Tanya Tadrous v Michael Tadrous

Limitations of Memory 9 In the course of the evidence, family members were arraigned on opposite sides of the controversy. However the alignment of witnesses did not proceed strictly along family lines. Although there was some other evidence, the plaintiff was supported by her sister (Raymonda Bechara) and her father (Abboud Safar). The defendant was supported by Charlie's sister (Caroline Kostamo), the plaintiff's brother (Carl Safar) and his wife (Christina Safar). I say "supported" in the sense that each gave evidence of statements made that were consistent with the existence, or non-existence, as the case may be, of a legal obligation owed by the defendant to Charlie and the plaintiff. 10 There was another singular feature of the evidence of most of the witnesses. Many of them insisted that they had a perfect, but uncorroborated, recollection of conversations with other family members, occurring approximately 10 years ago, on a topic in which they had no personal or financial interest at the time. Some of them were insistent to the point of implausibility. The witness who was least definite, more prepared to acknowledge the limitations of memory, and therefore more credible in a general sense, was the plaintiff. 11 A significant factor in assessing the veracity of most of the testimony, is that this litigation has become a family dispute. Family members have adopted entrenched positions for and against the widowed plaintiff. There may or may not be complex factors influencing the evidence and the attitudes of some of the witnesses. Some attempt was made during the hearing to introduce evidence that one protagonist was the biological father of the children of another. This was notwithstanding that the issue had not previously been the subject of any pleading, particularisation or affidavit evidence. Another attempt was made to introduce evidence that the plaintiff was in some way responsible for her husband's suicide or that the plaintiff was unfaithful and her husband depressed. I disallowed most of this evidence. It is a truism that family dynamics can be unfathomable. 12 My task is simply to make findings of fact having regard to what is more probable than not, drawing inferences from admissible evidence, and drawing a line at evidence that is remote or speculative. In doing so I have treated the accuracy of uncorroborated oral evidence of distant conversations with a natural caution. Evidence of this nature is frequently unreliable, especially in circumstances such as this, where the suicide of Charlie and the plaintiff's demands for the repayment of money from the defendant, have caused family members to take sides. Many of the factors explained by McLelland CJ in Eq in Watson v Foxman (1995) 45 NSWLR 315, on which I elaborated in Thomas v SMP International (No 4) [2010] NSWSC 984 at [90] - [91], are present in this case. But the evidence is even less reliable here because of the emotional overlay of extended family disputation. A number of the reasons for greater than usual scrutiny in these circumstances were explained in Chidiac v Maatouk [2010] NSWSC 386 at [102]. I adopt them. 13 In this case, the family witnesses may not have been directly influenced by pecuniary self-interest, but they undoubtedly felt strongly in a moral sense, one way or another, about the plaintiff's claim against her former brother-in-law. That the trigger for them recalling relevant conversations was the plaintiff's demand in June 2003, when before that date there was no particular reason to recall those conversations, compels me to scrutinise their evidence thoroughly and to constantly weigh it against the probabilities. In fact, for the reasons that I later explain, I did not regard the evidence of the supporting witnesses, on both sides, as particularly probative.

