provided.
Mr Davidson's first invoice was dated 22 November 2010. It was an account for work completed to that date of AUD 58,290.10 plus variations of AUD 1,413.90. The total of the invoice was AUD 59,704. After deduction of the deposit paid, the total amount owing inclusive of GST was AUD 45,704. The variations completed were the supply and installation of a new external 320-litre mains pressure gas hot water unit. The variations were authorised by Ms Pham.
The 22 November 2010 invoice also detailed future variations which Mr Davidson had discussed with Ms Pham including raising the roof and ceiling height of the new kitchen area, removing the wall between the old and new kitchens, removing and replacing the existing air conditioner unit in the lounge room which was not working and for which parts were not available, and arranging a regular lawnmowing service.
The second invoice was dated 14 December 2010. It was for a total sum of AUD 61,843.10. After applying a discount of AUD 3,429.10 to the purchase, the total outstanding was AUD 58,414, of which AUD 25,564 was to be transferred to Mr Davidson's account and AUD 32,850 was to be collected directly by Mr Davidson.
The invoice detailed variations to the works totalling AUD 11,859. The variations included raising the roof and the ceiling height to the new kitchen area (AUD 4,700 cash); replacing the existing non-working split system air conditioning unit with a new inverter LG unit to suit the area (AUD 3,120); supplying and installing an inbuilt Robin Hood ironing centre to the laundry (AUD 598.00); supplying and fitting new glazed window sashes in a style to match the existing windows (AUD 1,239.00); removing a section of the wall from the existing kitchen to the new kitchen area; installing a new roof beam and support studs; raising the level of the new kitchen floor; eliminating the step and matching the existing floor in the rest of the residence to install new overlay flooring (AUD 2,052.00) and arranging a lawnmowing service (AUD 150.00)
The invoice also attached a table setting out the various trades performing work, the contract price, how much money had been claimed back to date, how much was being claimed in the current claim and the outstanding balance owed. Specifically, the amounts owing were carpentry (AUD 7,000.00); plumbing (AUD 11,000); electrical (AUD 5,440), roof tiling (AUD 1,093.00); plastering - internal (AUD 12,500); glass items (AUD 4,543.00); joinery - internal (AUD 29.983.00); floor finishes (AUD 12,200.00); tiling, paving and waterproofing (AUD 1,978.00); heating, cooling, sailing (AUD 14,500); painting (AUD 10,500) and site cleaning (AUD 1,000 and AUD 111,737.00). An amount of GST was then added, to give a contract total amount outstanding of AUD 122,910.70.
On 21 January 2011, Mr Davidson rendered his third invoice in the sum of AUD 50,930.70. Variations totalling AUD 4,250 were included. These were for removing an existing surface-worn metal bath and for the supply and installation of a new white enamel metal bath (AUD 815); replacing an existing leaking low pitch tiled roof with new battens, roof iron and capping as quoted (AUD 3,360), and providing a lawnmowing service (AUD 75.00).
A further table was attached to the invoice setting out the various trades performing the work, the contract price, how much money had been claimed back to date, how much money was being claimed in that claim and the outstanding balance owed.
Specifically, the amounts owing were carpentry (AUD 200.00); electrical (AUD 250.00), roof tiling (AUD 300.00), glass items (AUD 1,500.00); joinery - internal (AUD 10,000.00); floor finishes (stated to be nil, but a handwritten amount of AUD 12,200.00); heating, cooling, sailing (AUD 4,500); painting (handwritten amount of AUD 9,200.00), and site cleaning (AUD 1,000 and AUD 39,150.00). An amount of GST of AUD 3,915.00 was then added to give a contract total outstanding of AUD43,065.
