Sleboda v Sleboda

Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 Black Uhlans v New South Wales Crime Commission [2002] NSWSC 1060; (2002) 12 BPR 22,421 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 CASES CITED: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Jozef Sleboda v Joseph Jan Sleboda [2007] NSWSC 361 Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431

PARTIES: Joseph Jan Sleboda (Appellant) Jozef Sleboda (Respondent)

COUNSEL: SA Kerr; BA Arste (Appellant) JE Armfield (Respondent)

SOLICITORS: Laliotis Lawyers, Earlwood (Appellant) Hills Solicitors, Maitland (Respondent)

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT DATE OF DECISION: 18 April 2007

LOWER COURT MEDIUM NEUTRAL CITATION: Jozef Sleboda v Joseph Jan Sleboda [2007] NSWSC 361

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40287/07 SC 1879/05

CAMPBELL JA BELL JA HANDLEY AJA

3 JUNE 2008 Joseph Jan SLEBODA v Jozef SLEBODA Judgment 1 CAMPBELL JA:

Nature of the Case 2 The Appellant is the son of the Respondent. I will refer to them respectively as the Son, and the Father. In the evidence the Son is sometimes referred to as "John" or "Johnny". 3 The Father and the Son bought a farm at Phoenix Park, New South Wales as tenants in common in equal shares in 1979. In 1981 the Son faced the prospect of criminal charges. On legal advice, his interest in the property was then transferred to the Father. A house was gradually constructed on the property. In 2002 the Father, the Father's wife and the Son all lived in that house. 4 In 2002 the Father signed documents that conveyed the entire interest in the property to the Son. 5 After the Son had argued with his parents in October 2004 and asserted that he owned 100% of the farm, the Father brought proceedings in March 2005 seeking a declaration that the property was held by the Son on constructive trust for the Father and the Son as tenants in common in equal shares, and an order for the Son to carry out all necessary steps to transfer to the Father a legal half interest in the property. 6 The Father's case was that he was elderly, poorly educated, of limited experience in practical affairs, of limited ability to read and write English, partly deaf, and accustomed to rely on the Son in business matters. The Father claimed that he had purchased the property entirely from his own funds, partly by way of paying a cash deposit, and partly by way of making all mortgage repayments on the property. He claimed that he executed the 2002 transfer documents in the belief, created in him by the Son, that they transferred a one half interest in the property to the Son. The Father asserted that no explanation of the effect of the documents had been given to him, he was unable to read them, and he did not receive any independent legal advice. He based his claim for relief on both undue influence, and unconscionable conduct of the type exemplified by Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447. 7 The trial judge, Gzell J, held that the Father had sufficiently made out each of those grounds, and that each of them led to the relief which the Father claimed: Jozef Sleboda v Joseph Jan Sleboda [2007] NSWSC 361. 8 In this appeal, the Son contends that the trial judge should not have found that either ground of relief was made out. The argument turns on questions of evidence rather than any point of principle concerning undue influence or unconscionable conduct.

Findings Concerning Initial Beneficial Ownership 9 The trial judge recognised that if one of two joint owners of property makes more than 50% of the contributions towards the acquisition of that property a trust can sometimes arise in favour of the co-owner who makes the greater contribution. Principles concerning whether the trust involved is a resulting trust or a constructive trust, what count as "contributions" for the purpose of these principles, and how one goes about ascertaining the terms of the trust are set out in Black Uhlans v New South Wales Crime Commission [2002] NSWSC 1060; (2002) 12 BPR 22,421 at [128]-[148], and in West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431 at [52]-[65]. In a case such as the present, however, where a parent conveys property to a child, a presumption of advancement can arise, even if (as was the case here) the child is an adult at the time of the transaction: Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538 at 548-9, 576, 585-6 and 601. The Father did not seek to rebut any presumption of advancement in the present case. 10 The trial judge rejected evidence from the Son that he paid for the purchase of the property. Thus, he proceeded on the basis that, before the property was transferred into the Father's name alone in 1981, the beneficial interests in it were held by the Father and Son equally. That starting point was not disputed on the appeal.

