Samootin v Shea and Ors

[2003] NSWSC 695

Supreme Court of NSW|2003-08-01|Before: Palmer J

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Court

Supreme Court of NSW

Decision date

2003-08-01

Before

Palmer J

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Judgment (72 paragraphs)

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CITATION : Samootin v Shea and Ors (No 2) [2003] NSWSC 695 HEARING DATE(S) : 14 to 18, and 21 & 22 July, 2003 JUDGMENT DATE : 1 August 2003 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Judgment for the Defendants on the Plaintiff's claims; Cross Claimants entitled to declarations and an enquiry.

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CATCHWORDS : RESULTING TRUST - Plaintiff claimed that her share of the proceeds of sale of the jointly owned property had been used in the purchase of other properties in the name of one of the Defendants alone, without her knowledge and consent. HELD: The Plaintiff had understood and agreed to the transactions - the other parties had never disputed the Plaintiff's entitlement to an interest in the properties - the Plaintiff was not entitled to the further relief which she claimed. SOLICITORS - NEGLIGENCE - FIDUCIARY DUTY - The Plaintiff claimed that the solicitor acting on the sale of the jointly owned property had applied the Plaintiff's share of the proceeds of sale to the purchase of other properties in the name of one of the Defendants alone, contrary to instructions, negligently and in breach of fiduciary duty. HELD: In carrying out the transactions, the solicitor had acted in accordance with the Plaintiff's express instructions. - Supreme Court Act 1970 (NSW) - s.84(2) LEGISLATION CITED : - Trade Practices Act 1974 (Cth) - s.51AA, s.51AC, s.52, s.82(1), s.82(2) - Trade Practices Amendment Act (No 1) 2001 (Cth) - Schedule 1, Item 21 Alexandra Samootin - Plaintiff Christopher George Shea - First Defendant Peter John Deans - Second Defendant PARTIES : Loan Design Pty Limited - Third Defendant S.R. Deans Pty Limited - Fourth Defendant Giselle M. Wagner t/a Northern Beaches Legal Service - Fifth Defendant Adrian Philip Holmes - Sixth Defendant FILE NUMBER(S) : SC 1973/01 In person - Plaintiff COUNSEL : In person - First Defendant M. Tzannes - Second to Fourth Defendants G. Curtin - Fifth and Sixth Defendants In person - Plaintiff SOLICITORS : In person - First Defendant Brian Muir & Co - Second to Fourth Defendants Mallesons Stephen Jaques - Fifth and Sixth Defendants

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1 This is a tragic case for all who have been involved in it. The Plaintiff, Ms Samootin, has developed a fixation that she has been a victim of a fraudulent conspiracy between her ex-husband, the First Defendant ("Mr Shea"), and the Second Defendant ("Mr Deans") whereby she has been cheated out of her home. She has commenced proceedings in the Family Court, in this Court and in the Federal Court, all of which she has conducted herself without legal assistance. 2 The reality is that, while Ms Samootin's share of the net proceeds of sale of her jointly owned former matrimonial property was invested in the properties the subject of these proceedings and her name did not appear on the title to those properties, Mr Shea and Mr Deans have never denied that Ms Samootin had a beneficial interest in the properties commensurate with the proportion of her contribution to the parties' equity in the properties. Indeed, at Ms Samootin's request Mr Shea and Mr Deans signed an acknowledgement to that effect in July 1998, well before Ms Samootin commenced these proceedings. 3 As far as I am able to determine, these proceedings and the proceedings in the Family Court were never necessary in order to establish Ms Samootin's interest in the properties because that interest was not in contest. 4 Nevertheless, the Defendants have not been able to disentangle themselves from a nightmarish web of litigation in which Ms Samootin has enveloped them since 1998, not only in the Family Court and in this Court, but in the Local Court, the District Court and the Federal Court. There has been at least one application by Ms Samootin to the High Court and numerous applications by her to the Full Court of the Family Court and to the Court of Appeal. 5 The costs of this litigation to the present Defendants and others whom Ms Samootin has sought to join must be very substantial. A large number of costs orders have been made against Ms Samootin in the interlocutory proceedings in the various Courts. They are said to amount to about $150,000 and a final costs order will be made against her in these proceedings. Whether those costs can actually be recovered from Ms Samootin must be extremely doubtful.

