Nguyen v Nguyen

Ms Nguyen, Dr Nguyen and the Terrigal Property - 2001 to 2018

1. The following is a narrative of the relevant history of the dealings between these parties about the Terrigal Property. This narrative represents the Court's findings on the matters covered, except to the extent that the context indicates that only the parties' allegations are being recorded. For reasons of economy, this narrative does not always refer to versions of the facts that have been rejected.

Witness Credibility

1. But before the narrative commences, the Court undertakes a preliminary assessment of the credibility of the main witnesses who appear in the narrative. The Court's findings in part turn upon on a determination of conflicting versions of conversations. The credibility of the witnesses was integral to that determination. These reasons commence with some comments on credibility.
2. Mr Andrew Ball. Mr Ball was the real estate agent acting for the vendor, who sold the Terrigal Property to the parties. He was a forthright, credible and reliable witness who had a good recollection of acting as the vendor's agent for the property. He remembers the Terrigal Property well: he says he even wanted to buy the property himself, but his wife wished to buy another property instead. The Court fully accepts his evidence of the events about which he speaks.
3. Ms Nguyen. Ms Nguyen, the plaintiff, was a witness of substantial truth. She was prepared to concede that any mistakes in evidence were her fault. She was trying to give evidence honestly. She was generally reliable in her account of relevant events. She was financially astute, although not highly sophisticated in matters of business. She and her husband had a number of other investment properties that they had acquired over the years. Because of this background, she understood the financial importance of the arrangements she was making with her brother at the time of the purchase of the Terrigal Property.
4. Mr Steve Luong. Mr Luong, Ms Nguyen's husband, is a pharmacist; although during the period, the subject of these proceedings, he and his wife were operating photo reproduction shops. He undertook some renovations to the Terrigal Property after its purchase. He was a precise and careful witness, qualities he needed to run a small pharmacy. He had a good recollection. Mr Luong corroborates evidence of Ms Nguyen. But of course, he is not an independent witness. He has an indirect financial interest in the outcome of this matter and his evidence was viewed cautiously, as a result. But his evidence was nevertheless internally consistent, and his credibility not damaged throughout cross-examination. His evidence was particularly convincing when he explained in his own words why he would not have done renovations to the Terrigal Property, if he thought that Dr Nguyen had owned 100% of it and his wife had no interest in it. As he colourfully put it, "I love my wife, not my brother-in-law. Why would I work on his property".
5. Dr Nguyen. Dr Nguyen's evidence was puzzling in places. He could not explain some of the objective factors that pointed towards Ms Nguyen's version of events. Dr Nguyen was vague about the time at which issues (such as Ms Nguyen renting the Terrigal Property) were first raised with him. He could not clearly recall Ms Nguyen asking him to buy the Terrigal Property, because she and her husband wanted to live in it, although on his version that must be so. He asked for questions to be repeated and clarified on a number of occasions. The Court had the impression this occurred so he could have more time to think about his answers. He could not give any reliable account of events. For example, he could not recall how long had passed between the parties' important pre-purchase conversation about the property he alleges was on Terrigal Beach and the subsequent exchange of contracts.
6. The narrative of events commences just before the purchase and finished on 2015 when the parties' dispute blazed into open conflict.

Preliminary Discussions about Property Investment - Mid 2001

1. In 2001, Ms Nguyen was operating a photo reproduction shop in the Sydney suburb of Bankstown ("the Bankstown shop"). In mid-2001, she and her husband, Mr Luong, decided to expand. They signed a lease for a second photo shop in Erina Fair Shopping Centre on the Central Coast ("the Erina Fair shop"). They began to consider the possibility of buying a residence not far from the Erina Fair Shopping Centre. In mid-2001, Mr Luong and Ms Nguyen signed a lease to take the occupation of the Erina Fair shop. The lease terms meant that, in practice, they needed to commence fitting out the shop in about December 2001 and to begin trading in March 2002.
2. From the time they signed the lease, they began driving from Sydney up to Erina and its surrounding areas on weekends, looking at houses for purchase in the price bracket of $400,000 to $600,000. Ms Ngyuen and Mr Luong had made preliminary enquiries at the Campsie branch of the Commonwealth Bank of Australia ("CBA") about mortgage finance. They had an existing connection with that branch of the CBA.
3. They believed as a result of their enquiries with the CBA that, given current interest rates, their joint income, the rent that they received from their existing investment properties and their direct interests in those properties, they would probably be able to borrow enough money to purchase a house together in that price bracket.
4. One evening in the second half of 2001, the couple attended a family dinner with Dr Nguyen. The general subject of property investment and the purchase of investment properties came up in discussion. Ms Nguyen told her brother about the success of an investment property she and her husband had acquired in Earlwood and how the tax advantages of negative gearing had helped to pay the property off for them. She explained to her brother that she and her husband "are opening a second photo shop in Erina and we are looking to buy a house in the area to live in. We will look out for something for you as well but only in the Erina area if you want our help, and not, for example in Wollongong (where he lived and practised as a doctor) or Campsie".
5. Dr Nguyen expressed sufficient interest in the subject of property investment for Ms Nguyen to encourage him further. She did not know what his budget was. As will be seen, Dr Nguyen's salary at that stage, as an intern, was modest. So she suggested, "Do you need to go to a bank and find out so I can help you?"

The Parties Visit the Commonwealth Bank - September/October 2001

1. But Dr Nguyen did not go to the bank himself. Ms Nguyen thought that he was reluctant to do so. In my view, she is correct in this. She decided to take the initiative. She made an appointment for them to go together and see the local Commonwealth Bank lending officer. They made an appointment at the Campsie Branch and saw a bank officer. Before going in to see the bank officer, Dr Nguyen told Ms Nguyen that he had savings of about $50,000. I accept that they had a meeting with the bank officer in September or October 2001.
2. As will be seen below, the CBA's internal documents suggest that there was a meeting between a CBA bank officer, Ms Michelle Lim, and Dr and Ms Nguyen that resulted in a finalised application for finance to the CBA on 18 January 2002, just after the exchange of contracts for the purchase of the Terrigal Property. But the CBA's documents do not exclude the possibility that a meeting could have taken place as early as Ms Nguyen says, with the application being finalised later. But she says the meeting took place in September/October 2001. It could have been a little later. The Court accepts that her timing is approximately correct, even though the bank's records do not clearly record a separate meeting then. Ms Nguyen and Dr Nguyen lodged application documents with the CBA on 10 December 2001. Not only is Ms Nguyen reliable, but a sensible experienced investor, such as she is, would be likely to have verified the quantum of available finance before looking too far for properties.
3. Ms Nguyen's recollection of the September/October meeting with the CBA is that the meeting started with the lending officer asking Dr Nguyen questions about his financial situation and then indicating to him that the maximum the bank would lend him was about $200,000 to $250,000. She recalls the Bank officer saying words to the following effect: "The bank would lend up to 80 per cent of the purchase price of the property. The bank will only calculate that you can put 40 per cent of your income into repaying the mortgage".
4. Her recollection is remarkably close to the actual calculations that the bank officer made about serviceability of the loan that they were prepared to offer to Dr Nguyen and Ms Nguyen, as the bank's documents later disclosed -having been brought into Court on subpoena.
5. Ms Nguyen is clear, and the Court accepts, that up to that point of time she had not proposed to Dr Nguyen that they purchase any particular property together, nor did she suggest to the CBA lending officer that they borrow money together. She says, and the Court accepts, that she went into the meeting with the CBA officer with her brother to help him launch into property development for the first time on his own account. Specifically, she says that they had not, by then, been introduced to or viewed the Terrigal Property.
6. But the lending officer said to them both that the maximum the bank would lend to Dr Nguyen was $200,000 to $250,000, perhaps enough for him to purchase an apartment. Ms Nguyen says, and the Court accepts, that she concluded that her brother, on his own, would not be able to borrow enough money to purchase an investment property. It was then that she resolved to help him, by purchasing a house with him. She did not want him to buy a home unit, as she thought a house would be a better investment.
7. She then said to the bank officer in his presence, "I own a house in Claremont Meadows. If we add my income to my brother's income what is the maximum we can borrow to purchase an investment property?" I accept that the lending officer then said, "If you are joint borrowers the bank will lend you up to $400,000 or $500,000". Ms Nguyen is not quite sure which of those figures was mentioned. The ultimate figure loaned was less than this, but that does not diminish Ms Nguyen's credibility on this issue.
8. At the end of the meeting, I accept there was discussion about whether Dr Nguyen and Ms Nguyen could apply for pre-approval for a loan. Ms Nguyen's recollection is that she supplied some additional documents to the CBA in the following week and that, within about two weeks, the CBA had issued finance pre-approval to them both. Her memory is that the pre-approval was issued about a month before she first saw the Terrigal Property.
9. Dr Nguyen criticises her account of this meeting in part on the basis that her account of a pre-approval with Dr Nguyen is not consistent with her account that she was first going to purchase with her husband and only later with her brother. But the answer to that is that the visit to the CBA must have occurred after the switch in purchasers and the visit to the CBA could have been a little later than September/October, which is nevertheless the period for the visit that the Court uses in these reasons.