Uncontroversial Facts 11 The case proceeded against a background of admissions on the pleadings that the Father: "(a) was born in Poland on 5 January 1923; (b) left school in Year 3; (c) immigrated to Australia; (d) after arriving in Australia worked as a crane driver and subsequently as a turner; (e) has a limited ability to read English; (f) cannot write English except for his name and numbers; (g) is partially deaf; …" 12 On the evening of 13 August 2002 the Father and the Son executed the documents that are at the heart of the present dispute. They are a contract for the sale of the land from the Father to the Son for $300,000, an old system conveyance of part of the land, and a Real Property Act 1900 transfer of the rest of the land by the Father to the Son. 13 They also executed two other documents. One was a document addressed to Messrs Reid & Reid, Solicitors, that stated: "We hereby authorise and instruct you:- 1. not to carry out the usual searches and rate enquires [sic] and not to obtain a Survey and Council Building Certificate; 2 we will attend to the payment of all purchase moneys and the adjustment of rates between ourselves; 3 we will also attend to transferring all the services and the insurance; 4 we have obtained our accountant's advice in respect to the tax implications in the sale and have satisfied ourselves in respect to capital gains tax and any other taxes and confirm that the sale documents are to show the sale as not being a taxable supply and that there is no GST on the sale."

The other was the front page of a valuation dated 10 July 2002, that valued the property at $300,000. 14 All those documents were executed at the house on the property, in the presence of Mr Harold Craig Lee, solicitor, of Reid & Reid. 15 Another document that Mr Lee brought with him on the evening of 13 August 2002, and I infer gave to the Son, was a document entitled "Tax Invoice" on the letterhead of Reid & Reid, dated 13 August 2002 and addressed to the Son. It stated: " Enclosed herewith are the draft Contract and Transfer and Conveyance for approval and signature. We note your instructions that:- 1 you have obtained your accountant's advice and have satisfied yourself in respect to tax implications on the sale and advised us that there is no GST applicable to the sale; 2 you do not require the normal searches, rate enquiries, Survey Report and Council Building Certificate to be obtained; 3 you will attend to the payment of the purchase money and the adjustments directly with your father. The following are the estimated fees and disbursements:- [They were set out] Would you please let us have a cheque made payable to Reid & Reid for this amount. Thanking you for your instructions." 16 There are only three documents from Mr Lee's file that shed any light on the circumstances of the transfer. One is a handwritten note in Mr Lee's handwriting, dated 12 July 2002. It is a note of the Son's attendance on him, on the occasion the Son gave initial instructions concerning the transfer. The note recorded the names of the Father and the Son and their address, a telephone number of the Son, that the selling price was $300,000, that the vendor and purchaser would adjust payment between themselves, and that there would be no mortgage, and no searches. Another part of the note stated that the Son would talk to an accountant concerning GST and capital gains. 17 The second document is a typed file note, dated 12 July 2002, recording that the Son had received accountants' advice that no capital gains tax would be payable on the property because it had been transferred to the Father prior to 1983. 18 The only record that anyone made of the events of 13 August 2002 is a handwritten note that Mr Lee made on a copy of the tax invoice. It reads: "13.8.02 - attended on John + his father at home - confirmed above instructions - father does not want independent advice - proceed - signed"

The Scope of the Evidence 19 The evidence before the judge consisted of affidavit evidence from the Father, the Father's wife and daughter, the Son, and Mr Lee. There was also oral evidence from each of those deponents. There was little documentary evidence beyond the documents involved in the various conveyancing transactions, and the documents I have already mentioned. 20 The trial occurred in two widely spaced tranches. At the first of them, on 3 and 4 April 2006, all evidence except that of Mr Lee was given. The court was informed that he was unavailable, being overseas and uncontactable. The next tranche of the hearing, consisting of Mr Lee's evidence and submissions, occurred on 13 April 2007. The trial judge delivered his judgment very promptly after the second tranche hearing, on 18 April 2007.

