JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION : WILMS -v- WILMS [2016] WASC 396

CORAM : KENNETH MARTIN J

HEARD : 11 & 12 OCTOBER 2016

DELIVERED : 12 DECEMBER 2016

FILE NO/S : CIV 1730 of 2013

BETWEEN : HARALD WILMS

Plaintiff

AND

RENE THOMAS WILMS
First Defendant

REGISTRAR OF TITLES
Second Defendant

Catchwords:

Real property - 1997 acquisition by first defendant - Payment of deposit and acquisition costs at settlement by plaintiff - Balance of purchase price by loan secured by the first mortgage over property - Loan taken out by the first defendant (son who becomes a registered proprietor) - Repayments of principal and interest on home acquisition loan reimbursed to son by father on monthly basis - Occupancy of property by plaintiff (father) with first defendant's stepmother - Property improved by plaintiff - Extensive renovations and additions carried out without reference to son - Repayments of home loan made directly into home loan account by father from around 2012 - Twenty-five-year home loan extinguished to zero balance by funds of plaintiff in early 2013 - Father demands transfer papers be signed by son rendering him legal owner - Refusal by son and assertion by son of ownership - Caveat lodged on title by father - Redraws upon loan account by son in 2013 - Father and wife continue to occupy property - Son acknowledges life tenancy entitlement of father - But asserts ownership subject to that life interest - Son accepts responsibility for repayment of redrawn loan funds - Application to Registrar by son to remove father's caveat - Caveat remains - Assertions at trial of resulting or constructive trust favouring father's full beneficial ownership of land on basis of 1997 oral agreement with son and subsequent conduct in funding repayment of home loan to zero balance - Result plaintiff's action seeking declaration of beneficial entitlement in property refused - Declaration of plaintiff's life tenancy interest in property consensually issued

Legislation:

Nil

Result:

Plaintiff's relief refused

Category: B

Representation:

Counsel:

Plaintiff : Mr M Curwood
First Defendant : Mr F A Robertson
Second Defendant : No appearance

Solicitors:

Plaintiff : McVay Bates & Associates
First Defendant : Chris Baker & Associates
Second Defendant : No appearance

Case(s) referred to in judgment(s):

Allen v Snyder [1977] 2 NSWLR 685
Anderson v McPherson [No 2] [2012] WASC 19
Atkinson v Festic (1990) DFC 95-089
Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137
Bloch v Bloch [1981] HCA 56; (1981) 180 CLR 390
Calverley v Green [1984] HCA 81; (1984) 155 CLR 242
Crichton v Crichton [1930] HCA 14; (1930) 43 CLR 536
Crisp v Mullings [1970] EG 730
Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6; (2015) 255 CLR 62
Lloyd v Tedesco [2002] WASCA 63; (2002) 25 WAR 360
Muschinski v Dodds (1985) 160 CLR 583
Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538


TABLE OF CONTENTS

Introduction 5
Basic facts 5
Facts: home loan and repayment receipts with Bank of New Zealand 7
Facts: Harald's December 2012 caveat 9
Facts: January 2013: the residue of Rene's home loan debt to BNZ is all paid off 9
Trial issues 11
Constructive trust 13
Resulting trust 15
Harald's position 15
Rene's trial evidence 23
The 1997 telephone conversations: was it agreed there was to be a transfer of title
from Rene to Harald for Clarkside Court, once Rene's home loan was paid off? 28
Rene's property anyway? 29
Were Harald's payments in the character of rent? 33
Repercussions of findings in crucial areas 34
Legal principles: resulting trusts 35
Observations upon resulting trust principles to present facts 40
Constructive trust: legal principles 41
Express trust not pressed 42
Final note: Rene's cross-examination credibility by having had reference to
Harald's earlier exchanged witness statement 43
Orders 47

KENNETH MARTIN J:

Introduction

1 The essential issue at this trial is whether the first defendant (Rene) holds the house and land suburban property at Wanneroo of which he has been the registered proprietor since 1997, on some kind of trust for the sole beneficial entitlement of his father (Harald), the plaintiff.

Basic facts

2 Harald Wilms is currently 76 years old, having been born in Germany in 1940, then migrating to Australia in 1971 with his first wife, Sigrid.

3 Harald and Sigrid brought Rene with them to Australia. He was then aged four, being born on 2 March 1967. In 1974 or 1975, Sigrid permanently returned to West Germany, taking Rene with her.

4 In 1981 or 1982, Rene, then 14 or 15, returned to Australia to live with his father. In the meantime, Harald had commenced a relationship with a woman who ultimately became his second wife, Linda. They were married some time around 1985 (having been together for around nine years prior to that). Around that time, Rene, now an adult, ceased residing with his father.

5 Rene commenced travelling around Western Australia before relocating to New South Wales, where he lived in Sydney from 1994 until December 1999 when he returned to live in Perth.

6 The present litigation concerns a property at 24 Clarkside Court, Wanneroo, a northern suburb of Perth. Rene has been the registered proprietor of this property since 1997, when it was acquired.

7 Harald and Linda had seen this house and land property at Wanneroo in early 1997 (Clarkside Court). At that time, Harald and Linda were renting a home in another location in Wanneroo, where they had lived since about 1994. Harald and Linda wished to relocate to the new Wanneroo location. But Harald was 57 years old and, at that time and was essentially unemployed, having ceased his essentially self-employment agency relationship with a commercial business known as Santos Packaged Nuts.

8 Harald's age and his unemployed status in 1997 were negative factors as regards Linda and he then being able to obtain a home loan from a financial institution to acquire the Clarkside Court property. After speaking to a mortgage broker and others, Rene was approached by Harald - to see if he could assist in the acquisition of Clarkside Court. As I indicated, Rene was by then an adult living in Sydney. All relevant 1997 communications by Harald with Rene were conducted over the telephone from Perth between father and son, speaking at that distance.

9 There appear to have been several telephone conversations at that time between Harald and Rene. Evidence was given by each of them at trial about those phone conversations from their own perspectives and looking back, almost two decades on. There were no notes of those conversations made on either side. That series of telephone conversations in early 1997, just as between Harald and Rene I shall elaborate upon in greater detail later in the reasons.

10 In 1997, Rene was 30 years old. He was then based in Sydney and appears to have owned no significant property or assets at that time.

11 The upshot of the telephone conversations was that the Clarkside Court property was to be acquired in the name of Rene. He became registered proprietor of the property on 17 April 1997. Rene had not seen it at that point and he would not for some time. Harald and Linda were to reside there, not Rene.

12 The Clarkside Court property was purchased in 1997 for $80,000, plus stamp duty and the usual associated acquisition costs. Funds for the purchase price of Clarkside Court and related expenditure came from two main sources.

13 All the deposit moneys were provided by Harald. The amount of the deposit was initially assessed to be $8,000. Ultimately, however, a $16,000 deposit was needed and was paid by Harald. That was because the house and land were not to be owner occupied by Rene as registered proprietor. Clarkside Court was to be occupied after settlement by Harald, Linda and, as well, by Harald's mother (Rene's grandmother), Gertrude Wilms. Gertrude was elderly. She was relocating from Germany to live with Harald and Linda at Clarkside Court. (I note that at pages 350 and 360 of the trial bundle, Harald's mother's name is spelled as 'Gertrud'. However, these reasons use the spelling 'Gertrude' as it appears in Rene's witness statement of 12 October 2015.)

14 The second (and major) component of the outlaid acquisition funds in 1997 was provided by Rene. Rene applied for and obtained a home loan of $64,000 from the Bank of New Zealand (BNZ). The loan was secured by a first registered mortgage against the Clarkside Court property. Arrangements for the loan by Rene had been made for him by Harald in Perth. Rene had essentially signed the loan and first registered mortgage documents that were sent to him in Sydney from Perth. This made Rene a debtor/mortgagor to BNZ as regards the Clarkside Court loan and property.

15 Acquisition and duty costs aside, the $80,000 purchase price paid to acquire Clarkside Court was sourced in 1997 to the extent of about 80% from funds Rene borrowed from BNZ, with that loan secured by a first registered mortgage to BNZ over Clarkside Court.

Facts: home loan and repayment receipts with Bank of New Zealand

16 The terms of Rene's secured loan arrangements with BNZ are not in dispute. Essentially, his $64,000 loan was to be fully repayable by a minimum of 300 instalments of interest and principal over 25 years. Repayment of the loan was to be by his monthly repayments of $453, to be debited as monthly instalments taken out of Rene's other nominated bank account with BNZ.

17 From May 1997 (see exhibit 2.9, TB page 25; then exhibit 2.10, TB pages 26 - 33; and exhibit 2.11, TB pages 34 - 53; and exhibit 2.12, TB pages 54 - 107), regular monthly deductions by way of the instalments applied in repayment of Rene's secured loan to BNZ began to be effected - over time reducing the level of Rene's principal debt to the bank. (The whole trial bundle was tendered uncontroversially as exhibit 2. References in these reasons are to: the exhibit number, tab number in the trial bundle (TB), and then the trial bundle's chronological page number.)

18 Over time, the BNZ account number for Rene's home loan account changed, making the evaluation of the workings of the account a little tricky to decipher. From commencement of these arrangements, 17 April to 25 May 1997, the account number was [redacted] (see exhibit 2.9, TB page 25). The number then became account number [redacted] from June 1997 (see exhibit 2.10, TB page 26). In May 2000, Rene's home loan account received a new number, under the name 'HomeSide' (see exhibit 2.10, TB page 33), noting that 'HomeSide' was then a 'new and dedicated division' of the National (Australia) Bank. That appears to have coincided with a takeover of BNZ by the National (Australia) Bank (NAB) at around this time.

19 At all events, from May 2000 Rene's home loan, which had by then reduced to a principal debit balance of $57,681.19, received the new account number [redacted] (see exhibit 2.11, TB page 34).

20 The regular monthly credit amounts which were applied against the debit balances of Rene's home loan account were funds deducted and applied from Rene's nominated bank account. This was Rene's BNZ account which was initially, at 16 May 1997, numbered [redacted] (see exhibit 2.8, TB page 24 and exhibit 5). That account was subsequently renumbered at around the end of May 1997. It became account number [redacted] (see exhibit 2.13, TB page 108).

21 By the end of December 2000, Rene's home loan debt had been reduced to $56,806.82 (see exhibit 2.12, TB page 54).

22 Most of the credit payments to the home loan debt account were by the regular monthly deductions out of Rene's nominated account. From time to time, however, there were also some cash amounts paid directly to the credit of Rene's home loan debt, usually in $100 amounts or multiples of that. For instance, see exhibit 2.12, TB page 55, noticing cash cheque amounts of $100 on 9 February 2001; $200 on 14 February 2001; $100 on 14 March 2001; then at TB page 57, a $300 amount on 17 October 2001; and the further $300 amount, on 16 November 2001.

