Morais v Mills[2010] QDC 237

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The defendant, James Mills, and Tarita Morais, the daughter of the plaintiffs Edward and Virginia Morais, first met on 4 December 2006. They were both in their twenties. He is now 27 and she is now 28. After forming a relationship during 2007 and 2008, they separated in November 2008. In the meantime, particularly from March 2008 until November 2008, they lived together in a home at Marsden in Brisbane. This home was owned by Edward and Virginia Morais. The young couple had made arrangements to be married on 11 July 2009; an engagement ring had been purchased; and James Mills had purchased land at Drewvale (in Queensland) in his name alone, subject to mortgage, which had been intended to be the place of a future family home for the couple.

2. [2]
   Following the breakup of the relationship in November 2008, Edward and Virginia Morais sued for moneys alleged to be due and owing to them from James Mills. James Mills, as defendant, has not only denied that any moneys are owing but seeks, among very many claims for relief in his counter-claim, delivery up of such of his chattels as were left at the Marsden property, damages for detinue and conversion, and equitable compensation. He also asserts that the purchase of the Drewvale land and the incurring of loan and mortgage obligations concerning it arose from breaches of an alleged fiduciary relationship between him and Tarita’s parents, and that moneys paid by him, or caused to be paid on his behalf, to them were only made because of such breaches. Further, he makes similar claims based on their undue influence over him and based on their engagement in unconscionable conduct towards him. Although he makes allegations of inequitable behaviour against Tarita Morais as well, she has not been joined as a party to the counter-claim. After two days of the trial, the hearing had to be adjourned and, during the interval, the plaintiffs became self-represented litigants. This continued for the remainder of the trial.

3. [3]
   Thus, the primary issues to be decided are: whether, in the circumstances that prevailed, there was an intention to create legal relations between the plaintiffs and the defendant; whether, if such legal relationships were formed, what was the nature and extent of them and what obligations have existed, and now exist; whether, if such relationships existed, or exist, the contentions of vulnerability arising from fiduciary relationships, undue influence and unconscionable conduct can be made out; and whether, if so made out, what relief and, or alternatively, remedy, is available to the defendant. The subsidiary issues of detinue and conversion are not complex and can be determined relatively easily. An interlocutory application to strike out paragraphs 1, 2, 3, 4, 5 and 7 of the Amended Statement of Claim, based on a failure to properly particularize the claims, was rejected on the morning of Day 1 of the trial. In the defendant’s written submissions, it is revived. Again, given that the defendant could well before the trial have sought such particulars, but did not, I again reject the revived application.

     Legal issues

4. [4]
   Before considering the facts of this proceeding, even those about which there is no dispute, it is necessary given the particular circumstances of this case that a survey of the legal landscape should be undertaken so as to be able to set those facts in context.

5. [5]
   The major legal issues will be canvassed in turn.

Intention to create legal relations

6. [6]
   As observed relatively recently, the twin presumptions - that in commercial agreements courts will presume that the parties intended to create legal relations and that the converse is true for agreements between family members - appeared immutable until this apparent and attractive certainty was altered by the High Court’s decision in Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95: see Nadine Courmadias, Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, at 175. 

7. [7]
   In the plurality judgment in Ermogenous of Gaudron, McHugh, Hayne and Callinan JJ the issue of “family arrangements” was touched upon.  After stating that it is said that it may be presumed that there are some family arrangements which are not intended to give rise to legal obligations, it was held, for their part, that they doubted “the utility of using the language of presumptions in this context”: at 106 [26].  In their view, at best, the use of that language does no more than invite attention to identifying the party who bears the onus of proof: also at 106 [26]. It followed that reference to presumptions may serve only to distract attention from that more basic and important proposition: also at 106 [26].  It is important to note that these statements were made in the context of a proposition that, for there to be a legally enforceable duty, there must be identifiable parties to the arrangement, the terms of the arrangement must be certain and, unless recorded as a deed, there must generally be real consideration for the agreement: at 105 [24].  Furthermore, it was held that, because a search for the “intention to create legal relations” requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour), circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules: at 105 [25]. 

8. [8]
   Given such expressions from the High Court, it does not appear to be heretical to accept the conclusion reached by the abovementioned author that the better interpretation of Ermogenous is that the High Court has rejected the use of presumptions in determining the issue of an intention to create legal relations -  and that this has been rejected entirely, and not simply for remuneration of a minister of religion: at 182.

9. [9]
   What, then, is the test? As the plurality judgment in Ermogenous held, there needs to be an enquiry about the circumstance whether the parties did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts. Such an inquiry ought to take into account the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances: at 105 [25]. As noted by Keane JA, speaking for the court, in GAD v DPP (Qld) & Anor [2008] QCA 27, the task of determining the meaning of any agreement requires the objective determination of what the terms of the agreement mean, rather than the study of what each of the parties subjectively intended to achieve: at [13].

10. [10]
    Here, the onus of proof would obviously be on the parents of Tarita Morais, the plaintiffs, for the claims propounded in the Statement of Claim.

Fiduciary relationship

11. [11]
    As identified in Meagher, Gummow and Lehane’s Equity: Doctrines & Remedies (4^th Edition), there are a number of factors which have been held to be indicative of the existence of a fiduciary relationship, including: relationships of trust and confidence, or confidential relations; and the exercise of a power or discretion which will affect the interests of another person in a legal or practical sense – so that that other person is especially vulnerable to abuse by the fiduciary of his position: at [5-005].

12. [12]
    As referred to in that text, for non-established categories Mason J in Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41, at 96-97 stated that the critical feature of accepted fiduciary relationships is that the fiduciary undertakes, or agrees, to act for or on behalf of, or in the interests of, another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense; and from this power or discretion comes the duty to exercise it in the interests of the person to whom it is owed. This passage was expressly referred to in the recent High Court decision of John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19 at [86]-[87]. Important points made by that unanimous judgement include: that phrases such as “for or on behalf of” (and “in the interests of”) must be understood in a reasonably strict sense, lest the criterion they formulate become circular; and – although this is expressed in a commercial context consideration - where interpretations of contractual terms, strained or otherwise, will not help, assistance by a strained application of equitable ideas does not promote justice either: at [88] and ]101].

13. [13]
    As the text goes on to state, the distinguishing characteristic of a fiduciary relationship is that its essence, or purpose, is to serve “exclusively” the interests of a person, or group of persons; or, to put it negatively, it is a relationship “in which the parties are not free to pursue to their separate interests”: also at [5-005].

14. [14]
    Quite importantly, although acknowledging the categories of fiduciary relationship are not closed, the examples of fiduciary duty listed in that text [at 5-015] do not cover the kinds of circumstances involved in this case. Nevertheless, as observed, the test must still be applied in accordance with Mason J’s analysis.

15. [15]
    Of assistance in this discussion is the judgment of Douglas J, with whom Holmes JA and Mackenzie AJA agreed, in Quince v Varga [2009] 1 Qd R 359.  Quoting from Muir J, as his Honour then was, in Benzlaw & Associates Pty Ltd v Medi-Aid Centre Foundation Ltd [2007] QSC 233 at [84]-[88], the following matters were canvassed:

• the most obvious factors suggestive of a fiduciary relationship are: the existence of mutual trust and confidence; reliance by one party on the other, or reliance by the parties on each other; and the obligation of one party to act in the interests of the other in the exercise of a power or discretion;
• one circumstance which has been relied upon as indicating the presence of a fiduciary relationship is the existence of a relation of confidence which may be abused;
• a fiduciary relationship exists where one party is in a position of reliance upon the other because of the nature of the relationship and not because of a wrong assessment of character or reliability (that is to say, the relationship must be of a kind which of its nature requires one party to place reliance upon the other, since it is not sufficient that the party in fact does so in the particular circumstances); and
• inherent in the nature of the relationship itself is a position of disadvantage or vulnerability on the part of one of the parties which causes that party to place reliance upon the other, and requires the protection of equity acting upon the conscience of that other;

: at 373 [29].

16. [16]
    It is important to note, at this stage, that the alleged disadvantage or vulnerability of James Mills is contended to result primarily from his condition of relative blindness, which is said to have rendered him more vulnerable, particularly, to any accompanying emotional or financial pressure. But this underlying medical condition did not afflict him until he was in his third year at university, when he was aged approximately 21 and one half years. As already noted, he is presently 27. While many other factors have been relied upon, they are quite common to many prospective “in-law” relationships, although it is important that the actual relationship must be carefully analysed in each case in question.

Inferred agreement

17. [17]
    It has been contended by the defendant that, in the absence of a “request” from the defendant to pay any particular amount in order to discharge a legal obligation entered into by either, or both, of the plaintiffs, or either, or both of them and Tarita Morais, it means that the only possible cause of action open is one based upon restitution.

18. [18]
    While the plaintiffs have made no restitutionary claim, instead relying upon debt in the contractual framework – and while it would be unlikely that the Court would entertain any application, particularly now, for an amendment to raise such a claim, if such an amendment were to be sought – the evidence as led does permit the Court to consider whether the particular circumstances yield a contract by inference.

19. [19]
    In Reed Constructions (Qld) Pty Ltd v Martinek Holdings Pty Ltd [2009] QSC 345, Daubney J referred to this concept of contracts being inferred from the conduct of the parties.  He referred, in particular, to McHugh JA (as he then was) in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR, 11,110 at 11,117 where the statement was made that a contract may be inferred from the acts and conduct of the parties as well as, or in the absence of, their words, thus posing the question of whether the conduct of the parties, viewed in light of the surrounding circumstances, shows a tacit understanding or agreement, while noting that the conduct of the parties must be capable of proving all of the essential elements of an expressed contract: at [54]. As further noted by Daubney J, this passage was cited with approval by Heydon JA (as he then was) in Brambles Holdings v Bathurst City Council (2001) 53 NSWLR 153 at 178: at [55].

20. [20]
    In Brambles Holdings Heydon JA also noted that a relevant principle in this area is that post-contractual conduct is admissible on a question of whether a contract was formed: at 163.  After referring to a number of cases, including that noted by Daubney J, Heydon JA stated that, in light of them, it was relevant to ask: In all the circumstances can an agreement be inferred?  Has mutual assent been manifested? What would a reasonable person in the position of the plaintiff and a reasonable person in the position of the defendant think as to whether there was a concluded bargain?: at 179.