Mr Lee's Evidence 21 Mr Lee's affidavit evidence was a single affidavit, sworn 5 August 2005. It confirmed that he had received instructions on 17 July 2002 from the Son. The totality of the account in his affidavit of the meeting of 13 August 2002 is: "On the 13 August 2002 I attended at the property and saw the Defendant and he introduced me to the Plaintiff and the Plaintiff's wife who was also present. I explained to the Plaintiff and his wife the Valuation, the Contract for Sale and the Conveyance and Transfer and talked them through these documents. I then said to the Plaintiff words to the effect: "You are transferring all the property to John for $300,000.00. I am acting for John and not you. I suggest you take all these papers to your own Solicitor for independent legal advice." He said: "No. I don't need to do that, I understand. I want to get them fixed up now." I said to the Plaintiff: "Once you transfer these deeds to John, if you have a fight with him he can throw you out of the house." He said: "I know." The Plaintiff appeared to understand what he was doing. The Plaintiff signed the documents and his wife witnessed his signature on the Transfer and the Conveyance." 22 Mr Lee gave oral evidence in chief that was significantly more extensive than his affidavit evidence. Additional matters deposed to in that oral evidence included: · He was at the house for approximately an hour, between about 5:00pm and 6:00pm. · He recognised the Father and his wife in court, as being people he had seen (I take it, on the occasion the documents were signed). · He communicated with the Father in English, had no difficulty in communicating with him, and no difficulty in understanding statements made by the Father to him. · He had no difficulty in making himself heard. · The members of the family spoke amongst themselves, in English. · There was a television on when he arrived, but it was either turned down or off. · He has a recollection of the substance of the conversation. · An overview of the meeting was: "A. When I first arrived I saw John and he took me inside, introduced me to, first of all, his father and then his mother came. I introduced myself as John's solicitor and said that I was there to talk about the transfer of the property, that a valuation had been obtained for $300,000. I had prepared a contract for sale of the whole property from the father to the son and I had a transfer and some conveyances and authorities and I was going to take them through them. I suggested to the father that he should seek independent legal advice. He said to me that he did not want to do that, he was happy to go ahead and wanted it to be fixed up then. At that stage I said that it was a very important document and what was involved was that he was transferring everything over and if there was ever a fight John can throw him out of the house. Q. How did you then set about going through the documents? A. Once he said that he didn't wish to go and see his own solicitor, I was sitting at a table with all three of them and I took them through document by document, explaining them and having them signed off as we went." · He went through the valuation, and the contract and that as each document was explained it was "signed off" at the end of the explanation. · He went through the authority letter point-by-point. · It was incorrect to say that the Father signed some documents, and then his wife came from somewhere else to witness his signature. 23 By the time of the second tranche of the hearing a transcript of the oral evidence given in the first tranche was available. Mr Lee had been provided with that transcript before he gave evidence. Mr Lee was taken in evidence in chief to particular items of evidence that had been given by the Father. He denied those. 24 As well, Mr Lee had put to him, without objection, as part of his evidence in chief, various items of evidence that the Son had given in chief: "Q. At the end of the signing process, the paperwork, did you hear John, Mr Sleboda junior, say anything to his father about the effect of the documents? A. I did. Q. What did you hear him say? A. It was to the effect that he transferred the complete property across to John, it was now John's. Q. Did you hear him refer to any particular figures? A. I think he also again mentioned $300,000. Q. At page 56, about line 47, the defendant says that in your presence he said to his father, "It's a hundred per cent in my name" and then that you mentioned things to him three or four times and that Mr Sleboda senior said, "I'm willing to sign it all in your name." Do you have any recollection of that? A. I do. Q. Is your recollection along the lines of-- A. My recollection is similar. Q. At page 66, line 55, the defendant gives evidence of you saying to Mr Sleboda senior, "You know what John wants" and Mr Sleboda senior saying, "Yes, I want him to have the whole farm." Do you have any recollection of that? A. I do recall something similar being said." 25 Mr Lee's cross-examination included the following: "Q. So it is correct to say that at all times prior to going out to see the plaintiff and his son, you were proceeding on the basis that this transaction was a sale for value? A. It was to be a sale for value. Q. And, indeed, the contract and the conveyances and all of the documents were drawn on that basis, were they not? A. Correct. Q. You were never told by the defendant that the transaction was to be a gift? A. No." 26 Mr Lee confirmed early in the cross-examination that he was first asked to recollect the events surrounding the transaction in about August 2005, and that the only sources he had for the preparation of his affidavit was his own recollection and his file. He said that his legal practice was fifty or sixty percent conveyancing, in the course of which he would do something in the order of 150 conveyances a year. He agreed he did not recollect the exact words that were used at the meeting on 13 August 2002, but said that he recollected the intent of what was said. 27 Mr Lee agreed that he had a practice of the way he explained contracts to clients, involving taking them through the front coversheet first, and then other important written terms of the contract and attachments like the zoning certificate. 28 Notwithstanding his earlier answer that he had relied only upon his recollection and his note in preparing his affidavit, he then gave evidence: "Q. Can I suggest to you that you have relied upon your practice in preparing your affidavit? A. No, I have relied on my practice, but I have also relied on my notes and my recollection at the time." 29 He stated that he recollected the attendance, "because it was an unusual one to be done at home." 30 He gave evidence that he could still recall some of the words he used. He was then challenged about that answer: "Q. Put it in direct speech - what do you have an independent recollection of saying to him? A. I recall saying to him, "I suggest to you that you obtain independent legal advice." And I also recall saying to him that "you are transferring the whole of the property to John for $300,000." And that "John can throw you out if you have a fight." Q. I noted that when you gave that evidence you were looking towards the letter which has been tendered in evidence; do you agree with that? A. I was just glancing at it, yes. … Q. Can I suggest to you - and in doing this I am not suggesting that you are deliberately fabricating something - but I am suggesting to you that you are reconstructing what occurred by reference to the note? A. I am to a certain degree, I agree. Q. And that you do not have an independent recollection of the words which were used, but rather what you are doing is, by reference to the note, you are doing the best you can to put them into direct speech? A. No, I still recall some of those words I used." 31 Mr Lee confirmed that before he came to the house he was not told that the Father had a hearing problem, or that he had a limited ability to read English, or that this was a transaction for which no consideration would be paid. The evidence continued: "Q. Can I suggest to you that, if that had been said to you, you would have taken greater steps to suggest to the plaintiff that he should obtain independent advice than merely saying to him, "You should get independent advice." Do you agree with that or not? A. No, I'd agree with that. Q. And the reason for that is that you would have appreciated that this was not a sale for a full consideration, but a gift? A. Yes. Q. You would also have been concerned, as the solicitor for the prospective beneficiary of the gift, that your client was sitting right next to his father at the time that this transaction was proceeding, wouldn't you? A. I would have been - yes, I would have." 32 Mr Lee confirmed that when he was acting for a donor it was better to have the client come to the office where there is a greater level of formality, and that one of the reasons for that is that the office setting has a greater capacity to bring home to them what they are doing. Mr Lee agreed that, when he was acting for a donee, it was in the client's interest that there not be a subsequent fight, and that it was less than desirable for the transaction documents to be signed in an informal setting. He agreed that, if he had known that this transaction was a gift, he would have suggested to his own client that it was in his interests for the Father to seek independent advice.