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12 At the commencement of the hearing of this case I sought to clarify the issues. From a reading of the pleadings, it seemed to me that Mr Shea, Mr Deans and Loan Design did not dispute, and never had disputed, that Ms Samootin's share of the net proceeds of sale of the Mona Vale Property had been used in the purchase of Nos.24 and 26 and that she had a proportionate beneficial interest in those properties. I sought confirmation from Mr Shea, who is appearing in these proceedings in person, and from Counsel for Mr Deans, Loan Design and the Fourth Defendant, that this understanding was correct. That confirmation was given. 13 I then spent a considerable amount of time explaining to Ms Samootin that there was no contest in the proceedings that she was entitled to a beneficial interest in the two properties commensurate with the contribution which her share of the net proceeds of sale of the Mona Vale Property had made to the equity in Nos.24 and 26. Mr Shea confirmed that he admitted that Ms Samootin was at all times entitled to fifty per cent of the net proceeds of sale of the Mona Vale Property. I explained to Ms Samootin that the law would give her remedies such as a declaration of her interest in Nos.24 and 26 and an order for sale of the properties so that there would be payment to her of her percentage interest in the net proceeds of sale of those properties, after appropriate adjustments. I explained that the relief which Ms Samootin sought, as set out above, could not be granted by the Court for various reasons which I gave. This explanation appears at pp.1 to 11 of the Transcript. 14 At several points during the course of my explanation to Ms Samootin I enquired of her what orders or relief she sought in light of the fact that Mr Shea, Mr Deans and Loan Design did not dispute that she was entitled to an interest in Nos.24 and 26 commensurate with her contribution to the equity in those properties. Ms Samootin was able to say no more than that she considered that the relief which she sought in her final Statement of Claim was more favourable to her. 15 I then suggested settlement discussions with the assistance of a Senior Deputy Registrar as mediator. The parties agreed and the mediation commenced in the morning of the following day. At 2.00pm that day it was announced that the mediation had been unsuccessful. 16 The factual issue between the parties is whether or not, prior to the acquisition of Nos.24 and 26, Ms Samootin knew and approved the use of her share of the proceeds of sale of the Mona Vale Property in the purchase of these two properties in the name of Loan Design. I have not been able to understand, however, what legal consequences Ms Samootin says should flow if I find this issue in her favour since, at all times from 8 July 1998, her interest in the properties has been admitted and further, at the commencement of the trial, Counsel for Mr Deans informed me that Mr Deans would be seeking an order that accounts be taken between the parties for the purpose of establishing their precise contributions to the properties and, consequently, what interests therein each of the parties have. I did not understand Ms Samootin to be opposed to such an accounting. 17 Nevertheless, I concluded that I was obliged to hear the whole of these proceedings for two reasons. First, if Ms Samootin's account of the facts was correct, a finding was possible that Ms Wagner had acted negligently or in breach of fiduciary duty. Even though such negligence or breach of duty did not result in Ms Samootin being deprived of an interest in the properties, it might be possible for Ms Samootin to prove some other compensable damage, as she had claimed in paragraphs 6 and 7 of the Relief: see para.11. Second, there should be findings of the Court on the factual issues which would bind the parties by issue estoppels or estoppels by judgment so as to put an end, so far as it is possible, to all further controversy between the parties. 18 Finally, I should add that the Sixth Defendant, Mr Holmes, purchased the goodwill of Ms Wagner's practice well after the events in question. Ms Samootin has made no assertions against Mr Holmes and it is clear that he should never have been joined as a Defendant.

