Plaintiff v Defendant

EQUITY AND TRUSTS - Common intention constructive trust - Property acquired in course of mother/surrogate son type relationship - Property held in the name of one party - No common intention to create trust.

EQUITY AND TRUSTS - Remedial constructive trust - Existence of joint endeavour - Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 and Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 - Provision of funds for the purchase of the properties by both parties - Non-financial contributions made by both parties - Pooling of funds for payment of properties - Whether unconscionable to allow one party to assert sole title - Quantification of contributions of parties - Adjustments to be made.

EQUITY AND TRUSTS - Applicability of the doctrine of laches.

PROPERTY - Lodging of caveats - whether reasonable cause to lodge caveats existed.

PRACTICE AND PROCEDURE - Admissibility of evidence after conclusion of trial.

1 This case arises out of a highly acrimonious falling out in April 2010 between two close friends. In the course of their relationship, which spanned nearly 20 years, a sizeable property portfolio was amassed which both now lay claim to.

2 The case has a number of intriguing features. Mr Leigh Garel, the defendant, was 20 years of age in 1988 when he met Ms Zoay Jeffrey-Potts, the plaintiff, who at that stage was 58 and operating a boarding house[1] located at 176 Victoria Avenue, Albert Park. Between 1994 and 2006, twelve units were purchased in Mr Garel's name and rented out. Ms Jeffrey-Potts claims that he was, in effect, a puppet and that the properties belong to her as only her funds were used in their purchase.

3 It is not in issue that a large sum - probably in excess of $200,000, which came from cash stashes at the boarding house - was provided by Ms Jeffrey-Potts for the purchase of a number of the units but there are major disputes as to the intentions of the parties underpinning the purchases and the amounts contributed by each of them. Ms Jeffrey-Potts says that apart from funds obtained from the bank, the properties were paid for by her and held on trust by Mr Garel. He denies this and contends that the funds provided by her, which supplemented his own contributions, were loans to enable him to build a property portfolio.

4 As I will try to explain, both Ms Jeffrey-Potts and, to a lesser extent, Mr Garel, provided revisionist accounts of what appears to have been a harmonious and close relationship until its termination. Each sought to minimise the role played and the contributions made by the other in the acquisition and management of the units during the term of their relationship.

5 The case is to be resolved by the application of principles of equity and contract law. However at the heart of the case are the factual findings as to the source of the funds, the parties' intentions at the time the units were purchased and the amounts of money and time invested by both parties in purchasing and managing the properties. One major complicating factor has been Ms Jeffrey-Potts' determination to deal solely in cash with no documentation to support many of her assertions. This, in conjunction with my reservations as to her credibility as a witness, has made the fact finding task difficult.

6 Ms Jeffrey-Potts was born on 13 January 1930 in the United Kingdom. She married, and in 1966 gave birth to a daughter Adelle. In 1967, the family emigrated to Australia.

7 In 1969, the couple purchased the boarding house.[2] In the seventies Ms Jeffrey-Potts and her husband separated and he moved to Adelaide with Adelle. Subsequently they divorced.[3] Ms Jeffrey-Potts continued to manage the boarding house.

8 Up until the 1980s, the boarding house accommodated up to 20 tenants: ten on the ground floor and ten on the first floor. Later, the rooms downstairs were converted into two units and a self-contained flat, which operated independently of the boarding house tenants, whose rooms were situated upstairs. There was also a dilapidated bungalow at the rear of the boarding house which was occupied by tenants from time to time. Gradually the number of boarders decreased to the point that by 2000 Mr Garel was the only boarder still residing at the boarding house.[4]

9 During the 1970s and 1980s, Ms Jeffrey-Potts was involved in the development and management of at least four hotel dining rooms both locally (the Victoria Hotel in Albert Park) and interstate.[5] She owned two properties in Iffla Street, South Melbourne, which she rented out.[6] She managed the properties and collected the rents herself. At one time, she was the part owner of a brothel,[7] and had what she described as "an interest in other properties" - including an art gallery and a caravan park.[8] Each of these businesses appears to have been conducted on a cash basis. There was also the management of the boarding house which involved managing the premises and collecting the rents. In addition, from 1995 she was an office bearer (either the Treasurer or Vice-President) of an organisation known as "Law Watch" which met regularly at a church hall in East Melbourne for several years.

10 Mr Garel (known as Leigh Garel) was born in Warracknabeal on 2 April 1968 and raised in that town. He was unemployed for a year and a half after leaving school and in 1988 moved to Melbourne to find work. Within a short time of his arrival, he obtained lodgings at the boarding house. By late June, he had obtained regular employment with McDonalds.

11 It was common ground that the two struck up a friendship in the late 1980s. It was also not in issue that in about 1993, Mr Garel ceased paying rent and was not charged for board by Ms Jeffrey-Potts while he resided at the boarding house.

12 In 1994, a unit at 168-174 Victoria Avenue, Albert Park (known as Victoria Court)[9] came on the market and was purchased in the name of Mr Garel. This was the commencement of the purchase of a portfolio of units (twelve in total) in close proximity to the boarding house. All were purchased in the name of Mr Garel.

13 The dispute raises the following issues for resolution:

(a) whether the funds contributed by Ms Jeffrey-Potts for the purchase of the units were provided as a result of an agreement between the two to permit Mr Garel to live rent-free at the boarding house and provide him with domestic help in return for the units being placed in his name; with the result that the properties were held in trust by Mr Garel for Ms Jeffrey-Potts;[10]

(b) whether the funds advanced by Ms Jeffrey-Potts were, in fact, loans by her to Mr Garel;[11]

(c) whether, given that Mr Garel is the legal owner of the units, equity should intervene in Ms Jeffrey-Potts' favour either in the form of a resulting trust or a constructive trust and if so, to what extent;[12]

(d) if equity is to intervene in the form of a constructive trust, the determination of:

(i) the funds that were contributed to the purchase of the units by each of the parties;[13] and

(ii) the contribution in terms of labour and skill to the management of the units and/or perhaps the maintenance of the boarding house;

(e) if Ms Jeffrey-Potts has an equitable interest in the units whether she is disentitled to such an interest by reason of laches;[14] and

(f) whether Mr Garel is entitled to damages as a result of the lodging of caveats by Ms Jeffrey-Potts over the properties.

14 Ms Jeffrey-Potts, consistent with her evidence throughout the trial, sought to minimise the closeness of the relationship that developed during the six years prior to the first property purchase. On her account, the relationship was, essentially, no more than one of landlord and tenant, although she provided Mr Garel with advice about investments from time to time and permitted him to live rent-free from about 1993.[15] In cross-examination she initially denied discussing leaving Mr Garel an amount of money in her will until it was pointed out that this was an allegation contained in her statement of claim [16]

15 Mr Garel says that within a relatively short time of his moving into the boarding house, he struck up a rapport with Ms Jeffrey-Potts. She gave him advice (which he took) about investments and they often dined together in the dining room of the boarding house. In 1992, they travelled by motorcycle to North Stradbroke Island and on at least one occasion had sex together. Mr Garel moved rooms at the boarding house on a number of occasions. Ultimately, in 1993, he moved into room 6, which was adjacent to Ms Jeffrey-Potts' room.

16 At about this time, he ceased paying rent and assisted with odd jobs around the boarding house, including assisting with the re-roofing of the two bungalows located at the rear of the boarding house. In the evening, they would usually have a meal together in the lounge and, on his account, by 1993, a sporadic sexual relationship had developed. Ms Jeffrey-Potts denied any sexual relationship between the two.

17 Mr Garel's account of the closeness of their relationship by 1994 is corroborated by a number of their friends who were called as witnesses in the trial. Mrs Mary Brown, Mr John Russo and Mrs Judith McCartney all met Ms Jeffrey-Potts and Mr Garel shortly prior to the acquisition of the first property in December 1994. Each gave evidence of regular social outings with Ms Jeffrey-Potts and Mr Garel - to the extent that Mr Russo and Mrs McCartney who both lived in the outer eastern suburbs, could never recall seeing the two apart from the time they first met until they split in 2010. Mrs Brown, who lived and worked in the area around Albert Park, would see Ms Jeffrey-Potts on her own on occasion but also on social occasions when she was, as I interpret her evidence, invariably accompanied by Mr Garel.

18 I am comfortably satisfied that by 1994 the two had a particularly close and harmonious relationship. It is not necessary for the purpose of this case to reach any final conclusion as to the sexual nature of their relationship. The continuing nature of the relationship after 1994, which I shall refer to in more detail later, demonstrates its enduring nature. One example suffices: when Ms Jeffrey-Potts' hip was replaced around 2009, Mr Garel was named as her next of kin with the Alfred Hospital.[17]

The competing versions as to the purchase of the units

19 What is hotly in dispute is the respective intentions of the parties at the time the properties were purchased, the amount of the funds contributed by each to the purchase of the properties and the purpose for which the properties were purchased.

20 Ms Jeffrey-Potts put forward the following scenario: she wished to establish a property portfolio for her retirement. She did not have a bank account but had very large amounts of cash on hand, which she kept at the boarding house. She also received about $120,000 in settlement of a claim against a firm of solicitors.[18] She determined not to purchase any properties in her own name because she was concerned that her daughter, whom she believed to be taking drugs, would exercise influence over her in relation to those properties. Mr Garel volunteered to place the properties in his name and said that he would hold them in trust for her. She, however, paid the full amount of the purchase prices (deposit and settlement funds), except where financed by bank loans. The deposits, at times running into many thousands of dollars were paid in cash from money kept by her at the boarding house. She rejected outright the suggestion that she loaned moneys to Mr Garel for the purpose of his purchase of the initial property or any others. Throughout her evidence she maintained that the properties were held on trust for her by Mr Garel, and that she "trusted" him with her properties and her money. [19]

21 Mr Garel paints a very different picture: the provision by Ms Jeffrey-Potts of funds was solely by way of interest-free loans. After Ms Jeffrey-Potts paid the initial deposit on the first unit of $1,000, he paid $12,200 being the balance of the deposit. He then obtained funds from his uncle and mother which allowed him to pay approximately $33,500 towards the purchase price of the unit with the balance paid by Ms Jeffrey-Potts. He accepts that Ms Jeffrey-Potts provided funds for the purchase of a number of the properties by way of loans, the first of which was later acknowledged and signed by her.[20] On his account it was always intended that he own the properties but Ms Jeffrey-Potts, altruistically, assisted with the financing of his purchases.

22 Before returning to the analysis of which of these two versions is to be accepted (or, for that matter, whether either can be accepted), it is necessary to return to an issue I have already mentioned. This case turns to a large extent upon the credibility of both parties and the available contemporaneous documentation.

23 Ms Jeffrey-Potts' evidence was, for reasons which I will set out, unpersuasive on many of the contentious issues. For instance, I do not accept Ms Jeffrey-Potts' vague account of the source of the money used to purchase a number of the properties and her alleged motive for placing the properties in Mr Garel's name. Her reliance upon cash in making contributions to the purchases and the ongoing management of the units, with an absence of any records, makes acceptance of parts of her account difficult and highlights the importance of the contemporaneous documentation.

24 Aspects of Mr Garel's evidence were also not without difficulties. A number of events described in his evidence-in-chief were not put to Ms Jeffrey-Potts in cross-examination and whilst some of these omissions were understandable, others smacked of recent invention. There is no independent confirmation of his mother's gift of $120,000 which, on his account, was used to finance the first purchase. His evidence as to the level of Ms Jeffrey-Potts' contributions to the purchase of the first unit was a moving feast. In addition, whilst he accepted that Ms Jeffrey-Potts had made sizeable contributions to the purchase of the properties, in excess of $200,000, these were characterised as interest-free loans which were, so he said, ultimately forgiven in an act of generosity by Ms Jeffrey-Potts. Only a couple of documents exist to support his version of events and primarily in relation to the purchase of the first unit.

25 In these conflicting accounts, neither party (particularly Ms Jeffrey-Potts) was able to recognise what was apparent from the evidence of virtually every other witness that was called in the trial: that from 1994 to 2010 the two had a particularly close and apparently harmonious relationship and spent much of their time together either socially or in the management of the properties.

26 All in all, the evidence given by both parties (and particularly Ms Jeffrey-Potts) was less than satisfactory and, as I will endeavour to explain, it is impossible to resolve the case on total acceptance of one version of events as opposed to the other. Rather, I have been compelled to do my best and have primarily relied upon the contemporaneous documents and then reached limited findings of fact based on the oral testimony and drawing inferences as to the most likely course of events between 1994 and 2010.

27 By 2006, Mr Garel was the registered proprietor of five units in Victoria Court and seven units around the corner at 82 and 84 Beaconsfield Parade.[21]

28 The Victoria Court block is located about one hundred metres east of the intersection of Victoria Avenue and Beaconsfield Parade. It is in effect, next door to (the northeast of) the boarding house with entrances facing Victoria Avenue and Reed Street. It is owned by a company, Victoria Court Pty Ltd; a parcel of shares entitles the owner to exclusive occupancy of a unit.

29 The Beaconsfield Parade units (located at 82 and 84 Beaconsfield Parade) are on strata titles and are located a short distance from Victoria Avenue facing the beach (i.e. to the southwest). The lane that separates the boarding house from Victoria Court also provides access to the rear of the Beaconsfield Parade units. Although in two separate blocks (numbered separately) and with two separate bodies corporate, these units were effectively managed jointly.[22]

30 The table below sets out the details of each of the twelve purchases.

31 The common theme running through each of the purchases and their subsequent management was the absence of any sign of Ms Jeffrey-Potts' involvement in the ownership of the properties:

(a) Mr Garel was the transferee and became the registered proprietor under the Transfer of Land Act 1958 (Vic)[23] of the Beaconsfield Parade units;[24]

(b) the Victoria Court units purchased as a result of share acquisitions in Victoria Court Pty Ltd were in the name of Mr Garel;[25]

(c) the rent from each of the properties was paid into bank accounts held in Mr Garel's name;[26]

(d) rates and services payments were made in Mr Garel's name;

(e) accounts for repairs were rendered to Mr Garel;[27]

(f) on occasions when finance was arranged for a purchase (for the settlement funds or deposit or both), the loan applications were in the name of Mr Garel;[28]

(g) Mr Garel was the mortgagor of the properties used to secure loans to finance new purchases;[29]

(h) from 1995 onwards, income tax returns disclosing rental income and expenses were filed in Mr Garel's name;[30]

(i) objections to proposed planning changes were in Mr Garel's name;[31]

(j) residential tenancy agreements were entered into in Mr Garel's name (as were any notices to tenants);[32] and

(k) the conveyancing for the transfer of all the units, except for the first acquisition, was conducted in Mr Garel's name.[33]

32 The properties were managed from Mr Garel's room at the boarding house, which partly filled the role of an office.[34] The records for each unit were kept in a filing cabinet in the room. A rent receipt book was kept and the income from the tenants (or at least some of it) was paid into accounts held at the Bank of Melbourne (later Westpac) in South Melbourne.[35] That bank also provided loan funds used for the purchase of a number of the properties.[36]

33 Bank of Melbourne records demonstrate that the first property which was the subject of finance was that of the fourth purchase, a Beaconsfield Parade unit (Unit 18).[37] In October 1996, Mr Garel completed a loan application and the sum of $53,000 was advanced, secured by a mortgage over that property.[38]

34 Bank records also reveal that from 1996 further loans (or redraws) accompanied by mortgages were taken out in respect of the purchase of the balance of the properties. The loan applications were made in Mr Garel's name and, of course, the mortgages were registered against the title in his name.

The financial position of Ms Jeffrey-Potts and Mr Garel

35 The following matters were established by contemporaneous documentary evidence or were uncontested and are my findings of fact (including any inferences I have drawn from these facts).

36 On 13 May 1969, Ms Jeffrey-Potts and her husband were registered as joint proprietors of the boarding house.[39]

37 On 22 March 1977, Ms Jeffrey-Potts became the sole proprietor of the boarding house.[40]

38 During the 1970s and 1980s, Ms Jeffrey-Potts "had quite a lot of different business".[41] In addition to the boarding house, she had, with others, managed hotel dining rooms in Sydney, Adelaide, Tasmania and Melbourne.[42] She had an investment in an art gallery in Hawthorn[43] and was the part owner of a brothel.[44] She had also owned at one time two investment properties in Iffla Street, South Melbourne[45] which were rented out.[46]

39 In October 1984, Ms Jeffrey-Potts was advanced $84,000 by the Williams, Winter & Higgs mortgage practice,[47] secured by a mortgage over the boarding house.[48]

40 On 10 November 1988, Ms Jeffrey-Potts gave a charge to the Legal Aid Commission, which in turn lodged a caveat on 2 June 1989 over the boarding house.[49] I infer that the Commission provided legal assistance for the prosecution of a civil claim by Ms Jeffrey-Potts against a firm of solicitors.[50]

41 The solicitors claim was settled in 1992. Cheques were made out to Ms Jeffrey-Potts by her litigation solicitors Nicholas O'Donohue & Co in the following sums: $70,000 on 3 December 1992, $18,000 and $420 on 14 September 1993.[51]

42 Ms Jeffrey-Potts made regular payments to Williams, Winter & Higgs, (totalling $67,974)[52] and paid out the loan of $84,000 on 3 December 1992,[53] the same day the cheque for $70,000 was made out. She was provided with a discharge of mortgage. Mr Garel said one of the cheques was made out to the mortgagees.[54]

43 On 23 June 1994, the discharge of mortgage was lodged with the Titles Office, as was the withdrawal of the Legal Aid Commission caveat; the end result being that as at June 1994, the boarding house was unencumbered.

44 Ms Jeffrey-Potts kept large sums of cash in her bedroom and other rooms at the boarding house. Given the amounts that were paid for the first three units, it is clear that she had at least $200,000 stored in cash at the boarding house. The provenance of these funds, which figure significantly in this case, remains a mystery. Mr Garel said that Ms Jeffrey-Potts had at least $100,000 in cash under her bed.[55]

45 So in summary, notwithstanding the absence of any evidence in the form of tax returns, bank statements, BAS or IAS statements, it was nevertheless clear that by 1994 Ms Jeffrey-Potts had a number of assets:

(b) the cash stash (as it was described in evidence) was, in all likelihood, at least $200,000; and

(c) she had some proceeds (probably about $18,000) from the solicitors claim, although I infer that the cheque for the largest amount, $70,000, was applied to paying out the Williams, Winter & Higgs loan.

46 In addition, in 1994 Ms Jeffrey-Potts was in receipt of regular income from boarders residing upstairs and the tenants of the two units and the bedsit downstairs, as well as (at times) the bungalow at the rear of the boarding house. Again, the absence of any documentary evidence as to the income received is stark but there seems no question that there was a reasonable amount of income being produced from the tenants and boarders.

47 Mr Garel's financial position was in distinct contrast to that of Ms Jeffrey-Potts. He did not work for a year and a half after leaving school. When he left Warracknabeal and came to Melbourne in 1988 at the age of 20 he obtained intermittent casual work as a builder's labourer.[56]

48 In June of that year, he obtained permanent employment with McDonalds which continued through to 1994 (and, indeed, to the present time). Prior to 1994, most of his savings had been depleted by bad investments in Pyramid and Estate Mortgage. He could not provide any accurate estimate as to the amount invested[57] and subsequently lost, other than it could have been a little more than six thousand dollars.[58]

49 There is no satisfactory evidence as to the amount of savings or disposable funds available to him in 1994, although absent a gift or a very successful day at the races, it would seem likely that such funds were unsubstantial.

50 One could infer that his 1994 wage was around $350.00 net per week. As at the end of 1996, he was earning around $400 net per week[59] with outgoings which, I would estimate on his evidence, at between $100 to $150 per week.

