Nieduziak v Nieduziak [2019] VCC 1277

for his exclusive benefit. I have determined that Bozena is entitled to judgment for the full amount of her claim, which amounts to $451,375, plus interest and costs.

2 The proceeding commenced by writ filed on 2 October 2018. Arek's then solicitors, PCL Lawyers Pty Ltd ("PCL") filed a notice of appearance on 7 November 2018 and a defence on 19 December 2018. Orders timetabling the proceeding to trial were made by consent on 24 December 2018. The proceeding was set down for trial on 24 July 2019. PCL later filed a counterclaim on Arek's behalf on 4 February 2019. A reply and defence to counterclaim was then filed on 18 February 2019. The pleadings in the proceeding were all drawn by counsel on behalf of the parties.

3 By email on 28 May 2019, PCL served on Bozena's solicitors a notice of ceasing to act. This was filed with the Court on 12 June 2019. The following day, Bozena's solicitors filed a request for a directions hearing to deal with the consequences of the filing of the notice of ceasing to act, among other things. On 13 June, JR Tran made orders on the papers granting leave for PCL to file and serve the notice of solicitor ceasing to act, and listing the proceeding for a directions hearing on 21 June to consider the future steps in the proceeding. The Judicial Registrar also ordered that (emphasis added) "unless otherwise ordered ... The trial can proceed in the absence of the defendant. If the defendant wishes to seek to avoid judgment being entered against them they must attend Court on 24 July 2019".

4 The Judicial Registrar also noted in other matters that she considered that the proceeding may be suitable for a Judicial Resolution Conference ("JRC") and that, with the parties' consent, the directions hearing could be converted to a JRC. On 18 June, Bozena's solicitors confirmed her consent to have the directions hearing converted to a JRC, and the following day, Arek personally emailed the Court doing likewise. Orders were then made on the papers formally vacating the directions hearing and listing the proceeding for a JRC before JR Tran on 21 June at 11am. Both parties attended the JRC that day, but were unable to resolve their dispute. The trial date of 24 July was confirmed.

5 On 9 July 2019, Bozena's solicitors filed a summons seeking freezing orders against Arek pending the hearing and determination of the proceeding. The substance of the application was that any judgment would be rendered futile because Arek was in the process of selling properties that he owned or controlled. The application was heard by A Ryan J on 9 July 2019. It was called inside and outside the Court, but Arek failed to appear. Ryan J made the freezing orders, and also ordered that the application and orders be served on Arek by no later than 12noon on 10 July. In fact, the Court itself sent a copy of the freezing orders to Arek by email sent in the afternoon of 9 July, which email also requested that Arek confirm receipt. Arek did this by email to Ryan J's chambers timed at 12.09pm on 10 July 2019, copied to Bozena's solicitors and counsel.

6 The freezing order application was due to return before Her Honour on 15 July 2019. On that date, Arek again failed to appear. Ryan J extended the freezing orders to the commencement of the trial the following week, noting in other matters that: "The Court was satisfied that service had been effected on the defendant of the freezing order made on 9 July 2019 and the defendant had acknowledged receipt of the order by way of email to the Court on 10 July 2019". In the days preceding the trial, it appears that Arek made no attempt to communicate with Bozena's solicitors or the Court to seek an adjournment or otherwise foreshadow that he would not be appearing at the trial.

7 When the proceeding was called on for trial before me on 24 July 2019, it was again called inside and outside the Court, and Arek failed to appear. In response to my enquiry, Bozena's counsel confirmed that there had been no communication from Arek since his email acknowledging receipt of the freezing orders. Counsel submitted that, in view of:

• the warning in JR Tran's orders of 13 June about the trial proceeding to judgment in Arek's absence;

• his subsequent participation in the JRC when the trial date was confirmed;

• his acknowledgement of receipt of the freezing orders and application; and

• his subsequent failure to communicate with Bozena's solicitors or the Court to seek more time or explain his failure to appear;

8 I acceded to that application. I was satisfied in the circumstances that Arek was aware that the trial was listed to commence that day and would also have been aware of the warning in JR Tran's orders of 13 June about the trial proceeding in his absence. Further, his email communications to the Court consenting to the JRC and acknowledging receipt of the freezing orders, showed that there was no obvious impediment to him notifying the Court or Bozena's solicitors about the need for more time or otherwise to explain his failure to appear. I also considered an affidavit of Mr Clarkson of Belleli King & Associates sworn on 23 July 2019 referring to ongoing steps by Arek to sell properties and extended the freezing orders until further order of the Court.

9 Bozena was born on 31 August 1954 in Poland. She married Miroslaw Stainislaw Nieduziak ("Mirek") in Warsaw on 8 November 1975 and on 6 March 1976 she gave birth to her first son, the defendant Arek. Mirek and Bozena immigrated to Australia on 15 June 1981. Shortly after arriving in Australia, Bozena commenced working at a plastic factory on Balaclava Road. She worked there for about four and a half years before starting a job with Telecom, where she worked for about five years, until she gave birth to her second son Michael on 3 December 1990. From that time, Bozena no longer worked in paid employment. Her evidence was that Mirek did not want her to work after Michael was born.

10 Bozena's evidence was that on 3 September 1997, she and Mirek purchased a property at 104 Moriah Street, Clayton ("Clayton property"). She said that "we bought it for $110,000". It was mortgaged to Westpac Banking Corporation ("Westpac") and Mirek was registered as sole proprietor. About a year and a half later, Bozena and Mirek obtained a permit to build a house at the rear of the property. This was paid for in cash using their savings. Construction of the second house was completed by about Christmas in 2000 and Mirek, Bozena and Michael moved in to that house. Arek and his then girlfriend moved into the original house at the front of the property.

11 In about mid-2001, Arek purchased his first home at 11 Cook Court, Dandenong North ("Dandenong North property") for $88,500. Bozena understood Arek required a guarantee from Mirek to secure his loan from Westpac, and Mirek arranged this with Westpac. It appears that Mirek also granted a second mortgage over the Clayton property to secure that guarantee, but Bozena was unaware of the creation of that second mortgage until recently. Arek moved into the Dandenong North property in about September 2003.