23 By the end of December 2005, Rene's principal debt to BNZ had reduced to $43,804.36 (see exhibit 2.12, TB page 68).

24 By the end of December 2010, the level of Rene's home loan debt was reduced to $29,430.72 (see exhibit 2.12, TB page 88).

25 During November and December 2011 (exhibit 2.12, TB page 93), there were a series of cash deposits to Rene's home loan debt account: $100 on 11 November 2011; $500 on 18 November 2011; $500 on 25 November 2011; and five payments of $250 each, respectively, on 2, 8, 16, 23 and 29 December 2011.

26 Between January and April 2012 (exhibit 2.12, TB page 95), further cash deposit amounts were received to the home loan account as credits. But in that period, three of the regular $453 per month credits were reversed. This was due, it would appear, to there not being sufficient funds in the nominated account of Rene (account number [redacted]. The first of the reversals happened in the middle of December 2011 (see exhibit 2.12, TB page 93) when a regular monthly credit to the home loan account of $453 was reversed with the notation, 'Refer To Cust' on 20 December 2011.

27 After 17 April 2012 (see exhibit 2.12, TB page 95), when the principal debt for Rene's home loan account had diminished to $20,260.00, there were no further regular $453 credits to the home loan account that look to be attributable to deductions out of Rene's nominated bank account. From that time, there are a number of cash credit amounts to the home loan account of Rene, in amounts of $250 or $500 paid into that account (see exhibit 2.12, TB page 97) and culminating in a cash deposit of $1,000 on 27 December 2012, leaving the residual indebtedness at the end of December 2012 at only $9,925.76.

Facts: Harald's December 2012 caveat

28 On 5 December 2012, Harald signed and caused a caveat to be lodged against the title of the Clarkside Court property (his signature witnessed by a solicitor, Peter Spensley Bates), asserting Harald's claimed beneficial interest in the Clarkside Court property, on a basis of his having an interest as a 'beneficiary pursuant to a resulting and/or constructive trust' (see exhibit 7, page 9).

29 The face of Harald's 2012 caveat is seen to claim that interest in Clarkside Court:

Pursuant to an agreement between the Registered Proprietor (ie, Rene) and the Caveator (ie, Harald), whereby the Registered Proprietor agreed to hold the land in trust for the Caveator, and the Caveator agreed to pay the purchase price for the land ...

30 Harald's 2012 caveat was accompanied by his statutory declaration which he swore in support of his absolute caveat at that time (exhibit 7, page 10).

31 Harald's lodgement of his caveat on 7 December 2012 is confirmed by the record of the certificate of title for the Clarkside Court property showing that caveat event (exhibit 7, page 6).

Facts: January 2013: the residue of Rene's home loan debt to BNZ is all paid off

32 In January 2013, deposit amounts of $1,000, $2,000, $2,000, $4,000 and $1,000 (in aggregate $10,000) were paid into the home loan account by further deposit amounts credited to the account. On the evidence, there is no dispute that those amounts of money were all paid into Rene's account by Harald.

33 A $1,000 cash deposit amount was paid on 18 January 2013. That took the balance of Rene's home loan account into credit, by $74.24.

34 It is accepted that at mid-January 2013, the $64,000 loan borrowed in 1997 as Rene's home loan was finally paid off in full. Repayment of the principal and interest had gradually transpired between 1997 - 2013, a time span of just under 16 years. That earlier repayment had come about notwithstanding that the actual lending arrangements, as initially perfected in 1997 between Rene and BNZ, were set then on the basis of a 25-year period of repayments of principal and interest to extinguish the loan. It appears, however, that there were no constraints under Rene's lending arrangements with BNZ against an accelerated repayment regime for the home loan.

35 However, there is a further feature of Rene's 1997 loan arrangements with BNZ which then became relevant from January 2013. There was the ability for there to be a redrawing of repaid funds by the borrower.

36 On 25 February 2013, Rene accessed his redraw facility on this loan by drawing for himself $17,000, returning his loan account to debit, then in the amount of $16,944.35 (see exhibit 2.12, TB page 97A).

37 There has since followed further credit payments made towards the loan account by Rene, essentially on a monthly basis taking place on and after March 2013 (see $500 credits on pages 97A - 101).

38 There was a further redrawing by Rene of more loan funds in the amount of $12,000 on 2 May 2014 (see exhibit 2.12, TB page 102). That event took the debit balance of his loan account to $17,255.89. But from 2014, regular repayment credit amounts have been made by Rene - this has reduced the level of his redrawn debt. I was told uncontroversially on the second day of trial, 12 October 2016, that the debit balance of Rene's home loan account was then in the order of just over $2,500 in debit.

39 Harald has made no further payments to reduce the debit balance of Rene's loan account since Harald's last $1,000 payment on 18 January 2013. Nor was that sought of him by Rene, who accepts full responsibility for repaying the redrawn moneys from that time.

40 None of the preceding facts which I have recounted are at all contentious in this trial.

Trial issues

41 The two-day trial proceeded before me on the basis that a (1997 - 2013) repayment to BNZ of the $64,000 home loan of Rene had essentially been implemented using funds paid (mostly) to Rene's nominated account by Harald (with Harald being assisted in this by some financial contributions of Linda from time to time) over that period.

42 As discussed above, for the last year or so of this period to 2013, cash amounts were caused to be deposited directly to Rene's home loan account by Harald - rather than being paid by Harald into Rene's nominated account. That had happened with Rene's consent given to Harald at the time.

43 It is accepted then that a discharge of Rene's initial $64,000 indebtedness to BNZ as at 18 January 2013 was substantially funded by moneys provided either to Rene's nominated account, or paid directly into Rene's home loan account with BNZ by his father, over 16 years. It is also accepted that those funding arrangements as implemented by Harald (with Linda's help) were in accord with what was the wholly verbal agreement reached as between father and son, over the telephone (by Harald in Perth speaking to his son, Rene, then in Sydney) in early 1997.

44 It is accepted that there are no notes or records evidencing any of the terms of Rene and Harald's verbal agreement of early 1997. But the parties via their pleadings and at the trial were of one accord that, at the relevant time in 1997, a legally binding agreement had been reached between Harald and Rene - to the effect that the Clarkside Court property at Wanneroo would be acquired in the name of Rene and, further, that his father would provide all the initial deposit and acquisition cost funds and, even further, that after acquisition, over time, Harald would regularly put his son in funds, so that Rene's secured home loan debt to BNZ could be fully repaid. All that is fully agreed from the outset here in this dispute.

45 What is not agreed as between Rene and Harald are some fundamental issues over further alleged aspects of the verbal agreement of 1997. The disputed issues directly bear upon Harald's present claim that he enjoys the entitlement, in equity, to the full beneficial ownership of the Clarkside Court property - notwithstanding that it is presently and has always been, since acquisition in April 1997, legally owned by his son as the registered proprietor.

46 Importantly, however, is this concession by Rene - there is no challenge by Rene, and the complete acceptance at trial, that his father is presently entitled to a life tenancy beneficial interest in the Clarkside Court property (or until his father decides that he no longer wants to live there). The acknowledged lifetime tenancy interest for Harald is accepted on a conditional basis that Harald does not need to pay any further funds to or for Rene, but must continue to meet all outgoings associated with Harald and Linda's ongoing occupation of the Clarkside Court property during Harald's life tenancy occupation of Clarkside Court.

47 Rene, in effect, also accepts that he must not jeopardise his father's enjoyment of that life tenancy interest for as long as Harald wishes by any dealings with the property - such as high level borrowings leading to a risk of an exercise of the mortgagee's power of sale. But subject to his father's life tenancy interest, Rene otherwise asserts full rights of legal and beneficial ownership over Clarkside Court, including the right to borrow a reasonable level of funds against it under the redraw facility, as Rene sees fit.

48 So, the essential disputed issue as between father and son arises out of Harald's claim to hold an entitlement to full beneficial ownership in the Clarkside Court property, on a basis that Rene holds it on trust for him (from the time the BNZ loan of $64,000 was first reduced to a nil balance in January 2013). Harald asserts (although this is disputed by Rene) that the arrangements agreed upon over the telephone in early 1997 are fully implemented.

49 Harald, by leave, amended his pleadings at commencement of the trial to add a new claim. This was on the basis of an asserted express trust favouring Harald, arising out of the early 1997 telephone agreement, which Harald says was perfected with his son. But by the end of the trial, the express trust claim grounded upon the 1997 verbal agreement was no longer pressed by counsel for Harald.

50 Essentially then, the trust relief now sought by Harald, above and beyond what is his accepted life tenancy interest, asserts Harald's present entitlement to the full beneficial ownership of the Clarkside Court property at Wanneroo (plus ancillary relief to compel a transfer of the legal title to him by Rene).

51 The equitable claims of Harald are pressed on either the existence of a resulting or of a constructive trust in his favour (consistently with the terms of Harald's December 2012 caveat, which I referred to above).

Constructive trust

52 As regards a constructive trust claim, the submissions of Harald invoke reference to such a trust arising as a matter of law and based upon what is asserted to arise from the parties' (ie, his and Rene's) 'common intention'.

53 The asserted common intention constructive trust is said to arise out of what was agreed between Harald and Rene over the telephone during early 1997. As indicated, a base level of agreement is accepted by Rene. But key aspects of the 1997 telephone discussions are disputed.

54 If Rene's version of the 1997 discussions is accepted, or even if Harald's version of the telephone discussions is not ultimately accepted as reliable, then factual findings in such terms would carry negative forensic repercussions against the assertion of a common intention constructive trust as between the parties in respect of Harald's ultimate full beneficial ownership of Clarkside Court.

55 As I have now related in the facts as assembled and found to date, there is no dispute that father and son were of a common accord in early 1997, that the Clarkside Court property would be acquired, that it would be purchased and registered in Rene's name, that Harald would fund all deposit and acquisition outlays, and that the property as from settlement would be occupied by Harald and Linda, and as well by Harald's mother, Gertrude, once she arrived from Germany. It is also accepted, and established factually, that there was agreement in 1997 that Harald would be free to occupy the premises for the rest of his life and, during that time, to renovate and improve the Clarkside Court property at his expense as Harald thought appropriate. Also in that period Harald was to meet all outgoings associated with his and Linda's occupancy of the property, including meeting rates, taxes and utilities, etc. It is accepted as well, from Rene's perspective, that he would in 1997 borrow $64,000 by way of a secured loan from BNZ, with those borrowed funds to be applied towards the rest of the purchase price for the property. Rene accepts further that, in due course, he would repay his loan using the funds he would regularly receive from Harald, which funds would be paid to Rene's account over time by his father, to effect by use of those moneys received from Harald a reduction and ultimate extinguishment of Rene's home loan. The common intention as between Harald and Rene, in those respects at least, can be easily identified, and indeed is uncontroversial.