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19 Ms Samootin and Mr Shea were married in 1971. There were three children of the marriage. They lived in a number of matrimonial homes, some of which were purchased in Mr Shea's name alone. In 1978 they purchased the Mona Vale Property in Mr Shea's name alone; in 1988 it was transferred into both their names as joint tenants. 20 Ms Samootin and Mr Shea were divorced in June 1993 but they continued to live together in the Mona Vale Property, they say, for the sake of their children. Mr Shea worked as a teacher and had a part-time job as well. He was primarily responsible for mortgage repayments and household expenses such as electricity and rates. He paid for his own food. From about April 1993, Ms Samootin began to receive a sole parent's pension and, later, a disability support pension on the ground that she was suffering from chronic fatigue syndrome and a heart murmur. 21 In 1997, Ms Samootin and Mr Shea decided to sell the Mona Vale Property and purchase another property together. By a contract for sale dated 27 July 1997 they sold the Mona Vale Property for a sum of $401,500. The solicitor who acted for them on the sale was the Fifth Defendant, Ms Wagner, who was then carrying on a sole practice at Mona Vale under the name "Northern Beaches Legal Service". 22 It is to be observed that the vendors are described in the contract for sale of the Mona Vale Property as "Christopher George Shea and Alexandra Shea" , despite the fact that Ms Samootin had been divorced from Mr Shea for four years. Ms Samootin signed the contract on the front page as "A. Shea" . These circumstances are significant because Ms Wagner says that it was not until January 1998 that she was informed that Ms Samootin was divorced from Mr Shea. 23 Mr Shea and Ms Samootin began looking for another house together. On about 18 October 1997 they found a house at 26 Oxford Falls Road, Beacon Hill ("No.26") and made an offer of $365,000, which was accepted. They wished to pay the deposit on the purchase of No.26 out of the deposit which had been paid by the purchaser of the Mona Vale Property and Ms Wagner made a request to the purchaser, in accordance with a term of the contract, for release of part of the deposit for that purpose. On 24 October 1997, the real estate agent holding the deposit forwarded a cheque for $36,500 to Ms Wagner in accordance with her request, and on the same day a contract for the purchase of No.26 in the name of Mr Shea alone was exchanged. The cheque for the deposit of $36,500 which had been received by Ms Wagner was banked into a joint account in the names of Mr Shea and the vendor of No.26, to be held pending settlement of the purchase. 24 On 25 October 1997, Mr Shea, Ms Samootin and their children moved into No.26 under licence. Mr Deans, who had been a friend of Mr Shea for some five years, helped Ms Samootin and Mr Shea with the move. On or shortly after that day, Mr Shea and Mr Deans became aware that the neighbouring property, No.24 Oxford Falls Road ("No.24") was for sale. Mr Shea and Mr Deans say, and Ms Samootin disputes, that with the knowledge and approval of Ms Samootin it was agreed that the three parties would purchase No.24 in the name of a company and that they would carry out a development of Nos.24 and 26 for profit. I will return to the resolution of this dispute shortly. 25 On 27 October 1997, settlement of the sale of the Mona Vale Property occurred. The net proceeds of sale on settlement were $226,809.79 and on 28 October a cheque for that amount in favour of Mr Shea and Ms Samootin (under the name "A. Shea") was picked up from Ms Wagner's office by Ms Samootin. In disputed circumstances to which I will return, that cheque was endorsed by Ms Samootin in Mr Shea's favour alone and was deposited into an account in his name alone at the Commonwealth Bank, Frenchs Forest. 26 On 7 November 1997, the contract dated 24 October 1997 for the purchase of No.26 in the name of Mr Shea as purchaser was rescinded by agreement with the vendor, and on the same day a contract for the purchase of that property was entered into in the name of Loan Design (which was then called Shea Dealite Pty Ltd). That company had been acquired by Mr Shea and Mr Deans and was to be the vehicle for the development of Nos.24 and 26. The directors were Mr Shea and Mr Deans. Ms Samootin was neither a director nor a shareholder. The sole shareholder of Loan Design is S.R. Deans Pty Ltd, the Fourth Defendant. Mr Shea and Mr Deans say that it was intended that the parties' interest in the project would be reflected in the shareholding of S.R. Deans. 27 On 14 November 1997, a contract for the purchase of No.24 was entered into for a purchase price of $370,000. The name of the purchaser under the contract was originally shown as Mr Deans alone, but that was crossed out and Shea Dealite Pty Ltd was substituted. 