Howell v Kelly

These proceedings involve claims by the plaintiffs, who are brothers Harry Richard Howell and Jeremy Robert Howell, as beneficiaries under the will of their late father, Harry Edmund Hector Howell, against Rosemary Edythe Kelly (the first defendant) and Sunglade Pty Ltd (the second defendant). I will refer to Rosemary and Sunglade collectively as the defendants.

Without intending any disrespect or overfamiliarity, I will refer to the parties and the other relevant family members in these proceedings by their first names or, in the case of Richard, by his second name by which he is known.

Harry and Rosemary were de facto partners for around 25 years before Harry died on 15 April 2019 when he was 85 years old. The principal relevant events took place over the course of the last years of Harry’s life.

The plaintiffs made two claims, one against Rosemary and the other against Sunglade, which are articulated in the amended statement of claim filed 23 September 2024 (ASOC).

The first claim made by the plaintiffs in the ASOC is a claim to account for money or alternatively equitable compensation against Rosemary set out in prayers 1 and 2 of the ASOC (Account Claim). In closing submissions, the plaintiffs did not pursue all of the bases on which the Account Claim was made.

Further or in the alternative, the plaintiffs made a second claim set out in prayer 3A of the ASOC seeking a declaration that Sunglade holds a one-half interest in a property located at Naremburn, New South Wales (Naremburn Property) on trust for the estate of Harry (Trust Claim).

The essential factual allegations in support of the relief sought in the Account Claim are contained in the ASOC at [1]–[18]. In summary, those allegations are that over a four-year period while Harry was in nursing care before his death, Rosemary made withdrawals totalling more than $1,280,000 from the joint bank accounts of Harry and Rosemary which were:

The causes of action on which the Account Claim were based in the ASOC are the following:

The essential factual allegations in support of the relief sought in the Trust Claim are contained in the ASOC at [19A]–[19I]. In summary, the plaintiffs allege that to the extent that Rosemary asserts that in around 2011–2012, Harry, Rosemary and Sunglade agreed to a joint endeavour to develop and construct a dwelling at the Naremburn Property in which they would live, and Harry and Rosemary agreed to share the building and construction costs of the development (ASOC at [19A–19D]):

In opening and closing submissions, the plaintiffs indicated that for the Account Claim they did not assert that Rosemary held the funds in the joint bank account on bare trust for Harry but instead put their allegations on the basis that there was a resulting trust in favour of Harry in circumstances where there was no presumption of advancement (T142–144). The defendants accepted that they were not prejudiced by that change in the basis for the plaintiffs’ case (T8–9).

The various causes of action on which the Account Claim and the Trust Claim are based also took on a very different emphasis and sequence in closing submissions from the plaintiffs. The plaintiffs’ case in closing submissions appeared to be put in the following way:

In closing submissions, the plaintiffs no longer asserted that Rosemary converted the funds in the joint bank accounts for her own use, is liable for a fraudulent breach of trust or breached her fiduciary duties as bases for the Account Claim. Instead, the plaintiffs only asserted, as an alternative, that Rosemary unconscientiously took advantage of Harry when he was in a position of special disadvantage in relation to her.

No point was taken by the defendants that the narrowing of the plaintiffs’ case in this way at the trial caused them any prejudice.

In the further amended defence to the ASOC filed 13 October 2025 (FAD), the defendants baldly denied the claims and also raised the defence of laches on the basis that the plaintiffs delayed between 2017 (when they became aware of the basis for the claims) and 2021 (when they brought the claims), which meant that Harry’s evidence on the relevant events is no longer available.

In communication with my chambers following the conclusion of the trial, the defendants indicated that they did not press the laches defence.

I have determined that:

In 1962, Harry married Veronica Howell, with whom he had three children:

In 1990, Harry and Veronica divorced after being separated for five years.

In 1994, Harry and Rosemary met. At that time, Harry was about 61 years old and Rosemary was about 59 years old. In around 1995, Harry and Rosemary commenced a romantic personal relationship with each other.

For about the last 25 years of Harry’s life, he worked as a literary sales agent. Harry regularly travelled to the United States of America as well as to New Zealand, Melbourne, Perth and Queensland for his work. Although Rosemary said that she accompanied Harry for most of these trips, Richard said that when he lived with Harry from 1995 to 2002, he did not observe Rosemary accompanying Harry on any of these trips. Nothing particularly turns on this difference in the evidence.

Rosemary has two children from her first marriage, which ended acrimoniously:

At the time that Harry and Rosemary met, their children were adults and largely independent of them.

According to Rosemary, Harry asked her to marry him on many occasions but she was always opposed to the idea of remarrying because her second marriage had ended acrimoniously and she was aware that Harry’s marriage to Veronica ended in less than ideal circumstances, although Richard recalled that his parents’ marriage ended amicably. Rosemary considered it was not necessary to burden her stable and happy relationship with Harry with marriage following their previous experiences.

On 8 December 2015, Harry and Rosemary had a commitment ceremony conducted by a registered celebrant at Northbridge Golf Club, followed by a celebratory lunch, with friends and relatives in attendance, although neither Richard, Jeremy nor Susan attended it.

Rosemary is now 90 years old.

The directors of Sunglade are John Arthur Bush (appointed 11 December 1985) and Rosemary’s son, Ross (appointed 8 April 2022). Both Bush Nominees Pty Ltd and Mosman Street Finance Pty Ltd hold one share each in Sunglade.

Mr Bush is a long-time friend of Rosemary and was a solicitor, although he is now retired. In cross-examination, Rosemary oddly described Mr Bush as “a friend or a semi-friend” (T132).

Rosemary is not and never has been a shareholder or a director of Sunglade (T71).

The FAD was verified by affidavit made by Mr Bush as the director of Sunglade.

The defendants accepted that Mr Bush is the controlling mind of Sunglade (T168).

All the shares in Bush Nominees are owned by Arthur Spooner, who is also the sole director and secretary of Bush Nominees.

All the shares in Mosman Street Finance are owned by Arthur Spooner and Sabine Spooner, and Arthur Spooner is the sole director and secretary of Mosman Street Finance.

The defendants made no attempt to explain the association between Mr Bush (on the one hand) and Arthur Spooner and Sabine Spooner (on the other hand).

At the hearing, Richard and Jeremy gave evidence on behalf of the plaintiffs and were cross-examined, while Rosemary and Byron Pedersen gave evidence on behalf of the defendants and only Rosemary was cross-examined.

As accepted by the parties in closing submissions, although it was clear during the respective cross-examinations that some of the evidence given on particular topics was incorrect due to the particular witness not knowing, not remembering or not having recourse to a document which otherwise would have indicated the true position on that topic, there was no submission made to me that a witness lacked credibility across the whole of their evidence (T167 and T171). As a result, where I have not accepted the evidence of a witness on a particular topic, it is only on the basis that I regard the specific evidence as incorrect and therefore unreliable.

In assessing the reliability of the evidence provided by each of Jeremy and Richard, I have given particular consideration to their general absence from Australia for most of the period in which the relevant events occurred, such that each of them often did not directly observe those events. This was especially acute in relation to their statements about the characterisation of the relationship between Harry and Rosemary, the living arrangements of Harry and Rosemary and the financial arrangements of Harry and Rosemary.

This is demonstrated in Jeremy’s movement records which indicate that he was in Australia for very short periods at a time between 2003 and 2019, often for periods of less than a week and never more than three weeks covering: 6–27 January 2003, 9–31 December 2005, 10–15 January 2007, 16–25 October 2008, 13–24 March 2009, 21–23 July 2010, 30 July–1 August 2010, 12–29 December 2010, 24–26 October 2011, 26 December 2012–5 January 2013, 14–16 June 2013, 18–20 February 2014, 9–11 November 2014, 7–9 June 2015, 22–24 November 2015, 24–26 February 2016, 13–15 September 2016, 27 February–1 March 2017, 26 December 2017–3 January 2018, 8–10 August 2018, 17 April 2019 and 30 April–2 May 2019. Jeremy’s affidavit evidence was prepared without access to these movement records.

The cross-examination of Jeremy revealed that his evidence in chief was often incorrect about whether he was or was not in Australia at the time of a relevant event he claimed to remember, which he readily accepted (T37–38). Jeremy’s concessions in this regard are captured by the following cross-examination of him (T38):

As for Richard, he gave evidence-in-chief that he only visited Harry in Australia in 2010 and 2016, and he accepted in cross-examination that those were his only visits to Harry across the period from 2005 to 2019 (T25). Richard also accepted in cross-examination that he had no knowledge of any changes in the living and financial arrangements of Harry and Rosemary from his own personal observations in the period after he moved overseas (T34).

As a result, I have been very cautious in considering the evidence of each of Jeremy and Richard in relation to matters which neither of them could have directly observed.

In closing submissions, the plaintiffs drew my attention to the fact that Mr Bush was present in court throughout the hearing, a matter which was agreed by the defendants (T142). The evidence also revealed that Ross lives with Rosemary. These circumstances gave rise to a submission from the plaintiffs that I should draw inferences in accordance with the rule in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, which I recently explained and summarised in Les & Zelda Investments Pty Ltd (as trustee for Les & Zelda Family Trust) v Whitehaven Coal Limited (No 4) [2026] NSWSC 107 at [76]. I have dealt with that submission in respect of Mr Bush and Ross in dealing with the relevant events below.

In the early 1980s, Sunglade purchased the Naremburn Property located at XX Waters Road, Naremburn, New South Wales.

The Naremburn Property has frontages on Waters Road and Dargan Street, and initially consisted of one building fronting Waters Road, which was divided into two flats with a front section and a back section, and a big block of vacant land fronting Dargan Street (T69–70). Plans were later made for the development of the Naremburn Property, which I have set out in detail below.

Although the evidence is not clear, in cross-examination Rosemary said that she did not know how the Naremburn Property came to be purchased by Sunglade and asserted that Sunglade acquired the Naremburn Property as trustee of a family trust, the beneficiaries of which are Rosemary, Peta and Ross (T70–71). But Rosemary also gave evidence in chief that in mid-2014, she had a conversation with Harry in which she asserted that the Naremburn Property “is owned by Sunglade on trust for me”. When confronted during cross-examination with this contrary evidence that she was the sole beneficiary of the trust, Rosemary continued to assert that the Naremburn Property was held on trust for her, Peta and Ross but agreed that she always received the rent for the Naremburn Property and paid the outgoings for it (T72).

In further cross-examination, Rosemary also agreed that in around June 2017, Peta had asserted that she was the true owner of the Naremburn Property, Rosemary disagreed with that assertion and said that she had a conversation with Mr Bush about him making a statutory declaration to explain the true ownership of the Naremburn Property but does not know whether he did so (T72).

Rosemary also gave evidence that she “donated” the land on the Naremburn Property as part of an agreement with Harry to develop the Naremburn Property, from which I infer that she regarded the Naremburn Property as her own.

I accept the plaintiffs’ submission that the unexplained failure of Rosemary and Sunglade to call Mr Bush to give evidence on the precise ownership of the Naremburn Property and the terms of any trust on which it is held gives rise to the application of the rule in Jones v Dunkel in the present case. It means that I can draw the inference that Mr Bush’s evidence would not have assisted the case of Rosemary and Sunglade, an inference that I can draw with greater confidence because Mr Bush appears to be in a position to cast light on whether the inference should be drawn.

As a result of the evidence and the inferences I can draw from the absence of Mr Bush that his evidence would not have assisted Sunglade, I consider that the Naremburn Property must be regarded as held on trust for Rosemary alone, she was able to treat the Naremburn Property as her own and that Sunglade acquiesced in the arrangements that Rosemary made with Harry in relation to the Naremburn Property.

The rent received by Rosemary for the Naremburn Property was at least about $2,350 per month (T79). The rent from the Naremburn Property formed part of the income on which Rosemary lived (T68–69).

On 24 April 2018, the existing building fronting Waters Road at the Naremburn Property was listed for rent and was leased on 15 June 2018. Rosemary agreed that she received the rent from that lease into her bank account and could provide no reason for why it was not paid into one of the Joint Westpac Accounts (T105). There is no evidence that the rental income from the Naremburn Property was ever paid to the benefit of Harry before he died in April 2019.