The Purchase of the Terrigal Property - November 2001

1. The Court accepts Ms Nguyen's account of the purchase of the Terrigal Property. She says that her first contact with the Terrigal Property was in November 2001, a clear period of several weeks after the meeting at the Campsie branch of the CBA.
2. Shortly after the meeting at the CBA, Ms Nguyen and Dr Nguyen had the following conversation: " Ms Nguyen: Steve and I are looking to buy a house in or around Erina. I can purchase the house with you instead of Steve and we can each own it and have an equal share or 50%. Dr Nguyen: Or I might buy it together with my girlfriend? Ms Nguyen: It's up to you. Are you sure you are going to marry her? If you know you are going to get married to her then you should, but if you don't know, then I wouldn't. What happens if you split up? Dr Nguyen: That's a good point."
3. Ms Nguyen recalls thinking that her proposal to buy together with him was a "win-win". It was a win for Dr Nguyen, she thought, because she was giving him an opportunity to get into the housing property market. It was a win for herself, she thought, because she was not certain that the Erina Fair shop would be profitable in the long term. It would assist Mr Luong and her financially if another person (Dr Nguyen) was contributing to paying the mortgage over the house they planned to purchase and live in.
4. After the meeting at the CBA, Mr Luong recalls that he and Ms Nguyen said to each other: " Ms Nguyen: I want to help Tuan [Dr Nguyen] get into the property market. I proposed to him that he and I purchase the house in or around Erina. This will help him get into the property market. Also, it may help us if he is contributing to paying the mortgage over the house. Mr Luong: Fine."
5. Mr Luong and Ms Nguyen continued to drive up to Erina and surrounding areas on Saturdays to inspect houses, with a view to purchase. Dr Nguyen joined them on two or three occasions. On one of these visits, they found the Terrigal Property through a local real estate agent, Mr Andrew Ball. This was not probably one of the times when Dr Nguyen accompanied them. He is likely only to have joined them on a later visit. Several aspects of the subsequent course of events makes this the more probable scenario.
6. Mr Ball showed the Terrigal Property to the plaintiff and her husband. He recalls, and the Court accepts, that he only had discussions with them in the negotiations to sell the Terrigal Property. If Dr Nguyen was present at the first meeting with Mr Ball, he said so little that Mr Ball did not even remember him. Mr Ball said that he believed Ms Nguyen and her husband, Mr Luong, were the sole proposed purchasers.
7. Mr Luong and Ms Nguyen could not submit an offer at first, as another purchaser had already made an offer of $450,000 that the vendor was considering. Nevertheless, Ms Nguyen remained interested. Mr Ball said he would stay in touch. But the other purchaser interest suddenly collapsed. Mr Ball contacted Mr Luong and revealed that the property was now available to the Nguyens. Mr Ball gave the news to Mr Luong that they could now close a deal for the Terrigal Property and invited them to make an offer. Mr Luong then told Ms Nguyen the good news. Mr Ball and Mr Luong's evidence agrees closely on this course of events.
8. Between them, they quickly decided to put in an offer to purchase the Terrigal Property for $440,000. Consultation, if any, between them and Dr Nguyen at that time is unlikely. But Mr Luong's logic, in pricing their offer, was to put it slightly below the offer that had fallen through.
9. The offer was accepted. Mr Ball telephoned the news back to Mr Luong. He then told his wife. "Mr Luong: Andrew Ball phoned me. The owner of [the Terrigal Property] has accepted our offer of $440,000. Andrew said we must put down a holding deposit of $1,100 today. Ms Nguyen: OK."
10. Mr Luong did not delay. He either drove to Terrigal within 24 hours alone (as Ms Nguyen says) or on the following Saturday with her (as he says). As he was the one who travelled up and as he was still working in a pharmacy in the Sydney metropolitan area at that time, his recollection is more likely to be reliable on this issue. Either way, Dr Nguyen did not accompany him. In Terrigal he paid a holding deposit of $1,100 to Mr Ball. This represented 0.25% of the purchase price of $440,000.
11. Ms Nguyen says she did not immediately contact Dr Nguyen to ask if he was interested in purchasing the Terrigal Property. One reason for this is that she liked the property and wanted to purchase it herself. I accept Ms Nguyen's evidence that if Dr Nguyen was not interested in purchasing the Terrigal Property with her, she believed that Mr Luong and she could purchase the property without him. And this was so even though Mr Luong and Ms Nguyen did not yet have formal finance pre-approval.
12. The Court accepts Ms Nguyen's evidence that she and her husband were realistic purchasers of the Terrigal Property without Dr Nguyen for the following reasons, that: 1. She had more than enough money available to pay the 10% deposit. 2. She could offer the Claremont Meadows Property as security for a loan, as the Claremont Meadows Property had already been fully paid off. 3. Interest rates were low and she had income from the rental property. 4. She still had money that her sister, Thu, was paying her back every month, after Ms Nguyen had loaned her sister $200,000 to purchase a home in Campsie.
13. But not long after the holding deposit was paid, Ms Nguyen invited her brother to come and look at the Terrigal Property. Contrary to his account of events, which is set out below, on the day of his visit with them no decisions were made about him being a co-purchaser of the property. Ms Nguyen was still keen on it herself.
14. Shortly after Dr Nguyen's visit, Ms Nguyen met him at their sister Thu's house in Campsie. They had a conversation with words to the following effect: "Ms Nguyen: About two weeks ago you inspected the house at [the Terrigal Property] with Steve and me. Steve and I made an offer to buy the house for $440,000. The offer was accepted. Do you still want to buy the house with me? If not, Steve and I will buy it on our own. Dr Nguyen: I will buy the property with you."
15. When this conversation took place, probably in about December 2001, the holding deposit had already been paid to the agent. But the full 10% deposit had not, as the contracts for the purchase had not yet been exchanged; although, they may have been signed and given to the agent at some stage. But Mr Ball, Mr Luong and Ms Nguyen all say that Dr Nguyen was not present then. I prefer their evidence on this.
16. Mr Ball is quite firm at the whole sequence of events, in a way that corresponds closely with Mr Luong's sequence: he and Mr Luong were present with Ms Nguyen, at an initial inspection of the Terrigal Property. He says, and the Court accepts, "I do not recall any one else at the inspection". Mr Luong gave Mr Ball his contact details.
17. The next communication between the two of them was by telephone. Mr Ball, confirming what Mr Luong says, believed that Mr Luong phoned him back and made an offer to purchase the property, which Mr Ball conveyed to the vendor, leading to negotiations then sale. Mr Ball at no stage recalls a face-to-face meeting involving Dr Nguyen.
18. It was not until 15 January that Ms Nguyen and her husband paid the 10% deposit of $44,000 on the contract, when an agent-organised exchange occurred. By then, through further discussions with Dr Nguyen, they had agreed that the purchase could proceed in his name. They also paid stamp duty of $15,294, shortly after the exchange of the contracts.