51 Mr Garel's tax returns from the financial year ended June 2003 to June 2009 were tendered.[60] It is not necessary to refer to each return other than to cite a couple of examples. In 2004, his take home pay from McDonald's was approximately $522.00. By 2009, it had risen to $663.00. During this period his taxation returns also revealed income from the rental of the properties.

The purchase of the first unit (Unit 2 Victoria Court) in 1994

52 The following facts (which are my findings) are not in issue in respect of the purchase of Unit 2 Victoria Court in November 1994:

(a) prior to its purchase both Ms Jeffrey-Potts and Mr Garel inspected the unit;

(b) it was also inspected by a building consultant engaged by Ms Jeffrey-Potts and Mr Garel prior to purchase;

(c) it was purchased for the sum of $132,200 in Mr Garel's name;[61]

(d) an initial deposit of $1,000 in cash was paid on 16 November 1994 by Ms Jeffrey-Potts to Mr Ian Hill of Parkside Real Estate, the vendor's agent, with a receipt issued in the name of "Mr Garle";[62]

(e) the balance of the deposit of $12,200 in cash was paid on 23 November 1994 to Ms Glenda Beer of Parkside and the receipt issued in the name of Mr Garel;[63]

(f) the contract of sale and the transfer of shares were in the name of Mr Garel;[64]

(g) the solicitor's account for conveyancing fees was rendered to Mr Garel;[65]

(h) settlement occurred on 5 December 1994 with the sum of $118,425.34 being paid;[66]

(j) rent derived from the unit was collected in cash and paid into a Bank of Melbourne account opened in Mr Garel's name.

53 There were two matters fundamentally in dispute as to the purchase of the unit:

(a) the provenance of the funds used in its purchase; and

54 Ms Jeffrey-Potts gave evidence that she, with the assistance of Mr Garel, commenced searching for appropriate properties so that she could build up an investment portfolio for her retirement.

55 She steadfastly denied the proposition that any part of the inspection of the unit or negotiations for its purchase was for the purpose of providing Mr Garel with an investment or that her funds used for the purchase were a loan to him.

56 Ms Jeffrey-Potts swore that prior to negotiating the purchase of the unit in 1994 she and Mr Garel had a discussion in the lounge room at the boarding house to the following effect: she was worried about her daughter getting her hands on her money which she suspected would be used to buy drugs and asked him to put the property in his name and hold it in trust for her:[67]

I said to him that I was very concerned about my daughter and I thought - I didn't see her smoking but when I saw those photos and she was very thin and had her hair cut and what have you the way she had I thought she was a druggie. And I didn't want my money that I was going to invest, going to someone who was on drugs. I didn't want my money spent in that way and if it was in my name she could have kind of put pressure on me to get money from me, but if it was in Garel's name she wouldn't know. And so he offered to look after my properties and put them in trust for me, and that was the word that was used. I'd trust him with my properties if they were - yes. That was the deal. And he was a young boy and I thought I could educate him a little bit for his future.[68] (emphasis added)

She went on to explain that in effect this was "an ideal situation" for her superannuation.[69] She said that on many occasions Mr Garel had said to her that she could have the properties at any time[70] and that he would look after the properties for her. She accepted Mr Garel's word (rather than formulating an agreement to this effect in writing) because that was the way her father had done business.[71] Throughout her evidence she continually reiterated that the purchase of this unit was solely for her benefit.

57 Ms Jeffrey-Potts said that she alone carried out the negotiations to purchase the unit.[72] Whilst Mr Garel was present at both the inspection of the unit and during the course of the dealings with the agent it was, essentially, as part of his relationship with her. Mr Garel also did not dispute that in dealing with agents it was Ms Jeffrey-Potts who conducted the negotiations and, in effect, did the deal for the purchase of the unit.

58 As I mentioned earlier, Ms Jeffrey-Potts was adamant that the source of the funds for the two payments of the deposit ($1,000 and $12,200 paid to Parkside Real Estate, the agent for the vendor) and the balance of the purchase funds came from monies held by her,[73] or to put it more bluntly, cash she kept at home "under the bed".[74]

59 Mr Garel gave evidence that in the years preceding the purchase he and Ms Jeffrey-Potts discussed finances. After a couple of bad investments he was advised by her to invest in property. On his account, the two looked at properties with an eye to purchasing an investment property for Mr Garel. In 1994 in particular, they looked at a unit in Withers Street, Albert Park.

60 They then became aware that Unit 2 Victoria Court was on the market and inspected the property and went to the agent together (which does not seem to be in issue). Ms Jeffrey-Potts conducted the negotiations for its purchase. Mr Garel agreed that the first amount of $1,000 was paid by Ms Jeffrey-Potts in cash to Mr Hill, the agent.[75] However, he asserts that the $12,200, the balance of the deposit, was provided by him from his savings account with the Commonwealth Bank.[76] Mr Garel said that the money used to provide the balance of the settlement monies - in the region of $120,000, comprised a combination of funds advanced to him by Ms Jeffrey-Potts and his own money. He obtained $120,000 by way of a gift from his mother and $3,000 from his uncle as a result of meetings in Warracknabeal.[77] To put it more precisely, he says that the amount of $85,000 in total was provided by Ms Jeffrey-Potts towards the purchase and he provided the balance of around $33,500. Ms Jeffrey-Potts (who Mr Garel says accompanied her on the trips to Warracknabeal) denies any such visit occurred.[78]

61 Mr Garel denied the conversation set out at [56] took place and also denied ever saying that Ms Jeffrey Potts could have the units back at any time.

62 At this stage it is convenient to turn to the evidence, outside of the two protagonists, relevant to the purchase of this unit. This body of evidence was admissible by reason of s 64(3) of the Evidence Act 2008 (Vic) and was probative in that it was said to go to Ms Jeffrey-Potts' state of mind at the time of the relevant conversations.

63 Mrs Mary Brown, a friend of Ms Jeffrey-Potts, gave evidence as to a discussion in 1994 with Ms Jeffrey-Potts. Ms Jeffrey-Potts told her that she had $120,000 to invest and asked her what options were available to her and mentioned a court case she had won. Mrs Brown referred her to an adviser at the ANZ Port Melbourne branch.[79] She also recalled that in November of that year Ms Jeffrey-Potts told her that she had put a deposit on a property in Victoria Avenue.[80] She had told Mrs Brown that she wanted to build a property portfolio for her retirement.[81]

64 Mr Ian Hill was the sales manager at Parkside in Albert Park in 1994. Unit 2 Victoria Court was listed with his company and handled by Mr Gerard Ballantyne, a Parkside employee. Mr Hill was asked by Mr Ballantyne to assist as the sale involved a company share transfer rather than a strata title transfer.[82] Ms Jeffrey-Potts conducted the negotiations.[83] He had several meetings with Ms Jeffrey-Potts in relation to the purchase of the unit. Ms Jeffrey-Potts told him on the first occasion when he went to the unit with Mr Ballantyne that she wanted to develop an investment portfolio and that it was a good area to invest in.[84]

65 Although Mr Ballantyne handled the negotiations, it was Mr Hill who accepted the first deposit of $1,000 in the boardroom at the Parkside offices on 16 November 1994. He regarded Ms Jeffrey-Potts as being the driving force behind the purchase. Mr Hill recalled Ms Jeffrey-Potts bringing $1,000 in cash for which he provided a receipt.[85] He wrote out the receipt in the name of Mr Garel, having been told by her that it was going to be placed in Mr Garel's name as she did not want it in her name:

Zoay informed me that it was going to be in the name of Leigh Garel's name and he was going to act as trustee for her because she didn't want the property in her name, for reasons that I didn't ask that were private.[86]

He did not recall whether Mr Garel was present. She said she would pay the balance in seven days.[87]

66 Mr Hill also recalled a discussion with Ms Jeffrey-Potts in which she said that she would continue to look for property within the area to build up her nest egg or investment portfolio which she proposed to put in Mr Garel's name as trustee for her.[88] Mr Garel denied this conversation.[89] Mr Hill thought that Mr Garel was present at the meeting at the unit[90] but could not recall whether he was present when the deposit of $1,000 was paid. As he put it "I was transacting business with Zoay really. That was what it came to".[91]

67 Mr Hill also gave evidence of a subsequent discussion with Ms Jeffrey-Potts (after payment of the deposit) in the backyard of the boarding house where he spoke to her about what he perceived were the risks of placing the property in Mr Garel's name. On his account, he said to her words to the effect "Do you know what you are doing?" to which she replied: "Yes, I'm happy with what I am doing".[92]

68 Although Mr Hill was recalling events which transpired nearly 17 years earlier and had engaged in many, many transactions since that time in his job as a real estate agent, I accept his evidence as to these conversations. He has no interest in the litigation and had no ongoing relationship with Ms Jeffrey-Potts as he left the area six months later.[93]

69 Ms Glenda Beer was also employed at Parkside and accepted the second instalment of the deposit in cash on 23 November 1994. She wrote out the receipt for the payment of $12,200. She said she had first met Ms Jeffrey-Potts when "they purchased property at [Victoria Court]"[94] - referring, I assume, to Ms Jeffrey-Potts and Mr Garel. As proved to be the norm over the ensuing years, on this first occasion Ms Jeffrey-Potts and Mr Garel came to the office together. Ms Jeffrey-Potts did the talking and instructed Ms Beer to put the receipt in Mr Garel's name. She could not recall whether Mr Garel or Ms Jeffrey-Potts handed the cash to her. I accept her evidence as to the circumstances surrounding the payment of the deposit.

70 In addition to contemporaneous statements made by her around the time of the purchase, Ms Jeffrey-Potts also relied upon subsequent statements made by her to others as to ownership and admissions (either in the form of direct statements or by silence) on the part of Mr Garel.[95]

71 Mrs Mary Brown gave evidence that on three separate occasions she discussed ownership of the units with Mr Garel. On the first occasion at a body corporate meeting of Victoria Court in 2003, Mr Garel said that he was not proxying for Ms Jeffrey-Potts because "the properties are in my name in trust for Zoay, the boss".[96] On the second occasion in 2004 or 2005 at the boarding house, when asked by Mrs Brown as to the ownership of the Victoria Court properties Mr Garel said "Zoay; the boss" owned the properties.[97] On the third occasion, again at the boarding house in 2005, when asked whether the keys on the back of the door were for Zoay's properties he replied "Yes".[98]

72 In cross-examination, Mrs Brown was not shifted from her account of these conversations, however she acknowledged that Mr Garel "was involved with the properties too"[99] and it was necessary to involve him in correspondence concerning the properties.[100]

73 Mr Garel denied each of these conversations and particularly ever using the expression "Zoay the boss".[101]

74 I accept that Mrs Brown endeavoured to give truthful evidence but on this point I am unable to reach a concluded view as to the veracity of one or other of these accounts. Whilst I have doubts about aspects of Mr Garel's evidence I think it unlikely he used the expression "Zoay the boss". I also cannot reconcile such a statement with my subsequent conclusion as to the ownership of Unit 2 Victoria Court and in particular, the documentary evidence. In the result, I am not persuaded that Mr Garel made such statements.

75 Mr John Russo also related conversations in which Ms Jeffrey-Potts spoke of her ownership of the units in the presence of Mr Garel and to which Mr Garel did not demur.[102] He specifically recalled a conversation in which she announced that she had bought a property "in Leigh's name".[103]

76 Mrs Judith McCartney recalled many conversations both at her home and at restaurants in Mr Garel's presence in which Ms Jeffrey-Potts had declared her ownership of the units, again with no demur from Mr Garel.[104] Although she thought that these discussions took place around 1993, they related to Beaconsfield Parade properties and it would seem more likely to have been several years later.[105] In any event, she recalled distinctly Ms Jeffrey-Potts stating that she was buying "a property" and that she was "putting them into Leigh's name".[106]

77 Subject to my remarks concerning Mrs Brown's evidence I accept the evidence of each of these witnesses concerning these discussions. Mr Garel's failure to make any denial is consistent, I think, with Mr Garel's character as each of the witnesses stated - he was a much younger person in the relationship with Ms Jeffrey-Potts' friends; Ms Jeffrey-Potts invariably did most, if not all, the talking. Ms Glenda Beer described him as being "incredibly shy".[107] Putting to one side Mr Garel's failure to deny these statements, they are consistent, as discussed subsequently, with the fact that Ms Jeffrey-Potts made contributions to the purchase of the units over a number of years.

78 Mr Garel also relied upon admissions made by Ms Jeffrey-Potts inconsistent with her declarations of ownership. There was the testimony of Ms Diane Downes and Mr Maurice Peachey. Each gave evidence of admissions made by Ms Jeffrey-Potts in relation to ownership of the units. Both referred to a conversation with Ms Jeffrey-Potts at a family function in which she said that Leigh, Mr Garel, was a millionaire and owned two blocks of units as she had taught him to invest.[108] Ms Downes also mentioned conversations in which Ms Jeffrey-Potts said "we have to be home by Sunday, for Sunday is rent day, Leigh has to collect his rents". Ms Jeffrey-Potts denied such a conversation.[109]

79 Ms Downes' credit was attacked on the basis that she had not mentioned all of these conversations in an affidavit filed by her in this proceeding. However, given it was an interlocutory application, one would not expect every conversation to be deposed to. I took the view that she was a believable witness whose evidence was accurate and at least one of the conversations was corroborated by her partner Mr Peachey, whose evidence I also accept.

80 Mr Peachy's evidence, not shaken by cross-examination, was that Ms Jeffrey-Potts at a family function mentioned that "Leigh owns the units, and how he's invested his money in these units and how he's going to be a very - he's going to be a millionaire".[110] This type of statement was repeated on other occasions - including at the name day for a grandson.[111]

81 Mr Tony Thompson, a Westpac home finance manager responsible for the loans taken out by Mr Garel, met on a number of occasions with Mr Garel and Ms Jeffrey-Potts - he estimated between six to ten occasions.[112] The loans were taken out in Mr Garel's name and the bank's calculations based on Mr Garel's income.[113] At no time at these meetings did Ms Jeffrey-Potts suggest that she had any interest in the properties or that they were held in trust.[114] Mr Thompson had never been told that Ms Jeffrey-Potts had put money towards these properties.[115]

82 Mr Gary Trowsdale, the accountant, saw Ms Jeffrey-Potts and Mr Garel approximately once a year over a period of nearly fifteen years for the preparation of Mr Garel's tax returns. It was never suggested by Ms Jeffrey-Potts that she had an interest in the properties. At no time did Ms Jeffrey-Potts mention advancing funds to Mr Garel or that he held the properties in trust for her.[116]

83 The evidence of both Mr Thompson and Mr Trowsdale was relied upon by Mr Garel as giving rise to admissions by conduct in the form of silence on the part of Ms Jeffrey-Potts.

84 The end result of this miscellany of evidence both as to state of mind and admissions is, I am afraid, inconclusive, particularly so when added to the other pieces of evidence concerning ownership of this unit and the other units. Simply put, it is impossible to reconcile the various accounts (notwithstanding my acceptance of the evidence of a number of the witnesses) and to draw any affirmative conclusion one way or another based on the statements made to others or their respective silence, other than it is clear that Ms Jeffrey-Potts made contributions to the purchase of these units. It is equally as clear that Ms Jeffrey-Potts was aware of the risks of the properties being placed in the name of Mr Garel.

85 I should now go to the documentary evidence which I regard as critical to determination of the dispute concerning this unit. Remembering that settlement was effected on 5 December 1994, there are three pieces of documentary evidence relating to the dealings between the two around this time.

86 The first in time is a copy of an instruction given by Ms Jeffrey-Potts on 21 November 1994 on the back of an envelope. It reads as follows:

I spoke to Katz Solicitors a Mr Raleigh at 9.AM Monday 21 Nov 94.

Explaining our settlement was on DEC 5th & the prospectus says we have 14 day (sic) in which to reply and today Monday 21 Nov is 14 days from the 5 Dec. could he see us earlier. I also explained that the VENDOR ASKED US FOR AN EARLIER SETTLEMENT BECAUSE WE HAD PLANNED A SIXTY DAY SETTLMENT. SO AT HIS REQUEST WE WERE ENDEAVOURING TO COMPLY.

KEEP THIS AS EVIDENCE PLEASE.

PLEASE WRITE TIME OF APPOINTMENT AND LEAVE ON MY CHAIR.[117]

87 As is apparent, the document refers to "our settlement" and its other references to the settlement are in the first person plural.

88 Ms Jeffrey-Potts said that this was a contemporaneous note made of discussions with the solicitor acting, at least nominally, for Mr Garel and that the instructions contained within it were directed to Mr Garel.[118] Mr Garel did not dispute this interpretation.

89 The next is a copy of a hand written note[119] of Mr Garel dated 19 December 1994 and also signed by Ms Jeffrey-Potts which reads as follows:

I owe B.E. Zoey Jeffrey-Potts the some [sic] of $88,000 borrowed on 5 December 1994 for Unit 2, 174 Victoria Avenue Albert Park. Payment to commence 1 Jan 1995 for six years ending 1 Jan 2001. $282.05 is to be paid weekly. In the case of B.E. Zoey Jeffrey-Potts death this debt is cleared. If W. Lee D Gorel dies the unit belongs to B.E. Zoey Jeffrey-Potts.[120]

90 Ms Jeffrey-Potts did not dispute that she signed the original and dated it 19 December 1994.[121] She explained the circumstances as follows: it was bought to her already written out by Mr Garel and presented to her in the lounge at the boarding house. Ms Jeffrey-Potts then gave the following extraordinary and incomprehensible description of the circumstances surrounding the signing of the loan acknowledgement:

COUNSEL: Right. And do you know why he wrote it out? Did he tell you the - why he was giving it you or why he presented it to you?---Well I said that they were my properties and I signed it that that wasn't so, I told him.

...

COUNSEL: What was said?---I said that I wouldn't - that he wanted, I think to buy them from me but I told him no, they were mine.

...

COUNSEL: Yes. And are you saying that Mr Garel wanted to buy that unit from you? ---Yes.

COUNSEL: Had he paid you any money?---No.

COUNSEL: All right. Now why then did you sign this document?---Because I told them there was no deal.

COUNSEL: Yes. And what did he say to that?---Accepted it.[122]

COUNSEL: Now, this provides for payments of $282.05 per week paid weekly for six years, did he ever pay you any monies?---No, it never transpired.

COUNSEL: All right, it also says in the case of B E Zoay Jeffrey-Potts debt, this debt is cleared---It says that, yes.

COUNSEL: Is that what you agreed to at the time?---Well no, because I mean I told him it wasn't on.

COUNSEL: But did you recall discussing any of these words with him at the time you signed the document or prior to signing?---Yes, I'd signed it that I'd sighted it.

HIS HONOUR: I'm sorry, say that again. I'm sorry Mrs Jeffrey-Potts, say that again.---I signed it that I'd sighted it but I knew that he couldn't afford to pay me that much money.

HIS HONOUR: You say I signed it but I sighted it, what does that mean?---Well I'd seen what he'd written, but I didn't agree to it.

HIS HONOUR: But is that your signature on the document?---Yes sir.

HIS HONOUR: Is it Mr Garel's signature on the document?---Yes. .[123]

Ms Jeffrey-Potts' evidence in cross-examination as to the signing of the loan acknowledgement was equally as incomprehensible.[124]

91 I do not accept Ms Jeffrey-Potts' explanation that she did not understand the terms of the December note signed by her shortly after settlement of the purchase of the unit. Nor do I accept that she signed it without regard to its contents. It would have been easy for Ms Jeffrey-Potts to have compiled a document affirming that the property was held on trust. Rather than do that, the note, particularly the use of the words "I owe" and "debt" support Mr Garel's account that the funds provided by Ms Jeffrey-Potts and used to purchase the unit were loaned to Mr Garel,[125] as does of course the stipulation in relation to weekly payments.