Between about 2014 until 2019, the Naremburn Property was developed with the renovation of the existing building and the construction of a new house. I have dealt with the development of the Naremburn Property in detail below.

Following the completion of the development of the Naremburn Property, Rosemary and Ross now live there. Rosemary said that Ross suffers from Parkinson’s disease and she sees him on a daily basis (T84).

In 1984, Harry purchased the property located at XX Gordon Crescent, Lane Cove North, New South Wales (Lane Cove Property). Harry lived at the Lane Cove Property from 1984 until about late 2014.

Harry paid the outgoings for the Lane Cove Property.

Harry built and maintained a very large model railway in a large shed at the Lane Cove Property, which was his passion, hobby and joy.

In about 2011 or 2012, Harry was approached by developers about them acquiring the Lane Cove Property to form part of a development in the area.

The Lane Cove Property was sold by Harry in about December 2014 for $1.625 million, with settlement of that sale occurring in April 2015 as a result of the purchaser extending it several times.

The property located at XX Caringal Place, St Ives, New South Wales (St Ives Property) was owned by Ross. Rosemary lived there from about 1996, two years after she met Harry, at which time she was living in Turramurra at a property also owned by Ross, which was sold and then the St Ives Property was purchased (T67–68). Rosemary paid the outgoings for the St Ives Property (T67).

The St Ives Property had a pool and tennis court.

In cross-examination, Rosemary explained that the St Ives Property came to be owned by Ross because he had health problems and she promised him that he would have a property (T67–68). Rosemary also said that she was free to use the St Ives Property in whatever way she wished as long as the proceeds of the sale of the St Ives Property ultimately went back to Ross (T73).

The St Ives property was sold in 2013 for net proceeds of $1,265,950.15. Mr Bush acted on the sale (T74).

On 28 November 2013, $1 million from these net proceeds was transferred to a term deposit in the name of Lisroan Pty Ltd (Lisroan Term Deposit). Both Bush Nominees and Mosman Street Finance each held one share in Lisroan. Mr Bush was also a director of Lisroan.

Rosemary treated the Lisroan Term Deposit of $1 million as her own to pay for part of the development of the Naremburn Property (T74). Rosemary could not recall what happened to the remaining amount of about $265,000 from the net proceeds of the sale of the St Ives Property but said that it would have gone into a bank account or been put on deposit (T74).

The property located at XX Crown Street, Woolloomooloo, New South Wales (Woolloomooloo Property) was owned by Lisroan.

Lisroan owned the Woolloomooloo Property on trust for Rosemary, and possibly also Peta and Ross, although the position was unclear on the evidence of Rosemary in cross-examination (T74–75). As in the case of the Naremburn Property, the precise ownership of the Woolloomooloo Property is not clear on the evidence of the defendants.

On 8 December 2017, on behalf of Lisroan, Mr Bush executed a transfer of the Woolloomooloo Property to Rosemary’s son, Ross, for $1,150,000 (T82). Ross now owns the Woolloomooloo Property.

Lisroan was deregistered on 30 September 2019.

Rosemary received all of the rental income of about $3,000 per month from the Woolloomooloo Property into her personal bank account and paid all the outgoings in relation to it (T75) until she and Harry moved into the Woolloomooloo Property in late 2014 (which I have dealt with in further detail below).

I accept the plaintiffs’ submission that the unexplained failure of Rosemary to call Mr Bush and her son, Ross, to give evidence on the precise ownership of the Woolloomooloo Property and the terms of any trust on which it is held by each of Lisroan and Ross for Rosemary also gives rise to the application of the rule in Jones v Dunkel in the present case. It means that I can draw the inference that the evidence of Mr Bush and Ross would not have assisted Rosemary’s case, an inference that I can draw with greater confidence because each of Mr Bush and Ross appear to be in a position to cast light on whether the inference should be drawn.

As a result of the evidence and the inference I can draw from the absence of each of Mr Bush and Ross that their respective evidence would not have assisted Rosemary, I consider that the Woolloomooloo Property must be regarded as having been held on trust for Rosemary alone.

Rosemary also owns a property in London (London Property), which was transferred to her as a beneficiary in 2018 by Mayfair Investments Ltd and which she accepted she now owns (T82).

Rosemary rented out the London Property and the rent from it was received into an account held by Rosemary with Barclays in England (Rosemary Barclays Account) (T82–83 and T110).

Having commenced their personal relationship in about 1995, it appears that up until 2013, Harry and Rosemary spent time interchangeably at the Lane Cove Property and the St Ives Property, although they each maintained their respective residences by separately paying the outgoings for them. When speaking to Jeremy, Harry referred to the St Ives Property as “Rosemary’s” and told Jeremy of the financial independence of Harry and Rosemary from each other.

From 1995 until September 2002, Richard lived with Harry at the Lane Cove Property. Up until January 2002, Richard lived there alone with Harry and then from January 2002 until about August or September 2003, Richard and his wife, Karolina, both lived with Harry at the Lane Cove Property.

As stated above, Harry had a very large model railway at the Lane Cove Property. The model railway could not be set up at the St Ives Property, which was one of the reasons that the Lane Cove Property was kept for a time.

Harry and Rosemary were keen tennis players and regularly entertained friends at the St Ives Property and held tennis matches there. Both Harry and Rosemary belonged to Hash House Harriers social running clubs that often ran together each week with a social get-together afterwards. Harry and Rosemary also went on Hash weekends away together and attended other joint Hash events regularly.

I am also satisfied that in the period from 1997 to 2014, Harry and Rosemary travelled extensively together to various parts of Australia, the United Kingdom, the United States of America, Europe, New Zealand and Hong Kong, with much of the travel in Australia being trips involving their caravan. In cross-examination, Jeremy accepted that Harry and Rosemary travelled widely together (T42). The trips after 2010 appear to have been exclusively within or around Australia, including for Hash events and model railway events.

I am also satisfied that Harry travelled alone when visiting Jeremy in Hong Kong between 2004 to 2010 and visiting Richard in Amsterdam in 2005 and 2007, but he did not travel alone after about 2007 and did not travel internationally after 2011.

After the sale of the St Ives Property in 2013 and then the sale of the Lane Cove Property in 2014, Harry and Rosemary spent much of 2014 packing up the Lane Cove Property, which they completed in late 2014 and then they moved into the Woolloomooloo Property in time for Christmas 2014. Rosemary’s memory of this timing is consistent with an email dated 20 July 2014 sent by Harry to Richard which stated:

Harry’s email refers to “we”, which was obviously a reference to Harry and Rosemary together. In cross-examination, Richard accepted that he knew that Harry and Rosemary were living together at the Lane Cove Property by 2014, were going to move to the Woolloomooloo Property together and were planning to live at Naremburn (T19).

The move by Harry and Rosemary to the Woolloomooloo Property also accords with an email dated 31 March 2015, which Richard sent to Harry in which Richard stated, “I heard from Jeremy that you moved out of Lane Cove”. In other words, there is evidence that both Richard and Jeremy knew that the move to the Woolloomooloo Property was complete before 31 March 2015.

As I have observed above, both Jeremy and Richard were located overseas for much of the past 20 years, Jeremy only visited Harry for short periods of time and Richard only visited Harry twice in that time. For those reasons, I am prepared to accept that the evidence of Rosemary as to her living arrangements with Harry in that period is likely to be more reliable than the respective evidence of Jeremy and Richard, which appears to be mostly indirect.

I am satisfied that in the period from 1995 to around 2013, Harry and Rosemary spent substantial time at each other’s residences, including a period in which Harry lived at the St Ives Property (when the Lane Cove Property was unliveable due to a fire) and a period after the St Ives Property was sold in 2013 (when Rosemary moved to the Lane Cove Property). I also find that on the whole, Harry and Rosemary maintained separate residences from 1995 until the end of 2013 (a period of around 18 years) when Rosemary moved into the Lane Cove Property, before they moved to live together at the Woolloomooloo Property in late 2014.

When Harry and Rosemary moved to the Woolloomooloo Property, Rosemary had to forego her income of about $3,000 per month from the rent for the Woolloomooloo Property.

During the course of the relationship between Harry and Rosemary, Rosemary had limited contact with Jeremy, Richard and Susan. Rosemary believed that as her relationship with Harry progressed, Veronica (Harry’s ex-wife), Richard and Jeremy were antagonistic towards her. Rosemary mostly stayed at the St Ives Property when any of Veronica, Richard and Jeremy visited the Lane Cove Property. Harry understood Rosemary’s reasons for staying away during the visits of Veronica, Richard and Jeremy.

Richard and Jeremy both deny that they were always antagonistic towards Rosemary. Richard considers that the antagonism started with Rosemary after Ross broke up a relationship he was in with a friend of Richard’s wife, Karolina. Jeremy accepts that he did not know Rosemary well and described their relationship as neutral until he developed negative feelings toward Rosemary’s behaviour due to later events in 2017, which are described below. Thankfully, it is not necessary for me to determine anything other than that the events leading to these proceedings demonstrate that each of Richard and Jeremy had a very strained relationship with Rosemary.

During the last years of Harry’s life, Rosemary had limited contact with Jeremy, almost no contact with Richard, but had more of a relationship with Susan.

In about 2011, Harry and Rosemary commenced discussions about the possible redevelopment of the Naremburn Property after Harry was approached by developers about acquiring the Lane Cove Property. They discussed their future living arrangements and applying for a dual occupancy subdivision of the Naremburn Property. In Rosemary’s words:

As there was an existing dwelling consisting of two flats with tenants on the Naremburn Property fronting Waters Road, Harry and Rosemary were talking about building an additional new house on the Naremburn Property on the big block of land fronting Dargan Street with the existing dwelling to remain and be rented (T69–70).

Rosemary regarded the dual occupancy subdivision of the Naremburn Property as a project that she and Harry were embarking upon (T68). It was a project which would take about five years (T78).

During the discussions in 2011, Harry said to Rosemary:

As I have outlined above, Sunglade owned the Naremburn Property under an unclear trust arrangement on behalf of Rosemary, in which Rosemary received the rent from the Naremburn Property and paid all outgoings for it. Rosemary’s evidence was that Harry and Rosemary would both receive the rent from the Naremburn Property (T70), but Rosemary did not give evidence of how that would be achieved in light of the trust structure, and there is no evidence that Harry ever did receive any rent from the Naremburn Property. As I have detailed below, on the whole Rosemary was someone who ensured that she kept her assets and finances for herself. As a result, the available inference is that Rosemary treated the Naremburn Property as her own (despite in cross-examination saying she was unsure of that (T72)) and kept the rent from the Naremburn Property for herself.

In about 2012, Harry said to Rosemary words to the following effect:

In 2013, Harry and Rosemary continued discussing subdividing the Naremburn Property so that there would be separate houses fronting both Waters Road and Dargan Street and “[w]e [Harry and Rosemary] decided that we would build a new house fronting Dargan Street in which we would live together”. During those discussions, Harry said to Rosemary:

Rosemary and Harry had frequent discussions about the development of the Naremburn Property in which Harry said to Rosemary on a number of occasions:

Harry would also frequently say to Rosemary:

In cross-examination, Rosemary said that she understood Harry’s reference to sharing the building costs at the Naremburn Property to be that they “would pay half each” (T76–77).

It is clear that in these discussions, Harry was referring to him “giving up” the Lane Cove Property by selling it and Rosemary “giving up” the St Ives Property by selling it. In cross-examination, Rosemary said that she understood this was what Harry was saying (T77). The plan between Harry and Rosemary was that Harry would sell the Lane Cove Property and Rosemary would sell the St Ives Property to fund the build at the Naremburn Property (T73).

Rosemary accepted in cross-examination that the proceeds of the sale of the St Ives Property being used to fund the build at the Naremburn Property meant that Ross had an interest in the Naremburn Property (T73).