21. [21]
    When considering this principle of inference, the Victorian Court of Appeal in Atco Controls Pty Ltd (in liq) v Newtronics Pty Ltd (Receivers and Managers appointed)(in liq) [2009] VSCA 238 held, in the circumstances of that case, that it could not realistically be supposed that the parties “intended to bind themselves to an agreement of … unlimited or indeterminate duration”: at [28].  As the Court of Appeal went on to analyse, if it is possible to conceive of the contract as being one of finite duration in the sense that, although having the potential to continue indefinitely, it is open to either party to terminate the arrangement at the end of any particular period, and perhaps also otherwise on reasonable notice, then certainty can be provided: at [29]-[30].  The court then referred to the judgment of Alsop J in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424, at 525 where he held that the essential question in such cases is whether the parties’ conduct, including what was said and not said, and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of the contract: at [36]. Lastly, reference was made to Owen J in The Bell Group Ltd (in liq) v Westpac Banking Corporation [2008] WASC 239. Referring to inferred contracts, he noted that it is a search for the “objective intention” of each party, to be inferred from what is manifested by the party’s communications and other conduct: at [37]. 

22. [22]
    The consideration of the legal principles involved does not need to be applied either to the alleged “rent” or to the obligations said to flow from the Veridian or Veridian2 lines of credit concerning the Drewvale land.

23. [23]
    With respect to other matters, there is evidence in at least one instance from which an agreement can be inferred because mutual assent has been manifested and reasonable persons in the position of each party would think that there was a concluded bargain. Necessarily, it will be necessary to analyse the exact circumstances in each instance, but I merely note, at this time, that it not simply a matter of restitution, or nothing.

Unconscionable conduct

24. [24]
    As Hargraves J observed in Williams v Mallouf [2005] VSC 346, the applicable law is not in doubt because of the High Court’s consideration of it in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447.  There, the equitable jurisdiction to set aside a transaction on the ground of unconscionable conduct was considered in the circumstances of a party to a transaction who suffers detriment by reason of the transaction, suffering from some special disability, or being placed in some special situation of disadvantage, at the time of the transaction: at [167].  As identified by Hargraves J, the applicable principles are:

• the circumstances adversely affecting a party which may induce a court of equity either to refuse its aid, or to set a transaction aside, are of great variety and can hardly be satisfactorily classified, but include: infirmity of body and mind; and lack of assistance or explanation (where assistance or explanation is necessary) - with the common characteristic seeming to be that they have the effect of placing one party at a serious disadvantage as against the other;
• such particular situations are no more than particular exemplifications of an underlying general principle;
• “special disadvantage” emphasizes that the disabling condition or circumstance must be one which seriously affects the ability of the innocent party to make a judgment as to that party’s own best interests, when the other party knows, or ought to know, the existence of that condition or circumstance and of its effect on the innocent party;
• where the relevant circumstances are shown to exist, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable;
• as to whether the special disability is “sufficiently evident” to the stronger party, “wilful ignorance is not to be distinguished in its equitable consequences from knowledge”;
• specifically by reference to Bridgewater v Leahy (1998) 194 CLR at 457, such unconscionable conduct may occur where, in the circumstances, it is unconscientious to procure, or “accept”, the weaker party’s assent to the impugned transaction; and
• emotional dependence can amount to a special disadvantage for the purposes of the equitable jurisdiction to set aside a transaction on the ground of unconscionable conduct;

: at [167]-[180] (omitting citations).

25. [25]
    As recently explored by Keane JA, with whom de Jersey CJ and Mullins J expressly agreed, in Mitchell v Pacific Dawn Pty Ltd [2007] QCA 74, the decision of the High Court in ACCC v CG Berbatis Holding Pty Ltd (2003) 214 CLR 51 has made it clear that this equitable doctrine is concerned to prevent a party taking unconscientious advantage of legal rights against another, where those rights have been obtained by virtue of some special disability on the part of the disadvantaged party, which has prevented that party from making a sound judgement to “conserve his or her own interests”: at [8]. Further, the person, by reason of some special disadvantage, must be unable to appreciate the disadvantageous nature of the bargain being made, and the other person must know of this disadvantage; at [9].

     Undue influence

26. [26]
    In Equity: Doctrines & Remedies the authors note that it is always open to the party seeking to set aside the relevant transaction to show that the other party has come to occupy or assume a position of ascendancy, power or domination, and that the subject party has taken a position of dependence or subjection: at [15-105]. 

27. [27]
    But, as pointed out in that text, there is a distinction between the head of equitable jurisdiction that leads to equitable intervention in cases of “catching bargains”, such as are illustrated by Amadio, and undue influence: at [15-035].  In the latter, the will of the innocent party may be independent and voluntary, but the complaint is as to the quality of the consent or assent of that party and as to the disadvantageous position in which the innocent party acted: also at [15-035].  As the text goes on to note, the doctrines should not, and cannot, be conflated: also at [15-035].  In the end, as also observed in that text, undue influence is a doctrine of equity pursuant to which a court sets aside a transaction which has been unconscionably procured in consequence of the relationship of the parties: at [15-005].  Thus, the mere fact that a transaction is based on an inadequate consideration, or is otherwise improper, unreasonable, or unjust is not in itself any ground on which the court relies to set it aside as invalid: see the text at [15-020], quoting from Brusewitz v Brown [1923] NZR 1106.  Clearly, where there is a bargain, or contract, the presence of full value means that the adequacy of consideration becomes a material question in the eventual determination.  Nevertheless, as again observed by the text, even if the weaker party has received full value, the transaction may be unfair, unreasonable and unjust from the viewpoint of the party under the disability: at [15-120].

Residential Tenancies Act 1994 (“RT Act”)

28. [28]
    The reason why this legislation is important is that the defendant, in his defence and counter-claim – in a cascading set of fall-back alternative allegations – claims that, if there was a rental agreement (which is otherwise denied), then the agreement was “void for non-compliance” with this legislation. The allegation identifies, in particular, sections 35 to 46 (inclusive). It concludes by claiming that the plaintiffs are not able to recover rent in the sum claimed, or at all, allegedly as a result of such voidness.

29. [29]
    Because, in the end, it is necessary for the Court to decide whether or not there has been a legal relationship entered into between the plaintiffs and the defendant concerning rental of the Marsden home, consideration of this legislation is important to an understanding of what might have constituted legal relations and, if such an eventuality occurred, whether any such agreement would be void, as alleged.

30. [30]
    The first thing that can be noticed from the RT Act is that section 8(3) [applying section 8(1), which states that a residential tenancy agreement is an agreement under which a person gives to someone else a right to occupy residential premises as a residence] applies whether the agreement is “wholly in writing, wholly oral or wholly implied”: see paragraph (a) 

31. [31]
    On both the plaintiffs’ and the defendant’s evidence, any agreement is wholly oral. Additionally, section 15(1) states that the Act binds all persons. Section 18(1) states that a right or remedy given to a person under the Act is in addition to, and not a substitution for, a right or remedy the person would have apart from the Act, while noting that section 18(2) states that, without limiting section 18(1), the Act does not operate to reduce the effect of a right or remedy a person would have apart from this Act. The Act then goes on to state, by section 22(1), that the Act does not apply to a residential tenancy agreement if the tenant is a “boarder or lodger”: see paragraph (b).  When one turns to sections 35 to 46 (inclusive) of the RT Act, it can be seen that the sections which create obligations also contain penalties for breaches of those particular provisions.  For example, section 39(1) (which requires that the lessor, or lessor’s agent, must ensure the agreement is in writing to the extent, and in the way, required by the section) imposes a maximum penalty of 20 penalty units for a breach.  But, for present purposes, perhaps most importantly, section 39(7)(b) states that nothing in section 39 affects “the enforceability of an agreement that is not in writing”.

32. [32]
    Two conclusions can be immediately reached.

33. [33]
    First, as would be apparent even apart from statute, there are many requirements that need to be met before it can be said that, objectively, the parties have reached an enforceable agreement. The sections under consideration at the immediate time here emphasize that to an additional degree. For instance, section 39(2) states that the agreement must not only include the standard terms of the agreement but also include any special terms of the agreement. What that means, in examining the context in which a determination has to be made as to whether legal relations have been established, is that it would be expected that the statutory requirements as to “special terms” would be the subject of a specific agreement, as would whether the tenancy was periodic, or for a fixed term, or even (if the legislation permitted) at will (although implications as to these matters can exist).

34. [34]
    Secondly, as to the issue of whether an agreement is vitiated where it has been entered into in contravention of legislative requirements, such was considered by the High Court recently in Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101.  There, it was expressly held by the Court, in the joint judgment, that it is not to be assumed that the common law sanction is to apply in the case of every contravention of a prohibition directed to one of the parties to a contract, unless the statute contradicts or displaces such an effect, holding that the correct approach to such a question was explained in Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 at 29 [45] – [46]: at 107 [11].  In Baxter Healthcare, the explanation of that correct approach included a recognition that: the general principle is necessarily subject to any contrary intention manifested by the statute; and whether or not the statute has the suggested effect depends on the mischief that the statute is designed to prevent, its language, scope and purpose, the consequences for an innocent party, and any other relevant consideration. Ultimately, the question is one of statutory construction. 

35. [35]
    On the facts in Ketchell, it was held: that it was no part of the scheme, and unnecessary to the purposes mentioned, to strike down a contract made by a non-complying franchisor; that it was sufficient for the purpose of the scheme that a franchisor was aware of the obligations imposed by the Code; and that action may be taken by a franchisee under the relevant legislation with respect to a contravention: at 112 [25].  Further, it was held that the use of imperative language (namely, that a franchisor “must not” enter into, renew or extend the franchise agreement or do other matters “unless” certain steps have first been taken) does not require a conclusion that a contract entered into by a non-complying franchisor “is to be void and unenforceable”, noting that in Project Blue Sky Inc v Australian Broadcasting Authority  (1998) 194 CLR 355 it was pointed out that it is necessary to ask whether it is a purpose of the legislation that an act in breach of the provision should be invalid, and that, in determining the question of purpose, regard must be had not only to the language of the relevant provision “but also to the scope and object of the whole statute”: at 112 [26].