On 22 February 2011, Mr Davidson rendered his fourth invoice for AUD 36,590.00. The account included variations of AUD 3,425. The variations comprised plastering - replacing water damaged feature cornice to the old kitchen area; supplying and fixing additional plaster to the east wall of the old kitchen because the existing surface was too bad to satisfactorily repair (AUD 946); supplying and fixing plasterboard to the east, south and fireplace walls (AUD 768.00); electrical - supply light fittings to all external and internal outlets (AUD 2,135.00 less an allowance included in the quotation of AUD 500.00 to give AUD 1,636.00), and a lawnmowing service (AUD 75.00).
Specifically, the amounts owing were for carpentry (AUD 200.00); electrical (AUD 250.00), roof tiling (AUD 300.00), glass items (AUD 1,500.00); joinery - internal (AUD 10,000.00); heating, cooling, sailing (AUD 4,500); painting (AUD 8,000.00), and site cleaning (AUD 24,750.00). An amount of GST of AUD 2,475.00 was then added to give a contract total outstanding of AUD 27,225.00.
Mr Davidson's final invoice was dated 30 March 2011 and was for AUD 47,232.00. The tasks in the invoice related to the installation of new floors, a new kitchen, a new bathroom and other works in the laundry, and to the veranda and drains. Mr Davidson also installed a gas hot water unit and air conditioning and organised for the lawns to be mowed so that the property was clear and accessible for construction.
The invoice included variations of AUD 4,167.00 which were for heating - supplying and installing an additional hydronic panel to the main bathroom and replacing the original electric strip heater (AUD 385.00); floor finishes - heavy sanding and filling to level the top surface of the floors prior to laying new floor coverings (AUD 1,673.00); tiling - supplying and laying new tiles over existing damaged and uneven concrete (AUD 932.00) and security door (supplying and installing a new lockable security screen door to the front entry (AUD 1,177.00).[80]
To complete the works, Mr Davidson explained that he would subcontract carpenters, tilers, painters and plumbers. Their costs were included in his invoices. Mr Davidson said he was ultimately responsible for the quality of the work, and he never received any complaints during his dealings with Ms Pham and Mr Tu. The work was finished in late March 2011 and was warranted for structural defects for seven years.
From the invoices, Mr Davidson's services for repairing the Caulfield Property totalled AUD 252,870.70. By his Statement of Claim, the plaintiff claimed the sum of AUD 252,870.70.[81]
The defendant made no contribution to the cost of the improvements but paid for a modem and internet connection to be installed. The plaintiff recounted that before the renovation work, the Caulfield Property had not had internet. He required internet for his studies. He recalled that the defendant came to the Caulfield Property when around 40 per cent of the renovation works had been completed and installed the internet for the plaintiff to use.
Mr Davidson said he understood from Ms Pham that the plaintiff's father required seven days to make the payments. The plaintiff's father paid Mr Davidson the amounts claimed by him[82] on behalf of the plaintiff. The invoices were paid mostly by direct debit into Mr Davidson's nominated account and partly via cash payments which he received from a property in Springvale.
The renovation and refurbishment work performed by Mr Davidson was signed off by the building surveyor on 5 April 2011 and a Certificate of Occupancy was granted.
The plaintiff remained living at the Caulfield Property during the renovations.
The plaintiff said that after the installation of the internet and modem, he only saw the defendant once more after the renovations were completed. The defendant came to see how the renovations had gone.
The plaintiff continued to live at the Caulfield Property after the renovation and refurbishment work had been completed.
The plaintiff's sister migrated to Australia in 2012 to study. She began living at the Caulfield Property.