28 Ms Wagner acted as the solicitor in respect of the purchase of both No.24 and No.26. 29 Settlement of the purchase of the properties was effected on 5 December 1997. Precise details of the source and application of funds for the settlement have not been ascertainable at this stage and will have to be determined in an accounting but the following appears from the available documentation. The total purchase price in respect of both properties was $735,000. The source of the deposits of $37,000 and $36,500 in respect of the purchases of Nos.24 and 26 respectively was the proceeds of the sale of the Mona Vale Property. The monies paid on settlement of the purchases totalled $666,351.79. Of that amount, $550,849 was provided by the St George Bank pursuant to a mortgage over Nos.24 and 26 and a mortgage over Mr Deans' property at 33a Oxford Falls Road, Beacon Hill. The balance came from two bank cheques, the exact source of which is presently unknown but probably was the proceeds of sale of the Mona Vale Property. Stamp duty on both contracts and other incidental costs and disbursements of the purchases were also paid out of the proceeds of the sale of the Mona Vale Property. 30 In short, it presently appears that the majority of the funds for the purchase of the properties not provided by the mortgagee came from the proceeds of sale of the Mona Vale Property. 31 Shortly after settlement of the purchase, in late December 1997, Ms Samootin fell out with Mr Shea. She had become convinced that Mr Shea had procured the murder of their son, Andrew, in 1994. The reality is that Andrew died in a cycling accident while in Brisbane on holiday; Mr Shea and Ms Samootin were in Sydney at the time. 32 Ms Samootin came to believe that Mr Shea had organised Andrew's murder for the purpose of making a profit from the illegal sale of his organs, that her sister and Mr Deans were involved in the sale, that Mr Shea had procured the murder of his son to enable his mistress to make investments from the profits of the sale of Andrew's organs, that his mistress' family had Mafia connections and were involved in the killing, that the Police and the Morgue officials were involved in the conspiracy, and a great deal more. Ms Samootin's beliefs, which she continues to hold and which she persists in introducing into the evidence in this case, bear the classic hallmarks of severe paranoid delusion. 33 To return to the narrative, in December 1997 Ms Samootin came to believe that Mr Shea had admitted that he was guilty of Andrew's murder and that she had to fight him for Andrew's sake. On 19 January 1998 she went to see Ms Wagner. According to a file note made by Ms Wagner that day, Ms Samootin appeared agitated. She recounted to Ms Wagner her beliefs about Andrew's murder by Mr Shea. She said that Andrew had been chosen to provide organs for a Brisbane magistrate who had been waiting some time for them. She said that she had been carrying out her own investigations and "would not rest until justice was done" . She concluded by saying that she wanted to see Ms Wagner again in relation to a family law property settlement which she would be seeking from Mr Shea. 34 On 30 January 1998, Ms Samootin again attended Ms Wagner's office. A diary note made by Ms Wagner records that Ms Samootin alleged that Mr Shea had defrauded her and misled her in relation to the Mona Vale Property. In the course of the conference, according to Ms Wagner's file note, Ms Samootin said "that she would like to be 'an equal partner' in any development with Mr Shea. Her husband should make her an 'equal partner' and remove Peter Deans" . 35 On 12 February 1998, Ms Samootin lodged caveats against the titles to Nos.24 and 26, claiming an estate or interest in the properties under a constructive trust. Those caveats have remained on the titles. 36 On 7 May 1998, Ms Samootin commenced proceedings in the Family Court. The relief sought in those proceedings is obscure but she obtained injunctions restraining Loan Design, Mr Shea and Mr Deans from dealing with the properties. Those injunctions are still in force. 37 In early July 1998, Ms Samootin requested Mr Shea to obtain a written acknowledgement from Mr Deans as to the parties' interests in Nos.24 and 26 and as to the use of the parties' funds in the acquisitions. Mr Shea prepared a document which he took to Mr Deans. Mr Deans re-worded it somewhat, signed it and returned it to Mr Shea. Mr Shea then showed the document to Ms Samootin, who expressed satisfaction with it. Mr Shea signed the document and Ms Samootin has had a copy ever since. 38 The document is in the following terms: "STATEMENT and ACCOUNT between CHRISTOPHER GEORGE SHEA and PETER JOHN DEANS.