92 Ms Jeffrey-Potts, in cross-examination, described the document as laughable[126] because, so she asserted, it was impossible given Mr Garel's income for him to be able to maintain the payments at the rate stipulated. Given that he was earning in the region of $400 net per week then that proposition may or may not be correct - but it does not affect the fact that she signed the document.

93 I reject Ms Jeffrey-Potts' suggestion, maintained by counsel in closing submissions, that the true purpose of the loan acknowledgement was to provide for the eventuality of one or the other dying.[127] Self-evidently, that purpose would have been easy to achieve by compiling a document that did not purport to verify a loan. Similarly, I reject the attack on the contents of the loan acknowledgement on the basis that Mr Garel could not have afforded to repay that weekly sum (just over $280) given that his wage was no higher than $400. True it is that, as counsel submitted, Mr Garel never made such a weekly repayment,[128] however the plain fact is that the document on any sensible reading records the existence of a loan and a method of repayment and was signed by both parties. Whether the repayments were made in the future is neither here nor there if I accept the veracity of the document. It is to be remembered that on this point Ms Jeffrey-Potts did not contend that the document was a forgery, that she had not signed it or, for that matter, that she was placed under duress at the time she signed it.

94 Mr Garel's account is that he was instructed by Ms Jeffrey-Potts after the settlement to draw up a document confirming that he had borrowed $88,000 from Ms Jeffrey-Potts to facilitate the purchase of the unit. That version is consistent with the contents of the loan acknowledgement. In addition, this sum is consistent with the contents of the third document if Mr Garel's evidence as to the manner in which it was prepared is accepted.

95 The third document is a copy of two pages which appear to be part of a 1991 diary kept by Ms Jeffrey-Potts. The pages bear the dates 27 and 28 December,[129] and contain entries that are mostly in Mr Garel's handwriting.[130] It is headed in Mr Garel's writing - "Money owed to Zoay by Leigh". According to Mr Garel, the original two pages were within this diary which he referred to as a loan book. Mr Garel last saw the diary in 2004. When the diary was produced in court from the possession of Ms Jeffrey-Potts,[131] many pages had been removed, including those for 27 and 28 December 1991. There was no explanation for the removal of these pages, although each appeared to suggest that the other had effected the removal.[132]

96 The December pages appear to record payments made from 15 November 1994 to 8 February 1996. On its face, the document records a number of payments made by Ms Jeffrey-Potts in relation to the purchase of the first unit and after 19 December 1994, payments apparently made in reduction the amount owing as at 19 December. The largest amount recorded prior to 19 December is for $84,846.34 paid to the vendor (as noted subsequently on the document by Ms Jeffrey-Potts). Given the nature and dates of the entries they are unlikely to relate to any subsequent property purchase. Each entry from 19 December 1994 is initialled by both Ms Jeffrey-Potts and Mr Garel. Mr Garel said that this was a running account of monies he owed to Ms Jeffrey-Potts in relation to this unit with entries recording payments made by both of them.[133]

97 Each were agreed that the diary in its original form contained a record of monies paid in relation to the purchase of the first unit and subsequent purchases. However, according to Ms Jeffrey-Potts, the diary simply recorded payments made by her in relation to particular properties - it was certainly not a "loan book"; rather, a record of monies expended by her on the properties.

98 Mr Garel said the "loan book" in its original form not only recorded monies paid towards the purchase of properties, at times financed by Ms Jeffrey-Potts, but also any reductions to what he said were loan funds effected by his repayments.[134] He said that in 2004 he wrote out on a piece of paper the total monies outstanding in relation to each of the properties at that time as recorded in the loan book - which totalled $244,473.00.[135]

99 Ms Jeffrey-Potts, whilst conceding that she first saw the December pages (as tendered in two loose sheets) after February 2006,[136] and that her initials appear on many of the entries, disputed that the original was a running document: rather it was initialled by her on one occasion;[137] it was materially different from the original pages of the diary. On her version, the running totals and the minus sign "-" had been made subsequent to the time when she initialled the entries - as had the wording at the top of the document.[138]

100 One entry, in particular, is consistent with Mr Garel's contention as to the manner in which the entries in the December pages were made: on its face on 19 December 1994 a payment of $48.34 was made to reduce the debt to $88,000 - the amount specified in the loan acknowledgement of the same day. On Ms Jeffrey-Potts' version, this amount would have been added to the debt and produced a sum of $88,096 approximately: she said it recorded payment by her of an unspecified bill. I think this is highly unlikely, particularly given the contents of the loan acknowledgement.

101 I also think it more likely that the individual initialling of the December pages[139] was made on a contemporaneous basis rather than on one occasion in 1996 as asserted by Ms Jeffrey-Potts. If it was to be acknowledged in 1996, then one acknowledgement at the conclusion of the document or, at the least, at the bottom of the page, would be more likely as opposed to the initialling of different parts of the document.

102 There is a further problem with Ms Jeffrey-Potts' account. One of the amounts paid by her (on her version) was in the sum of $55,000 which she said was by cheque to Mr Garel (consistent with the notation on the document). However, on her evidence she had no cheque account at this time and no other source for the cheque was established. She vaguely referred to another unidentified venture as being the source.[140]

103 I should say something here about the burden of proof. In this proceeding the legal burden of proof in establishing an equitable interest in one or all of the properties rested on Ms Jeffrey-Potts. It follows that she also carried the evidential burden to establish her particular claims. That burden remained constant. However, Mr Garel, in my opinion, also carried a burden of persuasion in relation to the existence of a loan to counter Ms Jeffrey-Potts' case based upon an equitable interest.

104 In discussion with counsel at the conclusion at the case I think it was accepted that in this regard Mr Garel carried a burden of persuasion. The nature of this burden was identified by Heydon J in Strong v Woolworths Ltd.[141] Although in dissent in the result, his Honour's statement of principle is not, I suggest, controversial:

[51] Of the expression "evidential burden", Sir Nicolas Browne-Wilkinson V-C said that in his "experience, every time the phrase "evidential burden" is used it leads to error". It can be used in at least three senses.

[52] In the first sense, "evidential burden" refers to the duty of one party (usually the party bearing the legal (ie persuasive) burden, who in most instances will be the plaintiff) to call sufficient evidence to raise an issue as to the existence or non-existence of a fact in controversy. This must be done to prevent a no case submission succeeding (or if the relevant evidential burden rests on the defendant, to prevent the issue otherwise being withdrawn from the jury). The Privy Council (Lord Hodson, Lord Devlin, Viscount Dilhorne, Lord Donovan and Lord Pearson) criticised the expression "evidential burden of proof" as follows:

It is doubtless permissible to describe the requirement as a burden, and it may be convenient to call it an evidential burden. But it is confusing to call it a burden of proof. Further, it is misleading to call it a burden of proof, whether described as legal or evidential or by any other adjective, when it can be discharged by the production of evidence that falls short of proof.

However that may be, this is what Wigmore called the duty of producing evidence.

[53] In the second sense, "evidential burden" refers to circumstances in which a plaintiff calls evidence sufficiently weighty to entitle, but not compel, a reasonable trier of fact to find in the plaintiff's favour. There is then said to be an "evidential burden" in the sense of a "provisional" or "tactical" burden on the defendant: if the defendant fails to call any or any weighty evidence, it will run a risk of losing on the issue - that is, a risk that at the end of the trial the trier of fact will draw inferences sufficiently strong to enable the plaintiff to satisfy the legal (ie persuasive) standard of proof. The "provisional" or "tactical" burden raises the question whether a defendant should as a matter of tactics "call evidence or take the consequences, which may not necessarily be adverse".

[54] The third sense in which the expression "evidential burden" is employed arises where a plaintiff, in discharging the evidential burden in the first sense, calls evidence so strong that a reasonable trier of fact would be bound to decide the issue in the plaintiff's favour if the defendant calls no evidence. It is sometimes said that an "evidential burden" rests on the defendant which, if not discharged, will cause the defendant to lose and which, if discharged so as to cause the trier of fact either to reject the plaintiff's evidence or to be undecided, will result in the legal (ie persuasive) burden on the plaintiff not being satisfied.[142] (citations omitted)

105 Here, the second category applied. Ms Jeffrey-Potts led evidence of contributions to a number of the units (either by way of deposit or by settlement funds or both). The evidential burden in relation to establishing the existence of a loan or loans required Mr Garel to lead "weighty evidence" or risk losing on the issue. He does not carry the legal onus to establish the existence of a loan but there must be sufficient evidence available to displace a conclusion on the balance of probabilities that the monies were provided by Ms Jeffrey-Potts by way of contribution to the purchase price; not as part of a loan agreement.

106 I am satisfied that the loan acknowledgement means what it says and that it was signed by both Mr Garel and Ms Jeffrey-Potts. This is consistent with the entries in the December pages. Ms Jeffrey-Potts' explanations, as I have discussed, for signing the document are implausible. Whilst I accept the November instruction may point more to a joint enterprise than a loan, it is a document that works both ways (i.e. it may be consistent with the two acting together on the basis that the money would be loaned; alternatively on the basis that this was a joint enterprise). Whatever the case, the stark reality is that the loan acknowledgement was signed by Ms Jeffrey-Potts and it makes it abundantly clear that the monies were advanced by way of loan. I accept Mr Garel's evidence as to the circumstances surrounding the compilation of the acknowledgement and its purpose.

107 In reaching this conclusion I have taken into account the contemporaneous statements made by Ms Jeffrey-Potts to others as to her ownership of this unit and others as well as later accounts to her friends - which are to be balanced against statements by her acknowledging that Mr Garel owned the properties. In particular, I have taken into account the evidence of Mr Hill which I regard as significant. Ultimately I am forced to the conclusion that Ms Jeffrey-Potts said different things to different people and that her state of mind and intentions (at least as may be determined objectively) fluctuated to such an extent that the vast majority of statements made by her (whether on oath or out of Court) are unreliable. I have also taken into account the asserted admissions (by conduct) made by Mr Garel which I have set out at [62]-[76] - none of which persuades me to view the documentary evidence in any different light. Nor do the criticisms of Mr Garel's evidence on this issue by Ms Jeffrey-Potts' counsel persuade me otherwise. One criticism was the paucity of documentary evidence to support the provision of such a loan. To use the vernacular, this was "a bit rich" given that Ms Jeffrey-Potts went out of her way to avoid any documentation connecting her with the properties; moreover she has not identified one piece of documentary evidence to support the existence of an express trust - her primary case. More importantly, there is documentary evidence supporting the existence of the loan and which I regard as critical, namely the loan acknowledgement.

108 I also reject the proposition advanced by counsel for Ms Jeffrey-Potts that any Jones v Dunkel[143] inference can be drawn against Mr Garel on the basis that he did not call his uncle as to the provision of family funds at this time. It is sheer speculation to endeavour to determine what evidence his uncle could have given about his mother's gift of $120,000. Patently, the relevant witness on this point would have been his mother who is now deceased.

109 It follows from my acceptance of the loan acknowledgement and the interpretation of the December pages that Ms Jeffrey-Potts' account of the discussion in late 1994 in the boarding house cannot be accepted. She could not have signed the loan acknowledgement if there was, in fact, an arrangement with Mr Garel to hold the unit or units in trust for her. It should be rejected on that basis alone and the account of Mr Garel on this point should be accepted. There are, however, other good reasons which I now set out for rejecting Ms Jeffrey-Potts' account which also go to her credibility overall.

110 First, I do not accept her account of the motive behind placing the property in the name of Mr Garel. In 1992, Adelle (who she only saw and spoke to occasionally) returned to Australia from a visit to the United Kingdom. She stayed for a couple of days with Ms Jeffrey-Potts and met Mr Garel. There is a dispute between Mr Garel and Ms Jeffrey-Potts as to how the film in Adelle's camera came to be developed by Mr Garel (or at least he arranged for its development). It is not necessary to resolve that contest: according to Ms Jeffrey-Potts, when the photographs were developed, two photographs showed plants hanging in a cupboard which Mr Garel told her was marijuana.[144] On this basis, plus the fact that Adelle looked sad at the time of the visit, Ms Jeffrey-Potts concluded that she was taking illicit drugs. On a subsequent visit to Adelaide, Adelle failed to invite her into her house and this, according to Ms Jeffrey-Potts, confirmed her suspicions. So, it was said, she determined to place not only the first unit but all the other units purchased over a period of twelve years in Mr Garel's name.

111 As mentioned subsequently, several witnesses recalled that they had been told by Ms Jeffrey-Potts that Adelle was on drugs and that this was the reason for the properties being held in Mr Garel's name. Indeed, Mr Garel confirmed this account which he qualified by stating that Ms Jeffrey-Potts only told people her daughter was on drugs to explain to others why they were estranged.[145] Mr Garel said that in 1992 he had developed photographs from Adelle's camera but that he did not mention anything about marijuana. On his account, Ms Jeffrey-Potts pointed out the plants and told him that this confirmed her belief that her daughter was "a druggie."[146]

112 As I mentioned earlier, I permitted evidence to be given by a number of witnesses as to discussions in 1994 with Ms Jeffrey-Potts in relation to this purchase. Some of the statements were made in the presence of Mr Garel, however others made in his absence were clearly firsthand hearsay. I ruled that this was admissible as an exception to the hearsay rule by reason of s 67(4) of the Evidence Act 2008 (Vic) and may have probative value as to Ms Jeffrey-Potts' intentions at this time.

113 I have already referred to aspects of the evidence of Mrs Mary Brown. She also said that she was told by Ms Jeffrey-Potts, in 1995, that she had placed another property (that is, subsequent to the first purchase) in Mr Garel's name as she was estranged from her daughter and did not want her money spent on drugs and that she trusted Mr Garel.[147]

114 Mr Lindsay Beer recalled a conversation with her to the effect that she had put the units in Leigh's name as she had a problem with her estranged daughter.[148]

115 Ms Glenda Beer recalled Ms Jeffrey-Potts telling her at the time of the purchase of the first unit that she did not want her daughter getting at her assets.[149]

116 Mr John Russo gave evidence that Ms Jeffrey-Potts told him in the presence of Mr Garel, that she had purchased another property in Mr Garel's name and she did so because her daughter had a drug problem and she wished to keep her properties "at arms length".[150] On his account, this conversation, which occurred at his home in the presence of his wife and Mr Garel, was not contradicted by Mr Garel.

117 Mrs Judith McCartney also recalled being at a restaurant in 1994 with Mr Garel and Ms Jeffrey-Potts and being told the property she was purchasing was going to be put in Leigh's name as she was estranged from her daughter in Adelaide.[151] It was not suggested that Mr Garel contradicted this statement.

118 Whilst I accept the evidence of each of these witnesses as to what they were told by Ms Jeffrey-Potts, I do not accept that this was the true reason behind the properties being placed in the name of Mr Garel. To put it bluntly, I do not accept the truth of the statements made by Ms Jeffrey-Potts.

119 Notwithstanding what she told others, the explanation is inimical to common sense - with no other evidence, Ms Jeffrey-Potts determined that photographs taken two years prior to 1994 demonstrated that her daughter was a drug addict to the extent that she would endeavour to exert influence upon her in relation to her properties or money. Although it is a question of the belief of Ms Jeffrey-Potts, I note that there was not a skerrick of evidence that Adelle had at any time taken drugs nor that she had made any demands or requests upon her mother.

120 Far from being an innocent in the commercial world, Ms Jeffrey-Potts was well able, in my opinion, to protect her own interests without resorting to placing the properties in the name of Mr Garel. She was (at least from 1995 onwards) an office bearer of an organisation known as Law Watch. She had for many years run the boarding house, and been involved in a number of commercial enterprises. This is hardly the background of someone who needed the protection of a front person in her property investments.

121 Even if one accepted that there was some risk of her daughter exerting influence in relation to the first purchase, those purchased later in the 1990s and during the 2000s were, in the absence of some persisting course of conduct of Adelle, one could reasonably have thought, unlikely to be the subject of any claim by her. Indeed, the evidence was that Adelle visited her in 2004 and also when Ms Jeffrey-Potts was hospitalised around 2009.

122 Then there are the inconsistencies in previous accounts of her motivation for putting the properties in the name of Mr Garel. In two affidavits sworn in May and August of last year, Ms Jeffrey-Potts set out several other bases (apart from that of quarantining the properties from the advances of her drug addict daughter) as to the purpose of placing the properties in Mr Garel's name. In an affidavit sworn on 5 May 2011,[152] she said as follows:

I did not maintain a bank account for many years as I had developed a neurological disorder that prevented me from writing correctly. I therefore considered it unwise to operate an account and instead relied on the defendant to conduct all banking. This remained the position when the properties were first purchased.

I had substantial savings which I mostly kept in cash and income from tenants in my two flats on the ground floor of my house at 176 Victoria Avenue, Albert Park and from rooms I let to boarders on the first floor of 176 Victoria Avenue. I built this cash reserve up over many years and as well received money from estates of members of my family.

I decided to purchase the properties as they were flats on real estate abutting the northern and eastern boundaries of my property, making them easy for me to manage them and providing me with a passive income.

I was 64 years old when the first property was purchased. As I needed to borrow funds, and did not have a bank account or employment, I asked the defendant if he would agree to hold the properties in trust in his name, which he did. (emphasis added)

Subsequently, in an affidavit sworn on 5 August 2011, she said as follows:

This proceeding involves a claim made by me relating to 12 investment properties I purchased between 1994 and 2006. the particulars of each property are set out in Schedule A attached to the statement of claim I caused to be filed in this proceeding. they principally relate to two sets of apartments, the first located at 82-84 Beaconsfield Parade, Albert Park, and the second relating to 168-175 Victoria Avenue, Albert Park which were purchased strategically for me to develop in due course as I have resided at 176 Victoria Avenue since I arrived from England in 1967. In 1994 I had been estranged from my daughter since she was 13 years old. I did not want to put the properties in her name in case she made a claim against my estate. Warren Leigh Garel ("Garel") was aware of this situation and offered to put the properties in his name to be held on trust for me so I could build up my property portfolio. I agreed to do so on the basis that in return I would house and care for him rent free. At the time Garel was a cleaner working at McDonalds and earned about $26,000.

Pursuant to an arrangement, I purchased each of the properties by way of paying the deposit for each property in cash to the vendors' estate agents and then arranging, with Garel to take loans out against each property which were put in his name to be held on trust for me. I went to the Bank of Melbourne in Clarendon Street South Melbourne to get the loans. I then collected the rent from each property and proceeded, over a period form 1994 onwards to pay off the loan on six of the twelve properties. (emphasis added)

123 In effect, the affidavits disclose two other motives for placing the properties in the name of Mr Garel: her resistance to opening a bank account in her own name owing to problems in the past with her handwriting and to avoid any claim being made by Adelle on her estate.

124 The clear inference to be drawn from the May affidavit was that her handwriting had continued to trouble her for some time, to the extent it was her belief that she could not operate a bank account in her own name. However, at the time of the purchase she did not have a neurological disorder (it was allegedly a result of an accident some 25 years earlier) and her handwriting was not affected.[153] No medical evidence was adduced to support this proposition. Her handwriting in her 1991 diary (which I have mentioned),[154] as well as other documents,[155] demonstrate that there was no difficulty whatsoever with her writing.

125 I do not accept her contention that she perceived it was unwise to open a bank account because of her previous affliction. In my view, this was nonsense. Equally so, the suggestion that she was concerned about her daughter getting her hands on her property.

126 The evidence-in-chief of Ms Jeffrey-Potts was particularly evasive on this issue. I endeavoured to clarify her answer to a question from her counsel:

Why was it in Mr Garel's name?---Because of my daughter. I didn't want her to get the properties and I thought it was better to have everything in his name for all reasons, tax purposes and everything else. And that's why I did it. To make life simpler.