12 Up until about this time, Bozena had been working from home for the business known as "MB Fire". The initials "MB" were for Mirek and Bozena. The business was registered in Bozena's name in about September 2002 and the work she did for the business involved cleaning and calibrating smoke detectors. However, Mirek collected all of the income from the business, so Bozena was unable to say what she earned for the work she did.

13 The business was deregistered in September 2003, at about the same time that Bozena and Mirek's marriage broke down. This happened after Mirek had taken a three month holiday in Europe on his own and returned in late August 2003 with a new girlfriend. Five days later, Bozena left the Clayton property with Michael and moved in with Arek at the Dandenong North property. Over the ensuing years she tried about three times to return to the Clayton property and come to some kind of arrangement with Mirek to live in either one of the two houses on the property. On her third and final attempt, Mirek had tried to strangle her and she returned to live with Arek at the Dandenong North property, where she stayed for the next 12 or 13 years.

14 On 23 September 2003, Bozena lodged a caveat over the Clayton property, claiming an interest pursuant to a constructive trust. Mirek subsequently commenced proceedings in the Family Court of Australia seeking a property settlement ("Family Court proceeding"). The proceeding was settled in October 2005, on terms discussed below. In the meantime, on 10 August 2005, the Clayton property was subdivided. The original house became 1/104 Moriah Street, Clayton ("Lot 1") and the house at the rear of the property became 2/104 Moriah Street, Clayton (with the certificate of title volume 10892 folio 891) ("Lot 2"). Mirek was named as sole registered proprietor of both Lots.

15 The Family Court proceeding was resolved by orders by consent made on 28 October 2005. The effect of the orders was that Lot 2 (then valued at $320,000) was to be transferred by Mirek to Bozena, on the basis that Bozena would be responsible for $50,000 of the total debt of $127,164 then outstanding under the mortgages over both lots. The orders also provided in effect that Mirek would retain Lot 1, and be responsible for the balance of that debt ($77,164). It is clear that the orders in the Family Court proceeding were not particularly generous toward Bozena. At the time she was on a Centrelink pension of about $280 per week and had no other property or assets of any substance apart from about $5,000 in her superannuation account.

16 Soon after the consent orders in the Family Court proceeding were made, Bozena and Arek had a discussion at the Dandenong North property. Bozena suggested to Arek that she would either have to sell Lot 2 or obtain a loan of $50,000, to cover her share of the debt under the terms of the orders. Bozena's evidence was that Arek replied "we go to the bank and we see what we can do".. She said that they later went to a Westpac branch (most likely in Clayton) and that was when Arek told her that he would need to be "on the deed" for Lot 2 or they would not be able to borrow the $50,000. She asked if Michael could also be on the deed and Arek said no, because he was too young.

17 The letter of offer from Westpac to Bozena and Arek is dated 11 November 2005. It is an offer to lend Bozena and Arek $100,000 on a 30 year term, secured by a mortgage over Lot 2. Bozena and Arek accepted that offer by signing the letter on 27 March 2006. Bozena was not sure why the loan was for $100,000, and not $50,000 as required by the consent orders in the Family Court proceeding. She said that Arek had arranged all this and added, "I didn't belong to that bank. So I don't know why he borrow more than we did - needed." Bozena's evidence was that the additional $50,000 over what was required to pay out Mirek, went to Arek.

18 During February 2006, Mirek transferred Lot 2 to Bozena as required under the Family Court proceeding consent orders, and then Bozena transferred Lot 2 to herself and Arek as joint proprietors. The consideration for the transfer was expressed to be "My desire to hold the land as joint proprietors". It appears from the results of title searches that the transfer to Bozena and Arek as joint proprietors was arranged by IAC Conveyancing. The execution of the transfer was witnessed by Daniel Orchard, a friend of Arek's. Bozena's evidence was that she did not retain IAC Conveyancing and could not recall how the transfer came to record the consideration in the words above.

19 Importantly, Bozena said that she did not receive any explanation about what transferring as joint proprietors meant. She then gave evidence as follows:

"Q: Did anyone tell you that if you died, the land would pass to Arek absolutely? ----

A: No. Not - why. I got two children. I would never do that.

...

Q: The effect of the transfer is that legally you're gifting Arek half of your property . Was that your intention? ---

A: My intention was to get that hundred thousand dollars to pay 50,000 to - to pay that mortgage I have from Mirek to split the - when - we split the property and that was the end of it. That was my intention, to pay that 50,000 and then this house was always mortgage free...

Q: So, if Arek was here and he said for instance, 'you intended to give me half of the property' as a proposition, what do you say to that? ---

A: I will give it to him. You know, I - the other half is for my other son. But I was, you know, thinking that I will live in the house for the rest of my life, and the after I died they would split the - the thing. You know, obviously he wants it yesterday.

Q: But back in 2006 when this transaction went through, did you intend to give him half of it to Arek? ---

A: When I died yes.

Q: But back in 2006? ---

A: No ...He was on the - on the deed only for the purpose of the 50,000. That's it. Not to give him half, a quarter, or anything else."

20 Bozena's evidence was that at around this time, Arek was employed in the fire industry as a technician. She said that while he worked across a number of different companies in the fire industry, he was always employed. She believed that he was receiving an income in 2005 of about $100,000 per year.

21 Lot 2 has been rented for most of the time that it was jointly owned by Bozena and Arek. Initially it was rented for a period of 14 months through LJ Hooker, with the rental income being paid directly into Arek's account. After that initial 14 month period, Mirek returned to live at Lot 2 for eight months after breaking up with his girlfriend. The property was then rented to Arek's friend Daniel Orchard for about $280 per week. Mr Orchard stayed at the property for a couple of years and then Mirek moved back in for another eight months. Bozena was not involved in any of these arrangements. She was not happy about Mirek returning and was unaware as to whether he paid any rent.