The Trial Judge's Findings 33 The trial judge found (at [18]) that at that time the transfer documents were signed the Father "… was then 79 years old. [The Son] knew that his father had difficulty with the English language and that he was partially deaf. [The Son] knew that his father trusted him. In particular, [the Son] knew that his father was prepared to do whatever he asked him to do in relation to the property and he knew that his father was relying upon him to accurately convey to Mr Lee the terms of any agreement that had been reached between them as to how the title should be held." 34 The ultimate conclusion reached by the trial judge at [51]-[53] was as follows: "I find that [the Father] was under a special disability in dealing with his son. I find that the relationship between them was such that [the Son] had such influence over his father that [the Father's] decision to sign the documents without taking independent advice, without having them read to him and without explanation was not voluntary but was overborne by [the Son's] instruction to his father to sign the documents. His decision to do so did not arise from an independent and well-understood act on his part. [The Son] cannot rely on the transfer unless he satisfies the court that he took no advantage of his father. He has not done so. I also find that in October 2002, the relationship between [the Father] and [the Son] was such that [the Son] was in a superior position to his father. He was aware that his father trusted him and that that trust was such that his father would do anything he asked him to do with respect to the property. I find that [the Son] made unconscientious use of his superior position to the detriment of [the Father]. I find that [the Father] was in a special situation of disadvantage. He was partially deaf following his heart by-pass operation to the knowledge of [the Son] and he had difficulty reading English, again to the knowledge of [the Son]. He placed his complete trust in his son. I find that [the Son] unconscientiously took advantage of that situation by calling on his father to sign the documents. In arriving at this conclusion, I do not overlook the fact that [the Father] had commercial experience. He had bought and sold realty previously and had instructed solicitors with respect to those conveyances. But his partial deafness and difficulty in reading the English language led him to place complete trust in his son and, so doing, he was in such a disadvantageous position as made it unconscionable for [the Son] to rely on that trust in asking his father to sign the documents without them being read to him or explained to him." 35 In reaching these conclusions the trial judge placed some reliance on the circumstances in which the dispute between the Father and the Son first arose. The Father had a triple by-pass operation in October 2004, and when he returned from hospital to the farm there was a disagreement between him and the Son about $64,000 that the Son had withdrawn from the Father's bank account during the Father's absence. There was another argument about $100,000 that the Father had had in cash in his wardrobe, that the Son took. The Son later returned both these amounts. However, these disputes about money led to the Son telling the Father that the property was not his. The Father then asked his daughter to see a solicitor and find out the correct situation. 36 The trial judge considered the evidence of the Father, the Son, and the Father's wife and daughter concerning these events, and noted that there were discrepancies between them, but concluded that the Father reacted to the statement by his Son. He found that the reaction of the Father "was one of surprise, inconsistent with knowledge that he had transferred the entirety of the property to his son". 37 In the course of his reasoning the trial judge did not accept Mr Lee's evidence. His reasons at [37] were: "Mr Lee said he relied upon the only file note he had to refresh his memory but he said he had an independent recollection of what took place. I doubt that that was so. Mr Lee had an extensive conveyancing practice with approximately 150 conveyances a year. In the three year period between the event and the time he was asked to recall what had happened, he conducted many conveyances. He had a set routine and he followed that routine on this occasion. I have no doubt that Mr Lee was sincere in the evidence he gave, but I put it down to reconstruction on his part." 38 His non-acceptance of Mr Lee's evidence led him to remark, at [48]: "If Mr Lee had, as he had said, explained to [the Father] that the documents he was asked to sign transferred the entirety of the property to his son, he would not have reacted in the way he did when his son told him he owned the farm 100%."