HIS HONOUR: What did you mean by the last answer in relation to tax purposes?---Well, it was easier for him to give one - if - if I didn't know how the tax system would work and it was much better for everything to be in his name even though I gave the money so that there was no discrepancies.[156]

This answer was disingenuous as were her explanations in cross-examination of these inconsistencies.[157] They demonstrate the lengths that Ms Jeffrey-Potts would go to in dissembling as to the motive for Mr Garel's ownership of the properties.

127 Subsequently, and again in evidence-in-chief, she said of a conversation with Mrs Mary Brown:

I was putting them in trust to Leigh Garel because he had facilities for banking and I did not have a bank account at that time.[158]

128 The end result is that I am unable to make a finding as to exactly what motive Ms Jeffrey-Potts had for avoiding any legal connection with the properties other than that I regard the explanation relating to her fears concerning her daughter as false.

129 Secondly, her account of the source of the funds for this and the following two purchases was vague and inconsistent. By this I mean both how she came to acquire over $200,000 for the purchase of the first three units, as well as the manner in which it was provided to the vendors at settlement.

130 Ms Jeffrey-Potts was unable to say what amount she had in cash in 1994;[159] she could not remember whether she had $1,000 or $100,000 in cash at the time of the purchases.[160] Given what I perceive to have been her considerable business acumen, the idea that Ms Jeffrey-Potts did not know, at least in general terms, the amount of cash that she had on hand at any point in time is, simply put, inconceivable.

131 Ms Jeffrey-Potts also referred vaguely to an inheritance from her family and owning four properties in England prior to moving to Australia but the only documentary evidence provided in the course of the trial was that of an inheritance received by her nearly ten years later (in June 2004).[161] It was an extraordinary feature of this case that no bank statements, no tax returns, no BAS or IAS statements and no statements as to estate distribution were produced to demonstrate how it was she had accumulated the substantial amount of cash used to purchase the first three units, nor were the terms of settlement produced in relation to the solicitors claim. Ms Jeffrey-Potts simply relied upon her own assertion and scoffed at any alternative account.

132 Ms Jeffrey-Potts maintained that the funds for the purchase of this unit came from the settlement of the solicitors claim.[162] However her evidence as to how the settlement monies from the claim were utilised in the purchase was also unsatisfactory. In evidence-in-chief[163], in cross-examination[164] and in re-examination[165] she said that she received $120,000 in 1994 and this formed the bulk of the funds used for the purchase. She said that three cheques had been made out in her name, but she also said at the time she had no bank account and was unable to explain how these cheques ultimately formed part of the funds used for the purchase. Mr Garel agreed that the settlement money was received in 1994 but said that the correct amount was $70,000, which was deposited into the bank[166] (this had not been put to Ms Jeffrey-Potts). In my opinion both were mistaken as to the date. The solicitor's records to which I have referred do not support Ms Jeffrey-Potts' evidence as to the total sum of $120,000 being available in 1994. At best it was $88,000 and I am satisfied that $70,000 of the proceeds was used to pay out the Williams, Winter & Higgs loan in December 1992.[167] In other words, Ms Jeffrey-Potts' account as to the source of the monies used to purchase the unit cannot be accepted. I do not think this was a mistake or a memory lapse. Rather, it is consistent with her determination to deal in cash and obfuscate as to the source of the large amounts of money she kept at the boarding house. Her contemporaneous statements to others that she had funds to invest from the solicitors claim does not alter this conclusion.

133 Thirdly, I do not accept her account that Mr Garel, prior to the purchase of the properties, volunteered to hold the properties on trust for her. Such a remark would be quite out of context in the relationship between these two at that time. The idea that a twenty-four-year-old with a relatively modest educational background[168] working as a handyman at McDonalds would, in relation to a property investment of some significance, volunteer to hold the property on trust (using these words) is, I think, highly unlikely. Indeed, Ms Jeffrey-Potts said of him:

He wasn't capable of doing business. He was very shy and inexperienced.[169]

134 There is another point of some significance: in her evidence-in-chief which I set out at [56], Ms Jeffrey-Potts made no mention of the central point of the alleged agreement pleaded in her statement of claim: Mr Garel being permitted to live rent-free in the boarding house. This aspect only emerged in re-examination.[170]

135 Moreover, her account in evidence-in-chief of the conversation is directly contradicted by the version contained in the May affidavit set out at [122]. On this version, it was her request of Mr Garel and was motivated by her lack of a bank account.

136 In 1994, Ms Jeffrey-Potts was, as I have already noted at [38], a woman of considerable business acumen. She was capable of expressing herself clearly in written form as the instruction of 21 November 1994 demonstrates.[171] It would have been a particularly easy task for her to simply draw up a document reciting the terms of the arrangement between her and Mr Garel. She did not.

137 It is also not to be forgotten that Ms Jeffrey-Potts attended in the company of Mr Garel at the accountant's offices each year. Mr Trowsdale said that at no time was there any suggestion that these properties were being held in trust by Mr Garel for Ms Jeffrey-Potts.[172]

138 Counsel for Ms Jeffrey-Potts sought to invest Mr Garel with a knowledge of trusts,[173] far beyond that which I think likely. Essentially the suggestion was based upon Mr Garel's reading of a book called 'Making Money Made Simple' by Mr Noel Whittaker.[174] Mr Garel agreed that he had read this book "cover to cover" after it was provided to him by Ms Jeffrey-Potts.[175] There is a chapter on unit trusts within the book - it was on this basis that Mr Garel was said to have acquired a knowledge of trusts so as to be able to volunteer his consent to act as a trustee for the purchase of this unit and the other units. I reject the contention - a reading of the chapter demonstrates that it was directed to listed and unlisted property trusts and the picking out of particular sentences - nearly 20 years later - and then contending that Mr Garel had knowledge of the basic principles of trust law must be rejected. What is far more significant, as I have just mentioned, is the fact that neither Ms Jeffrey-Potts or Mr Garel mentioned to the accountant Mr Trowsdale on any one of their annual visits that the properties were held in trust. I accept Mr Garel's evidence that he did not, at this time, understand the nature of a trust.

139 I even doubt whether Ms Jeffrey-Potts understood, at that time, or perhaps subsequently, what was meant by holding properties on trust. In cross-examination, she said as follows:

COUNSEL: They were legally in his name and he was the registered proprietor of those properties that came under the Transfer of Land Act was he not?---He had them entrusted to me your Honour. My father did business like that in England and that worked and I did it here and that worked until now. It was always a word of trust.[176]

140 I should add that I cannot understand how Ms Jeffrey-Potts could have signed the loan acknowledgement given that she maintains the monies were held on trust.[177] It is totally incompatible with her asserted belief that, as a result of her discussions with Mr Garel, he was holding the property on trust for her.

141 Fourthly, there was Ms Jeffrey-Potts' evidence concerning Mr Garel's knowledge of the settlement of the solicitors claim. As I mentioned earlier, Mr Garel gave evidence that he believed the solicitors claim had been settled in 1994,[178] however the evidence adduced from the firm of solicitors, Nicholas O'Donohue, does not support the date.[179] It appears to have been settled in 1992 with payments made to Ms Jeffrey-Potts in that year and in 1993. Notwithstanding the error in the dates, Mr Garel gave detailed evidence as to his knowledge of that proceeding and Ms Jeffrey-Potts' involvement with the solicitors prior to the case coming on for trial, including that of attending of offices of Nicholas O'Donohue and meeting a Mr Michael Ahmed, the solicitor handling the claim - he recalled that the settlement was for around $120,000 and that three cheques were made out - one to Zoay, one to the State Revenue Office and the other to her mortgagee Williams, Winter & Higgs for $70,000.[180] In her evidence-in-chief, Ms Jeffrey-Potts originally said, correctly, that the case was settled in 1992 or 1993 but was not "too sure of the date". [181]

142 Unfortunately Mr Garel's account of the dealings with his solicitors had not been put to Ms Jeffrey-Potts in cross-examination. I permitted Ms Jeffrey-Potts to be recalled to give evidence on this issue. She said as follows:

COUNSEL: Yes, Mrs Jeffrey-Potts, I just want to ask you about some things that weren't put to you in cross-examination. Firstly, Mr Garel alleged that you were going to sack your solicitor or your lawyers prior to the hearing of the case you had some time prior to 1992. Do you recall?---I did have a case in 92, yes.

And he alleges that at some stage shortly prior to the hearing you were going to sack your solicitors and he had to talk to them to get them back?---That's not true. He was 16 years old and still at school at that time.

All right. Secondly, he also maintains that- - -

HIS HONOUR: I need to understand that answer. You said he was 16 years old and still at school, and does that mean at the time of the litigation - - - ?---In other words, he didn't come with me. No, that's not true.

I need to understand the answer you just gave. Does that mean that he had no involvement?---Correct.

Whatsoever, with the court action?---Correct.

Because the court action, and please tell me if this is wrong, because the court action had concluded by the time he came to your house?---Correct.

Thank you.[182]

143 To put it bluntly, this evidence is patently wrong and again demonstrates her determination to distance herself from Mr Garel at every possible opportunity. The evidence is unequivocal that the settlement was effected in or around 1992 at which time Mr Garel was 22 years of age and had been living at the boarding house for four years. Moreover, his account of what transpired, particularly involving the repayment to Williams, Winter & Higgs, fits comfortably with the account of Mr Curl, of that firm, as to the repayment of the loan to which I have already referred.[183]

144 Fifthly, there is mystery surrounding whether Ms Jeffrey-Potts had a bank account in her own name at this time. In her evidence-in-chief, she originally said that in 1995 she had a bank account with Westpac but did not use it because:

I preferred it to go off the property, any cheques, because it was my property.[184]

This answer was unintelligible and any subsequent search for an explanation was fruitless - other than that Ms Jeffrey-Potts was unsure as to whether she had an account at this time or not. Indeed, the evidence of Mr Garel was to the effect that she did have an account in 1994 and 1995 with the Bank of Melbourne - corroborated by Ms Jeffrey-Potts' statements to Ms Mary Brown that she had such an account with the Bank of Melbourne at the time of the purchase of the unit.[185] On the last day of the trial, evidence was led of inquiries made at two branches of Westpac which revealed no accounts held in her name.[186] The mystery deepens further when one endeavours to determine what happened to the cheques provided in 1992 and 1993 to Ms Jeffrey-Potts as a result of the settlement of the solicitors claim.

145 By the end of the trial, when recalled, she was adamant that she did not have a bank account at the time of the alleged deposit of the cheques.[187]

146 I cannot reconcile these raft of inconsistencies which I think became more stark as the trial proceeded.

147 In summary, I have come to the conclusion that Ms Jeffrey-Potts' evidence concerning the purchase of this unit, and for that matter much of her evidence in relation to the other units, is unreliable. In reaching this conclusion I am acutely aware of Ms Jeffrey-Potts' age and the likelihood that her memory may well have been affected by the passage of time. Notwithstanding these considerations, Ms Jeffrey-Potts gave her evidence in a forthright and direct fashion, particularly where Mr Garel was concerned. I thought she understood clearly the issues in contest between herself and Mr Garel and would rarely make a concession or admit of doubt where she perceived it affected her case.[188] Her evidence concerning events surrounding the purchase of the unit was inconsistent with the documentary evidence, which, in a case such as this, is extremely important. Indeed, the documentary evidence points squarely to the acceptance, at least in relation to this purchase, of the evidence of Mr Garel to which I now turn.

148 It was not in issue that Mr Garel (without borrowings or a gift) did not have sufficient funds to purchase this unit. His wage from McDonalds was less than $400 per week and even allowing that he was living board and rent free at the boarding house, any money saved would only make up a small portion of the total purchase price.

149 He said he used $12,200 from his Commonwealth account to pay the balance of the deposit and this "pretty well wiped me out".[189] He said that with Ms Jeffrey-Potts' encouragement he tried to obtain funds for the purchase from his uncle Robert, who eventually gave him $3,000,[190] and finally obtained $120,000 from his mother as a gift, which he withdrew from her account at the Commonwealth Bank at Warracknabeal.[191] He received this amount after the payment of the second deposit on 23 November 1994.

150 On his account, he made two trips to Warracknabeal, both with Ms Jeffrey-Potts, to endeavour to obtain funds from relatives. Ms Jeffrey-Potts said that she knew nothing about either trip which I took to mean that she could not recall either going to Warracknabeal at this time[192] or obtaining any money to be used for the purchase of the unit.

151 Counsel for Ms Jeffrey-Potts contended that Mr Garel's assertion of this gift could not stand in the light of an affidavit sworn by Mr Garel in May 2011 that Ms Jeffrey-Potts had provided at least $120,000 to the purchase of this unit.[193] In evidence Mr Garel said that he had been mistaken in this affidavit and that it was only after belated discovery by Ms Jeffrey-Potts of the December pages and the loan acknowledgement that he appreciated the true position.[194] Subsequently at trial Mr Garel said that the correct amount was $70,000 or perhaps $79,000. Mr Garel was extensively cross-examined about the inconsistencies as he was about the receipt of the $120,000 and his failure to utilise all of that sum for the first purchase.[195] His evidence on these issues was not altogether satisfactory. However, I repeat (perhaps to the point of exhaustion) that I regard the documentary evidence as being vital to the determination of this issue given the conflicts in the evidence of the parties.

152 I also reject the criticism of Mr Garel as to his evidence as to when he closed his Commonwealth Bank account and when he opened a Bank of Melbourne account.[196] To my mind, this was inconsequential and again the critical point is the documentary evidence. Nor do I accept that Mr Garel's evidence as to when he obtained the $120,000 from his mother is fatal to his case. Whilst it can be accepted that he obtained the funds after 23 November 1994 (the date the second deposit was paid), that does not preclude him obtaining the money from his mother and thus having the wherewithal to provide around $33,500 for his contribution to the settlement.

153 I have already referred in some detail to the contents of the December pages and the loan acknowledgement. Acceptance of the veracity of those documents means that Mr Garel must have had available to him funds from a source other than his own savings given the amount he said he invested in the purchase of the unit. On the evidence, the only source is the gift from his mother - although it does not necessarily confirm his account of the amount provided by her.

154 Acceptance of the veracity of the December pages also, I consider, makes it more probable that Mr Garel repaid Ms Jeffrey-Potts the amounts identified in that document. Admittedly his capacity to repay these amounts depends upon acceptance of his account of the gift from his mother. However, as I have indicated, I am persuaded that the document records payments made by him to reduce the amount outstanding and the largest payment of $55,000 in February 1995 is consistent with him receiving a substantial gift from his mother. It follows that as at 8 February 1996 Mr Garel remained indebted to Ms Jeffrey-Potts in the sum of $19,000 which has not be repaid.

155 I should also refer to the manner in which the unit was managed after the sale which is also consistent with Mr Garel owning the unit. The first tenant was Ms Norma Van Rees who lived in Unit 2, Victoria Court for nearly 10 years. She described Mr Garel as "the landlord". He collected the rent each month over that period and Mr Garel would issue the receipts.[197] She was aware that Ms Jeffrey-Potts and Mr Garel lived in the house next door and she occasionally had conversations with Ms Jeffrey-Potts. She recalled being told by her "that he was doing very well and that she had helped him".[198] Although she was cross-examined on the basis of a discrepancy between the receipt books and her evidence, there was nothing in this point. Only one of the receipts made out for her rent was completed by Ms Jeffrey-Potts - the many others were completed by Mr Garel. I accept her evidence and reject any criticism of her as a witness: she had no interest in the proceedings and was patently impartial. To my mind, she did her best to assist the court[199] and her evidence supports the proposition that Mr Garel was, indeed, the owner of the unit.

156 Although I have reservations about Mr Garel's credibility on other issues (which I shall deal with shortly), on the question of the circumstances surrounding the purchase of the first unit, particularly the existence of the loan., I accept his evidence. It follows that I also accept, consistent with the entries in the December pages, that he repaid amounts of the loan from Ms Jeffrey-Potts to the extent that the amount of $19,000 was outstanding as from 8 February 1996.

157 Finally, I should return to the question of payment of the second instalment of the deposit, namely $12,200 paid in cash on 23 November 1994.[200] Ms Jeffrey-Potts maintains that she paid this amount in cash - as does Mr Garel.[201] In support of Mr Garel's contention is the fact that the December pages do not reflect this amount as being outstanding to Ms Jeffrey-Potts (whereas payment of the initial deposit of $1,000, payments of stamp duty and to the solicitors are contained in the document). Counsel for Ms Jeffrey-Potts made a number of criticisms of Mr Garel's evidence and particularly his capacity to pay such an amount and the lack of any documentary evidence to support such a payment, as well as the timing of the payment (i.e. on his evidence he had not received the money from his mother at this time). Each of the submissions has force.

158 Even though I am satisfied that Mr Garel received $120,000 from his mother he does not contend that this was the source of the deposit, nor does he say it came from his uncle.[202] Equally, I have no confidence in the evidence of Ms Jeffrey-Potts concerning her payment of the deposit other than that it is clear that she had a large amount of cash available at the boarding house. In the end I am unable to resolve this matter one way or another and cannot make a positive finding in favour of either.

159 Ultimately, I have reached the following conclusions in relation to the purchase of this unit:

(a) that the deposit of $1,000 was paid by Ms Jeffrey-Potts;

(b) that I cannot determine who paid the balance of the deposit;

(c) that Mr Garel obtained funds of $120,000 from his mother to use towards the purchase;

(d) that the settlement amount of approximately $118,500 was paid by a combination of funds; approximately $85,000 from Ms Jeffrey-Potts and approximately $33,500 from Mr Garel;

(e) that Ms Jeffrey-Potts advanced the sum of $88,000 to Mr Garel as a loan which was used in the purchase of the unit; and

(f) that further monies were repaid by Mr Garel but that an amount of $19,000 remains outstanding from 8 February 1996.

160 Before I turn to the purchases of the remainder of the units between 1995 and 2006 I think it helpful to set out the nature of their personal relationship over the period until the breakup in 2010.

161 During this period the boarding house business was, effectively, wound up. However, the units on the ground floor continued to provide income to Ms Jeffrey-Potts. There are, of course, no records of the income from those rentals or of the cash held at the house.

162 Mr Garel worked for McDonald's as a maintenance operator throughout this period initially in the Melbourne CBD (Bourke Street) and then at the Royal Children's Hospital and finally at Sunshine.

163 An analysis of the evidence demonstrates that their relationship was extraordinarily close, with the two being regarded by many as mother and son. The following facts (which I find established) demonstrate this:

(a) Mr Garel lived at the boarding house rent-free for over 15 years. On a day to day basis, he saw, spoke to and was in the company of Ms Jeffrey-Potts. For much of the time their rooms were adjoining and they shared a communal lounge and dining room;[203]

(b) Ms Jeffrey-Potts accompanied Mr Garel on trips within Victoria and outside Victoria. For instance, in 1994 they both travelled by motorcycle to Stradbroke Island in Queensland.[204] They visited Adelle in Adelaide.[205] They travelled together to regional Victoria. In 2010 they travelled to the Northern Territory;[206]

(c) they attended many social events (including a wedding and a funeral) and regularly went to restaurants together;[207]

(d) for several years they went to meetings of Law Watch and there met two of the witnesses in the case, Mrs McCartney and Mr Russo;[208]

(e) they regularly visited friends together, generally with Mr Garel being the driver;[209]

(f) they attended the offices of real estate agents (whether in relation to the purchase of properties or the management and letting of units) together;[210]

(g) Mr Garel was named as next-of -kin when Ms Jeffrey-Potts underwent hip surgery around 2009;[211] and

(h) Ms Jeffrey-Potts assisted in protecting Mr Garel's interests in several family probate matters. [212]

164 The idea conveyed by Ms Jeffrey-Potts that this relationship was anything other than close was absurd.[213] It demonstrates once again her intention to distance herself from any form of association (save one that is mandated by her own evidence) notwithstanding a relationship with Mr Garel for over 15 years. For instance, when asked about whether she was close friends with Mr Garel during this period, Ms Jeffrey-Potts initially appeared to deliberately avoid answering the question and then finally stated "we were friends, not close friends, friends. I had my own friends, Your Honour. I have had a male friend called Alex and he was my close friend".[214]

165 The relationship began to fall apart in early 2010, after the trip to the Northern Territory. I am satisfied that there was disharmony in relation to Mr Garel's apparent intention to marry which culminated in a note written by him on 22 April 2010[215] expressed as follows:

I Leigh Garel give all proceeds from all property at 82-84 Beaconsfield Pde Albert Park unit no 1, 3, 6, 7, 10, 14, 18 onees [sic] all morgages [sic] are cleared which are held by me

Leigh Garel

22/4/10

166 The end result was that on the night of 26 April 2010 the relationship broke down completely.[216] During what was apparently a physical altercation, Ms Jeffrey-Potts sustained an injury to her arm and sought help from her friends the McCartneys.[217] They arrived at the boarding house at about 10.30pm and took her to their home for the next three weeks.