22 After Mirek moved out again, the property was rented to another friend of Arek's, Jason Neil and his family. Mr Neil remained at the property until it was sold in 2016 in the circumstances described below. Bozena thought they paid $200 per week in rent. Any rent that was received on Lot 2 was paid directly to Arek. Bozena's evidence was that she understood that the rent that was paid to Arek was to be applied to pay off the $50,000 loan. However, whenever she asked Arek about the $50,000 loan and the progress of its repayment, Arek would say that as she did not pay rates or other expenses, she did not need to know.

23 Although none of the rent for Lot 2 was paid directly to Bozena, there was a period during which Arek paid her $100 per week for housekeeping, and there was some suggestion that this might have come from the rental payments to Arek. The circumstances of this payment were that for some time up until around May 2014, Bozena had been cooking and paying for food for Michael and Arek, as well as covering most of the costs associated with their two large dogs, out of her Centrelink pension. She said to Arek that her pension was not sufficient to cover these costs, so Arek agreed to pay her $100 each week to enable her to make ends meet. The first payment was made on 11 May 2014 and continued until January 2016, and involved a total of 97 payments of $100. In January 2016, Arek stopped the payments, saying he could not afford them anymore. Bozena was unable to say what money Arek used to make these payments. Arek just transferred them directly into her bank account.

24 On 26 November 2006, Bozena and Arek attended the Bankwest branch at the Fountain Gate shopping centre. Bozena gave evidence that Arek had asked her to come along to witness his signature on some documents, as he needed some money. The document she signed was in fact a loan agreement for the sum of $300,000 with Lot 2 and the Dandenong North property as security. The money was first applied to repay Westpac, and the balance was transferred into Arek's bank account.

25 At trial, Bozena did not dispute that it was her signature on the loan agreement. She gave evidence that once she found out about the Bankwest mortgage over the property, she raised this with Arek: "I have a talk with him and I said that they'll have to stop, because I don't want Clayton to be mortgage (sic) at all. I was working very hard to, you know, not to receive the rent money and everything to pay the $50,000 and then he mortgage the house again, which was - yeah". She confirmed at trial, that she understood she was signing the loan agreement as witness only and not to borrow a further $300,000 or else she would never have signed the document.

26 It was part of Arek's defence to Bozena's claims in the proceeding that at around the time of the Bankwest refinancing, Bozena represented to Arek that he could "treat Lot 2 as his own". In her evidence, Bozena denied saying that. I accept that evidence. Not only is it uncontradicted, I am satisfied that it is improbable that Bozena would so casually give up the only asset of substance that she had been able to salvage from 38 years of marriage to Mirek, and at a point in her life where her financial position (both at the time and for the foreseeable future) was so precarious. Moreover, it was inconsistent with her natural and understandable reluctance to favour Arek over Michael.

27 Although there is no direct evidence of how Arek spent any of the money raised by him on the security of Lot 2, there was evidence that he has bought and sold a number of properties since about July 2009. This was done both in his own name and in the name of a company of which he was sole director, secretary and shareholder, namely, Pro Active Property Investments Pty Ltd. These included the purchase by Arek in his own name of a property at 113 Riverside Avenue, Barellan Point, Queensland ("the Queensland property"). Arek became registered proprietor of the Queensland property on 16 June 2015.

28 There was also evidence concerning the business Proactive Fire. A business name search shows that this business was registered in Arek's name and was active between November 2012 and May 2016. Bozena gave evidence that she "practically run that business". She said that she cleaned and calibrated smoke detectors supplied to her by Arek and that "then he took them back and got some money for it, but I don't know how much or how often". Again, she did not receive any of the money.

29 In April 2015, Arek on behalf of himself and Bozena applied to refinance and pay out the Bankwest loan with loans.com.au ("Loans"), an online lender, and obtain a replacement loan; this time for $325,000. By letter dated 13 May 2015, Loans approved their application and on 14 May 2015, Arek and Bozena executed a loan agreement. Bozena was unable to explain how the Loans loan agreement and mortgage were executed. When shown a copy of the loan agreement, she accepted that at least one of the pages bore her signature, but she had no idea how it came to be there. She said that Arek did not ask for her consent and that, if she had been asked to agree to a new mortgage over Lot 2 for a large sum, she would not have agreed.

30 While Bozena had been receiving an allowance from Centrelink, she was otherwise almost entirely dependent on Arek, financially and for accommodation. In April 2015, Arek announced his intention to sell the Dandenong North property and move to Queensland. As noted above, by June of that year, Arek became the registered proprietor of the Queensland property. Bozena's evidence was that she felt as though she had "nowhere to go" and took up Arek's offer to join him. The two of them moved to Queensland that month, taking with them Bozena's furniture and other household and personal effects ("Belongings").

31 In about late-August 2016, Arek told Bozena that he could no longer afford to make the Lot 2 loan repayments, even with the property being rented. He suggested to Bozena that the property be sold. As she was not in a position to maintain the loan repayments alone, she agreed. In October 2016, Bozena appointed Jason Neil (as noted above, one of Arek's friends and the tenant of Lot 2) as her power of attorney to sign any documents on her behalf in relation to the sale/auction of Lot 2. The power of attorney was signed by Bozena and witnessed by Ann and Mark Bartlam (Bozena and Arek's neighbours in Queensland). Bozena gave evidence that when they were with the Bartlams, she told Arek that she would need a place to live, to which he replied, "I will owe you a place to live, or you can live with me for the rest of your life".

32 The auction of Lot 2 was held on 5 November 2016. Bozena and Arek sat in the living room at the Queensland property and listened to the auction take place over the phone. It was sold at auction for $635,000, $35,000 above their reserve. On 30 January 2017, shortly before settlement, the conveyancer engaged by Arek (Flat Fee Conveyancing) emailed requesting account details for where the residual funds of the sale of Lot 2 should be transferred to. That same day, Arek replied directing that the funds be transferred to an account in his name with the NAB. Bozena's evidence was that Arek explained that the real estate agent had told him that the proceeds could not be split between two accounts, so they had to go into his account, "so I didn't really have a say in it. That was the end of it".

