Sharkey v Nissi

Ms Nissi's claim

1. By her amended cross claim, Ms Nissi seeks relief to enforce a written agreement that she entered into with Mr Sharkey on 18 March 2011 (the "18 March 2011 agreement"). That agreement, in part, concerned the property at 96 Denison Street, Camperdown, which adjoins Number 98. I will call this property "Number 96". Sometime before the acquisition of Number 98, Ms Nissi and Mr Sharkey purchased Number 96 as joint tenants.
2. The terms of the 18 March 2011 agreement alleged by Ms Nissi are that (par 3): [Mr Sharkey] relinquished any interest in or claim to [Number 98] and agreed not to contest the ownership of [Number 98]; [Mr Sharkey] agreed to be responsible for the debt secured by a mortgage over [Number 98]; [Mr Sharkey] undertook not to incur any more debt under the mortgage over [Number 98]; [Mr Sharkey] would continue to pay the instalments under the mortgage as they fell due; [Mr Sharkey] undertook to discharge the mortgage debt by 1 January 2013; In consideration for [Mr Sharkey] relinquishing such interest and claims and giving such undertakings, [Ms Nissi] relinquished her interest, as a co-owner of [Number 96] in favour of [Mr Sharkey].
3. Ms Nissi says that, in accordance with the 18 March 2011 agreement, she relinquished her interest in Number 96, which was sold and the entire net proceeds, after deduction of the mortgage debt and sale expenses, were paid to Mr Sharkey. In breach of the agreement, Mr Sharkey has only paid the instalments under the mortgage up to the end of 2012, and failed to discharge the mortgage debt by 1 January 2013. Consequently, the mortgagee threatened to take proceedings to exercise its power of sale over Number 98, as a result of which Ms Nissi was forced to pay instalments under the mortgage of $22,090, and to refinance the mortgage by means of a loan to her of $524,888.63 from the Commonwealth Bank of Australia, which is secured by a new mortgage over Number 98. Ms Nissi alleges that she incurred fees and expenses of $35,875.54, because of the threats made by the prior mortgagee. She claims that Mr Sharkey is liable to pay damages to her in the total sum of $582,965.54.
4. Ms Nissi makes the following alternative claims. If it is found that she holds Number 98 on an express trust, or a resulting trust, for Mr Sharkey, she claims an entitlement to be indemnified as trustee for the $582,965.54 that she has paid in respect of the property. In addition, she claims a sum of $23,938.87 for carrying out necessary repairs to the property. She says that she is entitled to an equitable charge over Number 98 to support this claim.
5. Ms Nissi makes a number of other claims, which were not given prominence in the final submissions made on her behalf. She makes a claim for contribution on the basis that she repaid a substantial part of the debt secured by the mortgage over Number 98, and she and Mr Sharkey were co-guarantors. Ms Nissi claims that she is, alternatively, entitled to half the net proceeds of sale of Number 96, if it is found that Mr Sharkey is not bound by the 18 March 2011 agreement. Finally, she claims that she is entitled to be subrogated to the St George Bank mortgage that she discharged in the sum of $524,888.63.
6. Ms Nissi joined, as a second cross defendant to her amended cross claim, Sharkey Family Pty Ltd, as trustee for the Sharkey Family Trust (the "Trustee"). The Trustee was apparently joined because the Trustee was the borrower from St George Bank of the debt that was $524,888.63 at the time it was repaid by Ms Nissi. The claim for subrogation that is referred to above is made against the Trustee.
7. In his amended defence to Ms Nissi's amended cross claim, Mr Sharkey admits the existence of the document dated 18 March 2011, which Ms Nissi claims gave rise to the agreement of that date. Mr Sharkey claims that the alleged agreement was not supported by any consideration that flowed from Ms Nissi, so that it does not constitute an enforceable contract. Alternatively, if the contract was made, the contract did not effect a transfer of Mr Sharkey's interest in Number 98 to Ms Nissi.
8. Additionally, Mr Sharkey pleads that, if the 18 March 2011 agreement was made, it is unenforceable because Mr Sharkey was induced to create and sign the document by duress created by illegitimate pressure exerted by Ms Nissi. Mr Sharkey says that he avoided the 18 March 2011 agreement by refusing to abide by its terms, and contesting Ms Nissi's alleged ownership of Number 98.
9. The basis of the duress and illegitimate pressure alleged by Mr Sharkey, in par 2(a)(iv) of his amended defence to amended cross claim, is that Ms Nissi threatened to breach the duties that she owed as trustee (as defined in par 31 of the amended statement of claim); and that Ms Nissi threatened to breach her fiduciary duties owed to him, as referred to below (and pleaded in par 15 of the amended defence to amended cross claim). The particulars given by Mr Sharkey for these allegations are paraphrased as follows: (a) In about February 2011 Ms Nissi orally threatened Mr Sharkey that she would not permit the sale of Number 96 registered in her name as trustee for Mr Sharkey, unless he agreed to enter into an agreement that he would not take Number 98 away from her; (b) Mr Sharkey required the sale of Number 96 to obtain funds to meet his business and personal expenses; (c) Ms Nissi was registered proprietor of Number 96 as joint tenant with Mr Sharkey. (d) Ms Nissi held her interest in Number 96 as trustee for Mr Sharkey; (e) Ms Nissi had a duty to agree to sell Numbers 98 and 96 at the request and direction of Mr Sharkey; (f) Ms Nissi breached her fiduciary duties to Mr Sharkey by failing and refusing to perform that duty; (g) Ms Nissi took illegitimate advantage of her position as trustee and registered proprietor of Number 96 and/or the financial difficulties of Mr Sharkey to place illegitimate pressure on Mr Sharkey to require him to create and sign the document; (h) by placing such illegitimate pressure on Mr Sharkey, Ms Nissi acted in a manner that was in all the circumstances unconscionable; (i) by placing such illegitimate pressure on Mr Sharkey, Ms Nissi acted unlawfully in that she breached her fiduciary duties to Mr Sharkey as trustee of Number 96.
10. The structure of the amended defence to the amended cross claim makes it inconvenient to attempt to paraphrase all of the allegations that are contained in the pleading. It may be noted that Mr Sharkey alleges that, during the period from 28 April 2008 to 28 December 2012, he paid a total of $149,599.77 to St George Bank in respect of the mortgage over Number 98. He admits that he did not discharge the mortgage by 1 January 2013, or at all. Mr Sharkey does not admit that Ms Nissi made payments under the mortgage totalling $22,090, but he does admit payments of $15,500. Mr Sharkey admits that Ms Nissi discharged the St George Bank mortgage, and further admits that, if he is found to be the beneficial owner of Number 98, he will be liable to pay to Ms Nissi the amount that she paid to discharge the St George mortgage. He denies that he is liable to pay Ms Nissi the sum of $35,875.54.
11. In response to Ms Nissi's allegation that she provided consideration for the 18 March 2011 agreement, by means of her agreement that Number 96, which was jointly owned by them both, could be sold and the proceeds paid to Mr Sharkey, Mr Sharkey alleged in par 15 that the parties entered into a trust agreement in relation to Number 96. Mr Sharkey says that the agreement was oral, and was partly express and partly implied. It was an express term that Mr Sharkey was to pay the whole of the purchase price for Number 96. It was an implied term that Ms Nissi would be a joint registered owner of Number 96 as trustee for Mr Sharkey, who would be the sole beneficial owner of Number 96. The purchase price for Number 96 was $565,000. Mr Sharkey paid the whole of the price, as well as various other payments, including mortgage payments. Alternatively to the express trust, Mr Sharkey claims that Ms Nissi held her interest in Number 96 for him on a resulting trust.

Development of Mr Sharkey's business

1. Mr Sharkey said that, since 1994, when he was 12 years old, he had been involved in computer programming and online businesses. In December 2000, when he was 18 years old, he became professionally involved in computer programming and online businesses.
2. In 2001, he became a director of two companies that owned an online business. Mr Sharkey co-founded the business with Mr Robert Hunt. The business (which was ultimately called "Stayz") provided a platform for holiday home owners to list their holiday properties online. One of the companies operated the business, and the other owned the intellectual property relating to the business.
3. Stayz grew rapidly, and soon became the largest holiday accommodation website in Australia.
4. By the time Mr Sharkey met Ms Nissi, Stayz was already well established online, and was turning over in excess of $100,000 in gross profit per month on average; and the business was paying Mr Sharkey a salary of $70,000 per year (soon to be increased to $80,000).

The engagement

1. Mr Sharkey's evidence was that he and Ms Nissi met in early 2004. She said that it was in about August 2003. At that time she was 17 years old, and in Year 12. Mr Sharkey was 20 years old. Ms Nissi's evidence was that the couple began a live-in relationship in about February 2004. Mr Sharkey said that, after about three months, the couple moved to Orange, where Ms Nissi was a student at a campus operated by the University of Sydney. The couple lived together at Orange in rented accommodation.
2. There was a conflict of evidence as to whether the couple created a subterfuge that Ms Nissi was living separately at a dormitory at the University, to hide the fact that the couple were living together, because that arrangement would have been unacceptable to Ms Nissi's parents, because of their Iranian heritage. Ms Nissi denied that the evidence given by Mr Sharkey to this effect was true.
3. In his primary affidavit, Mr Sharkey gave the following evidence concerning the engagement: 22. In about December 2004 I proposed to Donya. Donya was from an Iranian family and I recall having discussions with Donya at about the time that we started living together to the effect: She said: We'll need to get engaged soon or my father will not be happy with us living together. When Corey and Samara [Donya's elder sister] were dating, they weren't allowed to live together until they got married. So for us to live together, we need to make our relationship more serious. I said: Okay. I definitely think we should get engaged in the future. I would need to save for a ring but I wouldn't imagine us getting married any time soon. She said: I don't want to get married soon either. This is just to keep my family happy and we can talk about actually getting married later. 23. Apart from telling our parents of the engagement, Donya and I did not make a formal announcement of our engagement nor did we tell many friends. I bought Donya an engagement ring however she did not wear it when we (or she) went out. No plans were ever made for a wedding.
4. The apparent purpose of this evidence by Mr Sharkey was to downplay the significance of the couple's engagement. Mr Sharkey, in effect, suggested that the engagement was a device to avoid Ms Nissi's parents being unhappy with their living arrangements, and was not a genuine engagement.
5. That view of the evidence is reinforced by Mr Sharkey's comment that Ms Nissi did not wear her engagement ring, which, if true, would suggest that she did not consider the engagement to be genuine. Ms Nissi, in her evidence, denied that she did not wear her engagement ring, and said that she always wore it.
6. Mr Sharkey said that the couple did not make a formal announcement of their engagement, and they did not tell many friends.
7. Ms Nissi denied that the conversation set out by Mr Sharkey in par 22 of his primary affidavit took place.
8. Mr Sharkey ultimately submitted that it was clear that the engagement occurred when it did due to Ms Nissi's Iranian heritage, and the attempt to appease her father. The submission went so far as to say that because Ms Nissi failed to call her father and her mother to give evidence, a Jones v Dunkel inference should be drawn against Ms Nissi.
9. I reject that submission, both because it is contrary to principle, and because it is at odds with the evidence of the manner in which Mr Sharkey put his proposal of marriage to Ms Nissi, which I will discuss below.
10. So far as the absence of Ms Nissi's parents from the witness box is concerned, the court should apply the principle which Gleeson CJ and McHugh J accepted in Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121 at [51]: … But there was nothing which called on the defendant to lead evidence in respect of these matters: its failure to call evidence therefore had no probative significance and could not assist the drawing of any inference in favour of the plaintiff. In Cross on Evidence Mr Dyson Heydon QC declares that: "[T]he rule [in Jones v Dunkel] only applies where a party is 'required to explain or contradict' something. What a party is required to explain or contradict depends upon the issues in the case as thrown up in the pleadings and by the course of evidence in the case. No inference can be drawn unless evidence is given of facts 'requiring an answer'." (Footnotes omitted)
11. The reasons why Mr Sharkey and Ms Nissi decided to get engaged are matters to which they alone were privy. Mr Sharkey did not give evidence that Ms Nissi's parents, and in particular her father, were in any way, by word or deed, involved in the decision. There was nothing that Ms Nissi could explain or contradict by calling her parents. Their unexpressed feelings are irrelevant. It would not matter to a proper determination of the reasons for the engagement whether either parent gave evidence that they were in fact opposed to the couple living together in the absence of an engagement, or that they were indifferent.
12. Mr Sharkey filed an affidavit dated 9 October 2014 in reply to Ms Nissi's affidavit. In par 10(b) Mr Sharkey listed a number of interactions that he had with Ms Nissi, and members of her family, about cultural sensitivities concerning the couple living together. It is not necessary to examine each of those matters in detail. I do not accept that, even if Mr Sharkey's evidence in relation to those events is accepted without qualification, that would justify a finding that Mr Sharkey proposed to Ms Nissi, with her agreement, as a subterfuge, without any serious intention to marry her, just so that he could secure the benefit of living with Ms Nissi.
13. The additional evidence that Mr Sharkey gave in reply, which he could have given in chief, does not support a finding that Ms Nissi agreed to the engagement to placate her father. To the extent that the evidence supports the conclusion that Ms Nissi's father may have had serious reservations about his daughter engaging in a live-in relationship, given that she was about 18 years old at the time, parental concern may have arisen without regard to her father's Iranian origin.
14. Mr Sharkey criticised Ms Nissi, both in cross-examination and in submissions, about why she did not put on an affidavit to respond in detail to Mr Sharkey's reply evidence. That attack is unwarranted. It was Mr Sharkey's case from the outset that the couple only became engaged to placate Ms Nissi's father. As I have noted, Mr Sharkey could have given his reply evidence in chief, and he should have done so. The court's procedures do not encourage the parties to litigation to engage in a protracted series of allegations and counter allegations in their evidence. Ms Nissi, on the advice of her legal representatives, was entitled to be selective concerning the necessity of attempting to reply to Mr Sharkey's reply evidence. This aspect of Mr Sharkey's reply evidence was not of the significance that commanded a further response from Ms Nissi.
15. The parties agreed in their evidence that, when they returned to Sydney to live, they stayed with Ms Nissi's parents. Mr Sharkey gave evidence that that arrangement lasted for 3 months, although he ultimately agreed that Ms Nissi's evidence that they stayed with her parents for 9 months was correct. While the parties did not go into detail in their evidence as to their living arrangements with Ms Nissi's parents, it would seem to have been relatively obvious to Ms Nissi's parents by that stage that the couple were living together.
16. Mr Sharkey gave evidence, in his affidavit in reply, to the effect that he and Ms Nissi were obliged to sleep on a mattress in the lounge room in Ms Nissi's parents' home, even though there were spare bedrooms that they could have used. Mr Sharkey suggested that this arrangement was required because of the parents' attitude. Even if this suggestion is true, its significance is unclear. Mr Sharkey gave the evidence to support his claim that he and Ms Nissi only became engaged to overcome her parents' resistance to the couple living together in a de facto relationship, without their being engaged. It is not clear, however, why the mere fact of engagement would have made all the difference, rather than marriage. Furthermore, Mr Sharkey appears to accept that Ms Nissi's parents were content to permit the couple to sleep together on the one mattress. Presumably, the lights were put out at night.
17. Mr Sharkey's failure of memory in respect of whether the length of the couple's stay with Ms Nissi's parents was 3 months or 9 months is significant. Clearly, the more transient the stay, the less significance it would have in relation to that part of Mr Sharkey's case theory, whereby he sought to downplay the seriousness of his engagement to Ms Nissi. This error justifies doubt as to the reliability of Mr Sharkey's recollection, on issues of fact that have significance for Mr Sharkey's entitlement to the relief that he claims. The event occurred about 10 years ago, but the circumstances in which Mr Sharkey found himself living in his girlfriend's parents' house, and having to sleep on a mattress on the lounge room floor every evening, were entirely out of the ordinary. Mr Sharkey ought to have remembered that event as having only lasted 9 months, rather than 3 months.
18. Mr Sharkey and Ms Nissi became engaged to be married when she accepted his proposal of marriage on 23 December 2004.
19. The evidence showed that Mr Sharkey went to exceptional lengths to orchestrate a dramatic, and even spectacular, setting for his proposal. At the time, one of Ms Nissi's favourite bands was the group known as "The Whitlams".
20. On 3 December 2014, Mr Sharkey sent an email to Mr Tim Freedman, the leading member of The Whitlams, about a forthcoming concert that the group was going to give in Newtown, which included the following: … Anyway, I am writing to you on a purely selfish basis because I want to ask you an unprecedented and gigantic favour. I expect you to refuse, but I am asking anyway. In short, I am about to propose to my girlfriend. We are coming to your concert on 23rd December in Newtown and her favourite "romantic" song is Lady in Red. My favour is: at the concert on 23rd, would you be able to play and sing "Lady in Red" (or just a little part of it) and say something like "this is for Donya from Chris" after which I will propose to her? The reason I chose that song and not one of yours is because if you sing one of yours she will probably want to marry you instead since she absolutely adores you (you actually spoke to her in Katoomba, she was the one who wanted to interview you). In return I will do absolutely anything you want me to; however probably the best thing I could offer you is a free holiday at any of the accommodation you can find on http://stayz.com.au or http://www.ozstays.com as this is my business. In fact even if you don't sing I'm happy to help you out with free holidays. A short response in your own time would be appreciated, even if it is a simple "no" just so I know to plan something else. I am willing to compromise on any aspect of my plan, so let me know!
21. After a number of email exchanges between Mr Sharkey and Mr Freedman, on 7 December 2014 Mr Sharkey sent a further email to Mr Freedman in the following terms: She will definitely say yes (without trying to sound too cocky) I know this for a fact so the only thing I'm nervous about it pulling the whole thing off! I guess I'll talk to you closer to the day with the precise details of the night?
22. I may infer without fear of contradiction that, given the circumstances in which Mr Sharkey arranged to propose to Ms Nissi, Mr Sharkey must have been supremely confident of receiving a positive response. However else one might describe the manner of Mr Sharkey's proposal to Ms Nissi, it was a grand gesture.
23. Mr Freedman agreed to make the necessary arrangements, and Mr Sharkey made his proposal on cue during the course of the concert, and Ms Nissi accepted.
24. Mr Sharkey sent the following message on 28 December 2004 to the recipients of emails with the following email address: everyone@thesharkeys.net. Mr Sharkey gave evidence that only his parents and siblings were recipients of emails to this email address. GOOD NEWS! On the 23rd of December I proposed to Donya and she said yes!!!. So we are engaged! I'll write up a full little story of how I did it a bit later on and send it off, in short we went to see The Whitlams and Donya was called up on stage by Tim Freedman then I came out from stage left and proposed to her in front of 200 people! Went really well!. I am exceptionally happy! Website is coming along well should have something online by February.
25. Mr Sharkey was apparently a member of the West Pennant Hills Cherrybrook Cricket Club. He informed the Club of his engagement to Ms Nissi to enable the event to be publicised to members in the Club's web-based newsletter for 15 January 2005, which contained the following item. Mr Sharkey said that he passed on the information concerning his engagement to the president of the Club, who was a member of the same cricket team as Mr Sharkey. Mr Sharkey claimed that he did not read the Club's newsletter himself. Wedding bells Congratulations to Chris Sharkey (B1 Blue) that he is engaged to the lovely Donya. Chris organised the proposal at a Whitlam's concert recently! He went up on stage and proposed over the microphone with Tim Friedman (lead singer of the Whitlam's) singing a song in dedication to the couple! Congratulations Chris.
26. Mr Sharkey understated the publicity he gave to the couple's engagement. The understatement is significant, as it must be inferred that Mr Sharkey appreciates that the court would be less likely to find that Mr Sharkey made any substantial gift to Ms Nissi, if it was persuaded by the evidence that the relationship between Mr Sharkey and Ms Nissi was, in reality, little more than one of living together, on a basis that did not involve any long-term commitment.