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40 I have taken the following account essentially from the Statement of Claim which Ms Samootin filed on 21 November 2001. 41 Ms Samootin says that at all times it was her intention that the proceeds of sale of the Mona Vale Property be utilised solely to purchase a new home, ultimately No.26, in the name of herself and Mr Shea as joint tenants. The following is her account of what happened after the contract for sale of the Mona Vale Property was entered into. 42 She and Mr Shea began looking for a home. They saw a property in Lyly Street, Allambie Heights, and made an offer to purchase it. They approached Ms Wagner to act on the purchase but subsequently changed their minds about the property. 43 When Ms Samootin and Mr Shea found No.26, Ms Samootin telephoned Ms Wagner on 20 October 1997 and asked her to find out if the property was suitable for dual occupancy development. 44 On 22 October 1997, Ms Samootin and Mr Shea attended Ms Wagner's office and instructed her that No.26 was to be purchased in both their names. She made a note that she was to attend Ms Wagner's office with Mr Shea to sign the contract on 24 October. She and Mr Shea gave Ms Wagner instructions to seek the release of $36,500 from the deposit paid under the contract for sale of the Mona Vale Property for use as the deposit on the purchase of No.26. 45 On 24 October, Ms Wagner received a cheque for $36,500 in her favour from the real estate agent holding the deposit for the sale of the Mona Vale Property, and Ms Wagner endorsed the cheque in favour of Mr Shea and the vendor of No.26 so that it could be banked into a joint account in their names pending settlement of the purchase. Ms Samootin did not know of, or authorise, this dealing with the deposit. 46 The contract for purchase of No.26 was exchanged on 24 October and showed only the name of Mr Shea as purchaser. This was done without Ms Samootin's knowledge and consent. Later, the contract was rescinded and a new contract was entered into by Loan Design as purchaser. This also was done without Ms Samootin's knowledge and consent. 47 The contract for the sale of the Mona Vale Property was settled on 27 October. On 28 October, Ms Samootin picked up from Ms Wagner's office a cheque in favour of herself and Mr Shea for the balance of the proceeds of sale, $226,809.79. She later met Mr Shea who told her that he was going to deposit the cheque into his own account at the Commonwealth Bank. Ms Samootin strongly disagreed and a fierce argument ensued. Finally, Mr Shea overbore her will and she attended the Commonwealth Bank branch at Frenchs Forest with him and there endorsed the cheque in his favour to enable him to deposit it in his account. She did so in the belief that the money would be used to purchase No.26 in the names of herself and Mr Shea as joint tenants. 48 In the first week of November 1997 Ms Samootin was told by Mr Shea and Mr Deans that Mr Deans was going to purchase No.24 and that No.24 was going to be developed. Ms Samootin said that she was not interested in participating in any such development and she warned Mr Shea not to use any of the money from the sale of the Mona Vale Property for Mr Deans' project. 49 Towards the end of November 1997, Ms Samootin began to worry about not having signed any papers in connection with the purchase of No.26. She began to ask Mr Shea about the papers but he shouted at her and overbore her will. She had a feeling somehow that she was being swindled out of her money. She did not know that Ms Wagner was still involved in the transaction. 50 Towards the end of November 1997 or the beginning of December, Mr Shea told Ms Samootin that he had to go and see Ms Wagner about the house. Ms Samootin said that she would go with him. Mr Shea refused and a violent argument ensured but Ms Samootin insisted on going to Ms Wagner's office. When she got there, she demanded that one of Ms Wagner's staff show her what had happened to her share of the money from the sale of the Mona Vale Property. The secretary showed her some documents in a file which indicated No.24 and No.26 had been purchased by a company. She then confronted Ms Wagner who told her that her money was no longer hers but belonged to Mr Shea and Mr Deans. Ms Samootin told Ms Wagner that she was divorced from Mr Shea and that she would seek a property settlement. Ms Wagner entered her own office and Ms Samootin tried to follow her but was forbidden entry. Mr Shea went into Ms Wagner's office alone. 51 Ms Samootin made another appointment to see Ms Wagner on 15 January 1998. On that occasion Ms Wagner told her again that her share of the proceeds of sale of the Mona Vale Property belonged to Mr Shea and Mr Deans. 52 Ms Samootin never believed that it was possible to carry out a joint development of Nos.24 and 26 to provide for dual occupancy. She attended discussions with two different builders after settlement in company with Mr Shea and Mr Deans, but she did not participate in the discussions because she felt that she had to be submissive to Mr Shea.