Dr Nguyen's Version

1. Dr Nguyen had quite a different version of these early conversations and events. It is difficult to reconcile with Ms Nguyen's version.
2. His version is of a two part conversation. According to him, the first part occurred immediately after they had inspected the Terrigal Property together. He says a discussion commenced on the beach at Terrigal about purchasing the property, which proceeded as follows: "Ms Nguyen: Are you interested to buy the house at [address not published], Terrigal. Dr Nguyen: It seems okay I would like to offer them $440,000.00". I said "I would pay 10% of $44,000, I will buy a bank cheque from the bank and pay this amount. Ms Nguyen: I can't wait for your bank cheque it will take too long I will write out a cheque to pay them. Dr Nguyen: I will pay for the Vendor the $1,100.00 to hold the property. Ms Nguyen: That's fine I will write a cheque to them for $44,000 this will include the $1,100 and the remaining $42,900.00. "I cannot wait for you to visit the bank to buy a bank cheque it will take too long, I will need to get this process moving fast, I will just quickly pay this to the agent". I recall the agent giving me a Contract. Having reached agreement to purchase the property, I signed the Contract to purchase the property. I was advised I had five days cooling off period to arrange finance.
3. His version is puzzling at several levels. Ms Nguyen was never looking for rental properties on the Central Coast. She and her husband were only in the market to purchase a property. They were not as keen as this conversation suggests, for Dr Nguyen to buy it with them. And the holding deposit was paid following a telephone conversation between Mr Ball and Mr Luong and a car journey for that specific purpose. It did not happen as a result of a decision made on Terrigal Beach.
4. It is improbable that Ms Nguyen and her husband would undertake a house hunting exercise on the Central Coast and then suddenly say to him, "Will you buy the house for us?". Equally implausible is the defendant's response, to agree immediately by saying "It seems OK. I would like to offer you $440,000". Some kind of discussion around the event is far more likely rather than this sort of artificially constructed immediate agreement. Then, if Dr Nguyen is right and the conversation on the beach was the first occasion on which Ms Nguyen proposed his purchase, it is difficult to understand why he would give up his weekends to travel with them to the Central Coast to inspect properties not potentially for himself but for his sister and her husband. When confronted with this implausibility, Dr Nguyen's only answer was to say that he went on the trips, "To hang out with his family and see some beaches".
5. Dr Nguyen says that the agent gave him a copy of the contract for sale, which he says he signed. According to him, this seems to have happened the same day that they inspected the property and had the discussion at the beach. He says that he was advised of the 5 day cooling-off period. Then he says that Mr Luong paid the holding deposit of $1,100.
6. Dr Nguyen's version may be close to the truth. The agent may have given him the contract on a later occasion, after Mr Luong had paid the holding deposit. And that may even have been an occasion after he and his sister and her husband, Mr Luong, had some discussion on the beach. The contract signed by Dr Nguyen got to the agent somehow. The agent was ultimately responsible for effecting exchange of the signed contracts. But whenever he did this, it was not also the time when he, or they, decided to proceed to purchase; it was well after that.
7. Dr Nguyen also says that on the same day, there was a longer conversation on the return journey from Terrigal to Sydney, a conversation in which the agreement was cemented. This second conversation was said to be to the following effect: "Ms Nguyen: If you were to buy this house then could you grant us this favour I will agree to a special agreement. Dr Nguyen: What special agreement? Ms Nguyen: I am willing to pay you rent at a reduced below market price of $250/ week. I will also pay the rent into home loan in advance to reduce the mortgage with no interest. You will still be the sole owner of the property. The payments that I put in is due to me and my husband Steve living in the house, all this will be offset against the rent. You are buying the property as the sole legal owner and Steve and I will be your tenants paying rent at a reduced market price since we are your family member and you are just helping us for cheap accommodation". Dr Nguyen: Also, you have agreed that due to wear and tear you will make renovations to the kitchen and bathroom and also pay some amounts to reduce the mortgage. All these payments you make will offset against the rent. Ms Nguyen: Yes, I agree that I will fulfill all the above. Dr Nguyen: You agree that I will be the legal sole owner of the property. Everything else you pay regarding rent $250/ week, Council rates, water rates, renovations and putting monies into the mortgage will be offset against the rent. Ms Nguyen: Yes, I agree that I will only be a tenant occupying the house with my husband Steve and my son and paying reduced market price rent of $250/week. Any renovations I make to the kitchen and bathrooms will be due to the wear and tear from us living the property and these costs will be offset against the rent. Also, any payments I make to reduce the mortgage will also be to offset the rent. Dr Nguyen: For as long as you run the business at Erina Fair, live in the property and will let you rent the property but if you move out and close the business I want the property back to rent out for market rent. Even that you are my sister, but I do not agree for you to live my house rent free. I have already given you a generous offer to pay $250/ week rent. If you go out to rent other houses you will not get any accommodation for a large 3 bedroom brick house for a reduced rent of $250/ week. You will be paying at least $500/ week. So don't forget that I am just granting you and your husband favour. Don't forget this. Ok then, I am willing to buy the house in Terrigal Central Coast. But don't forget the conditions that I have set in our agreement in order for me to buy this house in Terrigal Central Coast for the benefit of you and your husband Steve. Ms Nguyen: Yes, I agree. Steve and I and Joshua will live in the home after the purchase. … Ms Nguyen: Let's go down to Commonwealth Bank Campsie branch to apply for a home loan to buy the property in Terrigal."
8. Dr Nguyen says that he recalls Ms Nguyen saying to Mr Luong, "Can you write a letter to certify me as an employee of the Company with an income, so that I can show the Bank". Ms Nguyen then said to Dr Nguyen: "Ms Nguyen: I will put my name down to be the Guarantor on the Home Loan. Dr Nguyen: Why? I don't need you to be Guarantor. With my income I can easily get approval of the Home Loan by myself. Ms Nguyen: I will put my name down as Guarantor, so the bank can give you a fast approval. Just in case they slow things down and I need this approval very fast. Steve's Konica Company is rushing us to open the business very soon in Erina Fair Shopping Centre. So we need to get quick accommodation. We don't want the delay in home loan approval process as we need this so we can buy this house very soon. Please, I don't want anything to go wrong on the bank's side with approval process. I really need this Home Loan very soon. I need to get accommodation immediately. We are starting to set up the photo business in Erina Fair. Dr Nguyen: Ok then, but as I said again there is no reason why you need to be Guarantor on the Home Loan. Ms Nguyen: Please, just agree so we can get things moving with the Home Loan very soon. Dr Nguyen: "Ok then."
9. There are several other problems with these conversations. But those problems are better analysed when the narrative is rounded out with the later course of events, including the exchange of contracts and the parties' full interaction with the CBA.

Signing the Contract and the Purchaser's Identity - 15 January 2002

1. The contract for sale of the Terrigal Property from the vendors to Dr Nguyen, for a consideration of $440,000, was dated 15 January 2002. The solicitors for the purchaser were Janis Vu and Associates of Bankstown. The contract in evidence was the counterpart signed by the vendors. An indecipherable signature appears against the name of the purchaser, but the purchaser is named as "Anh Tuan Nguyen", namely Dr Nguyen. The signing of the contract raises a number of peculiarities in this case.
2. Mr Ball acknowledged in evidence that the writing on the form of the contract, apart from the signatures, was his. This strongly suggests that he was involved in handling the contract before the exchange. Mr Ball explained his practice in assisting in the exchange of contracts. If he is involved in the exchange of contracts, once counterpart contracts are signed by the vendor and purchaser and a deposit is paid of 0.25% of the purchase price, the contracts are then signed by him as agent and neither the purchasers nor the vendors get them back. The contracts then go to the respective solicitors for the opposite party. He, as agent, allows the parties to go through everything and make sure the contents are correct and then, after the cooling-off period, an automatic exchange occurs once the full deposit is paid, which is the balance of the ten per cent in most cases. Mr Ball confirmed that, in his practice, there are no more documents changing hands.
3. Mr Ball confirmed that, when he exchanges a contract himself, he usually takes the holding deposit, banks it into his trust account and then waits for the balance of the 10 per cent to come into the office later.
4. Dr Nguyen signed the form of contract in evidence as purchaser. But this must have been after Mr Luong had paid the $1,100 over to Mr Ball. If Dr Nguyen signed the contract in Mr Ball's presence, he would presumably have been recognised by Mr Ball. But Mr Ball says that he only dealt with Mr Luong and that is consistent with Luong's evidence.
5. This raises the question whether Mr Ball met Dr Nguyen across the table when signed contracts were given to Mr Ball. Mr Ball answered the Court's question, "So the person across the other side of the table has given you that name [Dr Nguyen's name] presumably, have they?" in the affirmative. But when counsel for Dr Nguyen then asked Mr Ball, "And who was the person across the other side of the table?" Mr Ball said, "Well I thought it was Steve [Mr Luong]. I am not sure". Mr Ball then reaffirmed that the purchaser's name written on the contract was in his handwriting.
6. This was an important issue. Dr Nguyen's case was that he had gone up to Terrigal and he had signed the contract. That meant consistently that he had to be the person sitting at the table opposite Mr Ball. But his counsel, Mr Shaw, did not, at first, put to Mr Ball that Dr Nguyen, who was in Court during Mr Ball's evidence, was in fact the person that was dealing with him.
7. So the Court intervened. The Court raised with Mr Shaw the need to put to Mr Ball, on Dr Nguyen's case, that he was the one that was dealing with Mr Ball, as he recollected. In response to that invitation, the following exchange took place between the Bench and Mr Shaw: "His Honour: I mean, I need to have this absolutely crystal clear. Mr Shaw: I just wanted to know whether ‑ well, first of all, whether it was your writing, and the answer is no; is that right? Mr Ball: No. It is my writing. Mr Shaw: It is your writing? Mr Ball: Yes. Mr Shaw: Do you recall how you came to put the‑‑ Mr Ball: The person ‑ the person who I would have been dealing with would have furnished me with that information. Mr Shaw: And you don't know who the person was? Mr Ball: Well ‑ well, I was under the impression ‑ when I say, "under the impression," I had sold the place to Steve and his wife, so in that case, it would have been one of them. If I could go one step further. I don't have any recollection of meeting anyone else. If I did, I just don't remember. His Honour: Mr Shaw, if your case is that the person sitting opposite Mr Ball was your client, you have to put that to him. Mr Shaw: I'm not putting it. I don't know who that person was and neither does Mr Ball. His Honour: You're not asserting it was your client? Mr Shaw: No. His Honour: Maybe take some instructions."
8. The Court then allowed a short adjournment for Mr Shaw to take instructions from Dr Nguyen about what questions should be put to Mr Ball. Mr Shaw appropriately took advantage of the adjournment and took the proper course of seeking instructions. After the adjournment, the Court invited Mr Shaw to invite any more questions that he wished but he declined and said that he had nothing more to ask.
9. The forensic approach that Mr Shaw here took on instructions can only mean that he could not get instructions from his client to put to Mr Ball that the person sitting opposite him [Mr Ball] was Dr Nguyen rather than Mr Luong. Although Mr Ball hesitated for a moment when this was first put to him and said, "Well I thought it was Steve [Mr Luong]. I am not sure" the rest of his evidence is consistent only with him dealing with Mr Luong. Dr Nguyen was no more positive about being present to give the contract to Mr Ball when he gave evidence. I find that he was not in the room at the time. This was, in my view, in part a reflection of the fact that Mr Luong and Ms Nguyen were purchasers and he was content for them to handle the purchase for him as well.
10. But how did Mr Ball come to write Dr Nguyen's full name, "Anh Tuan Nguyen" on the contract? Mr Luong must have given that name to Mr Ball. Dr Nguyen may have been nearby, but he was not dealing with Mr Ball. Mr Ball made it clear that he did not take much notice of the name he was given. He seemed to think that was Mr Luong's name. Or at least what he said was consistent with that belief.
11. And how was the contract signed on behalf of the purchaser? The answer to this is not clear. The contract that is in evidence is not actually signed on the purchaser's signature line. It appears to be the counterpart of the contract that was given by the vendor to the purchaser on exchange. There is only a signature above the line for the witness to the purchaser's signature, but that appears to relate to a post-contract entry of 17 January 2001 (clearly a mistake for 17 January 2002), that reads as follows, "Valuation accepted as $440,000 - 17.1.01".