56 But the core factual disputation as between the parties presents in respect of what present as three disputed aspects of their otherwise undocumented and wholly verbal telephone agreement of early 1997. The three key disputed aspects are:

(a) Whether Harald said to Rene, over the telephone in 1997, and Rene then in response either agreed or acknowledged that, once the home loan had been repaid, that Rene would at that time sign over and cause a transfer of the legal title in the Clarkside Court property to his father. That aspect of the parties' discussions and alleged agreement is asserted by Harald. But it is thoroughly disputed by Rene. Rene says that there were no such discussions to that effect as between himself and his father and, further, from his point of view, that this asserted outcome for his father's ownership of Clarkside Court was never his intention;

(b) Rene's assertion that his father said to him, in at least one of the early 1997 telephone conversations, that the Clarkside Court property then to be acquired 'would be mine, anyway' (as in Rene's property) (see exhibit 6A, par 13); and

(c) whether or not the funds it is agreed Harald was going to regularly pay to Rene over time, and which it was accepted by Rene, were to be applied by him towards meeting his monthly home loan repayments to BNZ (secured by first registered mortgage), were being paid by Harald to Rene, as a monthly 'rental' payment. In other words, Rene essentially contends that part of the verbal arrangements perfected with his father in their 1997 telephone discussions concerning future moneys to be made by his father towards funding Rene's home loan obligations on a monthly basis, were going to be paid to and received by Rene as rent payments made by his father - but, nevertheless, rent payments that were to be made, on a condition that the rent money received by Rene would be applied under Rene's promise to his father to use it only to meet his home loan repayment obligations to BNZ.

57 These three critical and conflicting aspects of the presenting factual disputation need to be resolved, before the underlying legal issues concerning Harald's alleged existence of a common intention constructive trust or, alternatively, for a resulting trust over all of the Clarkside Court property, can be safely evaluated.

58 Once resolved, those factual outcomes will then largely dictate the answers to the legal questions posed as to any existence or otherwise of a constructive or resulting trust favouring Harald's alleged full equitable ownership interest over Clarkside Court.

Resulting trust

59 As an alternative to the common intention constructive trust, Harald also alleges, in his favour a resulting trust, in like terms. A resulting trust is a trust that is presumed by law until rebutted by evidence, in circumstances where land or chattels are acquired in the name, say, of party B, but, in truth, the acquisition can be seen to be funded either wholly or in part by someone else (party A).

60 The underlying factual disputation towards the finding of a resulting trust, particularly as regards core underlying disputed issue (b) above, is also significant. That is because, if the alleged words are ultimately found to have been spoken by Harald, or words to that effect, thereby creating an understanding or belief in Rene in 1997 that the property would be his anyway, then that finding of fact would likely negate any otherwise arising presumption of a resulting trust, otherwise favouring Harald, as regard to Harald's alleged ultimate full beneficial entitlement of Clarkside Court.

61 I can now turn to examine the rival factual evidence and perspectives of Harald and Rene.

Harald's position

62 Harald, as plaintiff, gave evidence first, once the trial began.

63 At the time of trial, Harald was 76 years of age, having been born on 20 March 1940. Harald's wife, Linda, gave evidence following him at the trial. I will digress very briefly to mention her essentially inconsequential evidence.

64 Linda was not directly a party to any of the 1997 telephone conversations between Harald and Rene. Linda may have been in the vicinity of the telephone at the time of one or other of the telephone conversations and she may have heard Harald speaking to Rene at the time. But Linda was not in a position to present a coherent version of events beyond snippets of what she picked up from overhearing Harald speak, either from listening, or by speaking to her husband afterwards. Accordingly, Linda's secondary evidence towards only one end of an overheard or related telephone conversation involving Harald is of no real forensic value in the disputed areas.

65 Essentially then, the key evidence at trial arises just from that adduced either from Harald or from Rene. As I have already indicated, there were and are no contemporaneous notes or documents bearing upon their disputed issues. Even an offer and acceptance contract document that was obviously signed in 1997 in respect of the acquisition of Clarkside Court could not now be located to be put before the court at this 2016 trial.

66 Exacerbating the temporal forensic difficulties presenting was the fact that the evidence-in-chief of both Harald and Rene at trial was almost entirely elicited via the use of witness statements, tendered essentially as their examinations-in-chief. Those arrangements emerged from directions implemented by an earlier case manager, issued some time ago. This was not a matter previously case-managed in the CMC list. Had I been able to, I would have ordered the parties only exchange summaries of their evidence, but give their evidence-in-chief in the viva voce orthodox fashion, particularly concerning these critical telephone conversations, before cross-examination. Regrettably, that did not occur and it makes the fact finding task even harder than it should be as between Harald and Rene in these key aspects of dispute.

67 Consequently, the witness evidence unfolded at trial, I thought, in a disjointed fashion after the usual range of objections made to the respective witness statements, then consequent adjustments and excisions to the statements, and the early cross-examinations.

68 For all that difficulty, there was, of course, the accepted underlying edifice of some undisputed elements of the agreement between the parties concerning what had happened in 1997.

69 The Clarkside Court property was acquired after a property settlement effected in mid-April 1997. From that point, the house and land were always occupied by Harald, Linda and by Gertrude (until she passed away).

70 Rene, who was either travelling or based in Sydney, did not get to see Clarkside Court until 1999, when he first visited. By that time, his grandmother, Gertrude, was living at the property, after relocating from West Germany shortly after the property was acquired. (Accommodating Gertrude appears to have been one of the motivations of Harald for its 1997 acquisition.)

71 I need to, and have, make some allowances towards Harald's first language, being German not English, as regards assessing his trial evidence. Harald has been an Australian resident since 1971, but he said at trial that he regularly returns to spend large periods of time in Germany.

72 My assessment of Harald's English speaking and his English language comprehension skills whilst giving his evidence would suggest that he encounters very little difficulty in capably understanding and speaking in the English tongue, despite a discernible accent at times.

73 As regards the critical telephone conversations with his son of early 1997, Harald's evidence-in-chief, from his witness statement (exhibit 3A), was extremely brief. After speaking to a local Perth mortgage broker about his own (problematic at the time) borrowing position concerning an acquisition of Clarkside Court, and also to a close friend - none of which is controversial - Harald swore to this version of events:

17 I rung Rene. I cannot now remember the exact words spoken but I asked him if he would help me by going onto the title of the house as purchaser with Linda and I. I asked whether we could make it all happen together. I told Rene that I had spoken to a mortgage broker who had explained to me that if I could get my son (or daughter) to sign for the loan it would be very easy to arrange.

18 Rene said that he didn't want to be on a title with Linda. I remember he said words to the effect, he would do it, but if I wanted it done he would be the only one on the title.

19 My conversation with my son would have been a mixture of German and English.

20 Although I cannot remember the exact words we both used I put it to Rene that I would pay everything for the house and when it was paid off Rene would transfer the title to me.

21 I gave the mortgage broker Rene's contact details in Sydney. I organised for all the mortgage documentation to be prepared here in Perth together with the Real Estate Agent and Strand Settlements. The mortgage application and Landgate documentation was filled out in Rene's name, and was sent to him in Sydney to sign.

22 I had said that I only wanted a 15 year loan because I would then be 72 years of age and I did not want to be paying a mortgage after that age.

23 I cannot now recall how the offer and acceptance paperwork for the house was signed but Rene never left Sydney during the process.

24 After the offer had been accepted and the loan was going to be approved, I flew to Germany to make arrangements to bring my mother back to Australia.

25 Linda and I moved into the house on 17 April 1997 after settlement happened. I paid a $15,000 deposit. The deposit initially was $8,000, which I paid to either Roy Weston, or Strand Settlements but as Rene was the legal owner and mortgagee, but was not living in the house, the Bank required a $15,000 deposit and I also paid the excess.

74 At trial, without controversy, the $15,000 deposit figure seen above was increased by Harald by $1,000 to $16,000. That appears to bring it into better accord with the settlement statement, which was in evidence (see exhibit 2.4, TB page 10).

75 My finding is that all the purchase funds and ancillary amounts required to purchase Clarkside Court, such as the stamp duty, commissions and other fees, were funds provided by Harald. To that end, Harald was likely assisted by Linda, but she is not a co-plaintiff in the litigation. Linda's contributions may be regarded as her contributions to assist Harald and which he deployed in this 1997 dealing. Harald, in effect, represents Linda's interests, if any, by his present claims against Rene.

76 Nevertheless, the significant and greater components of the purchase price, $64,000, were the loan funds sourced by Rene from BNZ. They were moneys loaned to Rene by BNZ and applied by him at settlement towards the acquisition of the Clarkside Court property in April 1997.

77 Harald's witness statement relates the significant amount of extension and renovation work that he says he carried out to the Clarkside Court property after he and Linda and Gertrude moved in. I accept and find that all that work was carried out and, further, that it was carried out at Harald's expense and by his labours. This amounted to an outlay by Harald of roughly $40,000 just for materials. It was also, I find, improvement work done without any reference to Rene, although the 1997 agreement appears to have been to allow Harald and Linda whilst in occupation to carry out at their own expense, without reference to Rene, whatever improvements and betterments they thought necessary or beneficial to enhance the property. They did that.

78 At par 27 of his witness statement, Harald, after explaining the improvement works which he carried out and his intention to accommodate his mother at the property, says, 'I would not have spent that money on a house that I did not believe I owned or on a house from which my wife might be evicted in the event of my death.' The statement only speaks as to Harald's intention at the time of or after carrying out the improvement work at his expense. It speaks to Harald's subjective state of mind. Notwithstanding the objection to this evidence taken at the trial, I allowed the evidence, bearing in mind the constructive trust arguments about an existence of a common intention. I will accept that evidence of Harald.

79 My further finding, however, is that the subjective intention in Harald's mind was never communicated to his son, either expressly or impliedly. Nor, if it be necessary to find, would I conclude that Rene by his own acts or conduct, had ever at any time encouraged or acquiesced in his father holding or reaching that subjective state of belief. Indeed, no case was ever put by Harald, by an argument attempting to show a proprietary estoppel in his favour arising out of any acts or conduct by Rene to him that Harald had relied upon to his detriment.

80 I do find that Harald, for the most part, subsequent to 1997 (sometimes assisted by Linda) paid funds into Rene's account, in order for those funds to be directed and used from Rene's account towards the meeting of Rene's regular monthly minimum home loan repayment amount of $453 per month, thereby reducing the level of the loan. There may have been some few months when a regular payment was not made by Harald. However, as seen above, in the last 14 months before January 2013 (when the debit balance of Rene's loan account finally reached zero), amounts in the order of $25,000 by way of cash or other deposits were made directly by Harald (no doubt with the assistance of Linda when Harald was spending periods of time overseas in Germany, as she said in her evidence) to Rene's home loan account (see exhibit 2.12, TB pages 93 - 97A).

81 Within his witness statement, Harald provides evidence about an alleged amount of $10,000 that had been paid personally by Rene, in respect of reducing the level of his home loan. This is evidence Rene disputes.