In further cross-examination, when Rosemary was questioned on how it would be fair for Harry to give up a house in his name (the Lane Cove Property) and contribute to the cost of building on a property not in his name (the Naremburn Property), she concluded her answers by saying that she and Harry had talked about ultimately transferring the title to the Naremburn Property to their joint names (T77–78). Rosemary confirmed that it was jointly assumed by her and Harry that at some point the title to the Naremburn Property would be changed so that they both had an interest in it, although they had not been thinking about the legalities of it all the time (T82).

It was abundantly clear that by Harry paying all of Rosemary’s expenses and paying half the costs of the development of the Naremburn Property, she was able to retain all of her own assets (including those she treated as her own such as the Naremburn Property, the Woolloomooloo Property and the Lisroan Term Deposit), the $265,000 from the net proceeds of the sale of the St Ives Property on deposit, the London Property and the Rosemary Barclays Account. I make this finding despite Rosemary’s equivocation in accepting it (T82–83).

Rosemary made the application to Willoughby Council to develop the Naremburn Property with the permission of Mr Bush on behalf of Sunglade, and she discussed with Mr Bush that she and Harry were planning to develop the Naremburn Property into a dual occupancy subdivision (T71). The Council’s records dated 10 March 2014 and 14 April 2014 indicate that development application number “2011/384/A” was originally made in 2011 by Rosemary and that a modification application was then made in 2014. The development of the Naremburn Property was agreed by the acquiescence of Mr Bush on behalf of Sunglade.

The development of the Naremburn Property involved the renovation of the existing building and the construction of the new building (T75). When the renovation of the existing building was completed, it was rented out and, although Rosemary said in cross-examination that Harry and she had rented the existing building, she could not remember when and there is no evidence that Harry ever received any rental income (T75–76).

Rosemary gave evidence that in 2014 when she and Harry moved to the Woolloomooloo Property and began the development of the Naremburn Property, she gave up income which she derived from renting out both the Woolloomooloo Property (which was owned by Lisroan) and the Naremburn Property (which was owned by Sunglade) totalling about $5,350 per month, although Rosemary believes that estimate may have been understated (T78–79).

In mid-2014, Harry and Rosemary had a conversation to the following effect:

As I have mentioned above, it was in this conversation that Rosemary asserted that the Naremburn Property was held on trust for her alone.

A couple of weeks after his conversation, Harry and Rosemary had a further conversation to the following effect:

The reference to “Hash” in these conversations was to the social running group in which Harry and Rosemary participated, but Rosemary did not know which one of the (at least three) lawyers at Hash Harry had spoken with (T83).

In cross-examination, Rosemary agreed that she understood from this conversation that if Harry died before her she would receive Harry’s interest in the Naremburn Property and, if she died first, Harry wanted to be able to live in the house at the Naremburn Property, although she admitted that she never made a will to give effect to that, saying that Harry moved into Pathways Aged Care in Northbridge (which is detailed below), “everything escalated” and “[i]t was just that circumstances overwhelmed us” (T84). Rosemary said that she spoke to her son Ross about this and that he guaranteed that he would make sure that Harry did live at the Naremburn Property (T84). Rosemary did not indicate by what means this “guarantee” was to happen. In light of the fact that Ross was not called as a witness and Sunglade was the owner of the Naremburn Property, the inference I draw from Rosemary’s evidence is that the evidence of Ross would not have assisted either Rosemary or Sunglade in their defence of the claims made against them.

After Harry’s stroke in April 2015 (which I have dealt with in detail below), the original design of the development of the Naremburn Property was modified to accommodate Harry’s needs, including removing the stairs and installing a lift to enable Harry to gain access to the upstairs living quarters, making the upstairs areas open plan so that it was wheelchair friendly, enlarging the train room in the downstairs area and designing and building a specially equipped bathroom and bedroom for Harry’s use, which required excavations to be done. These changes were designed in 2016 by Bryon Pedersen, an architect friend of Harry and Rosemary who was also a member of Hash, as part of an amended set of plans for the development of the Naremburn Property.

In the discussions between Harry and Rosemary on the plans for the development of the Naremburn Property, they said that they were planning for it to be their “forever home” together. In those discussions, Harry’s main concern was his new train room, with him expressing how much he was looking forward to planning his new railway, that he would be designing it with friends and what the intended design of the tracks would be.

Rosemary and Harry discussed and investigated the option of home care and equipping the Naremburn Property to suit all of Harry’s needs to allow him to reside there and they agreed to proceed with specific alterations to the Naremburn Property to allow Harry to attend it and reside there.

On a number of occasions, Harry visited the Naremburn Property, followed the progress of the development with enthusiasm and often said how much he was looking forward to moving into the Naremburn Property and living with Rosemary there. Rosemary also regularly showed Harry photos of the development of the Naremburn Property as it progressed (T76).

In about September 2015, Harry said to Rosemary:

In response, Rosemary said that she would do everything she could to ensure that outcome.

In about late 2016 or early 2017, Harry and Rosemary discussed plans to enable Harry to come to live at the Naremburn Property, during which Harry said:

Rosemary said that she made some investigations about home help, discussed the problems that might arise with various medical and social welfare services people, that she and Harry decided that they could manage with home help for Harry to move to the Naremburn Property on completion of the build and that she also felt the cost of making arrangements for Harry to move out of Pathways to the Naremburn Property would likely not cost more than Pathways.

In early 2016, Jeremy was visiting Harry at Pathways when Rosemary was present and recalls Rosemary stating, “[w]e are having modifications made to my property at Naremburn, including installing a lift and wheelchair access”, to which Jeremy responded:

Rosemary disagreed with Jeremy and Harry said nothing in response.

At about the same time, Harry said to Jeremy:

Jeremy regarded this statement as unrealistic given Harry’s condition. When challenged in cross-examination on this evidence, Jeremy observed that Harry could not go to the toilet unaided, considered that Rosemary could not assist Harry because she could not lift him and Harry required 24 hours a day/7 days a week nursing care of the sort he had in Pathways (T50). In my opinion, Jeremy’s assessment was right.

In my assessment, the statements by Harry that he was looking forward to moving to the Naremburn Property were not supported by the reality of his health challenges after he had his stroke in April 2015 due to the significant deficits from which he suffered and the high level of constant care and assistance he required. In my view, this meant that there was never any realistic prospect that Harry would ever reside at the Naremburn Property. I have set out these matters concerning Harry’s major health challenges in detail below.

The development of the Naremburn Property did not finish until about 2019, with the renovation of the existing building having finished in mid-2017 (T76). As events turned out, Harry never resided at the Naremburn Property before his death in April 2019.

As I have stated above, Rosemary and Ross now live at the Naremburn Property (T84).

On 7 January 2014, Harry executed an enduring Power of Attorney, appointing Rosemary as his attorney. Mr Bush was the witness to Harry’s signature on the Power of Attorney and also certified that as a solicitor he had explained the effect of the Power of Attorney to Harry before it was signed and that Harry appeared to understand the effect of the Power of Attorney.

In cross-examination, Jeremy agreed that at this time he was not concerned that Harry had lost capacity to look after his own financial affairs and accepted that Harry appointing Rosemary as his attorney suggested that Harry clearly had considerable trust in her (T43).

The Power of Attorney stated that as his attorney, Rosemary could exercise the authority conferred on her by Part 2 of the Powers of Attorney Act 2003 (NSW), to do anything on Harry’s behalf that he may lawfully authorise an attorney to do.

The Power of Attorney was also given by Harry “with the intention that it will continue to be effective” if Harry lacked “the capacity through loss of mental capacity after its execution”. While the Power of Attorney included optional additional powers that Harry could choose to give Rosemary, the boxes on the Power of Attorney denoting those additional powers did not contain a “tick” or a “cross”, meaning that Rosemary, as Harry’s attorney, could not:

Rosemary’s signature accepting the Power of Attorney expressly indicated that:

In 2010, Harry had a minor stroke and underwent surgery to unblock arteries in his neck and install stents. This made it difficult for Harry to get from the street up to the house at the Lane Cove Property. In cross-examination, Rosemary admitted that after this stroke, Harry was diagnosed with short term memory loss (T85). This is reflected in the medical examinations of Harry undertaken by geriatric specialist, Dr Kevin Chang, on 13 October 2011, 1 November 2011, 10 May 2012, 8 November 2012, 11 April 2013, 10 October 2013, 3 August 2014 and 2 October 2014 in which Harry was repeatedly diagnosed with “mild cognitive impairment of the amnestic type (on a vascular basis) with predominant short-term memory loss”.

In June 2012, it was noted by neurologist, Dr Ronald Joffe, that Harry had just been diagnosed with diabetes, Harry could not remember what he did yesterday, names and places had become harder for Harry to remember, he mislaid his keys and glasses, manages most times watching television but occasionally finds the plot too difficult, sometimes has to re-read articles and he manages money without any difficulty.

In an email of 20 July 2014 from Harry to Richard, Harry described himself in the following way:

Unfortunately, Harry’s health did not remain in this state for very long after this email. In light of his stroke in 2010, Harry’s health was already at considerable risk.

On 12 April 2015, Harry suffered a serious stroke while living in the Woolloomooloo Property. He spent 10 days at St Vincent’s Hospital. On 22 April 2015, Harry was transferred to the United Care War Memorial Hospital in Waverley for extensive rehabilitation treatment over three months.

As a result of Harry’s stroke, he was unable to walk on his own, needed to use a wheelchair and was unable to stand, get into or out of bed or generally care for himself without assistance. The Woolloomooloo Property was unsuitable for Harry to live in with the needs he had for wheelchair accessible facilities and professional medical and rehabilitation support.

An aged care assessment dated 1 July 2015 for Harry was carried out. In cross-examination on that document, Rosemary admitted that (T85–88):

The aged care assessment also stated that the living environment most appropriate for Harry’s long-term care needs was a residential aged care service, although Rosemary did not agree with that proposition (T86–87). Nor did Rosemary agree that Harry required 24-hour supervision and assistance due to his care needs, although she did admit that she was not looking after him (T88). I do not accept Rosemary’s evidence on these two matters. I consider that it is very clear from the contemporaneous documents that Harry’s long-term care needs were residential aged care and he required 24-hour supervision and assistance.

Both Jeremy and Richard also confirmed that if Harry was bullied or pushed around, he would become confused. Rosemary confirmed this to be the case and said that Harry did not handle stress very well.

In Jeremy’s visits to Harry in Pathways, Jeremy also observed the physical and mental deterioration of Harry, demonstrating that he had lost his manual dexterity in making models and could only partly complete crosswords.

On 2 July 2015, Liz Bracken, the occupational therapist at the War Memorial Hospital, noted in her clinical handover notes:

On 22 July 2015, Harry moved to Pathways in Northbridge, initially on a two-week trial and then permanently on 11 August 2015, where he remained until his death on 15 April 2019.

On 13 August 2015, Harry paid a refundable accommodation bond of $750,000 to Pathways to become a permanent resident there. From that time until Harry’s death in April 2015, Harry paid regular monthly fees and other care charges to Pathways totalling $263,965.74.

As Rosemary admitted in cross-examination, while Harry was in Pathways his physical health declined and he was mainly confined to a wheelchair (T87 and T89).

On 4 June 2017, Rosemary made a diary entry of a telephone call with Harry which stated:

In cross-examination, Rosemary confirmed that this incident had occurred (T92–93).

An instruction card dated 12 October 2017 prepared at Pathways for dealing with Harry indicated that he required:

Further contemporaneous documents prepared by Pathways regarding Harry indicated that he suffered from significant health conditions that required considerable care and assistance. These documents included:

Rosemary said in cross-examination that Harry’s health rapidly declined in 2019 (T90–91).

On my assessment of the state of Harry’s health, I consider that at no stage after he suffered the stroke in April 2015 until his death in April 2019 was there any realistic likelihood that Harry would be able to reside at the Naremburn Property. He required assistance to walk short distances, was wheelchair bound and he even required the assistance of two people just to attend to his toileting needs. In light of the objective evidence recorded in the contemporaneous documents about Harry’s capabilities and requirements for care and assistance, I do not accept Rosemary’s equivocations and denials in cross-examination where she either did not accept or refuted that Harry required 24-hour supervision, two people to assist him with movement, was at high risk of falls and his return to the Naremburn Property was not realistic (T87–90 and T135). Whatever Rosemary and Harry might have been planning about him living at the Naremburn Property and however well-intentioned it may have been, it was not grounded in the reality of Harry’s circumstances and the high level of care that he required.