The Purchase of Number 96

1. Mr Sharkey's evidence was that, in January 2005, he was interested in investing his money in real estate. He had not previously invested in real estate. He said that he decided to buy Number 96. A side benefit of buying the property as an investment was that he could live in the property after it was purchased.
2. Ms Nissi said that she and Mr Sharkey had been looking for properties for some months. She put into evidence a couple of emails that Mr Sharkey had caused to be forwarded to her from web-based real estate sites that provided information about available properties. She said that the couple inspected Number 96 in June 2005.
3. Mr Sharkey gave evidence of a conversation that he had, after he had decided to purchase Number 96, in which he advised Ms Nissi that he had saved some money, and would be taking additional drawings from his company, which would increase his chances of paying a large deposit on the property, and improve his prospects of getting a loan. The tenor of the evidence was that Mr Sharkey had made an independent decision to buy a property for himself.
4. He said that, in about January 2005, he had the following conversation with Ms Nissi: I said: I need to meet with a lawyer to discuss purchasing a property in my name. I found a lawyer called Tim Young who is based in Camperdown near Newtown. She said: I would like to come to the meeting with you because we are a couple. Whose name will the property be in? I said: I'm purchasing the property, so it'll be in my name. She said: Is that because you don't believe in our relationship? If you love me and plan on marrying me, why wouldn't you want to put the property in our joint names? I said: This property is an investment for me with the money I've earned from Ozstays. It makes sense that it would only be put in my name. She said I can't believe that you think so little of me that you don't want the property in joint names. You obviously don't see me in your future. I said: Okay if you feel that strongly about it, I'll find out about putting the property in joint names.
5. Mr Sharkey claimed that, during the conversation, he felt that Ms Nissi was using their relationship to emotionally convince him to put Number 96 into both of their names, even though his intention was only to purchase the property as an investment.
6. Ms Nissi denied that a conversation occurred in these terms. She did not give evidence of any alternative conversations leading up to the purchase of Number 96 in joint names. She was pressed in cross-examination as to why she did not give positive evidence of alternative conversations. She said that she did not do so because Number 98 was the focus of the proceedings, not Number 96. However, if Ms Nissi's evidence is looked at on an overall basis, her case was simply that the couple were engaged to be married, and were living together, and intended to make Number 96 their home, and that a natural thing to do was to put the property in their joint names. The part of Mr Sharkey's evidence that she challenged was the stance that Mr Sharkey took that he made it clear that the property was to be his investment.
7. Mr Sharkey gave evidence of attending a meeting with Ms Nissi and his solicitor, Mr Young, and his business associate, Mr Hunt. He said that, prior to the meeting, he had intended to purchase Number 96 in his name only. However, he said he believed that, to appease Ms Nissi, he would have to raise the possibility of putting the property in joint names. He said that, when he raised this possibility at the meeting, Mr Hunt said: "I think you should put the property in just your name, so that you will not be exposed to having to deal with a claim by Donya if you break up". He said that Mr Young advised that it would make sense for him to buy the property in his name, so that if, at a later time, a second property was bought, then Ms Nissi would be able to use the benefit of her first home owners grant.
8. Mr Sharkey said that the following conversation occurred between him and Ms Nissi after the meeting: I said: I'm paying for the property. It's an investment for me. Plus, I don't want to give up your chance of getting the home owners grant if I want to buy another property. She said: Well you mustn't trust me very much. If we are going to get married, what difference to you is it if I'm also registered? I said: If it means a lot to you, even though you aren't paying anything, I'll register it in both of our names. She said: Okay, good. I said: I'm happy to register it in both of our names but this is still my investment. I'll be using my money from OzStays to pay a large deposit and I'll be making all of the loan repayments because the loan will be my responsibility. She said: Fine.
9. Mr Sharkey said that Ms Nissi was very emotional, and raised her voice at him during the conversation, and from the tone of her voice, he understood that she was angry.
10. Mr Sharkey relied upon this conversation as creating an express agreement between him and Ms Nissi that, although the property would be put in joint names, Mr Sharkey would be the sole owner.
11. There is an internal inconsistency in the version of this conversation given by Mr Sharkey, which tends to undermine the probability that it occurred, as stated by him. Mr Sharkey says that Ms Nissi was very emotional and effectively bullied him into agreeing to register Number 96 in both of their names. However, in the next breath, he reaffirmed that the property would nonetheless be his investment, and she simply responded: "Fine". It is improbable that Ms Nissi would immediately have agreed to an arrangement that undermined her objective. If she bullied him as claimed, it must have been for some purpose. The evident purpose was that she would have a personal right in respect of the property. She can hardly have wanted the merely symbolic right of having her name on the title.
12. This is the very sort of evidence that McClelland CJ in Eq warned in Watson v Foxman (1995) 49 NSWLR 315 at 318, 319 warrants considerable scepticism, and should not too readily be accepted.
13. He also said that he did not, at any time, say to Ms Nissi before Number 96 was purchased, "I'm buying this property for us", "This is a gift for you", or "You will be an owner of the property".
14. Ms Nissi denied that the conversation deposed to by Mr Sharkey occurred. She accepted, however, that Mr Sharkey did not say to her that he would put the title to Number 96 into her name jointly with his as a gift to her. She claimed that, essentially as a matter of course, the property was put into joint names as it was to be their first home, as a young engaged couple. Ms Nissi accepted that all of the money paid for the purchase of Number 96, and for the repayment of the mortgage, was Mr Sharkey's money. She said that her circumstances, at the time, did not permit her to make any significant financial contribution. She claimed, however, that her liability jointly with Mr Sharkey under the mortgage was real, and at some time, in the future, it might have been necessary for her to make a financial contribution.
15. Ms Nissi's position was that she and Mr Sharkey were a couple, who expected to get married, and that, for the present, Mr Sharkey was effectively the breadwinner, but that she was studying, and in due course would commence employment, so that in the future it remained a real possibility that, when she was able, she would contribute according to her ability to the financial needs of the relationship.
16. Mr Sharkey's evidence of his conversations with Ms Nissi may be distilled to the following propositions: (a) at all times he intended that Number 96 would be purchased as an investment property for him, and he would be the sole owner; (b) Ms Nissi emotionally bullied him into agreeing to put the property into joint names; and (c) when he told Ms Nissi that the property was nonetheless to be his property alone, she simply said "Fine". As I have said, that sequence of propositions is improbable. There is no reason why Ms Nissi should bully Mr Sharkey into putting the property into joint names, and then immediately accept without demur that the property remained solely his.
17. In his primary affidavit, Mr Sharkey gave an explanation of what he understood, following the meeting, and the later conversation with Ms Nissi. He said that he was not told in effect that, "By registering the property in Donya's name, you are giving her the property", or "Registering the property in Donya's name transfers ownership of the property to her". He said that, when he was told that he should put the property in his name alone "so that you will not be exposed to having to deal with a claim by Donya if you break up", he understood that Ms Nissi would have a claim over the property under family law or de facto relationship law. He did not understand that he would be immediately giving up to Ms Nissi any of his ownership of the property, if he put the property equally into her name. Mr Sharkey said that, at the time, the relationship was strong, and he believed there was a likelihood that the couple would get married sometime in the future. If the couple married, Ms Nissi would eventually be able to make a claim against the property because of family law.
18. Mr Sharkey said, however, that he did not believe that Ms Nissi would be able to make a claim to the ownership of the property, by its simply being registered in her name. He said that, in his mind, there was a difference between in whose name the property was registered, and who owned the property. He said that he believed that a person could not become the owner of a property if the person did not contribute to paying for the property.
19. In essence, Mr Sharkey's explanation of his understanding may be distilled to the proposition that he thought that a person who paid for a property would be the owner, and that the act of putting another person's name on the title to the property would have no effect on the issue of ownership, if that person did not also pay for the property.
20. If Mr Sharkey, in fact, had the understanding that he claims that he had, the equitable principles that govern the creation of resulting trusts would suggest that his understanding may have been right. However, Mr Sharkey claimed that he was an ingénue concerning legal matters. It is hard to accept that a member of the public, without any legal training, and without legal advice, would naturally believe that placing another person's name on the title to a property, particularly the name of a person with whom the person was living in a domestic relationship, would be irrelevant to the question of who owned the property. Most people, who were not lawyers, would have a strong suspicion that the act of placing another person's name on the title could be very significant to the issue of who was intended to own the property. The ordinary person would probably expect that it might be a contentious exercise to establish that the act of placing another person's name on the title to the property was intended to have no effect at all.
21. All Mr Young and Mr Hunt suggested to Mr Sharkey was that he should place the title to Number 96 in his own name, because that would minimise his family law risk, if his relationship with Ms Nissi broke down. Mr Sharkey did not give evidence that either gentleman advised him that he would be the sole owner of the property if he paid the entire purchase price, notwithstanding that the title was put in joint names. As will be seen, Mr Sharkey did not claim to have received advice to that effect until the purchase of Number 98, when his accountant gave him that advice. (Even then, the accountant did not give evidence of giving that advice). There is a strong appearance that, in his recollection, Mr Sharkey has backdated, so to speak, the understanding that he believes he had at the time Number 98 was purchased, to apply to the earlier time when Number 96 was acquired.
22. The contract to purchase Number 96 was entered into on 28 July 2005. Mr Sharkey and Ms Nissi were the purchasers. The price was $565,000. The deposit of $56,500 was paid by Mr Sharkey, as was the stamp duty of $14,618.50. The amount borrowed to complete the purchase was $452,000. The lender was the St George Bank. The mortgage was dated 3 August 2005. Mr Sharkey and Ms Nissi were the mortgagors. Settlement of the purchase of Number 96 took place on 7 September 2005. Ms Nissi makes no issue of the fact that Mr Sharkey paid the stamp duty and the conveyancing fees.

Ms Nissi's first home owners grant

1. There is an issue in the proceedings as to whether Ms Nissi applied her entitlement to the New South Wales government First Home Owner's Grant towards payment of the price of Number 96. There was in evidence an application form for payment of that grant, which had been completed in the names of both Ms Nissi and Mr Sharkey. The copy that was in evidence was only signed by Mr Sharkey. As I understand the evidence, Mr Sharkey in the first instance paid all of the costs of purchasing Number 96 that were not paid out of the money borrowed on mortgage. If any money was received by either Ms Nissi or Mr Sharkey, it is not clear what was done with the money. The evidence is inconclusive as to whether Ms Nissi in fact contributed her grant towards the purchase of Number 96, and she has not carried the burden of proving that it was.

Sale of the Stayz business

1. On 4 January 2006, Mr Sharkey and Mr Hunt sold their interest in the Stayz business for $12.7 million, and Mr Sharkey received half of that amount. Mr Sharkey was 23 years old at the time.
2. On 2 February 2006, Mr Sharkey used part of the proceeds to repay the mortgage over Number 96 by two payments of $392,394.96 and $59,183.85.
3. On 20 January 2006, Mr Sharkey paid $275,284 to his father to assist him in paying off his home loan and two credit cards.
4. Mr Sharkey also paid $304,066.95 to Ms Nissi's parents on 2 February 2006, to enable them to pay off their home loan. Mr Sharkey said that he made the payment to Ms Nissi's parents because she said to him that it was only fair to give money to both of their parents. Mr Sharkey specifically said that, when he gave the money to Ms Nissi's parents, he said to them that the money was a gift.
5. On any view of things, the gifts that Mr Sharkey made to his and Ms Nissi's parents were very generous, even allowing for the substantial wealth that Mr Sharkey then enjoyed as a result of the sale of the business.
6. This is an appropriate point to interpolate that there was very little evidence about what happened with the balance of the proceeds of sale of the business, save for the initial purchase of Number 96, and the subsequent purchase of Number 98. The evidence does not establish what Mr Sharkey's wealth was from time to time. In particular, Mr Sharkey's wealth at the time Number 98 was purchased is not known.
7. Mr Sharkey gave evidence that, in 2007, he lost approximately $200,000 because of a fall in the value of shares held by him because, as he described it, of the onset of the global financial crisis.
8. I infer from the evidence that Mr Sharkey invested his money in shares and a number of new businesses that he established after the sale of Stayz.
9. It appears that Mr Sharkey needed access to an amount of funds, shortly after Number 98 was purchased, in part for the need to spend money on improving his office. That was part of the reason why, as will be seen, Mr Sharkey secured Ms Nissi's agreement to enable him to borrow a substantial amount secured by mortgages over Number 96 and Number 98.
10. The evidence also includes a statement of Mr Sharkey's assets and liabilities as at 23 May 2010: Assets 23k Term Deposit Held w/ St George Bank Own 96 Denison St Newtown (bought for $565k in 2003) Own 98 Denison St Newtown (bought for $860k in 2006) Own 25% of property development in Maroubra Own 25% of restaurant in Carramar 30k Cash in Family Trust 2009 Audi A6 Sedan Liabilities Mortgage on 96 & 98 Denison St in form of line of credit for business and other investments (500k)
11. This statement of assets and liabilities does not place any value on the property development or the interest in the restaurant. It also does not place any value on Mr Sharkey's interest in the businesses in which he was then engaged.
12. The fate of the balance of the proceeds of sale of the Stayz business is, on the evidence, unexplained. Mr Sharkey may have sunk much of that money into the various businesses that he attempted to establish.
13. It also appears that, by early 2011, when Mr Sharkey and his two brothers were living in San Francisco, and trying to establish a new business there, it became necessary for Mr Sharkey to raise money from the sale of Number 96 for the purposes of the new business.
14. The paucity of the evidence concerning Mr Sharkey's wealth at relevant times is significant. The primary issue in these proceedings is whether, when Mr Sharkey caused the contract for the purchase of Number 98 to be put in the name of Ms Nissi as purchaser on 27 October 2007, he did so for the purpose of making a gift to her. There is a stark contrast between the evidence of the parties on this issue. Evidence of Mr Sharkey's wealth at that time could be significant in assisting the court to make a judgment concerning the probability that Mr Sharkey made the gift, as Ms Nissi has claimed. Everything else being equal, the more wealthy a person is, the more likely that person may be to make a gift to the object of that person's love, more particularly when that gift has a substantial value.
15. Number 98 was purchased less than two years after Mr Sharkey received his share of the proceeds of sale of the Stayz business. He has not led evidence to establish that the wealth generated by that sale had substantially been dissipated by the time of the purchase of the property. It was within Mr Sharkey's power to lead that evidence, if he had wished to put an argument that his financial position was such that it was unlikely that he would have made a gift of the value of Number 98 to Ms Nissi at that time. As I understand the submissions that have been made on his behalf, Mr Sharkey does not make that submission.
16. Accordingly, I should approach the task of deciding whether or not Mr Sharkey told Ms Nissi that he was putting the title to Number 98 in her name, as a gift, so that it would be her home, on the basis that at that time Mr Sharkey, at the age of about 25, had been exceptionally successful in business, and still retained a substantial portion of the $6.35 million that he received from the sale of Stayz.

Decision to purchase Number 98

1. According to Mr Sharkey, in about October 2007, he decided to purchase Number 98, which was the property immediately next door to Number 96, in which the couple were living. He said that he did so because he had lost about $200,000 through various share investments, because of the GFC, and he believed that he could not go wrong by investing in real estate, particularly as the value of properties in the Camperdown area was increasing. He said that the purchase of property was a secure investment, compared to purchasing shares which, at the time, had caused him to lose a lot of money.

Strength of the relationship

1. Mr Sharkey said that, by this stage, his relationship with Ms Nissi was not good. They were fighting a lot, and not spending as much time together, as they previously had done. His attitude to Ms Nissi began to change, and he began to question whether it was the right decision for him to marry her. Although his relationship with Ms Nissi was on troubled and insecure, and he did not trust her to the extent that he had early on in the relationship, he still had not made the decision to break up with her. In the back of his mind, he was still hoping that the relationship would work out.
2. Ms Nissi's response to this evidence was that, if that was what Mr Sharkey actually believed at the time, he did not disclose it to Ms Nissi.
3. In an email to Ms Nissi dated 19 October 2007, Mr Sharkey made a number of comments concerning an article that Ms Nissi was preparing. Leaving out the comments concerning the article, Mr Sharkey said: Hi Bubs, I've come up with some research for you for your article. The best idea I could come up with is the cosmetic surgery one, it just seems easier because… Love Chris. P.S. You have a beautiful face, I was admiring your sexy lips this morning. Thanks for the cuddles, you made me feel better after my whole ATM-robbery dream!
4. One affectionate communication of this nature does not, of course, disprove the assertion that the relationship was unstable at the time. However, it would at least have encouraged Ms Nissi in her belief that the relationship remained strong.
5. As I have recorded above, Mr Sharkey gave evidence that, at the time of the purchase of Number 98, he did not trust Ms Nissi to the extent that he had early on in the relationship. After this evidence was given, it became apparent that there was a forensic issue in the proceedings as to whether or not both parties had been unfaithful to the other. Mr Sharkey admitted in evidence that Ms Nissi had caught him cheating on her (T 47.40). He denied that one of the reasons why he told Ms Nissi at the time of the inspection of Number 98 that the house would be hers was that he felt guilty about that matter.
6. In cross-examination Ms Nissi denied that she had not been faithful to Mr Sharkey during their relationship (T 228.35). Nonetheless, Mr Sharkey put a submission that they had both been unfaithful (plaintiff's closing submissions part 71). That submission is unfortunate and entirely unsupported by the evidence in so far as it relates to Ms Nissi.
7. Mr Sharkey additionally submitted that Ms Nissi did not deny in her affidavit the evidence given by Mr Sharkey in his primary affidavit, where he described their relationship at the time as "… not good. We were fighting a lot and not spending as much time together as we had previously done". He suggested that Ms Nissi's denial in cross-examination did not reflect well on her credit.
8. This led to a submission by Mr Sharkey that such a state of mind on his part was inconsistent with an intention to wholly divest himself of substantial assets in favour of Ms Nissi.
9. There is force in the proposition that, if one party to a relationship believes, that the relationship will not last, the first party will be unlikely to make a substantial gift to the other. However, if one party to the relationship is seriously doubtful that it will continue the last thing the party would rationally do is to put a valuable property solely into the name of the other party, when relying upon a belief that the first party would retain ownership because of the payment of the price.

Discovery that Number 98 was on the market

1. Mr Sharkey gave evidence of a discussion with Ms Nissi that took place shortly after he decided to buy Number 98: I said: The house next door is on the market for sale. Given the state of the share market at the moment, I think it'll be a good investment for me to sell my shares and buy the property. I think property values in this area will rise, as there seems to be a shift away from students to young families. She said: True. I've noticed similar things in this area.
2. According to Mr Sharkey, he discovered that Number 98 was on the market by himself; he decided to buy it so that he could reduce his exposure to the share market; he informed Ms Nissi of his proposal; and she nonchalantly observed that she had noticed the same movements in the real estate market as had Mr Sharkey.
3. Mr Sharkey was cross-examined about this conversation (T55.45): Q. You say she says, "True, I've noticed similar things in this area". The impression your evidence tends to give his Honour, if it's to be accepted, is that this was an almost an idle chat over the paper at the breakfast table about a potential investment you might make. That's the impression that this evidence seems to give, would you agree? A. Yes. Q. At least as far as Ms Nissi was concerned, it wasn't a matter of great importance to her? A. Correct. Q. You just happened to mention to the person you were living with that you might switch your investment portfolio around? A. Yes. Q. That's all she took from it? A. Yes. Q. There was no excitement on her part whatsoever about buying the house next door? A. I think it was a matter of interest but I wouldn't say excitement. Q. Minor interest? A. Yeah.
4. It is hard to accept that any woman in Ms Nissi's position would react so dispassionately to the proposal that the more attractive property next door would be purchased for her to live in, even if there was no suggestion that she would personally acquire any interest in the new property. I should add that the position would be no different if it was the woman proposing to purchase the house, and the man was learning of the proposal. The reaction of almost all persons to the prospect of new and better accommodation being what it is, Mr Sharkey's version of events is hardly credible. It is an example of his propensity to go too far in his portrayal of events in a way intended to support his case.
5. Another stark contrast in the evidence between the two parties arose on this issue. Ms Nissi said that, on around 16 October 2007, Mr Sharkey and she were walking home from a late dinner and saw a huge auction sign outside Number 98. They had discussions that same night, and the following morning they decided to inspect the property on the weekend. Ms Nissi denies that the conversation occurred as deposed to by Mr Sharkey.

Mr Sharkey's preparation for auction

1. On Monday 22 October 2007, Mr Sharkey sent an email to Mr Young to inform him: "It's that time of year again when I decide to buy a property a few days before the auction". Mr Sharkey asked for Mr Young's legal assistance, and advised that he had arranged for the finance.
2. Mr Sharkey gave evidence that, on 23 October 2007, he had a telephone conversation with Mr Gurney, his accountant. Mr Gurney said: With the auction happening so soon, I doubt you can sell your shares quick enough to have the cash in time for the auction. I'm also concerned about the CGT implications of selling the Trust's investments. Because I trust you, my wife and I can provide you with a temporary loan so that you can pay for the deposit. Let's meet to talk about this more as soon as possible.
3. Mr Sharkey's evidence was that, in about November 2007, he took steps to have his Trust sell shares for approximately $900,000, to partly fund the purchase of Number 98, and also to cover some of the costs of his business.
4. Mr Sharkey borrowed the deposit money from Mr Gurney's wife, and repaid her from his own funds some time afterwards.
5. On 23 October 2007, Mr Sharkey met with Mr Gurney and Mr Sharkey's financial planner, Mr Andrew Brisbane. He said in his affidavit that, at that time, he was reluctant to register Ms Nissi's name on the title to another property. He repeated his evidence that the relationship with Ms Nissi was much less stable than in previous years, and he did not want there to be a problem if the relationship broke down. He specifically said that he had not had any prior discussion with Ms Nissi about registering the property in her name, and she had not asked him to do that.
6. Mr Sharkey's evidence in his primary affidavit, concerning the issue of asset protection, in his meeting with Mr Gurney and Mr Brisbane on 23 October 2007 was: David said: Asset protection is what I'm concerned about. So far we've helped you reduce your direct asset ownership. This protects you with your start-up business. Andrew and I believe that you shouldn't buy the property in your name. Whilst there are family planning risks you should consider if you're going to marry Donya, we believe you should buy the property in Donya's name or in the Trust. If the property is not registered in your name, it will protect the property against creditors if they come after you personally. I said: Okay. Tell me more about purchasing the property in Donya's name. David said: Well, you could give Donya an interest-free loan and take a charge to secure repayment of the loan. Putting the property in her name will give you tax concessions and the charge secures your interest in the property if you break up. As you're paying the whole purchase price, you will own the property. It doesn't matter that her name is registered on the title. I said: Okay. What about buying it through the Trust? David said: Whilst you would have the advantage of the property not being in your name, the Trust buying the property is expensive. You will also not be entitled to any GST or land tax exemptions. I said: I'd prefer to buy the property through the Trust but it sounds like I should put the property in Donya's name. I'll have to think about it. Can you come to the auction with me on Saturday? David said: Sure, I'm free on Saturday. I'll come with you.
7. It must be noted that, on Mr Sharkey's recollection of this conversation, Mr Gurney's advice that the property should be put in the name of Ms Nissi was predicated on the express assumption that Mr Sharkey intended to marry her. However, Mr Sharkey's evidence was that, by this stage, the relationship was unstable, and Mr Sharkey had doubts about whether the couple would get married. It must also be noted that Mr Sharkey apparently allowed Mr Gurney to give his advice under this mistaken assumption, and did not disclose his reservations. Whilst those reservations may have been private to Mr Sharkey, he could easily have told his adviser, Mr Gurney, of the real position in an appropriate way, to ensure that Mr Gurney did not give advice on a false premise.
8. A further matter to note is that Mr Gurney did not simply advise Mr Sharkey to put the title to the property in Ms Nissi's name. He advised Mr Sharkey, as one possible approach, to give Ms Nissi an interest-free loan and take a charge to secure repayment of the loan. That was a material component of the proposal, if indeed Mr Sharkey wanted to ensure that the ultimate legal position would be that Ms Nissi was the sole owner of the property, but Mr Sharkey, through the Trust, would enjoy the effective ownership.
9. Mr Sharkey attributed to Mr Gurney the statement: "As you're paying the whole purchase price, you will own the property. It doesn't matter that her name is registered on the title".
10. As will be seen, Mr Gurney did not corroborate this aspect of Mr Sharkey's evidence, although Mr Gurney's evidence was otherwise substantially consistent with that given by Mr Sharkey.
11. Mr Sharkey gave the following evidence, in cross-examination, concerning his conference with Mr Gurney and Mr Brisbane (T 49.45): Q. Mr Gurney, I apologise in relation to this property, he mentioned to you that there were risks about putting the house in Donya's name; correct? A. Yes, he said that there were family planning risks, yes. Q. Did you understand what he meant by that? A. I believed it to be the de facto laws. Q. Exactly what was your understanding of how this all worked? What was he warning you about the risks? A. I guess he was indirectly asking me if things were okay. Q. That was obvious to you, Mr Sharkey, because if you put the property in Ms Nissi's name and your relationship broke down, you would have a problem that she was the owner of the property? A. I would have a problem that I would have to enforce the ownership or somehow fight for the property, yes. Q. Why would you have to fight for the property? A. Because it's registered in her name. … Q. Did you discuss with him further what he meant by family law risks, or did you understand what he told you at the time? A. I don't remember. Q. If you had had any uncertainty as to what he meant at the time would you have asked him? A. It depends on the situation. I can't predict what I would have done. I don't know. Q. Mr Gurney was your adviser; you went to get advice from him? A. But I also trusted him, so I don't I can't answer that question. … Q. Did you tell Mr Gurney that you were thinking about breaking up with Ms Nissi at that stage? A. No, I didn't. Q. Did you think it was perhaps something worth raising with Mr Gurney, given your concerns? A. Yes, I did, but I was sort of scared to face that reality. Q. Just explain that. You were scared to face that reality that you didn't ask Mr Gurney about what happens if I do split up with her? A. Exactly. I didn't. Q. I don't understand that. Could you explain it to me? A. I'm saying that I guess I didn't know what was going to happen and I just thought it would be easier to just proceed.
12. Mr Sharkey's evidence is difficult to fathom. His evidence was that his relationship with Ms Nissi was unstable by this stage, and he had doubts about whether he could trust her. In fact he had been unfaithful himself. It appears that he entertained doubts about Ms Nissi. Yet it must have been clear to Mr Sharkey that Mr Gurney was only entertaining the possibility that the title to Number 98 would be put in Ms Nissi's name on the basis that Mr Sharkey was confident that the marriage would go ahead. That is plain from what Mr Gurney said. It is also plain as a matter of common sense. I do not find Mr Sharkey's response, that his failure to inform Mr Gurney of his true belief as to the prospects of the marriage going ahead, because he "was sort of scared to face that reality", to be persuasive.