The Facts 14 The brothers Charlie and Michael were born in the early 1960s. Charlie was 18 months older than Michael. Their father fostered an obedient and supportive family. The boys were, and always remained, close. They shared much of their time and their possessions. In their adult lives however, they pursued different career paths and exhibited different skills. 15 Michael, the defendant, has worked continuously in the menswear industry since leaving school in 1981. He does not appear to have received any substantial income from his employment or from the conduct of any business in that industry. His assessable income for the years ended 30 June 1998, 1999 and 2000 was $7,901, $9,602 and $35,098 respectively. For the years ended 30 June 2003 and 2004 it was $25,017 and $17,381 respectively. No other sources of significant income, whether declared or not, were revealed by the evidence. During the period 1998-2003, he appears to have earned approximately $107,000. In the same period, the plaintiff and her husband earned approximately $1.1million. It was suggested during submissions that I could infer that an item in the tax returns of Michaz Holdings Pty Limited described as "other expenses" could account for monies available to the defendant and used by him. But this was pure speculation unassisted by any explanation by the defendant. 16 In 1989, the defendant purchased the property at William Street, Yagoona which is the subject of this claim. The purchase price was $162,000. He obtained from the Commonwealth Savings Bank a home loan in the sum of $129,000. In 1991 he pleaded guilty to a serious criminal charge in connection with a fraudulent insurance claim relating to a Porsche motor vehicle. He received a non-custodial sentence. In 1992, he travelled to Lebanon where he met and married his wife. After they returned to Australia, the defendant and his wife Nidal resided with his parents until 1994. 17 The plaintiff's husband, Charlie left school in 1979, was employed for some years by a motor mechanic at Chullora and then subsequently undertook a computer course. From 1985, he commenced employment with Bonds, working on mainframe computers at their head office. For the rest of his life, except for a brief interlude, Charlie was employed in positions which utilised his computer and technical support skills. In 1993, he commenced employment with Unilever as a technical support manager. In March 2000, he transferred to Unilever's Singapore office as Head of Technology, South East Asia. In April 2003, he committed suicide. 18 Back in 1987, Charlie had purchased a property at Jean Street, Greenacre for $75,000. There was a modest fibro dwelling on the property at the time. In 1988 he married the plaintiff. In 1997 he caused his wife to become a co-owner of the property and undertook a re-development of the site. The fibro dwelling was replaced by three new double brick dwellings, one of which became the family residence of the plaintiff while the other two were tenanted. A construction loan agreement was entered into with RAMS Mortgage Corporation Limited. The total cost of development and construction was $389,176. There is a controversy as to the extent, if at all, that the defendant assisted Charlie with the purchase and development costs of this property. 19 The interlude in Charlie's career to which I adverted was the period from about September 1988 to January 1991 when he and the defendant jointly owned an operated a menswear business known as "Michaz". For about six months during that period, Charlie worked full-time managing a shop owned by the business. For the purpose of conducting the business, the brothers caused Michaz Holdings Pty Ltd to be incorporated. The business did not suit Charlie who quickly returned to work in the information technology industry. In 1996 he resigned as director of the company. 20 The witnesses were united in describing Charlie's bookkeeping and record keeping skills as meticulous, thorough and careful. His wife, the plaintiff also had administrative and bookkeeping skills. She described herself as a bookkeeper and has been employed in various administrative roles during her career. On the other hand, the defendant did not have any aptitude for the maintenance of financial and accounting documentation and records of expenditure. Nor, I infer, did his wife, Nidal. 21 Charlie's bookkeeping and record keeping skills were utilised in respect of three different undertakings in which he and the defendant were involved together. In each of these undertakings, the defendant said that he trusted Charlie and had no reason at the time to doubt the accuracy of the records of expenditure that Charlie collated and maintained. The repeated testimony as to Charlie's care and attention to detail suggests that it is more probable than not that the records of expenditure and other financial and accounting records that he created and maintained, are reliable. Absent compelling evidence of error, I have proceeded on that basis. That was also the basis on which the defendant proceeded, at least until the controversy that has resulted in these proceedings. 22 The three undertakings in which the defendant was content to trust Charlie to maintain a record of the financial arrangements between them were first, the Michaz business that commenced in 1988; second, the redevelopment in 1997 of the Jean Street property owned by the plaintiff and Charlie; and third, the redevelopment in 2001 of the defendant's William Street property, substantially with monies contributed by the plaintiff and her husband. 23 In connection with the Michaz business, each of the defendant and Charlie made contributions to assist in the commencement of the business. It is not necessary to resolve the amounts and it may be that the defendant contributed more. In the usual way of such businesses, it was necessary for Charlie, as its primary record keeper, to account for any drawings, wages and capital contributions by himself and his brother. I am satisfied that he did so and that there has never been any dispute by the defendant about the accuracy of the records he maintained. The position is different in relation to the records maintained by Charlie of financial contributions made toward the redevelopment of the respective properties. At least it has become different since the plaintiff commenced her attempts to recover the monies in dispute from the defendant.