Grounds of Appeal 39 The substance of the appellant's contention on the appeal is that the trial judge ought not have rejected Mr Lee's evidence. The point is put both by saying that the conclusion of the trial judge is demonstrably wrong, and alternatively that the trial judge gave inadequate reasons for that conclusion. 40 While there were also grounds of appeal that the trial judge was wrong in finding that the Father was under a special disability in dealing with the Son, and in finding that the Son was in a superior position to the Father, and had made unconscientious use of that superior position, each of those grounds depended, as the case was argued, upon the judge's conclusion concerning them having been infected by what was said to be his incorrect rejection of the evidence of Mr Lee.

Principles for Reversing Demeanour - Affected Factual Findings 41 The decision of the trial judge concerning Mr Lee's evidence is one that would inevitably have been affected to some extent by the trial judge's impression of Mr Lee as he gave evidence. 42 An appeal against a factual finding based in part on demeanour must be conducted in accordance with the principles identified in the majority judgment in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [21]-[31]. Thus, while it is by way of rehearing, it must be "a real review of the trial, and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons" (at [25]), though conducted recognising the advantages that a trial judge inevitably must have over an appeal court that sees only a transcript of evidence. An appeal court can be satisfied that a trial judge's credibility-based finding is incorrect if that finding is contrary to "incontrovertible facts or uncontested testimony" (para [28]). Further, "In some, quite rare, cases although the facts fall short of being 'incontrovertible', an appellate conclusion may be reached that the decision at trial is 'glaringly improbable' or 'contrary to compelling inferences' in the case." (at [29])