36. [36]
    Even on the general principles, I would be reluctant to hold that the consequence of voidness occurred here.

37. [37]
    But where, as here, section 8(3)(a) applies the Act regardless and section 39(7)(b) states expressly that nothing with respect to a written agreement affects the enforceability of an agreement that is not in writing, it is extremely unlikely that, on the application of the above principles, as in Ketchell, the putative tenant would not have the protection given by the legislative provisions and therefore not have an enforceable agreement both by him and against him.

Facts not in contest

38. [38]
    Besides accepting that James Mills and Tarita Morais moved into the Marsden home just prior to Easter in 2008, with Easter Sunday falling on 23 March 2008 (noting that the MiniMovers’ document contains a signature by the male plaintiff dated 19 March 2008 [exhibit 4]), both of these persons accept that their then permanent living together ended on a Saturday in late November. Tarita Morais places that date at 22 November 2008 (which was, in fact, a Saturday), whereas Karen Bernard-Mills, the mother of James Mills, asserts that the relevant Saturday was about 18 November 2008 (which was not a Saturday). The exact date, of course, is not a matter of significant moment, particularly considering that the primary onus here is on the plaintiffs.

39. [39]
    It is not in dispute that James Mills arranged to pay to Edward and Virginia Morais an amount of money that was equivalent to that which he normally would have been paying if he had been paying rent at his former rental property at Meadowbrook. It was not really in dispute that that sum was in the order of $1,300.00 per month. But James Mills asserted that that was part of a wider arrangement: the wider arrangement (discussed later) being denied by the plaintiffs. Further, he stated, in examination-in-chief, that he “just naturally just agreed” to pay that money because he had “already been agreeing to anything” that Tarita Morais told him and anything that her parents were suggesting and “telling them to do”, stating that it was in “desperation of trying to make the relationship work and to try and convince the parents, if you will, that their initial perceptions of me were wrong”.

40. [40]
    It is not in dispute that James Mills asked Edward Morais for his permission to marry Tarita Morais and that the answer was, “Yes”. As for the engagement ring, James Mills did not put in issue that he had originally given the “resized” ring of his grandmother to Tarita Morais, while also asserting that the “elegant ring” costing $5,500.00 (inclusive of GST) was to be the actual engagement ring. There is a dispute about whose obligation it has been to pay for the latter ring, while it is not in dispute that the “elegant ring” from Diamonds International was actually bought, in the sense of paid for, by Virginia Morais from that retailer: see Exhibit 3. James Mills now disputes that the “resized ring” can be retained by Tarita Morais, although he has not joined her as a party to the proceeding.

41. [41]
    It is not in dispute that James Mills paid some monies (as arranged) while resident at the Marsden home. But James Mills states that he was, first, doing what he was told to do by Tarita Morais (claiming that he was “vulnerable”) and, secondly, that it was part of a wider arrangement which saw his payments as contributions to discharging the plaintiffs’ mortgage over the home in which they lived in Parkinson in consideration for obliging Edward and Virginia Morais to help him (James Mills) to pay off his own mortgage whenever and howsoever it might arise.

42. [42]
    Finally, the reply and answer of the plaintiffs filed 23 July 2009 admitted a number of separate paragraphs in the “Counter Claim” filed by the defendant on 30 June 2009.

43. [43]
    So far as those admissions are presently relevant, they include (along with some undisputed qualifications and modifications to them):

• the defendant was born on 15 September 1982;
• the defendant was employed at PricewaterhouseCoopers from 16 July 2007 to about 1 June 2008 as a business consultant (software division) at a salary of $56,046.00 per annum, and thereafter in 2008 by dotRED as an IT programmer at an annual salary of $75,000.00;
• the plaintiffs lived at 55 Cocoparra Crescent, Parkinson (the “Parkinson home”) in the State of Queensland;
• the plaintiffs had a home at 12 Front Court, Marsden (the “Marsden home”) in the State of Queensland (which had been purchased in the name of Tarita Morais as an investment property);
• between 3 February 2009 and 25 March 2009, solicitors on behalf of the defendant wrote to solicitors on behalf of the plaintiffs asking for certain designated chattels (including the defendant’s grandmother’s engagement ring) to be returned to the defendant by delivering them up to him care of designated people at a designated address, and the solicitors on behalf of the plaintiffs replied to such letters refusing the return of the chattels and of the engagement ring;
• Edward Morais, in an affidavit sworn 24 June 2009, deposed, “I have advised James that when these moneys are repaid I will be prepared to release to him his chattels but until that happens I intend to hold them”;
• on 24 June 2009 Robin QC DCJ made an order, by consent, ordering that the plaintiffs deliver up to the defendant certain items of personal property and that, in compliance with that order, such goods were delivered up (apart from a disputed DVD player and the inadvertent keeping of a television stand);
• the land constituting an estate in fee simple at 88 Macquarie Way, Drewvale (the “Drewvale land”) in the State of Queensland was an unimproved parcel of land; and
• the defendant purchased the Drewvale land (on or about 15 May 2008).

44. [44]
    As will be seen from a more complete survey of the evidence (undertaken later), those admissions constitute the basic framework only of the particular set of circumstances that are of concern here.

Legal Relationship Concerning Rental of the Marsden home?

45. [45]
    In his evidence-in-chief Edward Morais asserted that there was a discussion with James Mills about moving into the Marsden home. He stated that Tarita Morais had been living there and that she was paying about $1,000.00 per month. It was stated that James Mills wanted to move out of the Meadowbrook property and “come into Marsden”. In response to a suggestion by Edward Morais that he pay only $1,000.00 per month, Edward Morais asserted that James Mills “insisted that he would pay the same amount of money that he paid at Meadowbrook of $1,300.00 per month”. When asked whether there was any discussion with James Mills about when the arrangement would start, Edward Morais responded that despite his suggestion that he should not break that Meadowbrook lease, James Mills insisted that he “just wanted to move in the following weekend”, and that Edward Morais “permitted him” to do so. As for making the payments, Edward Morais asserted that they both “agreed” that James Mills would make the payment to Edward Morais and Virginia Morais into their Streamline account with the Commonwealth Bank. As to any responsibility that Tarita Morais would have for the rent, Edward Morais asserted that James Mills stated that as “he’s the man of the house so he would pay $1,300.00 rent”.

46. [46]
    When asked whether there was any discussion about how long the arrangement would continue, Edward Morais answered that there was no such discussions, but added that since James Mills had ideas of actually getting married to Tarita Morais “so it would carry on until they probably found their own place”.

47. [47]
    When Edward Morais was cross-examined by Mr Fisher on behalf of the defendant, he stated that he was aware of the Residential Tenancies Act 1994 and further stated that it was agreed that James Mills could move into the Marsden home on a “hand shake”. Then, when after a few months Edward Morais informed James Mills that they “should have a rental agreement”, James Mills is asserted to have “disagreed” stating, “I’m family”. There was no written lease entered into as required by the Act.  Edward Morais also admitted that other requirements of the Act were not complied with either. Under the Act, by Schedule 3, there being no fixed term, it would be a periodic agreement, if the Act applied.

48. [48]
    In the evidence of Tarita Morais - who stated that she was present when her father talked with James Mills about arrangements for the Marsden home - she stated that James Mills suggested that he should move in with her and start a “full on relationship”, that he did not want to pay rental money to some unknown stranger, and that he preferred to “be part of our family” and “so he didn’t mind paying the rent to my parents”. She further stated that they both asked her parents’ permission and her parents agreed, “so he moved in just before Easter” of 2008. When asked about any discussions concerning rental, Tarita Morais replied that, although her parents asked him to pay a “grand”, James Mills insisted that he wanted to pay exactly the same as that which he was paying at Meadowbrook (which was $1,300.00 a month). She admitted that the arrangement was all verbal. She also stated, with respect to the timing of payments, that her parents were “flexible”.

49. [49]
    When Tarita Morais was cross-examined by Mr Fisher, he suggested that there was not in fact an arrangement for James Mills to pay rent but rather the idea was that the Morais family worked on the idea “of pooling your financial resources together” and that if James Mills “helped your parents pay off the Parkinson property more quickly” then “they would turn around and help James and if necessary you later on to pay off your own mortgage”. She did not agree with that suggestion, responding that both her brother and she paid rent, that they had been doing so ever since they got their jobs, and so she didn’t see “a complete stranger actually coming in and not paying rent” (emphasis added).  Tarita Morais further responded that, although James Mills did suggest to her father that James Mills would help her father and, in return, her father could help him, she continued by stating that there “was no question of that” because her father “didn’t want any help – extra help with paying off the mortgage” as he “didn’t need to”.

50. [50]
    In the evidence-in-chief of James Mills he stated that it was “actually never officially agreed between us that we would ever move in together” to the Marsden home and the decision to move in together “was at the direct suggestion of both Virginia and Edward Morais”. After stating that Tarita Morais asked him to speak to her mother and to use the term “dead money” in reference to the money that he was paying in rent on the Meadowbrook property – which he admitted was “roughly” $1,300.00 a month – he said that he told Virginia Morais that the rent was “dead money” and that he was wasting his money there, but then stated that he “didn’t recall” the rest of the conversation after that. When asked further in examination-in-chief about the purpose in having the conversation with Virginia Morais, he responded that he was “honestly doing just what I was told by Tarita”. In a follow-up question, when asked why he acted on what Tarita Morais said to him, he further responded that, “I don’t really know. I did a lot of what was said to me by her”. When Mr Fisher returned to the issue again, later in the evidence-in-chief of James Mills, the witness stated that he and Tarita Morais were told (by Tarita’s parents) not to disturb or alter the master bedroom and that they only had access to the small room that he was to be sleeping in, to a room adjacent to it to be used as a study, to Tarita’s room, and to the lounge and kitchen and, of course, to the bathroom facilities.  When then asked about the “financial arrangements about moving into Marsden”, James Mills stated that the “arrangement” was that he would pay Edward Morais and Virginia Morais “the same amount of money that I would normally have paid if I were just paying the rent at Meadowbrook”, adding that “this was to help them pay for the mortgage so that they could pay it off quicker”, and further adding that Virginia Morais mentioned that “this is what the family does, that they pool their resources together and help pay off things quickly”.  He added that it was “also suggested” that eventually Edward and Virginia Morais would turn around and be able to help Tarita Morais and him “eventually purchase and buy our own land and build our own house”.  When further pressed as to the exact words used, he stated that Virginia Morais said “we can pay off the house more quickly and then Eddie can help you and Tarita pay your house”.