Mr Gurney's evidence

1. Mr David Bryan Gurney gave evidence in Mr Sharkey's case. Mr Gurney is a chartered accountant, who has provided financial advice to Mr Sharkey in respect of his tax affairs since 2002. He has acted as the accountant and financial adviser to the Trust from about 2006.
2. Mr Gurney gave evidence that was relevant to two issues. He gave advice to Mr Sharkey concerning the purchase of Number 98 in the days before the purchase, and he also attended the auction on 27 October 2007.
3. Mr Gurney said that, from the time that he started working for Mr Sharkey, he regularly advised Mr Sharkey in relation to the structure of asset ownership, that it was important that any director or person exposed to business risk keep their asset level to a minimum where possible. He said that he gave this advice because, in his experience, many start-up businesses fail, and that can be extremely expensive for directors with assets in their own names.
4. Mr Sharkey telephoned Mr Gurney on about 23 October 2007, and told him that he was thinking of buying Number 98 at an auction the next Saturday. Mr Sharkey wanted advice about funding. Mr Gurney responded that it was extremely unlikely that funding could be obtained before the auction, and that it was not likely that selling shares would result in funds being cleared by Saturday. He said there were tax implications in selling shares. He advised that Mr Sharkey should have a conference with himself and Mr Andrew Brisbane, who was a financial planner, who had provided investment advice to Mr Sharkey and the Trust, and managed the listed investments.
5. The conference took place on 23 October 2007. Mr Gurney told Mr Sharkey that his two main concerns were asset protection, and funding the deposit. He said: "We have reduced your direct asset ownership to protect you." Mr Brisbane said that there would be a capital gains tax liability in selling shares. The following conversation occurred on the issue of asset protection: I said: We believe that you shouldn't buy the property in your name due to the asset protection risks. There are family planning risks you also need to consider before you make the decision about ownership, particularly because you have been with Donya for quite some time. As a result, we think you should buy the property in either the Trust or in Donya's name - not in your name. As Donya isn't working and not taking any business risk, if the property became your home it would be secure from your business risk and you would also save yourself from having to pay land tax and capital gains tax. Chris said: That sounds great. What if I buy the house in Donya's name? I said: Because Donya isn't working, it might be hard for her to get any sort of finance if you buy the property in her name. One suggestion is that the trust provides a loan to her at nil interest and takes a charge over the property. This has the benefit of providing the tax concessions and maintaining the current asset protection. As the trust will be paying for the whole of the purchase of the property, it will retain the wealth despite not being recorded as the registered proprietor. There is also the opportunity that should future borrowings be obtained via this trust, if applied to replace the investment sold, the interest would be tax-deductible. Chris said: Do you think buying the property under the Trust is the better option? I said: No. The Trust buying the property will be very costly, despite the advantage that the property is not in your name, you would miss out on capital gains tax main residence exemption and the land tax free threshold. The holding costs would increase by more than $5000 per annum and net proceeds from sale after tax would be diminished. In my opinion and subject to family planning risks, purchasing the property in Donya's name is the most cost-effective and prudent form of asset protection for you. Chris said: From what you say, it seems that my best option is for me to buy the property in Donya's name. But how can I get the funds out of the Trust or a loan for the deposit?
6. Mr Gurney prepared a file note, which materially said: Borrow from Trust with 0% interest. To consider charge over house. Consider buying in Donya's name for asset protection.
7. Mr Gurney apparently did not recall advising Mr Sharkey, that if he paid the whole purchase price, he would own the property, and it would not matter that her name was registered on the title. An accountant would ordinarily be expected to take care before giving that legal advice.
8. In cross-examination, Mr Gurney gave the following evidence on the issue of how the proposal that Mr Sharkey would put the title to Number 98 solely in the name of Ms Nissi would protect the asset from creditors (T 159.45): Q. This is just the point I'm trying to grapple with, with the advice that Mr Sharkey says he received. If Mr Sharkey were to say, yes, the property's in Donya's name but I remain the true and beneficial owner of the property, if that was the arrangement he reached with Ms Nissi, that wouldn't protect him from his predators, as you call them, would it? A. I believe it would. There's the fact that the asset is isolated in a different name. The initial position of a creditor looking to sue Chris would be to look at what assets he's got and that would not come up on the radar. Q. Chris would have to say to his creditors "I don't have a house and I don't have any interest in the house", wouldn't he? A. That's right. Q. If he was interrogated by his trustee in bankruptcy he'd have to say the same thing? A. Correct. Q. He certainly couldn't say to his bankruptcy trustee "There is a house, it's in my wife's name but it's actually my house and you can't touch it", could he? A. Well he could say that. Q. But he'd lose his house? A. That's right. Q. There are two ways that this could be asset protection. One is and I'm sure you're not suggesting it, is just an outright fraud on creditors to say, "The house belongs to my wife, it's in her name. I have no interest in it" and some side arrangement that his wife, maybe a little letter in the drawer of his desk to say, "You record that I own the property". That would be just an outright fraud on his creditors or he puts it in his wife's name and trusts that the relationship is going to last? A. Correct. Q. You didn't advise Mr Sharkey to do anything fraudulent did you? A. No.
9. Mr Gurney said in re-examination on this issue (T 163.10): Q. Mr Gurney, you were asked questions about the concept of asset protection and you were asked how putting the property in Donya's name could amount to asset protection. One of the answers that you gave is that if a creditor was to do a property search they might not find the property in Chris's name. How did you view that aspect as amounting to asset protection? A. If we had a creditor that was reasonably smart about what they were doing they would see if it was worthwhile to take an action against someone. If there's no assets to ensue one would expect that they would back off. Q. Was that part of your thinking in relation to asset protection for Chris? A. Yes, it is.
10. Mr Gurney's evidence substantially supported that given by Mr Sharkey on the issue of how it was expected that putting the title to Number 98 solely in the name of Ms Nissi would provide protection to Mr Sharkey from his creditors. However, Mr Gurney gave no explanation as to why his suggestion that the purchase price be provided by the Trust by way of a loan to Ms Nissi, supported by a mortgage over the property, was not pursued. At least superficially, that arrangement would have improved the prospect that any future creditors, who were stalking Mr Sharkey, would not identify Number 98 as being Mr Sharkey's property. Mr Sharkey might enjoy the advantage, assuming he married Ms Nissi, of living in a property that would not have disadvantageous capital gains tax and land tax consequences. Furthermore, Mr Sharkey could exercise a substantial measure of control over the title to the property through the debt and mortgage given to the Trust.
11. It is notable that Mr Sharkey and his advisers did not pursue that aspect of the proposal or any alternative structure that would have given Mr Sharkey some real control over the title to the property.
12. Placing the title to the property solely in the name of Ms Nissi may have had the potential benefit of shielding Mr Sharkey's ownership of Number 98 from the prying eyes of creditors. However, that would provide a very uncertain benefit, if Mr Sharkey fell into significant debt by reason of the failure of his business. It would be unlikely to protect him in the event of his bankruptcy, because of the laws that oblige bankrupts to disclose their property. That is at least so, if Mr Sharkey intended to be honest. If Mr Sharkey's debts to his creditors were sufficiently substantial, they would be likely to sue him on his debts, even in the face of uncertainty as to his assets, and even if they only saw proceedings to obtain a judgment on their debts as an avenue to securing Mr Sharkey's bankruptcy.
13. Just as it has been an easy matter for Mr Sharkey to prove in the present case that he made all of the payments necessary to purchase Number 98, it would not ultimately have been difficult for his creditors, or trustee in bankruptcy, to do the same. The fact that Mr Sharkey paid the whole of the purchase price, and placed the title solely in the name of Ms Nissi, was obvious, provided only that creditors would be sufficiently motivated to pursue recovery against Mr Sharkey.
14. Mr Gurney must at least have believed that Mr Sharkey would marry Ms Nissi. That distinguishes his position from that of Mr Sharkey. Although Mr Gurney did not put it this way, if the marriage had taken place, the issue of who owned Number 96 would have been governed by the principles of family law, rather than solely by the equitable principles that give rise to resulting trusts. Whatever subjective intention Mr Sharkey may have had as to what he would say to his creditors, placing the title to the property in Ms Nissi's name would make some commercial common sense, provided however that the marriage took place. It was Mr Sharkey who undermined the adequacy of Mr Gurney's advice, by not disclosing his doubts as to whether the marriage would go ahead.

Discussions between Mr Sharkey and Ms Nissi

1. Mr Sharkey said that, after he had spoken with Mr Gurney and Mr Brisbane, he made the following statement to Ms Nissi: "I think I can spend up to $900,000 for the property next door. I think I'm going to proceed with it". He further said that, during this conversation, he did not discuss with Ms Nissi in whose name the property was to be purchased, as he was still intending to purchase the property only in his name, and he did not want to involve himself in any argument with her about it.
2. Ms Nissi's evidence was diametrically opposed to that given by Mr Sharkey on this subject. She said that, during the couple's inspection of Number 98, Mr Sharkey said: "Why don't I get this house for you?" Following the inspection, when the couple returned to their home next door at Number 96, Mr Sharkey said: I will put this house completely in your name. You've put up with so much. I want to get this house for you to show my appreciation. I want to buy this house for you. If anything goes wrong with my business, they won't be able to touch this house because it will be your property… It will be yours.
3. Although, according to Ms Nissi, Mr Sharkey did not use the word "gift", saying that the property "will be yours" has the same meaning.

The auction

1. According to Mr Sharkey's principal affidavit, Mr Gurney, his wife Cheryl and their son, Bryan, attended the auction with Ms Nissi and himself at Number 98.
2. Mr Sharkey said that he registered himself as a bidder. He personally made at least four bids, the highest of which was $886,000. He did not refer to Ms Nissi at any stage throughout the auction, or ask her before he made any bid.
3. After the final bid was made by Mr Sharkey, he had a conversation with Mr Gurney, with Ms Nissi standing next to him, as follows: He said: You should put this contract in Donya's name to protect the property in case you're sued through your business. I said: Okay. That makes sense.
4. Mr Sharkey said that he made the decision to put the contract in Ms Nissi's name on the spot at the auction. Prior to making that decision on the day of the auction he had not spoken to Ms Nissi about putting her name on the sale contract or registering the property in her name, nor had she asked him to do that.
5. Mr Sharkey's evidence was that, after Mr Gurney and his wife had left to deal with the payment of the deposit (as Ms Gurney had agreed to lend Mr Sharkey the deposit) the following conversation took place between Mr Sharkey and Ms Nissi: I said: David said that I should place the property only in your name so that if I'm sued, my investment will be protected. She said: Okay. I said: David's going to loan me the deposit for the property, and then once the sale of my shares comes through, I'll pay him back and I'll also have the money to pay for the rest of the property." She said: Okay.
6. There was an inconsistency in the evidence between Mr Sharkey and Mr Gurney, in relation to whether a positive decision was made at the 23 October 2007 meeting that, if Mr Sharkey was successful at the auction, the title to Number 98 would be put in Ms Nissi's name. Mr Gurney gave the following evidence on this issue in cross-examination (T 160.40): Q. Your evidence creates the impression, at least to me, that by the end of the meeting there was a plan. You'd given Mr Sharkey some advice, he accepted the advice and you were going to implement the advice by giving a loan? A. Yes. Q. Have you seen Mr Sharkey's affidavit in these proceedings? A. No, I have not. Q. It could be said that Mr Sharkey's version of that same meeting with you leaves it on the basis that he was undecided as to what he was going to do after the meeting. Was that the impression you gained from the meeting? A. I can't recall exactly what Chris's impression would be but it was certainly my impression that we were going to go down the track of putting it in Donya's name.
7. Ms Nissi's evidence of what happened at the auction was starkly different to that which was given by Mr Sharkey. She denied that the conversations to which Mr Sharkey deposed took place. She said that she had not met Mr Gurney before, and was not introduced to Mr Gurney and his family at the auction. She could not recall them attending the auction with Mr Sharkey and herself. She said that it was her recollection that Mr Sharkey registered both of them as bidders. She said that Mr Sharkey said to her: "This is going to be your house so you should fight for it!" Ms Nissi said that she made the winning bid. When the auctioneer said words to the effect: "Who is this going in the name of?" Mr Sharkey cried out: "Donya!"

Mr Gurney's evidence

1. Mr Gurney gave evidence of attending the auction for Number 98. He said that he stood with Mr Sharkey and Ms Nissi during the auction. He said that Mr Sharkey was the person who was making the bids during the auction, and he did not see or hear Mr Sharkey talking to Ms Nissi before he made any of his bids. He said that he "believed" that Mr Sharkey was the only person who was making decisions as to whether to keep bidding or not.
2. Mr Gurney's affidavit was sworn on 26 May 2014, some 6 ½ years after the date of the auction. Mr Gurney said in cross-examination that his "recollection" was that Ms Nissi did not bid at the auction (T 161.50). He accepted that his recollection might be wrong (T 162.2). In response to a question as to whether he could recall Ms Nissi was excited after the auction, Mr Gurney said his recollection concerning Ms Nissi was "very vague", and both at the auction and at the lunch at the pub that occurred afterwards, Ms Nissi was not the focus of his attention (T 162.35). Mr Gurney accepted that Ms Nissi might not have been able to hear the conversation between Mr Gurney and Mr Sharkey at the auction (T 162.50).

Mortgage over Number 98

1. Settlement of the purchase of Number 98 did not occur until 10 December 2007.
2. However, earlier, on 30 October 2007, only 3 days after the auction, Mr Sharkey had a telephone conversation with Mr Brisbane in which he told Mr Brisbane that he was short of cash, after he had tied up all of his available money in property, and asked whether it would be wise to release some equity in the properties so that he could reinvest that money elsewhere. Mr Brisbane advised that Mr Sharkey could reinvest money to his advantage. Sixty percent of the equity in each of the properties could be released, which would leave Mr Sharkey with $890,000 to reinvest in a different way. Mr Sharkey relayed that Mr Brisbane said: "There are some well performing Australian shares that you could invest in".
3. Mr Sharkey sent an email to Mr Brisbane on 30 October 2007, which said in part: To summarise what we have discussed: House Price: $887,000 Stamp Duty: $35,405 Suggested withdrawal amount: $950,000 Equity Release: Original Home (60%): $360,000 New Home: (60%) $530,000 Total: $890,000 ◊ We will try and wait until Nov 10 to qualify for capital gains discount ◊ We will reinvest $890,000 in a different way: more Aussie shares, direct shares as opposed to Ralton (I like the sound of that) ◊ I am aware the Trust won't be correctly balanced after the initial sale and we'll be 'out of the market' for a month while things re-settle I also want to discuss how the interest on the interest-only loans will be paid and whether we should definitely use ALL of the $890,000 equity that is available for reinvestment, should we keep some aside for other investments opportunities including property … etc…
4. This email suggests that Mr Sharkey intended to reinvest in different classes of shares. His recognition that he would be 'out of the market' for a month suggests that Mr Sharkey considered that it was desirable for him to have investments in the share market.
5. Mr Sharkey was cross-examined on this issue at T65.25: Q. This is where I get confused. Because your earlier evidence is given the GFC or you foresaw the GFC occurring as far back as October 2007 and your shares were going down and you lost lots of money, you decided to swap to property but it seems that two days, three days after you bought the property you want to get back into shares, Mr Sharkey? A. Well I can explain that quite easily. I wanted the money for my business and I wanted a convincing reason to tell Andrew Brisbane why I wanted that money. Q. What do you mean convincing reason? Couldn't you tell Mr Brisbane the real reason why you wanted the money? A. Not necessarily. He wasn't I mean that's just what I did, I can't explain why. Q. You weren't being honest with Mr Brisbane were you? A. Well not entirely. Q. Seems to be a character trait of yours, Mr Sharkey, you agree? A. Not necessarily. I mean I didn't I didn't mind the idea, as I say in the email, of direct Australian shares. The funds that had lost me money were actually the subprime mortgage funds. I had a fund called I'm trying to remember the name of it but it basically its value went down to zero and that's what was the catalyst for me to make my decision. Direct Australian shares did have appeal to me, which is exactly what I've said in this email.
6. Further, at T66.30: Q. It made absolutely no sense to get out of shares at a bad time, risk capital gains and then to seek to borrow money to invest back in shares? A. That wasn't how I saw it. I didn't like the investments that I was in through my financial advisor, and a combination of direct shares and investing in my own business is what I was after. As I said yesterday, I might not have made the best decisions but that was my thinking at the time.
7. Mr Sharkey said in his primary affidavit that, based on Mr Brisbane's advice, he decided to obtain a home loan from St George Bank, secured over Number 96 and Number 98, so that he could free up some of the cash he had invested in those properties, and for use in his business.
8. He said that, in about November 2007, he had a conversation with Ms Nissi in the following terms: I said: I need to free up my equity in the two properties in order to finish the furnishing of 98 and have funds available for my business investments and getting back into investing in shares. I need to get a loan over the properties. She said: Is there any risk? I said: The loan will be a relatively small percentage of both the houses and the rent from 96 will offset some of the payments.
9. In her affidavit, Ms Nissi's response was that the conversation was as follows: Christopher: I need some funds to fit out my new offices in King Street and would like to use the property as security. Donya: Sure if you think that is the right thing to do.
10. Mr Sharkey said that, in late 2007, after he received draft documents from St George Bank, he said to Ms Nissi: I said: All of my funds are tied up in the properties. I need to have access to the equity to furnish the new house, fund our lifestyle and support my new business. There is no problem getting the loans since the properties will be the security.
11. On about 20 December 2007, according to Mr Sharkey, the following conversation took place: I said: These are the documents to get the loans we spoke about. I want to get them signed soon and have them witnessed so that I have the money to fully furnish this house, for our trip and for my business investments. She said: Okay.
12. Ms Nissi agreed in substance with this evidence. She said that Mr Sharkey asked her to sign the documents, next to stickers that had been placed upon them. She did so, and did not read the documents.
13. Ms Nissi was cross-examined concerning the mortgaging of the two properties at T 245.20: Q. According to you he said, "I need some funds to fit out my new offices in King Street and I would like to use the property as security"? A. Yes, that's what he told me. Q. Which property were you referred to? A. Number 98. Q. How do you know that? A. Because it was my property. Q. But wasn't your name on number 96 also? A. Yeah but 98 was what we moved into. … Q. That's consistent with your view that as far as you were concerned he could draw the money as he wished to, correct? A. Yeah. Q. You didn't know whether there was zero dollars, or $300,000, or $400,000 borrowed? A. I did not have access to any of his accounts. Q. Wouldn't that then been an obvious basis to say, "which property are you talking about?"? A. No. Because he asked me when he had moved into 98. Q. But you still had 96, correct? A. Yes. Q. Wouldn't it have been a good idea to say, "What about just taking the loan or mortgage on number 96"? A. Yeah, if I could turn back time I'd ask him. Q. The reality is, is it, the mortgage was obtained and loans were obtained on both properties, correct? A. With the documents that have been presented to me, yes. Q. The documents that you signed, correct? A. Yes. It seems that way. …. Q. Not necessary to borrow substantial amounts of money over these two properties were they? A. I did not have access to his accounts, I was not aware of how much he was borrowing. Q. That's the other thing of course; you don't know how much he was asking to borrow against number 98 were you? A. I did not, no. Q. Can you answer this question for me please? If number 98 was such an overwhelming gift of $886,000 for you why did you agree to give it away so quickly? A. Because he was my fiancé, if he asked me for anything I would have given it to him. I loved him. Q. You were so overwhelmed that he had provided you with this gift, correct? A. Yes. Q. This gift was something more than shared property, as you've put before this Court, correct? A. Correct. Q. This was something, yours alone, as you put to this Court, correct? A. Correct. Q. It was no longer part of the family de facto relationship property, it was your property? A. Correct. Q. Yet all of a sudden it now forms part of an asset that Mr Sharkey can very willingly easily access to take such money as he saw fit? A. Correct, he was my partner. Q. And you were giving this money effectively back to him, is that what you were saying? A. No. Q. If no why didn't you ask him any questions about how much he was going to borrow and when he was going to pay it back? A. Because as you pointed out it was a very extravagant gift and I'm not going to deny my fiancé moneys that he's put into my property.
14. The documents relevant to the St George Bank loan were executed at substantially the same time as the purchase of Number 98 was completed on 10 December 2007.
15. The borrower was the Trustee as trustee for the Sharkey Family Trust. The amount of the loan was $890,000, $531,600 of which was to be secured on Number 98, and $360,000 on Number 96. The residential loan agreement offer was dated 12 December 2007, and was signed by Mr Sharkey on behalf of the company.
16. Mr Sharkey executed a guarantee of the loan to the Trustee on 14 December 2007. Ms Nissi did the same on 20 December 2007.
17. Mr Sharkey and Ms Nissi granted a third party mortgage over Number 96 to St George Bank to secure the loan on 20 December 2007. Ms Nissi granted a mortgage over Number 98 for the same purpose of the same date.
18. Mr Gurney did not give evidence to explain why it was that his suggestion, that the Trust make a loan of the purchase price for Number 98, secured by a mortgage over the property, was not taken up. That suggestion probably could not have been implemented, once Mr Sharkey made the decision to make the borrowing from St George Bank on the security of both properties. Mr Gurney said that he was not involved in the banking arrangements that financed the purchase of Number 98. That was left to Mr Sharkey. Furthermore, Mr Gurney did not give evidence that he was aware of Mr Sharkey's discussion with Mr Brisbane (Mr Sharkey's 30 October 2007 email to Mr Brisbane was not copied to Mr Gurney).
19. Mr Sharkey's submissions relied heavily on the evidence that Mr Sharkey had exclusive access to the St George bank account, and control of the expenditure of the money borrowed from the Bank. The thrust of the submission was that Mr Sharkey's exclusive access to the account, and control of the money that was borrowed from the Bank, is consistent with his being the real owner of Number 98, and the money being borrowed for his benefit alone.
20. There is force in that argument, and it does tend to support Mr Sharkey's case that the couple understood that Number 98 was to be the property of Mr Sharkey. However, this argument is by no means conclusive. It is common knowledge that many different arrangements are adopted by couples in relationships, whether legally married or de facto, as to who controls the bank accounts and the couple's money. The arrangements adopted by couples can range from each party having personal control of their own funds, so that contributions to joint needs can be agreed on an ongoing basis, to the situation where one of the couple takes sole responsibility for the couple's finances, and the other person relies upon his or her trust in the person who is in control organising the couple's finances effectively. The traditional arrangement probably was that the male of the couple took sole and exclusive responsibility for the couple's financial affairs. The uniformity of that arrangement has broken down in modern society, and been replaced by a range of arrangements that are agreed as being suitable for the needs of each couple.
21. The financial arrangements between Mr Sharkey and Ms Nissi were towards the traditional end of the spectrum. Mr Sharkey, even though at a young age, was a successful and wealthy businessman. Ms Nissi was three years younger than him, and still a student. At that stage, she earned relatively little. The control that Mr Sharkey exercised over the couple's finances was consistent with a more traditional financial arrangement between the couple, which leaves open the possibility that Mr Sharkey did indeed make a gift of Number 98 to Ms Nissi.
22. Of greater significance is the fact that Ms Nissi readily agreed to allow Mr Sharkey to borrow $890,000 on the security of the two properties, including Number 98, virtually concurrently with Mr Sharkey's having made a gift of that property to her. It is necessary for Ms Nissi's case to accommodate the making of the gift, and the immediate agreement of Ms Nissi to permit a substantial mortgage to be taken out to allow the borrowing that was to be within Mr Sharkey's sole control.