82 On the basis of the trial evidence as a whole, I do not accept Harald's unduly vague evidence about this issue (at between pars 29 and 34 of his witness statement).

83 At the conclusion of his evidence, Harald says (par 38):

When NAB took over BNZ, there was a change of account details and I found out the balance due under the mortgage. I then made extra payments so that the mortgage was paid off quicker. I know that the mortgage was paid off in full by January 2013.

84 In essence, I would accept that evidence from Harald, save for his understandable lay reference to the 'mortgage' being 'paid off', either quicker or in full. In fact, what was being paid off by Harald's cash payments in the 14 months up to January 2013 was not a mortgage but was Rene's indebtedness under his secured loan to the NAB (formerly BNZ). The first registered mortgage in favour of the NAB still remains in place, securing what is currently a smallish debit balance of the redrawn funds received by Rene, after January 2013.

85 There is no suggestion by Rene that the 1997 telephone arrangements with his father extend to any obligation on his father to pay to Rene, or for anything more, once the $64,000 debt was first reduced to a $nil balance (to reduce the indebtedness on Rene's home loan account after 18 January 2013).

86 In other words then, post January 2013, under the perfected agreement reached in early 1997, as accepted and put by Rene, Harald and Linda can continue to live rent-free at Clarkside Court for as long as Harald lives, or for as long as Harald chooses at the Clarkside Court property. The only real fiscal responsibility of Harald, according to Rene, is to meet Clarkside Court's outgoings and utilities, etc, for as long as Harald continues to reside there.

87 However, Harald seeks more. He contends for the equitable entitlement after 18 January 2013, to a full legal and beneficial ownership in the Clarkside Court property, under constructive or resulting trust arrangements that he contends bind his son.

88 Harald's witness statement concluded:

39 After the final payment had been made I went to visit my son at his workshop near Joondalup. I found Rene by asking for him through one of his friends. I told him that the mortgage had now been paid off and we could transfer the house into my name. I said, 'We can transfer the title.' But he said, 'No, no, I'm not transferring anything.'

40 He said to me words to the effect, 'No, I will use it as collateral and borrow against it when I need to.'

41 I then took legal advice and my solicitor wrote to Rene on 14 February 2013 enclosing a Transfer of Title for execution, but Rene did not respond. Accordingly I lodged a caveat over the property to protect my interest.

42 Rene then caused Landgate to send me a Notice pursuant to s 138B of the Transfer of Land Act requiring me to lift the caveat within 21 days, but I obtained an order from this Honourable Court extending the caveat until further notice.

89 To resist the force of a s 138B Transfer of Land Act 1893 (WA) notice that Rene caused to issue in 2013, and which would have ended Harald's caveat had an order of this court not been made extending that caveat's duration, Harald swore out an affidavit of 6 May 2013. That affidavit became exhibit 7 at the trial.

90 Harald's 2013 affidavit contains a copy of his caveat and his supporting statutory declaration of 8 December 2012. Harald's caveat was of 5 December 2012. The record of certificate of title shows that it was lodged on 7 December 2012.

91 Consequently, Harald's evidence as seen under pars 39 and 41, as regards Harald going to see Rene after the final (home loan) payment had been made by him, and then Harald taking legal advice after the event of going to see his son, is exposed on the facts as fundamentally wrong. Harald's caveat was lodged on 7 December 2012, not in January 2013, after the payment was made reducing the debt to beyond a $nil balance.

92 In December 2012 the bank statements prove that Rene's home loan had not then been completely paid off. As seen, Rene's home loan account as at 10 December 2012 was still $11,866.20 in debit (see exhibit 2.12, TB page 97). It is factually incorrect then for Harald to contend that he only took legal advice about lodging a caveat after the final payment had been made and in that context after an exchange of words with Rene that he referred to in pars 39 and 40. This evidence of Harald is unreliable, inconsistent with the documents and must be rejected.

93 I find that Harald had taken legal advice earlier than January 2013. Harald's caveat refers to his claim, on a basis of a resulting and/or constructive trust, in or around early December 2012. That was a month before Harald chose to make his final substantive cash payments, to reduce the balance of Rene's home loan to a credit balance on 18 January 2013, by Harald's last cash deposit of $1,000.

94 Harald's erroneous evidence in that respect is well exposed by a review of the documents provided at trial. His error on an important aspect of the action of more recent occurrences also contributes to my cautious assessment of Harald, in terms of his overall reliability as a witness in the (few) disputed areas of fact in the trial.

95 As I mentioned, Harald was 76 by the time of trial. My general impression of Harald (mostly under cross-examination) was that whilst he did not deliberately attempt to mislead by his answers, or to give deliberately false evidence, Harald was of a somewhat rigid and dogmatic personality type. He had thoroughly convinced himself over time as to the correctness of his positions. But at times Harald proved during his evidence to be more than a little careless or cavalier in his definitely expressed answers, thereby exposing him to error and to try to back down when this was exposed.

96 Harald presented to me overall as someone with something of an overbearing personality who was not consistently reliable as a witness of fact. Consequently, I do not unreservedly accept his evidence in the controversial areas, notwithstanding that it was confidently given by him.

97 As I have indicated, much of the underlying factual evidence was common ground between the parties. But in the few controversial areas I found myself needing to look for more independent corroborating material, before I could accept Harald's version of events. There were also times when Harald would not answer questions. He would respond to counsel along the lines by his answer, 'ask my wife.' These were not helpful responses. They lead me to conclude that, in relation to matters of factual detail, Harald was not fully reliable.

98 Nor did the subsequent evidence given by Harald's wife, Linda, assist in shoring up controversial areas in Harald's evidence. On my assessment, Linda was a satisfactory and truthful witness. But she could not really assist in terms of providing direct or admissible evidence in the relevant disputed areas since, through no fault of her own, she was not a party to the 1997 key telephone conversations, conducted between Rene and her husband, although she may have been in the vicinity whilst Harald was speaking sometimes to glean aspects of that side of the dialogue.

99 I should note that, given what I assessed to be a lack of surrounding relationship context for the 1997 telephone conversations, I did at one point during Harald's cross-examination intervene, to ask him to describe the relationship he had with his son at around early 1997. Harald's response, in effect, was that they had a good relationship and that they spoke to each other on the telephone regularly or weekly (ts page 43). Later, that evidence was directly contradicted by Rene. Rene said, in effect, that the relationship with his father was always a difficult and distant relationship (ts page 151). I prefer Rene's evidence on that issue, as I will explain.

100 As regards to the men's relationship in subsequent years, there appeared to be no dispute that after Rene had returned to live in Perth in 1999, there followed a period of over 10 or 11 years during which there was no contact whatsoever, either in person or by telephone, as between Rene and his father. The lack of any relationship between a father and his only child in that period provides some more insights towards how these parties distantly treated each other at times.

Rene's trial evidence

101 Rene Wilms' evidence, as indicated, was also given in chief via his witness statement which, after objections, became exhibit 6A.

102 As mentioned, Rene was born in West Germany in 1967 before he emigrated with his parents to Australia in 1971, aged four. Consequently, he was 49 years of age at the time of giving evidence at trial.

103 As regards the critical early 1997 telephone conversations with his father, Rene's evidence-in-chief within his witness statement is found between pars 11 through 20 and, in particular, the important evidence within par 13. I will set out those pars:

11. In or around early 1997, I received a telephone call from my Father. I was still living in Sydney at that time. My Father told me that he was trying to get a loan to purchase a residential property in Wanneroo. During this discussion, he never mentioned Linda.

12. He told me that he had made preliminary enquiries as to whether he could get a Loan to purchase a property in Wanneroo Property (sic). He told me that he could not get a Loan due to his age and he did not have the financial capacity to service a Loan because he was still unemployed.

13. He asked me whether I would agree to provide a Guarantee to a Bank, in respect of a loan that he, himself was seeking, to facilitate the purchase of the Wanneroo Property. I told him that I did not want to be a Guarantor. I said that I could obtain a Loan in my name alone, and purchase the Property. I also told him that he could live in the home until he died or no longer wanted to live there, and pay rent to me on a monthly basis. I said the amount of rent would be equal to the monthly mortgage repayments, and that I would use the monies that he paid to me as rent, to repay the loan. He told me that the Wanneroo Property would be mine anyway. He also said he'd pay a large enough deposit to ensure that I would not have to take out Mortgage Insurance. He also said he would pay for all of the other costs associated with the purchasing the property.

14. He told me that if I obtained that loan, he would also have to pay all of the Council and Water Rates in respect of the Wanneroo Property and all of the Property's outgoings.

15. Linda did not participate in any conversations of negotiations, directly or indirectly, concerning my purchase of the Wanneroo Property, or my said agreement with my father.

16. A few days after the telephone conversation referred to in paragraph 11, my Father again telephoned me and said he'd found a Mortgage Broker that could help me get a loan. He told me his name was 'Gary'. I can't recall if Gary phoned me or I phoned Gary. I remember Gary telling me during that call that he'd send the documents to me. During around February 1997, I received in the mail paperwork concerning the Loan with the Bank of New Zealand, the associated Mortgage documentation, the Contract of Sale in respect of the purchase of the Property, and other documents, particulars of which I can't recall.

17. The contract stated that the property I was purchasing was situated at and known as 24 Clarkside Court, Wanneroo. I signed all the documentation and sent them back to either a Finance Broker nominated by my Father or to my Father, I can't recall which.

18. At the time of signing the documents, I was aged 30 and was earning approximately $750 per week after Tax. I had no significant assets.

19. During my discussions with my Father referred to earlier in this Statement, we did not discuss the Term of the loan that I was to obtain from the bank. I say based on my recollection, the term of the Loan was in fact 25 years.

20. At the time I signed the Contract to purchase the Property, my Father then told me that he had been unemployed for around one year. I have no knowledge as to whether my Father had been employed or self-employed since the date of the Contract. My Father paid for my Deposit payable under the terms of the Contract of Sale, he paid for my Settlement Agent's Fees, and for the Stamp Duty payable in respect of the Contract. I don't know where he obtained the monies from.

104 At par 21, Rene's witness statement relates to his learning that his grandmother was going to relocate from Germany to Perth to live with his father. He said this was around 1998. That timing is slightly contrary to the evidence from Harald and Linda about their occupying Clarkside Court almost immediately after settlement at or after 17 April 1997 and with Gertrude arriving at about that time. Under cross-examination, Rene, who had been living in Sydney up until early 1999, accepted, in effect, that he may have been wrong about 1998 (ts 147 - 148), as I find he was. However, this is a small issue of timing detail when Rene was living away from Perth. I do not assess that it bears adversely upon the reliability of his evidence overall.

105 Rene then describes in his witness statement at between pars 33 and 34 the circumstances by which he asserts that he (ie, Harald) made several loan repayments himself, during September and October 1999, then in February and March 2000, then again in June 1997 to August 1998. Rene relates how Harald telephoned him and insisted that he (ie, Harald) repay those payments (back to Rene) and that his father then paid those payments to the mortgage account by making 'rent' payments (as Rene says) in the total sum of $950 per calendar month for 16 months.