Retaining Janis Vu & Associates

1. The parties needed a solicitor to act for them on the purchase. Mr Luong telephoned a friend of Ms Nguyen, by the name of Be Be who worked at Janis Vu & Associates. Mr Luong initiated the retainer of that firm through Be Be, to act on the conveyance, and he instructed Mr Ball to send the contracts through to Janis Vu & Associates.
2. Mr Luong's distinct recollection is that, about the time that he was engaging with Janis Vu & Associates on behalf of himself and his wife to act on the purchase, his wife said to him, "I have spoken to Tuan about the property we are purchasing at Terrigal. He is interested in buying the property with me".
3. The timing of this conversation is significant in determining what version to accept. I accept Mr Luong's account that he had engaged with Janis Vu & Associates on behalf of him and his wife before he was informed that Dr Nguyen wanted to be involved in the purchase of the property. This is not consistent with Dr Nguyen's account, which has him involved in the purchase of the property from the very outset. On his account, there was no period of time when Mr Luong and Ms Nguyen were purchasing the property and dealing with the solicitors in their own names as purchasers.
4. I accept Mr Luong's evidence that, a few days after Ms Nguyen confirmed to him that Dr Nguyen was interested in becoming a co-purchaser, she confirmed in the following terms that he was going to proceed with that idea: "We are going to put the property in Tuan's name so only so he can claim $7,000 first home owner's grant. You and I can't get the grant as we have already bought a property in our names. Tuan and I will have both our names on the loan. Don't worry I trust Tuan when it comes time to splitting the monies. Is that ok?"
5. Mr Luong agreed. Whatever Dr Nguyen was trying to do in relation to home loan grants, Mr Luong and Ms Nguyen did not benefit themselves and did not intend to benefit. Indeed, it is unclear on the evidence whether Dr Nguyen even applied for a first home loan grant or received one. But this is what he proposed. Such a conversation would not have been necessary on Dr Nguyen's version of events.
6. Between the exchange of contracts and settlement, there were a number of meetings that Mr Luong, Ms Nguyen and Dr Nguyen attended at Janis Vu & Associates. Mr Luong assisted the solicitor in explaining the documents to Dr Nguyen. Mr Luong encountered some hesitation on Dr Nguyen's part, but he explained to Dr Nguyen, from his own experience in prior property transactions, that the documents were fairly unremarkable. Moreover, I accept Mr Luong's recollection that Dr Nguyen did not attend meetings at Janis Vu & Associates without him, or certainly Mr Luong was not aware of such meetings being arranged or having taken place.

The CBA Loan - Early 2002

1. Contracts were exchanged on 15 January 2002, with Dr Nguyen as purchaser. Settlement was effected on 18 February 2002.
2. On 18 January 2002, Dr Nguyen and Ms Nguyen probably re-attended together at the CBA to complete a CBA finance application. This time they had particular property in mind to discuss with the bank. The application was successful: they already had pre-approval. Ms Nguyen became a co-borrower with a loan of $335,000 from the CBA, secured by a first mortgage to fund the purchase.
3. She took her joint liability to repay the loan seriously. She did not just leave the responsibility for repayment to Dr Nguyen. In the 15 months following the purchase of the Terrigal Property, Ms Nguyen paid at least $90,000 to the CBA in lump sum amounts to reduce her and Dr Nguyen's liability on the loan of $335,000.
4. The Court accepts Ms Nguyen's account of what happened at the CBA. According to her, the substance of the conversation with the CBA happened earlier. Whatever happened on this later occasion was relatively brief. Her account of what occurred with the CBA, on a combination of these occasions, is well corroborated by contemporaneous CBA documents. Some of the conversation took place in September/October 2001, rather than January 2002, but her account of the substance, set out earlier in these reasons, is accepted.
5. Dr Nguyen's evidence is unreliable concerning the financing of the property. His first written statement of evidence asserts that he was the sole borrower of the CBA loan in 2002. But the documents he signed at that time clearly showed he was a joint borrower. And the CBA documents show that he and Ms Nguyen conversed together with the CBA on the basis that he was a joint borrower with her.
6. Ms Nguyen only first obtained documents from the CBA's 2002 loan file in 2017. What emerged supported her account of a joint purchase. A file note apparently prepared by a CBA officer, Ms Michelle Lim, signed off on the 18 January 2002 meeting states, in part: "Mr and Ms Nguyen (brother and sister) have approached this office in regards to purchasing a property together. However, due to the government's grant being granted only to the first home buyer they wish to request that the sole ownership of the property to be Mr Anh Tuan Nguyen under only and Ms Nguyen is ongoing as a debtor."
7. The CBA loan file also records that Ms Nguyen's annual income was $31,200, and Dr Nguyen's annual income was $38,784. These low income figures are about the same and are more consistent with Ms Nguyen's recollection of the CBA's concerns about Dr Nguyen's low income level. Importantly, Ms Nguyen prepared her principal affidavit setting out her version of these events prior to her having access to the CBA's loan file records, which confirm her version of events.
8. Dr Nguyen's case was that Ms Nguyen asked him to purchase the Terrigal Property, because she could not afford to do so and he could. But the CBA income information indicates that both parties had reasonably low incomes of the same order. And his was certainly not superior to hers.
9. He claimed he had an income of more than $80,000. But if he did, he did not tell the CBA of that income. And if his income was really that high, it is to be wondered why he would give the CBA a much lower figure of $38,784. If he could afford to buy the property himself on his full income, or had a greater chance of doing so, and he says that is what he wanted, he did not need Ms Nguyen. His evidence never satisfactorily reconciled why, if his income was as high as he said it was, he did not reveal it to the CBA.
10. Other parts of the CBA file note of 18 January 2002 show that Ms Nguyen's participation in the loan application was an important ingredient in its success. Continuing under the heading, "General Comments and Recommendations" on that date, the file note continues: "Ms Nguyen had a H/L with CBA and she managed to show a good repayment history with existing property already ownright. These clients managed to meet CBA criterias with commitment level of 37.7 per cent and LVR of 76.1 per cent recommended approval S/T."
11. The file note then goes on to suggest that Ms Nguyen should receive independent legal advice. This was necessary, because her name was not on the title and, in substance, she was proposed to assume the role of Guarantor.
12. This aspect of the CBA's 18 January 2002 file note also confirms Ms Nguyen's version. The file note refers to a "commitment level of 37.7 per cent". In the CBA's loan analysis, the "commitment level" is the ratio of the borrower's monthly loan repayment amount to the borrower's monthly gross income. The combined total income of Ms Nguyen and Dr Nguyen is recorded as $69,984. Their total gross monthly income therefore is $5,832 ($69,984 ÷ 12). Their total anticipated commitments per month on the loan being sought are $2,200, leading into a commitment level of 37.7 per cent ($2,200 ÷ $5,832 x 100). The CBA had lending criteria at the time of a maximum commitment level of 40 per cent. The application fell within that commitment level, because of the addition of Ms Nguyen's income to the application. The commitment level would not have been reached without the inclusion of her income.
13. Had Dr Nguyen continued with the application on his own with an annual income of $38,784, a maximum commitment level of 40 per cent would have limited the borrower to borrowing of the order of $200,000, to $250,000. That is indeed the figure that Ms Nguyen recalls the bank telling Dr Nguyen was the limit of what he could borrow on his own.
14. Now that the parties' dealings with the CBA are better appreciated, it can be seen that Dr Nguyen's version has a number of other curiosities that are not well explained. Why, if he did not have the CBA's pre-approval, did he not check with the Bank himself that the funding was assured before committing to such a large purchase in Terrigal - especially when he had no prior real estate investment experience. Indeed the contrasting investment experience between brother and sister in 2001 strongly favours Ms Nguyen's version: why would a man inexperienced in property development suddenly insist on going it alone when introduced to this opportunity by his sister? And why would she agree to bear half the external liability to the bank on a property in which she had no equity?
15. Moreover, if they went to the Bank after he was committed to the purchase, as he says is what happened, it is difficult to understand why he accepted Ms Nguyen as a co-borrower. He claims he did not need her and he already had a promise of her to be his tenant. Why did he let Ms Nguyen and her husband pay the balance of the $44,000 deposit, as they did?
16. These anomalies tend to suggest an alternative scenario: that Dr Nguyen well knew he did need his sister's financial support for the purchase and that he was proceeding on the basis he had that support in exchange for her taking an interest in the property.

