Kais v Turvey (1994) 11 WAR 357

1 TEMPLEMAN J: The plaintiff, Mrs Wendy Ellen Thornett, who is now 40 years of age, is the widow of Mr Lyall Edward Thornett who died on 2 June 1999, apparently from cancer contracted while working in the mining industry.

2 The plaintiff had herself worked in the mining industry for some 10 years before her marriage, as a dump truck driver. The plaintiff married her late husband, who had been her boss, as she put it, some 10 months before his death.

3 The plaintiff's late husband received (on the plaintiff's evidence) some $285,000 by way of compensation for his illness. This was deposited in their joint bank account on or shortly before 17 February 1999.

4 On 18 February, the plaintiff paid $60,000 out of the joint account to the defendant, Mr Garry John Williams. The defendant is aged 50 years. He has been employed by Wesfarmers CSBP as a maintenance planner. It is his fifteenth year with that company. The plaintiff claims she made the payment to the defendant, in effect, to purchase a one undivided half share as a tenant in common with him of his property at 2 Serpentine Way, Stakehill, Mandurah.

5 The defendant denies that there was any such agreement. He contends that the payment was a gift, made by the plaintiff in contemplation of a shared life together, following the death of her then terminally ill husband.

6 In her statement of claim the plaintiff seeks a declaration that the defendant holds the property upon trust for her "as to a one half interest ... alternatively in such shares as the Court shall determine". However, at trial, the plaintiff pursued an alternative claim: the repayment of $60,000 as money had and received, together with interest on that sum.

7 It is not necessary to refer to other claims pleaded in the statement of claim. That is because counsel for the plaintiff informed me that those claims had been settled.

8 It is common ground that the plaintiff and the defendant met by chance at the Sandy Cove Tavern, South Yunderup in December 1998. The plaintiff had then been married for some three months. She and her friend were at the tavern at the end of a day on which the plaintiff's husband had undergone a successful operation.

9 It is also common ground that the defendant gave the plaintiff his telephone number and that she called him a few days later. Shortly after that, the plaintiff visited the defendant at his property.

10 On the plaintiff's evidence that was the start of a friendship, which soured in about July 1999 when the defendant "started getting possessive" and wanted to enter into a sexual relationship with her.

11 The plaintiff says that during the friendship, she invested $60,000 of her husband's compensation money by purchasing a one-half share in the defendant's property. The defendant's account is quite different. He says that he and the plaintiff commenced a sexual relationship on her second visit to his property: a relationship which he hoped would lead to marriage. According to the defendant the plaintiff made a gift to him of $60,000:

" ... to do with what I liked, as long as I put in a pool, made my bedroom twice as big and put in a spa. There was never any mention of her wanting the money back."

12 That statement is not taken from the defendant's Defence which consists only of admissions and non-admissions: it does not plead a positive case. The statement is taken from an affidavit sworn by the defendant in opposition to the plaintiff's summary judgment application. It was accepted by counsel for the plaintiff that the defendant's affidavit disclosed his true defence. As the defendant appears not to have had any legal representation, I proceeded on that somewhat informal basis.

13 The plaintiff gave evidence in support of her claim. The defendant cross-examined the plaintiff and then gave evidence on his own account. He was cross-examined in turn by counsel for the plaintiff. There were no other witnesses.

14 I have to decide this case on the balance of probabilities. The principal issue is the parties' intention when the plaintiff made the payment of $60,000 to the defendant on 17 February 1999.

15 In her statement of claim, the plaintiff pleads as follows:

"2. On the 17th February 1999 in consideration of the payment by the Plaintiff to the Defendant in the sum of $60,000 the Defendant agreed to hold a one half undivided share in the land as tenants in common with the Plaintiff.

PARTICULARS

a) The Defendant paid to the Plaintiff on 17th of February 1999 the sum of $60,000 and the Plaintiff banked the same into his Home Building Society account on 18th of February 1999 in consideration of him agreeing to hold a one undivided half share as tenants in common in the land for the Plaintiff.

b) The parties thereafter agreed that he would provide security for the Plaintiff by making out a Will leaving the land to her.

c) It was further agreed between the parties that the Plaintiff would live on the land with the Defendant as man and wife and the Plaintiff would contribute to their joint living expenses.

d) Pursuant to the above agreement the Plaintiff moved onto the land and lived with the Defendant from 21 of June 1999 until 27 of August 1999."