51. [51]
    When the issue was revisited for a third time in examination-in-chief, in response to the question from Mr Fisher about whether he agreed with either Edward Morais or Virginia Morais that he would pay rent to stay in Marsden, he responded, “No, I did not.” In response to a question that whether, in having a discussion with those persons, they used the word “rent” to him, James Mills responded “No, they did not”. Nevertheless, he further responded that he “would pay the same amount of money as Meadowbrook”.

52. [52]
    I do not accept the assertions by James Mills that the “arrangement” with respect to payments concerned with the Marsden home was part of some wider arrangement whereby, if he made such payments, they would be, first, exclusively used to repay the existing mortgage over the Parkinson property and, secondly, that Tarita Morais’ parents would then help the young couple to buy their own house and land. One of the particular reasons for not accepting his evidence is that, as will be discussed later, I accept that he was the driving force about obtaining the Drewvale land in his name alone. Another reason is that, when particular issues became difficult, he suddenly had no recollection of the terms, or further terms, of the conversations that were then held. Thirdly, there were many instances of disagreements of recollection between Tarita Morais and James Mills and on all of them I was impressed with the evidence given by Tarita Morais. This has the consequence that I have concluded that much of the evidence given by James Mills was fashioned to suit the circumstances so as to show, or tend to show, that he was a particularly vulnerable person and was totally subject to emotional pressure from Tarita Morais, and financial pressure from her parents, when I find that he was not subjected to either. I, as will be discussed later, reject that Tarita Morais placed even any untoward, much less unconscientious pressure, on James Mills at any time.

53. [53]
    Thus, I conclude that, in the conflict between the terms of the “arrangement” concerning payments for residing in the Marsden home, I prefer the evidence given by Edward Morais and Tarita Morais. As for the apparent discrepancy between this conclusion and the evidence of Melissa Diefenbach and Emily Diefenbach: first, I accept the contrary evidence about the Tenterfield car trip given by Tarita Morais; secondly, I find that the differences between the detail given by each of these two witnesses mirrors their differences between who was driving and when the trip was undertaken (it being impossible if the trip was at Easter 2008 that Tarita Morais was wearing an engagement ring); and, thirdly, the level of generality concerning the arrangement reflects the probability of other discussions, particularly involving James Mills, and particularly after the relationship ended. This is exemplified by the reference to Edward Morais being a “guarantor” which was a term used by James Mills, but quite inaccurate in the circumstances.

54. [54]
    But that does not remove the issue from being resolved in the favour of James Mills in this particular proceeding. As was canvassed when exploring the issue of intention to create legal relationships, the onus is on the plaintiffs here to establish that legal obligations arose concerning this arrangement. Problems facing the plaintiffs are that the terms of the arrangement are uncertain about duration, that when made there was no attention paid to complying with the strict requirements of the Residential Tenancies Act 1994, and that the terms of the arrangement did not truly give to James Mills a right of exclusive occupation to the whole of the residential property.  To the extent of such uncontradicted evidence as to the nature of the occupation, this means that his position under the arrangement was more like that of a licensee, if not a border or lodger, in the Marsden home. It is noted that there was no contrary evidence about non-exclusivity given by either Edward or Virginia Morais, although no questions were asked of them either. Then, again, James Mills was not challenged in cross-examination either when asked questions by Edward Morais (noting, of course, that he was then self-represented). For the full context, the issue was raised in paragraph 17 of the counter-claim and “not admitted” in paragraph 16 of the answer.

55. [55]
    Given that later evidence can be relied upon for the purposes of establishing whether a binding agreement has been concluded, to reach such a conclusion however, it is necessary to reconcile certain later events. First, there is Exhibit 8, which is a handwritten note, originally impliedly admitted to be in the handwriting of James Mills, to the effect that he “solemnly” promised to pay $1,200.00 every month into an account known as “Veridian 2” until “the full balance” of $41,000.00 “is paid”. This was dated 23 December 2008. The $41,000.00 included rental said to be due and payable. The circumstances in which that handwriting was made are in dispute. While Tarita Morais asserts that it was made voluntarily, James Mills asserts that it was obtained in exchange for immediate sexual relations with Tarita Morais. This was put as being at her suggestion (i.e. that she “coerced” him). When cross-examined by Mr Fisher, Tarita Morais responded to this allegation by saying, “No. Definitely not. We were in an open car in front of people”. In his own evidence, James Mills did not give any detailed evidence of the alleged sexual inducement, other than to complain of coercion. In consequence, I find that the conversation and execution of the document as related by Tarita Morais occurred in the way in which she stated. But the “solemn promise” does not seem to me add much to disturbing the balance in favour of deciding that there did not come into existence legal relations sufficient to constitute a binding agreement between James Mills and Edward Morais and Virginia Morais concerning a continuing obligation to pay “rental”. Secondly, a fact that which is much in favour of the non-existence of such a legal relationship is that James Mills did not regularly pay the sum of $1,300.00 per month during the time of his occupation of the Marsden home, yet it was only after the relationship between Tarita Morais and James Mills ceased that any claim was made for “outstanding rental.” I find that the plaintiffs have not convinced me to the requisite standard that they would have not treated James Mills on this score in any different way, if the relationship had continued, from their son and daughter whom, I conclude, they would not have sued in the courts for outstanding rent. Thirdly, the bank manager’s notes (Exhibit 6) clearly state that James Mills was currently living with the (Morais) family “rent free” (emphasis added). Fourthly, it was clearly the case that neither party to the arrangement saw it as either a periodic arrangement a fixed term one, the only terms available under the RT Act.

56. [56]
    Therefore, I conclude that those parts of the plaintiffs’ claim that depend upon a binding legal obligation on James Mills to pay rental at the rate of $1,300.00 per month are not enforceable at law.

Intention to Create Legal Relations concerning Mortgage Repayments over Drewvale Land?

57. [57]
    For the reasons which will be canvassed later concerning the circumstances surrounding the purchase by the defendant of the Drewvale land, I find that the particular Commonwealth Bank “line of credit” [Veridian Line of Credit, Account Number 064133 10345608 (the Veridian line of credit)] – discussed there – which was set up to assist James Mills to discharge his liabilities concerning the loan and mortgage with the Commonwealth Bank over the Drewvale land also did not result from an intention to create legal relations between James Mills and Edward Morais and Tarita Morais.

58. [58]
    Accordingly, obligations that arose by the making of payments from that account in discharge of those mortgage obligations incurred by James Mills cannot be the subject of a claim by Edward Morais (much less by Virginia Morais, who was not even a party to this line of credit) in this proceeding. Even though the line of credit funding the mortgage obligations of James Mills was terminated and a new line of credit created with Virginia Morais, but not Tarita Morais, as a party [Veridian Line of Credit, Account Number 064133 10345608 (the Veridian2 line of credit)] in order to isolate Tarita Morais from obligations concerning James Mills, at the relevant time of any “promise” made by James Mills, Tarita Morais was a potential joint promisee under any contract that might exist. While procedurally it does not matter that she was not made a party with her co-obligor, her father, it does provide a context for the eventual decision that a legal relationship with James Mills was not concluded concerning the alleged promise by him.

59. [59]
    The nature of the absence of a legal obligation will be dealt with in the discussion concerning the Drewvale land.

Defendant’s Mother’s Ring

60. [60]
    In his counter-claim, James Mills seeks the return of this special ring and, or alternatively, damages for detinue, or conversion, concerning it.

61. [61]
    In the dispute about what occurred concerning this ring, the evidence of the mother of James Mills, Karen Bernard-Mills, concerning restrictions that she states she placed on her son cannot affect the relations between James Mills and Tarita Morais to the extent to which such restrictions were not conveyed at all by James Mills to Tarita Morais.

62. [62]
    Even if the relationship between James Mills and his mother was that whereby he was the bailee and she was the bailor, in a gratuitous bailment, if he gifted the bailed chattel to Tarita Morais without restrictions and that gift was effective in law, he cannot seek to recover the chattel by way of detinue, much less by way of conversion, whatever he consequence that may cause for him vis-à-vis his mother.

63. [63]
    The cases in this area of bailment demonstrate that outcome. In Lyte et Ux v Peny (1541) 1 Dyer 49; 73 E.R. 108 it was held that a bailment without consideration is revocable but only if the expressed condition is unperformed (i.e. executory). Here there was no expressed condition placed on the gift to Tarita Morais. In Maynegrain Pty Ltd v Compafina Bank [1984] NSWLR 258 it was held that there can be no conversion when an alleged trespasser acts with the consent, even if implied, of the person who (as the undisclosed agent of the owner) is known to him as the owner of the goods. Where, as here, James Mills acted, and was permitted to act, as if he were then the owner, especially where no restriction was placed by him on the gift to Tarita Morais, no detinue or conversion can be found.

64. [64]
    The other significant problem in the defendant’s case concerning this particular ring is that Tarita Morais is not a party to this proceeding. Whatever way one looks at the evidence, it is not possible to conclude on the balance of probabilities that Edward Morais and Virginia Morais ever had the requisite possession, or control, of the ring whereby a proper demand could be made upon them for its return. Since there is no evidence that such a demand was made upon Tarita Morais, and especially since she is not a party to the proceeding, even if it should be concluded that there was a bailment which was properly terminated in a way which obliged Tarita Morais to return the ring in question, it could not be the subject of any order by this Court in this proceeding.

65. [65]
    To make matters abundantly clear, the evidence given by the mother of James Mills concerning the restrictions that she says were placed upon the use of the ring must, in the circumstances of there being no communication of those restrictions on the evidence, lead to a failure to succeed in this proceeding on this issue.

66. [66]
    This means that it is unnecessary to resolve the particular disputes in evidence about how this particular ring was resized in order to fit the hand of Tarita Morais.