For the avoidance of any doubt about the issue, I also find that if Harry was not going to be living at the Naremburn Property, in all likelihood his model train set was not going to be accommodated there either.

Up until April 2014, Harry and Rosemary remained financially independent of each other by maintaining separate bank accounts, although they appear to have shared debit and credit cards to pay for shared expenses. As I have detailed below, a particular feature of their arrangements was how separate Rosemary kept her finances from those of Harry and even their joint financial arrangements. In many ways, the “joint” financial arrangements reflected the use of Harry’s money alone in both their joint expenditure and Rosemary’s own expenditure.

Harry held bank accounts with Westpac in his own name prior to the changes made in April 2014, which are described below.

On 10 April 2013, it appears that Harry signed the following document (2013 Authority Statement), witnessed by Sarah Wilson, that said:

The 2013 Authority Document is not relied upon by Rosemary to authorise any of the transactions at issue in these proceedings (which were from joint accounts, not Harry’s personal account), so it is not necessary for me to make any further findings as to what was within the scope of the permission Harry granted in it. I regard the 2013 Authority Statement as evidencing that Harry had kept his finances separate from Rosemary which is why it was necessary for him to give her authority to use his resources. Contrary to the defendants’ submission, I do not consider that this meant that Harry and Rosemary were sharing accounts and had intermingled their finances. The evidence is to the contrary: Rosemary was keeping her own assets and finances completely separate from Harry (as I have stated in more detail below) and she needed his permission to use his separate account.

On 14 April 2014, Rosemary and Harry opened two joint bank accounts with Westpac (together Joint Westpac Accounts), namely:

Despite the Joint Westpac Accounts being held in the names of both Harry and Rosemary, the funds in the joint bank accounts were overwhelmingly deposited by Harry.

In the period from 14 October 2014 to 12 April 2019, a total of $2,344,412.95 was deposited into the Joint Westpac Accounts, all of which were deposits of money from Harry except for two deposits totalling $18,000 made by Rosemary to the Choice Account, one on 6 June 2017 of $8,000 and the other on 21 December 2018 of $10,000, both of which were narrated “Deposit Rosemary Kelly – LOAN TO HH”. Rosemary also recorded the deposit of $8,000 on 6 June 2017 in her diary as “$8,000 loan to H from CBA personal RK A/c”.

Clearly these narrations meant that when Rosemary made each of those deposits, she regarded them as loans to Harry (“HH” denoting Harry Howell) because she wanted to make it clear that was money she was entitled to withdraw from the Choice Account. I do not accept Rosemary’s denial in cross-examination to the contrary, no matter what her fears may have been about the attitude of Harry’s children towards her (T101–102). The fact that Rosemary sensed trouble on the horizon from Jeremy and Richard as a reason for designating these deposits as loans from her does not change my view that they indicate that Rosemary considered the rest of the money in the Joint Westpac Accounts to be Harry’s money and his alone.

In cross-examination, Rosemary claimed that she had made further deposits to the Joint Westpac Accounts but was not able to identify any other deposit made by her into the Joint Westpac Accounts except for the deposits on 6 June 2017 and 21 December 2018 referred to above (T102). I am satisfied that Rosemary made no other deposits to the Joint Westpac Accounts than these two deposits in June 2017 and December 2018. Ultimately, in cross-examination Rosemary accepted that “most” of the money in the Westpac Joint Account was Harry’s money (T102).

In early 2015, Rosemary became concerned about the increasing expenses for her and Harry and the future effect that it may have on Harry’s family, particularly on Richard and Veronica. In about January 2015, Rosemary had the following conversation with Harry:

On 3 February 2015, Harry dictated and Rosemary typed up a document which Harry signed, which was a memorandum (February 2015 Memorandum) stating:

In cross-examination, Rosemary could not recall what expenses “due to the development of the new house at Naremburn” she was referring to in her conversation with Harry or how much they were increasing by, but could only state “there is [sic] a lot of expenses even before you start building … submissions to council, et cetera” (T103–104).

Rosemary did not discuss these arrangements with Jeremy and Rosemary and was not present when or aware of whether Harry discussed the arrangements with any of his children.

The February 2015 Memorandum does not refer to any expenses associated with the development of the Naremburn Property, and Rosemary could not explain why that was the case (T103–104).

In my view, the February 2015 Memorandum does not in its terms provide authority from Harry for the Joint Westpac Accounts to be used by Rosemary for any expenses associated with the development of the Naremburn Property.

In March 2015, after moving to the Woolloomooloo Property, Harry and Rosemary had the following conversation:

In cross-examination, Rosemary agreed that she did not make a note of this conversation in her diary but denied the suggestion that the conversation did not occur (T111). I accept that it did occur. Due to Rosemary’s loss of income from the rent she received from the Woolloomooloo Property and the Naremburn Property, it was clear that Harry agreed to support Rosemary financially, which was his compensation to her, and meant that Rosemary was not suffering a detriment (T79–80). Rosemary accepted that this was Harry’s “contribution” (T79–80).

Rosemary described this arrangement as being “in recognition that I was providing the land on which the new house was being built at Naremburn which was for the benefit of both of us”.

As I have found above, Rosemary kept her own assets separate from Harry’s assets and the Joint Westpac Accounts.

Rosemary treated the Naremburn Property (owned by Sunglade on trust for Rosemary alone), the Woolloomooloo Property (owned by Lisroan and then by Ross on trust for Rosemary alone) and the Lisroan Term Deposit as her own. Rosemary also held the $265,000 from the net proceeds of the sale of the St Ives Property on deposit, the London Property and the Rosemary Barclays Account.

In cross-examination, Rosemary also admitted that she had recently discovered that a Westpac bank account (Rosemary Westpac Account), which she asserted had been closed a short time after the Joint Westpac Accounts were opened, had not been closed (T105–106). On 30 August 2017, Rosemary transferred $100,000 from the Choice Account to the Rosemary Westpac Account and earned interest on that amount for the balance of 2017 and into March 2018. When confronted with this transfer in cross-examination, Rosemary did not give a convincing reason for it, conjecturing that she “probably transferred it for payments to the build, maybe, and maybe something happened and it, I didn’t have to pay it. I’m not sure” (T107). Rosemary was unable to explain why the amount could not have stayed in the Choice Account if that was so and she rejected the propositions that the Choice Account was truly Harry’s account and that the $100,000 sum was his contribution to the build (T107). I do not accept her rejections.

In cross-examination, Rosemary was shown a Westpac bank statement for an account in the name of Lisroan (Lisroan Westpac Account) in the period from 17 November 2016 to 17 February 2017 and agreed that it demonstrated that in January 2017, she made two transfers of $100,000 each into the Lisroan Westpac Account from a Commonwealth Bank account in her name which she still has (Rosemary CBA Account) (T108–109). Rosemary could also not explain why she made those transfers, refuting the suggestion that she did not make the transfers of those amounts into the Joint Westpac Accounts because they were truly Harry’s accounts (T108–-109).

Rosemary also agreed that she could have had other personal bank accounts but could not remember (T108).

It is damaging to Rosemary’s credit that she did not provide evidence of the full picture of precisely what she was doing with what she regarded as her money and other assets. There was no evidence that Harry knew that she had all of these other accounts and she had not paid the balance of those accounts into the Joint Westpac Accounts.

As stated above, Harry owned the Lane Cove Property until it was sold in about December 2014 for $1.625 million, with settlement of that sale occurring in April 2015. On 7 April 2015, the net proceeds of the sale of the Lane Cove Property of $1,458,131.43 were deposited into the eSaver Account.

At the time that these proceeds were paid, Harry said to Rosemary:

Harry had superannuation with Perpetual Investment Management Ltd and Challenger Life totalling $694,256.84, which was transferred to Fiducian Portfolio Services Ltd on 24 June 2016, from which he was paid the following monthly pension amounts into the Choice Account:

On 8 March 2017, Fiducian confirmed that Harry had a made a binding nomination expiring on 20 February 2020 in respect of his superannuation account for it to be distributed to Rosemary (52%), Jeremy (16%), Richard (16%) and Susan (16%).

Between 7 April 2014 and 12 April 2019, the deposits from Harry into the Joint Westpac Accounts totalled $2,226,312.75, including:

Between 7 April 2014 and 12 April 2019, a total amount of $1,011,172.34 was paid or withdrawn from the Joint Westpac Accounts directly for the benefit of Harry, comprising:

In accordance with the February 2015 Memorandum, the plaintiffs accept that Harry authorised Rosemary to use the Joint Westpac Accounts to pay “all household expenses, including personal items and other expenses, as she sees appropriate”.

In accordance with Harry’s statement made to Rosemary in March 2015 as set out above, Harry authorised Rosemary to pay her grandson’s school fees from the Joint Westpac Accounts, which the plaintiffs also accept were part of Rosemary’s living expenses. In cross-examination, Rosemary was unable to explain why she could not pay her grandson’s school fees out of the Rosemary CBA Account or the Lisroan Term Deposit but said that she could not pay them from the Rosemary Barclays Account because there was never very much in it (T110).

In the period from April 2015 to the time of Harry’s death in April 2019, the following amounts totalling $259,626.65 can therefore be said to fall within “all household expenses, including personal items and other expenses” of Rosemary and the school fees Harry agreed to pay, comprising:

The amounts which form part of the total of $259,626.65 include all payments made for purchases at Bunnings which were less than $100 on the basis that they are more likely to relate to everyday living expenses. I am content with this approach (T148).

The plaintiffs allege that the following amounts totalling $742,483.70 should be treated as having been paid from the Joint Westpac Accounts by Rosemary for the development of the Naremburn Property:

I consider that I should treat all of these payments totalling $742,483.70 as having been made from the Joint Westpac Accounts for the development of the Naremburn Property. In my view, the plaintiffs proved that these payments from the Joint Westpac Accounts most likely related to the development of the Naremburn Property (including by way of the lengthy cross-examination of Rosemary in relation to individual transactions (T115–127)) so that the evidential onus shifted to Rosemary to demonstrate that the payments did not relate to the development of the Naremburn Property. She did not meet that evidential onus in respect of the payments totalling $742,483.70.

The amounts which form part of the total of $742,483.70 include all payments made for purchases at Bunnings which were more than $100 on the basis that they are more likely to relate to development of the Naremburn Property. I am content with this approach (T148).

On 22 August 1996, Harry signed as a publisher member of Copyright Agency Limited (CAL) pursuant to which he was entitled to act as a publisher’s sales agent.

Rosemary said that Harry retired in 2006 but Jeremy said in cross-examination that when Harry actually retired is unclear because he continued to work for himself after he turned 65 years old (T40). In an email of 20 July 2014 from Harry to Richard, Harry stated that “my income has now dried up”. Nothing turns on the particular date by which Harry retired.

On 22 December 2016, Banki Haddock Fiora Lawyers (on behalf of CAL) sent a letter of demand to Harry, which was copied to Rosemary, claiming that between 1990 and 2015 Harry had received $1,741,415.41 on behalf of CAL members but failed to remit royalties owed to overseas publishers (CAL Claim). In essence, the letter contained allegations that Harry fraudulently represented himself as an authorised agent for various publishers, provided misleading declarations to CAL and retained funds for his own benefit. In the letter, Banki Haddock Fiora demanded a response by 22 January 2017.

Later in December 2016, Rosemary discussed the CAL Claim with Mr Bush to obtain his assistance at a time when he was a retired solicitor (T131). Rosemary claimed in her evidence-in-chief that she did not engage Mr Bush to act and appear in the CAL Claim, she sought Mr Bush’s advice only, Mr Bush was not appointed to represent Harry in the CAL Claim and Mr Bush was not retained as a lawyer to act on Harry’s behalf in the CAL Claim. In cross-examination, Rosemary at first maintained that Mr Bush did not act for Harry in the CAL Claim and was not retained by her either, stating that Mr Bush was just a friend or semi-friend, but then said that Mr Bush was retained by her to advise in respect of the CAL Claim but did not render invoices, which she then admitted had happened and that Mr Bush had been paid from the Joint Westpac Accounts (T132). In further cross-examination, Rosemary gave confused evidence about whether Mr Bush was retained to act for Harry or for her in relation to the CAL Claim, stating that “[i]t was Harry’s problem, not mine” (T132).