16 The plaintiff's evidence was that about two weeks before she made the payment, she was trying to decide what to do with $60,000 out of her husband's compensation which, she said, was her money to do with as she wanted.

17 The plaintiff said her husband was "a really big believer in land" and the plaintiff thought that was the way to go as well.

18 The plaintiff said she had some discussion with the defendant who had gone through a divorce. The plaintiff asked the defendant if he had had the property valued: he said yes, at $210,000. He had a mortgage of about $150,000 which meant that his equity was $60,000. The plaintiff went on to say, however, that the defendant had bought the land for $119,000 and that to buy half the land was $60,000. She said the conversation "was basically buying half the property".

19 The plaintiff said also that the defendant told her that when the freeway went through, the land would be worth "a phenomenal amount of money". The reference to the freeway is to the planned extension southwards of the Kwinana freeway.

20 According to the plaintiff, the defendant said if she paid him $60,000 she would earn no interest for five years but that after five years, when the freeway went through, the value of the property would rise to $340,000 and the plaintiff would double her money.

21 The defendant then went on to say (on the plaintiff's evidence) that if the property was sold before the end of five years the plaintiff would simply get her $60,000 back. If the property was sold after an interval of five years, she would have a one half share in the proceeds.

22 The plaintiff's evidence does not, therefore, accord with particular 2(a) of her claim. As to particular 2(b) above, the plaintiff said the defendant told her it would cost $2,000 to have her name put on the title and "instead of doing that, he eventually got a Will made up because I wasn't really happy about not having my name there somewhere".

23 The plaintiff gave no evidence in support of particulars 2(c) and 2(d) above. Indeed, the plaintiff asserted that she had not lived with the defendant at all: only that she had spent some periods at his property after her husband's death, to benefit from the tranquillity which it offered.

24 The defendant's evidence was that following their early meetings, he and the plaintiff had discussed their future, and specifically, where they would live together after the plaintiff's husband had died.

25 The defendant said he and the plaintiff discussed moving to Margaret River which appeared to have been a long held ambition for each of them. Then, when it became apparent that the defendant was not ready to move from his property, the plaintiff told him she would pay him $52,000 out of her husband's compensation money. That figure was the result of a rough calculation of the cost of improvements to the property which would make it a more attractive home for the plaintiff. The improvements included extending and refurnishing the bedroom, so as to remove the influence of the defendant's former wife, and installing a tennis court, swimming pool and a spa.

26 A few days after this discussion, according to the defendant, the plaintiff wrote out a cheque for $60,000 which she gave to him.

27 The defendant said he expressed his concern that he and the plaintiff hardly knew each other. The plaintiff then asked the defendant why he could not cope with a monetary gift from a woman: and that in any event, the money was "evil": the sooner it was gone the better. The plaintiff admits using that expression.

28 It is common ground that the defendant used some of the $60,000 for extending and refurnishing part of his house, and for the installation of a swimming pool and spa. He also paid $20,000 to complete the purchase of his car.

29 The defendant says that shortly after the death of the plaintiff's husband, the plaintiff announced that she and the defendant were "seeing each other", and that the plaintiff stayed with him "night and day" for about 8-10 days.

30 According to the defendant, the plaintiff asked him to marry her. He agreed: and the date was set for 6 October 1999.

31 The plaintiff denies that there was ever a sexual relationship between her and the defendant. However, she admits agreeing to marry him: but that was not until mid-September, and only in order to recover her investment, because the defendant left her no other way.

32 Viewed objectively, the plaintiff's account seems improbable. Apart from the inconsistency between the plaintiff's pleaded claim and her evidence, I find it difficult to accept that the defendant would sell a one half share in his property for $60,000, when on the plaintiff's evidence she believed it to have a value of $210,000. Indeed, it was her evidence that she wanted the property insured for more than $210,000.

33 Furthermore, I think it improbable that the plaintiff would part with $60,000 for an investment without any documentary evidence. It is true that the defendant made a Will (albeit not until 23 May 1999) by which he devised and bequeathed all his real and personal property to the plaintiff: not merely her alleged half share in the subject property. However, the Will obviously provided no security to the plaintiff because it could have been revoked at any time.