Jean Street, Greenacre 24 It is not necessary to make a finding as to the precise amount that the defendant contributed to the purchase and development of the Jean Street property. At best, on the defendant's case, it was $124,528. However the evidence of the contributions supposedly made by the defendant is incomplete, unpersuasive and substantially uncorroborated. It is so inherently unreliable, particularly having regard to my findings on the defendant's credibility, that I am not prepared to do any more than find that the defendant provided some financial assistance to his brother. 25 Whatever it was however, there was no monetary equivalence between the amount contributed by the defendant toward the Jean Street property and the substantial payments subsequently made by the plaintiff and her husband toward the defendant's William Street property. The latter were not intended to be a repayment of the former. They were of a different order and were made on a different basis. The defendant may have assisted Charlie by making some modest contributions toward Jean Street. However, Charlie assisted the defendant by making possible the re-development of the William Street property. He did so by becoming the defendant's banker and financier and by borrowing with his wife a substantial amount of money against the security of their own home for the defendant's benefit. 26 Some of the defendant's contributions toward Jean Street were said to have been in 1985 when the property was purchased. The defendant contended that he paid the deposit of $7,500 as well as $32,500 towards the purchase price. He said that both amounts were paid by bank cheques that he obtained. He said that Charlie "insisted that I keep certain documents that demonstrated my initial and ongoing contributions to Jean Street". Not surprisingly, given my view about his evidence, the defendant now says that unfortunately he did not do as his brother suggested. No documents were produced. Further, the solicitor's settlement statement at the time of the purchase did not indicate that any bank cheque for $32,500 had been provided by the defendant, or by anyone for that matter. The defendant acknowledged that Charlie maintained a record of expenditure in relation to the Jean Street development and that he trusted Charlie to do so thoroughly and accurately. The only document in evidence that was created by Charlie was not consistent with the defendant's contentions. 27 In contrast, the defendant said there was another unidentified spreadsheet maintained by his brother that recorded his contributions. There was no such spreadsheet in evidence. On the other hand, the positive evidence on which the defendant relied was ambiguous and insubstantial. It is not enough to support his claims. There was an envelope which the defendant says he found in his filing cabinet when preparing for this case. The envelope has markings on it consisting of handwritten notations that record dates and figures. The dates relate to 1997 and 1998 and the figures are said to total $35,919. The defendant says that they represent a reconciliation of payments made by him to Charlie. There was in fact no clear evidence of precisely what the record of payments actually related to. The defendant says that Caroline Kostamo was present with him when he carried out the reconciliation. Corroborative evidence was sought to be elicited from Mrs Kostamo but it was neither specific nor convincing. Mrs Kostamo confirmed incidentally that Charlie maintained a record of any monies that may have been contributed by the defendant. There was no such record in evidence which was consistent with the defendant's claims. 28 There were also two bank statements for an account belonging to Charlie relating to the period 1985 to 1987. The bank statements contain handwritten annotations in pencil. On each page there appear the words "Mick paid" followed by some figures. There was no evidence as to how or when the handwritten notations were placed on the documents. The defendant said that the handwriting is that of Charlie. The plaintiff did not agree. Her counsel invited me to engage in some amateur graphology by reference to cheque butts on which Charlie's handwriting was said to appear. I was unwilling to do so: cf. Jeans v Cleary [2006] NSWSC 647 at [157]. The position remains conjectural. 29 In the result, I am not satisfied that the defendant contributed $124,528. At most, I am prepared to find that the defendant provided some financial assistance to his brother. However, for the reasons that I have explained in paragraph [54] below, the precise amount does not matter. William Street, Yagoona 30 By December 1998 the plaintiff and her husband had completed the development of their property at Jean Street, Greenacre. There were now three new dwellings on the land, one of which the plaintiff's family occupied. The other two were rented. The defendant wished to undertake a similar development of his property at William Street, Yagoona. I am quite satisfied that it would have been difficult for the defendant to obtain construction finance from a commercial lender, particularly having regard to his assessed income. I am also satisfied that Charlie was prepared to help his brother. This was partly as a result of fraternal loyalty, partly in acknowledgement of the assistance that the defendant had provided in connection with the Jean Street property, and partly because it was an opportunity for the plaintiff and Charlie to acquire an investment property. 31 However the fact that Charlie's wife, the plaintiff, was now involved, added a dimension which was not present when the defendant first assisted Charlie in connection with Jean Street in 1985. She was now part of the equation, sharing with Charlie their decision making, their ownership of the Jean Street property, their borrowings and their future plans. 32 During 1999, the defendant and Charlie had numerous discussions about the defendant's aspiration to re-develop the William Street property. Many of these conversations were between each other. Some were in the presence of the plaintiff. And some were reported by Charlie to the plaintiff. I accept the plaintiff's evidence of the substance of these conversations. Naturally, I have principally relied on the evidence of the conversations in her presence. I have already explained that there was no intention to create legal relations. Nonetheless, the evidence indicated that a number of things became the subject of consensus between the plaintiff, the defendant and Charlie:

(a) First, the defendant would not have to seek or obtain construction finance from a commercial lender. This was because the plaintiff and Charlie would be his banker and would finance his development;

(b) Second, there was no mention of an interest rate payable by the defendant or the term during which funding was to be provided. This is despite the fact that the defendant knew that the plaintiff and Charlie would themselves have to borrow the funds to assist the defendant. This explains the next matter;

(c) Third, the quid pro quo for the plaintiff and Charlie was in two parts. They would get the return of their monies in due course but, it would seem, without interest. And they would have an entitlement to acquire one of the three units proposed to be constructed on the land at cost. To this end, the defendant agreed to sub-divide the land. 33 That consensus was a matter of trust. The plaintiff and Charlie had no reason to doubt the defendant's honesty and reliability in relation to the fulfilment of his promise in relation to the third matter. And all three matters formed the framework of the relationship between the plaintiff, the defendant and Charlie in relation to the re-development of the William Street property. They constituted the assumed state of affairs on the basis of which the plaintiff and Charlie then acted to their detriment. 34 I should make clear that the discussions about these matters extended over some months and were not concluded until about October 1999. The plaintiff was naturally cautious and had queried what security she and Charlie would receive. The decision to proceed appears to have crystallised in September 1999 with the offer to Charlie of a position as Unilever 's Head of Technology, South East Asia, based in Singapore. The plaintiff says that there was also an agreement about the payment of rent by the defendant for occupation of the Jean Street property while the defendant's construction was underway and the plaintiff's family was in Singapore. I am not satisfied about this. The evidence was unconvincing and opaque and the probabilities do not necessarily favour it. 35 I am satisfied however that by October 1999, when the plaintiff and Charlie had finally agreed to finance the development of the William Street property, they did so on the basis of the defendant's statement to them that "when we finish, you will have every cent back plus a property at cost."