167 The next day she was taken by Mrs McCartney to the Box Hill Hospital where she was attended to in casualty. The McCartneys took her back on occasions to the boarding house and eventually she retrieved her motor vehicle.[218] She returned to live at the boarding house, as I understand the evidence, in mid-to-late May 2010. Mr Garel moved into a unit in Beaconsfield Parade.

The purchase of the second and third units (Units 6, 84 Beaconsfield and Unit 14, 82 Beaconsfield)

168 The second acquisition, Unit 6, 84 Beaconsfield was purchased on 22 April 1995 for $67,000. The deposit of $6,700 was paid by cash to the agents Hocking Stuart[219] with the balance outstanding of $60,466.41 paid at settlement on 21 June 1995.[220] The Transfer of Land Act transfer was drawn up and signed by Mr Garel and witnessed by Ms Jeffrey-Potts.[221]

169 The third purchase, Unit 14, 82 Beaconsfield Parade was for $62,500 with a deposit in cash of $6,000 paid on 8 July 1995.[222] The Transfer of Land Act transfer was drawn up and signed by Mr Garel and witnessed by Ms Jeffrey-Potts.[223] At settlement the sum of $56,622.40 was paid.[224]

170 I should now restate the parties' positions in relation to the purchase of these two units. Mr Garel did not dispute that the total amount of the deposits and the settlement amounts for the second and third units were paid by Ms Jeffrey-Potts out of her funds. He, however, asserts that these were loans - as with the first unit. Ms Jeffrey-Potts, of course, asserts that the monies utilised to purchase the properties were provided on the basis that that the properties were to be held in trust by Mr Garel.

171 Ms Jeffrey-Potts agreed that she and Mr Garel had discussed the purchase of both properties and she had attended both auctions with Mr Garel.[225] With Unit 6, she said that she paid both the deposit and the settlement amount from cash held by her.[226] As I mentioned earlier, Mr Garel accepted that the deposit and the purchase price were both paid, in cash, by Ms Jeffrey-Potts.[227]

172 Similarly with Unit 14, it was accepted by Mr Garel that the deposit was paid in cash by Ms Jeffrey-Potts[228] and that she provided the balance of the settlement funds,[229] although he suggested that those amounts came from the Bank of Melbourne - which I took it to be a reference to a bank account held by Ms Jeffrey-Potts.

173 Unsurprisingly, there are problems with Ms Jeffrey-Potts' account. In two of her affidavits she swore that the balance of the purchase funds (apart from the deposit) came from loans.[230] However, this discrepancy is of no real moment in light of Mr Garel's concessions as to the source of the funds.

174 It is, therefore, not in issue that the funds came from Ms Jeffrey-Potts. However, Mr Garel asserts the funds provided by Ms Jeffrey-Potts were loans, to which I turn.

175 I have previously referred to the burden of proof. Although Ms Jeffrey-Potts bore the onus of establishing one or other of the various equitable interests she claimed in the units, Mr Garel carried an onus in the sense of adducing evidence of sufficient weight that the Court could not be satisfied on the balance of probabilities that the funds were contributions to the purchase price by Ms Jeffrey-Potts as opposed to loans to Mr Garel.

176 With the exception of a handwritten note from Mr Garel there is no documentary evidence to support the assertion that these funds were loaned to him by Ms Jeffrey-Potts. Moreover, there are aspects of Mr Garel's evidence in relation to these purchases that cause me to doubt his account that the subsequent contributions by Ms Jeffrey-Potts were, indeed, loans.

177 The primary contemporaneous document relied upon by Mr Garel was a note compiled by him in April 2004[231] which purported to summarise the amounts outstanding to Ms Jeffrey-Potts in relation to particular loans and properties.[232] The document is not signed by either and according to Mr Garel was compiled from the entries of the loan book and written by him.[233] He said that it related to nine properties[234] and the note consists of nine separate amounts which total $244,473.30 and has the words "money owed Zoay" inscribed upon it.[235]

178 On 27 March 2012, in the course of his evidence, I asked Mr Garel, as best he could, to ascribe the individual amounts to particular properties.[236] He endeavoured to do so overnight and produced a document which recorded as best he could, the entry relevant to the particular loan accounts.[237] However it was demonstrated that a number of these references could not be made out - at least one of the entries (the $19,000 which tallied with the amount owing on Unit 2 Victoria Court) made sense, but a number of the others did not.[238] I do not regard the note, of itself, as being persuasive.

179 In April 2010, shortly after the acrimonious split, Ms Jeffrey-Potts took out an application and summons for an intervention order which alleged the following:

The AFM [Affected Family Member] took the respondent into her home when he was 19. The AFM loaned the Resp $127,000 from her fathers [sic] estate. A cheque from England to him. This was to set against a mortgage to help him and save him on interest. The AFM alleges that there was an agreement between her and the Resp which was when she wanted the money back he would give it to her. The AFM has been asking the Resp for her money back for a couple of months now. The Resp says he does not have the money, he spent it.[239]

180 Mr Garel placed some store on this document as being consistent with the loan scenario. I do not give it much credence. It is simply a police officer's summary of an account given by Ms Jeffrey-Potts only a couple of days after the physical altercation with Mr Garel. Nor do I think much turns on the letter from her solicitor Mr Whelan who gave evidence as the purpose of his letter seeking repayment.[240] In the context of the evidence given at the trial, much of Ms Jeffrey-Potts' testimony bears little relationship to the facts and this, I suggest, is another example.

181 Mr Garel also relied upon the drawing of an inference based upon a finding that the first unit was financed by a loan from Ms Jeffrey-Potts. There is some force in this proposition but it also needs to be borne in mind that apart from the one page sheet compiled by Mr Garel there is no other contemporaneous written evidence of the existence of a loan. I repeat what I said earlier about the importance of documents in a case such as this.

182 There are a number of aspects of Mr Garel's evidence which cause me to doubt whether the monies provided subsequent to the purchase of the first unit were by way of loan. First, his evidence that in March 2004 Ms Jeffrey-Potts forgave any indebtedness in relation to the loans. He described the conversation as follows:

"Look, I'm going to be years paying this off and I doubt you're going to last, you know 30, 25 years or whatever" - I can't remember exactly how much the loan period was - and I said "Look, my back is playing up. I don't even know if I can continue working this long". And I said "We, you know, better come to some agreement". And she said "Don't worry about the loans, I'll waive them. You know? You've been good to me".[241]

In answer to a question from me, he confirmed that the loans amounted to nearly $250,000 and that the waiver was not recorded in the "loan book".[242]

183 One would have expected this stark proposition of waiver to be at the forefront of his defence, particularly as from the outset he has relied on the proposition that the monies advanced by Ms Jeffrey-Potts were a loan. It does not rate a mention. Moreover, Ms Jeffrey-Potts was not cross-examined on this point and the proposition only emerged in the course of his evidence-in-chief. Again, on this issue, I permitted Ms Jeffrey-Potts to be recalled and she flatly denied any such proposition. On this point I believe her. Whilst I have taken a particularly adverse view as to her credibility and accept Mr Garel's account in relation to the dealings with the first unit, her denials on this point cannot be totally discounted, particularly in the absence of other evidence.

184 The cross-examination of Mr Garel on this issue, and his answers,[243] demonstrates the improbability of Ms Jeffrey-Potts ever making such an offer. Further, it is incompatible, one would think, with Ms Jeffrey-Potts' continued involvement in the rental venture up to 2010 - on Mr Garel's account if there was forgiveness of all the loans he was, in effect, the sole proprietor.

185 In summary, I think it highly unlikely, particularly given the way in which the allegation emerged that Ms Jeffrey-Potts forgave the indebtedness. Indeed, I think it to be totally out of character, particularly given her age and the amount of money involved (as opposed to a loan for a comparatively modest amount fixed with specified repayments as on the loan acknowledgement).

186 Second is the note of April 2010[244] which I referred to earlier. It does not mention a loan or loan repayment. It is inconsistent with forgiveness of the debt. Mr Garel asserted that he was, in effect, forced to sign the note by Ms Jeffrey-Potts[245] on the basis that Ms Jeffrey-Potts would disclose intimate details of their relationship to his future wife. Given that he stated that he and Ms Jeffrey-Potts had "an open relationship" this is surprising. I do not think that by 2010 he was scared of Ms Jeffrey-Potts. I think the note is consistent with an attempt to resolve a potential dispute in relation to distributing the assets accumulated by both as part of a joint enterprise.

187 Third, in 1996 Mr Garel sustained a serious injury when he fell whilst carrying out repairs at the boarding house. Ms Jeffrey-Potts could not recall the event or its sequelae,[246] however her diary confirmed Mr Garel being hospitalised at the Alfred Hospital for a week.[247] Mr Garel's account as to his injuries, hospitalisation and wearing of a back brace all rang true - up to a point.[248] He asserted that Ms Jeffrey-Potts had, in the course of discussion after his return from hospital promised:

...that she would help me with my units and so that I would have a nice little nest egg if I ever - the injury ever got so bad that I could no longer work.[249]

This proposition was not put to Ms Jeffrey-Potts, notwithstanding cross-examination about Mr Garel's injury.[250] Ms Jeffrey-Potts denied such a discussion took place and again on this question I believe her. Even if it was accepted it is inconsistent with an ongoing loan arrangement - it is simply an offer of assistance if things go bad.

188 Finally, unrelated to aspects of the evidence, there is the sheer improbability of Mr Garel's account of the terms of the loan: no interest, no repayments and no end date of the loan.[251] Indeed, his evidence went this far:

I don't think that she ever wanted me to pay back the loans in full because as long as I had the loans to her I had an obligation to her.[252]

189 I am satisfied that the funds used for this purchase were by way of contribution and not by loan to Mr Garel. This conclusion holds good for the balance of the properties said to be the subject of a loan.

The purchase of the fourth, fifth, sixth, seventh, eighth and ninth units (Unit 7/84 Beaconsfield, Unit 18/82 Beaconsfield, Unit 1/84 Beaconsfield, Unit 1 Victoria Court , Unit 12 Victoria Court and Unit 3/84 Beaconsfield)

190 These purchases were effected between 1996 and early 2000. In each of the purchases settlement funds (at least in part) were obtained by means of a bank loan secured by one or other of the units, and in some the deposits by way of a redraw on an existing loan.

191 By 1996, accepting Mr Garel's evidence (as I have), he had utilised around $85,000 of the $120,000 he had received from his mother in payments for the first unit (either towards the settlement or repayments to Ms Jeffrey-Potts). He said the balance went to renovations of the purchased units.[253] Mr Garel in September 1996 was earning approximately $400 per week in take home pay[254] and by March 2000, approximately $460 per week ($600 gross).

192 On the other hand, Ms Jeffrey-Potts, it was acknowledged, still had an unspecified amount of cash stored at the boarding house. She was also still receiving income from the tenants of the units downstairs, although the income from the boarders had close to disappeared. It goes without saying that there are no financial records to assist in determining exactly what amount she had available for the purchases.

193 Generally, the method of purchase was essentially the same as with the first three acquisitions. The properties were inspected jointly and, in the case of an auction, both would attend the auction and Mr Garel would usually bid.[255] Both were involved in the negotiations in the event of a private sale although both parties agreed that Ms Jeffrey-Potts did most of the negotiating. Once the purchase was effected, the conveyance was carried out in Mr Garel's name and no solicitors or conveyancing firms were engaged.

194 The fourth purchase, Unit 7, 84 Beaconsfield Parade was for the sum of $67,000.[256] The deposit in cash was paid on 30 March 1996 to the agents Wilson Pride.[257] The Transfer of Land Act transfer was drawn up and signed by Mr Garel and witnessed by Ms Jeffrey-Potts.[258] Settlement occurred on 30 May 1996.

195 Ms Jeffrey-Potts asserted that she paid a deposit of $6,700 in cash after Mr Garel bid at the auction.[259] Mr Garel initially accepted that Ms Jeffrey-Potts had paid the deposit in cash, but later in his evidence asserted the deposit may have been paid by both parties contributing funds.[260] His evidence on the payment of deposits was, with one exception - the ninth unit - a moving feast. Ultimately, I think the true position to be his answer in cross-examination that:

...the majority of money would have come from Zoay. If I loaned any, I'd have to have the loan book to work out exactly where some of my money went, whether it was in settlement or whether it was deposit.[261]

196 Ms Jeffrey-Potts was not certain as to how the balance of the purchase price was paid or whether a mortgage had been taken out on the property.[262]

197 The evidence from the Bank of Melbourne, in the form of loan documentation, confirms that an amount of $53,000 was borrowed for this purchase secured against Unit 6, 84 Beaconsfield. This is consistent with Mr Garel's evidence that the funds for the settlement came from the bank and that he and Ms Jeffrey-Potts visited the bank together.[263]

198 At settlement, an amount of approximately $60,000 was required. Mr Garel conceded that Ms Jeffrey-Potts contributed money to the balance outstanding[264] but, as with the deposit, also contended that he had paid some part of it.[265]

199 It is also consistent with Ms Beer's one page letter of 11 April 1996[266] indicating the property would return a rental of $100 to $110 per week - previously intended to be provided to a bank for finance.

200 There is no documentary evidence to support the contention made by either party in relation to the funds not provided by the bank. I think it is likely that Ms Jeffrey-Potts paid both the deposit of $6,700 and the shortfall of $7,000. Mr Garel was not earning a large income and some of his income, at least, was being applied to outgoings and expenses related to the units. In addition, he accepted that at the time that this mortgage was taken out (and for the other loans) he was concentrating on paying the bank debt off. In other words the rental monies were applied to loan reduction as well as providing him with living expenses.

201 Ultimately, I conclude that the likely source of approximately $13,700 was the cash held at the boarding house and that this was a contribution made by Ms Jeffrey-Potts.

202 The fifth purchase, Unit 18, 82 Beaconsfield Parade was for $67,250. The deposit of $6,725 was paid in cash to Hocking Stuart, the agent.[267] Settlement was effected a month later on 18 May 1996 with the Transfer of Land Act transfer drawn up and signed by Mr Garel and witnessed by Ms Jeffrey-Potts.[268] At settlement, the sum of $60,540.70 was paid.[269]

203 Ms Jeffrey-Potts said that she paid the deposit.[270] Mr Garel did not quibble with this assertion.[271] Ms Jeffrey-Potts recalled attending the Bank of Melbourne with Mr Garel and a loan application being completed[272] and each were agreed that funds were obtained from the Bank of Melbourne.[273]

204 The evidence from the Bank of Melbourne, in the form of loan documentation, confirms that an amount of $50,000 was borrowed and appears to have been secured against Unit 7, 84 Beaconsfield Parade.[274]

205 The shortfall between the funds provided by the bank and that required at settlement was approximately $10,500 and there was no suggestion by Mr Garel that this amount was paid by him. The funds could only have come from the cash at the boarding house.

206 I am satisfied that an amount of approximately $16,700 was paid by Ms Jeffrey-Potts towards the purchase of this unit.

207 The sixth purchase, Unit 1, 84 Beaconsfield, was bought for the sum of $68,100. The deposit was paid in cash on 11 September 1996 to Wilson Pride, the agents.[275] The Transfer of Land Act transfer was drawn up and signed by Mr Garel and witnessed by Ms Jeffrey-Potts.[276] At settlement the sum of $62,515.80 was paid.[277]

208 Ms Jeffrey-Potts gave evidence that the deposit came from her funds and not from rent money.[278] Mr Garel originally accepted that the deposit was paid in cash by Ms Jeffrey-Potts but later said that he could not be sure as to who paid the deposit.[279]

209 Mr Garel agreed that $53,000 was provided by the Bank of Melbourne by way of loan for this property with a mortgage held over Unit 18, 82 Beaconsfield.[280] He said that the difference between the amount borrowed and the purchase price came from a mix of his funds and Ms Jeffrey-Potts' funds but could not identify the exact mix without the "loan book".[281]

210 I am satisfied that the deposit, as originally conceded by Mr Garel, came from Ms Jeffrey-Potts' funds. In relation to the balance of the settlement monies (i.e. approximately $9,000) the evidence is unsatisfactory. However, given Mr Garel's financial position I am prepared to accept that it probably came from the boarding house cash. Accordingly, a total of approximately $15,000 was provided by Ms Jeffrey-Potts.

211 The seventh purchase, Unit 1 Victoria Court was acquired on 25 October 1997 for $191,000. A deposit of $17,000 in cash was paid on that day to the agent, Wilson Pride. The agreement for the sale of shares was signed by Mr Garel in the presence of Mr Wilson, who I assume to have been the agent. The share transfer[282] is dated 15 December 1997 and signed by Mr Garel.[283]

212 Ms Jeffrey-Potts gave evidence that she thought she paid the deposit although she was not sure where it came from or how it was paid. Subsequently, she said that it was paid by her and the settlement funds came from the Bank of Melbourne.[284] Mr Garel said that the deposit would have come from Ms Jeffrey-Potts but that he needed the loan book to determine whether he contributed.[285] He accepted that the balance of the settlement funds came from Ms Jeffrey-Potts but could not be precise without recourse to the loan book.[286]

213 Mr Garel also accepted that the loan of $140,000 obtained from the Bank of Melbourne[287] was secured by a mortgage over Unit 1 and Unit 14 Beaconsfield.

214 The shortfall here was quite substantial: it was in the region of $34,000. There is nothing to suggest that Mr Garel at that time would have had that sort of money, particularly if the rental proceeds were being directed towards the reduction of the debt to the bank and any of his own monies was being utilised for the payment of expense or outgoings. I think that the only inference that can be drawn is that Ms Jeffrey-Potts provided those funds as well as the deposit, making a total of $51,000.

215 The eighth purchase, Unit 12 Victoria Court was acquired on 11 December 1999 for $283,000. The deposit of $28,000 was paid in cash to the agent, J R Buxton. Settlement occurred on 9 February 2000 for $255,436.[288] The share transfer was signed by Mr Garel.[289]

216 Ms Jeffrey-Potts gave evidence that she thought the deposit was paid in cash in two lots but was unclear as to the source of the cash for the deposit. She thought that the source may have been a redraw.[290] The evidence of Mr Garel was that a deposit was paid through a remortgaging of Unit 6, 84 Beaconsfield with the residual amount obtained by a loan secured by Unit 12.[291]

217 In final submissions, it was accepted by counsel for Ms Jeffrey-Potts that the deposit came by way of a redraw.[292]

218 The bank records demonstrate that a mortgage of $220,000 was taken out at this time and that was accepted by counsel for Ms Jeffrey-Potts as the sum used to purchase this unit. The residual amount not provided by the bank was approximately $35,430.