33 The sale of Lot 1 settled on 1 February 2017 and by letter dated 4 February 2017, Flat Fee Conveyancing set out its statement of adjustments. After paying selling costs, the proceeds of sale were disbursed to Loans (three sums totalling $300,525.35) and to Arek (two sums totalling $311, 219.74).

34 Bozena gave evidence that after the settlement of the sale of Lot 2 she and Arek went together to look at properties in Queensland for Bozena to purchase and live in. She understood that the property would be paid for using the proceeds of the sale of Lot 2. They looked at about three properties, including one in Ipswich. However, nothing came of it with Arek saying, "it will be good to buy it, but not now". Bozena said that she tried to ask Arek about the proceeds of the sale but, "there was no answer... He was barely home, you know. He only came to sleep and how he just refused to talk. I ask him what his plans and what the - what the things, you know, how it's going to be, and he says nothing".

35 On 20 October 2017, Bozena left Queensland and returned to Melbourne, where she continued to live up until the trial. She stayed with Michael. She gave evidence that this came about as a result of a discussion she had with Arek. Arek said he had purchased a ticket for her to return to Melbourne to "spend some time over there, because his girlfriend is moving in and she needs to adjust to the house or something. So, he drive me to the airport and here I am". Bozena took with her only a small suitcase, leaving the rest of her Belongings in Queensland (where they remain). These Belongings included her passport, medical records, irreplaceable items such as photos, and furniture and effects that had been transported to Arek's house in Queensland.

36 The beginning of the breakdown of Bozena and Arek's relationship can be seen from the following chain of text message exchanges sent in the beginning of November 2017 (errors in original):

Arek to Bozena 2 November 2017 at 9:53am:

"I suggest you find a place in Melbourne where you know some people."

Bozena to Arek 2 November 2017 at 10:09am

"What do you mean? The is no need to be angry or apset. ... The situation need to be resolved."

Bozena to Arek 4 November 2017 at 10:42am

"It's look like the apartment (1) bed. Will be about 130 . Can you help!!!"

Arek to Bozena 4 November 2017 at 10:42am

"So you want 65 from me and then we are even?"

Bozena to Arek Nieduziak 6 November 2017 at 2:41pm

"HI how are you? No 65 Is not enough to buy any thing..... Please do not start a war that every body will be at lost..."

Arek to Bozena 6 November 2017 at 2:44pm

"I don't know what you are talking about. You said 130, half of that is 65...

Just tell me how much money you want from so I can sell everything I have to to give you the money and free myself"

37 There were also a number of messages between Michael on behalf of Bozena and Arek at around this time concerning arrangements to purchase a flat for Bozena in Melbourne. In correspondence, Arek has alleged that he had an agreement with Michael that he and Michael would each contribute $65,000 towards the purchase of a home for Bozena. And, during the second half of November 2017, Arek made a number of funds transfers to Bozena, totalling $65,000. However, Arek has at no time alleged in the proceeding (including when he was represented by solicitors and counsel) that Bozena was bound by any agreement to release all claims against him on the payment of the $65,000. Nor, on my review of the evidence, is there a basis for him doing so.

38 Bozena gave evidence that she had sent two text messages to Arek to try and arrange for her Belongings to be sent to Melbourne, however, nothing came of it. The evidence shows that there were in fact a series of text messages as well as correspondence between Arek and Seniors Rights Victoria on behalf of Bozena. Relevantly:

• in a letter dated 21 December 2017, Arek refers to an earlier offer made to Michael that Bozena was welcome to take not only her Belongings but anything and everything that she wishes from his residence, but then states, "this offer is no longer possible";

• in a letter of 1 February 2018, Arek again refers to an earlier offer that Bozena could recover any items she wanted but stated: "[u]fortunately under the existing circumstances, household items are being withdrawn from this offer and Bozena Nieduziak is only permitted to retrieve her personal belongings until (sic) this matter is resolved";

• by an email dated 4 June 2018, Arek asserted he would pack the Belongings and post them pending agreement for payment of packaging and postage costs upon collection of the goods, alternatively, he queried if Bozena intended collecting her Belongings; and

• the final communication on the topic of Bozena's Belongings was from Arek dated 11 October 2018 stating (emphasis and errors in original):

"Yes it has been a long time. I tried to organize to ge your belongings to you when you went to Seniors Rights Victoria but they stopped responding to me. Then you went to a lawyer and wanted money, no mention of your belongings, now your lawyer also stopped responding. Now I am waiting for some documents from your new lawyer?

Unfortunately I had to move to Melb for work so I can not help with your belongings right now. There is a tenant in Queensland so YOU MUST NOT GO THERE. I will let you know when I will next be going to Queensland and will arrange for your belongings to be shipped but this wont be until next year, maybe March."

39 By her amended statement of claim dated 24 July 2019 as refined in closing submissions, Bozena claims (in substance):

• that Arek is liable to Bozena in the sum of $451,375, being 84.375% of the proceeds of sale of Lot 2 ($612,000), less the $65,000 paid by Arek in November 2017;

• that the $451,375 is payable by Arek as equitable compensation for his breach of trust or, alternatively, his unconscionable conduct;

• in the alternative, that following the sale of Lot 2, Arek held $197,591 on a resulting trust in favour of Bozena, being 84.375% of the net proceeds of sale of $311,219.75, less the $65,000 paid by Arek in November 2017; and

• an order that Arek deliver up the Belongings.

40 As noted above, Arek pleads in his defence that at or around the time of the application for the Bankwest loan, Bozena represented to Arek that he could treat the property as his own. Arek relies on that allegation to found a claim in estoppel. For the reasons above, I have accepted Bozena's evidence that she made no such representation. It is therefore unnecessary for me to say any more about that aspect of Arek's case. In his counterclaim, Arek claims (in the alternative to his estoppel claim) that he was entitled to half of the proceeds of sale of Lot 2 based on the presumption of advancement. He further claims contribution from Bozena for half of the total repayments by him in respect of the Westpac loan of $100,000, the Bankwest loan of $300,000 and the Loans loan of $320,000.