Rosemary delayed telling Harry about the CAL Claim until early 2017 as she did not want to stress him over the Christmas/New Year period.

During a subsequent visit by Jeremy between 28 February and 3 March 2017 (not December 2016 as Jeremy stated in his evidence-in-chief), Harry told Jeremy about the CAL Claim and appeared to be distressed (T52–53).

At about this time in early March 2017, Mr Bush rang Richard to tell him about the CAL Claim and Richard asked Mr Bush whether Harry was able to pay it, to which Mr Bush responded that Harry had the Pathways refundable accommodation deposit of $750,000 and $600,000 in superannuation.

Subsequently, Mr Bush telephoned Jeremy and told him that Rosemary and Harry had appointed him to defend the CAL Claim, while it was serious, a settlement would be reached for less than $1.7 million, and that he had also spoken to Richard about it. Mr Bush told Jeremy:

In this or another telephone call in March 2017 from Mr Bush to Jeremy, they had a conversation about the CAL Claim to the following effect:

On 12 March 2017, Mr Bush sent an email to Jeremy to which was attached a memorandum dated 10 March 2017 relating to the CAL Claim against Harry (CAL Memorandum). In the CAL Memorandum, Mr Bush outlined the CAL Claim, provided a breakdown of the amount sought of $1,741,415.41, noted that there was a discrepancy between the amounts claimed and the receipts recorded in Harry’s bank statements and summarised the events at a meeting which had been held on 3 March 2017 at which Rosemary, Mr Bush and the representatives of CAL had attended. In the CAL Memorandum, Mr Bush stated that Rosemary had requested a complete set of bank statements from Westpac for Harry’s account dating back to 30 June 2001 and those statements had now been received.

On 13 March 2017, Jeremy forwarded to Richard the email of 12 March 2017 with the attached CAL Memorandum from Mr Bush.

From the nature of the email of 12 March 2017 and the attached CAL Memorandum, it appeared that Mr Bush was acting for Harry in the CAL Claim. Contrary to Rosemary’s evidence, both Jeremy and Richard understood that Mr Bush was acting for Harry in the CAL Claim and they had a basis for believing that to be the case. Whatever the role of Mr Bush in the CAL Claim, Peter Bobbin of Argyle Lawyers acted in the matter for Harry and negotiated the settlement of it with CAL’s lawyers.

Further email correspondence then ensued between Mr Bush and Richard regarding the CAL Claim, which is dealt with in more detail below when considering the enquiries made by Richard and Jeremy about Harry’s financial affairs.

In about July 2018, a Deed of Settlement and Release was entered into between CAL and Harry (through Rosemary as Harry’s attorney) resolving the CAL Claim. In summary, the terms of the Deed provided that:

On 18 July 2018, Rosemary in her capacity as Harry’s attorney sent a letter by email to the directors of Pathways, instructing them to pay the Settlement Sum to CAL from the $750,000 accommodation deposit in accordance with the Deed.

On 11 September 2018, Rosemary paid the Legal Costs of $10,000 from the Choice Account to CAL.

As I have outlined below, the events which took place regarding the precise financial position of Harry after he sold the Lane Cove Property reflect the lack of any trusting relationship between Jeremy and Richard on the one hand and Rosemary on the other hand. The tension and conflict between them over Harry’s financial position particularly escalated following the making of the CAL Claim, with the prospect of Harry not having sufficient means to meet the CAL Claim and remain in care at Pathways. With both Jeremy and Richard based overseas, the lack of information to which they had access and the refusal of Rosemary to provide it to them made the situation even more acute.

In cross-examination, Richard accepted that Harry took the view that Richard and his siblings should stand on their own feet financially (T22), although Harry did provide a guarantee of a self-education loan to enable Jeremy to complete his flying training (T41).

Prior to his stroke in April 2015, Harry had a practice of openly discussing his finances with Jeremy and Richard, giving them detailed updates on how much money he had each year and what his financial advisor, Kevin Anderson, suggested he do with it, which was putting most of his money in long-term deposits. Jeremy confirmed this practice in cross-examination (T46).

After Harry sold the Lane Cove Property, Richard wrote an email on 10 July 2014 to Harry in which, amongst other things, he expressed an interest in what Harry was going to do with the money from the sale because Richard was heading into financial difficulties, saying:

In cross-examination, Richard said that one of the reasons he asked this question of Harry was in case he needed to ask Harry for money in the future and accepted that this could easily have been interpreted by Harry as an indirect way of setting the stage for the possibility of him needing to ask Harry for financial help in the future (T20–21).

As stated above, in Harry’s email of 20 July 2014 in response to Richard, he said that his income had dried up and he did not know what his future requirements were going to be. In cross-examination, Richard accepted that Harry was telling him that he would not be able to help Richard financially in the future (T21).

On an unspecified date and location, Richard recalled a conversation with Harry in which Richard asked Harry what he had done with the proceeds of sale of the Lane Cove Property to which Harry responded, “I don’t know, you need to ask Rosemary”. In cross-examination, Richard did not concede that he may have been told this by Harry because Harry did not think his financial circumstances were any of Richard’s business and Richard said that Harry had been very open with his finances with Richard for his whole life and so for Harry to suddenly not be wanting Richard to know was very much out of character (T24–25). I accept Richard’s evidence on this matter.

In November 2015, Jeremy visited Harry at which time Harry informed him that Rosemary and Harry were going to have a commitment ceremony, following which Rosemary asked Jeremy to join her alone in the coffee shop at Pathways during which she said:

Rosemary denied this conversation. In cross-examination, Jeremy was challenged that this conversation with Rosemary did not take place, in response to which Jeremy adhered to his evidence (T49–50). I accept Jeremy’s evidence that this conversation took place given that he was adamant that such a conversation took place (“I remember it vividly”) and it is inherently likely that Rosemary would have said such things in advance of the commitment ceremony occurring on 8 December 2015.

During 2016, Jeremy recalls visits to Harry at Pathways when Harry recounted that he had not seen any of his bank statements for years, did not know what was in his bank account and did not know his financial situation. On one of these visits, Jeremy also recalled Harry adding that he was “not happy about contributing large sums of money towards Rosemary’s house at Naremburn”. In cross-examination, Jeremy was challenged on the dates of his visits (said by Jeremy in his evidence-in-chief to be June and October 2016, but accepted by Jeremy in cross-examination that he was only in Australia during February and September 2016), and it was asserted that Harry did not make these statements at all, which Jeremy did not accept (T50–52).

Rosemary said that she gave bank statements for the Joint Westpac Accounts to Harry regularly (which may have been about every month or every couple of months), and at times Rosemary and Harry would go through them together but at other times Harry would wave them away saying, “[i]t’s okay, I’m not worried about that”. Rosemary also said that bank statements were never left in his room at Pathways and she would take them back to the Woolloomooloo Property for security reasons (T94). Although Rosemary asserted that Harry could remember reviewing the bank statements but had no memory of what was in them (T92 and T94), in my view it is more likely that Harry could not remember reviewing the bank statements and had no memory of what was in them, probably explained by the state of his failing memory, which had been an identified health problem for him for several years by 2016 as outlined above.

I accept that during Jeremy’s visits to Harry at Pathways in February and September 2016, Harry said to Jeremy that he did not have his bank statements, did not know what was in his bank accounts and did not know his financial situation. I do not accept that Harry said that he was “not happy contributing large sums of money towards Rosemary’s house at Naremburn”. In my view, accepting as I do that Harry considered that he had not seen his bank statements “for years”, Harry had no idea what was in his bank accounts and certainly did not know how much of his money was being spent on the Naremburn Property.

I do not accept Rosemary’s evidence that if at any time Harry became concerned about her use of the Joint Westpac Accounts, he had the means and capacity to stop any or all deposits to it by altering his arrangements through Fiducian (T95). Harry did not have any other bank accounts into which he could make the deposits from Fiducian and he did not have the practical means by which he could open a new bank account without considerable assistance given his health problems.

I do not accept Rosemary’s evidence that Harry knew how much he was contributing to the development of the Naremburn Property, that she would tell him when she took the money out of the Joint Westpac Accounts and that they discussed when they were transferring money from the Joint Westpac Accounts (T135).

As stated above, in about early March 2017, Mr Bush rang Richard to tell him about the CAL Claim, and during their conversation Richard asked Mr Bush whether Harry was able to pay it, in response to which Mr Bush said that Harry had the Pathways refundable accommodation deposit of $750,000 and $600,000 in superannuation. As Richard knew that Harry had recently sold the Lane Cove Property for about $1.6 million, he considered that there appeared to be a shortfall of about $1 million from the sale proceeds. Richard then telephoned Harry and said to him:

In cross-examination, Richard said that in early 2017, he became concerned about the consequences of the CAL Claim out of concern for his father and accepted that he hoped to receive some money from Harry’s estate but refuted the proposition that his interest was one of self-interest in the hope that he would be left some money from Harry’s estate to improve his family’s financial circumstances (T22–23). In cross-examination, Richard accepted that he asked Harry about his financial circumstances a number of times after the CAL Claim arose but denied that the CAL Claim threatened to bring down Richard’s hopes of improving his family’s financial position after Harry’s death and that it explained why he became far more interested in Harry’s financial affairs after he found out about the CAL Claim (T23–24). I consider that Richard held a genuine concern for Harry’s financial wellbeing as well as being conscious of his family’s financial circumstances which might improve from any inheritance from Harry’s estate.

Jeremy also gave evidence of a similar concern he held that the CAL Claim could result in Harry being unable to afford his accommodation and care at Pathways and that Harry’s assets as listed by Mr Bush were about $1 million short of where they should be as a result of the sale of the Lane Cove Property in 2014. In cross-examination, Jeremy explained that he considered that $1 million of Harry’s money was undisclosed but not missing (T55). As in the case of Richard, I accept that Jeremy’s concerns for Harry’s financial wellbeing were also genuine.

As stated above, in cross-examination Jeremy agreed that it was most likely that during his visit to Harry between 28 February 2017 and 3 March 2017 that Harry told him about the CAL Claim (T52–53). In the context of having been told this, Jeremy spoke to Harry to agree that they would visit Westpac to get the bank statements for the Joint Westpac Accounts, and then Jeremy made an appointment for 3 March 2017 at 2pm at the Westpac Lane Cove North branch.

In the morning of 3 March 2017, Jeremy went to Harry’s room at Pathways to search for Harry’s identification documents and, when he was unable to find them, Jeremy asked at the Pathways reception whether they had them on file but Jeremy was told that they did not. Rosemary then telephoned Jeremy on his Hong Kong mobile number for the first and only time and asked Jeremy why he was asking for identification for Harry and the conversation continued as follows:

Jeremy then said something in vague agreement with Rosemary (“I fobbed her off” (T53)), following which Harry and Jeremy drove using a wheelchair taxi to the Westpac Lane Cove North branch, where Harry usually banked. In cross-examination, Jeremy said that he said to Rosemary whatever was required to “get off the phone”, he did not need Rosemary to tell him what he could do in respect of Harry’s wishes and he had every intention of still taking Harry to obtain the bank statements that day (T53).

I do not accept Rosemary’s evidence of this conversation in which she alleged that she told Jeremy, “I have an appointment myself with the bank today and I will collect a current statement myself” or that she had already arranged to see her personal banker in the Westpac Lane Cove North branch before she spoke to Jeremy. I consider that Rosemary attended the Westpac Lane Cove North branch in an effort to thwart Jeremy’s attempt to obtain the bank statements for the Joint Westpac Accounts.

At the Westpac Lane Cove North branch, Jeremy was not required to show Harry’s identification because the bank staff recognised him.

