When judgments are published on the internet, they are published with a section, supposedly for indexing purposes, called “catchwords.” The cognoscenti have been having a bit of a chuckle over the catchwords to Gladys Hargraves v Susan Eveston [2018] NSWSC 505, a judgment by Justice Hamill:
CIVIL LAW – unpleasant litigation – contract dispute – loans from mother to daughter – internecine family dispute – where loans formalised by deeds – whether terms of deeds varied by subsequent conversation between parties – dispute as to whether conversation occurred – where neither party presents as a witness of credit – financial shenanigans – palpable personal animosity – dark looks across the public gallery – tsk-tsking – objectively established chronology – not satisfied conversation occurred.
The case was about a loan for $1.7 million from Gladys to Susan. There was a written agreement documenting this loan. Susan did not dispute that she had to repay it, but claimed that as a result of a conversation with her mother in September 2016 she did not have to repay it until another family dispute (in which she and her husband claimed to be owed a similar amount by a family company) was resolved. This was the conversation which Justice Hamill was not satisfied occurred – basically because the first mention of it by Susan was very late in the piece.
There was some colourful detail because Susan was forced to admit in cross examination that she had stolen some money from a family company (she said that she had worked in family companies for some years but was not paid at a level commensurate with her responsibilies). Maybe this was the stuff which elicited the “tsk-tsking.” Otherwise it wasn’t really a very complicated or legally interesting case, apart perhaps for the considerable wealth of the family involved.
Meanwhile, a more humble family has been slugging out before Justice Robb the question of who owned 14 Prout Street Cabramatta. His judgment is Lay v Pech [2018] NSWSC 460.
Maybe there was less eye-rolling and tsk-tsking because, as his Honour observed, the parties were all of Cambodian background. This was relevant on at least one parties’ case because of the obligation of a son to look after his mother according to traditional Cambodian values.
Ms Lay sued her son, Poly Pech, for orders that she was the beneficial owner of a house which was legally in Pech’s name. The legal owner of the property at the time of its purchase in 2010 was Mr Tai, her then-de facto, who joined Ms Lay as plaintiff.
Ms Lay and Mr Tai said that Mr Tai had bought the property in 2010 because Ms Lay lacked an income which would enable her to obtain a mortgage. Later, in 2015, it was transferred to Mr Pech. Ms Lay and Mr Tai said that this was part of a de facto property settlement between them, but that the intent of the transfer was that Ms Lay become the beneficial owner and not Mr Pech.
Mr Pech said that the property had always been his, and that it had first been purchased in Mr Tai’s name because Mr Pech had a bad credit rating, that Pech had provided the initial deposit, and that payments made by his mother or Mr Tai were explicable as rent paid to him. The transfer to Mr Pech in 2015 was not part of a de facto settlement between his mother and Mr Tai, but rather because he was by then in a position to obtain a mortgage.
Mr Pech faced at least two difficulties. The first was that he said he was earning about $50,000 a year at the time the property was purchased, whereas for a number of years his PAYG summaries and tax returns only referred to an income of $20,000. This, Justice Robb said, did not reflect well on his credit (ie, his believability). It probably also means that he was substantially paid in cash. The second (and this is my interpretation) was that even on Mr Pech’s case, mortgage payments made by Mr Pech were made by him to his mother who was then the person responsible for paying these into the bank which turned up as amounts deposited in NSW (for much of the time Mr Tai was away working in Queensland). This meant that when Justice Robb went to analyse the banking records, he only gave Mr Pech credit for what was actually banked by Ms Lay. Is it possible that Mr Pech paid his mother more than she banked? Justice Robb does not appear to allow for that possibility. Maybe she wasn’t asked that.
That may be because his Honour had other reasons for favouring Ms Lay’s and Mr Tai’s account, including patterns of payment and expenditure on renovations which Robb J found more consistent with Ms Lai being the intended beneficial owner, and what his honour considered to be exaggerations in Pech’s account of his involvement in undertaking renovation work.
But Ms Lay herself also had a bit of a problem, which is that (as far as I can amount) she had been receiving Centrelink payments (as an invalid pensioner) on the basis that she was a single person for the period of her de facto relationship with Mr Tai, when every indication is that his income would, if the truth were know to Centrelink, wholly or very substantially preclude her receiving such payments. She may also have been receiving rental assistance in relation to her occupation of a property which she now says she was the true owner of all along! (Correction: I initially wrote “all along” but actually that was an issue which she and Robb J both danced around and away from probably because of this. But it still doesn’t seem as though she was ever actually paying rent.)
Ms Lay’s status as a Centrelink recipient is probably why it appears to have been common ground that she was never the source of monies paid off on the mortgage, on the assumption that her living expenses fully accounted for her Centrelink income. Indeed it appears that Mr Tai subsidised her living costs.
It’s obviously a murky tale. I wasn’t there at the trial but I get the distinct feeling that the entire story has not been told on either side.
Pech made a last-ditch submission that if the judge found for Ms Lay, he should still decline to make an order in her favour because of the illegality of her conduct. Justice Robb rejected this argument, on the basis that the illegality was not sufficiently bound up with the reason for the equitable ownership that she now claimed.
Further, as Robb J put it (at [63]):
Mr Pech went so far as to submit that, if his defence of illegality was not accepted by the Court, the Court should not grant the relief sought by the plaintiffs without imposing a condition that Ms Lay first make a disclosure to Centrelink, and then pay whatever amounts are required by Centrelink to remedy the consequences of her unlawful conduct. While that may be a proper course for the Court to take in an appropriate case, it may be observed that this was a very aggressive submission for Mr Pech to make against his mother.
I’m a bit surprised that Robb J found “aggression” in the context of such litigation, where, incidentally, Ms Lay’s lawyer had effectively pinged Pech for tax evasion, to be at all remarkable. I expect there was a fair bit of antagonism on both sides. Maybe (too many “maybe”s in this post, I know) what his Honour meant was that it was a vindictive submission: making his mother pay Centrelink back would not advance Pech’s own position in the slightest.
Anyway, with a lot of giving Ms Lay the benefit of the doubt and declining to draw in my opinion almost inescapable conclusions along with a lot of dodging around what the position was for the almost 5 years up to the date of the transfer to Mr Pech when Ms Lay was almost certainly receiving rent assistance in relation to claimed rent paid to Mr Tai, his Honour declined to impose such a condition. He didn’t even refer the papers.
Stumbling on melons 