Communications after end of relationship

1. Mr Sharkey and Ms Nissi agreed in evidence that their relationship broke down in mid-2008. At that time, Mr Sharkey moved out of Number 98 into shared accommodation. Ms Nissi continued to live in Number 98.
2. A peculiar aspect of the breakdown in the relationship is that Mr Sharkey asked Ms Nissi not to publicise the breakdown, including to her family and the couple's friends, and Ms Nissi agreed. Apparently, sporadically, Mr Sharkey and Ms Nissi would go out together, including on at least one occasion to the christening of a child of Ms Nissi's sister, as if the relationship still existed. The couple would pretend that they were still together.
3. Mr Sharkey was cross-examined on this issue at T 72.15 Q. I'd like to move to a different topic. By mid 2008 you split from Ms Nissi? A. Correct. Q. At your request that was kept quiet from people in general? A. Yes. Q. You continued to keep the pretence up to the outside that you were still in a relationship? A. Decreasingly so. I didn't I didn't deny that we were together but I also didn't, you know, actively promote the fact that we were. Q. You went to a christening as Donya's fiancé? A. No, I don't recall that. ... Q. When you are giving evidence in your affidavit in challenging Ms Nissi's recollection that you continued to go to family functions and you say, "I don't recall that", we can't really trust your recollection, can we? A. I guess not in light of this. ... Q. If you look at the date and the Christmas tree in the background might have been a tip, that's Christmas 2008 after you split up, correct? A. Correct. Q. Your challenge of Ms Nissi's evidence that the two of you kept up a pretence of being together after you were split was perhaps unfounded? A. I think in terms of her family we definitely kept up a pretence but I am saying in terms of friends and things like that and I said in my evidence that we didn't widely tell anyone about our break up until 2009. Q. That was largely at your insistence, wasn't it? A. I guess so, yes. But in terms can I add a bit more than that?
4. Mr Sharkey and Ms Nissi communicated from time to time after their relationship ended. One reason for the continuing communications was that Ms Nissi remained living in Number 98, and she looked after Mr Sharkey's dogs. From time to time Mr Sharkey would make an arrangement with Ms Nissi to pick his dogs up from the property, so that he could walk them. A number of those communications contain statements by Mr Sharkey that are material to the question whether he understood that Number 98 was Ms Nissi's property.
5. On 24 September 2008, a Gmail exchange took place which included the following extract: Chris: … I think we need to work out what we are going to do about us, what are you doing tonight? Me: Iv already decided. We're over … Me: … Your sister and yourself have completely embarrassed me, now im not only a gold digger which your family hates, but im a psycho bitch with attitude and clinging problems Chris: I agree we need time. We just fight too often. I know its always my fault but it just hurt me that things are always so bad. I'm sorry that we have embarrassed you… people know it is a tough time for both of us… but I shouldn't have let us argue in front of them, its my fault Me: yeah it is, and it's my fault I let you interfere in my life. I will never forgive you. I am telling mum this week. I dont want to go on pretending anymore Chris: Don't you think we should talk about this in person tonight? Me: I'm not wasting another day you want to get me to shout at you in public so I have to move from Newtown too?/ If you want me to move I will, your sister will finally get to move here, and she'd be satisfied Chris: no I definitely don't want you to move, its your place I will give you my key back, I could leave it there when I walk the dogs today? :( Me: no I'm moving away tell cordy I gave your property back Chris: please don't
6. This exchange occurred shortly after the relationship ended. The initial exchange suggests that Mr Sharkey did not completely accept that there was no chance of reconciliation. Ms Nissi's comment about "telling mum this week" appears to refer to the fact that, at Mr Sharkey's request, the parties did not advertise the fact that their relationship had ended for quite a number of months. Mr Sharkey referred to Number 98 as being Ms Nissi's "place". Ms Nissi referred to Number 98 as being "my property".
7. Later, in the same Gmail exchange, the following was said: Chris: What are we going to do? Me: end it Im done with you Chris: let me know when i can see you. … Chris: do you genuinely think we can fix things? Me: no … Chris: Now you are just being silly Please, live there, its your place … you have done such a good job with it Me: I feel sick in that house I don't want another reminder of what a horrible person Iv been - gold digger - you don't even tell cordy im not you let them think that
8. Mr Sharkey again referred to Number 98 as "your place".
9. On 7 April 2009, a Gmail exchange occurred between Mr Sharkey and Ms Nissi concerning his taking his dogs on a trip, in which Mr Sharkey said: Chris: OK so to summarise. I'd really like to take the dogs with me, I'm leaving thursday arvo so if you change your mind please let me know by Thursday morning. I am willing to walk the dogs any time any day so if you ever want me to just leave a key and let me know and its no problem I think its really cruel if you're going to keep them from me entirely, but they're at your house so its your decision
10. Mr Sharkey again described Number 98 as "your house". When he was asked in cross-examination to explain his references to the property being Ms Nissi's "house" or "place", Mr Sharkey said: "I was referring to the place she was living in and that's all I can say" (T 180.20).
11. On 8 July 2009, in the middle of another Gmail conversation, the following exchange occurred: Me…hey tim told me about this investment broker what do you reckon ill send the details Chris: ok Me: im going to borrow 200,000 of the house and do this thing Cos ill get the dividends at the end as well and he's got good stats Chris: cool if you send me the details of have a look at it tonight when I get home or tomorrow morning…
12. Mr Sharkey was asked in cross-examination to explain why he reacted by saying "cool" to Ms Nissi's suggestion that she would borrow $200,000 on the security of Number 98, if it was his position that he was the owner of the property. Mr Sharkey could not remember the exchange. He observed that he did not think the suggestion made sense, as he already had a big loan against the house (T 105.45). He then suggested that: "Maybe she's talking about her parents' house, a different house. I'm not sure". The exchange is, however, consistent with Mr Sharkey having an understanding that Number 98 was Ms Nissi's house.
13. A proper balance requires that it be acknowledged that Mr Sharkey did not uniformly refer to Number 98 as being Ms Nissi's home, after the end of their relationship. On 11 May 2009, he sent an email to a young woman called Victoria Pooley, in which he made a number of chatty observations, and said: …Glad your'e loving Newtown! I've probably walked past your place 10,000 times, my houses are down on Denison St - 96 and 98, so its like 30 seconds walk from your place, and whenever I head down there to walk the dogs I walk past your place. It's a really good spot and having lived there for 3 years I'm telling you, you'll love it…
14. This inconsistent manner in which Mr Sharkey referred to the properties does not obviate the significance of his calling Number 98 Ms Nissi's home, in communications with her after the relationship ended. Those statements were against his interests.

Agreement for sale of Number 96 and future of Number 98

1. Mr Sharkey said that he decided in late 2010 to sell Number 96 to generate funds for his new business. Mr Sharkey said in cross-examination that he was "very short of funds". He signed an exclusive agency agreement in favour of Kelly & Sons Real Estate on 11 November 2010. The proposed sale price was $799,000.
2. On 29 December 2010, Mr Sharkey said in an email to his brothers: "I really think we should have a serious talk about dumping these guys and going for it ourselves. I'll sell my house to the next offer and raise money anyway I can - Patrick and I can finish the code on our own".
3. It appears from the balance of this email that Mr Sharkey and his brothers were in negotiation with some other party in relation to the development of, or investment in, the business in which the brothers were involved. Mr Sharkey was engaged in what he described as "working on updating redmine". The evidence did not explain that term. I infer that it involved some form of computer program, as Mr Sharkey referred to the source code, and said that he agreed that they needed to put in place a nondisclosure arrangement, and then only show samples. It was in that context that Mr Sharkey made his comment that the brothers should consider "going for it by themselves".
4. This objective evidence suggests that, while the new business in which Mr Sharkey was engaged needed funds, the decision to sell Number 96 was a commercial decision to raise funds to continue the development of the business without the need for introducing an outside investor. It is consistent with Mr Sharkey and his brothers being able to raise investment capital from outside sources.
5. There was no further objective evidence of circumstances, between the date of this email and late February 2011, that would support a finding that, by that later time, Mr Sharkey or his business had a truly desperate need for additional capital.
6. Mr Sharkey said that, as Ms Nissi was registered on the title to Number 96, he needed her to sign the necessary papers to enable the property to be sold.
7. In his primary affidavit, Mr Sharkey said that, in about February 2011, he asked Ms Nissi to visit his office in King Street Newtown "for a chat about 96 Denison Street and 98 Denison Street". Mr Sharkey's evidence of the conversation was, in substance, that he told Ms Nissi that he was struggling to meet the mortgage repayments on both properties, and to support his business. He needed to sell Number 96 urgently to use the funds to support his business. He needed Ms Nissi to sign the documents to enable him to do that. Ms Nissi replied: "But will you be doing anything with 98?" Mr Sharkey said that he replied: "I may need to sell it too but I haven't decided yet." He then said that Ms Nissi became flustered and upset, and kept crying and raising her voice loudly when she spoke to him. According to Mr Sharkey, the following conversation ensued: She said: You're being unfair, 98 is my home. What will I do? How can you do this to me? I said: You know that I purchased 98 as an investment and you paid nothing for it at all. I've been letting you live there but you can't keep it. The properties are mine and I'm willing to fight for them. She said: Well I'm not going to let you sell 96. She said: You can't do this to me. It's not fair. I'll have nowhere to live. She said: I won't sign the paperwork for you to sell 96 unless you write up a document that you won't take 98 away from me. I said: If I can sell 96 now, I'll leave 98 alone for the time being.
8. Mr Sharkey said that this conversation took place in his office, which was visible to his employees through a large glass window. The employees could see Ms Nissi crying, and they could hear the argument taking place. He said that Ms Nissi's "emotional reaction to me wanting to sell one or both of the properties was distracting to my staff and I wanted to quickly diffuse what I felt had turned into a loud and emotional argument". That led Mr Sharkey to make the last statement set out above. He said that he "felt pressured and shocked by Donya's threat…" He only made the last statement to calm down Ms Nissi, and "to de-escalate the emotional environment that she was creating by her crying and yelling".
9. Mr Sharkey's evidence was that, after Ms Nissi left his office, he prepared the document that she had requested. He said that, on 18 March 2011, he visited Ms Nissi at her workplace, and informed her that he had the document that they had discussed. Ms Nissi found a person able to witness the signing of the document, and it was then signed by both parties and witnessed.
10. Mr Sharkey said in his affidavit: "I drafted the document myself. I did not engage any legal or financial professional to prepare or review the document, nor did I obtain any legal advice as to the effect of the document".
11. As will be seen, Mr Sharkey's version of events does not include any conversation between the parties, as to the precise terms of the proposed agreement, that would explain the genesis of the document that was ultimately executed. On Mr Sharkey's version, he thought up the appropriate terms without any input from Ms Nissi. She simply signed the document.
12. The import of Mr Sharkey's evidence was that he set about preparing the document after the February 2011 meeting; that he prepared it himself without professional assistance; and that he took it to Ms Nissi on 18 March 2011; whereupon it was signed by both parties without further discussion.
13. In her affidavit, Ms Nissi, gave an entirely different version of the events that led to the parties making their agreement. She said that, in around February 2011, Mr Sharkey telephoned her to discuss the ownership of Number 96. He visited Number 98 with a bottle of red wine, and they had a discussion in the living room. According to Ms Nissi, the following conversation then occurred: Christopher: I am going to do really well with Bisir and would make more money than Stayz soon. I need to sell 96 Denison Street to get the funds I need for the time being. Christopher: Since you have 98 which is more expensive than 96, I only think it fair that I should keep 96. Donya: That isn't fair. 98 was purchased for me as a gift, and it's my home. You've been using 96 Denison Street for revenue and you've borrowed funds against my property and haven't repaid it. Christopher: I will repay that loan but I will need some time to do so. Donya: How long? Christopher: About a year. Donya: OK, if you promise to repay the loan on my property within a year then you can have 96. Christopher: OK, that's fair. Donya: Can we get something in writing so we both are on the same page? I would sleep better at night if we have something in writing. Christopher: I will write something up.
14. Ms Nissi denied that the conversation to which Mr Sharkey deposed occurred, or that it happened in Mr Sharkey's office during a conversation in which she was emotional, crying and screaming.
15. She said that, on 18 March 2011, Mr Sharkey telephoned her to advise her that the sale of Number 96 was to be settled soon, and that he needed her signature to get the sale proceeds. She was still waiting to receive the written agreement that Mr Sharkey had promised to write up.
16. Ms Nissi then contacted Mr Sharkey by Gmail. The following is a printout of the Gmail conversation: Donya Nissi Hey Chris, Can you please write something up that includes the following agreements: Parties - Chris and Donya (and possibly the Sharkey Family Trust as well, if they legally own 96 - Chris should be authorised to act as their representative). Date - the agreement is entered into Consideration - I will sign over interest in 96 You will sign over (any) claim to 98 You will agree to borrow no further money from 98 You will agree to repay all money owing on the house by a certain dated (Feb 2012?) Once all the money is paid back, he will relinquish any claim on 98 After we both sign it, I'll get two witnesses from my work to sign it as well with their contact details clearly marked on the page See you at 2:30! Good news about 96!!!!! how exciting for you! Chris Sharkey Who did you get advice from in writing this? Donya Nissi No one, I just looked up agreements online. Why?
17. The use of the expression "(any)" in the line: "You will sign over (any) claim to 98" suggests that Mr Sharkey had not specifically articulated a claim to Number 98. Even if Mr Sharkey had made a gift of the property to Ms Nissi, the possibility existed that Mr Sharkey could make a claim in relation to that property under the Property (Relationships) Act 1984 (NSW) (even though an extension of time to permit the application would have been required under s 18(2)).
18. The document that the parties signed was then prepared by Mr Sharkey. Its terms were as follows: 18/3/2011 Chris Sharkey agrees that he (or Sharkey Family Trust P/L) will not contest the ownership of 98 Denison Street Camperdown and will be responsible for the debt associated with that property. He will not take on any more debt to do with the property. This will be paid off and the loan extinguished by January 1, 2013 [Signed Mr Sharkey and witnessed] Donya Nissi, agree to that the proceeds of the sale of 96 Denison Street Camperdown will go to Chris Sharkey. [Signed Ms Nissi and witnessed]
19. In cross-examination, Mr Sharkey insisted that he started to prepare the document immediately after Ms Nissi left his office in February 2011, and that, by the time he received Ms Nissi's Gmail communication on 18 March 2011, he already had a draft document (T 87.40, 89.5 and 93.45). Mr Sharkey was obliged to concede that the terms of the Gmail communication, and the agreement that he signed, were inconsistent with the conversation that he claimed had taken place at his office in February 2011 (T 91.45). In particular, he conceded that there had been no suggestion in his version of the earlier conversation that Mr Sharkey would repay the mortgage on Number 98 (T 91.40). His response to the suggestion that the only sensible thing that he could have said in reply to the Gmail was: "That's not what we discussed" (T 92.7) was: "My motivation was to sell 96".
20. The following is an edited extract of the cross-examination of Mr Sharkey between T 92 and 100: Q. Maybe you would just lie to Ms Nissi about what you were going to do and do something different, is that what you are suggesting? A. I am suggesting that I was, in preparing the agreement my goal was to get 96 sold. Q. If that involved telling a lie? A. Then I would have done it… Q. That part makes perfect sense, Mr Sharkey, but what doesn't make sense is if all you told Ms Nissi and all that you had arranged and agreed with her was that you would not sell 98 for some time and not even discussed paying off mortgages, why you didn't challenge her in the email? A. Because I desperately needed to sell 96 for my business, that was my overwhelming priority at the time… Q. You accept you couldn't have had in our draft back in February that you would be responsible for the debt associated with the property, could you? A. No, I don't think that that is impossible, no. The property was mine and I was responsible for it. Q. What about the bit at the end, "This will be paid off and the loan extinguished by January 1, 2013"? A. That could have been in there too. I don't know. Like I said, I think looking at that document that it's likely that I updated it. Keep in mind my goal was to get Donya to sign this document so I could sell 96. Q. But you see from your evidence, Mr Sharkey, Ms Nissi hadn't even made that demand in the office in February. She hadn't asked you to repay the mortgage at that stage. She only did that on 18 March? A. Yeah, that's correct. Q. How could you have had such a gift of foresight back in February to know that she was going to make that demand? A. Well, I didn't necessarily I mean I wouldn't have known she was going to make that demand, it doesn't mean I wouldn't include it. Q. You just anticipated she might make that demand? A. I'm not saying that, no. Q. It doesn't make sense, does it, Mr Sharkey? A. I'm just saying that it's not impossible that I would have had it in the draft. Q. Even though Ms Nissi never asked you to repay the mortgage in your office in February, you might have just put it in the draft for some unknown reason? A. To make the agreement seem more complete, I'm not sure. Q. It's far more probably isn't it, Mr Sharkey, that when you realised Ms Nissi was going to be insistent on getting a written document, that you simply copied the terms of what she asked for A. Yeah, I think it's likely that I updated the draft based on what she had in the email. Q. Mr Sharkey, you didn't update the draft, you started drafting it for the first time on that date? A. I disagree with that. Q. If his Honour were to believe your evidence that you started drafting this document back in February, you had plenty of time to go and see Mr Young or some other solicitor about how to draft the document, wouldn't you? A. Yes, I would have. Q. If at the stage in February that you felt overborne by Ms Nissi's emotional outburst, you had plenty of time to think about matters? A. I wasn't overborne by the emotion, I was overborne by the fact that I knew that she would prevent me from doing what I needed to do and my business was the thing that was putting pressure on me. Q. You were caught between a rock and a hard place. You needed money, Ms Nissi wasn't being cooperative? A. Correct. Q. You had some three weeks to go and get some advice from someone about what to do about this situation, didn't you? A. Yes. Q. You had access to Mr Gurney? A. Yes. Q. You had access to Mr Young? A. Yes. Q. You had your mentor Mr Robert Hunt? A. Not at I mean I suppose so, I could've called him, yeah. Q. You didn't call any of these people though, did you? A. No, I didn't. Q. Because you weren't under any duress, were you? A. I don't see how those two things are incompatible. Q. You weren't bullied into doing anything, Mr Sharkey, were you? A. I felt that I had no choice. I felt that the only way I would be able to continue my business and was to Q. I am sorry to interrupt you. Finish your answer, sorry, I didn't mean to interrupt? A. That's okay. I just felt like the only way I could continue in my business, rightly or wrongly, was to sell this property and I knew that Donya would not allow me to sell it without drafting a document. I felt that I absolutely had no other option and I didn't want to be railroaded into making decisions in my business that I wasn't happy with, including shutting it down. Q. Mr Sharkey, if you really felt that you were being held to ransom by Ms Nissi, bullied into something that you didn't want to do that you thought was wrong, in the space of three weeks one would have expected you to speak to somebody and get some advice about what to do about this situation? A. I think that is a very reasonable expectation and it is what I should have done, yes… Q. You understood when you signed this document that Ms Nissi thought she got what she wanted? A. Yes. Q. What she wanted was two things. (1) You wouldn't make any claims in relation to 98, correct? A. Yes. Q. And (2) you'd get rid of the debt by January 1, 2013? A. Yes. Q. You wanted her to believe that? A. Yes, I did. Q. You gave that piece of paper so she'd believe it? A. Yes, I wanted her to sign it so I could sell the other property. Q. That's what you believed would happen if you signed this document? A. No, I believed that I would still be able to fight for it. I didn't think that you could agree in advance to not challenge something. Q. You gave a piece of paper that you prepared to Ms Nissi in the hope that she would believe that by signing this document she would be getting the two things I put to you, 98 and the debt paid off but you never intended to honour that undertaking? A. I believed I would be able to challenge it at a later date. Q. Basically you attempted to defraud Ms Nissi? A. I don't know the definition of that but I was intentionally ambiguous. Q. You made a representation to Ms Nissi that you knew was false? A. Well if the representation is my knowledge that I my mistaken belief that I could challenge it later, then, yes. Q. The representation was you would make no claim to 98 and you would pay off the mortgage? A. That was the representation, yes. Q. At the time you made it you knew that you weren't going to do either of those, you say? A. That's right… Q. I'm putting to you in very straight simple terms, Mr Sharkey. You hoped to deceive Ms Sharkey (as said) with this document. Isn't that what you were hoping to do? A. I don't know. I hoped that she would sign it. I think that I thought that I would be able to challenge it later. It wasn't my like I wasn't yeah, no, I wouldn't put it like that. Q. You wouldn't put it like that because it doesn't sound too good, does it, Mr Sharkey? A. It obviously doesn't but I also think that my thinking wasn't that I was creating a document that was evil or something, I just thought that I it wouldn't hold up, I thought that I would be able to fight it because I owned the property. Q. You thought you'd give a document that was ambiguous, that wouldn't hold up, that Ms Nissi would believe would hold up and give her the things that you'd promised? A. I didn't care what she believed other than that she would sign it and let me sell the property. Q. Whatever it took to sell the property, that's what you were prepared to do? A. I mean to this extent. Q. That's because you were still under this duress weren't you? A. That's correct, yes. I knew that if I didn't do this she would not allow me to sell it. I would have to give up pursuing investment in my business and probably start firing employees and shutting down, which I desperately wanted to avoid.
21. It is clear from a comparison between the Gmail conversation and the document that was signed on 18 March 2011, that the Gmail was the source of virtually every aspect of the agreement. Apart from the fact that the version of the conversation given by Mr Sharkey that occurred in February 2011 did not determine any of the terms of the agreement, the agreement that was actually signed by the parties was quite inconsistent with that conversation. On the other hand, the agreement is quite consistent with the version of the conversation that happened with the accompaniment of the bottle of red wine that was given by Ms Nissi. The precise terms were largely suggested in the Gmail.
22. A particular, but significant, change between the Gmail and the agreement was that, in her Gmail communication, Ms Nissi asked for an agreement that the mortgage would be repaid by February 2012. That was put as a suggestion (which is denoted by the use by Ms Nissi of the question mark). When Mr Sharkey prepared the agreement, he extended the repayment date to 1 January 2013. Mr Sharkey must have thought that the one year between March 2011 and February 2012 was insufficient to enable him to repay the mortgage. He decided that he needed the best part of an extra year. This amendment to Ms Nissi's proposal suggests that Mr Sharkey had a positive intention to repay the mortgage, and that the agreement was a negotiated one between the parties.
23. When asked in cross-examination why he extended the date for repayment of the mortgage, Mr Sharkey did not say that it was to give him more time to do so, but said: "I guess perhaps to give me more time before I had to deal with the property issue" (T 113.30).
24. I cannot accept Mr Sharkey's evidence that he commenced to draft the agreement immediately after his February 2011 meeting with Ms Nissi. Mr Sharkey's version of the manner in which the 18 March 2011 agreement was prepared is inconsistent with the terms of the final agreement, and the relationship between those terms and Ms Nissi's 18 March 2011 email. The manner in which Mr Sharkey attempted to defend his evidence on the basis of entirely improbable assertions was very damaging to his credibility.
25. After the agreement was made, Mr Sharkey commenced to make the mortgage payments required by St George Bank. He continued to make those payments for almost 2 years. His evidence was that he made payments in the total amount of $149,599.77.
26. Mr Sharkey was cross-examined about why he paid the mortgage payments for some two years, and why he waited so long to challenge Ms Nissi's ownership of Number 98 (T 76.20): Q. Your evidence in your affidavit is notwithstanding that Ms Nissi had started making claims for this property back in July 2008, you decided to not deal with the problem until August 2013? A. Correct. Q. Five years later? A. Correct. Q. Just to get yourself ready to deal with the problem? A. To make sure I was secure in my business, yes. Q. Nothing to do with the fact that by that stage Ms Nissi had paid off the mortgage over the property did it? A. No. Q. That made it a far more attractive proposition for you to start agitating about the property didn't it? A. No, it made it far more pressing. Q. Because at that stage you, as a guarantor and your trust as the borrow were off the hook with the bank? A. I didn't know that to be true. Q. You didn't know that? A. Well I didn't understand the implications, which was why I sought legal advice. Q. You see, you were sitting in the United States at that stage weren't you? A. Yes. Q. You took the decision in December 2012 to stop paying the mortgage? A. I couldn't afford to pay it anymore. Q. Of course because you couldn't afford to, you immediately telephoned the bank and told them that you had a problem meeting your obligations under the mortgage? A. No, I didn't. Q. No, you didn't, did you. You never wrote a single letter to the bank? A. No. Q. You made no arrangements whatsoever with the bank? A. No. Q. What happens when you don't pay a mortgage Mr Sharkey? A. They sell the property. Q. That's what you were hoping might happen here? A. I wanted to bring the issue to a head, yes. I didn't know precisely what would happen but I definitely wanted to make sure that I dealt with the issue now. Q. You wanted to bring the matter to a head by forcing Ms Nissi, her property to be sold by the bank? A. Not necessarily that, but I did want to make sure that I would have to take action. Q. You hoped Ms Nissi would be unable to meet the mortgage payments on her own? A. I didn't hope anything specific other than I wanted to bring the matter to a head. Q. Well how were you going to bring the matter to a head by simply not paying the mortgage payments? A. Well I knew that I knew that would result in the bank taking action and that would mean that I would need to take legal action of my own. Q. You knew that if you stopped paying the mortgage, and you've just said it, the bank would take action against Ms Nissi. That action, I put it to you A. No, I thought they would take action against me. Q. You wanted to be sued by the bank? A. No. No, I didn't want to be sued by the bank but I wanted to put myself under pressure to solve the situation. My natural inclination is to focus on my business. Q. Did you seek some legal advice before you made the decision in December to stop paying the mortgage? A. No, I didn't. Q. What was significant about 1 January 2013? A. I started to run out of money to pay for the mortgage. Q. Is that the only significance that date had for you? A. What date, sorry? Q. 1 January 2013? A. Yes. Q. It had no other significance to you? A. No. Q. Wasn't the date that you'd promised Ms Nissi that you'd repay the mortgage by was it? A. I believe that was the date on the document. … Q. Would you just tell his Honour, whilst you were sitting in the United States months after the fact that you stopped paying the mortgage, what did you think was happening back in Australia with the bank? A. I didn't know how long they would leave it for before taking some sort of action. I was worried about it. Q. You weren't that worried that you picked up the phone and spoke to the bank were you? A. No, I was avoiding the problem. Q. You were avoiding the problem, didn't speak to Ms Nissi about it? A. No. I believed it was my problem to do it. Q. Then you went to see Swaab Lawyers, was it August 2013? A. I'm not certain. Q. At that stage Ms Nissi had repaid the mortgage? A. I was unaware of that when I saw Swaab, yes.
27. Ms Nissi was cross-examined at some length about the circumstances in which the 18 March 2011 agreement was made (T 266.25): Q. You understood, I suggest to you, that Mr Sharkey needed to sell number 96 to raise money for his business? A. That's what he told me. Q. In fact he was quite desperate, wasn't he, to see number 96? A. That's what he told me. Q. He was desperate to sell number 96 because he needed those funds for the purposes of putting it to his business that was being established in America, correct? A. That's what he told me. Q. You appreciated the urgency of that situation when Mr Sharkey was asking you to sign documents for the purposes of selling number 96, correct? A. Yes. Q. You appreciated, I suggest, that because you were on the title of number 96 and number 98 you were in a very good bargaining position with Mr Sharkey to try and get what you thought would be a good deal in relation to number 98, correct? A. Yes. Q. I also suggest to you that at this time you were fully aware that your name was on the title of number 96 Denison Street to hold your joint interest on behalf of Mr Chris Sharkey, correct? A. My joint interest? Q. You knew that your name on the title was there so that the property would be held on behalf of Mr Sharkey alone? A. Yes. Like half/half, is that what you are saying? Q. No, all of it for Mr Sharkey, correct? A. No, no. Q. You were also aware that your name was on the title of number 98 to hold the property on behalf of Mr Sharkey, correct? A. No, there was a substantial debt on it that Chris had accumulated. Q. My point, madam, is that you were there only to act on behalf of Mr Sharkey because you were there as his nominee in relation to number 98, correct? A. No, that's not true. Q. But nevertheless you knew that Mr Sharkey couldn't do anything without your approval, correct? A. Yes. Q. He needed your signature, correct? A. Yes. Q. You were going to use that position to get the best deal you could, correct? A. No, actually I wanted him to pay back his debt. Q. You wanted to get him to give you number 98 Denison Street, a property which you held on behalf of Mr Sharkey, correct? A. Number 98 was always mine but there was a large debt owing on it. Q. You say that and according to you of course that it was all amicable, all agreed between you and Mr Sharkey as agreed in February 2013, correct? A. Yes, we were no longer in a relationship. Q. What I want to suggest to you is that Mr Sharkey told you that he wanted number 98 back and he wanted number 96 sold urgently. That's what he said to you, wasn't it? A. That's not true. Q. You simply refused, correct? A. Refused. Q. To give him number 98 back or to sell number 96 until you had got your hands on it, correct? A. No, I refused to give him my share of 96 until he paid the debt on 98. Q. Until he had agreed, I think you were saying, to pay the debt back? A. Yes, and he wrote the contract out. Q. Before you signed any document you sent him your email, correct? A. Correct.
28. On 26 January 2013, St George Bank sent a letter to Ms Nissi advising her that an amount of $2641.28 was overdue.
29. Ms Nissi sent an email to Mr Sharkey on 24 February 2013, in which she asked him when he intended to discharge the mortgage over Number 98, in accordance with the agreement.
30. Ms Nissi sent a reminder email to Mr Sharkey on 3 and 4 March 2013.
31. Mr Sharkey did not respond to any of these emails.
32. Ms Nissi's solicitors, on 11 March 2013, sought information from St George Bank about the state of the account.
33. On 9 April 2013, Ms Nissi entered into a lease of Number 98 for 12 months at a rent of $2000 per fortnight. That was apparently necessary so that she could pay the mortgage instalments.
34. On 11 June 2013, Ms Nissi was advised by St George Bank's solicitor that, as at 5 June 2013, the loan was in arrears in the sum of $14,462.56. The Bank served a formal notice of default on Ms Nissi.
35. Ms Nissi's solicitors sent a letter of demand addressed to Mr Sharkey and the Trustee on 25 July 2013, in which they demanded that Mr Sharkey perform the 18 March 2011 agreement.
36. On 5 August 2013, St George Bank issued to Ms Nissi a notice of demand in which it advised that it had accelerated the date for full repayment of the loan secured on Number 98, and demanded payment of $523,397.12 within 10 days.
37. Ms Nissi paid instalments of the debt to St George Bank in the total amount of $22,090.
38. On 25 October 2013, Ms Nissi repaid the Bank $524,888.63, after she refinanced the debt with a loan from the Commonwealth Bank of Australia.
39. Mr Sharkey made the following concession concerning the manner in which he had dealt with St George Bank (T 120.30): Q. Would you accept that the manner in which you dealt with the bank was less than honest? A. Yes, I do.
40. If Mr Sharkey had been overborne by Ms Nissi's alleged histrionics in February 2011, he had the best part of three weeks to consider his position, and to seek appropriate professional advice. He did not do so, and has not offered a good reason why not.
41. After Number 96 was sold, and he received the net proceeds of sale after repayment of the mortgage on the property, the duress under which he claimed to have signed the agreement with Ms Nissi disappeared, as he agreed in cross-examination (T 100.25). Yet Mr Sharkey continued to pay the instalments on the mortgage for some 2 years. In that respect, Mr Sharkey performed his obligations under the agreement as if it was valid and enforceable.