Incorrect Rejection of Mr Lee's Evidence? 43 Mr Kerr, counsel for the Son, submits that the judge's decision concerning Mr Lee's evidence is flawed by the judge's failure to refer to certain evidence of the Father. The Father gave repeated evidence that had a common theme that Mr Lee had not talked to him. The Father said that he had been in the same room as Mr Lee and the Son for half an hour, possibly three-quarters of an hour, during the whole of which time Mr Lee did not speak to him. Examples of this theme are: "He no speak to me. I remember he no speak to me. He walked in, he not friendly when he walked in. … Q. Didn't Mr Lee tell you about each of those documents before you signed them? A. Never mentioned a word, just sign, I signed. Never say a word. He talked to my son, never talked to me. I don't know what they talk. We were six or seven feet away. I can't hear what he talk." 44 Mr Kerr submits that this evidence is highly improbable, yet is not referred to by the trial judge. There are several remarks to make about that submission. First, it is correct that the evidence was not referred to by the trial judge. Second, I cannot be confident, from the transcript, what shade of meaning the Father was intending to convey by saying that Mr Lee did not talk to him. The remarks might possibly have been intended to mean that it was the Son, not the Father, who was the focus of Mr Lee's attention. If that was the intended shade of meaning (a matter that the trial judge would be in a better position to decide than I am) the Father's evidence that Mr Lee did not talk to him is not as improbable as it would be if it were taken literally. In circumstances where the Father was not Mr Lee's client (indeed, the contract of sale that was executed identified Reid & Reid as the purchaser's solicitor, and the vendor as "acting for self") it was hardly Mr Lee's task to direct his remarks to the Father. Third, and more importantly, even if this evidence is improbable it does not involve pointing to evidence of incontrovertible facts or uncontested testimony that shows that the judge's failure to accept Mr Lee's evidence was wrong. Nor is it the type of evidence that shows that the decision at trial is glaringly improbable or contrary to compelling inferences. Thus, I cannot see how it provides a basis for concluding that the trial judge's conclusion concerning Mr Lee's evidence was wrong. 45 Mr Kerr also pointed out that the Father made repeated admissions of having a bad memory. However, it is hard to see how that evidence advances Mr Kerr's ultimate submission, when the trial judge did not base his conclusions upon any explicit acceptance of evidence of the Father concerning the events on the evening the documents were executed. There was ample evidence contained in admissions by the Son of the dependence of the Father on the Son in business matters. As well as the admissions on the pleadings (para [11] above), the Son gave evidence to the following effect: · In 1992, when a dispute arose between the Father and Son on one hand, and a neighbour called Clark on the other, it was the Son who retained a solicitor to act on behalf of the Father and Son in the Land and Environment Court, gave that solicitor instructions, received correspondence from the solicitor and was generally the contact point with the solicitor, and that the Father relied on the Son for the purpose of making value judgements about that litigation. · He was aware his Father trusted him. · He knew that his Father relied upon him generally in relation to his affairs. · He accepted his Father had a limited ability to read English. · "… by the 1990s you were aware that he was relying upon you to accurately inform him as to those types of matters, by which I mean litigation, surveying and other types of matters." · He accepted that the first time the topic of transferring title to the land was raised between Father and Son in 2002 was when the Son suggested to the Father that the farm be signed back to him "like it was before". (Evidence of the Son, to the effect that the Father had later changed his mind and decided to transfer the whole title, was rejected by the trial judge.) · It was the Son who gave all of the instructions to Mr Lee, who got the valuation and paid for it. · "Q. You knew that he was relying upon you to accurately convey to that solicitor the terms of any agreement that you had reached with him as to how the title should be held? A. Yes. Q. You knew that your father would be unable to read any documents which the solicitor brought for him to sign, do you agree with that? A. Yes." · He accepted (eventually) that at the time his father had a hearing problem. 46 There is a slight error in the judge's conclusions, when he said that in October 2002 the Father "was partially deaf following his heart by-pass operation to the knowledge of [the Son]". The error is that the heart by-pass operation did not occur until October 2004. However, that error is inconsequential, when the Son admitted that in October 2002 he was aware that his father had a hearing problem. 