106 I contrast Rene's evidence against the evidence of Harald concerning Rene's $10,000 contributions. On balance, I prefer, if necessary, Rene's evidence about this overpayment and repayment issue as being more logical, although its significance at the end of the day, on my assessment, is minor.

107 Commencing at par 36 of Rene's witness statement, he relates a series of events commencing around February 2012 when he says his father visited him at his business premises at Neerabup. After that, they had a number of in person conversations. This was in a context of evidence given at trial by Rene to the effect that they had been uncommunicative for a period of over 10 years by this time, since Rene had returned to live in Perth in 1999.

108 Rene elaborates on his father's first in person visit in 2012 at par 39 of his witness statement. Rene relates at par 39:

In 2012, my Father visited me in my workshop in Neerabup. As it transpired, this was approximately twelve months before the Home Loan was repaid in full. He arrived at my workshop unannounced. He was acting quite sheepishly and said words to the effect of, 'let's be friends'. On this occasion, he said that he would pay his monthly rental repayments directly into my Mortgage Loan Account to avoid paying Bank Fee Transfer Costs. I agreed that he could do this. At the same time, he gave me various gifts such as a power inverter and a t-shirt.

109 Putting the 'sheepishly' comment to one side as unhelpful, I accept the essence of this evidence from Rene as reliable. From a timing perspective, it accords better with the credits received into the home loan account made directly by Harald prior to January 2013 in that 12-month period. Rene's version presents as more factually accurate as a timing sequence - in terms of when Harald first visited Rene at his Neerabup workshop, in contradistinction to Harald's version, which I have rejected as inconsistent with his caveat activity of early December 2012.

110 At pars 40 and 41 of his witness statement Rene relates further visits by his father to the Neerabup workshop in early 2012 and then, at par 41, in late 2012 (remembering that it was on 7 December 2012 Harald's caveat was lodged against the Clarkside Court property title).

111 Rene's evidence at par 43 of his witness statement in relation to the late 2012 meeting at his Neerabup workshop is:

43. During that discussion, I said that my long term intention regarding the Wanneroo Property, was to use it as security to obtain another Loan, to purchase another Property to live in.

44. I reassured my Father that any such future Loan, would not in any way affect our original Rental Agreement, entered into back in 1997. He then sat down, handed me a beer and said 'now hand the house over or I'll sue you'. I asked him to leave and ushered him off my business premises.

112 By my assessment, that version of events from a timing and also a content perspective is more readily reconcilable with the timing of Harald's caveat of 7 December 2012. Again, I prefer Rene's evidence in this regard.

113 Rene's witness statement then relates his receipt of a lawyer's letter sent on behalf of his father during February 2013. That, I assess, is reference to a letter of 14 February 2013 (exhibit 2.29, TB pages 331 - 332), sent by Harald's lawyer, Mr Peter S Bates, enclosing transfer of land documents 'to enable the property to be transferred from you to your father and stepmother …'.

114 The lawyer's letter to Rene ended with a request seeking Rene sign the enclosed transfer document in the presence of an adult witness.

115 I would observe at this point that prior to February 2013 Landgate, by a letter from Jean Villani, Registrar of Titles, had written to Rene on 23 January 2013 concerning caveat M126109, advising Rene that a caveat had been lodged against the title for the Clarkside Court property (see exhibit 2.31, TB page 334). However, it is apparent from the face of the Registrar's letter, it had been addressed to Rene at 24 Clarkside Court, Wanneroo - being Rene's stated address seen on the transfer of land form which Rene had signed back on 10 March 1997 (see exhibit 2.7, TB pages 21 - 22). As a letter from the Registrar despatched to that address (where Harald and Linda were resident) it seems unlikely that the Registrar's communication advising of the existence of Harald's 2012 caveat would be received by Rene. I do find that the Registrar's letter arrived at Clarkside Court, but that it was not given to Rene by his father. Harald does not contend to the contrary.

116 In terms of making a general assessment of Rene's trial evidence, my overall assessment is that Rene's evidence is the more reliable evidence in general, over that of Harald. It ought, in the main, to be preferred and accepted over Harald's evidence where inconsistent. However, Rene's evidence was not factually accurate, as seen, in all respects. I have also been cautious about the reliability of Rene's evidence in relation to its evaluation in contrast to the rival evidence of his father, and particularly in relation to the three critical disputed areas which bear on the equitable relief by way of a constructive or resulting trust, which Harald seeks.

117 In general terms, however, I thought Rene the more measured and reliable witness over his father. I assessed Rene was more thoughtful and careful in his responses to questions in cross-examination and that he did his best to answer them all honestly. It seemed to me that Rene had obviously been troubled and affected by what was his distant relationship with his father. I would prefer Rene's evidence concerning what he had described as a poor relationship between them at the time of the telephone conversations in early 1997. Rene rejected his father's description of their 1997 relationship as good. He gave that evidence, for him, in unusually forceful terms, calling his father's evidence to the contrary 'a lie' (see ts 151). Clearly, Rene held a very different perspective to that of his father about the state of their relationship - which perhaps for a parent/child relationship some might see as not unusual.

118 Rene's explanation for why he was prepared to help his father in 1997 was essentially directed to the assistance that his co-operation would provide for his grandmother, Gertrude, in providing a place for her when she arrived in Australia from Germany. That evidence emerged during cross-examination but had not been greatly discussed in Rene's witness statement. Nevertheless, on balance I accept it as being the likely truth.

119 Rene was also prepared, I thought, to give appropriate concessions under cross-examination against his own interests. He accepted, for instance, that regular sums of money that he received paid to his account from his father after 1997 had not been declared in Rene's income tax returns as assessable income - which would be the case in respect of true rental income when received.

120 In Rene's cross-examination something adverse was sought to be made of Rene's accepted non-declaration of 'rent' amounts, as received from his father if, in fact, they had been truly made as between both parties in 1997 as part of a rental arrangement for Clarkside Court, once occupied by Harald and Linda. There is substance in that criticism. But, in the end, it does not undermine my acceptance of Rene's evidence as the more reliable. The interest component in Rene's home loan ought ordinarily be capable of being set off against his assessable rental income, so that the taxable amount at issue from a tax perspective may not be as significant as it might otherwise first appear. In any event, Rene's tax returns can still be amended to correct an error of this nature, if necessary. Rene was for a period neglectful of his financial affairs, as he indeed accepted, and I have assimilated these negatives in my overall assessment of his evidence. In the end, it does not detract from my overall assessment of Rene as a basically honest, straightforward and reliable trial witness.

121 With those observations, I can turn to the key disputed factual areas concerning the early 1997 telephone conversations as between Harald and Rene. Both Harald and Rene accept that these conversations gave rise to a legally enforceable and binding agreement reached as between them, carrying corresponding rights and obligations on both sides from then on. But there is fundamental disagreement over what was agreed concerning the eventual beneficial ownership of the Clarkside Court property by Harald, once Rene's home loan of $64,000 had been paid off, as eventuated on 18 January 2013.

The 1997 telephone conversations: was it agreed there was to be a transfer of title from Rene to Harald for Clarkside Court, once Rene's home loan was paid off?

122 The first key aspect in factual dispute concerns dispute over whether or not Harald said to Rene in one of their 1997 telephone conversations, and Rene agreed, that, as Harald very succinctly puts it in his witness statement, see exhibit 3A, par 20:

Although I cannot remember the exact words we both used I put it to Rene that I would pay everything for the house and when it was paid off Rene would transfer the title to me. (emphasis added)

123 This factual issue remains fundamentally in dispute.

124 In Rene's witness statement, as set out earlier (see exhibit 6A), Rene provides a different version of events to Harald, particularly at par 13. Rene's version does not display any content supporting the statement along the lines Harald contends for. Furthermore, Rene says in his statement at par 46, in referring to the February 2013 letter from Harald's lawyer (Mr Bates) that:

I noted that he was alleging that our original Agreement included a term to the effect that when the Wanneroo Property Home Loan had been paid in full, I was to transfer the Title of that Property to my Father. This was never agreed to or discussed at any stage.

125 There is nothing from an evidentiary perspective to corroborate Harald's rival evidence in this respect. Harald has not in the end satisfied me on the balance of probabilities that his alleged words were spoken to Rene as he says.

126 Moreover, the further key issue of disputed fact which I next deal with, the issue of Rene being told by Harald he would receive the benefit of the acquired property which 'would be mine anyway' (par 13), reconciles harmoniously with my end conclusion of fact that there was no discussion about a transfer of the property to Harald by Rene at the end of the repayment of Rene's home loan, as Harald contends.

127 I turn then to that next related issue, being Rene's evidence, disputed by Harald, to the effect that Harald had said to Rene during one of the early 1997 telephone conversations that '[h]e (Harald) told me (Rene) that the Wanneroo Property would be mine anyway'.

Rene's property anyway?

128 When Harald was cross-examined, after his revised witness statement was tendered and became exhibit 3A, he was asked a series of questions by counsel for Rene, Mr Robertson, found in the transcript at between pages 41 and 42. I will set out an extract from this exchange as it is, on my assessment, of high importance to my end resolution of this issue, in favour of Rene.

129 The exchanges in cross-examination took place between Harald and counsel for Rene. At places I have emphasised some key components of the answers by Harald in bold.

MR ROBERTSON: And that was because Mr Wilms was going to own the property, wasn't he?---I was going to own the property.

No, my client was going to own the property?---No.

[Comment: The impermissibly argumentative form of this question by cross-examination from counsel was not objected to.]

That's why he was keen, wasn't he?---He thought he would own it.

He thought he would?---Yes.

And you knew that he thought he would own it?---Possibly. But I didn't give it much thought. I was under time pressure. I had to go to Europe. So it didn't leave me much time. Otherwise, if he would have said no, I would have had to find another possibility, which there - existed.

So when he said to you, 'Yes, Dad, I will go on the title. I will have the mortgage. And I will - and you will pay the mortgage off and the property will be in my name' you were too busy to argue with that and just said, 'Yes. Okay,' and went to Europe?---Yes.

Is that what happened?---Yes. It was - it was my mother, his grandmother, that had to be sorted out, because she was in hospital and she couldn't live on her own any more.

So you knew that my client thought he was going to own the property at the end of the day?---Once I die, possibly yes.

Once you die?---Yes. But first of all, I have to die.

…

Did you explain that to Mr Wilms, to my client, that you could sell the property?---He knows it himself. He's the - - -

Well, that's not my question, Mr Wilms.

Did you explain it to him? Did you say to my - - - ?---There was nothing to explain.