[131]

The first sign of discord between the plaintiff and the defendant was an email sent to the plaintiff on 10 June 2015 in which the defendant indicated that at 25 June 2015, he considered he was owed the sum of AUD 63,576 by the plaintiff.[88]
In August and September 2015, there were various emails passing between the plaintiff and the defendant which culminated with the email dated 7 September 2015.
On 31 August 2015, the defendant wrote to the plaintiff and indicated that he felt he had no option but to sell the Caulfield Property.[89] In the letter, the defendant claimed that the plaintiff owed him AUD 66,753 for settlement costs, AUD 130,228 for rental fees in respect of the plaintiff's occupation of the Caulfield Property, and AUD 825,277 for the initial investment debt for the Caulfield Property. For the Vietnam property, the defendant claimed that the plaintiff owed him AUD 763,893.
The plaintiff responded to that email by an email dated 1 September 2015.[90] The plaintiff claimed he was confused by the previous email and stated that the defendant was to deal with him as a co-owner and not to deal with his parents. The plaintiff asked why he had not been informed of the claimed costs beforehand when the defendant had contacted him regarding the council and water bills.
Regarding the AUD 66,753 which was said to be owed for settlement costs, the plaintiff was not aware of how the defendant had arrived at the claimed amount.
The plaintiff denied any rental agreement and disputed that he owed the defendant the sum of AUD 130,228.
As for the AUD 825,277 which the defendant claimed was the current value of the initial investment debt for the Caulfield Property, the plaintiff informed the defendant that the debt was his debt to pay off.
Regarding the Vietnam Property, the plaintiff asserted that he had no knowledge of that transaction and it did not have anything to do with him or the Caulfield Property.
The defendant responded via email on 2 September 2015 saying he was happy to work directly with the plaintiff. The defendant had a "gentleman's agreement" with the plaintiff's father which had led to the defendant becoming a co-owner of the Caulfield Property with the plaintiff. The defendant asked the plaintiff to consider his situation and queried why the defendant should be incurring costs with respect to the Caulfield Property without receiving any benefit. The defendant stated he would send the plaintiff accompanying emails to provide context to his current emails. He ended the email by saying that those matters had to be settled or drastic and necessary action would be taken.[91]
The plaintiff replied on 4 September 2015. In his response, he said that he was willing to resolve all misunderstandings regarding the Caulfield Property. The Excel files the defendant had sent to explain the defendant's accounting were confusing. He said he required receipts or invoices and ended his email by attempting to arrange a meeting with the defendant [92].
In an additional email sent on 7 September 2015, the plaintiff clarified that he accepted responsibility for the costs of home insurance. He further expressed that it was his intent to resolve the dispute.
On 7 September 2015, the defendant responded that the plaintiff was required to pay him AUD 66,753 by 21 September 2015 or the defendant would sell the Caulfield Property.[93]
On 8 September 2015, the plaintiff lodged a caveat on the title to the Caulfield Property because of the defendant's demand.[94]
On 13 October 2015, the plaintiff and his sister vacated the Caulfield Property.
Notwithstanding that the plaintiff vacated the Caulfield Property, on 20 November 2015, the plaintiff was given notice to vacate by the defendant. The notice purported to be a notice to vacate by the mortgagee when the defendant was not a mortgagee.[95]
After the plaintiff and his sister vacated the Caulfield Property, it was leased by the defendant to various tenants from time to time. The defendant has managed and has retained all rental from the Caulfield Property.

[176]