47 It cannot be doubted that, if the trial judge had accepted Mr Lee's evidence that that would have made the task of the Son in the litigation somewhat less difficult. However I doubt that, even if Mr Lee's evidence had been accepted, that would have been sufficient to rebut the presumption of undue influence that otherwise arose. Acceptance of Mr Lee's evidence would involve accepting that the Father said that he understood that he was transferring the whole of the property to the Son, and did not want independent legal advice. That would still leave open the question of whether the Father's expressed desire to transfer the whole of the property to the Son without receiving any independent legal advice was the product of his own unconstrained volition, rather than of the undue influence of the Son. However, it is not necessary to express a final view about that matter. 48 The essence of the trial judge's reasons for rejecting Mr Lee's evidence was not that it was outweighed by other evidence. Rather, it was that the trial judge simply did not believe what Mr Lee had to say. 49 Sometimes, when a trial judge disbelieves evidence of a witness, it is as a result of considering other evidence that show that certain facts are clearly correct, or are more likely to be correct than the witness's evidence, in the light of which the witness's evidence could not be correct. There are other occasions, however, when the reaction of a judge to some evidence, considering that evidence just by itself, is in substance "I have heard the evidence you give, but I have no confidence that what you are saying is really right". In the present case, it was the latter that was the trial judge's view concerning Mr Lee's evidence. Whether a Judge actually believes evidence that he or she hears is fundamental to whether that evidence proves the facts that it relates. As Dixon J said in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361: "… when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality." 50 Often, for a trial judge to take the view that he or she cannot accept a witness's evidence depends to some extent upon a witness' demeanour in giving evidence. In the present case, even from the transcript one can see ample ground for the trial judge having taken that view of Mr Lee's evidence. Even before the cross-examination started, the extraordinary improvement between Mr Lee's affidavit evidence and his oral evidence, would make an experienced trial judge pause. The practice of the Equity Division is to require evidence in chief to be given by affidavit well in advance of the hearing. Inspection of the file shows that the usual course was followed in the present case, with directions being given on 3 May 2005 for the defendant to file and serve his affidavits by 26 July 2005. It was clear from the pleadings (which closed before Mr Lee's affidavit was sworn) that there were issues about the following allegations in the pleading: "10. At the time the contract, deed of conveyance and any other documents necessary to effect the transfer of the property were executed the defendant knew: (a) the plaintiff believed that the documents proffered to him for execution gave effect to the antecedent agreement or understanding between the parties whereby the plaintiff would transfer to the defendant the one-half interest as tenant in common in the property; (b) that no explanation of the effect of the documents had been given to the plaintiff; … (d) the plaintiff was unable to read the documents; (e) the plaintiff had not received any independent legal advice in relation to the documents; and (f) the plaintiff was at a material disadvantage vis a vis the defendant. 11. In the premises the execution of the documents and the subsequent transfer of the property from the plaintiff to the defendant was procured by the unconscionable conduct of the defendant. 12. Further and in the alternative at all material times by reason of the matters pleaded in paragraph 1, the defendant stood in a relationship of influence over the plaintiff. 13. The execution of the documents conveying the property to the defendant and the subsequent transfer of the property were procured by the undue influence of the defendant over the plaintiff." 51 The supplementary oral evidence that Mr Lee gave was clearly material to those disputed issues. Unless there is some explanation as to why it occurred (which there was not in the present case) an experienced trial judge is likely to treat with caution evidence that is clearly material, that should have been provided in affidavits, but which emerges only orally in the course of the trial. 52 There were significant concessions obtained from Mr Lee in cross-examination - in particular, that he had relied in part on his practice, that to a certain degree he was reconstructing, and that he had not been given relevant facts concerning both the transaction and the Father. Those concessions provided a further basis on which a trial judge could have been justified in taking the view that, although Mr Lee said sincerely that he had a recollection, the trial judge did not believe him. 53 Approaching the matter from the transcript, I am certainly not in a position to say that the trial judge was wrong in taking that view of Mr Lee's evidence.