Did you say to my client, 'I can sell the property after the mortgage is paid off'?---No. There was - - -

…

Your evidence before, Mr Wilms, was that my client - you knew that my client thought that he was going to own the property, and you were too busy to correct him. Isn't that your evidence?---Well, it's a normal thing, if your name is on the title, you own the property. (my emphasis in bold)

130 This series of responses by Harald under cross-examination is revealing. On my assessment, it is destructive of Harald's contention towards a common intention constructive trust as regards Harald's ultimate beneficial ownership of the Clarkside Court property, once the home loan to be taken out by his son had been paid off.

131 The tenor of the responses by Harald under cross-examination suggests he well understood his son had been left thinking, in consequence of their 1997 telephone discussions, that Rene would get the acquired property in a full and beneficial sense. The tenor of Harald's answers betray he was content at the time to let his son remain under that impression, allowing for Harald to go to Europe, since he was under time pressures and so 'didn't give it much thought'. That is all adversely revealing for Harald.

132 That series of responses from Harald is compatible with and, indeed, supports Rene's contrary evidence (at par 13 of Rene's witness statement) to the effect that '[h]e told me that the Wanneroo Property would be mine anyway'. I would prefer and accept Rene's evidence, on the balance of probabilities. I assess that Harald's statement would likely have reasonably led Rene to a reasonable belief that he would get the ownership of the property in a full legal and beneficial sense, subject only to his obligation to allow his father to remain in occupation for his life, or until Harald wished to live elsewhere.

133 Under cross-examination it was put to Rene as a countervailing consideration that it was, in effect, unthinkable that the interests of Harald's wife, Linda, Rene's stepmother, would not have been discussed as a consideration in these 1997 telephone conversations. Rene's response was that it was not and that Linda's position, should she outlive Harald, was not a consideration. Rene's version of events is not, on my assessment, implausible as was suggested to him, but rejected by Rene. It is a position reconcilable with a distant father/son relationship and a somewhat rushed, overbearing and cavalier attitude towards the whole longer term ownership outcome issue by his father at the time - as Harald's answers to cross-examination suggest.

134 The consequence of my acceptance of Rene's evidence over that of his father in relation to this issue is that the constructive trust arguments of Harald, predicated upon his showing a 'common intention' constructive trust, in relation to Harald's ultimate beneficial ownership of Clarkside Court, once Rene's home loan was extinguished, are simply not capable of being accepted given the underlying lack of factual foundation for a common intention constructive trust - in this respect as delivered by Rene's evidence on this issue, which I accept.

135 Furthermore, this finding also carries repercussions negating against what was Harald's primary argument concerning a trust entitlement to him arising under a resulting trust.

136 It will be remembered there is a presumption of law, absent evidence to the contrary, for resulting trust where property is acquired in the name of party A, albeit paid for by party B, save for scenarios where there is a presumption of advancement in favour of the person to whom legal title in land or property is vested. But there does not present here, on the facts, any presumption of advancement favouring Rene as the adult son of Harald, aged 30 in 1997. At that time he was not in any relationship of loco parentis dependency upon his father. The legal principles will be addressed in a later part of these reasons.

137 As applied in Calverley v Green [1984] HCA 81; (1984) 155 CLR 242, 269 a starting point for the determination of the extent of respective beneficial interests by Harald and Rene in the Clarkside Court property is that the Clarkside Court property upon acquisition was held upon a resulting trust for them both - according to their respective financial contributions towards the purchase price and acquisition costs.

138 That starting presumption is rebuttable by admissible evidence.

139 The affirmative trial evidence of Rene which I have now accepted in its own right constitutes an evidentiary foundation to conclude that any presumption of a resulting trust arising out of the part funding of the acquisition of Clarkside Court provided by Harald in 1997, is rebutted. The same conclusion also applies concerning Harald's subsequent payments (between 1997 - 2012) applied in reduction of Rene's home loan debt. Likewise, it is also rebutted for the renovations and improvements made at Harald's expense to the Clarkside Court property. As Edelman J determined in Anderson v McPherson [No 2] [2012] WASC 19 the existence of a trust and the beneficial interest to which parties are entitled under that trust must be determined at the time of the purchase of the property, or 'so immediately afterwards as to constitute part of the transaction' [68]. In Anderson v McPherson [No 2] his Honour found that the subsequent improvements were not relevant to the resulting trust determination. In short, any presumption of a resulting trust favouring Harald is inconsistent with and is rebutted by the evidence on this issue.

140 The last of the key disputed issues is whether the payments which were to be made to Rene, and which were made, by Harald subsequent to the acquisition of the property were in the character of rental payments. The payments were received into Rene's nominated BNZ bank account, to allow him to fund the regular interest and principal repayments to BNZ to meet his secured home loan. Part of this enquiry is directed at whether Rene had told his father in their early 1997 telephone conversations that he would commit to apply all 'rental' payments received towards paying off his home loan, secured by first registered mortgage.

Were Harald's payments in the character of rent?

141 Whilst I was initially more than cautious about accepting Rene's evidence upon whether Harald's payments were in the character of rent, given that the moneys paid to Rene's account (and to his benefit) on a regular basis (1997 - 2012) by his father were not declared as rental income in Rene's tax returns, in the end I would accept this evidence as well. If this was the basis of the 1997 verbal agreement reached between them, then the character of the funds paid as rent to Rene, is very much against Harald's claims for a common intention constructive trust. It is also against Harald's resulting trust arguments - since rental payments made would be, in effect, a price of his ongoing occupancy.

142 I have given this disputed issue long consideration since, on my assessment, it is finely balanced. In the end, however, I do conclude that the regular monthly payments by Harald bore a rental character. I find that Harald paid moneys to Rene as rent - and this was understood by Harald. The conclusion in this respect arises out of an analysis, in part, of the series of deposit receipts kept by Harald and Linda, tendered as exhibit 2.14, TB pages 273 - 278 and exhibit 2.28, TB 319 - 330.

143 Some of their deposit receipts are accepted to be missing. Indeed, the jumbled assembly of these receipts tendered in the trial bundle presents something of a challenge to assimilate. However, Harald was cross-examined about the circumstances in which on a particular day, namely, 16 November 2001, he caused a deposit amount of $453 to be paid into Rene's personal account, [redacted] (that number being endorsed upon the deposit slip, see exhibit 2.28, TB page 321, first receipt in top left-hand corner). But on the very same day Harald had also caused a payment of $300 to be paid directly into Rene's home loan account [redacted] (see exhibit 2.14, TB page 273, National Australia Bank receipt of 16 November 2001). Such dual payment same day events appear to have also happened a month earlier, on 16 October 2001 (contrast TB pages 273 and 321, as regards payments of $300 into the home loan account and a payment of $453 into Rene's personal account as a regular monthly payment).

144 A scenario of dual deposit payments made the same day, one made directly into Rene's home loan account, but then the other regular monthly deposit amount of $453, is explicable, as was suggested by Rene, on the basis that the $453 regular monthly payment by Harald was then being treated by both of them as Harald's regular monthly rental payment. Otherwise, it is difficult to rationalise why the two payments on the same day by Harald should have been made to separate accounts that day, as occurred on 16 October and then on 16 November 2001.

145 In the end then, although it is a more finely balanced consideration, I assess that there is independent evidence to support what can be detected over time post 1997 as a loose rental arrangement or, more accurately, a conditional loose rental arrangement in existence as between Rene and Harald. This rental relationship was governed by the significant condition that rent moneys as received by Rene would all be the subject of his obligation to apply them in full in a reduction of his home loan and to not apply them to any other purpose.

146 In conclusion then, I would accept Rene's version of events, as regards the regular monthly deposit moneys paid by Harald as being paid to Rene as moneys for Clarkside Court.

Repercussions of findings in crucial areas

147 My overall assessment of facts favours Rene and, in particular, his version of events, as regards elements of the 1997 agreement with his father that both parties accept was reached as a result of wholly verbal telephone conversations.

148 Rene's version of the 1997 agreement reached with his father is to be accepted, over that contended for by Harald. The end conclusion is further supported by a difficulty of law, that I would perceive in detecting any element of legal consideration for the 1997 agreement flowing to Rene from his father - upon his father's rival version of a 1997 agreement, carrying the disputed components for which Harald contends.

149 In other words, on my assessment of Harald's version of a 1997 agreement whereby Harald would live in the Wanneroo property with Linda and Gertrude, but which title Rene must transfer to him once the last instalment loan repayment was made, it is more than difficult to detect any legal consideration by way of a benefit that would flow to Rene under such terms. Harald's is an arrangement which would see (as has been seen) Rene being exposed (potentially) to a personal liability for 25 years to the BNZ in respect of a $64,000 personal loan obligation (admittedly mitigated in ambit perhaps to only a net exposure to BNZ if any, if the Clarkside Court property loan had fallen into arrears and BNZ had then needed to execute by its power of sale. But, nevertheless, on that scenario a personal liability for any net residual indebtedness is ultimately carried by Rene for no tangible reward).

150 On Rene's more plausible version of the 1997 agreement, there is palpable legal consideration seen flowing to him, first out of rental payment receipts and then by his ultimate beneficial enjoyment of the Clarkside Court property at cessation of his father's life tenancy, or when his father should choose to live elsewhere.

151 It is necessary to render some brief observations about the law concerning common intention constructive trusts and upon resulting trusts. I turn to that.

Legal principles: resulting trusts

152 The equitable presumption of a resulting trust is explained in the reasons of Mason and Brennan JJ (as their Honours then were) in Calverley v Green (255). They said:

Equity presumes a trust in favour of the person who contributes the whole of the purchase price when the property is conveyed into the joint names of himself and another … though the strength of the presumption varies from case to case … and may be confirmed, rebutted or qualified by evidence of his intention. (citations omitted)

153 In certain circumstances, the equitable presumption of a trust can be rebutted where evidence presents that the relationship between the parties gives rise to a counter-presumption, namely, a presumption of advancement such as arises in situations involving husband and wife, parent and child or loco parentis.

154 Where the legal title following a purchase is vested in a party to whom the person providing the purchase money is under an obligation to support, any presumed resulting trust in favour of the party who advances the funds for purchase is rebutted. The presumption instead is that the property was vested as an absolute gift: see Crichton v Crichton [1930] HCA 14; (1930) 43 CLR 536.

155 In 1997, Harald was 57 years of age. Rene was a fully independent adult of 30 years of age then living independently without support in another State. Could there be in such circumstances a presumption of advancement favouring Rene?

156 In Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538, the High Court held that a presumption of advancement may apply to favour the beneficial interests of an adult child. In that case, however, the presumption was rebutted by direct evidence that the mother's intention was that her adult child was to hold the beneficial interest for the mother.

157 In this trial no argument contending for a presumption of advancement favouring Rene was raised. Hence, it is not strictly necessary to evaluate what might otherwise have been argued based on such a presumption. Rene's case is that the position is catered for expressly by the tenure of the 1997 agreement with his father.