Drewvale Land 

67. [67]
    Given that the defendant has now sold the Drewvale land, has discharged the loan and mortgage obligations outstanding at the date of sale and has no obligation to any persons concerning that land other than the plaintiffs, subject to the issues of breach of fiduciary relationship, undue influence and unconscionable conduct, it can be safely concluded that James Mills was the purchaser of the Drewvale land, that he entered into a loan and mortgage with the Commonwealth Bank concerning that land and that at no relevant time was the land either legally, or beneficially, owned by any person other than James Mills. Additionally, several claims concerning land have no longer been pressed in the final submissions of the defendant. Furthermore, no financial loss has been established; or even asserted in the submissions.

68. [68]
    Given those conclusions, it becomes necessary in this proceeding to canvass only briefly the many disputes of fact between the plaintiffs and the defendant about the circumstances of how the land was first discovered, how it was located and how the defendant came to be the registered proprietor. But, of course, this still leaves for determination the very important issue of why these events occurred and their effect, if any, on the equitable issues.

69. [69]
    From the perspective of James Mills, his evidence is that he merely awoke one morning to the sound of excitement of the Morais family and found that Tarita Morais “had discovered some land”, and that Virginia Morais “displayed excitement as well about this piece of land”. But, importantly, his recollection of events that occurred after “are very much a blur”. James Mills recalls driving to a block of land at Drewvale and standing on the council strip with Virginia Morais, but stated that was “as much as I remember on that occasion”. He further stated that he saw no signage, no outline of a sign and did not recall walking around the land on that occasion. Furthermore, he could not recall any conversations that were held at the land on that first occasion. His recollection was that there was a second time that he went to the land - but, again, he did not remember the exact details, stating that he was not certain whether it was before or after the signing of the contract of the purchase - where Edward Morais and he eventually walked very carefully over it: the care being because he was worried that he would fall over and trip over things. Lastly, he does not recall any specific conversations that Edward Morais or Virginia Morais or Tarita Morais had with him about buying the land. When first asked in examination-in-chief as to what led him to buy the Drewvale land, he stated that Tarita Morais had a “dream to have a Golden Edge home to live in and raise a family in”. Yet he was the only purchaser, and borrower, ever involved. As to the decision to buy the land, he stated that he believed it was in May of 2008 but the decision made to purchase was “not his own” because “Tarita made it with me”. When asked about what was actually said in making that joint decision, he responded that he did not remember but “just simply went along with it”.

70. [70]
    When further asked, in examination-in-chief, at what point he realised that he needed money to buy the land, he responded that “he actually didn’t think much about that at all” and that “nobody said anything to him about the funding.” When asked by Mr Fisher about how he came to interact with the Commonwealth Bank, he stated that Edward Morais took him to see his friend who was a bank manager at Wynnum, that he met “a gentleman” by the name of “Anthony” there and that he did not really remember any conversation other than Anthony said to him that the Commonwealth Bank could lend him 80% only.  Although acknowledging that the meeting took “at least” two hours, he stated that nothing was said to him about the remaining 20%, that he did not pay attention, that he had no idea of how to deal with mortgages or the purchase of land or any of those financial things; and yet, he stated that he left with the feeling that most likely he would not be given a loan.  When asked about what he thought the purpose of the meeting was, he stated that it was to try to sort out some finance stuff with the land.  He further said that he could not remember having more than one meeting but he did recall signing the contract to buy the land, although he did not remember anything said to him during that meeting.  When asked about how he was to get money to pay for the land, he stated that he did not know, that he was very confused about how it was going to be arranged, and that he was not told “specific details”.

71. [71]
    As to how the loan commitments of the obligations under the mortgage were to be met, he stated that the “early awareness” he had of “a line of credit” was that at the Wynnum branch meeting at the Commonwealth Bank he recalled “Anthony” (Anthony di Pino, a customer service manager for the Commonwealth Bank, who gave evidence) saying something about it being “risky”. If said - and it was not put to Anthony di Pino that it was said – the risks were to the Morais’ interests, as is clear from the events as they unfolded.

72. [72]
    James Mills admitted that he asked his mother whether she would be a guarantor for the loan to purchase the land, although he admitted that before any “positive” response was received, he called his mother and told her not to worry about it, as it was “all sorted”. It seems to me that seeking persons to be guarantors strongly indicates an intention to be personally liable for the obligations guaranteed. Further, Karen Bernard-Mills raised no concerns then with her son regarding his inability to understand such a financial transaction.

73. [73]
    Both with respect to the mortgage documents and the contract for purchase of the Drewvale land, James Mills stated that no one read to him line-by-line the mortgage documentation and that he only vaguely remembered bits and pieces of the contract for purchase. As to the aspect of payments to discharge the loan and mortgage obligations, he stated that he was told by Edward Morais that both Tarita Morais and he needed to start putting more money “into the line of credit”, stating that Tarita Morais informed him that the payments of the interest on his mortgage were coming out of a line of credit and that the only aspect of the payment that he was informed about was the “interest”. When asked about whether he said to Tarita Morais, “How did that come about?”, he responded that, “I just trusted whatever she said”. It strains credibility, in circumstances where separately I find that he was an independently minded person, to accept that he needed guarantors but had no knowledge about how he should discharge those primary obligations (which would have been so guaranteed); or why he should be limited to paying interest only on his own loan and mortgage on his own land .

74. [74]
    Not surprisingly for this case, the evidence given by Edward Morais and Tarita Morais was in marked contrast to that given by James Mills. Edward Morais said that James Mills showed him the land on the “internet” and then after that they both drove to see what the land was like. Edward Morais observed that the land sloped downwards and that James Mills “had a very big idea of utilising that slope to his advantage so that he could have a service centre at the bottom of the slope, which would be on the third floor, where he would have a number of computers and would provide service to small companies to run their businesses.” Edward Morais said that he was told by James Mills that he had approached the owner and that James Mills asked Edward Morais to drive him to the property after which he stated that he was interested in the land. So he suggested to James Mills that he would take him to a friend of his who would probably find the best solution to solve the problem of finance. That friend was Anthony di Pino. At the meeting with Anthony di Pino at the Commonwealth Bank, the version given by Edward Morais was to the effect that James Mills took a full role in the discussions that occurred. Further, as to the line of credit, the plaintiffs had an existing line of credit with the Commonwealth Bank and, consequently, opened a special line of credit (Veridian line of credit) for James Mills stating that that line of credit could then be transferred to the account of James Mills as soon as he achieved an “equity amount”, with James Mills agreeing both to the line of credit and to a promise to pay “as fast as he could”. Edward Morais then gave evidence that it was from that line of credit that the plaintiffs made payments of about $900.00 a fortnight for the Drewvale land. Tarita Morais did not want the Drewvale land, but James Mills insisted that he buy it.

75. [75]
    The further evidence of Edward Morais was that, in relation to the Drewvale property, James Mills made no payments at all to the plaintiffs with respect to reimbursing them for the mortgage payments mentioned.

76. [76]
    The evidence of Anthony di Pino was, substantially, to the same effect as that given by Edward Morais, so far as the relevant issues remaining are concerned. The one major exception is the contended limitation on the borrowing for the purchase as being limited by the Commonwealth Bank to 80% of the value of the land. Both Edward Morais and James Mills, independently, asserted it. From Anthony di Pino’s evidence, it is clear that the loan, and accompanying mortgage, related to approximately 95 per cent of the value of the land (i.e. $221,711.000, or 96.4%). The contract of purchase was for consideration of, also, $230,000.00. The bank witness, called by the plaintiffs, and cross-examined, faced no questions about the purported 80% limitation. One can only conclude that, like many other aspects of this case, no one intimately involved paid any great attention to detail because the relationships which were formed were not ones directed to later legal enforcement.

77. [77]
    Despite the conclusion that the primary obligation to discharge the loan and mortgage obligations was accepted by James Mills, the following surrounding circumstances have inclined me to find against a legally enforceable promise concerning the Veridian and Veridian2 lines of credit set up by Edward Morais and Tarita Morais, and then Edward Morais and Virginia Morais, specifically for the Drewvale land:-

• it would have been simple, in circumstances where Edward Morais arranged all relevant bank meetings, to have James Mills as a party to the account when establishing the Veridian line of credit, thereby concluding his legal liability to pay - but only Edward Morais and Tarita Morais were parties to the rights and obligations (without explanation – even though there may have been a valid one – for the exclusion of James Mills) from the beginning (it being noted that, while paragraph 32 of the answer gives such a reason, there was an implied non-admission of it, and, most importantly, no evidence was led at trial);
• the “transfer” of the line of credit was conditional upon sufficient “equity” being obtained in the Drewvale land, in circumstances where the only evidence of what that term might mean (given by Tarita Morais) renders it uncertain both as to meaning and timing, because of the very uncertainty of the land value necessarily rising, because of when that might be objectively determined to have occurred, and because of how “fast” was as “fast as he could”, particularly when it was later agreed that the line of credit could be more extensively used to clear other, including higher interest, obligations of James Mills;
• no request to reimburse any particular payout (in order to discharge the accrued loan and mortgage obligations) was made until after the breakup of the relationship, strongly suggesting that the requisite condition had not been met, although an approach had been made to Anthony di Pino to try to arrange a “transfer” (although James Mills seems not to have had a role in the approach), but he was unavailable at the time James Mills ended the relationship; and
• the “promise” to pay on the part of James Mills, even on the evidence of Edward Morais, was a promise to pay in the future and, because no explanation was proferred as to why the obligation was not immediate (even acknowledging that James Mills may not have had sufficient asset backing at that stage), it is strongly indicative of there being a non-binding, in the legal sense, promise, if only because of the uncertainty of its terms: see Atco Controls at [28].

78. [78]
    Accordingly, it is unnecessary to consider the circumstances of the Veridian2 line of credit, except to remark that it was an attempt to “transfer” the debt from the Veridian line of credit to it, in order to isolate Tarita Morais from any fall-out that might result from any rupture to her relationship with James Mills.