The Dilapidation of the Terrigal Property and the Early Renovations - 2002

1. The Terrigal Property was very dilapidated at the time of its purchase and needed major attention. All rooms on the upper level, other than the kitchen and bathrooms, had carpets that were stained, dirty and smelly. Paint on the interior walls of the house was cracked and peeling. The kitchen had older appliances, a vinyl floor and rotting joint work. The bathrooms looked old and tired and had woodwork on the door and vanity cupboards, which was rotting, mouldy and swollen.
2. Before Ms Nguyen and Mr Luong moved into the Terrigal Property, they commenced renovating it. They spent not unsubstantial sums in hiring tradespeople and committed their own time in doing so. They engaged a painter to repaint the interior for $3,000 in cash. They engaged a handy man to remove the old carpets, demolish the kitchen and lay floor tiles on all the upper level rooms, other than the bathrooms, for $5,000 in cash. They purchased the floor tiles from a ceramic tile market on 26 February 2002 for $2,813.45. They committed to other small tile purchases.
3. At the end of March 2002, Ms Nguyen, Mr Luong and their two year old son moved from their Claremont Meadows property into the Terrigal Property. Whilst they lived in the property, they slowly continued a program of repairs and renovations to it. The principal renovation undertaken in the early months was the installation of a new kitchen.
4. During 2002, after they had renovated the property, Ms Nguyen created a document to record the money that they had spent on these renovations and the purchase up to that time. Ms Nguyen says, and the Court accepts, that she wanted to record how much she had spent on the purchase and the renovation up to that point and that she communicated this information to Dr Nguyen by giving him that document. She kept a copy. When she gave him the document, she told him that it represented what they had spent on the property so far. The document is written partly in Vietnamese. It does not represent all the cash payments that Ms Nguyen actually made as recounted in her evidence. But importantly, it confirms many of the payments that support Ms Nguyen's version of the evidence.
5. Ms Nguyen describes this document as "the Initial Expenditure Document" and it will be referred to in these reasons by that name. It contemporaneously refers to payments that Ms Nguyen made. It is convenient for now, to refer to the capital payments to aid the purchase that it records. They were as follows: "(1) Cash 42,900" This is the difference between the required deposit of $44,000 and the holding deposit already paid at $1,100. This assists in confirming that Mr Luong and Ms Nguyen were responsible for this payment. "(2) George Brand $1,100" This is the holding deposit that Mr Luong paid on the day he exchanged contracts. "(3) Janis Vu $880" This was a payment to Janis Vu & Associates, the solicitors acting for the purchasers, on account of legal fees for the purchase. "(4) Office of State Revenue $15,294" Mr Luong and Ms Nguyen arranged for a cheque in this amount to go to the Office of State Revenue on account of stamp duty for the purchase. "(5) Janis Vu $607.20" Ms Nguyen and Mr Luong paid this sum by cheque to Janis Vu & Associates for disbursements relating to the purchase. "(6) Council $517.74" This sum represented the first instalment of Council rates that Ms Nguyen and Mr Luong paid after moving into the Terrigal Property.
6. There were other payments relating to the renovation of the Terrigal Property listed in this Initial Expenditure Document. The Court accepts that Ms Nguyen made all of the payments described in the Initial Expenditure Document. The payments are important for facilitating the purchase transaction and making the property habitable; all expenditure that is closely consistent with a joint venture agreement of the kind that Ms Nguyen alleges and not consistent with a mere tenancy relationship.

The 2003 Variation

1. Ms Nguyen says that in 2003, the parties varied their original 2001 agreement. Dr Nguyen disputes that any variation occurred at this time.
2. Ms Nguyen says that she and her brother agreed in 2003 that: she would bear the cost of certain improvements that were then needed at the Terrigal Property and the cost of ongoing maintenance of the property; and she would continue to help repay the loan to the CBA. In return for this increase in her relative financial burden, Ms Nguyen says that: it was agreed she would be able to live in the property without paying rent to her brother; and the parties' respective beneficial interests in the property would change from the originally agreed 50/50, to 60% for Dr Nguyen and 40% for Ms Nguyen.
3. Ms Nguyen says, and the Court accepts, that in early 2003 she met Dr Nguyen at her investment property in Earlwood to discuss the money that was urgently needed to renovate the bathroom and toilets of the Terrigal Property and to keep it maintained over the longer term.
4. By then, Dr Nguyen had been to the Terrigal Property a number of times and he was familiar with its physical condition. Ms Nguyen and Mr Luong were living in the property and were directly experiencing its daily practical deficiencies and limitations. So a conversation about its condition physical condition is not improbable. That a conversation might occur about such a subject is consistent with both the plaintiff's and the defendant's cases. I accept Ms Nguyen's evidence that its bathrooms and toilets were in poor condition. But even if they were merely Dr Nguyen's tenants, they would be just as likely to raise this issue.
5. The Court accepts that the conversation commenced this way: "Ms Nguyen: As you know, the bathrooms on the upper floor of the house are dilapidated and in need of renovations. I have obtained quotes for the labour cost of renovating the main bathroom and toilet. To fix it properly, the labour cost alone is about $15,000 to $20,000 and that does not include the cost of any material. The quotes for the materials would cost about a further $15,000 to $20,000. How should we split the cost?"
6. Her whole proposal "How shall we split the cost?" is fundamentally inconsistent with her and her husband believing they were only Dr Nguyen's tenants. A tenant in a residential property can look to the landlord for basic repairs and ongoing maintenance to the property. Despite the brother-sister relationship here, Ms Nguyen was not so financially foolish. She would not have sacrificed her best bargaining point as a tenant at the outset of these negotiations.
7. The conversation moved to a discussion about their respective historical financial contribution towards the purchase, renovation and maintenance of the Terrigal Property. Ms Nguyen recalls, and I accept her account, that in this conversation each of them identified the contributions they claimed they had made to the Terrigal Property. This again is hardly consistent with a belief, on Ms Nguyen's part, that she and her husband were only tenants of the property.
8. The developing conversation showed that differences were emerging in their respective views on who was financially sustaining the ownership of the Terrigal Property. Ms Nguyen says that, during this conversation, she said that she had given Dr Nguyen a Subaru WRX motor vehicle worth $40,000, which she contended should be taken as a contribution to him. Dr Nguyen mentioned that up until then she was living in the Terrigal Property without paying any rent. I accept her evidence that their conversation continued as follows: "Ms Nguyen: Okay, so it looks like you can choose a few options. One option is that you can have the Terrigal Property and I will no longer be an owner and it's 100% yours. Steve and I are receiving a net rent of $250 per week at our Earlwood property and, although this Terrigal Property couldn't possibly get that due to its poor condition, let's just use $250 per week rent for simplicity. I can live in the Terrigal Property like a tenant, pay you $250 rent and you give me back all the money I've put in - the deposit, stamp duty, renovations and so forth - and you have the Terrigal Property and you pay for all the renovations. The second option is that I pay for this bathroom renovation, I pay for all council and water rates, all maintenances and expenses to the Terrigal Property. I will also live in Terrigal Property without you asking for a share of rent and I will also continue to contribute money to repay the loan down. And you can have the Terrigal Property as a 60% owner and me as a 40% owner instead. Dr Nguyen: Okay, I like the second option. Ms Nguyen: Okay."
9. Again this part of the conversation well supports Ms Nguyen's case. Dr Nguyen could hardly have acquiesced in Ms Nguyen offering to renegotiate their shares in the Terrigal Property if he believed she had none.
10. He took the second option. It had the attractive advantage to Dr Nguyen that he did not then have to attempt to find the money from his own resources to buy out his sister's share in the property.
11. The Court accepts her account of this conversation as not only the more credible, but the more plausible. There were renovations to be done to the property. They had to be funded somehow.
12. They were in fact done using Ms Nguyen's, and her husband's, time and financial resources. If Dr Nguyen's account of their early dealings is correct, there is no satisfactory explanation for why Ms Nguyen and her husband would have taken on themselves the time, trouble and cost of these not unsubstantial improvements. As these reasons have earlier recorded, Mr Luong had no particular interest in committing his time and using his money to enrich his brother-in-law, rather than his wife.
13. Dr Nguyen does not accept that any conversations to this effect occurred in 2003. But the Court prefers Ms Nguyen's evidence on the subject.