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53 Mr Shea says that at about the end of 1995 or early 1996 there began a series of discussions between himself and Ms Samootin wherein Ms Samootin expressed the desire that the Mona Vale Property, which was in their joint names, be transferred into Mr Shea's name alone. The reason was that she and Mr Shea were investigating a proposal to develop the Mona Vale Property by way of dual occupancy, and Ms Samootin did not wish to put at risk the pension and disability allowance that she was then receiving by being seen to be participating in a profit-making development venture. 54 Mr Shea says that he sought advice from the parties' solicitor and was informed that there would be stamp duty of $10,000 payable on the transfer into Mr Shea's name alone. He and Ms Samootin agreed that the transfer should not proceed because they did not wish to pay the stamp duty but they agreed that when they came to sell the Mona Vale Property they would purchase the new property in Mr Shea's name alone. 55 Mr Shea says that this discussion was repeated a number of times over the following two years, particularly when, in mid-1997, the Mona Vale Property came to be sold and he and Ms Samootin began looking for a new house. 56 According to Mr Shea, when he and Ms Samootin agreed to buy No.26 it was agreed and understood that Mr Shea alone was to be named as purchaser, although it was also understood that Ms Samootin would have a half interest in the house. Mr Shea said a number of times during his evidence that he and Ms Samootin regarded themselves as "fiduciaries" of their assets for the benefit of their children. 57 Either Mr Shea or Ms Samootin must have informed the real estate agent that No.26 was to be purchased in Mr Shea's name alone because on 21 October 1997 the agent wrote to Ms Wagner advising details of the purchase, including that Mr Shea alone was to be purchaser. 58 The real estate agent's letter has been produced from Ms Wagner's conveyancing file. There is a notation at the top in Ms Wagner's handwriting "Pauline please obt(ain) instructions from client as to how they are purchasing the property?" . "Pauline" is a reference to Ms Pauline Knowles, the conveyancing clerk employed by Ms Wagner at the time. There is another notation on the letter in the writing of Ms Knowles: "Mr Shea only? Clients confirmed yes" . 59 Ms Knowles, who had over thirty years experience as a conveyancing clerk and as what we would now call "a paralegal", gave evidence that she herself knew that it was standard practice to confirm instructions with both clients when a matrimonial home owned jointly was being sold and the proceeds were being used in the purchase of another home in the name of one of the parties only. She said that when she received the real estate agent's letter with Ms Wagner's notation on it she telephoned Ms Samootin at her home and said words to the effect: "I am querying the fact that I have received details from the Agent regarding the purchase of 26 Oxford Falls Road, Beacon Hill. The Agent's instructions state that the house is to be purchased solely in Mr Shea's name. Is this correct?" Ms Knowles says that Ms Samootin responded: "The house is to be in Mr Shea's name only" . Ms Knowles says that she clearly recalls this conversation because she had to ask the question several times before getting any response other than "You will have to ask Mr Shea" . Ms Knowles says that she also telephoned Mr Shea to confirm the instructions. When she had confirmation from both clients, Ms Knowles says that she wrote the note on the letter: "Mr Shea only? Clients confirm yes" . Ms Samootin, of course, denies any such conversation with Ms Knowles. 60 Ms Wagner says that on or about 21 October Ms Knowles told her that she had rung Ms Samootin who had confirmed that the property was to be purchased in Mr Shea's name alone. Ms Wagner denies Ms Samootin's allegation that she and Mr Shea had a meeting with Ms Wagner in her office on 22 October in which Ms Wagner was instructed that No.26 was to be purchased in joint names. Ms Wagner says that a meeting took place in her office with Mr Shea and Ms Samootin on 23 October. Ms Wagner's file contains a diary note confirming the date and that both parties attended. Ms Wagner says that in accordance with her usual practice she went through the details on the front page of the contract for the purchase of No.26 to confirm with the clients that the details were accurate. Amongst the other details, she confirmed that the purchaser was to be Mr Shea alone. Ms Samootin did not express any disagreement with Mr Shea being named as sole purchaser. 61 Mr Shea says that when the cheque for the balance of the proceeds of sale of the Mona Vale Property became available Ms Samootin took delivery of it and they went together to the Commonwealth Bank to deposit it into his account as he was to be shown as sole purchaser of No.26. He denies that there was any argument between himself and Ms Samootin over the deposit of the cheque, as she alleges. 62 Mr Shea denies that there was any argument between himself and Ms Samootin towards the end of November 1997 about the "papers" Ms Samootin was supposed to sign. He, Ms Wagner, Ms Knowles and a receptionist employed in Ms Wagner's office, Ms Gray, deny that there occurred an episode in Ms Wagner's office about the end of November or the beginning of December in which Ms Samootin confronted Ms Wagner about the proceeds of the sale of the Mona Vale Property, attempted to follow Ms Wagner into her office and was excluded. Ms Wagner's files show that she had no attendance upon or communication with Ms Samootin after 23 October until Ms Samootin came to her office on 19 January 1998 and told her about Andrew's "murder", as I have recounted in paragraphs 32 and 33. 63 Mr Shea says that on 24 or 25 October 1997 the real estate agent who had acted on the sale of No.26 telephoned him at home and said that No.24 was now for sale and that purchasing No.24 would provide a profitable development opportunity in conjunction with No.26. Mr Shea says that he immediately discussed this proposition with Ms Samootin and that they agreed that as they themselves could not afford the finance for both properties they should seek a partner. Mr Shea then approached Mr Deans, whom he had known for some years. Thereafter Mr Shea and Mr Deans discussed the proposition for the development, which eventually matured into the acquisition of both properties by Loan Design, as I have earlier recounted. Mr Shea says that he kept Ms Samootin informed of these discussions and of what was being done, and that she was enthusiastic about the proposed development. He says that after the settlement of the purchase of the properties Ms Samootin attended meetings with two different builders and contributed enthusiastically to the discussions. 64 Mr Deans says that he discussed the joint development proposals for Nos.24 and 26 many times with Mr Shea at No.26 in the presence of Ms Samootin. He was always of the understanding that the money to be contributed by Mr Shea was the proceeds of sale of the Mona Vale Property owned jointly by Mr Shea and Ms Samootin (whom he believed to be married) and that Mr Shea was investing Ms Samootin's share on her behalf. He was told by Mr Shea that Ms Samootin "can't have property in her name because she is on the pension" .