“Infatuation”

79. [79]
    Much was made on behalf of the defendant, in the submissions, particularly oral, about the alleged infatuation for Tarita Morais by James Mills. In particular, great emphasis was placed upon the High Court decision in Louth v Diprose (1992) 175 CLR 621.  As the headnote accurately states, a man of comparatively modest means gave $58,000 to a woman, with whom he was infatuated but who was largely indifferent to him, for the purchase of a house for occupation by herself and her children of a former marriage, with the woman being registered as proprietor.  When the parties fell out, the trial judge found that he had been emotionally dependent on the woman who as a result had great influence on his actions and decisions, that the woman tolerated the man’s attentions because of the material advantages which resulted, but that she manufactured an atmosphere of crisis about her ability to continue living in her rented accommodation and did so in order to influence him to provide the money for the house. She played upon his love for her by making suicide threats in relation to the house and she was aware of his infatuation – which she manipulated – and of his consequent inability to judge what was in his best interests. Her manufacture of an atmosphere of crisis was dishonest.  Immediately one can discern massive differences between that case and the present.  They will be discussed in some more detail later. 

80. [80]
    For the moment, it is noted that it has been held recently in Queensland that the judgement of Deane J in Louth shows that an order will not be made against a party if the party demonstrates that the transaction itself was “fair, just and reasonable” (per Lyons J in Paroz v Paroz [2010] QSC 041 at [69]).  Deane J dealt with the relationship between the parties in the following terms: there was an extreme contrast between their respective attitudes to one another; for his part, the man was “utterly infatuated” by the woman; he was “completely in love” with her; in contrast, the woman had become “quite indifferent” to “the man”; the motives for her continued association with him “were of a material nature”; and his infatuation placed the man “in the position of emotional dependence upon the (woman) and gave her a position of great influence on his actions and decisions”: at 636.  Furthermore, according to Deane J, the woman set out “on a planned course of conduct aimed at persuading the (man) to provide the money necessary to enable her to purchase the house”: also at 636.  On the basis of these and the other aspects referred to in the headnote, Deane J held that, on the basis of the trial judge’s findings about the woman’s purpose and conduct, the learned trial judge not surprisingly expressed the view that her conduct “smacked of fraud”: at 637.

81. [81]
    Finally, according to Deane J, a special disability arose not merely from the man’s infatuation. It extended to the extraordinary vulnerability of the man in the false “atmosphere of crisis” which, to a significant extent, the woman had deliberately created: at 638. Thus, Deane J concluded that the intervention of equity was not merely to relieve the man from the consequences of his own foolishness - it was to prevent his victimization: at 638.

82. [82]
    Turning to the evidence here, when Tarita Morais was cross-examined she was asked whether she accepted that during the course of her relationship with James Mills he was infatuated with her. After responding, “No”, it was then suggested that he was “very much in love” with her (Tarita Morais), to which she replied “Yes. We both were.” In answer to further questions as to whether that was reciprocated and that she was “pretty much in love” with James Mills, she answered, on both occasions, “Yes”. It was in that context, after Tarita Morais had conceded that she trusted James Mills “completely” and that she presumed that James Mills also trusted her and her family, that she accepted that her father dispensed advice and wisdom for James Mills at least at the same level as the wisdom and advice he would dispense for her brother, Elton Morais. Accordingly, she further conceded that James Mills was treated “as if he was the second son”.

83. [83]
    Taken by itself, it would be an impossible basis upon which to build a plank of infatuation which in any way even palely reflected that in Louth. It also must be stated at this time that, with respect to this issue, I accept completely the evidence of Tarita Morais.  In general terms, particularly with respect to this aspect of the evidence, when I observed her in the witness box she was forthright, conceded issues that she would have been expected to, and strongly rejected others which were totally consistent with the other evidence she gave.  She presented to me as an honest witness, doing the very best she could to present the truth.  This is not to say that she did not also express a very strong affection for her parents, particularly when they were the subject of criticism from James Mills through his legal representative.  Nevertheless, my conclusion is that she never crossed the boundary and distorted her evidence because of that affection.

84. [84]
    When James Mills came to give evidence on this topic, while he used the word “infatuated”, it was actually expressed in the terms of being “in love with each other and in fact, infatuated with each other” (emphasis added).  That statement was made with respect to the whole of the year 2007 right up to the beginning of the year 2008.  Intriguingly, during the time when the alleged conduct said to give rise to equitable relief and remedies arose, there was no mention again of such infatuation.  Rather, and this is only referable to a time after the relationship had broken up, James Mills referred to Tarita Morais coercing him to sign the document which is Exhibit 8.  This has been dealt with earlier.  I merely remark at this time that with respect to that matter also – as I have already indicated – I accept what Tarita Morais said. 

85. [85]
    I have also taken into account the post-separation period. While James Mills wished for reconciliation and while Tarita Morais said that she still had significant feelings for James Mills, I see nothing in that evidence which shows that there should be a conclusion any different from that which finds that there was no disabling infatuation; and certainly not in the sense that it is used in Louth.  These are not the circumstances here of one party to the relationship having such a dominant role because of the level of emotional attachment of the other party that the latter did not bring an independent mind and full consent to the matters in concern here. While I note that the evidence of Karen Bernard-Mills dealt extensively with this later period, and while I have no doubt that James Mills was then distressed, he subsequently made attempts to reconcile with Tarita Morais and wrote the note that is Exhibit 8. His distress is understandable in the context of the two families fighting since at least mid-2008 and upon realising that Tarita Morais was always likely to maintain extremely strong affection for, and strongly defend, her father and mother (with whom James Mills, post-purchase of the Drewvale land, was having continuing disagreements). Even his mother noted that, when she first spoke with him in November 2008, he had “not decided definitely to break up”.

James Mills’ disabilities

86. [86]
    As I have already touched upon, James suffers from a congenital mitochondrial disease, Leber’s Hereditary Optic Neuropathy, that caused his blindness when he was aged 21. The vision with which he is left is less than 1/60^th of normal vision.  In layman’s terms, he has no central vision.  What a normal person can otherwise see at 60 metres he can see at less than 1 metre.  When he was in the witness box on Day 3 of the trial, he had with him a  Pico electronic instrument.  That magnifies up to 15 times the size of normal print and it makes it very thick.  Additionally, according to Tarita Marais, he was able to use disability software on the computers he used at the Marsden home to enable effective use of such devices. 

87. [87]
    When cross-examined by Mr Morais – at a time when the plaintiffs were no longer legally represented – James Mills admitted: that he finished his university degree in Information Technology while having these sight issues; that he was able to watch television; that he owned a Nintendo Wii, and was able to play the game; and that he climbed on both roofs of Edward Morais’s double storey house in Parkinson in order to install a camera with his friend Steven.

88. [88]
    In terms of what jobs he was able to obtain, he admitted, in cross-examination, that after graduating he had been employed by: PricewaterhouseCoopers for some 11 months; an information technology company known as dotRED Pty Ltd for four months; a further information technology company known as Vision 6 for two months; and, on a part-time casual basis, Pizza Hut, for some three months. During the period from March to December 2008, his employment covered the first three of those jobs. In other words, during a significant time that the relationship with Tarita Morais existed in 2008, James Mills had a job. As noted earlier, the income from such jobs was at least the income from PricewaterhouseCoopers, being in excess of $55,000.00.

89. [89]
    Additionally, he left home when he was aged 19 and lived at a number of residences including the one at Meadowbrook for some six to eight months immediately before he moved in with Tarita Morais. At that residence, he looked after himself entirely, although transport was always something that he had to arrange for others to do, at least from the time that he effectively lost most of his sight. Even so, according to Tarita Morais, he was always capable of arranging for taxis, for which he paid only half price.

90. [90]
    Much was made of the relationship between James Mills and Edward and Virginia Morais. In his evidence, James Mills asserted that for the whole of 2007 and right up to the beginning of 2008 his relationship with Tarita Morais was secret because her parents disapproved of him (James Mills). When asked whether Tarita Morais explained why her parents disapproved of him, his response was that he did not recall. Yet, when later asked about initial perceptions of his about how Edward and Virginia Morais felt towards him, James Mills responded that, some weeks after the initial contact, Tarita Morais informed him that her parents were not happy with him and did not want them to keep dating and, when he asked why, he “got the feeling” that it was because he still had not completed university, he did not have a job, he did not have any money, “and so forth”. Tarita Morais in her own evidence quite readily conceded that, initially, those particular reasons were concerns expressed by her parents. Nevertheless, by the time the couple moved into the Marsden home, James Mills had graduated, did have a job, was earning a good income and had made an “arrangement (at the very least) that he would pay money to Edward and Virginia Morais. Thus, whatever initial difficulties there may have been, by the time of the relevant events in late 2008, while tensions undoubtedly existed, the notion of extreme disapproval could not longer be said to exist. By June 2008, the couple had become engaged, although tensions, particularly between the two families, were festering, as deposed to – and not disputed by the plaintiffs in terms of generalities – by Melissa Diefenbach and Emily Diefenbach. The transfer of the fee simple in the land (on which the Parkinson home was an improvement) from Tarita Morais to her parents for $580,000.00, again in order to isolate property from the potential reach of claims – with a concession from Edward Morais that no money changed hands (but with full stamp duty being paid) – shows how the arrangements on a family scale often did not conceive of involving the Courts in any adjudication concerning such agreements .

91. [91]
    Besides the alleged emotional dependence of James Mills on Tarita Morais (which I have rejected), it is necessary to examine the financial matters concerning the four main players (i.e. Edward and Virginia Morais, Tarita Morais and James Mills). While $1,300.00 was a substantial amount to pay per month for the “rental” arrangement, it is clear from the examination of the payments made that any such payment was made irregularly and never in that particular sum, or any multiple of it. The full amount of $26,594.00 paid into Tarita Morais’ and plaintiffs’ account [Commonwealth Bank – Account Number 064-130 10276954] (the “Streamline Account”) encompassed, according to the evidence of Tarita Morais, payments for “rent” and payments for obligations incurred for the benefit of James Mills including a payment made by James Mills as a result of receiving a refund of $5,000.00 from the ATO.

92. [92]
    James Mills, for his part, asserted that he did not remember making most of those payments totalling $26,594.00 and did not “personally recall” making a single one except for one of 17 July 2008 against which a notation of “RENT” appears. Instead, he asserted that it was Tarita Morais who made all those transactions herself. James Mills further asserted that the reason that he knew she did was that it was “agreed” that Tarita Morais would look after, between the two of them, the transactions and financial arrangements that they had. Of course, it should be remembered that Tarita Morais, in cross-examination, denied that she made such transactions. Importantly, it was suggested to her in cross-examination that she put pressure on James Mills “to make those payments referred to in paragraph 65 of counter-claim” (i.e. the $26,594.00), which she denied. The suggestion is surprising, because that suggestion is inconsistent with the evidence that James Mills gave which has just been canvassed. It may, of course, have been intended to limit that suggestion to the one, or perhaps two, or perhaps three, that he did recall. But the words do not readily admit of that interpretation.