Inadequate Reasons? 54 In the course of his judgment the trial judge (at [23]-[24]) gave a précis of the evidence that Mr Lee gave in chief. That précis does not seem to me to have any material omission. The trial judge adverted specifically to the fact that Mr Lee said that he had a recollection of the events. In circumstances where the judge did not accept that Mr Lee had any such recollection at all, there was no need to set out the detail of the matters that Mr Lee said he recollected. Thus, it seems to me that the reasons of the trial judge meet the first of the criteria for adequate judge's reasons that were laid down by Meagher JA in Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 443, namely that "a judge should refer to relevant evidence". 55 The next criterion there laid down by Meagher JA is that "a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached". Insofar as the evidence of Mr Lee is concerned, it seems to me that the trial judge has done that - he has said he does not accept Mr Lee's evidence about having a recollection. 56 The third of the criteria laid down by Meagher JA is (so far as here relevant) that "a judge should provide reasons for making the relevant findings of fact (and conclusions) …" 57 In the present case, the trial judge adequately conveyed his reason for not accepting Mr Lee's evidence. It was not a complex reason: it was simply that, having heard Mr Lee, he had no confidence that what Mr Lee said was truly based on recollection. When that was the state of the judge's mind, no great elaboration is either possible, or necessary. The trial judge gave adequate reasons. 58 That such a statement of reasons is adequate is confirmed by Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 273-4, where Mahoney JA said: "The weight which a judge will give to the evidence of a witness will often be not capable of rationalisation beyond the statement: having heard him, I am not satisfied that I should accept what he says … …A fact is found in a particular case if the judge is satisfied that it is so. In many matters … whether a judge is so satisfied in the sense required by Briginshaw v Briginshaw (1938) 60 CLR 336, may depend upon matters subjective to him as well as upon matters common to judges. I do not mean by this that decisions are, or are to be, made upon the basis of matters essentially idiosyncratic to the particular judge. The determination of facts is assumed to be objective. But it would be to misunderstand the basis of a decision, and in particular decisions in matters of assessment, weight and the like, to assume that decisions can always, or perhaps ordinarily, be justified by objective rather than subjective considerations." 59 Similarly in Soulemezis at 280 McHugh JA said: "Where the resolution of the case depends entirely on credibility, it is probably enough that the judge has said that he believed one witness in preference to another; it is not necessary 'for him to go further and say, for example, that the reason was based on demeanour': Connell v Auckland City Council [1977] 1 NZLR 630 at 632-633 per Chilwell J. The position will usually be different if other evidence and probabilities are involved."

1. Appeal dismissed with costs. 61 BELL JA: I agree with Campbell JA. 62 HANDLEY AJA: I agree with Campbell JA. **********

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