When Harry and Jeremy arrived at the Westpac Lane Cove North branch, Rosemary was already there and they had the following conversation:

The Westpac Lane Cove North branch provided Harry with the bank statements for the Joint Westpac Accounts, being statements for the eSaver Account for the period from 31 October 2016 to 28 February 2017 and the Choice Account for the period from 25 November 2016 to 28 February 2017, which Harry then gave to Jeremy to examine.

Subsequently, Rosemary telephoned Jeremy and asked him where the bank statements were, in response to which Jeremy said, “I have thrown them out” and when Rosemary explained that they were not in Harry’s waste bin, Jeremy said “I have thrown out in a street bin”. In cross-examination, Jeremy agreed that this conversation had occurred, that he had kept possession of the bank statements and had not them thrown out and that he was willing to mislead Rosemary and lie to her because he felt that Rosemary was misleading him (T54).

As stated above, on 12 March 2017, Mr Bush sent the email to Jeremy attaching the CAL Memorandum outlining the CAL Claim, which Jeremy then forwarded to Richard the next day. In the CAL Memorandum, Mr Bush mentioned that Rosemary had requested and received the complete set of bank statements from Westpac for Harry’s account dating back to 30 June 2001.

On 14 March 2017, Richard sent an email to Mr Bush in response to the CAL Memorandum raising questions about the CAL Claim and seeking information about Harry’s financial position to assess his ability to meet any liability under the CAL Claim. Richard asked about the limits to Harry’s liability, the protection and status of Harry’s superannuation and noted that it appeared about $1 million was missing from Harry’s known assets. Richard concluded his email by saying “… I trust you will keep us informed”.

On 14 March 2017, Mr Bush responded to Richard’s email that day, noting that Mr Bush had received the Westpac bank statements, the CAL Claim seemed overstated except for 2014/15, deposits were only identifiable from 2012 and “[w]e are awaiting a detailed reconciliation from CAL”.

At about this time, Rosemary and Richard had a telephone conversation about Harry’s financial position. Neither gave clear evidence about what was discussed but they each did then engage in an email exchange about it.

On 19 March 2017, Richard sent an email to Rosemary in the following terms:

I note that the conclusion of this email accords with my view that Richard held a genuine concern for Harry’s wellbeing, which partly explained the reasons for his inquiries.

On 28 March 2017, Rosemary sent an email in reply to Richard which attached a letter in the following terms:

After Richard received this email, he had a telephone conversation with Harry to ask him why he received correspondence instructing him to ask further questions via lawyers and told Harry he was very hurt and distressed as a result. During that telephone conversation, Harry appeared to not know what Richard was talking about, saying “I don’t know, I think I need to ask Rosemary about what you’re talking about”.

In cross-examination, Richard accepted that he repeatedly asked Harry about his financial circumstances up until he received Rosemary’s letter of 28 March 2017 when he stopped asking Harry directly (T31).

On 3 April 2017, Mr Bush sent an email to Richard, Jeremy and Susan in the following terms:

On 3 April 2017, Richard sent an email in reply to Mr Bush which stated:

No audit of Harry’s financial position took place. In cross-examination, Richard said that he did not consider that he was alleging that $1 million had been “stolen” from Harry (T32). Neither do I because it was clear from the chain of communications that Richard was looking for information so he could understand fully Harry’s financial position.

In the course of cross-examination, it was put to Richard that about this time he had conversations with Harry in which he told Harry that if Harry paid any money towards the Naremburn Property, Richard would sue for part of the house and contest Harry’s will, which Richard denied saying (T26–30 and T32). I accept Richard’s denials that he threatened to sue Harry for part of the Naremburn Property and contest Harry’s will. I do not consider that Rosemary’s assertions of what Harry told her about his conversations with Richard are a safe basis for making any findings about what took place in the conversations between Richard and Harry. Clearly, Richard asked Harry about his financial circumstances but in my view Harry had a very limited understanding of what they were and deferred the answering of these questions to Rosemary.

Having been told by Rosemary on 28 March 2017 that communications regarding Harry’s financial position had to be conducted with “Harry’s legal adviser”, Mr Bush, Richard then contacted a lawyer at Fraser Clancy Lawyers to act for him in relation to the matter. I have no doubt that having to do so was stressful for Richard given the concern he held that the CAL Claim might leave Harry unable to continue living at Pathways.

On 2 August 2017, Fraser Clancy Lawyers (acting on behalf of Richard) sent a letter by email to Mr Bush which commenced with a request that Mr Bush confirm his role in Harry’s affairs given that he was not publicly listed as a registered legal practitioner in New South Wales. The letter also stated (emphasis added in underline):

Mr Bush brought this email to Rosemary’s attention and they discussed it (T133). Rosemary did not recall discussing it with Harry (T133).

On 14 August 2017, Argyle Lawyers sent a letter by email to Fraser Clancy Lawyers that stated (emphasis added in underline):

This last statement in the letter of 14 August 2017 was false and it was based on instructions which Rosemary gave to Argyle Lawyers (T134). As I have stated above, from April 2015 onwards there had been significant payments from the Joint Westpac Accounts for the development of the Naremburn Property, being money which had almost wholly come from Harry. I do not accept Rosemary’s attempt in cross-examination to limit the statement to the “renovation” of the front house of the Naremburn Property (the building fronting Waters Road) as opposed to the “new build” (the building fronting Dargan Street) (T134–136). The letter makes no distinction of that sort to any reasonable reader of it and it was damaging to Rosemary’s credit to have provided instructions to Argyle Lawyers which allowed the statement to be made on her behalf when it was quite misleading.

Richard felt he received no clarification in this response from Argyle Lawyers and was left shocked and distressed by it.

On 25 November 2016, Harry executed his last will (Harry’s Will). Harry’s Will included provisions in which he:

On 15 April 2019, Harry died.

At the time of his death, Harry’s assets were listed in the inventory of property for the probate application by Rosemary as solely comprising an accommodation bond of $750,000 from Pathways.

At the time of Harry’s death, the balance of the eSaver Account was $10,858.37 and the balance of the Choice Account was $19,869.80.

On 14 January 2020, Harry’s superannuation account of $658,509.82 with Fiducian was distributed to Rosemary (52%), Harry (16%), Jeremy (16%) and Susan (16%), in accordance with Harry’s executed binding nomination of 8 March 2017.

On 25 July 2019, probate of Harry’s Will was granted to Rosemary.

On 5 or 6 August 2019, the entire refundable accommodation deposit of $760,326.71 (including interest) held by Pathways was paid into the trust account of Gordon Pegler Lawyers.

On 12 August 2019, the Settlement Sum of $375,000 was paid to CAL by cheque from the trust account of Gordon Pegler Lawyers in accordance with the Deed.

On 19 February 2020, Gordon Pegler Lawyers sent an email to Richard, Jeremy and Susan attaching a document entitled “Howell Family – Financial Chronology”, which set out, as the title suggests, a summary of Rosemary’s understanding of the financial affairs of her and Harry and related transactions in chronological order from when they met until Harry’s death.

Between 5 March 2020 and 9 October 2020, a series of emails were sent between Armstrong Legal (on behalf of Richard and Jeremy) and Gordon Pegler Lawyers (on behalf of Rosemary) concerning the provision of documents from Rosemary. In summary, Jeremy requested documents to aid the determination of Harry’s true financial position.

In response, on 1 May 2020, Armstrong Legal sent copies of documents held by Rosemary relating to Harry’s assets, including copies of:

Despite additional requests from Armstrong Legal (on behalf of Richard and Jeremy), Gordon Pegler Lawyers (on behalf of Rosemary) did not provide any further documentation.

On 9 March 2021, Richard and Jeremy commenced proceedings in this court by way of summons seeking discovery pursuant to r 5.3 of the Uniform Civil Procedure Rules 2005 (NSW) from Rosemary (proceedings number 2021/00067283). Ward CJ in Eq heard the matter on 25 October 2021 and delivered judgment on 4 November 2021, granting the preliminary discovery: Howell v Kelly [2021] NSWSC 1422.

On 26 November 2021, Coleman Greig Lawyers (on behalf of Rosemary) sent a letter by email to Armstrong Legal in respect of the orders made in light of the judgment of 4 November 2021 outlining investigations and inquiries made by Rosemary to various entities for the discovery of documents, including attaching various letters dated 25 November 2021 to such entities.

On 17 December 2021, Armstrong Legal sent a letter to Coleman Greig Lawyers requesting that errors in Rosemary’s return residential address be corrected and that copies of other correspondence with Westpac be provided.

On 23 December 2021, Coleman Greig Lawyers sent an email to Armstrong Legal which attached the list of documents provided by Rosemary in response to the preliminary discovery required to be provided by her.

On 27 October 2022, Richard and Jeremy filed a statement of claim principally seeking that Rosemary account to the estate of Harry in the amount of $1,847,632.20, or alternatively, pays equitable compensation in the same amount.

On 24 January 2023, the defendants filed the defence.

On 23 September 2024, Richard and Jeremy filed the ASOC.

On 6 November 2024, the defendants filed the amended defence to the ASOC.

On 13 October 2025, the defendants filed the FAD to the ASOC.

The plaintiffs bring the claims in their capacity as beneficiaries under Harry’s Will. A beneficiary under a will may institute proceedings in their own name to protect their interest in a deceased estate in circumstances where the executor of the estate (normally the proper plaintiff) refuses or fails to institute proceedings: Ramage v Waclaw (1988) 12 NSWLR 84, Powell J at 91–93; Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432, Cohen J at 436; Chahwan v Euphoric Pty Ltd [2009] NSWSC 805, Brereton J at [16]–[18].

In this case, the proceedings have been commenced against Rosemary in her personal capacity and she is also the executor of the estate under Harry’s Will. As a result, the plaintiffs have standing to bring the proceedings against Rosemary.

Even though the plaintiffs have standing to bring the proceedings against Rosemary to recover assets on behalf of the estate, they properly recognise that they are at their own risk as to costs: Ramage at 91; Lamru at 436-437; Re Estate Nitopi, deceased [2018] NSWSC 1560, Lindsay J at [3].

The critical issue for the plaintiffs to prove in all of the causes of action on which the Trust Claim and the Account Claim are pursued is whether the funds in the Joint Westpac Accounts were beneficially owned by Harry despite them being opened in the joint names of Harry and Rosemary.

I accept the plaintiffs’ submissions that it is clear that Harry and Rosemary intended that Harry would retain the beneficial interest in the whole of the funds in the Joint Westpac Accounts based on the following objective evidence:

Based on this evidence, I reject Rosemary’s submissions that the opening of the Joint Westpac Accounts as jointly held accounts means that Harry and Rosemary were the legal co-owners of them and the funds in them. The money in the Joint Westpac Accounts was not the money of Harry and Rosemary: it was Harry’s money. It was accepted by the defendants that the evidence demonstrated that Harry’s money became the funds in the Joint Westpac Accounts and Rosemary maintained separation in her finances from those of Harry (T161). It follows that I also reject Rosemary’s repeated denials in cross-examination of the proposition that all of the funds in the Joint Westpac Accounts were Harry’s funds.

If I am wrong about the conclusion that Harry had the beneficial interest in the funds in the Joint Westpac Accounts based on the evidence of actual intention, I would also reach the same conclusion using the operation of a set of presumptions which apply to real and personal property even though they are expressed in terms of real property in the formulation of them.

Where two or more persons advance the purchase price of property in different shares, it is presumed that the person or persons to whom the legal title is transferred holds the property upon resulting trust in favour of those who provided the purchase price in the shares in which they provided it: Calverley v Green (1984) 155 CLR 242; [1984] HCA 81, Deane J at 266–267; see also Gibbs CJ at 246–247 and Mason and Brennan JJ at 258.

In Koprivnjak v Koprivnjak [2023] NSWCA 2, the Court of Appeal approved the statement of principles by Ward CJ in Eq in Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 at [161]–[168], which were summarised by Griffiths AJA at [19] as follows:

The presumption of resulting trust may be rebutted by evidence demonstrating that the actual intention of the relevant purchaser or purchasers, who contributed unequally to the purchase price, was that the person or persons in whose name legal title was vested would be entitled to the use and enjoyment of their legal title for that person’s own benefit: Cong v Shen (No 3) [2021] NSWSC 947, Ward CJ in Eq at [1712], citing Anderson v McPherson [No 2] [2012] WASC 19, Edelman J at [155] and Calverley v Green, Gibbs CJ at 251 and Deane J at 269.