Quantification of Payments 36 During 2000, the defendant finalised the plans for his re-development and obtained all necessary consents. In December the plaintiff and Charlie obtained approval to increase the level of their borrowings secured against their Jean Street property. Their lender was RAMS Mortgage Corporation Limited. Between February 2001 and November 2002, the plaintiff and Charlie drew down $705,920 against their RAMS facility. All of the monies were deposited into their existing Commonwealth Bank Account No 9156. This account then became the project account for the William Street development. In July 2001, the defendant was made a signatory and became authorised to operate this account. This was necessary as the defendant was supervising the construction in Sydney while the plaintiff and Charlie were in Singapore. 37 I have mentioned that the plaintiff contends that $561,360 was paid from the project account to or for the benefit of the defendant. Before the hearing commenced, the defendant had admitted approximately $300,000 of that amount. On the second day of the hearing he admitted $400,982. His evidence on this issue is unreliable. It represents no more than his own interested reconstruction after the event. It substantially depends on uncorroborated and unexplained assertion by him. 38 In contrast, the defendant acknowledged that during the construction, while funds were being provided from the project account by the plaintiff and Charlie, he did not personally maintain any record of expenditure. His own affidavit evidence was informative: 103 I cannot be sure about the exact amount I drew down from this account because the understanding that Charlie and I had was that he would keep account of what he contributed to my development … I have never been good with keeping track of figures and at that time I did not even know how to use a computer properly. I trusted Charlie in this regard. Every invoice I paid and receipt I received I gave to Charlie, including ATM receipts. On occasions I recall observing him on his computer reconciling invoices and receipts with his banking records. 119 I would always provide Charlie with copies of the invoices and receipts and withdrawal banking slips for the costs and expenses associated with the William Street development. Charlie was extremely bright and meticulous and he took care of the administration records. 39 Charlie maintained a continuous record of expenditure. He did so on a spreadsheet which he updated from time to time on his computer. Among other things, it recorded the date of each payment, the cheque number where applicable, whether the payment was by cash or EFTPOS and a description of the subject matter of the payment or the name of the payee. Importantly, it included two columns, one headed "Mick's Mny" and the other headed "Chas' Mny". There were two versions in evidence. In both documents, the amount appearing at the top of the column headed "Chas' Mny" was $561,360. Each was a business record. The defendant did not submit otherwise. Having regard to their provenance and the circumstances of their creation by Charlie, they are inherently reliable. They are also coherent. They derive added force from the unanimous evidence that Charlie was a meticulous record keeper. 40 As between the two documents, every payment between 30 March 2001 and 22 February 2003 is accounted for. The entries for 4 November 2001 to 22 January 2003 are missing on one document but are found on the other. Similarly, on the other document, the entries for 21 December 2001 to 14 May 2002 are missing but they may be found on the first document. A careful review of both documents provides an explanation of each payment made during the period to which the spreadsheets collectively relate. I feel confident in acting on them. In particular, the total appearing in the column headed "Chas' Mny" is supported arithmetically when the entries for the whole of the period are analysed. 41 The spreadsheets are far more dependable than the uncorroborated assertions of the defendant that some of the entries relate to extraneous matters. I am not prepared to act on the defendant's word alone given my views about his credibility and the evidence to which I referred in paragraph [38] above. In addition, the defendant gave evidence on this issue which I regard as reflecting poorly on him. A copy of one of the spreadsheets containing the two columns headed "Mick's Mny" and "Chas' Mny" was annexed to an affidavit of the plaintiff sworn on 24 January 2008. That document is a foundational part of the plaintiff's case. The defendant swore three affidavits after being aware of that document - on 19 November 2009, 3 November 2010 and 23 November 2010. He did not suggest in any of those affidavits that he had never before seen a spreadsheet containing those two columns. Yet in cross-examination, he said that before the proceedings commenced, he had never seen a spreadsheet in that form, namely, containing two columns separately delineating the expenditure by each of them. 42 Not only that, but the plaintiff's affidavit sworn on 1 July 2009 described the defendant and Charlie regularly working together on a spreadsheet in Charlie's computer room after the plaintiff and Charlie returned from Singapore. In her oral evidence, the plaintiff identified the spreadsheet on which they worked as being one in the same form as that which contains the separate columns recording their respective expenditure. During cross-examination, the defendant said that he and Charlie had worked from a spreadsheet in a different form that did not contain the two columns specifying their separate expenditure. He did not say this in his affidavits. I did not find this evidence plausible. On this issue, as well as many others, I regard the plaintiff's evidence as more reliable than the defendant's evidence. In a number of respects, the defendant's evidence was mistaken and erroneous, reconstructed and sometimes, I thought, untruthful. 43 There was another form of the spreadsheet in evidence. It was created for the defendant's GST purposes and had no need to specify the separate expenditure of the defendant and Charlie. But I am quite satisfied, having regard to the probabilities and the plaintiff's evidence, that the defendant was familiar with both forms. He had a direct interest in the amount of the expenditure by the plaintiff and Charlie because he knew that the substantial amounts paid by them were not a gift. He knew that he would have to repay those monies in due course. 44 A related issue is that the parties agreed that when Charlie's hard drive was inspected shortly prior to the hearing, there were 10 other versions of the spreadsheet also containing separate columns for the expenditure of both Charlie and the defendant. I do not find this surprising having regard to the progressive nature of the preparation of a document such as this and the facility with which computer generated spreadsheets may be added to or corrected. The bare fact of the existence of other versions does not detract from the probative value of the spreadsheets which were in evidence and on which the plaintiff relies. This is particularly so having regard to the matters to which I referred to in paragraphs [39] and [40] above. For those reasons I am satisfied that I should act on the basis of the figure for which the plaintiff contends, namely $561,360.