34 It seems to me far more probable that the plaintiff made the payment in the course of what she then believed would be an enduring romantic relationship. I do not accept the plaintiff's evidence that she agreed to marry the defendant only for the purpose of realising her investment. It seems quite inconsistent with an arrangement of that kind that the plaintiff would ask her step-daughter to be her matron-of-honour, as the plaintiff says she did.

35 Despite my view about the inherent improbability of the plaintiff's claim, I would find in her favour if I believed her evidence. But I do not: I believe the defendant. This case has been one in which the demeanour of the parties and their manner of giving evidence has been all-important. I do not think it possible to assess the character of the witnesses from a mere reading of the transcript. But my very strong impression from seeing the witnesses under cross-examination in the witness box, was that the defendant told the truth and the plaintiff frequently did not. I therefore accept the defendant's evidence wherever it conflicts with that given by the plaintiff.

36 In reaching that conclusion, I have taken account of three matters on which the plaintiff placed considerable reliance.

37 The first is the transcript of a tape recording of a conversation between the parties in mid-September 1999, at the defendant's property.

38 The recording was made with a video camera which the plaintiff had with her. The plaintiff says the defendant knew she was making the recording. However, I prefer the defendant's evidence that he did not know the recording had been made until after the plaintiff removed the tape from the camera and showed it to him.

39 I find that the plaintiff made the recording in the hope of obtaining some admission from the defendant that the payment of $60,000 had been an investment in the terms pleaded in her statement of claim.

40 The transcript appears to have been prepared by Verbatim Reporters. It identifies "Speaker 1" and "Speaker 2" who are obviously the plaintiff and the defendant respectively. However, the transcript contains many references to passages which are said to be indistinct. The tape was tendered in evidence and I have listened to the recording in my Chambers. It is clear that some of the indistinct passages are quite lengthy. However, the sense of the conversation is clear.

41 In cross-examination of the defendant, much was made of the fact that he had used the word "investment" several times in the course of the conversation. It is true that he did: but not in the sense used in the statement of claim.

42 I find that the conversation took place shortly after the plaintiff and the defendant had agreed that they would be married on 16 October 1999. The defendant tendered a receipt from the marriage celebrant relating to that intended ceremony. In the course of the recorded conversation, the defendant referred to those arrangements in terms of "if we get married on 16 October".

43 I find that the defendant used that expression because the plaintiff had by then changed her mind about marrying him. She had met a Mr Greg Newman, who she preferred to the defendant and of whom the defendant was extremely jealous. On 17 August, about one month before the recorded conversation took place, the defendant had entered the plaintiff's house (to which he had been given a key by the plaintiff) and had slashed the tyres on Mr Newman's car. The defendant was charged with that offence and pleaded guilty to it in the Court of Petty Sessions. Later, the plaintiff took Mr Newman, other friends and her step-daughter on holiday to Bali.

44 Thus, by the date of the recorded conversation, the relationship between the plaintiff and the defendant had soured to a very considerable extent. However, the defendant still wanted to marry the plaintiff.

45 Against that background, the plaintiff, who then wanted her money back, attempted to induce the defendant to admit that the payment of $60,000 had been by way of an investment, which should be made the subject of a written agreement. The plaintiff had pen and paper for the purposes of recording the terms of such an agreement.

46 Accepting as I do, the defendant's evidence about the manner in which the plaintiff paid him the $60,000, I find that no terms had been agreed previously. Furthermore, no terms were agreed during the course of the recorded conversation.

47 It is clear that the defendant was prepared to try to work out something in the nature of a pre-nuptial agreement, but he was at pains to point out that because much of the $60,000 had been spent, he could not repay it. He said also that when the freeway went through, the property would increase in value to such an extent that the plaintiff would gain much more than her $60,000. The following exchange then took place:

"THE DEFENDANT: Can you see what I'm getting at? Now I can't say, we get married on the 16th of October, and then the 16th of November, Wendy gets itchy feet and off she goes, and then say within 30 days, I want my 60 grand. I can't do that. It's just not possible. But if we get married on the 16th of October, and Wendy gets itchy feet on the 16th of November, if the deal says that when I sell the house, I can give her back her 60,000, that's a still a deal.

THE PLAINTIFF: But you said - -

THE DEFENDANT: ...(indistinct)... no way - -

THE PLAINTIFF: That means then it's a gift.