93. [93]
    I am left in no doubt, after consideration of all of the evidence and observing carefully the various witnesses as they gave their evidence, together with the sparse documentation that was tendered, that, while James Mills did attempt to do many things in order to fit in with the Morais family, he did so of his own free will and not as a result of pressure brought on him a kind that in any way overwhelmed him. In particular, I find, in accordance with the evidence of Tarita Morais, and Edward Morais, that James Mills expressed no real concerns about his long-term financial position because he confidently expected a large settlement sum from a court case he was pursuing. Both were not, in cross-examination, challenged as to the truth of such testimony.

94. [94]
    In particular, I find that his decision to change his job from PricewaterhouseCoopers was totally his decision - despite pleas not to do so from both Edward and Virginia Morais, from Tarita Morais and from his mother – and that he gave up that position because of his personal problems with those with whom he worked. I also find that his further jobs were all engaged as a result of his own decisions, although there is no doubt Tarita Morais, from the perspective of attempting to look after the best interests of James Mills, encouraged him to take the job with Vision 6. Further, I find that it was James Mills who first located the Drewvale land, who pushed for the purchase of that land, and who was an equal participant in the arrangements made by Edward Morais to visit the Commonwealth Bank in order to arrange finance. I accept the evidence that James Mills used his own conveyancers, Conveyancing Works, to effect the settlement of the contract of sale for the Drewvale land. I also find that he was encouraged to obtain legal advice, but did not do so, except for engaging Conveyancing Works to attend to the conveyance. I was not impressed at all of his many denials of recollection of circumstances concerning the Drewvale land when, for other matters, he appeared to have quite a detailed memory of occurrences. It strains credibility to believe that such an important matter as the purchase of the land in his own name did not lead to a much better recall of events concerning it. To attribute his lack of recollection to emotional and financial pressure put on him does not do justice to the strong independent streak that I observed in him while he was giving evidence. In particular, I find that on numerous occasions during, for instance, cross-examination he showed the quite assertive side of his nature in responding to suggestions made to him that he clearly did not accept. Instances of these include: when asked again about his sight difficulties, his response was that he “believed that had been asked before”; when asked about whether he had ever installed wireless communications for the university accommodation at Nathan, he responded that it was “far too dangerous for a blind person to do”; to a question about whether he saw, as he alleged, Tarita Morais make payments for him, he responded that he had seen her do some of them “but then how much does a blind person see”; and, when asked by Edward Morais why he made changes to his mortgage repayments once the relationship was ended, he said he did so “to try and regain some of the control that you and your wife had taken from me without my request”. I was also not impressed by his responses when asked about his NAB credit card. When presented with a copy of an email he had sent (Exhibit 11), he stated that he “actually honestly” did not know how that credit card “had got paid off”, even though that email referred to a meeting he was to have with Edward Morais and Tarita Morais at Garden City at 3.20 pm on 4 April 2008. He finally stated, in response to the suggestion that Edward Morais had handed him a cheque for that $9,321.21 on 4 April 2008 at Garden City Shopping Centre and had walked with him to the NAB to pay off the debt, “I simply don’t remember that, sorry”, in circumstances where, when the matter was revisited in re-examination, in response to a question about whether he asked Edward Morais “to pay that money on his behalf,” he stated that he “did not”.

95. [95]
    In reaching these conclusions, as also remarked earlier, I found the evidence of Tarita Morais to be most helpful, primarily because I believe that she honestly strove to give her honest recollection of what occurred. While acknowledging that she was undoubtedly loyal to her parents, and in particular to her father, I do not find that such loyalty was in any way reflected in any adaptation of her evidence simply to suit the circumstances of her father’s and mother’s case.

96. [96]
    There was no doubt that, at the time of termination of the relationship between James Mills and Tarita Morais, the tension between the Morais family and the Mills family had reached a point whether neither trusted nor the believed the other. As for the relationship between James Mills and Tarita Morais, while I do accept that Tarita Morais took her parent’s side in many of the arguments that seemed to develop between the couple, and although I accept that James Mills resented the extent of that devotion to her parents, I find that it never reached the stage where he was overborne in any way such that his decisions were not freely reached on his own. To the extent that his decisions might be seen to have been improvident, I conclude that that was solely as a result of his own decisions and, even though decisions may well have been made in an attempt to achieve a better relationship with Edward and Virginia Morais, they did not result in James Mills being unable to resist any requests from Edward and Virginia Morais and of Tarita Morais concerning financial transactions, or result from James Mills being emotionally vulnerable and dependent upon those persons.

97. [97]
    In reaching that conclusion, it is necessary to reconcile the circumstances in which James Mills signed the handwritten document that is Exhibit 8. This has already been canvassed in other contexts. In this context I find that James Mills did want to re-establish his relationship with Tarita Morais. I find that, despite the assertions by James Mills concerning the circumstances of the document coming into existence, he believed that his prospects of achieving reconciliation would be improved substantially by the writing of the document in question. I do not hold that it has any legal effect of itself. There has never been any suggestion in the plaintiffs’ pleadings that in any way it was some kind of negotiable instrument or other legally effective document. From the plaintiffs’ perspective, the document simply went to matters of credit. Lastly, I do not find that in any way it gainsays the conclusions reached about the lack of an intention to create legal relations. It simply is another expression of an obligation in a field outside law in which the circumstances of this case, and undoubtedly other cases, concerning families do occur. Whether that field is one of honour, or morality, or is attended by some other characterization, is unimportant for the determination of the legal issues here.

Conclusion on equitable grounds raised by the defendant

98. [98]
    When reaching the conclusions that follow it is important to note that they are not done in the context where the plaintiffs have received some real advantage from any of the transactions in question. For instance, with respect to the purchase of the land at Drewvale by James Mills in his own name, it is irrelevant to consider what causes of action he might have against the Commonwealth Bank, his own legal conveyancers, or even the vendor of the land in question. What is considered here is simply the circumstances of the obligations that he incurred insofar as they concern the plaintiffs.

99. [99]
    Concerning any fiduciary relationship that might have existed, even if it is to be concluded that there was a relationship of trust and confidence between James Mills and Edward and Virginia Morais, I find there was no exercise of a power affecting the interests of James Mills in a legal, or practical sense, so that James Mills was especially vulnerable to abuse by those persons. Edward and Virginia Morais did not undertake to act, or act in a way which sought to serve exclusively the interests of James Mills, since it was not a relationship in which the parties were not free to pursue their separate interests. The mere fact that James Mills relied for advice, at least in a fatherly sense, on Edward Morais in the particular circumstances of this case does not mean that the relationship was of the kind which of its nature required James Mills to place such reliance. As already analyzed, there was no position of disadvantage or vulnerability which caused James Mills to place such reliance upon Edward and Virginia Morais. Consequently, I hold that James Mills does not need the protection of equity in a way which acts upon the conscience of Edward and Virginia Morais. Since Tarita Morais was not made a party to the proceeding, any act, or omission, solely on her part would be irrelevant. To the extent that Tarita Morais was alleged to be an instrument of her parents in this regard, I do not on the evidence led find any such conduct did occur.

100. [100]
     Isolating the various transactions, it is necessary to consider the issues of “rent” and repayment of the Veridian and Veridian2 lines of credit, even though such never gave rise to any legal relations. To the extent to which there were, in law, obligations of that nature – if I were to be otherwise in error - I would still hold that there was no relevant fiduciary relationship created for the reasons next canvassed.

101. [101]
     Hence, the concern at this stage is simply for the payments that were made. They are not only those payments to the Streamline Account which total $26,594.00 but also the payment of $50.00 made on 7 June 2008 (as a deposit for wedding celebration expenses) and the payment of $1,000.00 made on 17 July 2008 (which was not the subject of any evidence given by, or for, James Mills).

102. [102]
     On acceptance that such payments were made by James Mills himself, it is impossible to see how any fiduciary obligations arose. Apart from the arrangement for “rental” entered into freely and openly by James Mills which was for his benefit, the payments were for moneys outlaid by Edward, Virginia and Tarita Morais, which were also for his benefit, with the same applying to the deposit of $50.00 which was for his joint benefit. 

103. [103]
     Even if one were to accept the assertions by James Mills that he only made a few such payments, in the circumstances in which he authorised Tarita Morais to make the payments - even putting to one side the improbable account of typing in the word “RENT” when unable to type in something meaningless (in circumstances where it was always open for him to type in, for instance, “TTTT”) - I still would not hold that there was any fiduciary obligation that existed. As to such payments, of whatever number, he readily conceded that Tarita Morais had authority to make such payments on his behalf. Therefore, in the absence of any such payments being made other than in discharge of the rental arrangement or in discharge of sums of money outlaid for his benefit, it is again impossible to conclude that they were made in any breach of any fiduciary obligation owed.

104. [104]
     The next equitable ground relied upon is that of unconscionable conduct. This ground requires someone to suffer detriment or disadvantage by reason of the transaction in question. I have already found that James Mills was not suffering from some special disability and was not placed in some special situation of disadvantage, at the time of these payments. It is also difficult to see where he has suffered some detriment or disadvantage, particularly given his own evidence about what he did personally commit himself to, even if extra-legally, concerning “rental”, concerning obligations defrayed and goods purchased, and concerning repayments of loan and mortgage obligations due to the Commonwealth Bank. As observed, he had the advantage of using the accommodation at the Marsden home and no quantified loss has been established from the eventual sale of the Drewvale land, which on an objectively sound basis he had intended to use as his future family property; and the land cannot be subjected, if it ever could have, as originally sought in the counter-claim, to some equitable order for relief or remedy. While James Mills did suffer the impaired faculty of sight, he was never placed in circumstances where Edward and Virginia Morais unconscientiously took advantage of an opportunity placed in their hands. Even on a Bridgewater v Leahy approach, I do not accept that in any way James Mills was the weaker party or that the payments which are the subject of this discussion were to his detriment or disadvantage.  Finally, as to undue influence, paying particular note to the avoidance of conflation with this doctrine and that of unconscionable conduct, the quality of the consent or assent of James Mills, in the context of not being in a position of disadvantage, does not lead me to conclude that the payments were unconscientiously procured, particularly in circumstances where the payments truly reflected moneys that had been outlaid for the benefit of James Mills or moneys that he himself had arranged, even if in a non-legally binding way, to pay. In terms of unconscientious behaviour, where James Mills has now no legal obligation to pay for many benefits obtained or outstanding “rental” (or even to pay for the gratuitous discharge of his loan and mortgage obligations to the Commonwealth Bank), it would confound conscience that he could have returned to him payments made where he has enjoyed the benefits of the accommodation, the obligations discharged for his benefit and any payment made for his contemplated marriage.