158 Where there is no suggestion of a presumption of advancement to counter the equitable presumption of a resulting trust arising from the payments made, the equitable presumption of trust is still capable of being rebutted (remembering that its strength varies from case to case) by direct evidence. A presumption is only that, a mere presumption. Evidence that one party intended to make a gift, or to provide money to benefit a recipient party is admissible evidence of that character: see Gibbs CJ in Calverley v Green (246) and Ipp J in Atkinson v Festic (1990) DFC 95-089.

159 The High Court's decision in Bloch v Bloch [1981] HCA 56; (1981) 180 CLR 390 addressed circumstances for a resulting trust (which was found) around a real property purchase involving an adult son and his parents. Whilst there was no express trust found arising from the facts as presented in that decision, the acquired land purchased in the name of the son was found in the High Court to be held by the son to the extent of a one-third share of the proceeds of the property for his parents.

160 The principal reasons in the High Court were delivered by Wilson J, with whom Gibbs CJ, Murphy and Aickin JJ agreed. At page 397 his Honour observed:

The circumstances surrounding the acquisition of the flats do not yield with sufficient certainty the expression of an intention to create a trust. On the other hand, the facts present a classic illustration of the creation of a resulting trust. The property was conveyed into the name of the son, with the father having contributed part of the purchase price in circumstances which rebutted the presumption that the contribution was intended to advance or benefit the son. The contribution was not a gift. It was not a loan. The inference then arises that the father intended the son to hold the property in trust for him in a proportion corresponding to the proportion of the purchase price which was contributed by him.

161 His Honour was referring at footnote 19 to Underhill's Law Relating to Trusts and Trustees (13th ed, 1979) at page 267 and to Allen v Snyder [1977] 2 NSWLR 685, 698 (Samuels JA). Wilson J concluded at 398:

In my opinion, it was open to the trial judge to accept this evidence as establishing a consensus between the father and the son in relation to the question of fact which he had to determine, namely, the respective contributions which the parties made towards the purchase of the flats. It supports the declaration which his Honour made. It does not itself establish the trust; that was constituted when the property was acquired.

162 The facts of Bloch v Bloch display some of the financial contributions made there by the father had arisen from contributions towards repayment of a loan secured by mortgage, after the 'flats' had been acquired. Brennan J observed at 401:

This is not a case where the beneficiaries' intention as to the beneficial interests to be held by the parties was not shared by the trustee, and it is not necessary to consider whether the beneficiaries' belief that they were acquiring a beneficial interest was induced by the trustee's conduct. His Honour's finding was that there was a common understanding that the property was to be shared in proportion to the contributions made establishes an actual intention common to the parties that the beneficial interests should be in the same proportion as the moneys contributed … And as the common intention of the parties was that the parents' beneficial interest should be in the same proportion as the moneys they contributed, it is not necessary to consider what would have been the effect of their intention if they had intended that their respective interests should be in different proportions from the proportions of their contributions.

163 In Calverley v Green the High Court looked back to consider the significance of Bloch v Bloch, decided only some three years earlier. Mason and Brennan JJ pointed out at page 257, that it was erroneous to regard a payment of mortgage instalments as a payment of the purchase price for a home. Their Honours said at pages 257 - 258:

The payment of instalments under the mortgage was not a payment of the purchase price but a payment towards securing the release of the charge which the parties created over the property purchased. We would agree with the view expressed by the English Court of Appeal in Crisp v Mullings ([1976] EG 730 at 733), a case in which the material facts are not distinguishable from the present.

164 After referring to an extract from Crisp v Mullings [1970] EG 730, their Honours continued to observe as regards the contended constructive trust in that case in the following terms at page 258:

As both parties contributed to the purchase price, there could not be a resulting trust in favour of the defendant alone. It follows that the Court of Appeal was right to allow the appeal from Rath J. Then the Court of Appeal went on to hold that the legal estate prevailed unless there were an express trust created in favour of the defendant when the parties acquired the legal estate in the Baulkham Hills property. That was too large a step to take, for it was necessary to consider another equitable presumption which arises from the unequal contribution of the purchase price and which governs the present case unless some opposing presumption displaces it or the other facts of the case rebut or qualify it. Unless an equitable presumption of a trust is displaced by a counter-presumption or is rebutted or qualified by evidence of the intention of the party paying the purchase price or of the common intention of the parties who contribute that price, the presumption determines the conclusion to be reached: Stewart Dawson & Co (Vic) Pty Ltd v Federal Commissioner of Taxation (1933) 48 CLR 683 689 - 691; Carkeek v Tate-Jones [1971] VR 691, 695 - 696). Once it was found that both parties had contributed to the purchase price, the conclusion had to conform to the relevant equitable presumption unless it was displaced, rebutted or qualified.

165 Their Honours advanced to refer to the equitable presumption of trust in terms I earlier set out.

166 The joint reasons of Mason and Brennan JJ in Calverley v Green further discuss the nature of evidence which counters an equitable presumption of resulting trust, in scenarios of uneven contributions towards a purchase price used in the acquisition of property, for the purposes of rebutting or qualifying the equitable presumption of trust. Their Honours observed at page 261:

The equitable presumption can be rebutted or qualified by evidence of a contrary intention common to the contributors of the purchase price. When a common intention is in issue, it is not ordinarily to be found in an uncommunicated state of mind; it is to be inferred from what the parties do or say.

167 I also note their Honours' following observations concerning evidence of a sole purchaser's own state of mind at the time of purchase as being admissible evidence, however, continued at page 261:

but in the search for the common intention of two or more purchasers at that time, light will rarely be shed by evidence of their uncommunicated state of mind. Lord Diplock's speech in Gissing v Gissing [1971] AC 886, 906.

168 Addressing the facts in Calverley v Green, where a purchase of the property had been in the de facto couple's joint names, their Honours continued to observe at page 262:

In some cases it is possible to treat the concurrence of one party with the other's payment of the mortgage instalments as an admission of the former's exclusive interest, but the circumstance attending the payment of mortgage instalments is no more than one of the relevant facts. Another relevant fact is the relationship between the parties at the time. In the present case there was evidence of both of those facts. The Court of Appeal, having regard to those facts, inter alia, found that there was no common intention between the plaintiff and defendant that the plaintiff was to hold her interest in trust for the defendant. Nor did they find any other common intention. Their Honours held that the legal interests of the parties must prevail. The error in this approach is not in the refusal to find a common intention but in the failure first to apply the presumption that comes into play when the legal owners who are unequal contributors to the purchase price are not shown to have a common intention inconsistent with a tenancy in common in shares proportionate to their contributions. Applying the relevant presumption, the Court of Appeal should have held the parties to be equitable tenants in common in the Baulkham Hills property in proportion to the contribution each made to the purchase price. That proportion has not been precisely ascertained.

169 Their Honours finally came to consider Bloch v Bloch, which had been relied upon. They now observed at pages 262 - 263:

As there was no agreement made after the purchase to alter the equitable interests acquired when the property was purchased, the payments made under the mortgage work no alteration in those interests. This case cannot be likened to Bloch v Bloch where the relevant property which the parties intended to acquire was seen to be not the title to land subject to mortgage but the land freed of the mortgage. In such a case the price paid to free the land of mortgage as well as the price paid for the title to the land itself must be taken into account in determining the parties' beneficial interests. Mortgage payments may quantify the parties' interests under a resulting trust of a property acquired as a mortgage-free investment, but they would rarely quantify the interests of parties under a resulting trust of a house property acquired as a home to live in. If it is right to regard the payment of the mortgage instalments as having been made by the defendant out of his own funds or on his own account - that is, if he made those payments not intending the plaintiff ultimately to have the benefit of those payments - the defendant may be entitled to contribution from the plaintiff for her share of the payments and to an equitable charge to secure the making of her contribution: see Ingram v Ingram [1941] VLR 95, 102. That question was not argued on the appeal. Neither has any argument been raised to assert the existence of a beneficial interest under a constructive trust arising after the transaction of purchase was closed and overriding the beneficial interests then acquired. (my emphasis in bold)

Observations upon resulting trust principles to present facts

170 Applying the principles established by Calverley v Green to the present circumstances, it can at this point be seen that:

(a) the purchase moneys raised in 1997 to meet the major component of the purchase price were raised by the home loan taken out by Rene personally and secured by first registered mortgage against the Clarkside Court property. That was a real contribution by Rene to the purchase price needed to acquire that house and land in Wanneroo. He was personally liable for and exposed to that debt to BNZ from 1997 to 2013;

(b) the underlying facts as found in terms of the 1997 discussions between Harald and Rene, conducted over the telephone between Perth and Sydney, first need to be determined as to their content. This bears heavily upon whether or not any equitable presumption of resulting trust prevails as regards deposit and allied funds contributed by Harald either initially in 1997, or subsequently, by way of his property improvements and by way of his financial payments as moneys paid to Rene for the purpose of being used to discharge the level of Rene's home loan;

(c) the basis upon which Mason and Brennan JJ distinguished Bloch v Bloch is important, as seen at pages 262 - 263: namely, was the property to be acquired as a mortgage free investment or the acquisition of a home property acquired as a home to live in. For present circumstances, it is known that Harald and Linda took up occupation in the Clarkside Court property along with Harald's mother and Rene's grandmother, Gertrude Wilms, shortly after settlement in April 1997. Close attention is therefore required to those underlying arrangements;

(d) the question of whether or not there is, as a matter of evidence, a finding capable of being expressly made or inferred as to the existence of a common intention in Harald and Rene when the Clarkside Court property was acquired in 1997 or subsequently over time, is a critical issue; and

(e) it is to be remembered that an equitable presumption of resulting trust is only that - a legal presumption, which in appropriate circumstances is fully capable of being altered by the state of the underlying admissible evidence that is adduced in a particular case.

Constructive trust: legal principles

171 Harald also invokes principles of constructive trust, albeit his submissions make reference to constructive trust scenarios arising as a matter of common intention. Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 are leading High Court authorities dealing with scenarios of the remedial use of a constructive trust being used by the court for circumstances where in failed personal relationship cases the court as a matter of law found a trust. In those cases the circumstances presented what had turned out to be failed joint endeavours by parties, where it would have been ultimately unconscionable to allow one of the parties to hold at the end more than their proportionate share of their contribution towards a joint endeavour prior to its failure. See Lloyd v Tedesco [2002] WASCA 63; (2002) 25 WAR 360, in particular observations by Pullin J at [49] concerning a 'common subjective intention' to create a trust, referring to Baumgartner v Baumgartner at page 146 and the joint reasons of Mason CJ, Wilson and Deane JJ, and the alternate situation where there was no common subjective intention (see [50] in Pullin J's reasons).