Credibility of the parties

1. There are so many stark contradictions in the evidence given by and on behalf of the parties to these proceedings that I will principally have resort to the objective facts, and the conclusions that should be drawn on the balance of probabilities based upon those facts.
2. I will deal, first, with the apparent credibility of the parties having regard to their respective cross-examinations.
3. It was my perception that one of the parties, Ms Nissi, gave her evidence in a manner that was more persuasive and credible than the other, Mr Sharkey.
4. I formed a strong impression that Ms Nissi responded to her cross-examination forthrightly. Ms Nissi adopted a proper attitude to her cross-examiner, and engaged with the questions in the sense of giving immediate and responsive answers. She did not appear to me to shirk the need to answer the question. That was so even where the answer might not support her case (a particular example being her evidence about her perception that she was in a position of advantage over Mr Sharkey when she negotiated the 18 March 2011 agreement). Ms Nissi appeared to be comfortable and poised in the witness box. She clearly had a belief in the virtue of her own case, but that is hardly surprising. I could not detect any appearance of delay or prevarication in her responses to questions. The responses were almost invariably immediate. Ms Nissi appeared to answer questions as if by immediate reference to what she could actually recall.
5. Ms Nissi's evidence was not without any flaws. For example, it appears that her recollection was in error when she said that she did not visit Mr Sharkey's business premises in Newtown after the couple separated. Her qualification that she meant that she did not visit the office after the separation became public was not entirely satisfactory. However, it did not appear to me that there were many instances in which Ms Nissi's evidence was contradicted by objective circumstances.
6. I found that Mr Sharkey's performance in the witness box under cross-examination was more problematic. In cross-examination Mr Sharkey almost uniformly stuck to his case, even in the face of inconsistencies or improbabilities. As I have recorded, he made a relatively significant number of concessions that, if the facts were as he claimed them to be, cast doubt on his honesty. Concessions of that nature do not support the credit of the witness, as would a concession that removed the inconsistency or improbability. It appeared to me that Mr Sharkey was guarded, and somewhat distracted, as if he had an awareness that he faced an uphill battle to substantiate some aspects of his evidence; as if he could see that his evidence did not all fit together in a satisfactory way.
7. There were a significant number of aspects of Mr Sharkey's evidence that were unsatisfactory, and there were many respects in which that evidence did not gel with the objectively proved circumstances. Individually and collectively these matters undermined the credibility of Mr Sharkey's evidence.
8. I will list the principal matters that have undermined the credibility of Mr Sharkey's evidence in the order in which they have been considered in these reasons for judgment: 1. Even after some 10 years, it is improbable that Mr Sharkey would forget that he had lived for nine months, rather than three months, on Ms Nissi's parents' lounge room floor. This was an error in recollection that tended to support Mr Sharkey's case. 2. Mr Sharkey's evidence in chief sought to understate the significance of his engagement to Ms Nissi, by suggesting that it was no more than a device agreed to by Mr Sharkey and Ms Nissi to placate her parents in respect of the couple's living together. That evidence is at odds with the spectacular circumstances in which Mr Sharkey made his proposal of marriage to Ms Nissi. The evidence generally did not substantiate Mr Sharkey's claim. The peculiar circumstances in which Mr Sharkey persuaded Ms Nissi to maintain a pretence that their relationship continued after they had broken up tends to suggest that Mr Sharkey was strongly attached to the relationship, and could not readily give it up. Mr Sharkey also understated the degree to which he publicised the fact that Ms Nissi had accepted his proposal. 3. Mr Sharkey's evidence that, at the time of the purchase of Number 96 in the couple's joint names, Ms Nissi dispassionately agreed with him that he would be the sole owner of the property is improbable. It was Mr Sharkey's case that he only agreed to place the title to the property in joint names because Ms Nissi emotionally bullied him into doing so. If that were the case, then she would have gained nothing by agreeing to the ownership of the property remaining solely with Mr Sharkey. 4. Mr Sharkey said that, at the time of the purchase of Number 98, his relationship with Ms Nissi was on rocky ground, and he had ceased to trust her in the same way that he had earlier in the relationship. It is very hard to accept that Mr Sharkey would, in those circumstances, have put the title to Number 98 solely in the name of Ms Nissi, in reliance upon an alleged oral agreement by her that she would hold the title to the property exclusively for him. 5. Moreover, Mr Sharkey's and Mr Gurney's evidence was that Mr Gurney only advised that it might be in Mr Sharkey's interests, to protect his assets from potential creditors, to put the title to Number 98 solely in the name of Ms Nissi, on the assumption that Mr Sharkey had decided that he would marry Ms Nissi. That is only common sense. Yet Mr Sharkey did not inform Mr Gurney of the doubts that he entertained about the longevity of the relationship. Mr Sharkey's explanation that he could not face telling Mr Gurney that truth is unpersuasive. 6. All of Mr Sharkey's evidence concerning the circumstances in which Number 98 was discovered to be available for purchase is improbable. It was Mr Sharkey's case that he came across the property being on the market and made a dispassionate decision to buy it as an investment for himself. If Number 98 had been no more than just another investment property, there would have been no reason for Mr Sharkey to take precipitate steps to enable him to bid for the property at an auction that was to occur within a week. Mr Sharkey borrowed the deposit from his accountant's wife. He put in train arrangements to sell part of his share portfolio, notwithstanding that he thereby risked incurring capital gains tax liabilities. The objective circumstances are much more consistent with Ms Nissi's version of events, in that the couple came across the fact that the next-door property was on the market unexpectedly. The circumstances strongly suggest that there were emotional reasons that caused the couple to bid for Number 98, essentially on the spur of the moment. 7. Mr Sharkey's evidence that Ms Nissi was entirely dispassionate, when he informed her that he had decided to buy Number 98 is improbable. Even if Mr Sharkey had made it clear to Ms Nissi that Number 98 would be purchased solely in his name, any normal person in the position of Ms Nissi would have been excited with the prospect of being able to live in the much more attractive property next door. 8. Mr Sharkey gave an improbable explanation for what he claimed to be his entirely commercial decision to make a property investment by acquiring Number 98. He said that he decided he should get out of the share market because he had lost $200,000 because of a fall in share value caused by the GFC. There is a question as to whether the GFC had caused a drop in values on the share market as early as 2007. That is an unresolvable issue, as Ms Nissi did not tender evidence that proved when the GFC began to take effect. However, putting that issue aside, at the very same time that Mr Sharkey was making arrangements to sell shares and buy Number 98, he was exploring how he could borrow money on the security of the two properties that would enable him to re-enter the share market. Even though he said that he would invest in a different class of shares, his evidence on this issue is unpersuasive. He considered that the Trust would not be correctly balanced after the initial sale of shares, and that he would be "out of the market" for a month until he could re-acquire shares with the money he proposed to borrow on the security of the properties. 9. Mr Sharkey's case was that the benefit he expected to gain from placing the title to Number 98 solely in Ms Nissi's name was that, if his business failed in the future, and he became substantially indebted to creditors, any creditors who carried out a title search of properties in Mr Sharkey's name, before they decided to sue him, would not discover that he owned Number 98. That is an insubstantial benefit, when weighed against all of the risks of putting the property in Ms Nissi's sole name, particularly if it is true that Mr Sharkey doubted that the relationship would lead to marriage. 10. Mr Sharkey's evidence that he only made the decision to put Number 98 solely in the name of Ms Nissi on the day of the auction, when prompted to do so by the question asked by Mr Gurney, is inconsistent with Mr Gurney's evidence that he understood that Mr Sharkey had made the decision at the earlier conference on 23 October 2007. 11. In the course of cross-examination about the different recollections of Mr Sharkey and Mr Gurney concerning the time when Mr Sharkey decided to put Number 98 solely in Ms Nissi's name, Mr Sharkey explicitly accepted that he sometimes said one thing to one person when he meant something else, and that he was not always an honest person. 12. In giving Mr Brisbane reasons in his 30 October 2007 email, for why he wanted immediately to borrow a substantial amount of money on the security of the two properties, Mr Sharkey accepted that he was not being entirely honest with Mr Brisbane. 13. Mr Sharkey initially disputed the fact that he had requested Ms Nissi to suppress the fact of their breakup for some six months after it occurred, but was forced to admit the truth in cross-examination. 14. Mr Sharkey's evidence concerning the preparation of the agreement that the parties signed on 18 March 2011 is incredible. The terms of the conversation between the parties that Mr Sharkey said happened in late February 2011 were not consistent with the terms that were ultimately put in the agreement. Yet Mr Sharkey insisted that he commenced to prepare the document immediately after the conversation, even going so far as to say that he anticipated terms that Ms Nissi would require, which she had not raised during the conversation, and which were contrary to Mr Sharkey's interests. On the other hand, the signed document strongly appears to reflect the terms of Ms Nissi's 18 March 2011 email. 15. The fact that Mr Sharkey extended the period provided for in the 18 March 2011 agreement for him to repay the mortgage secured on Number 98 by one year suggests that the agreement was a negotiated document, not a document whose terms solely reflected Ms Nissi's demands. 16. Mr Sharkey's evidence in cross-examination, that he signed the 18 March 2011 agreement without any intention to comply with it, does not do him credit. He said that he drafted the agreement using words that were intentionally ambiguous, so that Ms Nissi would be induced to believe that the document recorded their agreement, while leaving Mr Sharkey with the greatest scope possible to claim that he was the beneficial owner of both properties. 17. Mr Sharkey justified the fact that he paid the mortgage instalments on Number 98 for some two years before he stopped by saying that, as the property was his, he was responsible for the payments. However, it is difficult to accept that Mr Sharkey would have continued to pay the mortgage until he was financially unable to do so, because that left the title to the property in Ms Nissi's name, and in the meantime Mr Sharkey was reducing the mortgage. Mr Sharkey's explanation that he was consumed by establishing his business, and accordingly did not attend to the detail of who was the owner of Number 98 for more than two years is not persuasive. 18. Mr Sharkey accepted that he was less than honest in his dealings with St George Bank, in that he simply stopped paying the mortgage payments without communicating with the Bank. He thereby left Ms Nissi in the position where, unexpectedly, she would have to pay or refinance the mortgage, or suffer a mortgagee's sale. 19. Mr Sharkey did not adequately explain why, if he had been overborne by Ms Nissi's histrionics in February 2011, he did not seek the advice that was available to him as to how he should deal with the problem in the three weeks or so that he had to consider his position, or why, after he had the proceeds of sale from Number 96, he did not set about challenging the validity of the 18 March 2011 agreement.
9. I have come to the conclusion that there is a significant amount of confabulation in Mr Sharkey's evidence. I believe that, at least from the time he entered into the 18 March 2011 agreement with Ms Nissi, he entered upon a process, perhaps subconsciously, of reimagining the relevant events.