Mr Wolohan relied on this case as supporting the view that a court could take a "broad brush" approach and simply set-off occupation rent against the costs of the improvements.[113]
In addressing the defendant's submissions, the plaintiff noted that the cases the defendant relied upon were from jurisdictions outside Victoria and, importantly, dealt with legislation that differed from the PLA. It was contended by the plaintiff that there was no Victorian law that required that the improvements to the property had to improve the value of a property for a co-owner to be reimbursed. The Victorian legislation only required the decisionmaker to consider the reasonable amount spent on improving the land or goods.[114]
The plaintiff submitted that he had reasonably spent AUD 252,870.70 on improving the property through the renovations conducted by Mr Davidson. Pursuant to the Deed of Trust, the defendant had a 60 per cent interest in the property, so the defendant should pay/reimburse the plaintiff 60 per cent of the improvement costs (being AUD 151,772.42).
Further, as VCAT often deals with these matters, greater weight should be given by the Court to past VCAT decisions as opposed to decisions of courts in other jurisdictions addressing different legislation.
Mr Northrop, counsel for the plaintiff, referred to Gates v Robinson (Building and Property)[115] in which Senior Member Vassie at VCAT considered Silvester v Sands.[116] In Gates, Senior Member Vassie noted that the Victorian case of Rosselli v Rosselli[117] had cited Silvester v Sands with approval but noted the comments were only in relation to a point concerning occupation rent. Accordingly, Senior Member Vassie found that the decision was not binding on him.
Senior Member Vassie found that the Property Law Act 1969 (WA) did not contain an equivalent provision to s233 of the PLA. Further, the Senior Member noted that s233(5) of the PLA stated that s233 "applie[d] despite any law or rule to the contrary".[118] Senior Member Vassie ultimately found that although Western Australia must apply common law principles, VCAT (or in this instance, the Court) must consider the requirements of s233 of the PLA, unqualified as they are. Accordingly, there was no requirement under the PLA to show that the improvements increased the value of the land.
Under section 233(1) of the PLA, the Court may order that compensation or reimbursement be paid or made by a co-owner to another co-owner;[119] that a co-owner account to the other co-owner in accordance with s28A of the PLA,[120] and/or that an adjustment be made to a co-owner's interest in the land to take account of amounts payable by co-owners to each other during the period of the co-ownership.[121] Ultimately, however, the Court may make any order it thinks fit to ensure that a just and fair sale or division of land or goods occurs.[122]
In this proceeding, the plaintiff seeks orders under each of these subsections.
In determining whether to make an order that the defendant contribute 60 per cent of the renovation costs incurred,[123] which he estimated to be AUD 151,722.42,[124] s233(2) of the PLA lists six matters that the Court must consider. These matters include any amount that a co-owner has reasonably spent in improving the land,[125] and any costs reasonably incurred by a co-owner in the maintenance or insurance of the land.[126]
There was no dispute, in either the witnesses' evidence or in the parties' final submissions, that extensive renovations and repairs were undertaken to the Caulfield Property. There was also no dispute that the plaintiff's father paid for the works. Additionally, there was also no issue about the reasonableness of the works. All witnesses accepted that the house was in poor condition and required renovations.
The defendant submitted that the work was done at the direction and control of the plaintiff's father for the distinct benefit of the plaintiff who lived at the property for five years. The defendant also submitted that insofar as the work done constituted maintenance, he had no obligation to contribute to such costs. The plaintiff was responsible for the maintenance costs pursuant to the Trust Deed.[127]
I prefer the Victorian cases that specifically discuss the PLA, including s233.
Forgeard dealt with s66G of the Conveyancing Act 1919 (NSW). That case did not provide any assistance regarding how to apportion the costs of improvements in a co-ownership situation like this matter. Instead, the Court relied on common law principles to arrive at its decision that the amount of the increase in value of the property due to improvements should be apportioned.
Ryan v Dries[128] heavily relied on the decision of Forgeard. For that reason, it, too, is of little assistance.
The matter of Silvester v Sands[129] was cited and approved by the Supreme Court of Victoria in Rosselli v Rosselli;[130] however, Forrest J only approved and cited the discussion on the issue of occupation rent.[131] Further, as Senior Member Vassie noted in Gates,[132] the Property Law Act 1969 (WA) did not contain a provision like s233 of the PLA.
I have concluded that in arriving at my decision, construction of s233 of the PLA is paramount.
Section 233(1)(a) of the PLA is not in contest. As detailed already, this Court has the powers of VCAT in this matter and s233(1)(a) allows VCAT to make an order that one co-owner compensate or reimburse the other co-owner.
Section 233(2) prescribes the relevant matters I must take account of when making an order under s233(1).
I must consider any amount that a co-owner has reasonably spent in improving the land or goods and any costs reasonably incurred by a co-owner in the maintenance of the land.
First, nobody contested that the work that was done was not needed. All parties involved were aware that the Caulfield Property required renovation to be habitable. In my view, the work done was reasonable. Nor were there any claims that the rates that Mr Davidson charged were unreasonable.
I found Mr Davidson to be an honest witness who had almost 60 years' experience as a registered builder. His explanation of his costs was not contested. In those circumstances, I find the renovation costs were reasonable.
Improvements to land means doing something to land to enhance the value of the land.[133] Such a definition encapsulates within its bounds, a broad range of works that can be classified as improvements. This interpretation of "improvements to land" is consistent with the defendant's interpretation extrapolated from Forgeard.[134]
Mr Davidson said that the house on the Caulfield Property had a:

[185]