172 The present underlying circumstances, by my assessment, are difficult to describe as a scenario of failed joint endeavour. They could instead be better described as a scenario of a wholly successful (1997 - 2013) joint endeavour, given the Clarkside Court property in Wanneroo was first legally acquired by Rene in 1997, then subsequently occupied by Harald and Linda (and for a time Gertrude). This unfolded in subsequent circumstances where, in the main, Harald would appear to have honoured his commitment to keep Rene in funds, so Rene could meet his secured loan repayments under his personal loan. Rene then met his commitment by directing that the funds which he received from his father all be used towards the reduction of his home loan debt over time, culminating in the loan being completely paid off by 18 January 2013.

173 The problematic question, of course, finally arose as to whether or not Rene was committed, either by a consensual agreement or by law, to cause the legal ownership of the Clarkside Court property to be transferred to Harald (or as Harald seeks, to himself and to Linda as joint tenants) thereby enabling on Harald's death, under principles of survivorship, a transfer by law of all the interest in the Clarkside Court property to Linda.

174 In those circumstances, it is difficult to characterise the presenting facts as being akin to a Muschinski or Baumgartner scenario of failed joint endeavour, which was not achieved and where it would be unconscionable in the eyes of equity to allow one party to take advantage, given the parties' respective contributions and objectives. Here the real question presents to me as one of disputed fact, as regards to what these parties had agreed or committed to, in terms of the long-term legal and beneficial ownership of the acquired property, once the secured home loan taken out by Rene was finally paid off a long time into the future.

175 Answers to those factual questions largely subsume the issues of equitable principle arising from the resulting and constructive trust case authorities.

Express trust not pressed

176 I will briefly record that at one point the plaintiff sought to rely upon arguments directed towards an establishment of an express trust emerging out of the 1997 agreement reached between the parties. Those short lived written arguments sought to invoke recent observations by French CJ in Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6; (2015) 255 CLR 62 [9] - [10], particularly at footnote 43, where his Honour observed as to the conceptual distinction between express and constructive trusts that:

Intention may nevertheless be relevant to the imposition of a constructive trust where, for example, the expectations of one party are affected by the conduct of another, or where a trust is imposed by operation of law as an element of a wider property transaction which the parties intended to enter: Bryan, 'Constructive Trusts' in Ford and Lee (eds), Principles of the Law of Trusts, (looseleaf service) vol 2 at [22.600].

177 But in the end here, the contention towards an express trust to be inferred out of the parties' early 1997 dealings was not pressed. On my assessment, that concession was correctly made, with the facts presenting here being more aligned with the observation of Wilson J in Bloch v Bloch that the circumstances 'did not yield with sufficient certainty the expression of an intention to create a trust' (397).

Final note: Rene's cross-examination credibility by having had reference to Harald's earlier exchanged witness statement

178 Rene was closely and competently cross-examined by counsel for the plaintiff during the course of the trial. In closing Mr Curwood made a credibility submission adverse to Rene. This was advanced on the basis that Rene had accepted that in the preparation of his own witness statement (which was exchanged under directions made by a Registrar of this court at a case management conference) that Rene had been shown by his legal adviser and had regard to the earlier exchanged witness statement of his father, Harald, whilst preparing his statement. Harald's witness statement, which became exhibit 3, is dated 29 June 2015 (albeit filed at court on 13 July 2015). Rene's witness statement followed three months later, which became exhibit 6 at trial. It bears the date 12 October 2015 and is marked as having been filed that day.

179 Rene accepted, as is evident, that he had indeed been provided with, and did have regard to his father's witness statement in preparing his own witness statement, by his legal representatives. This was in accordance with the directions timetable for witness statements issued for a sequential exchange of statements.

180 So it was that counsel for Harald submitted in closing by reference to par 23 of the 'Best Practice Guide on Preparing Witness Statements for Use in Civil Cases' (01/2009 - 2011) published by the Western Australian Bar Association (Best Practice Guide) that Rene, in preparing his evidence for trial ought not have been shown his father's witness statement, for a purpose of preparing his own witness statement (I note that exhibit 6 displays on its first page of substantive content in the top left corner the reference to it being 'draft no. 3').

181 When this submission was first put I admit to suffering some surprise, given that it seemed to be at odds with my experience and, I also thought, with common sense. But Mr Curwood then drew my attention to the wide terms of par 23.1 of that Best Practice Guide, and which is incorporated by reference into the Practice Direction issued by this court concerning the exchange of witness statements. That Best Practice Guide was expressly made the subject of the case management directions in this action by a Registrar of this court. Paragraph 13(g) of the orders issued on 14 April 2015 directed:

13. Each witness statement shall satisfy the following formal requirements:

…

(g) It shall be prepared in accordance with the best practice guide 01/2009 issued by the Western Australian Bar Association entitled 'Preparing Witness Statements - for Use in Civil Cases' and shall contain a certificate to that effect signed by the practitioner most responsible for its preparation.

182 The Best Practice Guide of the WA Bar Association appears to have been revised or amended in August 2011. I observe that par 23.1 now says:

A witness should not be shown the written statement of another witness because:

• providing the witness statement of one witness to another is a means of facilitating collusion concerning the testimony of witnesses;

• providing the witness statement of one witness to another is likely to result in witness coaching by identifying matters with which the witness must agree or disagree;

• a witness does not need to know the evidence of another witness in order to give complete and accurate testimony as to the matters known to that witness;

• it is for the lawyer to identify the matters addressed in other witness statements about which a particular witness may be able to give evidence and for the lawyer to ask the witness proper questions to elicit the testimony that the witness is able to give without collusion or coaching;

• there may be an order for witnesses out of court at trial and the process of requiring witness statements is to facilitate the efficient conduct of the trial, not to otherwise alter the trial process by which the evidence of a witness may be tested.

183 Upon my respectful observation, the Best Practice Guide in the terms, as seen from par 23.1 above, looks to be too widely framed. In my view, there is nothing at all undesirable, untoward or that bears adversely against a witness's credibility from the witness being shown in preparation for a trial what is an adverse witness statement that has been earlier exchanged - for a purpose of gathering and providing their evidence or instructions by way of a response - where the two witnesses are on opposing sides of civil litigation.

184 The true circumstances which look to be the intended object of par 23.1 of the Best Practice Guide are much narrower. The sensible intent of par 23.1 is directed against the prevention of collusion or collaboration as between trial witnesses on the same side and so that such aligned witnesses at a looming trial are not prepared so that they uniformly 'sing from the same song sheet'.

185 Where, however, as for the present case, Harald is plaintiff and Rene is the defendant opposing party, any suggestion that they should not see each other's witness statements before the trial for the purposes of responding to each other at the trial is wholly illogical, unjust and cannot be accepted. It would defeat the purpose of basic natural justice if a party were not fully able to know the case that is put against them by another.

186 By analogy and to the same policy end, I would refer to Firmware Technologies Inc v Asia Platinum Group Ltd [2016] WASCA 179 [38] - [39], where the Court of Appeal has only recently said:

[38] Because of the view which we take with respect to the proper construction of the springing order made by the Master, it is unnecessary to deal with the specific submissions made on behalf of Asia Platinum with respect to the extent to which the witness statement provided by Firmware fell short of a statement which complied with the various requirements of order 14 made by the Master on 6 May 2015. However, there is one aspect of those submissions which merits attention, and that is the proposition that, by responding seriatim to the witness statements provided by Asia Platinum, the witness statement provided by Firmware involved a contravention of r 39 of the Legal Profession Conduct Rules 2010 (WA). That rule provides:

(1) A practitioner must not suggest to or advise a witness that the witness should give false evidence.

(2) A practitioner must not make a suggestion to, or condone a suggestion being made to, a prospective witness about the content of evidence which the witness should give at any stage in the proceedings.

(3) A practitioner who -


(a) advises a prospective witness to tell the truth; or

(b) questions and tests in conference the version of evidence to be given by a prospective witness; or

(c) draws the witness's attention to inconsistencies or other difficulties with the witness's evidence,

has not, by that action, breached subrule (1) or (2).
[39] Counsel for Asia Platinum submitted that it was a contravention of this rule for a practitioner to show a prospective witness a statement provided in relation to the evidence to be given by another prospective witness. With respect to counsel, we are quite unable to see how such a course would involve a contravention of r 39 without more. Of course, the rule would be contravened if the purpose of providing a statement of the evidence to be given by one witness to another witness was to enable those witnesses to align their evidence. However, there can be no suggestion that, for example, the provision to Mr Blandin of the statement of the evidence to be given by Mr McAleer was undertaken for the purpose of allowing Mr Blandin to align the evidence he was to give with the evidence to be given by Mr McAleer. Clearly, the purpose of providing Mr Blandin with a copy of the statement provided by Mr McAleer was to enable him to respond to the various assertions contained within it. It is also to be remembered that Mr Blandin is, in effect, the guiding mind of Firmware and the person responsible for the provision of instructions to Firmware's solicitors. It is difficult to see how he could appropriately discharge that responsibility without an awareness of the evidence proposed to be led in support of Asia Platinum's claim.

187 It is entirely legitimate, in my view, (as happened here) for an opposing party defendant such as Rene to sit in the open court to hear all of the plaintiff's adverse evidence given viva voce, had it been led that way by counsel. But here witness statements were used.

188 For it to be said that Rene's credibility is adversely affected by seeing his father's witness statement before the trial is curious. It was said instead, that Rene's legal adviser ought to have painstakingly sat with him for the purpose of taking a witness statement, but seeking to have Rene respond verbally to a series of non-leading questions posed by his lawyer by reference to his father's witness statement (that the legal adviser held, but could not give or show to Rene) in preparing Rene's witness statement. That hypothesis, with respect, presents to me as an almost certain recipe for a looming trial disaster. It would engender a scenario of unnecessary imprecision and accompanying high level confusion, not to mention much wasted time and costs.

189 In my view, the submitted view of the scope of the Best Practice Guide at par 23.1 is too wide, to the extent that the Guide paragraphs are read more broadly than being only applicable to control the preparations for witnesses on the same side of a case in civil litigation. The paragraph may require some revision to that end, as it looks to be open to the misunderstanding that manifested here.

190 In any event, I would reject a credibility attack framed in this way put against Rene. As I indicated, on my assessment, giving close attention to his evidence at trial, Rene's evidence was more than satisfactory. Indeed, it was more reliable than, and was to be preferred to that of his father from an overall reliability perspective, in areas where there was a clash of evidence over an important issue.

Orders

191 Harald's case seeking to prove for himself a constructive or resulting trust to the extent he claimed fails.

192 I will publish these reasons to the parties' counsel so that they can confer and hopefully provide a minute of agreed orders implementing their content. Rene has, of course, acknowledged Harald's life tenancy interest in the Clarkside Court property and the terms of declaratory orders to that end need to be prepared with some care.

193 For the present, I shall simply declare that Harald's action seeking the constructive and resulting trust relief in the terms he sought over Clarkside Court will be refused and that claim is dismissed. Otherwise, all other consequential orders including all questions as to costs are reserved.

194 I will allow the parties 7 days from the publication of these reasons to confer upon orders and, if necessary, for a further appointment to settle orders as to relief and costs if they cannot be agreed.