41 It is convenient to consider each of these claims by reference to the following questions:

• does the presumption of advancement apply in favour of Arek and, if so, has the presumption been rebutted?

• if that presumption does not apply or has been rebutted, did Arek hold any (and, if so, how much) of Lot 2 on a resulting trust for Bozena?

• if so, what remedies are now available to Bozena in respect of Arek's dealings with that part of Lot 2 held on trust for Bozena?

• was Arek's conduct in dealing with Lot 2 unconscionable and, if so, what remedy is available to Bozena for Arek's unconscionable conduct; and

• is Bozena entitled to an order for the delivery up of her Belongings?

42 In Wilkins v Wilkins,[1] Kaye J stated (citations omitted):

"In the absence of evidence to the contrary, a registered proprietor of real estate is presumed to own the equitable interest in it. However, where a person purchases property, and places that property in the name of someone else, the law presumes that that person holds the property on a resulting trust for the purchaser who paid the cost of acquisition of it. The presumption of a resulting trust may be rebutted by showing that there is a relationship between the parties which gives rise to a countervailing presumption known as the "presumption of advancement". In such a case, the presumption of resulting trust is, in effect, nullified. As the High Court stated in Martin v Martin:

'It is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose or in other words that the equitable right is not at home with the legal title.'"

43 In Calverley v Green[2] ("Calverley") Deane J noted that the presumptions evolved at a time when a majority of adults laboured under restrictions and disabilities in respect of the ownership and protection of property and that, even in those times, the worth of the presumptions was at best debatable and that in present times, their propriety is open to serious doubt. However, the relevant presumptions are too well entrenched as "land-marks" in the law of property to be simply discarded.[3] More recently, in Anderson v McPherson [No 2],[4] Edelman J described the presumptions as requiring navigation of "procellous waters".

44 In Carkeek v Tate-Jones[5], McInerney J referred to the 3rd edition of Wigmore which cited dicta of Lamm J in Mockowik v Kansas City (1906) 196 Mo. 550 at 571; 94 SW 256 to the effect that presumptions have no place in the presence of the actual facts after stating:

"Presumptions may be looked on as the bats of the law, flitting in the twilight but disappearing in the sunshine of actual facts."

45 In Nelson v Nelson,[6] Deane and Gummow JJ stated (citations omitted):

"The presumptions operate to place the burden of proof, if there be a paucity of evidence bearing upon such a relevant matter as the intention of the party who provided the funds for the purchase. ... The other presumption, that of advancement, is perhaps not strictly a presumption at all. Rather, the position is that there are certain relationships from which equity infers that any benefit provided for one party at the cost of the other has been provided by way of "advancement". The consequence is that the equitable estate follows the legal estate and is at home with the legal title; there is an absence of any reason for assuming that a trust arose.

The operation of the presumption of advancement may be rebutted by evidence of the actual intention, at the time of the purchase, of the parent or other person who provided the purchase money. Evidence also may be given to support the presumption of advancement."

46 In the same case, their Honours noted that the presumption of advancement is only of practical importance if the evidence, including that of the actual relationship between the parties, does not enable the court to make a positive finding of intention.[7]

47 Despite some earlier authorities to the contrary, it has been clear since at least the decision in Nelson v Nelson[8] that the presumption of advancement applies to transfers of property by a parent regardless of gender.[9] Further, the burden of rebutting a presumption falls upon the party against whom the presumption is raised.[10] Having regard to these authorities, Bozena accepted in submissions that the presumption of advancement applied in May 2006 to her transfer to Arek and that she carried the onus of rebutting the presumption that she intended to gift half of Lot 2 to Arek. As discussed further below, if Bozena succeeds in rebutting that presumption, Arek must rebut the presumption of resulting trust. The relevant time is at acquisition.

48 In relation to the question of evidence of rebuttal, in Davies v The National Trustees Executors and Agency Co. of Australasia Ltd,[11] Cussen J stated:

"It is impossible to try to arrange into certain sets of categories certain facts, and say beforehand they will or will not become decisive or immaterial. The attention must be kept steadily fixed on the one fact is issue - What was at the time the intention of the purchaser or transferor? Anything which is relevant to that issue is admissible. You may have the evidence of the purchaser or transferor himself, if he is alive, as to his mental condition in the past, and though in some circumstances such evidence should be received with caution, yet it may be accepted. In the absence of his personal evidence you must adopt, to find his past intention, the best means possible by evidence which, on ordinary principles, is relevant and admissible.

49 A passage from Snell's Equity (24th edition, 1954) was adopted by Viscount Simonds in Shephard v Cartwright[12] and subsequently by the High Court in Charles Marshall Pty Ltd v Grimsley,[13] to succinctly define the scope of admissible evidence, as follows:

"The acts and deliberations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the declaration. ... But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour."

50 In Calverley, Deane J noted that this passage should not be accepted as good law to the extent it purports to lay down that no other evidence will be admissible. Evidence of the relationship, both factual and legal, will always be admissible.[14]

51 In Buffrey v Buffrey[15] ("Buffrey"), Palmer J stated:

"(5) If the presumption of advancement arises where joint tenants have made unequal contributions to the acquisition cost:

(a) whether the presumption is rebutted depends upon the intention solely of the party who provided the larger contribution because the question is whether that person intended to make a gift conferring equality of interest in the property on a person who did not contribute equally to its acquisition; and

(b) evidence as to the intention of the person making the larger contribution is admissible and assessed in the same way as the case where one party has provided the whole of the acquisition cost [that is, the evidence of his or her intentions at the time of the transaction is admissible but the court will treat that evidence with caution as the evidence of an interested party and the court is more assisted in determining the subjective intention of that person by evidence of that person's contemporaneous statements of intention, subsequent admissions against interest, subsequent dealings with the property, and by evidence of other relevant surrounding circumstances]."