In Bosanac v Commissioner of Taxation (2022) 275 CLR 37; [2022] HCA 34, Kiefel CJ and Gleeson J stated at [13] that:

If a presumption of a resulting trust arises, it may be rebutted by a presumption of advancement, meaning that because a particular relationship exists (discussed below), the person who provided part or all of the purchase price intended to do so as an advancement or gift. The presumption of advancement, like the presumption of resulting trust, can be rebutted by evidence of actual intention. In Bosanac, Kiefel CJ and Gleeson J stated the following at [14]–[15]:

In Bosanac, Gageler J at [57] stated that if equity were redesigned to accord with contemporary Australian societal expectations, the default position would be that a purchaser of property is its sole legal and beneficial owner, whether or not someone else contributed to the purchase price, and a trust for a contributor would require proof of an actual intention to create a trust, with no presumption of a resulting trust and no counter-presumption of advancement. Gordon and Edelman JJ at [115] stated that the “presumption” of advancement is not a presumption, but a circumstance in which the presumption of resulting trust does not arise. In a relationship of close trust, there may be no occasion to presume a resulting trust in favour of a contributor or transferor, and no equitable interest is created and engrafted onto the legal interest.

In relation to the weight to place on the presumptions, in Bosanac, Kiefel CJ and Gleeson J stated that the presumption is weak at [19]–[22]:

Similarly, in Bosanac, Gordon and Edelman JJ stated the following at [98]:

A question arises as to whether the presumption of advancement can arise in circumstances involving a de facto relationship. The general law recognised no presumption of advancement between a man and woman in a de facto relationship on the basis that de facto partners cannot be assumed to have intended the same consequences as a husband and wife who have entered into a formal marriage: Cong, Ward CJ in Eq at [1714]. In Bosanac, Kiefel CJ and Gleeson J at [17]–[18] did not decide whether the operation of the presumption of advancement should be expanded to include the transfer of property between de facto spouses, stating:

A majority of the High Court in Calverley v Green considered that the categories of relationships to which a presumption of advancement applied did not include that of a “de facto” husband and wife: see Ryan v Ryan [2012] NSWSC 636, Ward J at [65]–[69]. In Calverley v Green, Mason and Brennan JJ stated at 260–261 that:

Similarly, Deane J in Calverley v Green stated at 268 that:

As stated by Ward J in Ryan at [61], Deane J does not go so far as to deny that a presumption of advancement can arise in any de facto relationship, being circumscribed to the particular relationship considered in Calverley v Green.

In Caverley v Green, Gibbs CJ dissented and was of the view that a presumption of advancement should be recognised, considering that Napier v Public Trustee (1980) 32 ALR 153 was not authority for the contrary proposition. His Honour at 250 said that:

In describing the nature of the relationship in question in Calverley v Green, Gibbs CJ stated at 250 that:

In Ryan at [58]–[75], Ward J traced a number of changes to the legislative regime governing property division between de facto couples upon dissolution of their relationship that have taken place since the decision of Calverley v Green in 1984: see Cong, Ward CJ in Eq at [1716]. In Cong, Ward CJ in Eq stated at [1717] that there is no reason in principle to treat the presumption of advancement as limited to the husband and wife relationship as opposed to the de facto husband and wife relationship but, until Calverley v Green falls to be reconsidered at an appellate level, it remains a binding authority as to this issue. I agree.

Accordingly, applying these principles as outlined in Calverley v Green, I agree with the plaintiffs’ submissions that as Harry provided the overwhelming proportion of the funds in the Joint Westpac Accounts (99.99%), the presumption of resulting trust in that proportion of those funds arises in favour of Harry and it is not rebutted by any presumption of advancement, which cannot arise in the de facto relationship between Harry and Rosemary.

In any event, I accept that based on the various observations in Bosanac, the presumption of advancement is weak and evidentiary in nature, operating merely as a circumstance that may rebut or prevent a presumption of resulting trust and can itself be rebutted by evidence of actual intention. In this case, the evidence of the actual intention of Harry and Rosemary serves to confirm the presumption of a resulting trust in relation to the funds in the Joint Westpac Accounts in favour of Harry.

The plaintiffs assert the Trust Claim based on a common intention constructive trust or a joint endeavour constructive trust over the Naremburn Property.

A common intention constructive trust arises where equity intervenes to prevent the unconscientious denial by the legal owner of another party’s rights, where the parties agreed, or it was their common intention, that the claimant should have an interest in the property owned by the other, and the claimant acted to his or her detriment on the basis of that agreement or common intention: Shepherd v Doolan [2005] NSWSC 42, White J at [31], citing Grant v Edwards [1986] Ch 638, Green v Green (1989) 17 NSWLR 343 and Maharaj v Chand [1986] AC 898 at 907.

A joint endeavour constructive trust arises where equity intervenes to prevent the unconscientious retention of money or property by one party which was paid or applied by another party on the basis of a consensual joint relationship or endeavour between them which fails without attributable blame and the benefit of the money or other property contributed on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which was not specifically intended or specifically provided that the other party should enjoy it: Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78, Deane J at 618–620, applied in Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59, Mason CJ, Wilson and Deane JJ at 148–149.

In Shepherd, White J at [30] summarised the two classes of case in which equity will intervene as follows:

In Green, Gleeson CJ (with whom Priestley JA agreed) at 357 approved the test in Grant of Sir Nicolas Browne-Wilkinson VC at 657 (citations omitted):

The basis for a common intention constructive trust is summarised in Galati v Deans [2023] NSWCA 13 by Basten AJA at [148] as follows (footnotes omitted):

In Bijkerk Investments Pty Ltd v Bikic [2020] NSWSC 1336, Leeming JA, sitting at first instance, observed at [116]–[119] that there seems to be a large question, addressed mainly in academic literature, about whether the doctrine of common intention constructive trusts survives, following developments in Australian law in the previous 35 years. His Honour did not express a concluded view although remarked at [119] that “it may be that this form of trust no longer survives in Australian law as an institution separate from an entitlement in estoppel”. Kirk JA (with whom Mitchelmore JA agreed) referred to some “controversy” about this form of trust in Li v Ye [2025] NSWCA 227 at [39]. See also Zekry v Zekry [2020] VSCA 336 at [76] and Galati, White JA at [53]–[60] and Basten AJA at [148]–[149]. There was no suggestion in this case that I need to come to a concluded view about this question and the matter was not argued before me.

In Shepherd, White J sets out the following principles regarding common intention constructive trusts at [34]–[48], as quoted by White JA in Galati at [54]:

The application of these principles from Shepherd to the present case results in the conclusion that a common interest constructive trust over the Naremburn Property arises based on the actual common intentions of Harry and Rosemary as evidenced in their statements and inferred from their conduct for the following reasons:

Alternatively, the same elements as outlined above for establishing a common intention constructive trust also establish a joint endeavour constructive trust over the Naremburn Property. The elements of the agreed plan between Harry and Rosemary evidence their joint endeavour for the development of the Naremburn Property, which completely failed on 12 April 2015 when Harry suffered a major stroke. As I have found above, from that time there was no longer any realistic likelihood that Harry would be able to reside at the Naremburn Property in light of his health challenges. As a result, it was no longer possible for Harry to “live together” with Rosmary at the Naremburn Property. Upon the failure of their joint endeavour, it would be unconscionable for Rosemary and Sunglade to retain the benefit of the $1 million that Harry contributed to the joint endeavour following his stroke.

The defendants say that there is no evidence to suggest that the value of the Naremburn Property improved after its development plans were altered to accommodate for Harry’s mobility issues and that it is more likely that the alterations decreased the value of the Naremburn Property, were expensive and were for Harry’s benefit. I reject this argument as a basis for the suggestion that there was nothing unconscionable in Rosemary and Sunglade retaining the benefits from the payments made from the Joint Westpac Accounts. In light of the fact that the development involved the building of a house and the renovation of another house at the Naremburn Property, and in the absence of evidence to the contrary, I should presume that the development increased the value of the Naremburn Property.

The defendants submitted that Harry was content with the plan agreed with Rosemary because he benefited by having a place to live for the rest of his life with his long-term partner and his beloved train set. But this fails to recognise that at the time the plan was first hatched between Harry and Rosemary in 2011, Harry was in his late 70’s and had already suffered a stroke in 2010 which had caused his short-term memory loss. By the time the plans for the development were being modified with the Council in 2014, Harry was 80 years old. Given that Rosemary considered that the project would take five years, this meant that Harry would be getting a place to live for the rest of his life from 85 years old and beyond. So on this reckoning, Harry was paying $1 million to live in the Naremburn Property for a small number of years at best if he happened to reach 90 years old and have his train set accommodated.

Not only do these circumstances suggest the improvidence of the arrangements between Harry and Rosemary (a topic to which I will return below when dealing with the allegations of unconscionable conduct by Rosemary), but they also tend in favour of a common intention that Harry would obtain an interest in the Naremburn Property rather than simply a right to live there for a very short time.

The defendants also argue that if Harry wanted the money spent on the development of the Naremburn Property to have been available to his estate, the bulk of which was left to Rosemary in any event, it would be expected that he would have made provision for that in Harry’s Will but he did not do so. I do not think that the lack of any mention of Harry’s interest in the Naremburn Property in Harry’s Will tells me anything about his intention. Whatever interest Harry would ultimately receive in the Naremburn Property (as Rosemary conceded he would) would simply form part of the estate described in Harry’s Will without the need for it to be specifically mentioned.

In light of my conclusions, it is appropriate for a constructive trust in favour of Harry’s estate to be declared over the Naremburn Property. There appears to be no reason why I should not proceed on the basis that “equality is equity” as outlined in Shepherd when it comes to the nature of the interest that Harry’s estate should receive in the Naremburn Property. In crafting the appropriate relief, the plaintiffs concede that they must also “do equity”, which would be recognised in the moulding of relief such that the estate in the Naremburn Property should be subject to a right of Rosemary to reside there for the remainder of her life or until such time as it is agreed that it is to be sold: Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66, Gaudron, Gummow and Kirby JJ at [127].

As a result, Harry’s estate should receive an equitable interest in the Naremburn Property which is one-half of the value of the Naremburn Property, recovery of which is postponed to allow Rosemary to continue living in the Naremburn Property for the remainder of her life or until it is agreed that the Naremburn Property be sold.

If I am wrong about the equity attaching to the Naremburn Property because Sunglade is not bound by it, then I would order that Rosemary pay equitable compensation to Harry’s estate in the amount of $1,002,110.35 plus interest.

If I am wrong in relation to the common interest constructive trust and the joint endeavour constructive trust arising in respect of the Naremburn Property, then the alternative Account Claim brought by the plaintiffs is that Harry has spent $1 million for little-to-no-benefit as a result of Rosemary unconscientiously taking advantage of Harry’s special disadvantage.

The principles relating to unconscionable conduct under the general law are well established. Unconscionable conduct occurs where “a party makes unconscientious use of his [or her] superior position or bargaining power to the detriment of a party who suffers from some special disability or is placed in some special situation of disadvantage” and “the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he [or she] is placed and of the other party unconscientiously taking advantage of that position”: Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14, Mason J at 461. The focus is on the stronger party’s exploitation of that disadvantage. This formulation has been followed and applied in Louth v Diprose (1992) 175 CLR 621; [1992] HCA 61, Brennan J at 626; Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49, Kiefel CJ, Bell, Gageler, Keane and Edelmann JJ at [38]; Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1; [2022] HCA 6, Kiefel CJ, Keane and Gleeson JJ at [39] and [45].