I find that the plaintiff is liable to pay the maintenance fees of AUD 300 for the lawnmowing. Had the sum of AUD 252,570.70 contained other outgoings such as rates or charges, the plaintiff would have been responsible for those also; however, other than the lawnmowing fees, I find that the sum of AUD 252,570.70 constituted improvements.
The amounts included within that sum were not amounts incidental to the use of the land. They related to amounts required to fix the Caulfield Property to make it habitable. They were amounts that needed to be expended from the time the Caulfield Property was purchased.
The defendant submitted he was never told by Ms Pham about the renovation and refurbishment works and so he was not required to reimburse or compensate the plaintiff for a portion of the improvement costs.
I have considered whether the defendant knew about the renovations and improvements to the Caulfield Property.
It is possible, as the defendant said, that he was not made aware of the renovations when Ms Pham introduced the plaintiff's father to Mr Davidson. Ms Pham's evidence suggested that she was often selective in what information she shared with the defendant. It was plain that she shared an extremely close relationship with the plaintiff's father and wanted to assist him and at times she attempted to downplay her knowledge and involvement in the transactions that occurred. It was also apparent Ms Pham was self-interested enough to want to protect her own financial interests, whatever that took. While I do not form the view that the defendant was selfless and only acted out of altruism, I do discern that what he often knew about various transactions, was likely only part of the story. Ultimately however, I find that the defendant knew about the renovations.
I formed that view, because the defendant visited the Caulfield Property when, according to the plaintiff, about 40 per cent of the renovation work had been undertaken. The defendant admitted he attended the Caulfield Property in late 2010 because it did not have internet, and the internet had to be installed. Mr Davidson said he was engaged to perform work at the Caulfield Property on 28 September 2010. He rendered his first invoice on 22 November 2010. It was in respect of the installation of a new external 320-litre mains pressure gas hot water unit. A second invoice was rendered on 14 December 2010. It was in respect of a substantial amount of work.
I am satisfied, on the balance of the evidence, that if the defendant had not been informed about the renovations previously, from the time he attended the Caulfield Property to install the internet in late 2010, it was more probable than not that he became aware of the renovations.
Even if this is incorrect, I am required to ensure that a "just and fair" sale of the land will occur.[138] In all the circumstances, I am satisfied that the defendant should be required to contribute 60 per cent towards the cost of improvements to the Caulfield Property, particularly seeing the defendant will receive the benefit of the increase in value of the Caulfield Property by reason of those improvements.
I am satisfied that to ensure that a just and fair sale or division of land is achieved, it is appropriate to order that the defendant compensate the plaintiff pursuant to s233(1)(a) for 60 per cent of the sum of AUD 252,570.70 (being 60 per cent of AUD 252,870.70, less AUD 300 for lawnmowing).
I find that the defendant is required to compensate the plaintiff for AUD 151,542.42 and I direct that the sum of AUD 151,542.42 should be paid by the defendant to the plaintiff.

[193]

(a) any amount that a co-owner has reasonably spent in improving the land or goods;

(b) any costs reasonably incurred by a co-owner in the maintenance or insurance of the land or goods;

(c) the payment by a co-owner of more than that co-owner's proportionate share of rates (in the case of land), mortgage repayments, purchase money, instalments or other outgoings in respect of that land or goods for which all the co-owners are liable; ...

In exercising jurisdiction under Pt IV of the Act and considering what order ought be made 'to ensure that a just and fair sale or division of land or goods occurs' there will be a necessity intrinsic to that task, to be decided according to law, to determine the nature and extent of existing interests in the co-owned property be they at law or in equity. That is, in order to carry out and properly adjudicate the conferred jurisdiction, the Tribunal may have to consider the nature and extent of the interests that exist to decide if adjustments are to be made to a co-owners interest and to carry out the statutory jurisdiction to order a just and fair sale or division of land. It will be quite a different matter, of course, if a co-owner applied to VCAT not under Pt IV of the Act, but in some other way for the declarations of trust that were sought in this case.