Three Disputed Deposits - March, May and August 2003

1. The variation conversation in 2003 preceded other disputed events. The parties had made a series of payments through 2002 and 2003 to reduce their mortgage liability to the CBA. But they disagreed as to which of them had been responsible for making certain of these payments in 2003. In question were three payments totalling $25,000: namely $10,000 on 7 March 2003; $7,000 on 30 May 2003; and $8,000 on 22 August 2003. Both parties claimed to have made these payments. This dispute did not bear upon the nature of the agreement made between the parties but rather it ultimately related just to the quantum of each party's respective contributions to the equity in the property. The Court concludes that $15,000 of these amounts should be to Ms Nguyen's credit and $10,000 to Dr Nguyen's credit for the reasons that follow.
2. The proper inference about the true payer of these deposits depends in part on thin circumstantial evidence, which is nevertheless of some assistance. Ultimately though, the Court has to take into account the overall credibility of the parties in determining this question.
3. Dr Nguyen rested his case that he made the payments, in part, upon his possession of the CBA Deposit Book ("the Deposit Book"), which he said evidenced that both parties accepted he was responsible for making the mortgage payments over the Terrigal Property.
4. Ms Nguyen had the Deposit Book until just after Christmas in 2002. It shows that she made a deposit to the CBA on 29 December 2002. Sometime in 2003 after that deposit, she says Dr Nguyen came to the Bankstown shop when Ms Nguyen was working. She says, and the Court accepts, that she had this conversation with Dr Nguyen as to why he wanted the Deposit Book: "Dr Nguyen: Can I look at your deposit book which records deposits you have made into the loan account for the Terrigal Property? I want to check it with my records. Ms Nguyen: Sure."
5. Ms Nguyen had the Deposit Book with her at the shop at the time. So she gave the Deposit Book to Dr Nguyen. He took it away with him, but did not return it to her. The Deposit Book is in evidence. But when in 2003 this conversation occurred is in contest.
6. Dr Nguyen's taking of possession of the Deposit Book does not show any mutual assumption with Ms Nguyen that he had it because they both knew he had primary responsibility for making mortgage payments as the sole owner of the Terrigal Property. Rather, he obtained it for a temporary purpose which was no doubt fulfilled long ago and he has not returned it. It was convenient for him to keep it because did continue to make the mortgage payments of $1,044 per fortnight on the CBA mortgage. But Ms Nguyen has always had joint liability for the mortgage to the CBA.
7. The making of these three disputed deposits should mostly be resolved in the plaintiff's favour. The Court accepts Ms Nguyen's account that she kept the Deposit Book in her possession and used it to record the deposits that she made into the home loan account until sometime in 2003. The Court accepts her account that Dr Nguyen visited her at the Bankstown shop in 2003 and asked to look at the Deposit Book, took it away and never returned it to Ms Nguyen.
8. But this is not only Ms Nguyen's evidence. Parts of Dr Nguyen's evidence acknowledged that the Deposit Book was in Ms Nguyen's possession for a period of time after the CBA posted it to the Terrigal Property, where it was picked up by Ms Nguyen. An early page of the Deposit Book records the Terrigal Property as the address to which it was posted. Dr Nguyen clearly accepts the course of events of the Deposit Book being in Ms Nguyen's possession through a period and then him picking it up and keeping it. There are objective indicators of the Deposit Book still being in Ms Nguyen's possession up until at least 4 December 2002. On that day, the Deposit Book records a deposit of $20,000 at Erina Fair. Dr Nguyen accepts that Ms Nguyen made this deposit and must have had the Deposit Book in her possession as late as that day.
9. Dr Nguyen advances a different version about the retention of the Deposit Book: "that it was left at the home of my mother" at Campsie. He says the Deposit Book was retained at Campsie at his mother's house "and uplifted to make the deposit". He says that the explanation for deposits, such as the one made on 7 March 2003, was that he uplifted the deposit slip from his mother's home. This could indeed be right for temporary periods. He can point to objective evidence that he withdrew $10,000 from his own bank account on 7 March 2003. Ms Nguyen has no equivalent evidence for that deposit. It is likely in my view he used the $10,000 withdrawn from his account to make the deposit.
10. Dr Nguyen's version (that the book was kept at their mother's house in Campsie) does not assist in proving that he made the disputed deposits, rather than his sister. For example, the deposit on 4 December 2002 was made at Erina Fair. It makes little sense for the Deposit Book to have been kept at the siblings' mother's house in Campsie, uplifted by Dr Nguyen and then taken to the Erina Fair branch of the bank for him to make a deposit, then returned back to the mother's house in Campsie. And just why the Deposit Book needed, on his version, to be kept at their mother's house in Campsie was never satisfactorily explained. But I accept it may have been left there temporarily for convenience so that one or other party could collect it to make a particular payment.
11. Dr Nguyen accepts that Ms Nguyen also deposited $20,000 at the Bankstown branch of the CBA on 13 June 2003 and that the deposit was made by Ms Nguyen with the Deposit Book in her possession. It can be inferred from this concession and Ms Nguyen's evidence that the book was in her possession in early June 2003. It is likely in the circumstances that he 30 May payment was made by Ms Nguyen.
12. That only takes the analysis up to 13 June 2003. But who made the 22 August 2003 deposit? That in turn depends upon whether Dr Nguyen took back the Deposit Book before or after 22 August 2003. On this issue, there are a few objective factors pointing either way. The issue is determined on the parties' relative credibility. The Court accepts Ms Nguyen in this and determines that Dr Nguyen probably collected the Deposit Book from Ms Nguyen after 22 August 2003.

Use of the Terrigal Property - 2003 to 2006

1. Once Ms Nguyen and Mr Luong moved from their Claremont Meadows property into the Terrigal Property, they rented out the Claremont Meadows property. Soon afterwards, they opened the Erina Fair shop for trading. Mr Luong arranged for another employee, Bac Ta, to look after their Bankstown shop, while he worked in the Erina Fair shop for five to seven days a week.
2. But in 2003, Bac Ta left their employ. That meant that Ms Nguyen spent most work days working at the Bankstown shop. As a result, the couple had to lead something of a travelling existence. Ms Nguyen stayed in Sydney overnight from Monday through to Thursday, and came up to Terrigal on the weekends. Their son stayed at the Terrigal Property most of the time.
3. But Dr Nguyen sometimes asked to come and stay at the Terrigal Property over the weekend. He would telephone and say, "My girlfriend and I are planning to come up to Terrigal for the weekend". Mr Luong would generally accommodate this and say, "That's fine. I'll arrange to be in Sydney that weekend" and he did so. Mr Luong and Ms Nguyen were accommodating of Dr Nguyen using the premises.
4. Dr Nguyen used the Terrigal Property for his own purposes a few times a year. Mr Luong did not always see him in the property after Mr Luong left and went down to Sydney. But it was quite evident to Mr Luong that the property had been used by Dr Nguyen.
5. Mr Luong and Ms Nguyen were quite flexible about Dr Nguyen using the property. In my view, their willingness to be accommodating about this issue evidences their understanding of their legal relationship with Dr Nguyen. Were they tenants under a lease from him with exclusive possession, they would have been more reluctant to move out of the premises than they were. But they saw themselves as joint owners of a property which they were sharing with Dr Nguyen; and partly as matter of maintaining his goodwill as a co-owner, they let him use the property from time to time.
6. After using the property for some years, in about 2005 Ms Nguyen and Mr Luong decided that the Terrigal Property needed further renovation. This conclusion partly arose from Ms Nguyen's change of employment circumstances. In 2005, she closed the Bankstown shop as it was no longer profitable due to competition from digital photographic systems. Ms Nguyen gave up paid employment and spent more time at home. As a result, she focused more closely on the need for renovations to the bathrooms and kitchens of the Terrigal Property.
7. When Mr Luong and Ms Nguyen were living in the property together full time, they recognised that the bathroom looked run down and old. When they had first moved in, their focus had been on the kitchen. Once that was done, Mr Luong devoted his time to building up the Erina Fair shop whilst Ms Nguyen was busy at Bankstown. The bathrooms would have to wait.
8. But in 2005, Dr Nguyen and Ms Nguyen discussed and agreed on the bathroom renovations. Soon after, Dr Nguyen rang Mr Luong and said to him, would "you organise the bathroom renovations and get it done".
9. Mr Luong and Ms Nguyen worked on the bathroom project together. But Ms Nguyen was the project co-ordinator, researching and selecting materials, dealing with contractors and purchasing materials. They travelled from Terrigal to Sydney from time to time to purchase materials. All up, Mr Luong estimates he did about 40 hours of physical labour on the bathroom. This included the following tasks: helping the handyman remove the old spa; carrying the spa out of the bathroom; buying timber and helping install the base of the new spa tiling and doing the grout of the tiles; helping remove damaged Gyprock and replacing it with new Gyprock; plastering and filling up gaps in the Gyprock wall and sanding down the wall filler; helping install pumps for electrical power; and moving power points and helping with the water piping.
10. This work was extensive. In my view, Mr Luong and Ms Nguyen would not have done this work had they perceived themselves to be mere tenants of her brother. The commitment to this level of activity on top of running the Erina Fair shop was quite incompatible, in my view, with their holding a mere tenancy.