Credibility of Plaintiff 45 The plaintiff was an impressive witness. She was, in my view, truthful. Her explanation of the events in question was understandable. It reflected a sensible, even predictable approach by an intelligent and interested woman to the circumstances in which she found herself. She did not share her husband's brotherly loyalty to the defendant, but she respected her husband and trusted her brother-in-law. She knew that as a joint borrower and co-owner she would be personally exposed if the defendant did not fulfil the assurances that he gave to her and Charlie. She personally would have preferred to have security. She regarded the arrangement as an investment, which it was. I accept her evidence of the conversations, discussions and motivations during 1999 when the defendant sought assistance. The thrust of her evidence was that the discussions took place over a period of time, rather than in one event. The defendant criticised this evidence, and in particular one answer in cross-examination, but overall it was clear to me. I thought it was also honest. Further, there was no reason at all why she should have discussed the arrangement with the defendant's wife or her own brother. The cross-examination on these matters was misdirected. 46 After the death of her husband, she was understandably emotionally distressed. The behaviour, and attitude towards her, of members of the extended family may have made matters worse. She completed an affidavit for the purposes of the administration of the estate. It stated that one asset of the estate was the sum of $561,360 owing by the defendant. The fact that the asset was described as monies paid in respect of the development of townhouses in a joint venture whose terms are not known, does not reflect on the reliability of her evidence generally. On the findings I have made, there was in fact no contractual joint venture. The arrangement was relatively informal and depended on trust. The statement made in the affidavit was all that was necessary at the time. The plaintiff's priority was to obtain administration. Nor do I think that anything of substance turns on the inaccuracies and overstatement of income in a subsequent loan application form completed by her. Those matters are peripheral. Although I do not condone them, they are understandable in the circumstances that then prevailed.

Credibility of Defendant 47 It will be clear by now that I have not formed a favourable view of the defendant's evidence. I do not regard it as reliable. I do not think that it was always truthful. I cannot have any confidence in it, except where there is corroboration or where it accords with the probabilities. His assertion that Charlie owed him $300,000 prior to the re-development of his William Street property was convenient to his case, but had no basis in the objective evidence and is contrary to the probabilities. I have referred to other unsatisfactory features of his evidence when dealing with his alleged contributions to the Jean Street purchase and re-development. Where the defendant's evidence differs from the evidence of the plaintiff, I have preferred the latter. This applies with particular significance to the discussions in 1999 during which the defendant sought and obtained a commitment of financial assistance from the plaintiff and Charlie for the re-development of the William Street property. I do not accept the defendant's characterisation of that arrangement or the content of the discussions as he explained them. 48 The plaintiff invited me to make an adverse credit finding against the defendant partly because of his past conviction for making a fraudulent insurance claim. In this context, reliance was placed on the following statement by Walsh JA in Ex parte Tzioniolis re The Medical Practitioners Act (1966) 84 WN (Pt 2) (NSW) 275: …Reformations of character and of behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes it must require clear proof to show that some years later he has established himself as a different man. 49 My adverse view of the credibility of the defendant's evidence has been reached independently, having regard to my consideration of the competing evidence and the probabilities. I have not based my conclusion on any presumption that a reformation of character "is not the usual but the exceptional thing". That statement by Walsh JA was approved by the Court of Appeal in Prothonotary of the Supreme Court of New South Wales v Nikolaides [2007] NSWCA 73 at [23] and Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 at 637. But it reflects a perception of human nature that is usually invoked in the context of professional misconduct cases, where the question is whether past misconduct establishes a lack of fitness to practice at a future date. I am wary of its application in the circumstances of this case. And I have not done so. Other Witnesses 50 I have not found the evidence of the other witnesses, on both sides, helpful or probative. The evidence called on the defendant's behalf consisted largely of generalised statements attributed to Charlie acknowledging some indebtedness or obligation by him to the defendant. None of it was necessarily inconsistent with, nor clearly undermined, the plaintiff's case. Some of it was decidedly airy. All of it was infected by doubts as to its veracity and concerns as to the witness's motive. Caroline Kostamo gave vague evidence about the defendant giving Charlie amounts of cash, some of it 20 years ago in their bedroom. The evidence of George Abdullah that Charlie said he owed money to the defendant was equally vague and non-specific. The evidence of Carl and Christina Safar seemed to proceed on the basis that they would have been told if there was a "joint venture" between the defendant and Charlie. This did not advance matters. Its premise was flimsy. Christina Safar's evidence that Charlie said he owed the defendant about $300,000 "but we do not know the exact amount" lacked credibility. Mrs Safar and other witnesses such as Erdem Hussein said that Charlie said he would "look after" his brother. I have found that he did, in a considerable way, together with the plaintiff. But none of that leads to the conclusion that the borrowed sum of $561,360 was intended to be a gift by the plaintiff and Charlie to the defendant. 51 On the plaintiff's side, similar criticisms apply. The witnesses called on her behalf did not advance matters. Their evidence consisted largely of hearsay self-corroborating statements on which I have placed little or no weight. The most important witnesses were the plaintiff and the defendant. The plaintiff's evidence was not only more careful and credible but it accorded with the probabilities and the objective facts.