That view was supported by decisions to which I was taken made by the Tribunal. In Sherwood v Sherwood Senior Member Riegler was dealing with a situation of a co-owned property held as joint tenants in which the question was whether a constructive trust should be imposed, arising out of a failed endeavour. It also concerned a resulting trust. The Tribunal found it was 'just and fair' that the legal interests in the property be adjusted under the Act to take into account the unequal contributions to the purchase price. The Tribunal concluded that a resulting trust arose by reason of the unequal contributions to the purchase price such that it was fair to vary the legal interests according to the contribution made. That is, once the original jurisdiction of VCAT is properly invoked under Pt IV of the Act by a co-owner, the exercise of that discretion to make an order for sale or division of the property may, depending on the case, necessarily involve findings about the nature and extent of interests held in the land according to equitable principles or remedies. It was well observed I think by Senior Member Riegler in Trakas v Aravopoulos that the giving of relief under the Act and the making of adjustments must necessarily involve an alteration of parties rights and interests at common law and in equity, the discretion bestowed upon the Tribunal under the Act to do what was 'just and fair' was not based upon idiosyncratic notions of justice and fairness, but rather taking responsibility to do that which is just and fair having regard to the general law as applied to the facts as found.

There may be a question whether the Tribunal can or ought give a declaration as a remedy. But it is now clear to me that the Tribunal can certainly make findings about beneficial interests in the land under resulting or constructive trusts for the purposes of and in order to make its ultimate determination under s 228 or s 233 of the Act."

[195]

(qq) Fifthly, whether an intention to create a trust exists must be determined by reference to the 'outward manifestation' of such an intention, rather than to the subjective intention of the alleged settlor. As Gummow and Hayne JJ observed in Byrnes, a settlor

'must, of course, possess the necessary intention to create a trust, but his subjective intentions are irrelevant. If he enters into arrangements which have the effect of creating a trust, it is not necessary that he should appreciate that they do so; it is sufficient that he intends to enter into them.'

(rr) This fifth proposition applies not only to an alleged express bilateral covenant to create a trust, but also to a unilateral declaration of an alleged trust and to an alleged trust that is not wholly in writing. In relation to an alleged trust that is not wholly in writing, the need to draw inferences from circumstances in construing the terms of conversations may in practice widen the extent of the inquiry, but it does not alter its nature.

(ss) Sixthly, trust obligations arise where equity operates on the conscience of the holder of the legal interest. A person cannot be a trustee of property if that person is ignorant of the facts alleged to affect their conscience. That is, unless the putative trustee is aware that they are intended to hold the property for the benefit of others, their conscience will not be affected in a relevant way.

(tt) Seventhly, where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested in B alone, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A. This is only a presumption, which presumption may be rebutted.

(uu) Eighthly, a payment (including a loan) for a specific purpose, where the recipient is not free to apply the money for any other purpose, gives rise to a trust. However, a trust does not necessarily arise merely because money is paid for a particular purpose. The question in every case is whether the money was intended to be at the free disposal of the recipient or whether the person providing the funds intended to retain a beneficial interest in the funds. A freedom to dispose of the money is necessarily excluded by an arrangement that the money shall be used exclusively for the stated purpose. That is because a necessary consequence of a finding of an exclusive purpose must be that if, for any reason, the purpose could not be carried out, the money was to be returned.

(vv) Finally, a court will not readily infer that funds provided to a company will be impressed with a primary express trust for use exclusively for a specific purpose, the failure of which creates a secondary resulting trust in favour of the person who provided the funds. A mere 'expectation' or 'general understanding' or 'preference' that the funds are to be used for a specific purpose is insufficient. Rather, it is necessary to demonstrate an intention that the funds have been provided on the condition that they will be earmarked for use exclusively in accordance with an agreed purpose."[143]

[205]