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65 In my opinion there can be no doubt that Ms Samootin's account of events cannot be accepted in any material particular in which it differs from the accounts given by the other witnesses. My reasons are as follows. 66 First, it is powerfully telling against the accusation of dishonesty made against Mr Shea and Mr Deans that upon request by Ms Samootin in July 1998, they immediately prepared, signed and gave to her a full statement which expressly acknowledged that her money had been used in the acquisition of Nos.24 and 26 and gave an account of how that money had been used. No such signed account would have been given to Ms Samootin if Mr Shea and Mr Deans had really intended to "swindle" her, as she claims. 67 Second, Ms Samootin's account is contradicted on important points by contemporary records. An example is Ms Knowles' note on the real estate agent's letter of 21 October of the result of her telephone conversation with Ms Samootin as to the identity of the purchaser. Another example is Ms Wagner's file note that she saw Mr Shea and Ms Samootin on 23 October, not 22 October as Ms Samootin insists. A third is the absence in Ms Wagner's file of any note of her seeing Ms Samootin between 23 October and 19 January 1998 when Ms Samootin gives evidence of an acrimonious confrontation in her office in November or early December 1997. 68 Third, Ms Samootin's evidence was not believable on many issues. For example, she said that she had noted an appointment for her and Mr Shea to attend at Ms Wagner's office for the purpose of signing the contract for the purchase of No.26. If her account is correct, she did not attend and sign the contract but she did not enquire directly from Ms Wagner why this was so. Her evidence in this regard was unsatisfactory and implausible: she admitted that she thought that in order to become a joint tenant of the property she would have to sign a contract, but she said that she believed Mr Shea when he told her that although she had not signed the contract "everything's been fixed up" : T185.47-189.7. Yet at T77.25 she said that she nagged Mr Shea about signing the documents. She said: "I didn't know exactly what I had to sign but I knew I had to sign something jointly with him, not just the loan documents …" . It is impossible to understand how Ms Samootin could have believed that everything was "fixed up" without herself having signed not only loan documents, but a contract for the purchase of No.26. 69 Again, Ms Samootin said that she had refused to allow Mr Shea to deposit the cheque for the balance of the proceeds of sale of the Mona Vale Property into an account in his name alone and that she had ultimately agreed only after a fierce argument. She was asked, in respect of this argument, what she wanted Mr Shea to do with the cheque if it were not to be deposited in his account. She had no answer to this question. She had her own bank account but she says that she did not think about putting the cheque into her account: T155.34-156.12. This evidence is most unsatisfactory and the hesitant and awkward manner in which Ms Samootin gave it convinced me that she was not telling the truth. If Ms Samootin did not want Mr Shea to deposit the cheque into his account she must have wanted him to do something else with it, but she was unable to say what that was. In other words, she was unable to say what was the reason for the argument in the first place. Further, from my observation, Ms Samootin is a person of intractable persistence and I find it impossible to believe that her will can be overborne by mere argument. She has never alleged that Mr Shea used physical violence against her - his alleged coercion is said to be verbal. Having regard to Ms Samootin's character and to Mr Shea's character as I observed it, I am unconvinced that Ms Samootin's will concerning the deposit of the cheque could have been overborne by Mr Shea as she claims. 70 In the light of the unsatisfactory evidence of Ms Samootin to which I have referred, I am unable to accept Ms Samootin's account as to how the deposit of the cheque occurred. I conclude that she has fabricated the "argument" with Mr Shea as a means of explaining away the fact that she endorsed the cheque for the balance of the proceeds of sale of the Mona Vale Property to Mr Shea alone and then attended the Commonwealth Bank to facilitate its deposit into his sole account. If it were seen that she had done so freely, it would have seriously damaged her case that she did not consent to the purchase of No.26 in Mr Shea's name alone, as she must have realised. 71 Fourth, Ms Samootin was prepared to give contradictory and prevaricating evidence when it suited her. She said that in 1993 when she was in receipt of a sole parent's benefit, she investigated a dual occupancy development of the Mona Vale Property: T131.32-132.27. At T55.43, she said that while she was investigating this development she rang "the pension office, social security and I informed them of what I was doing and they said, well, that's good. Keep us informed and we'll make an assessment of your situation when it occurs. And I said, I can understand that." At T189.9ff, she was asked again about this telephone call. She denied that the Department had told her that if she did proceed with the Mona Vale development they would make an assessment. She said at T189.42: "They did not say that. They just said for me to keep them informed" . She was then confronted with the evidence which she had previously given. The following exchange occurred: "Q: They said words to the effect of they would make an assessment after you developed the property? A: They said they would make an assessment of the situation, the circumstances.