52 In this case, Lot 2 was not acquired by Bozena and Arek - it was transferred to Bozena by Mirek pursuant to consent orders made in the Family Court proceeding. It was then transferred by Bozena to herself and Arek as joint proprietors. In my judgment, when viewed in the context of the circumstances giving rise to these transactions, nothing turns on the fact that Bozena and Arek did not make direct financial contributions to the purchase of Lot 2. In particular, I reject the allegation in Arek's defence that Bozena's ownership of Lot 2 before her conveyance to Arek and herself does not constitute "a contribution" to their subsequent joint ownership.

53 The evidence above demonstrates that Bozena secured her ownership of Lot 2 after a difficult separation from Mirek and the division of the property of the marriage. As I have observed, given the length of the marriage and Bozena's contribution to it (both financially and by raising her and Mirek's two sons), the allocation to her from the marital assets was not generous. Further, Lot 2 would have stayed in her sole name were it not for the fact that the Family Court orders required that she also assume liability for $50,000 of the debt owing under the mortgage on Lot 1 and Lot 2. Thus, in my view, Bozena's contribution to Lot 2 was the largest by a significant margin. I am satisfied that her contribution was the full value of Lot 2 as at the date of transfer to her and Arek in February 2006, less Arek's 50% share of that $50,000 debt.

54 I am also satisfied that Bozena did not intend to gift a half share of Lot 2 to Arek, whether at all or to the exclusion of her other son, Michael and the presumption of advancement is clearly rebutted on the facts of this case. First, this was the effect of her evidence (which I accept). Second, it was supported by the following additional objective factors:

• as noted above, Lot 2 was hard won by Bozena after a difficult separation from Mirek;

• at the time of the transfer, Bozena's financial position was precarious - she owned no assets of substance apart from Lot 2 and $5,000 in superannuation and was unemployed and on a pension;

• Arek was in a far stronger financial position, including being in a well-paid job and owning the Dandenong North property;

• there was no reason to think that Bozena would prefer Arek to Michael, particularly as the latter was only about 16 years old at the time, and in Bozena's care; and

• Bozena did not give any instructions in relation to the preparation of the transfer and nor did she receive any advice (or otherwise understand) the implications of the transfer to Arek and her as joint proprietors.

55 In my view, the evidence establishes overwhelmingly that Bozena transferred Lot 2 into her and Arek's joint names only because she believed Arek's assertion that he needed to be "on the deed" before she could arrange the modest finance to repay the $50,000 owing by her under the Family Court orders. The need to obtain finance was recognised by Gibbs CJ in Calverley as a sufficient ground to rebut the presumption of advancement.[16] Bozena's evidence to the effect that she did not intend to confer an interest on Arek beyond what was necessary to secure that finance, is consistent with her objective circumstances at the time of the transfer, as listed above. It is inconceivable that she would have willingly given up 50% of her only asset of substance to one of her sons who was then financially secure, at a time when her and Michael's financial future was so uncertain. In my view, there is no evidence of relevant post acquisition admissions[17] that points to a different conclusion.

Did Arek hold his share of Lot 2 on a resulting trust?

56 In Buffrey,[18] Palmer J again conveniently summarises the principles on which the court proceeds in determining both the existence and extent of a resulting trust. Notably, Palmer J held that:

"(1) one begins with the presumption that the equitable title to the property is at home with the legal title but that presumption, like all evidentiary presumptions, gives way to facts showing the contrary;

(2) where a property is held in joint names but the joint tenants have not contributed equally to the cost of acquisition, it is a presumption of equity not lightly displaced, that the beneficial interests in the property are to be held between the parties upon a resulting trust in proportion to their respective contributions to the acquisition cost..."

57 As discussed above, the facts establish that there was a significant disparity in the contributions of Bozena and Arek to the acquisition of Lot 2. Bozena's contribution was the total value of Lot 2, less the $50,000 loan necessary to secure and retain ownership. At the time of the Family Court proceeding, Lot 2 was valued at $320,000. As to the $50,000 loan, I am satisfied that Bozena and Arek were jointly liable for the repayment of that loan and thus should be treated as having contributed to the borrowed capital in equal shares, that is, $25,000 for Bozena and $25,000 for Arek. On that basis, at the time of acquisition, Bozena's contribution was $295,000 or $92.2% and Arek's was $25,000 or 7.8%.

58 It follows that Arek must prove that Bozena intended he was to receive a beneficial interest in Lot 2 that exceeded his contribution to the acquisition of Lot 2. Palmer J further explained in relation to the presumption of a resulting trust that:

"(6) If the presumption of resulting trust arises where the joint tenants have made unequal contributions to the acquisition cost:

(a) the presumption may be rebutted by evidence showing that the common intention of the parties at the time of acquisition was for equality of interests despite inequality of contributions;

(b) evidence of the subjective and uncommunicated intention of one of the parties is inadmissible as going to prove the common intention; and

(c) the common intention of the parties may be ascertained from the evidence as to their contemporaneous communicated statements of intention, subsequent admissions against interest, subsequent mutual dealings with the property, and from evidence as to other relevant surrounding circumstances."

59 In Black Uhlans v New South Wales Crime Commission,[19] Campbell J emphasised that the court must take into account evidence which both supports and undermines the presumption of resulting trust. His Honour continued:

"The sort of conduct which could possibly be taken into account in this way could include who took occupation and control of the property, who made improvements to it and in what circumstances, who paid periodical outgoings on the property, who received any rent from the property, and who paid income tax on any rent received from the property. To the extent that any of these types of transaction occurred at a time which was not "so immediately thereafter as to constitute a part of the transaction", they could be taken into account only to the extent that they were admissions."

60 I have already found that there was no intention, at least on Bozena's part (and thus no common intention), to confer an equality of interest in Lot 2 on Arek. And, as there were no relevant post-acquisition admissions or conduct to resurrect a presumption of advancement, in my view there was similarly no relevant post-acquisition conduct to rebut the presumption of a resulting trust. In particular, I am satisfied that Arek's receipt of rent and payment of outgoings on Lot 2 do not provide a basis for finding that Bozena's intention was contrary to her oral evidence.