With respect to the pre-settlement amount, the defendant claimed that while the purchase price for the Caulfield property was AUD 870,000, the additional costs of stamp duty and other fees increased the final settlement price to AUD 900,439.98. The defendant submitted that the increase in the purchase costs equalled AUD 30,438.98 and that the sum of AUD 30,438.98 was properly payable by the plaintiff for the following reasons.
First, the defendant submitted that the agreement between the defendant and the plaintiff's father was that the defendant would contribute AUD 500,000 to the purchase price and that the plaintiff's father would contribute the balance and/or pay any other expenditure.[153]
Secondly, the plaintiff's father never contested that the sum of AUD 30,438.98 was owed by the plaintiff.[154]
Thirdly, the Deed of Trust which was signed after the settlement of the sale of the Caulfield Property, stated that the plaintiff "agrees to pay the outgoings associated with the property, including but not limited to council rates, water rates and costs of maintenance".[155]
Other than the defendant's oral evidence, with respect to the claim for AUD 30,438.98, the defendant relied on a spreadsheet created by the defendant calculating the supposed amount owed[156] and a settlement letter from Willocks Lawyers to the National Australia Bank dated 24 August 2010 advising the defendant in relation to the settlement of the Caulfield Property, which detailed rates, water and conveyancing fees.[157] The defendant also relied on the fact that the plaintiff's father never disputed the claim made by the defendant and reassured the defendant that the amount would be paid.[158]
I have found that the agreement which was ultimately reached in late July early August 2010 was that the plaintiff agreed to contribute 40 per cent and the defendant agreed to contribute 60 per cent of the purchase costs and not simply the purchase price.
The effect of an agreement to that effect was that the plaintiff was required to contribute 40 per cent of AUD 900,439.98 (being the final purchase costs) which was AUD 360,175.99. In fact, the plaintiff contributed AUD 370,000. The result was that rather than the plaintiff being required to pay the defendant a further sum of AUD 30,438.98, an adjustment should be made in the plaintiff's favour in the amount of AUD 9,824.01.
The post-settlement amount of AUD 18,757.23 claimed by the defendant includes:
- Home Insurance (AUD 2,335.21)
- Telephone and Internet (AUD 1,429.03)
- Land Tax (AUD 730)
- Interest Charges (AUD 14,262.99).[159]
The defendant relied upon the spreadsheet he prepared. There were no invoices or receipts for payment.
At trial, the defendant conceded the claimed interest of AUD 14,262.99 was not the subject of any express agreement between the plaintiff's father and the defendant.[160] I accept that was the case. The defendant nevertheless contended that interest was payable pursuant to an implied contract. The interest rate was said to be based on the "margin lending account" rate in Vietnam, based on information provided by the plaintiff's father.[161] The defendant was therefore entitled to claim interest, on a compounding basis, at a rate of 23 per cent.
I disagree.
There was no agreement, either between the plaintiff and the defendant or between the plaintiff's father and the defendant,[162] for the payment of interest by the plaintiff. Further, how the defendant had calculated the amounts outstanding was unclear. It is unreasonable for the plaintiff to bear these costs.
I make no allowance for interest.
The defendant also claimed the sum of AUD 2,335.21 for home insurance. This comprised monthly payments of AUD 90.81 from 30 August 2011 to 30 June 2011 and then AUD 95.45 from 30 July 2011 to 25 August 2012.
There was no dispute that the plaintiff was responsible for paying the outgoings associated with the Caulfield Property after execution of the Deed of Trust[163] including the insurance; however, the plaintiff contended he had no knowledge of the amounts claimed. No invoices or receipts for payment had been provided to the plaintiff by the defendant. The defendant said he "didn't see the point."[164] The defendant relied on the spreadsheet created by him as supporting his claim.
In an email dated 7 September 2015, the plaintiff accepted that the home insurance was properly his responsibility; however, he maintained that it was inappropriate for the defendant to charge interest. Because the plaintiff acknowledged that he was responsible for payment of the home insurance, based on the only evidence available as to the costs of such insurance, namely the spreadsheet, I find that the plaintiff is liable to pay the amount of AUD 2,335.21 for home insurance.
Similarly, I find that the plaintiff is responsible for payment of the land tax of AUD 730 and for payment of AUD 1,429.03, being for home telephone and internet charges.

At a glance

Court

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Before

Source

Judgment (257 paragraphs)

Parties

Legislation Cited (7)

Cases Cited (9)