Equitable Remedies 52 On the facts that I have found, the defendant made a promise to the plaintiff and Charlie, knowing that they would act to their detriment in reliance on that promise by borrowing substantial monies and further encumbering the existing mortgage security over their own home. The defendant has resiled from that promise and seeks to benefit from doing so. He promised that they would "get every cent back plus a property at cost". He offered them an interest in the William Street property on favourable terms and promised to repay their investment. I have found that the amount of that investment was $561,360. 53 Without the assistance of the plaintiff and her husband, the defendant was unlikely to be able to re-develop his property. By providing the finance, they enabled him to bring about a situation where he is now the sole registered proprietor of a valuable property on which three dwellings have been constructed. For many years now, he has also derived substantial rent from two of those dwellings. The parties' joint valuation indicates that the current market value of the dwelling in which the defendant resides with his family is $800,000, assuming a sub-division. The current market value of the other two tenanted dwellings, assuming a sub-division, is $450,000 each. On the other hand, the plaintiff is out of pocket by $561,360 plus the interest incurred on that borrowing. She has also been denied the opportunity to acquire at cost one of the subsidiary dwellings on the defendant's property. There has been no sub-division. 54 I reject the contention that the payment of $561,360 represented a gift to the defendant. The plaintiff and Charlie were helping the defendant. Their assistance was considerable. The reason and origin for their assistance lay in Charlie's love and loyalty towards his brother. But Charlie and the plaintiff were in no position to make a gift of borrowed monies amounting to $561,360 and never intended to do so. The defendant knew this. Nor was there any direct relationship, or monetary equivalence, between those monies and the assistance that had been rendered by the defendant in connection with the Jean Street property. There is no claim by the defendant for credit in respect of the amount of his contribution to Jean Street, whatever it may have been. Nor is there any cross claim or set off. Nor could there realistically be, given the paucity of the evidence and the doubts about the genuineness of the defendant's claims in that regard. 55 The defendant has sought to take advantage of the situation that has arisen since his brother's death. He has acted unconscionably towards the plaintiff. He has also given evidence before me that was unreliable at best and untruthful at worst. The fact is that he induced and encouraged the plaintiff and Charlie to assist him by expending money on his property. He did so knowing that they had an expectation both of recoupment and that they would be able to acquire an interest in the property on favourable terms. It would be inequitable if he retained the benefit of that expenditure free of any obligation of recoupment. 56 In those circumstances, an equity arises in favour of the plaintiff. The remedies of constructive trust and estoppel may well be, and probably are, justified based on the principles explained and expounded in Giumelli v Giumelli (1999) 196 CLR 201 at [2] - [10]. See also Baumgartner v Baumgartner (1987) 164 CLR 137 at 146-148 and Muchinski v Dodds (1985) 160 CLR 583 at 620. However, I need not go so far. Having regard to the issues in this litigation and the current circumstances of the plaintiff and the defendant, I have concluded that there is an appropriate remedy falling short of the imposition of a trust - and falling short of an estoppel that would operate to fulfil the defendant's promise. The relief that I propose to grant will satisfy the demands of justice and operate more conveniently as between the parties. 57 In my opinion, the plaintiff's equity will be satisfied by having an equitable charge over the defendant's property to secure the sum of $561,360 together with interest on that sum. The principles which underpin the availability of an equitable charge in appropriate circumstances are broad. The remedy is not confined to any narrow category: Hewett v Court (1983) 149 CLR 639 at 645 (Gibbs CJ) and 650-1 (Murphy J). As Gummow J explained in Stephenson Nominees Pty Ltd v Official Receiver (1987) 16 FCR 536 at 554, the equitable lien or charge is "an equitable remedy created by the court, regardless of the intent of the parties, as a remedial device to protect a party against some inequitable loss". 58 In Morris v Morris [1982] 1 NSWLR 61, McLelland J referred to the wide principles that apply where the plaintiff has spent money on the defendant's property in the expectation, induced or encouraged by the defendant, that he would have some right in relation to the property. He concluded by saying at 64A: In my opinion, on the facts of this case, it would be unconscionable and inequitable that the defendant should now retain the benefit of the expenditure by the plaintiff of his money on their property free of any obligation of recoupment to him. Consequently an equity arises in favour of the plaintiff and the court must determine how in all the circumstances justice required that that equity be satisfied.