61 Bozena wanted to live at Lot 2 with Michael, but was effectively prevented by Mirek from doing so, with the result that she was forced to allow Arek to arrange to rent it out. Further, I accept that she believed Arek was using the rent to pay for their loan and cover the outgoings, with a view to eventually paying off the loan. In my view, Bozena's willingness to allow Arek to manage Lot 2 and receive rents was a reflection of Bozena's financial and personal vulnerability and Arek's obvious influence over her. It was not evidence of any intent by Bozena to confer a benefit on Arek alone. At most (unsurprisingly for a mother of two sons) her intent was that Arek and Michael would share equally in Lot 2 after her death.

62 Moving to the question of whether there were adjustments in contributions since acquisition, in Cetojevic v Cetojevic,[20] Campbell J noted that precise accounting is not always possible and a broad-brush estimate needs to be made to ensure that the onus of proof does not itself become an instrument of injustice. I agree with Bozena's submission that those observations are apposite in this case where the relevant transactions took place more than 13 years ago between family members acting without the benefit of legal or accounting advice. Further, some caution is required in allowing for loan repayments. For example, in Calverley, Mason and Brennan JJ stated:

"It is understandable but erroneous to regard the payment of mortgage instalments as payment of the purchase price of a home. The purchase price is what is paid to in order to acquire the property; the mortgage instalments are paid to lender from whom the money to pay some or all of the purchase price is borrowed."

63 To my mind, the following matters may nevertheless be relevant to the calculation of contributions by each of Bozena and Arek:

• Lot 2 was initially mortgaged to Westpac to secure a loan of $100,000, despite the fact that only $50,000 was needed;

• the evidence was that the additional $50,000 was applied exclusively for Arek's benefit, and thus any loan repayments on that sum should not be taken into account in assessing Arek's contribution;

• the evidence was that rental income exceeded $13,000 per annum (allowing for 7% agents' commission) and $7,896 per annum was payable to Westpac under its loan agreement for $100,000;

• thus had the loan been for only $50,000, the rent is likely to have been more than sufficient to cover loan repayments and outgoings;

• on the other hand, Bozena and Michael lived with Arek at his Dandenong North property, so it is arguable that the rental payments were also covering their living costs;

• for a time Arek paid Bozena $100 per week which, it could be argued, constituted a share of the rental payments;

• against this, there was evidence that Bozena was using this $100 per week, as well as her Centrelink pension, to cover household expenses, including those of both Arek and Michael;

• there was also evidence that Bozena assisted Arek in his smoke detector business for no remuneration; and

• the evidence was that the additional funds borrowed from Bankwest ($300,000) and Loans ($320,000) and secured (in part) by mortgages over Lot 2 were also applied exclusively for Arek's benefit, so again any loan repayments on those sums are not relevant to Arek's contribution.

64 The evidence is not sufficient to undertake anything approaching a forensic assessment of what effect these various competing factors might have on the original contributions by Bozena and Arek referred to above. On one view, they could be said to have had a neutral effect. If so, and having regard to the observation by Mason and Brennan JJ in Calverley extracted above, there are good grounds for finding that Bozena and Arek's contributions did not materially alter from their shares at acquisition. However, in the amended statement of claim, Bozena calculates Arek's interest in Lot 2 as $50,000 of the $320,000 or 15.625%, on the basis that he made the loan repayments. This is favourable to Arek because Bozena was jointly liable to repay the debt and Arek received all rental payments. Bozena has in effect conceded an adjustment in Arek's favour, and I am content to adopt that concession.

What remedies are available to Bozena in relation to her lost interest in Lot 2?

65 There can be no doubt therefore that a resulting trust can be declared over the net proceeds of sale of Lot 2 after paying out the Loans loan and selling costs, which were paid exclusively to Arek. I accept Bozena's submission that Arek held the net proceeds of $311,219.74 on resulting trust as to 84.375%, which equals $262,591.66. Arek has paid $65,000 to Bozena and thus continues to hold the sum of $197,591.66 on resulting trust for Bozena. However, this is not the end of the matter. As the learned author GE Dal Pont explains:[21]

"As the existence of a resulting trust rests on a presumed intention in a particular type of transaction, it arises at the time of the transaction [citing Westdeutsche Landesbank Girozentrale v Islington Borough Council [1996] UKHL 12; [1996] AC 669 at 708]. It is not dependent on a court order; the court simply recognises and enforces a pre-existing trust. This feature, inter alia, marks the resulting trust as a property institution, as opposed to a remedy like some forms of constructive trust

...

That the resulting trust is a property institution does not oust the availability of relief in personam in favour of a beneficiary whose equitable interest has been prejudiced. For instance, in the case of an express trust, a trustee under a resulting trust who misappropriates trust property, thus leaving nothing over which the resulting trust can operate in a proprietary sense, is nonetheless liable to restore to the beneficiary the value of the misappropriated property by way of monetary compensation in equity [citing Wilkins v Wilkins [2007] VSC 100, per Kaye J at [92]]."

66 Equity has long exercised an inherent jurisdiction to award monetary compensation for loss in respect of purely equitable wrongs. In Target Holdings Ltd v Redferns,[22] Lord Browne-Wilkinson stated (in relation to breach of trust but applicable generally):

"The basic rule is that a trustee in breach of trust must restore or pay to the trust estate either the assets which have been lost to the estate by reason of the breach or compensation for such loss. Courts of Equity did not award damages but, acting in personam, ordered the defaulting trustee to restore the trust estate: see Nocton v Lord Ashburton. If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the trust estate to put it back to what it would have been had the breach not been committed: Caffrey v Darby, Clough v Bond...Thus the common law rules of remoteness of damage and causation do not apply. However there does have to be some causal connection between the breach of trust and the loss to the trust estate for which compensation is recoverable, viz, the fact that the loss would not have occurred but for the breach."