Evidence of other witnesses

1. Each party called witnesses to support their case, most of whom were close relatives. The evidence called primarily related to whether Mr Sharkey had publicly stated that he had bought Number 98 as a gift for Ms Nissi, shortly after the contract to purchase that property was entered into. The evidence centred on whether a number of events occurred at which Ms Nissi, Mr Sharkey, and a number of the other witnesses were present, and where Mr Sharkey made the statements in question.
2. Again, there was a stark difference between the evidence given by the witnesses lined up to support each party's case.
3. Ms Nissi called two of her sisters, Ms Lily D'Cruz and Ms Samara Phillips, as well as Mr Guy Bolton, who was a friend of both Ms Nissi and Mr Sharkey at the time of the relevant events.
4. Ms Nissi had filed affidavits by other members of her family, being her father and mother, Ms Phillips' husband, and a third sister. After Ms D'Cruz, Ms Phillips and Mr Bolton were cross-examined, counsel for Ms Nissi made a tactical decision not to read the affidavits of these further witnesses. It is evident from what was said by counsel that he took the view that the cross-examination of the witnesses that he did call left Ms Nissi's case in a strong position.
5. For reasons that I will give below, I think it is not necessary to deal with the evidence given by all of the additional witnesses in minute detail. I have carefully considered all of the evidence given by them, both in their affidavits, and in cross-examination, but will only set out the principal aspects of the evidence that they gave.
6. The thrust of the evidence given by Ms D'Cruz was that, one night shortly after the contract for the purchase of Number 98 was signed, she and her husband visited Ms Nissi and Mr Sharkey at their home at Number 96, and while the parties were standing in the courtyard of Number 96, Mr Sharkey said: "I have purchased it [meaning Number 98] as a gift". Later that evening, Mr Sharkey's brothers Michael and Peter, and his sister Elizabeth, as well as Mr Sharkey's brothers' partners, attended the Marlborough Hotel. Ms D'Cruz had a conversation with Mr Sharkey about the bidding at the auction, during which, among other things, Mr Sharkey said that Number 98 was entirely in Ms Nissi's name. She said that, at a New Year's Eve party on 31 December 2007, Mr Sharkey again announced in the presence of Ms D'Cruz and her family: "I bought this house as a present for Donya".
7. The effect of Ms Phillips' evidence was that, on 31 December 2007, she and her family were invited to Number 96 to celebrate the New Year. When she arrived, Ms Nissi and Mr Sharkey appeared on the balcony of Number 98 and called out "Surprise!", and then invited everyone inside. She said that Mr Sharkey said: "I have bought this house under Donya's name for her". She said that Mr Sharkey gave as a reason, that he was lucky because "Donya is such a loving and caring fiancé taking care of me even when I'm busy at night working".
8. Mr Bolton, who was a friend of both parties, said that they both "continuously" referred to Number 98 as "Donya's house", and that Mr Sharkey referred to Number 98 in the following terms: "I bought this house for Donya", and "It is Donya's house".
9. Ms Elizabeth Lucy Sharkey is Mr Sharkey's sister. She denied going to Number 96 at the time of the supposed revelation by Mr Sharkey that he had bought Number 98 for Ms Nissi, or going to the Marlborough Hotel. She said that she had never heard Mr Sharkey say that he had made a gift of Number 98 to Ms Nissi.
10. Mr Peter Sharkey is Mr Sharkey's brother. He was formerly a solicitor, but now works in the business that is operated by Mr Sharkey and his brothers in California. He said that he had no recollection of any celebratory dinner, and that Mr Sharkey never said to him that he had made a gift of Number 98 to Ms Nissi. He said that he would have remembered had he been told that, as he was studying law at the time, and would have regarded it as an extraordinary thing for his brother to do.
11. Mr Michael Stephen Sharkey is also a brother of Mr Sharkey. He also denied that he had attended a celebratory dinner at the Marlborough Hotel, or a celebration at Number 96. He said that he had never heard his brother say that he had bought Number 98 for Ms Nissi or any words to that effect. He said that he would have remembered had his brother made a statement like that to him.
12. Mr Michael Sharkey said that his brother had made statements to him in conversations to the effect that he owned both properties in Denison Street, and also that he had put Number 98 in Ms Nissi's name because it reduced the tax he had to pay, and would protect his assets from his creditors.
13. He also gave evidence that Ms Nissi had frequently visited Mr Sharkey's office in Newtown after the couple separated, and used the office equipment there. This evidence was given in response to a claim by Ms Nissi in her evidence that she had not visited the office after the separation. This aspect of Mr Michael Sharkey's evidence was supported by evidence given by Mr Christopher James Barnett, who said that he frequently saw Ms Nissi in the Newtown office after the separation. This evidence caused Ms Nissi to qualify her earlier evidence by saying that she meant that she did not go to the Newtown office after the separation became generally known.
14. Mr Michael Sharkey gave evidence that he learned about the separation in late 2008 or 2009 from a business associate.
15. Ms Sharnee Marie Cross, who was Mr Michael Sharkey's girlfriend at the time, and is now his wife, denied that she was present at any celebration at Number 96 or the Marlborough Hotel, and denied that she had ever heard Mr Sharkey say that he had made a gift of Number 98 to Ms Nissi.
16. Ms Ainslie Claire Chapman, who is a solicitor, and was the girlfriend of Mr Peter Sharkey at the time, but has since separated from him in unpleasant circumstances, also denied that she had been at Number 96 or the Marlborough Hotel. She denied that she had heard Mr Sharkey say that he had made a gift of Number 98 to Ms Nissi.
17. Counsel for Mr Sharkey attacked the evidence given by Ms Nissi's sisters on the ground that aspects of their evidence was so similar (particularly, as I understand it, the affidavits of Ms Phillips and Ms Sharaf) that the court should conclude that the witnesses colluded in preparing their evidence. I agree that there is an improbable degree of repetition of precise parts of the affidavits of Ms Phillips and Ms Sharaf. Ms Phillips sought to explain the similarity between the affidavits on the basis that the two witnesses had often spoken of the relevant events, because of the extraordinary fact that Mr Sharkey had given Number 98 to their sister. Ms Nissi's sisters claim that they were simply asked to write out their recollection of the events, and they did so and sent their records of the events to Ms Nissi's solicitors to be turned into affidavits.
18. In response to a number of questions in cross-examination, albeit not entirely responsively, both Ms D'Cruz and Ms Phillips gave somewhat expansive evidence concerning the circumstances in which Mr Sharkey told members of Ms Nissi's family that he had made a gift of Number 98 to her. They did so in a manner that appeared to be spontaneous and an accurate statement of their true recollections. I found that their evidence was persuasive, and appeared to be given honestly. Evidently, so did Ms Nissi's counsel, as it led him not to read the affidavits of the witnesses who were not called.
19. All of Mr Sharkey's witnesses also stood by their evidence in cross-examination. Nothing in the manner in which they gave their evidence would justify the court in forming a view that their evidence was not a truthful statement of their recollection. Counsel for Mr Sharkey made a valid point that Ms Chapman, in particular, had no reason to give evidence that was partial to Mr Sharkey's interests, because of the circumstances of her breakup with Mr Peter Sharkey.
20. I have come to the conclusion that I should not give any decisive weight to the evidence given by the witnesses that lined up for Mr Sharkey on the one hand or Ms Nissi on the other. This is the reason, to which I have adverted above, why I have not analysed the evidence given by these witnesses in minute detail. I am inclined to believe that Mr Sharkey did make statements to Ms D'Cruz and Ms Phillips to the effect that he had made a gift of Number 98 to Ms Nissi. I say that principally because, as will be seen below, I have concluded that Mr Sharkey made statements to that effect to Ms Nissi. If that is right, it is probable that he would have made similar statements to members of Ms Nissi's family. However, I have not accepted the evidence given by Ms Nissi's sisters as having unilaterally established that fact.
21. I do not know what finally to make of the evidence given by Mr Sharkey's brothers and sister, and the brothers' girlfriends at the time. They may well not have actually been present when Mr Sharkey made the statements deposed to by Ms Nissi and her sisters. It would be hard for the court to conclude that they were present, and have simply forgotten as a result of the passage of time. The nature of the statements that Mr Sharkey is alleged to have made was so unusual that they would not readily be forgotten by members of his family.
22. Save for the evidence given by Mr Bolton, I have concluded that the safest course would be to proceed upon the basis that the evidence given by these witnesses, for one party or the other, has led effectively to a neutral result. I should decide the case primarily on the basis of the probabilities that arise from a consideration of the primary objective evidence, and the conduct of the two parties.
23. There is no reason why I should not accept the evidence given by Mr Bolton, and I do. He appeared to me to be a candid witness, who gave evidence from his recollection. I will treat his evidence of the statements made by Mr Sharkey concerning Mr Sharkey's having bought Number 98 for Ms Nissi, or that property being Ms Nissi's house, as objective evidence relevant to the issue of whether Mr Sharkey made statements to Ms Nissi at the time the contract to purchase Number 98 was entered into that support the conclusion that Mr Sharkey intended to make a gift to her.

Primary findings

1. In the course of my consideration of the parties' contentions, and the evidence they have tendered in support of those contentions, I have made various observations concerning the credibility or persuasiveness of aspects of the evidence. I have also revisited significant parts of the evidence in setting out my conclusions concerning the relative credibility of the evidence given by each of the parties. It will now be necessary for me to address the primary issues of fact that must be determined in order to resolve the legal issues that will determine the outcome of this dispute. That exercise will necessarily involve a degree of overlap with matters discussed during my consideration of the evidence and the credibility of the parties.

The parties' engagement

1. As will be seen, the terms of the engagement between the parties, the strength of the relationship from time to time, and the parties' expectation that the engagement would lead to marriage, are ultimately only relevant to the probability that Mr Sharkey formed the intention to make a gift of Number 98 to Ms Nissi, and made statements to her and others that conveyed that intention.
2. I find that the parties entered into a real engagement with a genuine intention to be married. While a couple as young as the parties were at the time may have had an eye towards the benefits of demonstrating a mutual commitment to marriage to Ms Nissi's parents, I reject the suggestion that the engagement was merely an arrangement of convenience, or a subterfuge.
3. I prefer the evidence of Ms Nissi on this issue to that given by Mr Sharkey. It is consistent with the circumstances in which Mr Sharkey made his proposal of marriage, the manner in which Mr Sharkey publicised the engagement, and Mr Sharkey's peculiar insistence that the couple's separation not be made public for some 6 months after it occurred. It is also consistent with the fact that Mr Sharkey put the title to Number 96 in joint names, and the title to Number 98 solely in Ms Nissi's name. It is improbable that a man in Mr Sharkey's position would have taken either of those steps, if the relationship was no more than a domestic one between a cohabiting couple.
4. As is accepted by both parties, however, they never came to an agreement as to when they would get married, or form a positive intention actually to do so by initiating the steps that would lead to a wedding.
5. At some time before the purchase of Number 98, Ms Nissi discovered that Mr Sharkey had been unfaithful to her. There is no basis for finding that Ms Nissi had been unfaithful to Mr Sharkey, and I do not do so. That supports the conclusion that, if Mr Sharkey aspired to a continuation of the relationship, he would think that he had to do a lot to make up to Ms Nissi for his misdemeanour.
6. In the period leading up to the purchase of Number 98, the parties experienced difficulties in their relationship. The evidence does not permit any findings to be made concerning the precise nature of those difficulties. The evidence establishes that the parties separated in fact in mid-2008. It does not permit a finding as to when the difficulties that the parties experienced reached a point of no return.
7. I am satisfied that the relationship did not reach breaking point until well after 27 October 2007, when the contract for the purchase of Number 98 was entered into. I am also satisfied that, whatever the ups and downs of the relationship were, Ms Nissi understood in October 2007 that the relationship was likely to endure. Her belief in that respect would have been enormously reinforced by Mr Sharkey's decision to put Number 98 in her name. It is difficult to make a determination as to what Mr Sharkey's state of mind was at that time concerning the longevity of the relationship. That is because I found his evidence to be unreliable, and the positions he took to be inconsistent. A reasonable approach is to conclude that Mr Sharkey's belief in the strength of the relationship, and the likelihood that it would endure and lead to marriage, was the belief that an engaged man would have to have before he paid $886,000 for a house and put the title solely in the name of his fiancée. I reject Mr Sharkey's contention that he put the property in Ms Nissi's name to protect himself from some theoretical risk of being pursued by his creditors in the future, notwithstanding that he had significant doubts about the durability of the relationship, as being obvious nonsense.

Arrangements for the purchase of Number 96

1. I find that the parties did not enter into an oral agreement before they entered into the contract for the purchase of Number 96 that Ms Nissi would hold her joint interest in the property on trust for Mr Sharkey.
2. Instead, at that stage, as was accepted by both parties, their relationship was strong and their expectation was that they would ultimately get married.
3. The decision by Mr Sharkey to take the steps necessary for Ms Nissi to enter into the contract to purchase and the mortgage jointly with him, and for the title to Number 96 to be placed in the joint names of the couple, was not made in contemplation of marriage, in the sense that the parties had a real intention of relatively imminent marriage, and Mr Sharkey acted as he did actuated by an intention that the marriage would occur.
4. I prefer the evidence given by Ms Nissi to that given by Mr Sharkey on this issue. I find that the decision by the couple that they would buy Number 96 in joint names, and jointly become liable on the mortgage, was a natural evolution of their relationship, and their joint expectation that they would ultimately marry. I do not accept that Ms Nissi emotionally bullied Mr Sharkey against his will into acquiring Number 96 jointly with her, in circumstances where he had tried to insist that the property be acquired solely in his name as an investment, because he would be solely responsible for paying the costs of purchasing the property. There may have been discussions between the parties concerning the joint purchase, and Ms Nissi may have adopted a position - perhaps even strongly so - that if the couple's engagement was genuine, she had a reasonable expectation that the property would be put in their joint names. There is nothing unusual about that position, if it were taken by Ms Nissi, as I would expect that most contemporary women, who were engaged to be married, would adopt the same position.
5. I find that Mr Sharkey's contentions that Ms Nissi emotionally bullied him into acquiring Number 96 in joint names, and then meekly agreed that she would hold her joint interest in the property on trust for him, so that the investment would be wholly his, mutually inconsistent, improbable, and I reject them.
6. I find that Mr Sharkey, however, paid all of the initial costs of purchase, paid whatever mortgage repayments were made, and then paid out the mortgage from the proceeds of sale of the Stayz business, so that he made all of the payments necessary for the acquisition of Number 96.
7. Ms Nissi did not contest a finding that it was the mutual expectation of the couple that, at least in the near to medium term, Mr Sharkey would make all necessary payments from his own funds, and that, depending upon what followed the marriage of the couple, Mr Sharkey might continue to do so indefinitely. Ms Nissi took the position that her liability as a joint mortgagor was real, so that after she finished her studies, and became employed, depending upon circumstances, it might be necessary for her to contribute to mortgage payments. I accept that Ms Nissi's position was genuinely held. However, as a real and practical matter, Ms Nissi's expectation was that Mr Sharkey was the breadwinner, and would probably make all of the payments.
8. However, I find that, at the time the contract to purchase Number 96 was entered into, Ms Nissi genuinely believed, and probably reasonably took it for granted, that the engagement would lead to marriage, and that the effect of the title to the property being put in joint names was that she would become a true joint owner; meaning a joint beneficial owner, in legal terms, although Ms Nissi would naturally not have thought precisely in terms of beneficial ownership. That was a reasonable belief for a young, engaged woman in Ms Nissi's position, to form.
9. I also find that, at that stage, Mr Sharkey formed the same belief as did Ms Nissi concerning the effect of the purchase of Number 96 in joint ownership. I reject any suggestion that, at that stage, Mr Sharkey entertained unexpressed reservations to the effect that he was the sole beneficial owner of Number 96, because the intention was that he would be the only one to make all necessary payments. I do not accept that, at that stage, Mr Sharkey had any awareness of the difference between legal and beneficial ownership, or any awareness of the principles known to lawyers concerning resulting trusts.

Discovery that Number 98 was on the market

1. I accept Ms Nissi's evidence that the couple discovered that the property next door to Number 96, being Number 98, was on the market one night when they were returning home from dinner, and they saw a large 'For Sale' sign on the front of Number 98. I prefer Ms Nissi's evidence to that given by Mr Sharkey on this issue. It is inherently more probable that the couple discovered that the property was on the market by chance by seeing the 'For Sale" sign soon after it was put up by the vendor's agent. It is improbable that Mr Sharkey managed, by some unidentified independent enquiry, to find out that the property was on the market before the 'For Sale' sign was put up and noticed by Ms Nissi. Mr Sharkey did not explain how he could find out that the property was on the market before the 'For Sale' sign was put up.
2. Number 98 is plainly a more attractive and commodious residence than is Number 96, being a two-storey terrace house, compared to a one-story one. It is self-evident that the couple, and in particular Ms Nissi, would have been delighted with the prospect of acquiring Number 98 as their home.
3. I reject Mr Sharkey's contention that he discovered that Number 98 was on the market as part of a program of rearranging his investment portfolio as a result of losses he experienced on the share market, and for the primary purpose of holding the property as an investment in his own name. That contention is inconsistent with the steps that Mr Sharkey took to put himself in the position where he could outbid other bidders for the property within about week of discovering that it was on the market. Mr Sharkey went to the lengths of borrowing the deposit from his accountant's wife; and he caused parts of the Trust's share portfolio to be sold, notwithstanding the receipt of advice that this would probably cause him tax and other problems. Mr Sharkey caused the Trust to sell shares in circumstances where, if any credence can be given to his statements to Mr Brisbane, he immediately intended to borrow money on the security of the two properties to re-enter the share market. They are not the actions of a dispassionate investor. I find that Mr Sharkey decided to purchase Number 98, if he could, largely for emotional reasons arising out of a strong desire on his part to acquire the property.

Arrangements for the purchase of Number 98

1. Mr Sharkey's case is that, after he decided to try to purchase Number 98 as an investment in his own name, Ms Nissi dispassionately agreed to that course being taken; and indeed, once the decision was made that the title to the property would be put solely in Ms Nissi's name, Ms Nissi calmly and readily agreed that she would hold the title to the property solely on trust for Mr Sharkey.
2. The alternative case that is before the court; that put by Ms Nissi, is that Mr Sharkey made a splendid and generous gesture of saying that he would buy the property for her, so that she would be the sole owner.
3. I prefer the version of events given by Ms Nissi to that given by Mr Sharkey.
4. My finding on this issue is probably the most significant for the purposes of determining the issues in these proceedings; as it involves a finding, based upon all of the relevant evidence, that Mr Sharkey made express statements to Ms Nissi, during the course of the transaction, that led to the acquisition of Number 98, that would reasonably cause a person in Ms Nissi's position, and did cause her, to believe that the title to the property would be put solely in her name with the intention that it would be hers. The intention here is, in legal terms, an intention that she be the sole beneficial owner of the property, although a lay person in Ms Nissi's position would not, and she did not, conceive of the issue in terms of beneficial ownership.
5. I have been conscious of the need, in making findings on this issue, to have careful regard to the following observations made by Ward JA (with whom Basten JA and Sackville AJA agreed) in Weige v Cupton Pty Ltd [2012] NSWCA 414; (2012) 8 ASTLR 229: [46] The onus of rebutting such a presumption lies on the party seeking to rely on the legal title (here, the appellants)… Rebuttal of the presumption of resulting trust requires proof of a "definite intention" not (in the words of Dixon J in Drever v Drever [1936] ALR 446 at 450) a "nebulous intention".
6. I have also had regard to the statement of principle by Campbell JA (with whom Bergin CJ in Eq and Sackville AJA agreed) in Brown v NSW Trustee and Guardian [2012] NSWCA 431; (2012) 10 ASTLR 164: [52] The onus would be on the Appellant to satisfy the court on the balance of probabilities that John received the sale proceeds on the basis that he would hold the house purchased with those proceeds on trust for Ian. To satisfy an onus of proof on the balance of probabilities is not simply a matter of asking whether the evidence supporting that conclusion has greater weight than any opposing evidence. As well, both under the common law and also under s 140 Evidence Act 1995, the evidence must be enough to enable the court to feel actual persuasion that a particular fact is so: Helton v Allen (1940) 63 CLR 691 at 712; Seltsam Pty Ltd v McGuiness [2000] NSWCA 29 ; (2000) 49 NSWLR 262 at [136]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACCC [2007] FCAFC 132 ; (2007) 162 FCR 466 at [31]; R v Galli [2001] NSWCCA 504 ; (2001) 127 A Crim R 493 at [55]; Nguyen v Cosmopolitan Homes [2008] NSWCA 246, McDougall J at [55], McColl and Bell JJA agreeing. I respectfully agree with the observation in Cross on Evidence, 8th Australian edition (2010) LexisNexis [9130] and footnote 184 that "according to ALRC 26 [998], the provision does not require actual belief; but that is not what the language says". What s 140(1) says is: In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (emphasis added). It is perfectly possible for there to be a scrap of evidence that favours one contention, and no countervailing evidence, but for the judge to not regard the scrap of evidence as enough to persuade him or her that the contention is correct.
7. In the present case, Mr Sharkey gave evidence that it was not his actual intention to make a gift of Number 98 to Ms Nissi at the time of its acquisition, and that he did not make the statements that she has attributed to him as conveying his intention to make a gift of the property to her. Evidence of Mr Sharkey's subjective (or real) intention, as the purchaser, is admissible as is acknowledged by Mason and Brennan JJ in Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at 261. In Martin v Martin (1959) 110 CLR 297, land was purchased by the husband in the name of his wife. The question was whether the presumption of advancement had been rebutted and a resulting trust to the husband made out. The court said [at 304]: "It is for the most part assumed that proof of the intention will be made out by circumstances. But it is undeniable that the husband who found the money may testify to his own intentions". The court went on to approve remarks of Cussen J in Davies v The National Trustees Executors and Agency Co of Australasia Ltd [1912] VLR 397, 403: The attention must be kept steadily fixed on the on fact in issue - What was at the time the intention of the purchaser or transferor? Anything which is relevant to that issue is admissible. You may have the evidence of the purchaser or transferor himself, if he is alive, as to his mental condition in the past, and though in some circumstances such evidence should be received with caution, yet it may be accepted". His Honour's judgment, which contains a very clear formulation of the principles involved, makes it entirely a question of fact. The burden of proof is firmly placed upon the person asserting that a trust was intended but the issue depends upon the intention with which the property was purchased by the parent in the name of the child or the husband in the name of the wife or as the case may be.
8. In Calverley v Green, Gibbs CJ put it in the following terms: The question whether the other person, the 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…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.
9. In the same case, Mason and Brennan JJ explained: The strength of the presumption varies from case to case (Fowkes v Pascoe (1875) 10 Ch App 343 at 353) and may be confirmed, rebutted or qualified by evidence of his [the person who contributes the whole of the purchase price] intention (Russell v Scott (1936) 55 CLR 440 at 449, 451-3; Marshal v Crutwell (1875) LR 20 Eq 328).
10. In Russell v Scott (1936) 55 CLR 440, Dixon and Evatt JJ explained [at 451] that "[t]he presumption of resulting trust does no more than call for proof of an intention to confer beneficial ownership" - it is simply a question of onus of proof.
11. In Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ [at 365] set out the evidence required to rebut the presumption, having acknowledged that the presumption should not 'give way to slight circumstances': The presumption can be rebutted or qualified by evidence which manifests an intention to the contrary. Apart from admissions, the only evidence that is relevant and admissible comprises the acts and declarations of the parties before or at the time of the purchase (in this case before or at the time of the acquisition of the shares by allotment) or so immediately thereafter as to constitute a part of the transaction. If that evidence is insufficient to rebut the presumption the beneficial gift, absolute or subject only to qualifications imposed upon it at the time, is complete and no subsequent changes of mind or dealings with the property inconsistent with the trust by the donor can as between himself and the donees alter the beneficial interest. (emphasis added).
12. See also p 364 where the court adopted remarks of Lord Langdale MR in Sidmouth v Sidmouth (1840) 2 Beav 447; 48 ER 1254 (in the context of the presumption of advancement) that evidence of an intention to confer a gift: may be rebutted by other evidence, manifesting an intention that the child shall take as a trustee; and in this case, as in most others of the like kind, the only question is, whether there is such other evidence. That contemporaneous acts and even contemporaneous declarations of the parent may amount to such evidence, has often been decided. Subsequent acts and declarations of the parent are not evidence to support the trust, although subsequent acts and declarations of the child may be so; but, generally speaking, we are to look at what was said and done at the time. (emphasis added).
13. The position is summarised by Mason P (with whom McColl and Basten JJA agreed) in Neilson v Letch (No 2) [2006] NSWCA 254 said: [26] The resulting trust that is presumed in the circumstances referred to in the previous paragraph [where two or more persons have contributed to the purchase price in unequal shares] is itself capable of being displaced by evidence showing that the parties had a common intention to share an equal interest in the property and/or that the party making the disproportionate contribution intended that the parties would have an equal interest in the property notwithstanding. As an American judge (Lamm J) stated in Mackowik v Kansas City St J & C B R Co 94 SW 256, 262 (1906): Presumptions ... may be looked on as the bats of the law, flitting in the twilight, but disappearing in the sunshine of actual facts. [27] Lord Upjohn said in Vandervell v Inland Revenue Commissioners [1967] 2 AC 291 at 313: In reality the so-called presumption of a resulting trust is no more than a long stop to provide the answer when the relevant facts and circumstances fail to yield a solution. [28] Evidence of the intention of the relevant party or parties may be drawn from contemporaneous statements of intention, subsequent admissions or inferred from the "facts as to subsequent dealings and of surrounding circumstances of the transaction" (Cummins at [65]). In Calverley, Mason and Brennan JJ (at 261) cited with approval Lord Diplock's statement in Gissing v Gissing [1971] AC 886 at 906: As in so many branches of English law in which legal rights and obligations depend upon the intentions of the parties to a transaction, the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. On the other hand, he is not bound by any inference which the other party draws as to his intention unless that inference is one which can reasonably be drawn from his words or conduct.
14. It is a difficult exercise to convey clearly and precisely why it is that one has been satisfied that a party in Ms Nissi's position has proved that Mr Sharkey made the statements to her that she has attributed to him. I have referred above to the fact that I preferred her evidence to that given by Mr Sharkey; but in the light of the authorities considered above I should add that I was positively persuaded by the manner in which she gave her evidence. On the contrary, so far as Mr Sharkey is concerned, at the end of his evidence I was left with the belief that he had put forward a somewhat complicated array of disconnected explanations; which were not inherently persuasive; and that he was unable forthrightly to face the conclusions that appeared to emerge objectively from the evidence.
15. To guard against the dangers of too readily acting upon the word of one witness against another, even though that word is expressed credibly and persuasively, I have given careful attention to all of the relevant events that were objectively proved by the evidence. In conducting this exercise, I have tried to align all of the events in the matrix in the manner which most logically and consistently fits, on the balance of probabilities, with either the version of events given by Ms Nissi, or that given by Mr Sharkey. In particular, I have given weight to all of Mr Sharkey's conduct, particularly that which occurred after the acquisition of Number 98, in so far as that conduct sheds light on Mr Sharkey's own appreciation of what his actions, and intentions, actually were at the time that the property was acquired. I have in part, proceeded upon the basis that Mr Sharkey's own understanding of what he truly did and said when Number 98 was purchased, would probably influence how he subsequently acted, and that with due care, legitimate inferences could be drawn about Mr Sharkey's conduct and intentions at the time of purchase.
16. I will now return to a consideration of the circumstances in which Number 98 was purchased.
17. I note Mr Sharkey's submission that Ms Nissi's story is one of incredible and unbelievable generosity by Mr Sharkey, which should not be believed.
18. In the circumstances that most men of Mr Sharkey's age at the time would ordinarily find themselves, it would indeed be an extremely unusual, if not highly unlikely, event for the man to pay the whole of the price for a property such as Number 98, and then say that it was a gift to his fiancée, and put the title to the property solely in her name. It would not be particularly strange for a man of that age to put the property in joint names with the intention that the property would be jointly beneficially owned by the couple. Ordinarily, the financial circumstances of men of that age would be unlikely to permit them the indulgence of giving the whole of the property to their fiancé.
19. However, in my view, the circumstances of the present case are quite unusual, and the question whether the court should reject the suggestion that Mr Sharkey intended to make a gift of Number 98 to Ms Nissi, and said so, because of the improbable generosity of the act, should be answered by reference to the particular facts of this case.
20. Mr Sharkey was in the exceptional position of having received a sum of over $6 million by the age of 23 years from the sale of a business, which he had established with his friend and mentor, but which had been developed through his own skills in information technology. It would not have been unreasonable for Mr Sharkey to see himself as being a 'star', and I believe he did so. The evidence does not establish what Mr Sharkey's remaining wealth was in October 2007, but for the reasons that I have set out above when considering the consequences of the sale of the Stayz business, I have concluded that Mr Sharkey remained very wealthy. I accept the evidence that Ms Nissi gave that Mr Sharkey told her, at the time the couple discussed Mr Sharkey's proposal that Number 96 be sold in early 2011, that: "I am going to do really well with Bisir and would make more money than Stayz soon". 'Bisir' was the name of the new business Mr Sharkey was in the course of establishing at that time. Although that statement was made well after October 2007, I find that Mr Sharkey was, in October 2007, a supremely confident entrepreneur in the information technology field, and that he believed that he could replicate his success with the Stayz business.
21. Mr Sharkey arranged to propose to Ms Nissi at a concert on stage before some 200 strangers, and he made very substantial gifts to his and Ms Nissi's parents. He had a penchant for the spectacular, and, in my view, it would have been in character for him, perhaps spontaneously, to make the extremely grand gesture of buying Number 98 in Ms Nissi's name for her, as her home.
22. It must also be acknowledged that Ms Nissi is an attractive woman, and while the significance of that circumstance as a motivator for a man in Mr Sharkey's position making a grand gift to her should not be dwelt upon, it must not be ignored.
23. Mr Sharkey gave evidence in relation to the purchase of Number 96, that Ms Nissi had a strong expectation that, if Mr Sharkey had faith in the engagement, the property would be acquired in joint names. As I have said above, although I do not accept that Ms Nissi emotionally bullied Mr Sharkey into putting that property in joint names, I do accept that Ms Nissi had a strong belief that a couple who intended to marry should have joint ownership of what would become matrimonial property. I find that that expectation continued to the time when the couple were discussing the proposal to bid for Number 98. Ms Nissi would not have had any expectation that Mr Sharkey would put the property solely into her name, but she would have expected that it would be acquired jointly. It is highly improbable that Ms Nissi would meekly have agreed to hold the title to Number 98 solely on trust for Mr Sharkey, in the manner for which he contends.
24. There is no contemporaneous written or other objective evidence that Mr Sharkey said to Ms Nissi that he would buy Number 98, if he could, for her; save, of course, for the fact that the property was actually put in her name. There is, however, a considerable body of evidence concerning Mr Sharkey's subsequent conduct, which strongly suggests that he made statements to Ms Nissi at the time Number 98 was purchased, which caused them both to understand that the property was to be Ms Nissi's.
25. It is important to note in this respect that Mr Sharkey's case was not that, when the couple broke up, he retained a substantial amount of residual affection for Ms Nissi, and agreed to let her live in Number 98 indefinitely so long as he did not need to sell it, because he was wealthy, she was not, and she needed a home. If that had been his case, it would have been necessary to look at his subsequent conduct in that vein. In particular, it might then have been appropriate to treat his regular subsequent references to the property being Ms Nissi's home as having no real significance. It would also have explained his preparedness to continue to pay the mortgage, and his delay in seeking to establish his sole ownership of the property.
26. That, however, was not Mr Sharkey's case. His case was that the couple expressly agreed that Mr Sharkey would be the sole owner of Number 98, and that Ms Nissi held the title on trust for him alone. When the couple separated, and Mr Sharkey moved out, according to him, both understood that the property was solely owned by Mr Sharkey. Mr Sharkey did not allow Ms Nissi to continue to reside in the property out of residual affection; rather, he was too busy trying to establish his business, and consciously left the question of the ownership of the property in abeyance until he was satisfied that his business was on a sound footing.
27. In the light of the case propounded by Mr Sharkey, I find that his many references, discussed above, after the separation, to Number 98 being Ms Nissi's home as having some significance; as does the evidence of Mr Bolton concerning the statements made by Mr Sharkey on that subject (which were probably made before the date of the separation). I do not place undue weight on these statements, but they support my strong inclination to prefer the evidence of Ms Nissi on this subject.
28. A decent person in Mr Sharkey's position may well have given Ms Nissi time to arrange alternative accommodation - perhaps a generous amount of time - but it is improbable that a man who firmly believed that Number 98 was solely his property, and what is more, that Ms Nissi had expressly agreed to that effect, would have permitted Ms Nissi to live in the property, and treat it as her own, for years without taking some positive step to establish his ownership, and to cease bleeding money in payment of the mortgage. Mr Sharkey's conduct is much more consistent with his having an acceptance, perhaps a grudging one, that he had told Ms Nissi that, if the property could be purchased, it would be hers.
29. I will deal more fully with the 18 March 2011 agreement, which the couple made concerning the sale of Number 96, and the future of Number 98, below. However, for present purposes, I find that the circumstances in which Mr Sharkey entered into that agreement provide very substantial support for the conclusion that Mr Sharkey recognised that he had agreed with Ms Nissi that Number 98 would be hers. I am entirely unpersuaded by the argument that the degree of financial pressure to which Mr Sharkey was subject at the time effectively overbore his will, and caused him to agree not to contest the ownership of Number 98, and to pay the debt associated with that property. The equity in Number 98 at the time was a valuable asset, and the obligation to continue to pay the mortgage, and pay it off completely within about two years, was a real burden. It is highly improbable that Mr Sharkey would have agreed to that arrangement, if in his heart he did not accept that, as between himself and Ms Nissi, he had given the property to her.
30. I am satisfied that, at the time that the contract for the purchase of Number 98 was entered into, Ms Nissi genuinely believed, on reasonable grounds, because of the statements made by Mr Sharkey, and the fact that the property was going to be put into her name, that she was would be the sole owner of the property. In her mind, she reasonably did not distinguish between legal and beneficial ownership, but her understanding was consistent with what lawyers would call beneficial ownership.
31. Ms Nissi understood, however, that the property was going to be a gift, in the sense that it was the mutual expectation of both parties that Mr Sharkey would make all payments connected with the purchase of the property.
32. I also find that Number 98 was not purchased in expectation of marriage, in the sense that I have discussed that concept above in relation to the purchase of Number 96.