219 Mr Garel accepted that some of the settlement funds were provided by Ms Jeffrey-Potts.[293] Again, given the amount paid I think it unlikely that it could have come from Mr Garel and the only inference available is that it came from Ms Jeffrey-Potts' cash funds.

220 Unit 3, 84 Beaconsfield was the ninth purchase on 20 March 2000 for $125,250. The deposit of $12,525 was paid in two amounts: $8,000 and $4,525. Settlement took place on 18 April 2000. The Transfer of Land Act transfer was drawn up and signed by Mr Garel and witnessed by Ms Jeffrey-Potts. At settlement the sum of $112,792.73 was paid.[294] Ms Jeffrey-Potts gave evidence that she paid both amounts out of her cash at the boarding house.[295] She said that the settlement was paid by way of mortgage but could not identify the property which was mortgaged.[296] Mr Garel accepted that the $8,000 for the deposit came from Ms Jeffrey-Potts but said that the $4,525 came from both rents and withdrawals from an ATM.[297]

221 There was a contest as to the payment of a portion of the deposit. Ms Jeffrey-Potts asserted that she paid $8,000, which was not disputed by Mr Garel. However, each asserted making the payment of the balance of the deposit.[298] Given my doubts about Ms Jeffrey-Potts' credibility I am inclined to accept Mr Garel's evidence as it is substantiated by a withdrawal from his personal account at the time of an amount of $3,900;[299] by 2000 he had the capacity to pay such an amount.

222 Mr Garel did not dispute that the balance on settlement came from a loan against the unit although he had no independent recollection of how much the mortgages were for.[300] The most reliable evidence are the bank records which demonstrate that two loans in the sum of $100,000 and $55,000 were obtained at this time and, given the evidence, it can be assumed that the balance of nearly $112,000 was probably paid out of these funds.

223 I am satisfied that Ms Jeffrey-Potts contributed $8,000 towards the deposit and that Mr Garel paid $4,525.

The purchase of the tenth, eleventh and twelfth units (Unit 3, 84 Beaconsfield, Unit 10, 84 Beaconsfield, Unit 4 Victoria Court and Unit 11 Victoria Court)

224 It is not necessary to go into any great detail in relation to the purchase of these units. Each of the purchases followed the model I have set out at [31] and [32], with one important qualification: the total funds for the purchases came from the bank: that is, both the deposit and the settlement monies. There were no contributions from either Mr Garel or Ms Jeffrey-Potts with the security provided being either the unit the subject of the purchase or one or more of the units already held in Mr Garel's name.

225 Mr Garel said that Ms Jeffrey-Potts did not contribute to the purchase of the last three properties and each were financed by funds obtained from the bank. Ms Jeffrey-Potts' evidence in relation to the three properties was inconsistent and vague.[301] Bank records support Mr Garel's contention.

226 By the time of final submissions it was accepted by both Ms Jeffrey-Potts and Mr Garel that each was financed solely by bank facility[302].

227 With Unit 10, 84 Beaconsfield, a deposit of $20,000 was paid either through a redraw or a loan with a mortgage of $187,600.[303]

228 The tenth purchase (Unit 10, 84 Beaconsfield Parade) was purchased for $204,250. the deposit for that purchase was obtained by means of a redraw on an existing loan with a loan of $187,600[304] secured over the property.

229 Unit 4 Victoria Court, the eleventh property acquired, was purchased for $370,000 on 2 February 2004. The deposit came from a redraw on the loan of $18,000 and the balance from a loan of $354,000[305] secured over the property.

230 The final purchase, Unit 11 Victoria Court, was for the sum of $345,000 with a deposit of $34,500 being obtained by a redraw and a loan of $315,000[306] for the balance, secured by a mortgage. Both Mr Garel and Ms Jeffrey-Potts were of the view that this loan was secured over Unit 11.[307] The documentary evidence suggests that the loan was secured by three of the Beaconsfield Parade units.[308] Nothing turns on this.

The role played by each in the purchase and management of the units between 1994 and 2010

231 At the outset, it can be seen from the tax returns filed on behalf of Mr Garel that the enterprise flourished. For instance, the gross rent in the financial year ended June 2003 amounted to just over $77,000 with net income just short of $30,000. In 2009, the gross rent had risen to $141,860, although the net rent had fallen to $13,068 but $76,000 of this went to interest payments. Although the evidence is not entirely clear, by 2007 the loans on at least five or six of the properties were repaid.

232 Ms Jeffrey-Potts was at pains in her evidence-in-chief to emphasise the she was the person responsible for the acquisitions of the properties and the management of the units. This was consistent with her approach throughout the trial that the properties belonged to her and, notwithstanding evidence to the contrary, Mr Garel was no more than a front man. I do not accept the breadth of this characterisation.

233 It is necessary, I think, to differentiate between the roles played by each in, on the one hand, the selection, negotiation and purchase of the units as opposed to the management of the units subsequently.

234 I am satisfied that the actual decision making in relation to the purchases was a joint enterprise in which Ms Jeffrey-Potts played the dominant role. Whilst both would be involved in negotiations, inspect the property and attend the auction or negotiate the sale, it was Ms Jeffrey-Potts who had the final say and, in the main, conducted the negotiations.

235 At the commencement of the venture Mr Garel was in his mid-twenties, had no experience as a property investor and no experience in the rental business.[309] However, his confidence and abilities in this area appeared to grow over the term of the relationship. Ms Jeffrey-Potts had considerable business experience as well as a sizeable amount of cash available for property acquisitions.

236 It is only necessary to cite a couple of examples as to the role played by Ms Jeffrey-Potts. In relation to the purchase of the first property, Unit 2 Victoria Court, the evidence of Mr Hill was quite clear - Ms Jeffrey-Potts was the person with whom he had all the dealings in negotiating the purchase of the property. This, I think, formed the pattern for future purchases. For instance, with Unit 4 Victoria Court which was purchased from a Robyn Coverdale in a private sale, Ms Jeffrey-Potts conducted the negotiations and ultimately agreed to the purchase price and the conditions.[310] Then with Unit 18, 82 Beaconsfield, Ms Jeffrey-Potts wrote the requisitions on title, which were signed by Mr Garel.[311] She also made the calculations as to the amounts to be provided at settlement.[312]

237 It was also accepted by Mr Garel that Ms Jeffrey-Potts:

(a) was involved in the choice of properties;[313]

(b) attended auctions and settlements;[314]

(c) was mostly present when deposits were paid;[315]

(d) participated in the negotiations;[316] and

(e) witnessed the Transfer of Land Act transfers.[317]

In cross-examination, Mr Garel accepted that each purchase that had been made involved the input of Ms Jeffrey-Potts.[318]

238 As to the management and maintenance of the units the position was different, particularly in the latter years. The best evidence did not come from the combatants but from the documentary material and the recollection of other witnesses familiar with the properties.

239 First, the documentary evidence demonstrates the following in relation to the management of the properties after purchase:

(a) that the vast majority of rent receipts were completed by Mr Garel. I infer that he collected these rents, as he deposed to;[319]

(b) that Mr Garel attended the body corporate meetings;[320] from December 1996 had become a director of Victoria Court Pty Ltd and at times acted as the chairman and secretary of the Beaconsfield Parade bodies corporate;[321]

(c) that Mr Garel communicated regularly with tenants of both properties;

(d) that Mr Garel dealt with the Port Phillip Council in relation to both rates and planning matters;[322]

(e) that Mr Garel handled the conveyancing transactions, apart from the first purchase; and

(f) that Mr Garel lodged objections on planning matters and attended a number of VCAT hearings.[323]

240 Second, is the evidence of those who dealt with the pair during this period.

241 After the initial purchase of Unit 2 Victoria Court, Ms Glenda Beer, for over 15 years, handled the letting of each of the units. Her evidence was to the effect that the two acted together in the management of the units. Ms Jeffrey-Potts was initially the driving force. They were "almost always together".[324] In the early years she perceived Mr Garel to be shy and in Ms Jeffrey-Potts' shadow. In the ensuing years, he participated more in the management of the units, particularly after the introduction of email. He, she noted, was computer literate and her correspondence by email was always to him in relation to the management of the units. Her characterisation of the two acting jointly was reflected by an email sent by her to a tenant referring to "the landlords" meaning Ms Jeffrey-Potts and Mr Garel.

242 The evidence of Mr Gerald Beer, a plumber who operated roof distributors in Caulfield South, confirmed his sister's perception. For over 15 years he was involved in carrying out maintenance tasks at Beaconsfield Parade and Victoria Court.[325] He regarded his clients as being "Zoay and Leigh"[326] and was also under the impression that the properties were let by his sister for the two of them. Usually he would obtain instructions from both of them, occasionally by way of both of them being on the telephone. When he attended at the property, he would discuss the job with both of them and then usually Leigh would take him to the unit which required work.[327]

243 Mr Lindsay Beer provided a different picture to that of his brother and sister. He operated a company known as Chatsworth Constructions and also had dealings with Ms Jeffrey-Potts and Mr Garel from about 1994. His company worked both individually for them and also did work on behalf of the body corporate.

244 The tenor of his evidence was to the effect that Mr Garel played a secondary role to Ms Jeffrey-Potts, although he accepted that they would both attend his office and that the accounts were made out in Mr Garel's name. My impression, particularly after cross-examination, was that Mr Lindsay Beer was doing his best to assist Ms Jeffrey-Potts' case. Whilst I accept his evidence that Ms Jeffrey-Potts played an active role in terms of giving instructions, I do not accept his minimisation of the role played by Mr Garel. On this account, I prefer the evidence given by his brother and sister as to the roles each played. In particular, the evidence of Ms Glenda Beer was illuminating. She had regular contact with the pair during this period and the clear implication from the totality of her evidence was of two close friends conducting a successful business.

245 The evidence of Ms Glenda Beer and Mr Gerard Beer as to the two working, in effect, as a team in relation to the management and maintenance of the units was confirmed by two other witnesses. Mrs Mary Brown also said that each played a part in the maintenance of the properties, with Mr Garel doing jobs that Ms Jeffrey-Potts was unable to do. Ms Jeffrey-Potts' work, on Mrs Brown's account, related to the Beaconsfield Parade garden, and cleaning (including putting out the bins). However at times she was involved in painting units to be prepared for letting.

246 Ms Justine Engdahl lived in a Beaconsfield Parade unit (Unit 4, 82 Beaconsfield Parade) owned by her father from approximately 2001.[328] Her evidence was to the effect that both carried out maintenance tasks such as cleaning and gardening at the Beaconsfield Parade units.[329]

247 Mr Tony Thompson, in the later 1990s, was the home finance manager employed at the South Melbourne branch of Westpac. He thought that he first met Mr Garel and Ms Jeffrey-Potts around 1997.[330] He dealt with a number of loan applications made in Mr Garel's name. As part of the loan process Mr Garel and Ms Jeffrey-Potts would attend his office. His recollection was that Mr Garel did most of the talking but Ms Jeffrey-Potts would contribute occasionally.[331] In his early dealings in relation to the properties he would see both of them but in later years he would see less of Ms Jeffrey-Potts.[332]

248 Mr Gary Trowsdale had, through his firm Davis Accountants Pty Ltd, prepared taxation returns for Mr Garel since 1995.[333] He practiced in Bulleen. He produced Mr Garel's notices of assessment from June 1992 through to 2010 and Mr Garel's tax returns from 2003 through to 2010.[334] Mr Garel would attend his office generally once a year and would always be in the company of Ms Jeffrey-Potts.[335] Whilst Mr Trowsdale accepted that Ms Jeffrey-Potts took part in conversations where particular issues arose and required clarification[336] the nub of his evidence was that Mr Garel, his client, provided the information for completion of the tax returns.

249 In the early days, Mr Trowsdale believed that the material for the tax returns was provided by way of handwritten summaries which, by early to mid-2000s, had been converted to digital form by means of a software program.[337] From that point, Mr Garel would bring a printout from an electronic record (using a rental program software)[338] as well as his PAYG information.[339]

250 In addition to this body of evidence, it is important to note that it was not in issue that the management of the properties was carried out on a day to day basis by Mr Garel from his room in which his computer and files relating to the units were kept.[340] He (unlike Ms Jeffrey-Potts) was computer literate and by the end of the 1990s or early 2000s bank transactions and records of income and expenses were all electronically managed by him from the office at the boarding house.[341]

251 In my opinion, it is clear from the above that Mr Garel played the major role in the management of the properties particularly in relation to the record keeping, banking, taxation and accounting needs of the enterprise.

252 But that is not to say Ms Jeffrey-Potts did not play some role in the management of the properties, and this was accepted by Mr Garel:

(a) she regularly "vetted" Mr Garel's correspondence and had dealings from time to time with the tenants;[342]

(b) she also attended body corporate meetings[343] - although only once as proxy for Mr Garel;

(c) she had dealings with Ms Glenda Beer concerning tenancies;[344]

(d) she had dealings with Lindsay and Gerard Beer concerning maintenance;[345]

(f) she occasionally collected the rent[346]and at times dealt with problem tenants;[347]

(h) she carried out gardening work around the Beaconsfield Parade units and sometimes performed maintenance tasks on the units.

What I do not accept is her persistent insistence that Mr Garel's role was either non-existent or minimal. One example suffices. Ms Jeffrey-Potts maintained that Mr Garel played only a minor role in the collection of rents - at best no more than half the rents were collected by him.[348] The rent receipts, of which there are literally hundreds, paint a totally different picture. Apart from odd entries initialled by Ms Jeffrey-Potts the vast majority were receipted by Mr Garel and demonstrate convincingly that he played a major role in the collection of rents, aside from when he was away in the USA. In my opinion, the reality is that in relation to management of the units she, not Mr Garel, was the bit player.

253 The evidence of the other witnesses supports Mr Garel's evidence that he played a part in the maintenance of the properties. He was by occupation a "handyperson"[349] and it was only natural that he would carry out minor repairs and painting to the units. I accept his evidence on this issue, that Ms Jeffrey-Potts played a role particularly at 82 and 84 Beaconsfield Parade in performing minor maintenance tasks around the garden beds and with cleaning.[350] But as she aged and her physical condition deteriorated it was inevitable that her role would diminish.

254 Finally, I should mention the two other relevant aspects of the enterprise. The first is the deployment of the rental monies and particularly Mr Garel's private use of these funds. The evidence of both was that the rental monies were utilised to pay down the loans once monies were borrowed from the bank. But Mr Garel admitted that he also used the rental funds pay for his living expenses,[351] other personal expenses[352] and to pay amounts off his credit card. A schedule produced in closing submissions by counsel for Ms Jeffrey-Potts[353] set out a number of withdrawals made by Mr Garel over the years from an account which was said to include rental monies. The problem with endeavouring to make any sense of these calculations is that there was an intermingling of Mr Garel's personal funds with those from the rental properties. For instance some of these payments went to business related expenses. For example, he used his credit card to pay off council rates[354] and to purchase internet and telecommunication services.[355] A further schedule produced by counsel for Ms Jeffrey-Potts[356] extracted a number of the credit card payments. It supports the proposition that Mr Garel was paying, at least in part, rates by use of the credit card. It also demonstrates that he was making a number of personal payments by use of the credit card. However, Mr Garel could not say when he used rental monies and when he used private funds to pay off his credit card. He initially said he "occasionally" used rental monies but a short time later said that it made no difference as the rental monies were his personal funds to spend as he saw fit.[357]

255 The second is the payment of outgoings and expenses associated with the properties which I have already touched on. Ms Jeffrey-Potts asserted that she paid all expenses, such as plumbing services, accounting services and tradespeople in cash out of her personal funds[358] and that Mr Garel helped "deal" with these people or would make himself available to meet with them but that his role was peripheral.[359] However, later in her evidence she stated that the accounts from the Beer brothers for work around the properties and from Chatsworth Plumbing were paid out of the rental monies[360] and then that expenditure related to the purchase or maintenance of the units was taken out of the rental monies or the bank.[361] Then, in specific reference to renovations to Unit 2 Victoria Court that she paid with "some cash" from her stash although she appeared to admit the bulk came from rental monies.[362] Ms Jeffrey-Potts also said that she personally paid for legal representation at VCAT regarding the opposition of one or both of the Beaconsfield Parade bodies corporate to a proposed development on an adjacent lot.[363]

256 Mr Garel, on the other hand, said that he occasionally used rental income to pay expenses towards the properties.[364] He later extrapolated on this, asserting that every expense to do with the properties after settlement had occurred, such as council rates and land tax, had been paid for by him either out of his wages or through the rents. He disputed that Ms Jeffrey-Potts had put anything into the outgoings for the properties.[365]

257 The end result is that, given the lack of records and conflicting testimony (and notwithstanding my doubts as to Ms Jeffrey-Potts reliability), I am unable, even on the most general basis, to determine whether one or the other contributed more to the management expenses or the extent to which rental monies were used for this purpose.

Was there an agreement to use Mr Garel's name? Did he hold the units pursuant to an express trust?

258 The allegation was pleaded as follows: in or around 1994, Ms Jeffrey-Potts entered into an agreement with Mr Garel whereby Ms Jeffrey-Potts would purchase investment properties and put them in Mr Garel's name, in consideration for which Ms Jeffrey-Potts would provide Mr Garel with rent-free accommodation and domestic help.[366] The particulars of the agreement were said to be conversations in around 1994, the transfers of land and mortgages as well as handwritten documents of 11 and 15 November 1994 and 22 April 2010. The terms of the agreement were wide-reaching[367] and included that Ms Jeffrey-Potts would provide some, if not all, of the funds involved in the purchase, the balance being provided by mortgage; the properties would be held on trust for Ms Jeffrey-Potts and would be transferred to her upon request and that Mr Garel would sell any of the properties at Ms Jeffrey-Potts' request. It was said that Mr Garel and Ms Jeffrey-Potts would maintain the accounting books and in the event that Ms Jeffrey-Potts died then Ms Jeffrey-Potts would leave in her will an amount of money and/or property for Mr Garel with the balance being left to her daughter Adelle.

259 For reasons I have set out at [133]-[140], the evidence bears out none of these assertions. I do not accept that there was any conversation between Mr Garel and Ms Jeffrey-Potts as to the properties being held in his name on the basis that he could remain at the boarding house rent-free. There was no express trust as described by Ms Jeffrey-Potts: for such a trust to exist, I must be satisfied that there was a manifestation of her intention to create the trust. Her evidence is, however, contradictory and unpersuasive.

260 It is clear that Mr Garel lived rent-free with Ms Jeffrey-Potts but this, in my opinion, was simply another aspect of a close relationship that had developed between the two which extended well beyond just business dealings - it had nothing to do with any purported conversation concerning a trust.

261 Once it is accepted that there was a loan by Ms Jeffrey-Potts to Mr Garel in relation to the first unit then the existence of an agreement at or around the same time, initiated by Mr Garel, to hold the properties on trust is inconceivable.

262 Counsel for Ms Jeffrey-Potts relied upon Ms Jeffrey-Potts' ongoing involvement in the purchase and management of the units as being consistent with the properties being held on trust. To this, he added the fact that Mr Garel lived rent-free at the boarding house during this period. These considerations he said point to an intention to create a trust. I disagree: they are equally as consistent with a close relationship between the two without any thought of the units being held on trust.

263 As I mentioned earlier, I do not regard the statements made by Ms Jeffrey-Potts to a number of her friends to the effect that the properties were either held on trust or were held by Mr Garel in her name as being any more than, at best, a reflection of her state of mind at that time. It may be that at times Ms Jeffrey-Potts did consider - given that it was her money used to purchase the properties - that she had an interest in these properties even though they were purchased in Mr Garel's name. However, she is an unreliable witness and these statements need to be balanced against the documents and other statements made by her to Mr Garel's relatives which are entirely inconsistent with the units being held on trust or pursuant to an agreement.