THE DEFENDANT: It doesn't matter if it's a fucking gift or it's a fucking loan or whatever. If we write this document out and sign it both, it's a legal thing, right? And when the time comes, if we want to split, we have got this thing in your safe and we want to go by that. Now if I - - if in 1 year's time we split, I can't sell the house to get enough to pay you. If in 5 years time we split, it's time to sell the house, I will sell it and give you your money. Can you see what I'm coming from? Do you like that idea or not? Do you understand it?"

48 In my view, it is clear from that passage that far from admitting that the plaintiff had invested the $60,000 on the terms pleaded, the defendant was attempting to formulate a proposal which would satisfy the plaintiff in the circumstances as they then were: namely that she no longer wanted to marry him.

49 It is true that the defendant referred to the $60,000 as an investment. In cross-examination he said, and I accept, that he did so because the plaintiff used that expression so repeatedly that he adopted it himself.

50 I think also that he used the term in an attempt to dissuade the plaintiff from seeking the return of her money (much of which had been spent in any event) now that the relationship had ended. In other words, if the plaintiff left her money where it was, and married him, it would prove to be a good investment in the fullness of time.

51 For those reasons, I do not think the transcript assists the plaintiff. To the contrary, it supports the defendant's case. Indeed, at one stage in the conversation, the defendant referred to the payment as a gift.

52 The second matter on which the plaintiff relies is a GIO Australia insurance policy relating to the subject property and the contents. The document shows the policy to be current from 13 May 1999 until 13 May 2000 and states the policy holders to be the defendant and "Mrs Wendy Williams". Mrs William's date of birth is given as 19 June 1961, which is the plaintiff's birth date.

53 The plaintiff's contention is that by insuring the property in their two names, the defendant acknowledged the plaintiff's interest. It is the plaintiff's evidence that the defendant insured the property in that way because she asked him to do so.

54 The plaintiff produced the policy at the trial and gave an unconvincing account of the way in which it came into her possession. She said it had been in one of her files which she had had out at the defendant's house. The plaintiff said she had most probably put the document in her file "for a copy".

55 It was the defendant's evidence that he knew nothing of the addition of the plaintiff's name to the policy. He said he discovered that had been done only after he made a claim in respect of a washing machine and received a cheque from the insurance company made out to him and the plaintiff.

56 I believe the defendant. Although the plaintiff volunteered the information that she had had nothing to do with the insurance company I find that it was she who had her name added to the policy and that she did so sometime before 13 May 2000 when she thought she and the defendant would be married.

57 I accept the defendant's evidence that the plaintiff had a key to his property and had access to the house and to the defendant's papers. This gave the plaintiff the opportunity to locate the policy and deal with the insurance company as she did.

58 The third matter on which the plaintiff relies is an open letter dated 22 September 2000 which the defendant wrote to the plaintiff's solicitor. It is in these terms:

"In regards to the above mentioned case, I would be willing to settle out of court, being that the out-of-court settlement payment sought is of a reasonable bottom line amount and this should be before the set date of the trial."

59 The plaintiff would have me draw the inference that the letter constituted an admission by the defendant that he had no defence. I do not accept that to be so. It is to be noted the letter refers only to "a reasonable bottom line amount", which has not been quantified.

60 In cross-examination the defendant said he offered to settle because he did not want to go to court. Given that the defendant was unrepresented, and given the history of his relationship with the plaintiff, I find that evidence entirely credible. In any event, I believe the defendant's evidence about that matter.

61 In the course of the trial I heard a good deal of evidence which is irrelevant to the central issue. However, I formed the clear impression that the plaintiff was the dominant personality in the relationship. She took the defendant up and organised him in several respects. The defendant was compliant because he thought he had found a soul mate with whom he would enjoy a long term relationship. He was soon disappointed.

62 It was in the early stages of their relationship that the plaintiff made what I find to have been an impetuous and ill-considered gift of $60,000 to the defendant. The plaintiff denied that the money was paid in contemplation of marriage, and has not claimed to recover on that basis. The plaintiff's claim that the $60,000 was paid as an investment is an attempt to salvage something from the wreckage of the relationship. The claim appears to have been based, in part, on the proposal made by the defendant in the course of the recorded conversation of September 1999. But that was not the basis on which the payment was made: I repeat, it was a gift. That being so, the plaintiff's claim must be dismissed.