Advice given to Mr Sharkey before auction

1. I accept Mr Gurney's evidence that the decision to put the title to Number 98 in the sole name of Ms Nissi was made during the course of the week before the auction, and not on the day. Mr Sharkey may have been impetuous, but it is unlikely that he would have made such a momentous decision on the spot.
2. Mr Gurney's file note of his meeting with Mr Sharkey and Mr Brisbane said: "Borrow from Trust with 0% interest. To consider charge over house. Consider buying in Donya's name for asset protection". On the basis of this evidence, and the testimonial evidence given by Mr Gurney in support of it, I find that in the week before the auction Mr Sharkey was advised that it would be in his interests to protect himself from potential future actions by creditors, by putting the title to Number 98 solely in the name of Ms Nissi, and by setting up the structure of the purchase in a way that would give him ultimate legal control over the property. The manner suggested by Mr Gurney involved the Trust lending the whole of the purchase price at 0% interest, secured by a mortgage over the property. There was no final decision to implement this suggestion of Mr Gurney's; and the structure that should be implemented remained unsolved by the date of the auction.
3. I do not accept that Mr Sharkey received advice that it would be a prudent course for him to take simply to put the title to the property solely in the name of Ms Nissi, without their being any legal arrangement that gave him control over the property.
4. Ms Nissi made a strong submission that the whole story of Mr Sharkey protecting himself from creditors, by putting the title to the property in Ms Nissi's name, while retaining the whole of the beneficial ownership, was so improbable - involving as it did, and incipient fraud on creditors - that the story should be rejected by the court. Both Mr Sharkey and Mr Gurney in cross-examination strove to maintain the position that the stratagem was sensible, and likely to be effective, simply because it might put predatory creditors off the track, because title searches would not show that Mr Sharkey was the owner of the property. Ms Nissi submitted that the only proper finding was that indeed Mr Sharkey, with Mr Gurney's knowledge, intended that Ms Nissi would have full beneficial ownership of the property.
5. I do not accept this argument, in the sense that I do not accept that Mr Sharkey and Mr Gurney, during the course of their discussions, actually intended that Ms Nissi would have the full beneficial ownership of the property.
6. However, I also do not accept that, during the course of those discussions, Mr Sharkey and Mr Gurney agreed that Mr Sharkey would put the property in the sole name of Ms Nissi, and regard that as an adequate commercial outcome, without their being some legal mechanism that gave Mr Sharkey control of the beneficial ownership in the property; such as the one suggested by Mr Gurney.
7. Mr Gurney advised Mr Sharkey that he should only contemplate putting the title to the property solely in Ms Nissi's name if he was sufficiently satisfied that, in due course, the couple would marry.
8. Mr Sharkey did not advise Mr Gurney that he had any doubts or qualms about whether marriage to Ms Nissi would be the ultimate outcome. I find it to be much more probable than not that the reason why Mr Sharkey did not advise Mr Gurney that he had such doubts, was that Mr Sharkey did not have them, at least to any significant degree. It would obviously have been imprudent for a man of Mr Sharkey's experience to go ahead with an exceptional strategy intended to protect his assets from creditors that was dependent upon his marriage to Ms Nissi going ahead for its effectiveness, if he believed there was a real likelihood that it would not, without telling his adviser of his fears.
9. The discussions between Mr Sharkey and Mr Gurney are, so far as they go, inconsistent with the idea that Mr Sharkey would tell Ms Nissi that she would be the owner of the property, as the whole purpose of the discussions was to protect Mr Sharkey's ownership of the property from potential creditors.
10. However, the fact that the object of these discussions was to devise a stratagem for protecting Mr Sharkey's interest in Number 98 from potential future creditors does not prove that Mr Sharkey did not make the statements to Ms Nissi concerning her being given the property that she claims were made.
11. First, as I have said, Mr Gurney understood that there would be a legal structure put in place that would give Mr Sharkey effective legal control of the asset. I have not accepted that Mr Gurney, being an accountant, was thinking in terms of intentionally creating a resulting trust, or that he gave legal advice to that effect to Mr Sharkey.
12. Secondly, it does not follow from the fact that Mr Sharkey and Mr Gurney understood, during the course of their discussions, that the transaction would take a particular form, that Mr Sharkey actually caused it to be implemented in that form.
13. As I have discussed above, the only positive recommendation that Mr Gurney gave was that the Trust would lend the whole purchase price to Ms Nissi, and then take a mortgage over the property to secure the loan. No explanation was given as to why that recommendation was not implemented. Mr Gurney gave evidence that he had no involvement in the manner in which the purchase was structured, or the purchase price was financed. There was no evidence that Mr Gurney was made aware of the communications between Mr Sharkey and Mr Brisbane, and I infer that he was not. Mr Sharkey arranged with Mr Brisbane for the sale of shares in the Trust to pay the price for Number 98, and he also discussed the arrangements that he could enter into to borrow a substantial sum on the security of the two properties, so that, among other things, he could re-enter the share market. I infer that Mr Sharkey was the one who conceived of this proposal, although it is probable that he listened to Mr Brisbane in relation to its precise mode of implementation.
14. One effect of this new proposal was that the Trust would no longer be able to lend the full purchase price for Number 98 to Ms Nissi on the security of a first mortgage over the property, as Mr Sharkey would have to arrange for mortgages to be granted over the two properties to secure the new borrowing.
15. A consequence of this change was that Mr Sharkey would lose control over the ownership of Number 98, by means of his control of the Trust and its mortgage over the property, if he put the title to Number 98 solely in Ms Nissi's name.
16. As Mr Sharkey went ahead and caused the title of Number 98 to be put solely in the name of Ms Nissi, the consequence was that she would appear to the world at large to be the only owner of the property, and Mr Sharkey would be reliant upon whatever principles of law might flow from the fact that he provided the purchase price.
17. He said in evidence that he was told by Mr Gurney that he would be the real owner because he paid the price, but, as I have noted above, Mr Gurney did not corroborate that evidence. I am not prepared to accept Mr Sharkey's evidence in this respect. It is much more likely that he learned about these principles of law when he finally sought legal advice, which was a number of years later.
18. The advice that Mr Sharkey received before he went to the auction, and the manner in which he implemented the purchase, are not objectively inconsistent with Mr Sharkey deciding to tell Ms Nissi that he would put the property in her name, and that it would be hers. I find that he did so.
19. Starting from the advice that he received from Mr Gurney, which he did not implement, Mr Sharkey achieved a result whereby the property was in the name of Ms Nissi; that would provide a shield against potential creditors; it would provide him with capital gains and land tax advantages, assuming the marriage went ahead; he would earn the gratitude and affection of Ms Nissi; he would improve his chances of the relationship succeeding; he would enjoy de facto conjugal benefits; and into the bargain, by means of the new borrowing, he could re-establish his investments.

The auction

1. There was a contest between the parties as to whether Mr Sharkey or Ms Nissi bid at the auction.
2. Ultimately, this contest does not require resolution. It does not matter who made the winning bid. The purpose of the contest appears to have been to provide a basis for the court to decline to accept the evidence given by the opposing party. In fact, I feel unable on the evidence to determine which version was correct. I am inclined to believe that both parties were highly excited, and that they both participated in some way, but I cannot say how.
3. I do not think the evidence given by Mr Gurney of these events, so long ago, provides a reliable basis for choosing one version as against the other. In saying this, I do not suggest otherwise than that Mr Gurney gave the best recollection that he could of the events.

Mr Sharkey's subjective intention

1. I have considered this issue, because the parties made submissions in relation to what the real intention of Mr Sharkey was; which I understand to mean his subjective intention. The relevance of Mr Sharkey's subjective intention, if not expressed to Ms Nissi, will be considered below.
2. It would obviously be difficult for the court to make, with any confidence, a positive finding as to Mr Sharkey's subjective intention, when he put the title to Number 98 solely into the name of Ms Nissi. A finding on that issue might be possible if the court was confident about the reliability of Mr Sharkey as a witness, and he stated under oath what his subjective intention was. I do not consider Mr Sharkey to be a reliable witness on that subject.
3. In my view, the attempt to identify Mr Sharkey's subjective intention does not readily lead to a binary outcome. That is to say, the inference is not solely that Mr Sharkey intended to give the ownership of the property to Ms Nissi, or alternatively that he intended to keep it for himself. It is most likely that he had a number of overlapping intentions that were contingent on various then unknown contingencies. If marriage to Ms Nissi occurred, Mr Sharkey could simply leave the issue of the ownership of Number 98 as it appeared on the title, and in a practical way gain all of the benefits of ownership, as well as protection from his creditors. If it turned out that the marriage did not eventuate, he could deal with the consequences as they might arise. Mr Sharkey may well have had some residual belief that he could recover title to the property if the couple separated. If that is so, it is difficult to gauge the strength of that belief in an objective manner. It is reasonable to have regard to the fact that Mr Sharkey entered into the 18 March 2011 agreement without much of a struggle, and without seeking legal advice as to whether he was obliged to do so, or whether he could recover the properties by some other means. Thereafter, he implemented the 18 March 2011 agreement for some two years before he ceased making the mortgage payments because, on his evidence, he was no longer in a financial position to do so. Those matters suggest that Mr Sharkey did not have any strong belief at all that he was the true owner of Number 98; and that suggests that any residual belief or intention that he had that he would own the property, notwithstanding that it was in Ms Nissi's name, and notwithstanding what he said to her about the property being hers, was relatively weak.

The mortgages over Numbers 96 and 98

1. Ms Nissi readily accepted that, shortly after the transfer of the title to Number 98 into her name, and notwithstanding that she had been told by Mr Sharkey that he had bought the property for her, she signed at his request the documents necessary to enable the Trust to borrow a substantial amount of money on the security of both properties.
2. That fact obviously has a significant bearing on the true nature of the couple's understanding as to the ownership of both properties.
3. Mr Sharkey's contention is that Ms Nissi's conduct simply reflected a recognition by her that she had agreed to hold her interests in both of the properties on trust for him; so that it followed that she was obliged to act in accordance with his directions.
4. That contention does not survive my finding, in respect of the ownership of Number 96 that, whatever the true legal position may have been, Ms Nissi had a genuine and reasonable belief that she was truly a half owner of the property.
5. Separately, it does not survive my finding that, as a result of the statements made by Mr Sharkey, and the fact that he put the title to the property in her name, Ms Nissi genuinely and reasonably believed that Number 98 was to be her property.
6. Why then did Ms Nissi readily cooperate in both properties being mortgaged for the benefit of the Trust? I accept the evidence given by Ms Nissi that, at that time, she regarded herself as being part of a loving and long-term relationship, so that, just as Mr Sharkey had been generous with her, it was incumbent upon her to be generous with her property for the mutual benefit of the couple.
7. That finding may introduce subtleties into the question of the exact nature of Ms Nissi's belief that she was the owner of Number 98. I have concluded that she genuinely believed that she was the owner, but that ownership was subject to the qualification that she was as much obliged to apply her property to the common good, as was Mr Sharkey.

18 March 2011 agreement

1. I prefer Ms Nissi's evidence of the manner in which, in February 2011, she and Mr Sharkey sat down to reach a mutual agreement concerning the future of the two properties. I do not accept that the agreement was reached as a result of a rancorous exchange in which Ms Nissi bullied Mr Sharkey into entering into the 18 March 2011 agreement.
2. There is no objective evidence of the meeting that took place in February, save to some extent for the terms of the 18 March 2011 email that Ms Nissi sent to Mr Sharkey. The terms of that email do not, however, rule out the possibility that Ms Nissi varied what the parties had earlier agreed to, although the fact that Mr Sharkey prepared the agreement in the terms that he did, without overt complaint, suggests that Ms Nissi's email did not depart greatly from what had earlier been agreed.
3. I have concluded that it is appropriate to accept Ms Nissi's version, and reject Mr Sharkey's, because I have found his evidence concerning the manner in which the 18 March 2011 agreement was prepared to be incredible. Mr Sharkey's evidence about what was agreed in February suggests that the terms of the agreement were quite different to those contained in the 18 March 2011 agreement. Yet Mr Sharkey insisted that he set about drafting the agreement immediately after the meeting, and that he somehow anticipated terms that Ms Nissi would insist upon, that were entirely in her interest, and were not included in the terms that were agreed in February. The 18 March 2011 agreement is clearly rudimentary, and I find that it was prepared by Mr Sharkey in response to Ms Nissi's 18 March 2011 email.
4. A further reason to prefer Ms Nissi's version of the circumstances in which the 18 March 2011 agreement was entered into, arises out of a consideration of Mr Sharkey's claims as to how he was overborne. On Mr Sharkey's version, after his confrontation with Ms Nissi, he had three weeks or so to get advice concerning his legal position. He did nothing but meekly prepare and sign the agreement. Faced with a choice between whether Mr Sharkey did nothing, because there was nothing to do, and that he did nothing, because he was desperate, I would prefer the former. I simply do not accept, from my assessment of Mr Sharkey's character, and the manner in which he gave his evidence in cross-examination, that if he genuinely thought he was the only true owner of both properties, he would not at the least have sought advice from the sources that he agreed in cross-examination were readily available to him.
5. Mr Sharkey said that he was in pressing need of funds to invest in his business in California, and for that purpose he needed to sell Number 96 as soon as possible. He was cross-examined on behalf of Ms Nissi on a basis that accepted that he had a real need to raise money. However, as I have observed above, Mr Sharkey did not lead evidence to show what his overall financial position was. Plainly, even a person with substantial assets may find from time to time that those assets are tied up, and the person can be stretched for funds. I do not accept that Mr Sharkey has shown that his need for funds was truly desperate; in the sense that his position was that he was overborne and compelled to accept whatever conditions Ms Nissi imposed on her agreement to sign the documents necessary to sell Number 96. Rather, I infer from the terms of the 29 December 2010 email that Mr Sharkey sent to his brothers, that Mr Sharkey had made a decision to go it alone with the financing of some important aspect of the business, rather than to deal with other parties who had been involved to that date. That may well have created a real need for Mr Sharkey to raise funds from the sale of an asset, but I do not accept that the need was so great that the problem could not be resolved by other means.
6. I have not ignored the evidence Ms Nissi gave in cross-examination, that she appreciated that she was in a strong bargaining position, and took advantage of that position to gain the best outcome for herself that she could in the settlement of the property arrangements, following the end of the relationship. However, I find that she did not unconscionably take advantage of some abject weakness that she perceived Mr Sharkey to suffer from.
7. I find that, albeit in an inchoate way, during the course of the negotiations and on 18 March 2011, Ms Nissi and Mr Sharkey both understood that their relationship had lasted for a period that was long enough to attract the operation of laws that governed property adjustments of de facto couples after the end of the relationship. In cross-examination, Mr Sharkey spoke of "family planning risks" (T 32.24). They did not have any detailed understanding of what those laws were, or how they would operate, but they believed that each party probably had a right to go to court to seek relief to ensure that the property that had been acquired during the currency of the relationship was divided appropriately between them.
8. In signing the 18 March 2011 agreement, both parties understood that one consequence of their actions was to settle whatever claims each may have had against the other concerning the property that had been acquired, as a result of the laws that govern the distribution of property after the end of de facto relationships.

Consideration

1. The parties delivered a comprehensive agreed statement of the issues to the court shortly before the hearing began.
2. As a result of the findings of fact that I have set out above, the issues that need to be addressed for the purposes of determining the dispute between the parties can be dealt with in a relatively straightforward way, on the basis of uncontroversial principles of law.
3. It will not be necessary to determine all of the issues raised by the parties, as the resolution of a number of the principal issues leads others to fall away.
4. It will be convenient to address the issues in an order that is generally chronological.

Was there an express trust for Number 96?

1. The first issue is whether, at the time Number 96 was purchased, Ms Nissi expressly agreed that she would hold her interest in the property on trust for Mr Sharkey. As stated above, I have found as a fact that she did not.

Was there a resulting trust for Number 96?