The essential features of unconscionable conduct have been expressed in various formulations. In Louth, Brennan J at 627 stated that unconscionable conduct ordinarily arises when:

A similar summary was cited in Turner v O’Bryan-Turner [2021] NSWSC 5 by Ward CJ in Eq at [399], who adopted the following summary of the elements of unconscionable dealing in Turner v Windever [2003] NSWSC 1147, Austin J at [104]–[105] (which was based on Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81, Amadio, Louth and Bridgewater):

As explained in Stubbings by Kiefel CJ, Keane and Gleeson JJ at [39], these considerations are not to be treated as if they were rigid elements of a tort. Rather, the doctrine requires a close examination of the particular facts, the relations between the parties and the mental capacities and circumstances of the vulnerable party, consistent with the approach taken in Jenyns v Public Curator (Qld) (1953) 90 CLR 113; [1953] HCA 2 by Dixon CJ, McTiernan and Kitto JJ at 118–119 and as endorsed in Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25, French CJ, Hayne, Crennan, Kiefel, Bell, Gageler and Keane JJ at [122]–[123] and Thorne at [45].

There are no fixed or closed categories of circumstances that might constitute a special disadvantage. In Blomley, Fullagar J at 405 referred to matters such as poverty, sickness, age, infirmity, drunkenness, illiteracy or lack of assistance or explanation where assistance or explanation is necessary. In Stubbings at [40], Kiefel CJ, Keane and Gleeson JJ emphasised that a special disadvantage is one that “seriously affects” the weaker party’s ability to make a judgment as to their own best interests and may arise from a combination of circumstances. Similarly, in Thorne, Gordon J at [113] stated that:

As Mason J explained in Amadio at 462, the requisite disadvantage or disability must be one which seriously affects the ability of the weaker party to make a judgement as to his or her own best interests. This proposition has been approved in Thorne at 103, Kakavas at 398 and Stubbings at [45].

In Bridgewater, Gaudron, Gummow and Kirby JJ at [115] stated as follows:

The stronger party must have actual or constructive knowledge of the special disadvantage. In Amadio, Mason J at 467 stated that where the stronger party has actual knowledge of that situation, or is aware of facts that would raise that possibility in the mind of a reasonable person, and takes unfair advantage of their superior position, the conduct is unconscionable.

As stated in Nitopi v Nitopi [2022] NSWCA 162 by Bell CJ at [6], constructive knowledge arises from the “knowledge of facts from which a person ought to have known that another person was suffering under the relevant special disadvantage”. However, constructive notice is insufficient, being notice of facts that might lead an inquiry to the discovery of the existence of a special disadvantage: Nitopi, Bell CJ at [9] and Ward P at [121].

In Kakavas at [161], the High Court emphasised that the doctrine is concerned with “victimisation” and ordinarily requires exploitation of a special disadvantage, not mere inadvertence or indifference. In Thorne at [38], the plurality observed that the unconscientious taking advantage of a special disadvantage has been “variously described as requiring ‘victimisation’, ‘unconscientious conduct’, or ‘exploitation’”.

In Thorne at [109]–[110], Gordon J stated that unconscionable conduct “looks to the conduct of the stronger party” in seeking to enforce or retain the benefit of a dealing with a person under a special disability where it is not consistent with equity or good conscience to do so. Equity intervenes where, at the time of the transaction one party was under a special disadvantage and the other party unconscientiously took advantage of that disadvantage. It is the existence of those circumstances that “affect[s] the conscience” of the stronger party.

The doctrine ordinarily requires some positive exploitative conduct antedating and causing the impugned transaction. Consistently with that approach, in Kakavas at [161], the High Court stated that equitable intervention requires proof of a “predatory state of mind”; heedlessness or indifference is insufficient, and the principle is concerned with “victimisation”, not mere inadvertence.

The doctrine, however, is not confined to active procurement. As recognised in Hart v O’Connor [1985] AC 1000 and approved in Bridgewater at [76], “victimisation” may extend to the “passive acceptance of a benefit in unconscionable circumstances”. In Louth, Deane J at 637 observed that equity may intervene where it is prima facie unfair or unconscionable that a party “procure, accept or retain” the benefit of a disadvantaged party’s assent. Likewise, in Wilton v Farnsworth (1948) 76 CLR 646; [1948] HCA 20, Rich J (with whom Dixon and McTiernan JJ agreed) at 655 recognised that it may be unconscientious to “take the gift or retain it” where it was improvidently made in circumstances of disadvantage. As Bell CJ explained in Nitopi at [28]–[30], although some passages in Kakavas emphasise active victimisation, the concept is not narrow and the law has long recognised both unconscientious procurement and unconscientious retention of benefits. See also Wu v Ling [2016] NSWCA 322, Leeming JA at [14].

In Louth, Brennan J at 632 explained that, where substantial property has been given after exploitation of a known disadvantage, an inference may be drawn that the gift is the product of that exploitation, but the inference must arise from the facts and causation remains a “final and necessary link”. On this point, Bell CJ in Nitopi at [21] stated as follows:

In Turner, Austin J further stated at [106] that where it is established that the plaintiff was under a special disadvantage which seriously affected his or her ability to protect his or her interests, that the defendant knew of that disadvantage, and that the resulting transaction was improvident, equity may raise a presumption that the transaction was a consequence of the disadvantage and that the defendant unconscientiously took advantage of it. This presumption was adopted by Bell CJ in Nitopi at [36]–[39], who identified earlier support for existence of such a presumption in Blomley at 429, Amadio at 474 and Louth at 637. In Nitopi, Bell CJ at [38] also noted that Austin J’s summary of principle, including the operation of the presumption, was referred to with apparent approval by Santow JA on appeal in Turner v Windever [2005] NSWCA 73 at [99]. In Rydzewski v Rydzewski [2024] NSWSC 802, Richmond J at [281] summarised this presumption by stating that:

Richmond J also stated at [281] that “[a]n improvident transaction includes a sale at a substantial undervalue or a gift”. In Wu, Leeming JA at [8] stated that:

The doctrine does not relieve a party from their own imprudence. In Louth, Deane J at 638 stated that equity will not intervene to relieve a plaintiff from the consequences of their own foolishness but rather to prevent their victimisation. In Kakavas, as followed in Stubbings at [38], French CJ, Hayne, Crennan, Kiefel, Bell, Gageler and Keane JJ at [20] stated that equitable intervention does not relieve a plaintiff from improvident transactions in the ordinary course of a lawful business. Instead, there must be conduct beyond the ordinary which makes it just to restore the plaintiff to their previous position.

If I am wrong about my conclusion that a common interest constructive trust or a joint endeavour constructive trust arose in respect of the Naremburn Property, then I consider that by applying the principles I have outlined above, Rosemary engaged in unconscionable conduct in transferring $1 million from the Joint Westpac Accounts in the period from April 2015 to April 2019 as part of the arrangements she had reached with Harry before that time.

Following Harry’s stroke on 12 April 2015, as I have found above, he suffered from numerous significant health issues that required considerable assistance and care. Before that time, he was already suffering from short-term memory loss and mobility issues from his minor stroke in 2010. Following his stroke in April 2015, Harry was unable to walk on his own, needed to use a wheelchair and was unable to stand, get into or out of bed or generally care for himself without assistance, was incontinent, suffered from mild cognitive impairment in the form of fluctuating short-term memory loss, would become very confused when bullied or pushed around and was at risk of falls. From the time that Harry suffered the stroke in April 2015 and, until his death in April 2019, he was in full-time nursing home care.

All of these matters put Harry at a special disadvantage in relation to the stronger position of Rosemary, particularly in relation to financial matters. With all of Harry’s money having been transferred into the Joint Westpac Accounts (and none of Rosemary’s money having been transferred except by way of the two minor loan amounts totalling $18,000), Harry was at a cognitive and practical disadvantage to her because she was in a position where she was able to operate the Joint Westpac Accounts as one of joint account holders but he could not easily do so because he had to be physically taken to a Westpac branch to engage in any transactions and had no access to electronic means to make transactions. Harry was in no position to judge or protect his own interests.

Without assistance, Harry did not have the practical means to stop his deposits going into the Joint Westpac Accounts and arrange them to instead go into another account. Harry did not know how much he was contributing to the development of the Naremburn Property and did not know his financial circumstances.

The way in which Rosemary dealt with Harry in relation to the bank statements for the Joint Westpac Accounts highlights the significant practical disparity between them. Although Rosemary gave Harry the bank statements for the Joint Westpac Accounts every month or every couple of months, he showed little interest in them and those bank statements were never left with Harry and were taken away by Rosemary. As I have found above, Harry could not remember reviewing the bank statements, had no memory of what was in them and did not know how much of his money was being spent on the development of the Naremburn Property.

Contrary to the submissions of the defendants, it is not necessary for me to find that Harry lacked mental capacity to enter into the transactions by which the money in the Joint Westpac Accounts would be expended on the development of the Naremburn Property so he could live there with Rosemary for the remainder of his life to establish that Harry had a special disadvantage in relation to Rosemary in respect of them.

As Harry’s de facto partner and enduring attorney under the Power of Attorney, Rosemary was fully aware that she was in the far stronger position in relation to Harry and that he was in a position of special disadvantage in relation to her. Rosemary actively tried to prevent Jeremy and Richard from knowing the precise position of Harry’s finances, including by instructing her solicitors (Argyle Lawyers) to send a letter on 14 August 2017 to the solicitors for Jeremy and Richard (Fraser Clancy Lawyers) which falsely stated that Harry “has made no financial contribution to the renovation of the property at Naremburn and it is not anticipated that he will make any such contribution in the future”.

All of the payments from the Joint Westpac Accounts from April 2015 until April 2019 were undertaken by Rosemary knowing all of the matters which gave rise to Harry being under a special disadvantage in relation to her. Rosemary knew that she was making payments of Harry’s money for the development of the Naremburn Property when Sunglade was the registered proprietor of the Naremburn Property held under a trust arrangement for Rosemary. If Harry was not going to receive an interest in the Naremburn Property then the payments were entirely improvident because he was paying $1 million in circumstances where there was no likelihood that Harry was ever going to live there and, even if he did, it would be for a very short duration given that by the time he might move into the Naremburn Property he would be 85 years old with very significant health challenges requiring full-time care and assistance beyond what Rosemary was capable of providing him. The payments made from the Joint Westpac Accounts were well in excess of the rental income that Rosemary lost from the Woolloomooloo Property and the Naremburn Property while the latter was being developed. Both Sunglade and Rosemary benefited from those payments and retained that benefit, as Sunglade owned the Naremburn Property, Rosemary was able to treat it as her own and Rosemary is able to live there with her son Ross.

I consider that a presumption of unconscionability arose in relation to the payments made from the Joint Westpac Accounts insofar as they were direct and indirect contributions by Harry to the development of the Naremburn Property. Rosemary did not provide evidence that could overcome that presumption.

Even if Harry had the capability to have a full understanding of the payments being made from the Joint Westpac Accounts at the time they were made, which I do not think he did, the weak position he was in relation to Rosemary after April 2015 and the absence of any advice or proper explanation being given to Harry properly characterise those payments as having been made by Rosemary unconscientiously taking advantage of Harry.

Rosemary points to the authorisation of the payments made from the Joint Westpac Accounts by Harry in the form of the February 2015 Memorandum and other statements made by Harry as amounting to a fully informed consent from him to those payments being made. But the problem with that submission is that it fails to take into account the significant event that occurred in April 2015 when Harry had his major stroke. The continued payments made towards the development of the Naremburn Property after that time were of no real benefit to Harry. Rosemary continued using Harry’s funds to contribute towards the development of the Naremburn Property when there was no likelihood that he would be able to reside there and without securing any interest for him in the Naremburn Property.

As a result, if I am wrong in relation to my conclusion that a common interest constructive trust or joint endeavour constructive trust arose in favour of Harry’s estate then I would have ordered that Rosemary pay equitable compensation to Harry’s estate in the amount of $1,002,110.35 as it would be unconscionable for her to retain the benefit of the payments made from the Joint Westpac Accounts.

I will allow the parties 14 days within which to provide agreed short minutes of order by email to my Associate reflecting the reasons set out above. Subject to any contrary submission, I consider that those orders should include an order that the defendants are to pay the plaintiffs’ costs of the proceedings. If the parties are unable to agree on the proposed orders, I will determine the orders to be made on the papers.