105. [105]
     In summary, I do not conclude that there is any basis upon any of the equitable grounds raised which would permit any equitable relief, or remedy, to be granted to James Mills in this proceeding.

Remaining sums of money claimed.

106. [106]
     Apart from damages for detinue or conversion – which will be dealt with next – most of the remaining claims are those that the plaintiffs have claimed in the manner set out in paragraph 1 of the amended statement of claim filed 18 June 2009. They also include a few of those set out in paragraph 3 of that pleading, being those which do not relate to repayments of obligations which were otherwise due and owing on the loan and mortgage for the Drewvale land. I will deal first for those for which no evidence was led by the plaintiffs. For the sums of $2,156.24 and $2,000.00, being respectively concerning moneys outlaid for the purchase of a Macbook Air computer and for “wedding expenses”, there was no evidence at all. Accordingly, such sums are not recoverable.

107. [107]
     Concerning the claim of $11,505.40 alleged to be for the deposit on the purchase of the Drewvale land, plus a fee for the cheque for the payment of the deposit, at least with respect to $8,000.00 of that, the plaintiffs abandoned such a claim during the trial hearing. There was no evidence led as to the balance of that sum (namely $3,505.40). Accordingly, no recovery is possible for that sum, or even part of that sum.

108. [108]
     With respect to an alleged payment to the Office of State Revenue concerning the payment of Stamp Duty on the purchase of the Drewvale land in the sum of $4,575.00, and the payment of $999.00 to Conveyancing Works for the conveyance of that land, Tarita Morais gave evidence that the sum of $5,584.80 withdrawn from the Veridian line of credit on 28 April 2008 was with respect to those two sums. It should be noted that the total of those sums claimed in paragraph 3 of the amended statement of claim is $5,574.00, leaving a difference of $10.80. The additional sum of $10.80 is undoubtedly for the alleged fee for the two cheques. No evidence was led as to why such a fee was incurred, though it is quite possible that it was because bank cheques were obtained for the discharge of the particular obligations. The problem that I face in determining whether these sums paid on that day were made at the request of the defendant is the same problem that I face with respect to other matters concerning an intention to create legal relations. Although it is demonstrably true that the payments were for the benefit of James Mills, there is no evidence led on behalf of the plaintiffs which convinces me that, while undoubtedly the plaintiffs themselves expected, as did Tarita Morais, that James Mills would pay these sums, the circumstances yield a legal obligation to pay. Even using the analysis of an inferred contract, given the state of relations between the parties as at the time surrounding the purchase of the Drewvale land, I am unable to conclude, again, that there was intention to form legal relations with respect to those payments.

109. [109]
     That leaves three remaining claims. I will deal with, first, the transport of the defendant’s furniture from Meadowbrook to Marsden, secondly, the payment made in reduction to the defendant’s NAB credit card and, thirdly, the purchase of the “second engagement ring”.

110. [110]
     The cost of the moving by MiniMovers of the defendant’s furniture is the subject of Exhibit 4. The sum paid was $290.25. The sum claimed is $250.00. The defendant, in both written and oral submissions, claimed that that discrepancy should itself be a reason that the claim should not be allowed. With all due respect to the argument, it is clear that besides the majority of the defendant’s furniture being taken to the Marsden home, there was a fridge that would not fit there that was then taken to the Parkinson home. It was really never contended by James Mills that the fridge was not part of his furniture. The plaintiffs have only sought, thus, part of the total sum of $290.25 which represents the transport to the Marsden home. Unfortunately for the plaintiffs’ case, although it is clear, particularly from his cross-examination, that James Mills accepted that it was fair to say that it was his responsibility to organize the transportation, his further evidence was that Virginia Morais organized it and that he was not asked to pay. The evidence given by Edward Morais was that, while James Mills initially said that he was going to pay, when the time came he did not have the funds and, so as to make things simpler, Edward Morais asserts that he said to James Mills, “I will pay for that transport and you will pay me back that money” and that James Mills replied, “I promise to pay to you that money”. Tarita Morais was unable to give any direct evidence of what occurred.

111. [111]
     In the cross-examination of James Mills by Edward Morais himself, he did not put directly to James Mills the version that he gave in his own evidence-in-chief. In fact, it was Edward Morais who put it to James Mills that his wife Virginia Morais was the person who had organized the transport. Therefore, at the end of the day, I am left in doubt as to what the exact nature of the arrangement was, namely whether there was indeed a promise by James Mills to pay in consideration for Edward Morais “paying” the transport cost, particularly in the circumstances that have already been extensively canvassed concerning a general absence of an intention to create legal relations. Hence, I hold that the onus of proof has not been discharged to the requisite standard by the plaintiffs for this claim.

112. [112]
     Moving then to the defendant’s NAB credit card. While it is true, as submitted on behalf of the defendant in oral submissions, that there was no direct evidence of the payment of the sum of $9,326.61 (which in fact according to the defendant’s email was actually $9,321.21, although the anomaly might be well explained by some additional fee required on the actual closing of the account), I am satisfied, on the balance of probabilities, particularly given the response of James Mills to the cross-examination on this point, that the sum that is shown to be paid on 23 April 2008 from the Veridian line of credit contains the amount that was paid by Edward Morais to the NAB on 4 April 2008 at Garden City, even though that conclusion is based upon a circumstantial case, relying upon an inferred contract. I am satisfied that the inference that the sum was paid is the more probable inference from all the inferences open on the evidence led. Hence, the plaintiffs should recover the sum of $9,326.61. But because of the paucity of cogent evidence about how any discharge by the defendant of both legal and non-legal obligations was to be allocated (the most being “some payments” according to Edward Morais), because the most that can be attributed to any repayment is the sum of $1,000.00 on 18 July 2008 paid to the same Veridian line of credit as “discharged” the NAB credit card debt, and because therefore no appropriation can be shown to have been intended by the manner of keeping this account (thereby excluding the rule in Clayton’s Case (1816) 1 Mer 572), I do allow a set-off, but of $1000.00 only. I do not allow any claim for interest, because I have otherwise held that the Veridian line of credit was not agreed between the parties to be set up in contemplation of the discharge of legal obligations, yet the plaintiffs “reimbursed” themselves from the Veridian line of credit for this sum.

113. [113]
     Lastly, there is a matter of the second engagement ring. An additional amount of $2,207.00 is sought because a total of $7,707.00 was paid on 9 June 2008. But since it has not been identified, no claim can be made for it.

114. [114]
     This item, in paragraph 1 of the amended statement of claim, suffers from the same flaw that I have already addressed concerning the lack of an intention to create legal relations with respect to similar such payments. It is clear from the plaintiffs’ case that the sum that should be claimed is the sum of $5,000.00 only, given the circumstances of the transactional device that was used to avoid the payment of GST. Of course, that in itself raises serious concerns about the way in which this whole arrangement was undertaken. Nevertheless, I find that it was James Mills who first located the Diamonds International site, that it was he who found the specific ring, that it was he who went with Virginia Morais to the Diamonds International store and that the ring was, with James Mills’ consent, bought. I reject the evidence of James Mills to the effect that when he had the conversation with Virginia Morais that she was trying to prevent him from purchasing the ring himself. While I have no doubt that Edward and Virginia Morais attempted to dissuade James Mills from spending that amount of money, I do not accept that they in any way attempted to prevent him from himself purchasing this particular ring once he was resolved to do. But the problem here is that Edward Morais admitted in cross-examination that he was not there when the ring was purchased. Since Virginia Morais did not give evidence, this is certainly one circumstance where an adverse inference can be drawn on the basis of Jones v Dunkel (1959) 101 CLR 298.  According, the plaintiffs’ claim can not succeed with respect to the sum of $5,000.00.

Detinue or conversion

115. [115]
     In circumstances where no pleading of the plaintiff raises any claim of a lien and where the whole justification for the retention by the plaintiffs of the goods acknowledged to belong to the defendant depends upon the claim that such goods were purchased from moneys made available to the defendant by the plaintiffs – but which were utilized by the plaintiff to purchase his own goods - there is no basis at all for the continuing detention by the plaintiffs.

116. [116]
     There has been no suggestion from either party that the goods are in a condition such that they cannot be returned. There was no evidence which establishes that the plaintiffs have claimed the goods as their own. In such circumstances, I intend to make orders, based on the tort of detinue, with respect to the outstanding goods in the same terms as the order that was made by Robin QC, DCJ on 24 June 2009 regarding the other items of personal property. Since no evidence was led as to why the disputed DVD player should be retained, it will be ordered to be returned.

Costs

117. [117]
     Since neither party succeeded to any significant extent, given the issues raised, on these respective claims, I am limiting their costs to reflect that limited success.

Orders

118. [118]
     Therefore, I make the following orders:

1. That the defendant pay to the plaintiffs the amount of $8, 326.61.

2. That the plaintiffs deliver up to the defendant all items of personal property identified in paragraph 30 of the counter-claim of the defendant filed 30 June 2009, other than items 1c, 1d, 1e, 1l, 2g (apart from the TV stand and DVD player), 2k and 2r, on a date to be agreed by the parties, and failing such agreement on Sunday, 27 June 2010, at 12 Front Court, Marsden, with such removal to be at the defendant’s cost.

3. That the defendant pay the plaintiffs’ costs of the claim, fixed at 10% of the assessed costs on the standard basis.

4. That the plaintiffs pay the defendant’s costs of the counter-claim, fixed at 10% of the assessed costs on the standard basis, and including the reserved costs of 24 June 2009 fully assessed on the standard basis.

5. Liberty to apply within 14 days concerning costs.