1. The second issue is whether, by reason of the circumstances in which Number 96 was purchased, and paid for, Ms Nissi held her interest in the property on a resulting trust for Mr Sharkey.
2. Ms Nissi did not contest an affirmative answer to this question in any real way. Indeed, when cross-examined about why she did not give comprehensive evidence about the circumstances in which Number 96 was acquired, she defended her position by saying that she understood that the case was really only about Number 98. Be that as it may, at the time the contract to purchase Number 96 was entered into in the joint names of Ms Nissi and Mr Sharkey, both understood that Mr Sharkey would, in due course, pay all of the costs of purchase, and all mortgage repayments. The only qualification to that proposal for payment of the acquisition price for Number 96 was an improbable contingency that, at some time in the future Ms Nissi might be called upon to contribute to mortgage repayments. I am satisfied that, in these circumstances, a resulting trust arose in respect of Ms Nissi's interest in Number 96 in favour of Mr Sharkey, upon the principle in Calverley v Green.
3. Ms Nissi, rightly, did not submit that a presumption of advancement arose in her favour because of the existence of the de facto relationship: see Calverley v Green at 250, 260 and 268-9. She did submit in her written opening before the commencement of the hearing, that a presumption of advancement arose because the couple were engaged to be married, relying upon Moate v Moate [1948] 2 All ER 486. With respect, this submission ultimately appeared to be but faintly pressed.
4. While it is true that the couple were engaged at the time of the purchase of Number 96, I have found that in fact the property was not purchased in contemplation of marriage. At that time there was, in no real sense, an expectation that marriage would actually occur, and the property was not purchased for any reason that was connected with an impending marriage. As Wheeler J said in Bertei v Feher [2000] WASCA 165: [38] Without positive evidence from either party pointing to a contemplation of marriage at the time of purchase of the property, and in the light of the respondent's evidence which points to a contrary conclusion, it seems to me that it was not open to his Honour to assume that because of the engagement in 1988, apparently entered into with no very definite idea of when or how a marriage might take place, the events of 1991 occurred "in contemplation of" marriage.
5. In any event, I am satisfied that the principles of law that govern purchases of properties that are in contemplation of marriage are as stated by Kennedy J (with whom Ipp J agreed) in Bertei v Feher: [13] Although it was not pleaded, the learned trial Judge gave consideration to there having been a presumption of advancement, on the basis that the transfer of the Duncraig house into the names of both parties was made in contemplation of marriage. Jenkins J in Moate v Moate [1948] 2 All ER 486, at 487, indicated that the presumption was that the prospective husband in such cases intended there to be provision by way of gift to his prospective wife, provided that the marriage was duly solemnised. In Wirth v Wirth (1956) 98 CLR 228, at 237 - 238, Dixon J described the transfer in that case as being made "so to speak in preparation for the marriage and on the footing that the transferee became the transferor's wife but in advance of her doing so". In each of those cases, the marriage was in fact solemnised. See also Ulrich v Ulrich (1968) 1 WLR 180, per Lord Denning MR at 45. In the South Australian case of Davies v Messner (1975) 12 SASR 333, Mitchell J treated the transaction as a conditional gift, this being the manner in which the case had been pleaded. The same approach was adopted in Kais v Turvey (1994) 11 WAR 357. See also the judgment of McPherson SPJ in Jenkins v Wynen [1992] 1 Qd R 40, at 40 - 47.
6. See also the judgment of Wheeler J in that case at [30]; and Ikeuchi v Liu [2001] QSC 54 at [108], [109]. Compare Tayles v Davis [2009] VSCA 304 at [40].
7. As no marriage took place, reliance by Ms Nissi on any presumption of advancement based upon Number 96 being purchased in contemplation of marriage would not have sustained her beneficial interest in the property.
8. Ms Nissi had a genuine and reasonable expectation that she would enjoy joint beneficial ownership of Number 96, but the applicable legal principles lead to that expectation being disappointed.
9. Accordingly, the effect of the application of the relevant principles of Equity is that Ms Nissi held her joint interest in Number 96 on trust for Mr Sharkey.
10. It is important to remember, however, that the legal principles that were pertinent to the ownership of Number 96 were not limited to the principles of Equity. As I have said, both parties understood that their legal entitlement to properties purchased during the currency of their relationship was likely to be affected by laws governing the entitlement to property of de facto couples. There is no evidence that they had any clear or detailed understanding of what those legal principles were. I will return to this issue when I consider Mr Sharkey's submissions concerning the legal effectiveness of the 18 March 2011 agreement.

Was there an express trust for Number 98?

1. The third issue is whether Ms Nissi expressly agreed to hold the title to Number 98 on trust for Mr Sharkey. I have held as a matter of fact that she did not.

Was there a resulting trust for Number 98?

1. The fourth issue is whether, by reason of the circumstances in which Number 98 was purchased and the title put solely in the name of Ms Nissi, she held the title to that property on a resulting trust for Mr Sharkey.
2. A presumption of advancement does not arise in relation to the purchase of Number 98, out of the circumstance that the parties were engaged and were living in a de facto relationship, for essentially the same reasons that applied to the purchase of Number 96. I have found that the property was not purchased in contemplation of marriage.
3. It was always the intention of the parties that Mr Sharkey would pay the whole of the purchase price for Number 98, notwithstanding that it was proposed that the title to the property would be put in the sole name of Ms Nissi.
4. Accordingly, the presumption arose that Ms Nissi would hold the title to Number 98 on a resulting trust for Mr Sharkey; and that will be the legal result unless Ms Nissi carries the burden of proving that it was Mr Sharkey's intention at the time of the purchase that she would not hold the property on trust for him.
5. In the circumstances of this case, the question arises as to the nature of the intention on Mr Sharkey's part that must be proved by Ms Nissi, before the court can find that the presumption of a resulting trust has been rebutted.
6. I have already set out above an extract from the judgment of Mason P in Nielsen v Letch (No 2) at [28], where his Honour referred to the citation by Mason and Brennan JJ (as their Honours then were) in Calverley v Green (at 261), with approval, of Lord Diplock's statement in Gissing v Gissing [1971] AC 886 at 906 that "…the relevant intention of each party is the intention which was reasonably understood by the other to be manifested by that other party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party".
7. In Anderson v McPherson (No 2) [2012] WASC 19; (2012) 8 ASTLR 321 Edelman J said: [155] The presumption of resulting trust can be rebutted by evidence which shows that the intention of Bruce and Carol at the time of the purchase of the Anstey Road property was that Troy and Stephannie would be entitled to the use and enjoyment of their legal title for their own benefit: Calverley v Green (251) (Gibbs CJ), (269) (Deane J). [156] The references to "intention" in the paragraph above, and generally in this judgment, are references to objective, or manifest, intention. As I have explained at [98], the intention is not a subjective, uncommunicated intention but it "is to be inferred from what the parties do or say": Calverley v Green (261) (Mason & Brennan JJ), (270) (Deane J).
8. Further, in Ryan v Ryan [2012] NSWSC 636 Ward J (as her Honour then was) said: 75] As to the possibility in the present case that the presumption of resulting trust might be rebutted by evidence as to the objective intentions of the parties at the time of the acquisition of the property, in Calverley v Green, Deane J noted that "[r]egardless of whether the circumstances are such as to bring the case into one of the categories of advancement, evidence of the relationship - both legal and factual - between the parties will always be admissible" and went on to say: More importantly, the subsequent judgment of Dixon CJ, McTiernan, Fullagar and Windeyer JJ in Martin (at 303-5) accepted, as correct, statements of Stuart VC and Cussen J to the effect that, in a case where the subjective intention of a person is relevant, the evidence of that person of his intention at the time of the purchase is admissible notwithstanding that "it must in every case be liable to observations which tend to diminish its weight" (see also Devoy v Devoy (1857) 3 Sm & G 403 at 406 ; 65 ER 713 at 714; Fowkes v Pascoe (1875) 10 Ch App 343 at 349). [76] In Anderson, Edelman J noted at [98] that the intention to be discerned in a resulting trust is an objective, manifest intention (not an unexpressed subjective intention) referring to Calverley v Green; Byrnes v Kendle [2011] HCA 26 ; (2011) 243 CLR 253; and Re Vandervell's Trusts (No 2) [1974] Ch 269 at 294.
9. These authorities establish that the relevant intention of the purchaser in Mr Sharkey's position is "an objective, manifest intention (not an unexpressed subjective intention)".
10. On that basis, the finding that I have made that Mr Sharkey made statements to Ms Nissi that reasonably and objectively caused her to believe that Mr Sharkey intended to make a gift of Number 98, when he caused the title to the property to be put solely in her name, is sufficient to permit Ms Nissi to carry the burden of rebutting the presumption that Mr Sharkey's intention was that she would hold the title to the property on trust for him.
11. Accordingly, the investigation that I have made above concerning Mr Sharkey's subjective, unexpressed intention is not material to the determination of who is entitled to the beneficial ownership of Number 98.
12. However, I would note in any event that I have not found on the evidence that Mr Sharkey had, at the time of the purchase, a single subjective intention that Ms Nissi would hold the title to the property on trust for him. The ascertainment of Mr Sharkey's real intention is elusive. The best that I could do on the evidence is to conclude that he entertained, at the one time, a multifaceted and inconclusive view of how the title to Number 98 would be held, depending upon the development of presently unknown contingencies, and how future events could benefit Mr Sharkey's own interests.
13. It remains to consider the consequences of Ms Nissi's having agreed to mortgage Number 98 to provide a third-party security for borrowings made by the Trustee. The parties did not address any detailed submissions to this question. There was no evidence that the parties addressed their attention to the issue, or came to any agreement as to the consequences, at the time the mortgage was granted. The issue is not ultimately significant, because of the agreement that the parties entered into on 18 March 2011. However, the better view is that, as Ms Nissi agreed to encumber her title to Number 98 with a mortgage to benefit Mr Sharkey's trust, she in effect permitted him to have the benefit of the existence of that security, in much the same circumstances and effect as Mr Sharkey had put the title to Number 98 into Ms Nissi's sole name.

What was the effect of the 18 March 2011 agreement?

1. As I understand Mr Sharkey's case concerning the effectiveness of the 18 March 2011 agreement, it was predicated upon the court's finding; first, that Ms Nissi held her interests in Number 96 and Number 98 on resulting trusts for Mr Sharkey; and secondly, that Ms Nissi acted unconscionably in taking advantage of Mr Sharkey's desperate financial circumstances in insisting upon his entering into the 18 March 2011 agreement on terms dictated by her.
2. As it has happened, I have found that Ms Nissi did hold her joint interest in Number 96 on a constructive trust for Mr Sharkey at the time of the 18 March 2011 agreement, but she was not a trustee of Number 98 for Mr Sharkey. Further, in negotiating the terms of the agreement she did no more than take legitimate advantage of the bargaining position that she found herself in, and did not take unconscionable advantage of any desperate financial position on Mr Sharkey's part.
3. Mr Sharkey put the argument that it was a breach of Ms Nissi's obligations, as trustee for Mr Sharkey of her interests in the two properties, for her to act in her interests, rather than in his, when she insisted upon him entering into the 18 March 2011 agreement. As Mr Sharkey was beneficially entitled to the entirety of the ownership of the two properties, the only legitimate course open to Ms Nissi was to comply with his request to transfer her interest in Number 96 to him; and if he asked, to do likewise in respect of the title to Number 98.
4. In putting this argument Mr Sharkey relied upon various authorities including dicta of Lord Goff and Lord Brown-Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669, at 690 and 705-706, where their Lordships made observations to the effect that, where a resulting trust over property is found to exist, at least from the time where the trustee "become[s] aware of the facts which give rise to a resulting trust", the trustee may be bound by all of the duties of a trustee.
5. On the facts that I have found Ms Nissi was bound, because of the resulting trust over her interest in Number 96, to transfer that interest to Mr Sharkey upon request by him. She did so under the 18 March 2011 agreement. Because of the absence of a resulting trust over her interest in Number 98, she was entitled to retain ownership of that property; and that was the effect of the agreement.
6. As at 18 March 2011, the parties had been parties to a domestic relationship, within the meaning of the Property (Relationships) Act for longer than the 2 years required by s 17(1). They were resident within New South Wales for the whole of the period of the domestic relationship, as required by s 15. Although more than two years had expired after the relationship ceased in mid-2008, it was possible for the court to make an order under s 18(2) granting leave to the parties to apply to the court for an adjustment order under s 20.
7. The rights of the parties concerning the repayment of the outstanding mortgage on Number 98 were not solely to be determined by the application of the principles of trust law at that time. Ms Nissi had agreed to grant the mortgage, and that may have had the result that, as a matter of equitable principle, she had to suffer the consequences of its continued existence. I do not make any findings on that question, as it was not addressed by the parties.
8. I am satisfied, however, that the parties intended the 18 March 2011 agreement to take effect as a final settlement of their property rights, following the end of their de facto relationship, and the termination of their engagement. They were aware, albeit indefinitely, that they each probably had a right to institute proceedings to achieve an appropriate distribution of the properties between them, and they intended that the agreement would take effect as a final compromise of those rights. The prospects of success of any application that Ms Nissi may have been entitled to make are not material. Ms Nissi had rights that were compromised in the 18 March 2011 agreement.
9. In my view, the 18 March 2011 agreement was not vitiated by any breach of trust by Ms Nissi, or any unconscionable conduct on her part, arising out of her taking advantage of any desperate financial position of Mr Sharkey.
10. It is therefore not necessary for me to explore any further the validity of Mr Sharkey's argument that, if it had been found by the court that Ms Nissi held her interests in both Number 96 and Number 98 on trust for Mr Sharkey, then it would necessarily follow that it would have been a breach of trust for her to require Mr Sharkey to enter into the 18 March 2011 agreement.
11. In the present case, Ms Nissi had a belief and expectation, on reasonable grounds, that she jointly owned Number 96 with Mr Sharkey. She also believed that a gift had been made to her of Number 98. The validity of her beliefs was genuinely and reasonably contestable. She also correctly understood that both she and Mr Sharkey had real, but unidentified, rights to commence proceedings to seek an appropriate distribution of the properties following the end of their relationship.
12. It seems to be inherent in the argument put by Mr Sharkey that if, at the end of a court case, it is found that one party held his or her interests in a property on trust for the other, that other party could secure an order setting aside an earlier compromise agreement between the parties of their respective rights over the relevant property, on the ground that the first party should not have negotiated to enter into the compromise, but should simply have agreed to give the property to the other party.
13. The essence of the argument appears to be that, at least from the time the party found to be a trustee knows the facts that give rise to the resulting trust, that party cannot compromise the dispute with the party ultimately found to be the beneficiary, because that ultimate finding carries with it the consequence that the trustee's negotiation of the compromise agreement in his or her own interests was a breach of trust.
14. If it had been necessary for me to decide this case on the basis that Ms Nissi held her interest in Number 98 on a resulting trust for Mr Sharkey, as well as her interest in Number 96, it would have been necessary for me to decide the validity of this argument. I do not think it is valid, at least in the present case. The argument leaves out of account the fact that the rights of the parties to the two properties were not governed solely by equitable principles concerning the creation of resulting trusts. The equitable title to the property was subject to orders being made by the court under the Property (Relationships) Act, which might alter the ownership that would otherwise have applied. In my view, even if Ms Nissi had the obligations of a trustee to Mr Sharkey, because she held her interests in both properties on a resulting trust, that would not have prevented her from entering into a genuine settlement of the parties' property rights in respect of the claim she was entitled to make under the statute.
15. Furthermore, in my view, the argument that a trustee under resulting trust cannot enter into a settlement agreement with his or her beneficiary of competing claims to the subject property, because that will necessarily involve a breach of trust, should not be accepted as being necessarily true in all cases.
16. As it is not necessary for me to decide this question, I will merely point to the following extract from the judgment of McPherson JA (with whom Davies JA and Mullins J agreed) in Port of Brisbane Corporation v ANZ Securities Ltd (No 2) [2002] QCA 158; [2003] 2 Qd R 661: [31] … In terms of legal theory, this analysis may be justified by saying, like Lord Browne-Wilkinson in Westdeutsche Bank v. Islington London Borough Council [1996] A.C. 669, 705, that: Since the equitable jurisdiction to enforce trusts depends upon the conscience of the holder of the legal interest being affected, he cannot be a trustee of the property if and so long as he is ignorant of the facts alleged to affect his conscience, i.e. until he is aware that he is intended to hold the property for the benefit of others in the case of an express or implied trust, or, in the case of a constructive trust, of the factors which are alleged to affect his conscience. His Lordship's formulation has been the target of a good deal of criticism by commentators for the reason that it is well settled by authority that a person may be subject to a resulting trust even though ignorant of its existence; for example, in the case of an infant, as in Re Vinogradoff [1935] W.N. 68. It is, however, reminiscent of what was said by Barwick C.J. in argument with counsel in Consul Development Pty Ltd v. D.P.C. Estates Pty Ltd (1975) 132 C.L.R. 373, 375: To whom did Consul become bound in conscience? … How can a person be bound in conscience to someone whose existence is not known at the date of purchase? [32] A preferable view is said to be that the resulting trust arises as soon as the property is transferred, but the transferee does not become subject to a fiduciary duty, or liable for breach of trust, until he is aware of his position: see Hanbury & Martin, Modern Equity (16th ed.; 2001) at 239. This rationalisation has the support of Sir Peter Millett, and, indeed, may have been originated by him in a paper published in (1998) 114 L.Q.R. 399, 405, where he said that: "If the trustee is to be treated as a fiduciary, this must be because he has knowingly subjected himself to fiduciary obligations. These are not created by the separation of the legal and equitable titles, though they may be created by the same circumstances which give rise to the separation. But where the only relationship between the parties, who may not even know of each other's existence, is that one holds the legal title and the other is the equitable owner, there can be no fiduciary relationship." A resulting trust, according to Sir Peter Millett, is not a fiduciary relation (114 L.Q.R. 399, 405). Whatever may be the correct resolution of these questions, it is in my opinion offensive to notions of equity and common sense to hold ANZ Securities liable for a supposed breach of trust as trustee for Port Corporation at a time when it had never undertaken and was not aware that any such obligation existed, but knew only that it had accepted appointment as express trustee for Windermere. As has been recognised by both Lord Browne-Wilkinson and Sir Peter Millett, the question is essentially one of semantics.
17. Difficult questions would have arisen if Ms Nissi held her interest in both properties on a resulting trust for Mr Sharkey, and the issue of the validity of the 18 March 2011 agreement had not been affected by the compromise of the parties' claims under the Property (Relationships) Act. The public interest in parties being able to avoid litigation by settling disputes should, in appropriate cases, extend to disputes between alleged trustees and beneficiaries. Great care would have to be given to addressing the question of when a compromise by an alleged trustee is unconscionable because of the trustee's knowledge, and the compromise is in the interests of the trustee rather than the beneficiary. The argument that a person who claims to be a beneficiary, but compromises his or her claim with the alleged trustee, is entitled to an order setting aside the compromise by proving in subsequent proceedings that, in fact, a trust existed, may require careful consideration in a case in which it arises, and may be contrary to principle.
18. Mr Sharkey put a submission that the 18 March 2011 agreement was not supported by consideration, but that argument also depended upon a finding that Ms Nissi held her interest in both properties on trust for Mr Sharkey at the time of the agreement.
19. In any event, in my view, the compromise that both parties understood that they were making concerning their rights to institute proceedings for something in the nature of a fair distribution of the properties between them constituted good consideration for the agreement.
20. Mr Sharkey also put a submission that, on the proper construction of the agreement, the use of the words "will not contest" the ownership of Number 98 were not words of transfer of a beneficial interest in that property. As I have found that Ms Nissi held Number 98 beneficially, she does not need to rely upon any transfer of the property effected by the agreement.
21. It will be convenient to repeat the terms of the 18 March 2013 agreement. 18/3/2011 Chris Sharkey agrees that he (or Sharkey Family Trust P/L) will not contest the ownership of 98 Denison Street Camperdown and will be responsible for the debt associated with that property. He will not take on any more debt to do with the property. This will be paid off and the loan extinguished by January 1, 2013 [Signed Mr Sharkey and witnessed] Donya Nissi, agree to that the proceeds of the sale of 96 Denison Street Camperdown will go to Chris Sharkey. [Signed Ms Nissi and witnessed]
22. The words: "Chris Sharkey agrees that he…will not contest the ownership of 98 Denison Street Camperdown" are straightforward. Mr Sharkey bound himself not to institute the proceedings that he has instituted to recover the title to that property.
23. Further, the words: "…and will be responsible for the debt associated with that property… This will be paid off and the loan extinguished by January 1 2013" also have a clear meaning. As part of the compromise, Mr Sharkey bound himself to pay all mortgage payments in respect of the mortgage over Number 98, and to extinguish the loan by 1 January 2013. While Mr Sharkey made some mortgage repayments, he failed to make others, and he failed to repay the balance of the debt by 1 January 2013. That was a breach of the 18 March 2011 agreement.

Conclusion and orders

1. It follows that Mr Sharkey has failed to establish the claim that he makes in his amended statement of claim, which must be dismissed.
2. Ms Nissi has succeeded on her amended cross claim, in so far as she seeks damages from Mr Sharkey for breach of the 18 March 2011 agreement, by reason of his failure to make a number of mortgage repayments, and his failure to repay, or procure the Trustee to repay, the mortgage over Number 98, by 1 January 2013.
3. The amount that Ms Nissi claimed as damages was the total of the $525,000 that she borrowed from the Commonwealth Bank of Australia to repay the mortgage debt; plus instalments of $22,090 that she paid to the Trustee's mortgagee; plus an amount of $35,875.54, being legal fees and expenses as a result of the Mortgagee's threat to exercise the power of sale over Number 98. The damages should include the sum of $525,000 referred to above. Mr Sharkey disputes the additional amounts of damages claimed by Ms Nissi. Ms Nissi failed in her attempt to tender into evidence certain evidence upon which she wished to rely to quantify part of her damages claim. The parties did not deal, in their final submissions, with the evidence concerning the quantification of the balance of Ms Nissi's damages claim in sufficient detail to enable me conveniently to determine the appropriate amount (other than the amount paid for a discharge of the mortgage over Number 98). I propose in these circumstances to require the parties to address this issue in further submissions, if they cannot agree to the quantum of damages.
4. Ms Nissi also claimed interest on the amount of the damages, and it will be necessary for the parties to address the quantification of the interest that is payable.
5. Ms Nissi's claim against the second cross defendant, the company that I have called the Trustee, fails.
6. In principle, Mr Sharkey should be ordered to pay Ms Nissi's costs on the ordinary basis. However, I will invite further submissions from the parties on the issue of costs, including in respect of the position of the Trustee.
7. I make the following orders: 1. The plaintiff's claim is dismissed. 2. The first cross defendant is ordered to pay damages to the cross claimant in an amount to be determined in accordance with order (5). 3. The first cross defendant is ordered to pay interest to the cross claimant in an amount to be determined in accordance with order (5). 4. The cross claim against the second cross defendant is dismissed. 5. The parties are directed to confer about the amount of damages and interest that the cross defendant should be ordered to pay to the cross claimant in accordance with these reasons for judgment (in particular par 406), and if agreement is not reached, the parties will be required to submit further submissions to the court at a time to be determined. 6. The parties are directed to confer about the orders for costs that should be made, and if agreement is not reached, the parties will be required to submit submissions to the court at a time to be determined. 7. The exhibits and any documents produced to the court on subpoena may be returned forthwith in accordance with the rules immediately upon the making of final orders in these proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 September 2015