Closure of the Erina Fair Shop - 2006

1. The Erina Fair shop itself also became unprofitable by 2007 and was closed. Mr Luong fell back on his primary qualifications as a pharmacist and renewed his registration. By March 2009, he had purchased a small pharmacy in Concord, where he began to work full-time. That took the couple back from Terrigal to Sydney, where they moved into a house of one of Ms Nguyen's relatives in Cherrybrook.
2. Soon after Ms Nguyen and her husband vacated the Terrigal property, the relationship between her and her brother began to deteriorate. The precise course for this decline in harmony is obscure. But Ms Nguyen had trouble making contact with Dr Nguyen. She tried to telephone and text message him many times to see what he wanted done with the property. Her communications with him clearly conveyed the message that one of his options was to pay her out her share of the property, so that they could each deploy their capital independently. The assumption behind her messages was that she had an entitlement to part of the property. But he failed to respond to her text messages to this effect.
3. Ms Nguyen and her husband needed the capital. They were contemplating the purchase of a house in Concord near his pharmacy. Buying out Ms Nguyen's share of the Terrigal Property was one way of helping to fund such a purchase.
4. This stalemate continued throughout much of 2009.

Tenanting the Terrigal Property - 2010

1. After months without a response from Dr Nguyen, Ms Nguyen and her husband decided they had to turn the Terrigal Property to a profitable account. They instructed a local agent and rented the property out to tenants, who moved in and commenced paying rent. They still had not heard from Dr Nguyen.
2. But not long after the tenants moved in, Dr Nguyen telephoned Mr Luong. He had become aware that the tenants were now in the Terrigal Property. I accept Mr Luong's evidence that Dr Nguyen and he had the following exchange about the property: "Dr Nguyen: I heard the house at Terrigal now has tenants in it. Mr Luong: Yes. Dr Nguyen: That's fine. If they are any issues, you sort it out. You take care of the property. You deal with it for me. Mr Luong: Ok."
3. Mr Luong informed his wife about this phone call and he acted in accordance with what it implied he should do. He continued to deal with the agent concerning the property. He gave instructions about the management of the property under tenancy and he received payment of the rent. This seems to have been done in his mind on behalf of both his sister and brother-in-law. But one of the residual issues in these proceedings is that the rent from these tenants has not been accounted for. This issue will need to be dealt with in a subsequent hearing.

The Tenancy's End and the Dispute Begins - Early 2014

1. The last tenant left the Terrigal Property in early 2014. As part of an ordinary management review of the premises, Mr Luong travelled up to Terrigal to inspect the property with a view to a possible re-tenanting. When he arrived, he found that the locks had been changed. The neighbours told him that Dr Nguyen had changed agents and the locks on the property.
2. This situation led to solicitors' correspondence and, in due course, to the commencement of these proceedings.

Renting the Terrigal Property: Dr Nguyen and the Australian Taxation Office (ATO)- 2002 to 2009

1. Dr Nguyen claims he rented the Terrigal Property to Ms Nguyen from March 2002 until 2009. From 2002, Ms Nguyen paid to Dr Nguyen what he claims to be rent of over $150,000. He says that rather than being framed as a particular amount of rent per week, this rent was paid by way of paying the deposit, paying stamp duty, and repaying part of the loan from the CBA, over the years 2002 to 2009.
2. If Ms Nguyen had agreed to rent the Terrigal Property from Dr Nguyen at $250 per week, she would be paying $13,000 in rent per year. But it is unlikely that, if she were only a tenant, Ms Nguyen would pay over $150,000 for the deposit, stamp duty and mortgage repayments to the CBA between late 2001 and mid-2003. That $150,000 represents 11.5 years of rent in advance, at a rental rate of $250 per week.
3. If these were indeed receipts on account of rent for the Terrigal Property, then Dr Nguyen did not declare them as rent in his income tax returns submitted to the ATO in the years ending 30 June 2002 to 30 June 2009. And since 2010, the defendant has not corrected his tax returns for those years.
4. Dr Nguyen was not cheating the ATO. The explanation for his failure to declare these payments to him from Ms Nguyen between 2002 and 2009 as rent, is that Dr Nguyen knew he was not receiving rent from Ms Nguyen but was receiving money on account of her contribution to her agreed capital investment in the purchase and improvement of the Terrigal Property.
5. Apart from the tax issues, unanswered questions abound with Dr Nguyen's account that he was renting out the property: (a) why would he accept an indefinite rent of $250 per week; (b) he did not check with the agent how much the market rent for the property would be, before agreeing on $250 per week, something that might be expected if he was renting it long term, when he did not have any market expertise himself in Central Coast residential property rentals; (c) why did he not record the rental agreement in a simple conventional lease if their arrangement was that simple; and (d) if renovations were to be off-set against the agreed rent, he would in the ordinary course be expected to ask for details of what Ms Nguyen and Mr Luong had spent on renovations in order to work out what the set-off would have to be - but he did not.
6. This completes the Court's factual narrative of findings. The next section of these reasons analyses Ms Nguyen's claims for relief.

Analysis

1. Ms Nguyen puts her case in the alternative. First, she claims that Dr Nguyen holds the Terrigal Property on constructive trust for her, as to 50% or in the alternative as to 40%. In the alternative, she claims he holds the property on resulting trust for her. As a result of the Court's findings in the factual narrative above, Ms Nguyen succeeds in her constructive trust claim. It is not necessary to examine the resulting trust claim.
2. The applicable law in relation to constructive trusts arising in these circumstances may be shortly stated. The Court can impose a constructive trust on the basis that it would be unconscionable for the defendant to deny the plaintiff an interest in the property: Baumgartner v Baumgartner (1987) 164 CLR 137; (1987) 76 ALR 75; [1987] HCA 59 ("Baumgartner") (at p 146-8). Baumgartner has been further explained in West v Mead (2003) 13 BPR 24,431; [2003] NSWCC 161 ("West") (at [59]) where it is stated as follows: "59. …If, within the scope of a joint endeavour which lasts for years, an asset is acquired, as a result of contributions both parties have made, and for a purpose of the ongoing joint endeavour of the parties, this gives rise to the presumption that the beneficial interest ought be shared equally. That presumption can be displaced if one party is able to show that the contributions, both financial and non-financial, to that asset should be regarded as unequal. In practical terms, this way of proceeding will place the onus of attributing a value to non-financial contributions on the person who asserts that the title should be held unequally."
3. The Court is encouraged in applying Baumgartner principles to strive to give effect to the notion of "practical equality" rather than to pursue complicated factual enquiries, which will result in relatively insignificant differences in contributions and consequential beneficial interests: Baumgartner at p 150.
4. The Court's findings as to the conversations between the parties support Ms Nguyen's constructive trust claim. Here there was an express agreement to jointly invest in the Terrigal Property, made in the terms that Ms Nguyen says.
5. Apart from what was said between the parties, the high level of Ms Nguyen's early financial commitment to the purchase strongly suggests there a joint venture. These payments also imply greater financial capacity on Ms Ngyuen's side. It is accepted by both parties that for the purchase Ms Nguyen and her husband paid the deposit of $44,000, the stamp duty of $15,294, legal fees of $1,487 and a bank valuation fee of $500. These upfront payments total $61,281. And Ms Nguyen co-borrowed $335,000 from the CBA with Dr Nguyen to purchase the Terrigal Property and assumed with him a joint liability to pay that loan. Moreover, in the 15 months following the purchase, Ms Nguyen paid at least $90,000 to the CBA in several lump sum contributions to reduce the loan liability to the CBA of $335,000. Dr Nguyen never proposed that Ms Nguyen be relieved of her liability to the CBA so he could take full responsibility for the liability himself. This would have been consistent with the first option she offered him in 2003. Rather he continued to take advantage of her creditworthiness, whilst she paid the rates on the property. These facts are more consistent with a joint venture agreement than a mere rental arrangement. Dr Nguyen had the benefit of Ms Nguyen's investment in the Terrigal Property, which in my view he must have appreciated was not rent in advance.
6. Moreover, as the Court's narrative of findings above also shows, the contemporaneous documents objectively record the borrowing, mortgage and purchase transactions in a manner only consistent with a joint venture between the two. The CBA's 18 January 2002 loan file note includes a file note that clearly implies such a joint co-operative investment: "Mr and Mrs Nguyen (brother and sister) have approached this office in regards to purchasing a property together. However, due to the Government's grant being granted only to the first home buyer, they wish to request that the sole ownership of the property be to Mr Anh Tuan Nguyen, under only [sic] and Mrs Nguyen is ongoing as a debtor".
7. And Ms Nguyen behaved throughout as a joint-venturer. She and her husband renovated and improved the Terrigal Property in a manner only consistent with a joint venture. She managed the letting of the property only consistent with a joint venture. And until he locked his sister out in 2014, Dr Nguyen seemed to accept the benefit of his sister's and her husband's improvement work and other efforts to maximize the return from the property in the manner that it was offered; as conduct in furtherance of a joint venture.
8. Little done between these parties' supports Dr Nguyen's contention that Ms Nguyen and her husband were just Dr Nguyen's tenants. But a few documents arguably point the other way. Ms Shaw contends that "a golden thread" runs through the evidence of Ms Nguyen that Dr Nguyen needed to account to Dr Nguyen for the money that she and her husband had outlaid in relation to the Terrigal Property. He points to a conversation at the family dinner table in February 2010 and a concession on her part that at that time she thought she was a creditor of Dr Nguyen.
9. A document was handed over at this February 2010 family meeting by Ms Nguyen which in her handwriting appears to total her expenditure at $168,000 and then claims annual interest at 10% on that figure (namely $16,800) plus annual rates (which she paid) of $1,700 per month making a total per month of $18,500. This appears then to be set off against an annualised rent of $13,000 (being $250 per week multiplied by 52). This throws up a net balance in her favour of $5,500, said to be the net amount owed by Dr Nguyen to Ms Nguyen.
10. In my view this is merely a negotiating or discussion document in which one family member seeks to illustrate to the other the value of their contribution to the property by reference to a number of metrics including an assumed interest rate of 10% and an assumed rent of $250 per week. It was really designed to show the real relative value of Ms Nguyen's contributions. The document is too informal to be a very reliable basis to infer much and does not look like any kind of attempt at a final accounting between these parties. It is not inconsistent with Ms Nguyen's case in my view. The same can be said about Exhibit B which shows money owing by Dr Nguyen to Ms Nguyen. It is not inconsistent with Ms Nguyen's case that in anticipation of a final accounting with her brother she should want him to acknowledge that he owed her certain amounts and to show him that what he owed her well exceeded a nominal rental figure. It was up to him to prove his outlays to which she would be required to contribute. The document does not deal with them.
11. In summary, Ms Nguyen has the advantage here of first making and then modifying a clear joint venture agreement about her and Dr Nguyen's respective beneficial interests in the Terrigal Property. It is not necessary for the Court to draw inferences about the agreement from the respective financial and non-financial contributions of the parties. There was express agreement between the parties about their shares. Their initial agreement was to take a 50:50 share each in the Terrigal Property.
12. But it was convenient to Ms Nguyen to vary that agreement in 2003, as the Court has found. Through that variation, she and her brother reached a new broadly convenient arrangement between themselves. She reduced her share to 40% in exchange for living in the property rent free. The 2003 Variation results in Ms Nguyen having a 40 per cent interest in the Terrigal Property and Dr Nguyen a 60 per cent interest.
13. Over the years, beyond the financial benefits Dr Nguyen derived from the original transaction, he received many material benefits from this joint venture arrangement, as modified by agreement in 2003. Not least of these benefits were: having the house secured and occupied continuously from 2002 to 2009, without having to hunt for tenants; having renovations and refurbishments arranged on-site and paid for; and after Ms Nguyen and her husband vacated the property, having successive tenancies arranged for him. Dr Nguyen must have appreciated that his sister and her husband should be held to the agreement so made.
14. The Court reasons below that possible illegality does not impede Ms Nguyen's claim to relief. So the Court will make a declaration that Dr Nguyen holds 40% of the Terrigal property on constructive trust for Ms Nguyen.