264 I am not satisfied that there was ever an agreement between the two for Mr Garel to hold the properties on trust for Ms Jeffrey-Potts. Ms Jeffrey-Potts carried the onus of establishing an intention to create a trust. She has failed to discharge that onus.

Was there a loan or loans from Ms Jeffrey-Potts to Mr Garel?

265 For the reasons I set out in paragraphs [85] - [156], I accept that the first unit (Unit 2 Victoria Court) was the subject of the loan as evidenced by the loan acknowledgement and the December pages.

266 I reject the submission of Ms Jeffrey-Potts that the loan agreement in respect of the first unit was not complete or too uncertain. The loan acknowledgement evidenced a fixed amount owing and a specified rate of repayment. It was up to the parties to determine whether interest should be charged or whether the loan should terminate on a fixed date. The fact that Mr Garel did not make payments in accordance with the agreement is neither here nor there in determining the existence of a loan agreement.

267 For the reasons set out at [174]-[189], I am not persuaded, however, that the funds provided by Ms Jeffrey-Potts towards the purchase of the other units was by way of loans.

268 Ms Jeffrey-Potts' argument as to the existence of an agreement giving rise to an express trust has failed. Alternatively, she contends the first three purchases (Unit 2 Victoria Court, and Unit 6, 82 Beaconsfield Parade and Unit 14, 84 Beaconsfield Parade) are the subject of a resulting trust on the basis that she made contributions towards the purchase price.

269 In relation to Unit 2 Victoria Court, I have concluded that her contribution towards the purchase of the property constitutes a loan to Mr Garel and no question of a resulting trust arises. However, it is clear that Ms Jeffrey-Potts made the full contribution to the purchase price of the next two units (Units 6 and 14 at 82 and 84 Beaconsfield Parade) and this issue needs to be considered, as does her contention that the balance of the purchases (the fourth to twelfth units) were the subject of a constructive trust. On this point it was submitted that the Court should impose a constructive trust in her favour based either on the common intention of the parties or alternatively that the buying and managing of the rental properties was, in essence, a joint enterprise between herself and Mr Garel. This issue will also need to be considered.

Resulting trust in relation to the second and third units

270 Recently in Anderson v McPherson (No 2),[368] Edelman J summarised the resulting trust sought to be asserted by Ms Jeffrey-Potts:

For centuries, the most common instance in which resulting trusts have arisen has been where the settlor's objectively manifested intention is that the rights which the settlor transferred to another, or purchased in the name of another, should be held on trust for the settlor. If this intention is proved by evidence the trust is usually described as an express trust. But where the intention is proved by presumption the trust is described as a resulting or implied trust.[369]

271 The accepted statement of principle in relation to the creation of resulting trusts is that of Gibbs CJ in Calverley v Green[370] in which his Honour said:

Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly, and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such - not, e.g., as a loan. Consistently with these principles it has been held that if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money...[371]

272 The judgment of Mason and Brennan JJ in Calverley also reflects a potential issue in this trial: identifying with reasonable precision the contribution made by each party. Their Honours said as follows:

When two or more purchasers contribute to the purchase of property and the property is conveyed to them as joint tenants the equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions unless their contributions are equal...[372]

273 It is established that the trust and any purported beneficial interest must be determined at the time of purchase or "so immediately after it as to constitute a part of the transaction".[373]

274 My findings in relation to these purchases are set out at [168]-[189].

275 Mr Garel did not rely upon a presumption of advancement to displace an argument based upon a resulting trust. Rather, as I have explained, he asserted that the payments made by Ms Jeffrey-Potts constituted a loan. However, I have not been persuaded that any subsequent money utilised in the purchase of the units can be treated as a loan.

276 I am satisfied that at the time of payment of the deposit and settlement that the whole of the purchase price (deposit and settlement) towards the second and the third units was contributed by Ms Jeffrey-Potts. No contribution was made by Mr Garel.

277 I conclude, therefore, that the beneficial ownership in these properties is entirely that of Ms Jeffrey-Potts and Mr Garel holds both properties on trust for her.

Was there a common intention or a joint endeavour constructive trust in relation to units four to twelve?

278 Counsel for Ms Jeffrey-Potts argued that each of the remaining properties was the subject of a constructive trust.[374]

279 As I mentioned earlier, two forms of constructive trust were relied upon by Ms Jeffrey-Potts (assuming she failed on the express trust or agreement) in relation to an equitable interest in the fourth to twelfth units namely:

(a) a constructive trust based upon a common intention that the units be owned by both and transferred, if necessary, into their names; or

(b) a constructive trust arising out of the endeavour - it would be unconscionable in the sense described in Muschinski v Dodds[375] and Baumgartner v Baumgartner;[376] to permit Mr Garel to retain full ownership of the units.

280 In Lloyd's Bank plc v Rosset,[377] Lord Briggs (which whom Lords Griffith, Ackner, Oliver and Jauncy agreed) said as follows of the evidence needed to establish a constructive trust based on mutual intention:

The first and fundamental question which must always be resolved is whether, independent of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that this property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between their partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel.

In sharp contrast with this situation is the very different one where there is no evidence to support a finding of an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust. In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. But, as I read the authorities, it is at least extremely doubtful whether anything less will do.[378]

281 Ms Jeffrey-Potts pleaded her case on common intention as follows:[379]

1. Ms Jeffrey-Potts, induced by Garel to assume the common intention.

PARTICULARS

Ms Jeffrey-Potts purchased properties in Garel's name and made payments for each of the properties. Further, she supported him in obtaining loans from Westpac bank for some of the properties that were necessary in relation to mortgages. Ms Jeffrey-Potts and Garel collected all or most of the rent from the properties and paid the mortgages accordingly and Ms Jeffrey-Potts attended all body corporate and/or directors meetings of the properties. Ms Jeffrey-Potts also, from 1994 to 2010 allowed Garel to stay rent free and cooked and clean for him as well as doing his laundry. During that period of time Garel was not require to pay rent or payment towards his household living expenses.

1. In reliance upon the intention Ms Jeffrey-Potts has maintained Garel's domestic expenses and housed him since 1994 and has continued to pay monies and collect rents for the properties.
2. Garel knew and intended Ms Jeffrey-Potts to act in reliance upon the truth of the common intention.
3. It would now be unconscionable for Garel to ignore the common intention or to act contrary to it.
4. Further, or alternatively, Garel represented to Ms Jeffrey-Potts that if she allowed him to continue to live in the boarding house and paid for his daily domestic expenses, he would allow her to buy a number of investment properties in his name.

PARTICULARS

Garel made the representation intending that Ms Jeffrey-Potts should act in reliance upon it in purchasing the properties and supporting Garel in obtaining the requisite finance together with paying for his domestic expenses and living expenses.

1. In reliance upon the truth of the representation and not otherwise, Ms Jeffrey-Potts purchased the properties, collected the rent, formed other duties towards the properties and housed and fed Garel and commenced and continued to make payments towards the properties and his lifestyle. She also provided him with the use of a car.
2. Garel continued to live rent free and the full care of Ms Jeffrey-Potts from 1994 until April 2010.

282 Putting aside some of the niceties associated with the pleading, Ms Jeffrey-Potts' case turned upon establishing a meeting of the minds in 1994 (either by direct evidence or inferentially) to the effect that Mr Garel would live rent-free in the boarding house, with assistance and care from Ms Jeffrey-Potts, in return for, as I followed it, assisting in the purchase of the properties and the use of his name as the legal owner of those properties.

283 The pleaded case has not been made out. There was never, on my findings, any agreement or arrangement as alleged by Ms Jeffrey-Potts.

284 Even if the pleaded case had been simply one of a common intention to share the assets and profits generated from the property investments I would, on the evidence, have been unable to reach a conclusion that such an intention was ever formed. It is not necessary for me to repeat the difficulties I have had with the evidence particularly of Ms Jeffrey-Potts but also with that of Mr Garel.

285 The existence of the second type of trust, now known as a remedial constructive trust cannot be doubted. The principle was stated by Deane J (with whom Mason J agreed) in Muschinski:[380]

[A constructive trust] operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do_..._[381]

286 In Baumgartner,[382] the High Court (Mason CJ, Wilson and Deane JJ with whose reasons Toohey and Gaudron JJ agreed) - concluded that a constructive trust did not depend solely upon imputing a common intention to the parties. The reasoning of the majority in the New South Wales Court of Appeal was rejected and that of Mahoney JA (in dissent) adopted by the High Court:

On the other hand Mahoney J.A. (12) correctly acknowledged, as did Samuels J.A. (13), that a constructive trust may be imposed, even though the person on whom the trust is imposed had no intention to create a trust or to hold the property on trust. His Honour observed that in such situations an intention may be imputed in circumstances where the imputation is necessary "in good faith and in conscience", though he added that this expression was of such generality that it did not provide an acceptable test for decision-making. In the ultimate analysis his Honour rejected the argument that the court would impose a constructive trust by reference to what was "fair" in the ordinary sense of that term (14). But in the course of reasoning to that result Mahoney I.A. indicated some situations in which it might be appropriate to impose a constructive trust. Thus, he said (15):

"A husband may pay for the matrimonial home and cause the legal title to be vested in the wife. The wife may earn money and use it in defraying household expenses, thus relieving the family budget and allowing the husband to pay mortgage instalments on the home. It will be necessary, from time to time, to determine whether, in such situations, the failure to recognize that the one or the other has a proprietary interest in the home is so contrary to justice and good conscience that a trust or other equitable obligation should be imposed."

His Honour's reference to "contrary to justice and good conscience" is to be understood as "unconscionable". The significance of this statement so understood is that it asserts that the foundation for the imposition of a constructive trust in situations of the kind mentioned is that a refusal to recognize the existence of the equitable interest amounts to unconscionable conduct and that the trust is imposed as a remedy to circumvent that unconscionable conduct.[383]

287 Ms Jeffrey-Potts pleaded her case based on a joint endeavour constructive trust as follows:[384]

1. Further, in the alternative, on the basis of the relationship, Garel and Mrs Jeffrey-Potts entered into a joint endeavour and pooled their resources whereby:

(i) Jeffrey-Potts would pay the deposits and make other payments towards the purchase price of the properties purchased and further paid maintenance on the upkeep of the properties;

(ii) Jeffrey-Potts would put the properties purchased in Garel's name to be held by him for her;

(iv) Garel would provide his labour to collect rent and perform maintenance on the properties when required;

(iii) Jeffrey-Potts would provide rent and board for Garel at her boarding house free of charge;

1. Pursuant to and in reliance upon the joint endeavour, Jeffrey-Potts purchased the properties in Garel's name between 1994 and 2006, paying entirely for Unit 2, 84 Beaconsfield Parade and paying the deposits for the other properties and other costs. Garel and Jeffrey-Potts managed the Properties and contributed money, time and labour to the properties for the purpose of joint endeavour.

1. By reason of the matters set out in paragraph 20 herein, the substratum of the joint relationship was removed without attributable blame and the benefit of the moneys contributed by Ms Jeffrey-Potts on the basis and for purposes of the joint endeavour will be enjoyed by Garel in circumstances in which it was not specifically intended or specifically provided that Garel should so enjoy it.
2. By reasons the aforesaid it would be unconscionable for Garel to retain possession of the title of the properties or deny Jeffrey-Potts an interest in the Properties.

288 I am not satisfied that the allegations contained in [24] of Ms Jeffrey-Potts' Statement of Claim are made out; in reality it is the pleading of a common intention which I doubt was ever formulated. However, I am satisfied, for reasons I have already spelt out, that Ms Jeffrey-Potts made contributions both in terms of the injection of capital, skill and labour in the management and maintenance of these eight units that it would be unconscionable in the sense explained in Baumgartner not to recognise her contribution and that a trust should be imposed on the fourth to twelfth purchases.

289 Counsel for Mr Garel argued that the Court should not conclude that a remedial constructive trust was available on the evidence. He contended that there was no evidence of unconscionable conduct on the part of Mr Garel, no evidence of pooling of resources and neither party viewed their actions as a joint endeavour.

290 I do not accept these contentions. It is not necessary for the Court to be satisfied that there was unconscionable conduct on the part of Mr Garel - rather a refusal of the Court to recognise the existence of the equitable interest would be unconscionable or, to put it another way, it would be contrary to justice and good conscience as explained by the High Court in Baumgartner.

291 I accept that at trial neither was prepared to concede that they were engaged in a joint endeavour. Each, in my view, failed to acknowledge the realities of the relationship (both business and personal) that existed between 1994 and 2010.

292 There were, in fact, occasions when both Ms Jeffrey-Potts and Mr Garel "slipped" and gave evidence consistent with what I think was the true situation. For instance, in the following exchange between Ms Jeffrey-Potts and her counsel:

COUNSEL: Did Glenda Beer - it says property manager. Was she - what was her job do you know?---Well we - she used to rent our properties for us. She would vet a client.

COUNSEL: When you say your properties do you mean the ones you were buying---Yes.[385]

293 Given my findings as to the purchase and management of the units I am satisfied that there was a pooling of resources, capital, skill and management which was "for the purpose of their joint relationship and for their mutual security and benefit".[386] Notwithstanding the protestations of the parties, this was, in reality, a joint enterprise which depended upon injections of capital as well as the different skills of the two parties. A constructive trust should be imposed.

294 The approach taken to the determination of the appropriate allowance for contributions, non-financial and financial, differed in Muschinski and Baumgartner. In Muschinski, the High Court held that it was appropriate to identify the amount of the financial contributions (which were to be repaid) to the joint property and then determine the appropriate level of contribution as applicable to the residue.

295 In Baumgartner, Mason CJ and Wilson and Deane JJ said as follows:

The facts that the Leumeah property was acquired and developed as a home for the parties and that, at least indirectly, it was largely financed out of money drawn from the pool of their earnings, this being one of the purposes which the pool was to serve, combine to support an equality of beneficial ownership at least as a starting point. Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they should share the beneficial ownership equally as tenants in common, subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind.

...

The court should, where possible, strive to give effect to the notion of practical equality, rather than pursue complicated factual inquiries which will result in relatively insignificant differences in contributions and consequential beneficial interest. We do not think, however, that the difference in the present case can be regarded as relatively insignificant. Nor has it been suggested that the difference in the amount of the financial contributions was offset by the greater worth of the respondent's contribution in other areas. In these circumstances, though acknowledging that the case is close to the borderline, we consider that the constructive trust to be imposed should declare the beneficial interests of the parties in the proportions 55 per cent to the appellant and 45 per cent to the respondent.

...

The appellant should be entitled to receive from the proceeds of any sale of the property repayment of the contributions effectively made by him before and after the period during which the parties were living together and pooling their resources.

...

The appellant should also be entitled to be repaid the instalments under the mortgage over the property which he has paid during the period since the termination of the relationship between the respondent and himself.

...

The final adjustment which should be made in the appellant's favour relates to the furniture which was taken by the respondent when her relationship when her relationship with the appellant terminated.

...

If the parties are not able to agree on the precise amounts of the above adjustments, it will be necessary to remit the matter to the Supreme Court to enable those amounts to be determined.[387]

In the setting of this case where two parties effectively lived as mother and son with their personal and business lives intermingled, I think it is appropriate to approach the task as the High Court suggested in Baumgartner. Given that the amounts I have identified as making up financial contributions are relatively similar, little turns on the approach taken.

296 Importantly for this case is the notion of giving effect to practical equality rather than examining the minutiae of every transaction - although in this case such a task would be impossible by reason of the lack of adequate records and the conflicts and inconsistencies in the evidence.

297 As is apparent from the decisions in both Muschinski and Baumgartner, assessing the respective contributions of each of the parties is not confined to financial contributions. As Debelle J said in Parij v Parij:[388]

Regard will be had to financial and non-financial contribution by the parties and, secondly, that is expressly stated that the indirect contributions or non-financial contributions includes support, home making and family care. In the particular circumstances of Muschinski v Dodds there was no necessity to have regard to indirect contributions. Although the guiding principle is unconscionability, the means by which a court should determine what is in the circumstances of a particular case the "practical equation" between direct and indirect contributions is not expressed in this decision.[389]

298 It is not necessary for me to repeat the evidence given by a multitude of witnesses as to the manner in which the properties were managed and maintained. They were managed from the boarding house and I readily infer from that evidence that questions of purchase, negotiations, maintenance, planning, matters, loan applications, rental and repayments of loans were all the subject of discussion between the two. The proceeds of the rental of the units was applied to the reduction of the loans held in Mr Garel's name. Both played a real part in dealing with third parties, but with different roles. Their areas of expertise and skill differed, particularly with the handling of digital records. I am also satisfied that there is no evidence in relation to the fourth to twelfth units that either intended or provided that the other should enjoy the benefit solely of a particular property or properties.

299 I have set out at [190]-[223] my conclusion as to the contributions made by Ms Jeffrey-Potts to the deposits and settlement funds in relation to the fourth to ninth units. In addition to that there is the amount of $127,253 inheritance in 2004 which was transferred into one of the loan accounts in Mr Garel's name.[390] This amount, however, can be ignored for present purposes as in 2010 the monies were repaid by Mr Garel.[391]

300 Mr Garel received two amounts in 2002 as a result of inheritances from his father, namely $30,000 and $81,026.78 and one from his mother's estate of $40,336.78. He said these amounts were paid into Westpac loan accounts thus reducing the bank debt. Ms Jeffrey-Potts could not recall how these funds were used.[392] The documentary evidence set out in the summary prepared by Mr Garel's counsel confirms Mr Garel's contention that these funds were used in this way.[393] I accept that these amounts are to be treated as contributions to the joint enterprise.

301 It is necessary now to summarise the conclusions I have reached in relation to financial contributions (rounded out) of both parties in relation to the fourth to twelfth properties.

(b) $30,000 - interim distribution from father's estate;[394]

(c) $81,020 - final distribution from father's estate;[395] and

(d) $40,330 - distribution from mother's estate.[396]

304 Also, I think it necessary to consider the $19,000 still owed by Mr Garel to Ms Jeffrey-Potts in relation to the first unit. True it is that at common law a claim for this amount may be statute barred, however given the nature of this relationship it should be brought into account in any equitable resolution of the enterprise's dealings, notwithstanding my finding in relation to the purchase of the first unit.

305 As I mentioned earlier I have found it close to impossible to determine who paid the outgoings and expenses for the units.[397] It is clear that some were paid by Mr Garel on his credit card; Ms Jeffrey-Potts says he was reimbursed for these payments - he denies it. Some funds for these payments came from the rental receipts - but cannot be traced. Some, it can be assumed, came from the cash kept at the boarding house. I am satisfied that Mr Garel expended part of his income on outgoings and expenses but absent any proper bookkeeping I cannot say how much - just as I cannot reach a conclusion about how much Ms Jeffrey-Potts contributed.

306 I have set out at [231]-[257] the evidence and my conclusions concerning the non-financial or indirect contributions made by both.

307 A further issue arises here: what if any recognition is to be given to the competing contentions relating to life at the boarding house. Ms Jeffrey-Potts argues that I should take into account the fact that Mr Garel lived rent-free at the boarding house for nearly sixteen years and had the use of Ms Jeffrey-Potts' car as part of their relationship. Mr Garel counters by asserting that he spent considerable amounts of time carrying out repair work on the boarding house during his time as a tenant. It was not in issue that Mr Garel lived rent-free from 1993 onwards. I cannot make a finding one way or another as to the provision of food as each gave conflicting accounts of how the food was paid for.[398] I suspect the reality lies somewhere between the two accounts.

308 I am also satisfied that Mr Garel spent at least one or two weeks a year assisting with repairs and maintenance to the boarding house and the bungalow at the rear.[399] There was lengthy cross-examination of Mr Garel on the point and I think in general his evidence as to the work he performed should be accepted. He also assisted Ms Jeffrey-Potts with planning matters concerning the boarding house. To this may be added the fact that he was, in effect, a chauffeur for Ms Jeffrey-Potts, albeit using her car, particularly as she aged and, quite clearly, in his younger days performed errands on her behalf.