See also Henderson v Miles (No 2) [2005] NSWSC 867; 12 BPR 98200, per Young CJ in Eq; Pennie v Pennie [2010] NSWSC 565. 59 I regard the promise of a right of residence in Morris v Morris (supra) as the operative equivalent of the assurance by the defendant in this case that the plaintiff and her husband "will have every cent back plus a property at cost". Indeed, in this case, the promised right is more proprietary and the conduct of the defendant more blameworthy. On the facts that I have found, he has deliberately resiled from a promise in circumstances where he knew at the time of making the promise, that in order to assist him, and in reliance on his promise, the plaintiff and her husband would be borrowing substantial monies, incurring interest and further encumbering their own property. 60 I do not regard the application of the principle in this case as depending on the plaintiff having an existing equitable interest in the defendant's land. The principle is more flexible than that, as the facts of Morris v Morris (supra) demonstrate. In this case, as I have already found, there was no intention to enter into legal relations. There was therefore no enforceable option to purchase and no subsisting agreement to transfer one of the dwellings at cost. There was however an expectation, induced and encouraged by the defendant, that the plaintiff and her husband would acquire a proprietary interest. That is, in my view, at least sufficient.

Compound Interest 61 The plaintiff claims compound interest. This is reasonable in the circumstances. The monies made available to the defendant were drawn down by the plaintiff and her husband from a loan facility on which interest would have accrued on a compounding basis. At the other end, the defendant has, since 2003, been the recipient of the undoubted appreciation in value of the William Street property as well as the income from the rental of the two tenanted dwellings. 62 I have elsewhere referred to the fact that, as a general principle, simple interest is uncommercial and rarely adequately compensates a plaintiff for the true loss that has been suffered: Thomas v SMP (International) No 6 [2010] NSWSC 1311 at [3] - [7] citing among things Hungerfords v Walker (1988) 171 CLR 125 at 149 (Mason CJ and Wilson J). To my mind, there is something reactionary about the common law's historical preference for simple interest. 63 The equitable jurisdiction to award compound interest is however broad. It is not confined to cases of breach of fiduciary duty, let alone cases where the defendant has profited at the expense of the plaintiff. I repeat what I said in Thomas v SMP (International) No 6 (supra) at [10] - [14]. And I adopt the following statement in Talacko v Talacko [2009] VSC 579 at [25] per Kyrou J: Although the Court's equitable power to award compound interest is not confined to particular classes of case and may be exercised when appropriate in the interests of justice, the power is not at large. There must be features in each case which justify a departure from the normal rule that simple interest is awarded. 64 The features that I have explained in paragraph [61] above, make this an appropriate case for the award of compound interest. I do not do so in order to punish the defendant, but in order to give the plaintiff the most complete remedy, appropriate in the circumstances, that equity permits. 65 The plaintiff has undertaken a calculation of compound interest at a rate of 8.75% with yearly rests. Although it would have been appropriate to undertake the calculation by reference to each payment and the date on which it was made, the plaintiff has adopted a commencement date of 10 June 2003 (when she first made demand) and calculated interest on the whole sum. This approach favours the defendant. The figure on which interest has been calculated is also $120 less than I have found. This also favours the defendant. On the basis on which the plaintiff has calculated the interest, the amount for the period 10 June 2003 to 3 December 2010 is $491,504. This should be added to the principal amount of $561,360. I accept the plaintiff's calculations and regard the outcome as appropriate.

Orders 66 For the reasons that I have explained, I make the following declarations and orders:

(a) The plaintiff should have an equitable charge over the defendant's property known as 199 William Street, Yagoona, being Lot A in Deposited Plan 363734, Folio Identifier A/363734; (b) The charge should secure the sum of $1,052,864 together with interest pursuant to Section 101 of the Civil Procedure Act, 2005 until discharged;

(c) The defendant should pay the plaintiff's costs;

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