67 Arek caused Lot 2 to be mortgaged first to Westpac for $50,000 more than was required and applied that additional $50,000 for his exclusive benefit. He then re-mortgaged Lot 2 to Bankwest and then Loans for $300,000 and $320,000 (respectively) and again applied the additional borrowings for his exclusive benefit. Finally, he retained the net proceeds of sale of Lot 2 for his exclusive benefit. In my view, those actions were a clear breach of trust by Arek in respect of that part of the trust estate of Lot 2 held by him on behalf of Bozena. I am satisfied that he is liable to pay to her equitable compensation equivalent to what is necessary to restore the estate to its full value at the time of the sale of Lot 2, less Arek's 15.625% share and the $65,000 he has already paid. I accept Bozena's calculation of that figure as $451,375.

68 In view of my findings above, it is not necessary for me to determine Bozena's claim that Arek acted unconscionably in procuring her execution of the Bankwest and Loans loan agreements and mortgages and in failing to account to her for the proceeds paid to Loans for his sole benefit. However, for completeness, based on my analysis of the facts summarised above and for the reasons submitted in writing by Bozena, I am satisfied that:

• Bozena was under a special disability or disadvantage in her dealings with Arek because of her age, lack of income and assets and ignorance of commercial dealings;

• further, Bozena relied on Arek to provide her with somewhere to live, accepted the truth of his assertions about their financial dealings (for example, that he needed to be "on the deed" to secure the loan from Westpac) and trusted him to make arrangements concerning Lot 2 that protected her interests;

• at the time the loan agreement was entered with Bankwest, Centrelink benefits were the Bozena's sole source of income;

• at the time of the loan agreement with Loans, Bozena's income was supplemented by $100 per week from Arek (which Bozena spent provisioning the household);

• Bozena was unaware of the legal effect of the transfer of Lot 2 to her and Arek as joint proprietors and by the fact that Arek could procure Bozena's signature to legal documents by requesting her to act as a witness;

• because Bozena lived with Arek at the Dandenong North property practically at all times after 5 September 2003, Arek knew of Bozena's special disadvantage;

• Arek took advantage of Bozena's vulnerability in other ways, such as arrogating all of the rental income for himself and excluding her from the Barellan Point property;

• Bozena derived no benefit from either of the Bankwest and Loans loan agreements; and

• Bozena executed those agreements and supporting mortgages in ignorance of their legal effect.

69 In all the circumstances, I accept Bozena's submission that Arek cannot make unconscionable use of his superior position to both retain the net proceeds of sale (save for $65,000) and the benefit of the repayment of the debt owed to Loans. While that debt was jointly owned, save for the sum of $50,000, it was only Arek who benefited from the Bankwest and Loans transactions. Again, the result is that Arek is liable in equity to Bozena in a sum equivalent to what she lost by reason of these transactions, being 84.375% of $612,000, less the $65,000 already paid.

Is Bozena entitled to orders for the delivery up of her Belongings?

70 I have set out above the circumstances of Arek's shifting position on the return of Bozena's Belongings. I am prepared to infer (as Bozena submits) that, at least in relation to Arek's December 2017 and February 2018 correspondence, Arek improperly retained the Belongings as a bargaining chip in his ongoing negotiations with Bozena. I also accept Bozena's submission that detinue arises where chattels are wrongfully detained in the face of a demand for return by the person with a right to immediate possession. A plaintiff who seeks the return of goods must sue in detinue alone.[23] Bozena is entitled to an order that Arek deliver up the Belongings or do all things to facilitate their immediate return.

71 I will order that there be judgment for Bozena in the sum of $451,375, together with interest on that sum and costs. I will also order that Arek forthwith deliver up the Belongings to Bozena. Arek's counterclaim will be dismissed. I am satisfied that that interest should be assessed from the date of commencement of the proceeding on 2 October 2018, pursuant to s60 of the Supreme Court Act 1986 (Vic) (made applicable in this court by s50 of the County Court Act 1958 (Vic)) and that Arek should pay Bozena's cost of and incidental to the proceeding (including reserved costs) on the standard basis, in default of agreement. I will therefore make orders substantially in the form submitted by Bozena's counsel

I certify that these 30 pages are a true copy of the reasons for Judgment of His Honour Judge Woodward delivered on 20 August 2019.

[1] [2007] VSC 100 per Kaye J at [8]

[2] [1984] HCA 81; (1984) 155 CLR 242 at 264

[3] See at 265 - 266. See also Charles Marshall Pty Ltd v Grimsley [1956] HCA 28; (1956) 95 CLR 353 at 364 and Dullow v Dullow (1985) 3 NSWLR 531 at 535 - 536 per Hope JA (Kirby P and McHugh JA agreeing) who described the primary presumption of a resulting trust to be completely anachronistic.

[4] [2012] WASC 19 at [5]

[5] [1971] VicRp 84; [1971] VR 691 per McInerney J

[6] (1995) 184 CLR 538 at 547

[8] (1995) 184 CLR 583

[9] (1995) 184 CLR 583, for example per McHugh J 598-599.

[10] Ryan v Ryan [2012] NSWSC 636 per Ward J

[11] [1912] VicLawRp 73; [1912] VLR 397 at 403

[12] [1954] UKHL 2; (1955) AC 431 at 445

[13] [1956] HCA 28; (1956) 95 CLR 353 at 363

[14] [1984] HCA 81; (1984) 155 CLR 242 at 269

[15] [2006] NSWSC 1349 at [14]

[16] [1984] HCA 81; (1984) 155 CLR 242 at 251

[17] Charles Marshall Pty Ltd v Grimsley [1956] HCA 28; (1956) 95 CLR 353 at 365

[18] [2006] NSWSC 1349 at [14]

[19] [2002] NSWSC 1060; (2002) 12 BPR 22,421 at [138]

[20] [2006] NSWSC 431 at [36]

[21] GE Dal Pont, Equity and Trusts in Australia, 6th Ed, Lawbook Co 2015 at [26.10]

[22] [1995] UKHL 10; [1996] 1 AC 421

[23] See Law of Torts, 5th Edition, Balkin, RP and Davis, JLR, LexisNexis Butterworths at [4.60]