309 The end result is that I regard life at the boarding house as being of mutual benefit to both, in relation to companionship as well as the provision of basic needs. In my opinion it is appropriate, given the contribution made by each to the others existence, to put to one side this aspect of their relationship and focus on the joint endeavour in relation to the purchase and management of the units.

310 Baumgartner stands for the proposition that where capital has been pooled in roughly equal amounts, then equality should prevail.

311 The financial contributions by Mr Garel outweigh those of Ms Jeffrey-Potts. But there is an adjustment in respect of the outstanding loan amount of $19,000 which should be taken into account in Ms Jeffrey-Potts' favour making the financial contributions roughly proportionate. Mr Garel, of course, assumed the risk by taking out loans and mortgages in his name alone.

312 As to indirect contributions, Ms Jeffrey-Potts' contribution to the enterprise, particularly of capital and management, in its formative stages is significant just as Mr Garel's management of the enterprise was important in the latter stages. Whilst I think this is a case where equity should favour equality particularly as the capital contributions with adjustments are relatively similar I am of the view that but for Ms Jeffrey-Potts' capital injections and expertise the enterprise could not have flourished as it did. She provided the resources and skill which set up the business and permitted it to grow. This, I consider, means that there should be a slightly greater recognition of her contribution to the enterprise than that of Mr Garel. The constructive trust to be imposed in relation to the fourth to twelfth units should declare the beneficial interest of Ms Jeffrey-Potts to be sixty per cent and Mr Garel to be forty per cent.

The other allegation made by Ms Jeffrey-Potts - the misuse of $127,253

313 Ms Jeffrey-Potts alleged that Mr Garel has misused the inheritance forwarded to her in 2004.[400] On her instruction[401] the funds had been electronically transferred by the solicitors in England to a nominated account number - 03-13555-5109 - in Mr Garel's name. However the allegation fell away as the evidence demonstrated that this was a Westpac loan account in relation to the purchase of Unit 10 Beaconsfield Parade, consistent with Mr Garel's evidence that the money was used to pay "the lowest loan off and that the residue was transferred to another loan".[402]

314 These funds were subsequently the subject of a separate claim and Ms Jeffrey-Potts was repaid in 2010.[403]

315 At best, Ms Jeffrey-Potts' complaint came down to the fact that the monies were, contrary to her instruction, not placed in an offset account. Even if I accept that this was her instruction, nothing turns on it.

316 Mr Garel maintains that Ms Jeffrey-Potts should be disentitled to any equitable relief she seeks by reason of laches. This defence was never fully aired by Mr Garel's counsel during the course of the trial despite Mr Garel bearing the onus of proof.[404] However, in essence it amounts to an assertion that by reason of Ms Jeffrey-Potts' delay in asserting her claim over the properties, it is inequitable and unreasonable to award her equitable relief because of the irreparable prejudice that the delay has had on Mr Garel.[405]

317 In his closing submissions, counsel for Mr Garel identified Ms Jeffrey-Potts' delay in lodging the caveats over the properties (which were, according to counsel for Mr Garel lodged on 30 May 2010 and counsel for Ms Jeffrey-Potts lodged in August 2010) as the relevant delay that attracted the defence of laches. The documentary evidence suggests the caveats were lodged in May and June of 2010.[406] It was submitted that until that point, Mr Garel was entitled to deal with the properties as if he was the sole owner. In particular it was said that his purchase of a property at Horsham in May 2010, entirely through borrowed funds, was undertaken in the belief that each of the properties belonged to him alone and could be used to provide security for the Horsham purchase. Counsel for Mr Garel identified the following principles in Hourigan v Trustees Executors and Agency Co Ltd[407] as relevant to whether the defence applied:

If a party in a position to claim an equitable right which is not undisputed lies by and acts in such a way as to lead to the belief that he has no such claim, or will not set it up, and thus encourages the party in possession to so deal with his own affairs that it would be unfair to him... to tear up the transactions and go back to the position which might originally have obtained, the Court of equity will not, even where the claim is that an express trust is created, disregard the election of the party not to institute his claim and treat as unimportant the length of time during which he has slept on his rights and induced the common assumption that he does not possess any.[408]

318 It is clear from the evidence that prior to 26 April 2010, with the possible exception of the early months of 2010, the relationship between Ms Jeffrey-Potts and Mr Garel was harmonious. Moreover, it seems plain that before the breakdown of the relationship, it would not have been foreseeable that either party would have dealt with the properties without the involvement of the other. It follows, as identified by counsel for Mr Garel, the only delay that could attract the defence of laches is the time taken between the breakdown of the relationship on 26 April 2010 and the lodging of the caveats in May and June 2010, and with the only prejudice to Mr Garel being the liability he assumed in relation to the purchase of the Horsham property.

319 In determining whether this delay attracts the defence of laches, the Court is required to look at the length of the delay, the nature of the acts done during the interval period, the nature of the right claimed and the property in which it is claimed.[409] In my opinion, a delay of approximately six to seven weeks is neither inordinate nor unreasonable particularly given Ms Jeffrey-Potts' age and the need to obtain legal advice about her position, which as this trial has demonstrated, was complex.

320 Further, the nature and length of the relationship between Ms Jeffrey-Potts and Mr Garel (and its acrimonious termination) should have put Mr Garel on notice of a potential claim against the properties. His decision to purchase the property in Horsham shortly after the dissolution of the relationship must have been made with this knowledge, particularly given his offer of 22 April 2010 to "gift" the Beaconsfield Parade properties.

322 The counterclaim filed on behalf of Mr Garel included a number of allegations which have been dealt with as part of the assessment of the contributions made by each towards both the enterprise and their mutual existence at the boarding house. I need say no more about those matters.

323 I am not satisfied that there was an agreement between the two that Mr Garel would take an interest in the boarding house in the event of the relationship coming to an end. This was denied by Ms Jeffrey-Potts[410] and the evidence of Mr Garel is unpersuasive.

324 The remaining substantive allegation in the counterclaim relates to the lodging by Ms Jeffrey-Potts of caveats over the properties to which I now turn.

325 In May and June 2010, Ms Jeffrey-Potts lodged caveats in relation to each of the Victoria Court and Beaconsfield Parade units which have prevented Mr Garel from dealing with the properties.[411]

326 Mr Garel's counterclaim is premised on establishing that caveats lodged by Ms Jeffrey-Potts were "without reasonable cause".

327 Section 118 of the Transfer of Land Act provides for the recovery of compensation where a caveat is lodged "without reasonable cause". In Commonwealth Bank of Australia v Baranyay,[412] Hayne J said:

It is clear that the onus is on the bank to show that the caveator acted without reasonable cause. Is it enough for the bank to show that Baranyay had no caveatable interest or must it show more? Authority suggests that more must be demonstrated. Without in any way seeking to give an exhaustive definition of the circumstances covered by the very general expression "without reasonable cause" it would seem to me to be likely that the foundation for reasonable cause will often be as Wootten J said in the Bedford Properties Case "not the actual possession of a caveatable interest but an honest belief based on reasonable grounds that the caveator has such an interest." However, as his Honour went on to say, honest belief on reasonable grounds may not always be enough to show reasonable cause for lodging a caveat, eg in the case where a caveat is lodged not for protection of the caveator's interest but for an ulterior motive and without regard to the effect on transactions to which the caveator had agreed...[413] (authorities omitted)

328 Baranyay was considered by the Victorian Court of Appeal in Disctronics Ltd v Kingston Links Country Club Pty Ltd:[414]

[91] It is true that, to recover compensation for the lodging of a caveat, the aggrieved party must go further than showing simply that the caveator never had a caveatable interest. As Hayne J said in Baranyay, more must be demonstrated...

In that case, Hayne J went on to accept, on the evidence, that the caveator did 'honestly believe that he had the interest that he claimed' and further that it had not been shown that he had no reasonable grounds for that belief.

[92] Baranyay was decided in 1992. In 1994, the Court of Appeal in New South Wales decided Gustin v Taajamba Pty Ltd. In that case, there was a long history of dispute between the parties in relation to a contract for the sale of land and upon the vendor's purported rescission of the contract for breach by the purchaser, the purchaser lodged a caveat to protect its interest under the contract and sought specific performance. Interlocutory relief was obtained on the usual undertaking as to damages and the court subsequently granted a declaration that the contract had been validly terminated. The question was what damages ought to be paid, either by virtue of the undertaking or because the caveat had been lodged without reasonable cause, if such was the case. As to the latter, Handley JA (with whom the other judges agreed) said:

In my opinion the caveator did have reasonable cause to lodge and maintain his caveat while his proceedings were pending in the equity division of this court. He applied and obtained ex parte interlocutory relief on 24 December 1985 and in doing so necessarily persuaded the judge that there was a substantial question to be tried in the proceedings. Thereafter, until the dismissal of the proceedings ... on 13 October 1986 an interlocutory injunction remained in force ...

... Although the proceedings were dismissed, [the] history [of the proceeding] demonstrates that there was reasonable cause for lodgement of the caveat. Following the appeal to this court ... the plaintiff again moved for interlocutory relief which was granted ... This remained in force until the appeal was dismissed.

Once again, the grant of such interlocutory relief either by judicial decision or as a matter of admission by the respondent, demonstrates that there was a substantial question to be determined on the appeal. Apart from the history of the proceedings there was no other evidence to establish that the caveat had been lodged without reasonable cause.'

Wanting any other evidence, it was accepted that the plaintiff believed that he had reasonable cause to maintain the proceedings and equally that he had reasonable cause to maintain the caveat. There was no evidence that the plaintiff at any stage thought or was advised that he had no reasonable cause for lodging or maintaining the caveat. This was despite the failure of the plaintiff to give evidence and expose himself to cross-examination...

[93] ...It was, I think, only the fact that Disctronics was the caveator that led her Honour to conclude that the caveat was lodged without reasonable cause.[415]

329 Ms Jeffrey-Potts has established that she has an equitable interest in eleven of the twelve units and this of itself is sufficient to dispose of the application in relation to those caveats.

330 In relation to the first unit, I am not satisfied that Ms Jeffrey-Potts acted without reasonable cause in lodging the caveat. Even though my findings result in Ms Jeffrey-Potts not having a caveatable interest in the property and notwithstanding my views as to her credit, it is clear that her funds were used in the purchase of the property and that funds remained outstanding to her notwithstanding my rejection of her case based upon an express trust or other form of caveatable interest. As these reasons have demonstrated, the position was anything but simple. I am satisfied that she believed that she had a reasonable cause to maintain her claim and the caveat.

(a) the first unit, Unit 2 Victoria Court, remains in the legal ownership of Mr Garel;

(b) the second and third units, Unit 6, 84 and Unit 14, 82 Beaconsfield Parade are each held by Mr Garel on trust for Ms Jeffrey-Potts, who holds the entire beneficial interest;

(c) the remaining units are the subject of a constructive trust based on the joint endeavour of the parties;

(d) the beneficial interest, pursuant to the constructive trust, of Ms Jeffrey-Potts is 60% and Mr Garel 40%;

(f) Mr Garel is not entitled to compensation under s 118 of the Transfer of Land Act in relation to the lodging of the caveats by Ms Jeffrey-Potts.

332 After the conclusion of the evidence, Mr Garel's solicitors sought to tender Mr Garel's tax returns for the financial year ended June 1995 to 2002. The request was made on 13 June (over one month after the evidence concluded) and nine days prior to the delivery of judgment. My associate requested that the parties consider the matter and if it could not be agreed to admit the tax returns by consent, to provide submissions by 18 June 2012. On that day, the solicitors for Ms Jeffrey-Potts wrote to my associate indicating that they had not received copies of the documents which were sought to be tendered and, in any event, opposed the application. The solicitors for Mr Garel sought a further one day's delay in finalising submissions. I rejected this application and Mr Garel's submissions were filed that afternoon.

333 I think Mr Garel's application should be rejected. I am prepared to accept that the documents may be of some probative value[416] although I note that the tax assessments for these years have been tendered. In my opinion the application was made far too late. There is no evidence as to why these documents could not have been adduced in the course of the trial and no satisfactory explanation for their delivery at such a late time. The failure to provide Ms Jeffrey-Potts' solicitors with the documents only exacerbates the problem particularly in the light of the delivery of judgement on 22 June. In those circumstances, I was not prepared to permit the adducing of further evidence.

334 There is then an outstanding issue about the rental payments that have been made since this dispute erupted. It will be necessary for adjustments to be made concerning those amounts as a consequence of my findings. One would have thought that the parties could sit down and sort this out. Hope springs eternal. Failing that, I propose to appoint a special referee to report as to the appropriate distribution.

335 It may also be necessary to make consequential orders concerning the sale of the units and the removal of caveats. The parties will have 28 days to consider my findings and endeavour to bring in orders reflecting my conclusions.

336 There is one final matter. It was accepted that Ms Jeffrey-Potts has not filed a tax return or any other financial document required under Commonwealth taxation legislation with The Australian Tax Office since at least 1992 despite her receipt of income from tenants of the units in the boarding house.[417] There is also no evidence (apart from her weak unsubstantiated protestation that she had at some point of time in the past paid income tax) of her having filed a tax return at any earlier point of time notwithstanding her receipt of income from multiple sources prior to that year. The very large amount of cash held by her has never been satisfactorily explained. It is appropriate to refer my findings to the Deputy Commissioner of Taxation.

[4] Another boarder, a printer, kept a room but was rarely resident; T1307.

[10] [3]-[11] of the Further Amended Statement of Claim.

[11] [4(c)] of the second Further Amended Defence - also alleged in [35]-[39] of the Further Amended Statement of Claim.

[12] [12]-[34] of the Further Amended Statement of Claim.

[13] Compare [6] of the further amended statement of claim with [4(a)] of the Second Further Amended Defence. Mr Garel contributed funds from his earnings, inheritances and a gift from his mother. Mr Garel made no payments towards the purchases.

[14] [36] of the Second Further Amended Defence.

[19] T324-T325, T423, T426-T427, T560, T657, T664.

[23] "Transfer of Land Act"

[24] Exhibits P17, P22, P27, P37, P43, P59 and P64; T650, T1026.

[25] Exhibits P8, P59 and P64; T650, T1026.

[27] Exhibits P94, P95, P83, P86, P100 and P116; T757, T778.

[28] Exhibits P38, P77, P117-119; T1053.

[32] Exhibits D9, D19, D20, D21, D23; T660, T1079, T1182, T1188, T1191.

[33] Exhibits P4-8, P10, P12, P17-18, P20-25, P27-9, P32-5, P37, P39, P41-6, P48, P51, P53, P55-7, P59-60, P62, P64-5, P67-8, P70, P72-3, P75-6; T785-786, T801, T821, T835.

[95] Ms Jeffrey-Potts also relied upon the uncontradicted statements made by her to Mr Hill in the presence of Mr Garel as an admission by conduct. See also [66] above.

[129] Exhibit P13 ("the December pages").

[132] Counsel for Ms Jeffrey-Potts relied upon telephone records of the boarding house phone to suggest that Mr Garel had returned to the boarding house after 26 April 2010 and used the home telephone to make calls to Warracknabeal (see Exhibit P103). It was suggested that he removed items from the boarding house. Mr Garel denied doing so (T1726) and another witness, Ms Downes - whose Warracknabeal number appears in the records at this time - swore that she had, in fact, been rung by Ms Jeffrey-Potts shortly after the break up (T1086, T1109). Ms Jeffrey-Potts denied such a conversation (T705). I accept Ms Downes' evidence.

[140] T568-569. In final addresses, counsel for Ms Jeffrey-Potts advanced a theory based on accumulation of rental as the source of this amount. This was never attested to by Ms Jeffrey-Potts and fails to deal with her asserted lack of a cheque account.

[141] [2012] HCA 5.

[143] [1959] HCA 8; (1959) 101 CLR 298.

[152] Exhibit D6 ("the May affidavit").

[167] See [41], [42] and [55] above. This is also consistent with Mr Garel's evidence that one of the cheques went to Williams, Winter & Higgs (T987-T1323).

[210] See [69] above and [241] below.

[273] T603, T1054, T1404, T1407 and T1409.

[301] E.g. in relation to 10/84 Beaconsfield T625 and T631; in relation to 4 Victoria Court T625 and T632. In relation to 11 Victoria Court T625, T632 and T633.

[302] See [80] of the written submissions of Ms Jeffrey-Potts; Mr Garel T1813.

[310] Exhibit P69; T636-637, T346-348, T1159.

[353] See Schedule 2 to Ms Jeffrey-Potts' closing submissions.

[356] See Schedule 3 to Ms Jeffrey-Potts' closing submissions.

[366] See [3] of the Further Amended Statement of Claim.

[367] See [4] of the Further Amended Statement of Claim.

[368] [2012] WASC 19.

[369] Ibid, [96]. See also the discussion in relation to resultants trust other than those resulting from the presumed manifestation of an intention to create a trust, [100]-[116].

[370] [1984] HCA 81; (1984) 155 CLR 242, "Calverley".

[371] Ibid, 246-247. See also Mason and Brennan JJ, 258 and Deane J, 269. See also Trustee of the Properties of Cummins (A bankrupt) v Cummins (2006) ADLAJR 589 at [55].

[373] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at 262, 252 and 269.

[374] See [43] of Ms Jeffrey-Potts' written submissions.

[375] [1985] HCA 78; (1985) 160 CLR 583, "Muschinski".

[376] [1987] HCA 59; (1987) 164 CLR 137, "Baumgartner".

[377] [1990] UKHL 14; [1991] 1 AC 107.

[378] Ibid, 132-133. See also Ogilvie v Ryan (1976) 2 NSWLR 504.

[379] Further amended statement of claim.

[380] [1985] HCA 78; (1985) 160 CLR 583. But see the discussion in Ong, Trust Law in Australia, 3rd ed. 464-465.

[382] [1987] HCA 59; (1987) 164 CLR 137.

[384] Further Amended Statement of Claim.

[386] Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 149.

[387] Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137,149-151.

[388] [1997] SASC 6771; (1997) 72 SASR 153.

[400] See [9] and [10C] of the Further Amended Statement of Claim.

[404] Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221.

[405] Orr v Ford [1989] HCA 4; (1989) 167 CLR 316 per Deane J, Fysh v Page [1956] HCA 13; (1956) 96 CLR 233 per Dixon CJ, Webb and Kitto JJ; Hourigan v Trustees Executors and Agency Co Ltd [1934] HCA 25; (1934) 51 CLR 619.

[407] [1934] HCA 25; (1934) 51 CLR 619.

[408] [1934] HCA 25; (1934) 51 CLR 619 at 629-630 per Rich J.

1. [409] Fysh v Page [1956] HCA 13; (1956) 96 CLR 233 at 243-4 per Dixon CJ, Webb and Kitto JJ; Boyns v Lackey (1958) SR (NSW) 395 at 402; Orr v Ford [1989] HCA 4; (1989) 167 CLR 316 at 341 per Deane J and Baburin v Baburin (No 2) [1991] 2 Qd R 240.

[412] [1993] VicRp 43; [1993] 1 VR 589.

[414] [2005] VSCA 27; (2005) 12 VR 513.

[415] Ibid, 548-549. See also the discussion by Croft J in RDN Developments Pty Ltd v Shtrambrandt & Ors [2011] VSC 130.

1. [416] Although it is doubtful whether the evidence would be so material that the interests of justice require it or that the evidence would affect the result. See Murray v Figge (1974) 4 ALR 612.

[417] The only evidence that Ms Jeffrey-Potts completed a return around 1992 was her own unsubstantiated account. See T649.