The Resulting Trust Claim

1. The relevant principles of resulting trust may be shortly stated. If two or more persons provide purchase money towards a property and it is put in the name of one of them only, in the absence of a relationship which gives rise to a presumption of advancement, the law presumes a resulting trust in favour of the other and the beneficial title is taken in the same proportions as the purchase money: Calverley v Green (1984) 155 CLR 242; (1984) 56 ALR 483; [1984] HCA 81 (at p 246). The presumption of a resulting trust seeks to give effect to the intention of the parties by making a presumption about what the parties intended: West at [62]. The presumption in question is "about the intention of the person who provides part of the purchase price when title is taken in the name of another, not…the intention of anyone else": Black Uhlans Incorporated v NSW Crime Commission (2002) 12 BPR 22,421; [2002] NSWSC 1060 at [148].
2. Had the Court not concluded that there was joint venture between this brother and sister, the Court's findings would also provide a platform for Ms Nguyen's resulting trust claim. She (partly through her husband) provided a substantial portion of the purchase price. But her intention is known. Here it is inferred objectively, as part of the express agreement that constituted the joint venture. So it is not necessary in this case to deploy the presumptions that are the tools of the doctrine of resulting trusts or to analyse this claim any further.

Is There an Illegality Issue?

1. The facts the Court has found raise an issue about the availability of relief, given that the transaction was structured so that Dr Nguyen could apply for and obtain a first home owner grant, when he was not the sole owner in equity of the Terrigal Property.
2. Legislation in New South Wales operative in late 2001 early 2002 enabled the Chief Commissioner of State Revenue ("the Commissioner") to pay grants upon applications in respect of contracts for the purchase of a home by a first-time purchaser, provided the consideration paid for the property was less than a cap of $600,000. The First Home Owner Grant (New Homes) Act 2000 ("First Home Owner Act") makes "a first home owner grant" payable upon application, if each of the applicants complies with the eligibility criteria under the Act and the transaction for which the grant is sought is an "eligible transaction" within the applicable cap and the transaction has been completed.
3. It is not necessary to consider here much of the detail of the First Home Owner Act, as it is not in contest that Dr Nguyen would have been eligible for a grant under the Act were he to purchase a property on his own but not were he to purchase it jointly with Ms Nguyen.
4. This issue does not impede the Court granting relief to Ms Nguyen. The Court accepts Dr Nguyen's evidence that he did receive the grant in 2002 but that he has since repaid it to the Commissioner. The Court accepts that Dr Nguyen made full restitution of the amount of the grant. The First Home Owner Act s 45 allows the Commissioner's notice seeking repayment of a grant also to impose a penalty, upon making a finding of the applicant's dishonesty. But here the Commissioner's notice has not sought a penalty and full restitution has been given.
5. The situation is closely analogous to that dealt with by the High Court in Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538 ("Nelson"). In Nelson a plaintiff seeking equitable relief (namely a declaration of an interest in certain proceeds of sale of a property held in her children's names) had obtained a statutory financial benefit in the form of subsidised loan on a second property, by making a false declaration to a public authority that she had no interest in the first property. The High Court held that there is no general proposition that equity will let the loss lie where it falls in the case of illegality consisting of contravention of the policy of a statute. The Court found that the extent to which the illegal purpose has been furthered by a transfer or the creation of a trust meant that the Court could make a declaration in favour of the plaintiff but subject to a requirement that she be denied the benefit obtained by her unlawful conduct. This reflected the unavailability of equity to obtain for her the fruits of that conduct.
6. Nothing in the policy or structure of the First Home Owner Act suggests that the New South Wales Parliament intended to avoid transactions in the course of which a first home owner Grant was wrongly claimed. Indeed First Home Owner Act s45 is quite inconsistent with such a policy. It empowers the Commissioner to recover grants and to impose penalties within a broad discretionary framework. He has exercised that power in this case and has received full restitution to the extent that he was misled.
7. Moreover, here there is nothing to suggest that Ms Nguyen herself was involved in making the application for a first home owner grant respect the Terrigal Property, or that she received any benefit from such a grant.

A Joint Venture Accounting

1. The Court has found that a 40:60 ratio was the parties' agreed respective beneficial interests in the property since 2003. But the parties have not accounted as between themselves, in relation to rents they have each received since 2009: Ms Nguyen from 2009 to 2014 and Dr Nguyen from 2014. Nor have they fully allocated expenditure on the basis of this ratio. So some further financial accounting and consequent adjustments will need to take place between the parties, so their revenue entitlements and expenditures reflect this ratio.
2. This accounting will not involve the bringing to account of any rental liability of Ms Nguyen to Dr Nguyen of $250 per week during the period of her and her husband's occupation of the Terrigal Property from 2002 to 2009. He chose the second option at the time of the 2003 Variation, which meant that he was not entitled to rent from his sister but he consequently did not have to repay her substantial early capital outlays. But the accounting will involve valuing the work done by Ms Nguyen and her husband during their occupation and their rental management of the property between 2009 and 2014.
3. The determination of appropriate adjustments will need to occur in a supplementary hearing. The Court will order that a supplementary hearing take place, so that full accounting can be settled between these parties. Each party is encouraged to try and agree on a satisfactory accounting in light of these reasons. The Court will give the parties an opportunity to achieve agreement, before fixing a further hearing of accounting issues.
4. Costs should follow the event. The plaintiff has been wholly successful and should have her costs on the ordinary basis of the proceedings so far. This will be the costs outcome, unless one or the other party seeks a special costs order.

Conclusions and Orders

1. For these reasons the Court makes the following declarations and orders: 1. Declare that the plaintiff holds a 40% interest in the Terrigal Property, the title particulars to which are identified in the pleadings. 2. Direct the parties to file submissions by Friday 22 March 2019 as to the further disposition of these proceedings and in particular as to whether and in what form any further accounting is required between the parties, as to their mutual financial dealings in relation to the Terrigal Property. 3. Order that subject to order (4), that the defendant pay the plaintiff's costs of the hearing of these proceedings up to date on the ordinary basis. 4. Order (3) will not operate if either party has filed a motion by Friday 15 March 2019 seeking a special costs order, being an order other than a costs order in the form of order (3). 5. The parties are directed to consult with a view to agreeing by 31 March 2019 upon the final accounting between themselves in relation to the Terrigal Property, on the basis of the findings and conclusions in this judgment. 6. List the proceedings for further directions on 3 April 2019 at 9.30am before Slattery J. 7. If the parties have not reached agreement on a final accounting in relation to the Terrigal Property by 31 March 2019, they will be required to declare at the directions hearing on 3 April 2019 whether or not they regard the remaining accounting issues as appropriate for a referral to mediation under Civil Procedure Act 2005, s 26. 8. Grant liberty to apply.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 February 2019