[56]

Q: Did you think it might occur? A: It did not occur, did it." 72 In my opinion, the evidence given by Ms Samootin that "I didn't consider making any profit" out of the Mona Vale development was unbelievable and her evidence as to her awareness of the consequences of making a profit was prevaricating. Ms Samootin is a shrewd and astute person. As late as 30 January 1998 she wanted to be an equal partner in the development of Nos.24 and 26: see para.34. She has obtained current valuations of the two properties and she has done her own research on their development potential. In 1997 it must have been obvious to her that if she was seen as a participant in a profit-making real estate development, her continuing eligibility for a pension might be affected. 73 Fifth, the reliability of Ms Samootin's evidence generally must be inherently dubious because of the evidence which she persists in giving concerning the circumstances of her son's death and the alleged involvement of Mr Shea, Mr Deans and many others in his alleged murder. The character and tone of that evidence may be appreciated by a reading of paragraphs 61 to 86 of Ms Samootin's affidavit sworn 26 May 2002. It is to be noted that she alleges that amongst those involved in Andrew's "murder" were Mr Shea and Mr Deans, and that at paragraph 70 of that affidavit she says: "I vowed to God that I would seek justice for my son's death" . Ms Samootin tried to raise the allegations of Andrew's death again in her final submissions; I explained to her once more that they were irrelevant. She insisted on pressing them and I set a time limit for her submissions. She chose to use up the remaining time in repeating the allegations about Andrew's "murder". She said that Andrew's "murder" was relevant to the issues in the case because Mr Shea's intent to defraud her of the proceeds of sale of the Mona Vale Property was explained by a desire to prevent her from using the money to investigate Andrew's death further, thereby exposing his own guilt. Her statements were rambling and disjointed. What emerged was that she felt compelled to bring these proceedings to make public her accusations about Andrew's death in the public interest: see T389.17-393.4. 74 I do not pretend to make a psychological diagnosis of Ms Samootin. It is sufficient for me to say that this evidence, and much evidence of the same character given by her during the trial and in her affidavits, coupled with the fact that Ms Samootin's interest in the properties has never been in issue, convinces me that I cannot safely rely upon Ms Samootin's evidence where it is in conflict with other plausible and credible evidence. In my view, there are grounds to believe that, while Ms Samootin is highly intelligent and shrewd, nevertheless she may be suffering from a disorder of the mind which distorts her perception of the facts and circumstances in issue in this case. Ms Samootin makes serious allegations of dishonesty against Mr Shea and Mr Deans and she has the onus of proving those allegations to the requisite degree of the Court's satisfaction. The state of Ms Samootin's mind must have a bearing on the degree of satisfaction which the Court can feel as to the reliability of her evidence on contested issues. 75 Sixth, the evidence given by all of the other witnesses was inherently plausible, it was supported by contemporaneous documentation, and it was consistent. Nothing emerged in the course of their cross examinations to shake their credibility. 76 Mr Shea's evidence that Ms Samootin did not wish her name to be shown on the title to No.26 is inherently plausible. Ms Samootin was at that time receiving social service benefits. It is clear that she had long been interested in making a profit from developing a property in dual occupancy. It was she who had made intensive investigations with Mona Vale Council about the possibility of developing the Mona Vale Property in this way. She asked Ms Wagner in the conference on 23 October about the zoning of No.26 and whether dual occupancy was possible. It would have been obvious to a person of Ms Samootin's shrewdness that if she were shown on the title to No.26 as a participant in a profit-making development venture her social security benefits could well have been at risk. Ms Samootin now says that those benefits would not have been at risk but, in my opinion, this is an attempt at ex post facto justification on her part. I accept Mr Shea's evidence that it was Ms Samootin who did not wish her name to be on the title to No.26. 77 I accept Ms Knowles' evidence that she had a conversation with Ms Samootin as to the identity of the purchaser of No.26 on or about 21 October in the terms which Ms Knowles recounts. Ms Knowles struck me as a knowledgeable and experienced conveyancing clerk who was fully alive to the problems which can occur in dealings with matrimonial property if the parties fall out. Her evidence was not only supported by her contemporaneous note on the real estate agent's letter, it was inherently probable. 78 Likewise, I accept the evidence of Ms Wagner. I formed the impression that she was a careful solicitor who was in the habit of taking file notes of matters of significance. In the present case, Ms Wagner had made contemporaneous file notes which supported her evidence where it differed from Ms Samootin's evidence. Ms Wagner was a solicitor who had had experience in family law: it is inherently probable that when dealing with the proceeds of sale of the Mona Vale Property she would have been aware of the need to obtain clear instructions to use the proceeds of sale in the purchase of another property in the name of one of the parties only. I have no hesitation in accepting Ms Wagner as a witness whose evidence was truthful and accurate. 79 Mr Deans did not have a great deal of discussion with Ms Samootin directly but he says that she participated actively in discussions with two different builders about the possibilities of development of Nos.24 and 26. I accept this evidence. It is consistent with what he said in the statement which he and Mr Shea signed and gave to Ms Samootin in July 1998 and which Ms Samootin regarded as satisfactory at the time, and it is consistent with Ms Samootin's active investigation of the development potential of the Mona Vale Property and with her enquiries of Ms Wagner in the discussion on 23 October 1997 as to the development possibilities of No.26 alone. Mr Deans presented as a careful witness whose evidence was not shaken in cross examination. I accept his evidence as truthful and accurate. 80 For these reasons I make the following findings of fact: