Burns v La Greca [1999] QDC 266

IN THE DISTRICT COURT HELD AT BRISBANE QUEENSLAND No 109 of 1998 BETWEEN: PAMELA JUNE BURNS Plaintiff AND: VICKI MARIE LA GRECA Defendant JUDGMENT – FORDE D.C.J. Delivered the 18th day of November 1999 Introduction 1. The plaintiff, Pamela June Burns, in her original Plaint claimed that she lent to the defendant, Vicki Marie La Greca, the sum of $50,000.00. She further alleged that an additional sum of $150,000.00 was given to the defendant on the basis that Αthe defendant would retain the agreed sum of $50,000.00 and repay to the plaintiff forthwith, the balance of the amount, namely, $150,232.00". In a subsequent Further Amended Plaint filed on 4th March, 1999, the pleading again alleged that the plaintiff agreed to lend an amount of $50,000.00 to the defendant. Paragraph 3 alleged: “It was a further term of the agreement between the Plaintiff and the Defendant that, for the purposes of convenience, the Plaintiff would cause a sum of $200,232.00 then held in an investment account, to be transferred to the Defendant, whereupon the Defendant would retain the agreed sum of $50,000.00 and repay to the Plaintiff on demand, the balance of the amount, namely, $150,232.00 and that the Defendant would act as Trustee of these monies for the Plaintiff until the said demand for repayment.≅ -- 1 of 12 -- 2 2. The defence case was that the plaintiff gave the sum of $200,232.00 by way of a gift. The defendant was the daughter of the plaintiff. Facts not in dispute 3. The following facts were not in dispute: (a) The sum of $200,232.00 was taken from the plaintiff’s account on her direction on 24th December, 1996 and given to the defendant by way of a bank cheque. (b) The defendant deposited the funds into an account in her name. (c) At the time that the plaintiff gave instructions to her bank, she was recovering from an operation for bowel cancer. She initially thought that she might need a colostomy bag after the operation. (d) The defendant paid to the plaintiff the sum of $20,000.00 after the plaintiff asked her for monies in or about May, 1997. The plaintiff received the monies in June and July, 1997: (44.50). (e) The plaintiff, whilst in hospital in December, 1996, asked the defendant to look for a house for herself (the defendant). (f) In or about February, 1997, the defendant and the plaintiff purchased adjoining blocks of land in Maryanne Street, Victoria Point just opposite from where the defendant was then living with her husband and four children in a rented house. (g) The defendant had a house built on her land and the plaintiff moved in with her in June, 1997. The plaintiff was aware that the defendant’s husband was unemployed. The monies given to the defendant by the plaintiff were used to buy the land purchased by the defendant and to build the house. The plaintiff used her own money to buy her block of land. The plaintiff had separated from her husband in or about 1993. 4. From these facts and having regard to other evidence in the case, the following findings can be made: -- 2 of 12 -- 3 (i) That at the time that the plaintiff was in hospital, she had some reservations about the future and recognised the need to have the defendant near her after she left the hospital. (ii) The plaintiff was aware of the defendant’s financial position and wanted to help her and her husband John purchase a home. They had four children whom the plaintiff loved dearly. (iii) The plaintiff had a good relationship with the defendant and her son-in-law up until she left the home in August, 1997. The defendant was happy to look after her mother. (iv) The payment by the defendant to the plaintiff of $20,000.00 must be considered with evidence from the defendant that the plaintiff asked for a sum of that magnitude as she had to pay her bills. She was also looking at an investment in an industrial shed with Stephen and Leslie her sons. The plaintiff gave evidence that she did not want to draw on her investment accounts: (63.50). The plaintiff said that the repayment of $20,000.00 was an acknowledgement of the debt. The defendant said that it was really to help her mother avoid paying extra bank charges. Plaintiff’s evidence 5. The plaintiff’s evidence was in accord with the latest pleading. She said that when she came to Brisbane from Townsville for the operation, the defendant and her husband met her at the airport. This was in early December, 1996. There was talk about the defendant, Stephen and Leslie looking after her after the operation, several months at a time. The plaintiff said that the defendant told her that the house that she (the defendant) was living in was not large enough and if the plaintiff would lend her some money. No figure was discussed. The plaintiff gave evidence that she believed that the defendant had some money at that stage as they had previously attempted to buy some land in the Noosa district. In fact, the defendant and her husband John had some $50,000.00 saved. This also was spent on the new house. 6. The plaintiff said that on or about the 6 th of December, 1996, the defendant rang her at Stephen=s place and asked how much the plaintiff could lend to her. The plaintiff -- 3 of 12 -- 4 suggested a figure of $50,000.00. The plaintiff said that she believed that with the money that the defendant had that would be sufficient. Whilst recovering in hospital, the defendant rang her from Stradbroke Island. The plaintiff said that the defendant asked her for the money. The plaintiff said that she had some $200,000.00 invested and rang the bank to make arrangements to transfer that amount to the defendant. The plaintiff said that she was unaware that she could divide the money up but only agreed to give the defendant $50,000.00. It should be noted that although she had a financial advisor, the plaintiff made no inquiry as to whether she could withdraw $50,000.00 only. The plaintiff said she told the defendant that she could not split it up and said she would get a bank cheque drawn up to be picked up by the defendant. The plaintiff says that the defendant asked not to mention this to her brothers as it could cause some problems. 7. After she was discharged from hospital, the plaintiff underwent chemotherapy and radiation treatment. She stayed with the defendant and her sons Stephen and Leslie. She was unwell for some months. She started asking the defendant for the $150,000.00 in or about March, 1997, according to her evidence. Initially, she said that the defendant ignored her. On the third occasion she said that the defendant told her that John her husband, had lent the money out. By that time the plaintiff was feeling Αwell enough to get myself back into life again≅: Transcript p.8.56. In other words, the plaintiff was becoming less reliant on her daughter. After being informed about the money, the plaintiff asked the defendant for $20,000.00. When the defendant asked why she needed the money, the plaintiff says that she told her that ΑI=ve got bills to pay≅:(10.36). 8. In early August, 1997, the plaintiff says that she asked her sons, Stephen and Leslie to come to the defendant’s house to discuss the money arrangements with the defendant. The plaintiff says that Vicki acknowledged that she owed her the money and said that it would be repaid with monies from the insurance claim John was making. She said that Stephen and Leslie did most of the talking. Versions of Stephen and Leslie Burns 9. The version given by Stephen and Leslie supports the plaintiff’s version. It was to the effect that the defendant said that she would sell the house if necessary. Stephen -- 4 of 12 -- 5 thought that was going a bit far and suggested a mortgage on the house of $100,000.00 and the balance of $80,000.00 to be paid with the proceeds of the insurance action. He said that the defendant seemed to accept this. Both Stephen and Leslie described the mood of the meeting as a cordial one and that no bullying occurred. I accept the thrust of the evidence of both Stephen and Leslie Burns as to what occurred at that meeting. The fact that she had received money was not disputed by the defendant who said that she felt some pressure and intimidation but was waiting for her mother to tell her sons the real situation as the defendant had promised to keep the arrangements a secret. The full version of the defendant will be discussed later. In fact, when Stephen returned on 3rd August, 1997, in the absence of her mother, the defendant gave him her version of events. That version of events was repeated later in August to Stephen at Thompson=s Beach in the presence of her husband. Those latter conversations are admitted only as original evidence. 10. It seems to be common ground in this case that at no stage at the meeting in early August did the defendant suggest that the monies were by way of a gift. 11. There is an interesting entry in the diary of Stephen Burns on 13 th April, 1997 (Ex.3). ΑRang mum discussed business project suggested by Les. Mum said she financially supported Vicki and John for their new house and she wanted to be fair by supporting Les and I. She said Dr. Hitchins had told her while she was in hospital that she had only two to five years because of her young age.≅ 12. This statement by the plaintiff of assisting her children did not sit comfortably with the notion that she was lending money. For example, it would be unlikely that the plaintiff would enter into a loan transaction where the borrowers had little or no prospects of meeting the repayments and then to proceed to offer similar financial support to other siblings. The plaintiff was also aware that the insurance company was seeking the sum of $40,000.00 from the defendant’s husband. I am satisfied that the plaintiff had indicated that she might fund part of the industrial shed project Αif Les and I (Stephen) were jointly involved≅: (Ex. 3 entry of 11th April, 1997.) I am satisfied that Stephen Burns made an honest mistake in thinking the entry of information regarding the plaintiff’s financial support for the defendant was in his diary for this date. In fact it was referred to on the -- 5 of 12 -- 6 opposite page being 13th April, 1997. He had an independent recollection of his conversation with Leslie. The latter gave evidence that the three of them were to be involved as partners. I accept that evidence. In that event, it is unlikely that the transaction could be categorised as a loan to her sons but rather a contribution by the plaintiff as part of her equity in the development. 13. It was common ground at the trial that the plaintiff had made gifts of money or property to her children in the past. 14. It was only when the defendant refused to pay back the $150,000.00 that the plaintiff made demand for the $50,000.00 as well: (31.22:37.40). The plaintiff said that she was aware that the defendant and her husband John were receiving some $1,200.00 per fortnight and would be able to repay the loan of $50,000.00. The source of the monies was from Social Security. That figure of $1,200.00 was not disputed. Relevance of the Plaintiff’s Will 15. It was put to the plaintiff in cross-examination that after she had signed her will at her solicitors, she told her daughter that she had not left much for her in the will because she had already received a gift of money for the purchase of the house. The plaintiff denied this conversation. The fact is that the terms of the will (Ex.2) reveal that the defendant was to receive a share of the investments and accounts with Australia and New Zealand Banking Group Limited including Esanda with fifteen other beneficiaries. The total amount of these excluding the $200,232.00 was about $150,000 to $200,000 (76.2). The defendant was not to benefit from the residuary estate which included the plaintiff’s home. Therefore, the evidence of the defendant as put to the plaintiff, and denied by her, had a ring of truth about it. After sharing that sum with the other beneficiaries, the defendant would not receive a large sum. Bank Records 16. In cross-examination, the plaintiff denied that she signed any documents in relation to the subject transaction whereby the defendant received the sum of $200,232.00: (69.50). The defence was given leave to re-open their case. The ANZ bank -- 6 of 12 -- 7 was dilatory in answering the notice to produce. An employee from the bank, Ms. Sandra Joy Ward produced the relevant file which contained two documents. A ΑTerm Deposit Prepayment Request≅ dated 24.12.96 was produced. It was shown to the plaintiff who identified her signature together with an entry which was initialled by her and which read: Α... The funds are required for the purpose of gift to daughter≅. 17. It was common ground that as at the 24.12.96, the plaintiff was still in hospital. She gave evidence that in or about February, she attended the bank and signed and initialled the document. The plaintiff had some time to consider the question of what she may have told the bank between December 1996 and February 1997, and at trial. It was likely, I find, that the plaintiff gave those instructions to the bank when she was in hospital. The other sheet to Exhibit 4 reveals that the plaintiff called at the bank to sign the Request Αactioned on 24/12/96". No adverse inference can be drawn against the defendant for not calling the bank witness as the document speaks for itself and the appropriate inferences can be drawn without knowing about bank procedures. 18. The surprising reaction of the plaintiff to Exhibit 4 was that she denied that any part of the monies were intended as a gift. Either she was misleading when she informed the bank of the reason or she was misleading the court. She had no legitimate reason for telling the bank that the monies were a gift. Initially, the plaintiff said that the initials against the words Αgift to daughter≅ was Αwell, that was for the 50,000.≅ This was further evidence of her original intention. When asked about this concession given she said in evidence-in-chief that no part of the monies was a gift: ΑNo. I just put that there because I knew she’d pay - was going to pay it back. I didn’t know the relevance of the document when I signed it≅. Credibility Of Plaintiff 19. The plaintiff’s explanation was wholly unsatisfactory. Her initial instructions to the bank were whilst she was in hospital. Her visit to the bank two months later was when she was undergoing chemotherapy. Even taking these matters into account, her failure to concede that even $50,000.00 was a gift reflected adversely upon her given the clear concession was made by her in the first instance: (211.58). Her unwillingness to adhere to -- 7 of 12 -- 8 her original explanation and her demeanour satisfied me that she was not being candid with the court: (215.3-218.43). 20. The plaintiff was attempting to keep the truth from her sons. She had told them that she had merely loaned the money to the defendant. She also denied telling her daughter that she instructed her to sell her home for $280,000-300,000. It was a course of conduct, I find, to keep her sons particularly Stephen and Leslie from knowing about the favouritism she had shown to her daughter when the plaintiff knew she was probably going to rely upon her after her discharge from hospital. In fact, the defendant did care for the plaintiff after her discharge: (131.30; 141.24; 147.20). She was prepared to continue to do so forever (179.12). Defendant’s evidence 21. The defendant was not a sophisticated witness. She did however attempt to answer in a forthright manner. She was open and responsive and made concessions when appropriate. Her memory for detail was very good. She was a loyal daughter who was willing to help her mother in a time of need. I accept her evidence generally. I find that the plaintiff asked her to keep secret any financial arrangements between her and the plaintiff. It was in this context that one has to consider the evidence of the defendant and particularly the meeting in early August 1997 when she told her brothers that she would attempt to repay the monies lent to her by the plaintiff. 22. The defendant’s conversation with her mother about the monies occurred when the plaintiff rang the defendant from hospital. The defendant was asked and responded as follows: ΑPlease tell the Court the conversation. What did your mother say? What did you say?-- My mother had rung me up and at first when she was on the phone I spoke to her about her health, how she was going and then she started telling me that she wanted to give me some money for a house and I said – at first I said no I didn’t want to accept it and she then said, ‘It’s not just for you, it’s for your children, I want to make sure they’ve got a roof over their head’, and I still baulked at the matter. Then she told me that she was giving Les and Steven some money and I said I don’t know, I said I’d have to talk to John about this, I said, because it’s something that we have to talk about. I would not accept anything off her -- 8 of 12 -- 9 unless I spoke to John first. She said that was fine. She then told me that I had to tell John that he had to see Greg Staines to put her house up for sale down Redland Bay. She said it was too big for her to look after and that also that whilst I was looking around for a house for myself I had to look around for a house for her. And that she wanted it in the same street if not next door or close to the house that I would get. And I said, well – I still didn’t know, I said I had to speak to John and in which case then we just – I said goodbye to her and that and I said I’d get – I said I’d get back to her as soon as possible. All right, stop there. In the conversation did your mother say anything in relation to your brother Graham?-- Yes, she told me that she intended to buy him a house as well but she wasn’t going to put it in his name because he was a bit irresponsible and that she would keep in her name.” 23. Later the defendant responded to the plaintiff’s offer as follows: ΑThe second time. Please tell the Court who said what in that conversation, what you and your mother both said?-- I told her that John wasn’t very – didn’t really want the money and that if it – it was up to me whether or not I accepted it and if I did accept it that he wanted me to have the house in my name only as he felt that the boys might later on have it in against him and he didn’t want any trouble with them. And what was your mother’s reply if any?-- She said that was fine. You know, that – she said maybe later on down the track you might want to put it in both names and I said to her that John was adamant he did not want his name on the house and as far as he was concerned it was gift from – the money was a gift from my mother and it was not to him. Was there any mention made during this second conversation about Mrs Burns’ own house?-- Yes, I was to – I had to find out how much she wanted for it so that we could tell Greg Staines. And at that time she had said she wanted 280,000 for it and----- Just tell the Court who’s Greg Staines?-- Greg Staines is a real estate guy who is mum’s best friend. He sold her last property. That’s the only real estate person that she trusts. She wouldn’t go to anybody else. In the second conversation was there any discussion of your brother’s Steven and Les?-- Well, she just said that I wasn’t allowed to tell Steven and Les or anyone for that fact that she had given me the money – that she was going to give me the money. It had to be a – it had to be between me and her and John, that was it.” -- 9 of 12 -- 10 ΑPlease tell the Court what was said in the next conversation?-- She had told me that – she had told me that she didn’t want 280,000 for the place. She wanted – she thought about it and she actually wanted 300,000 for the place. She actually said that it cost her, I think, 330 for the property but because of the slump in the market she would take 300.” 24. The plaintiff again rang the defendant and told her to go to the bank and to pick up a cheque. The defendant picked up the cheque for $200,232.00 and banked it in an account in her name at Suncorp. She said she Αput the whole lot into a trust account≅. She put it in such an account as she did not know what to do with it. I am satisfied that what the defendant meant was that the monies were given to her to enable her to buy a house and that they could not be used for any other purpose: (129.36). In fact it was put in a term deposit in the defendant’s name and not described as a trust account. After a subsequent discussion about the type of housing each of them might build or obtain, the defendant said that ΑI actually started to believe her, that we could have this money≅: (130.52). A significant piece of evidence was given by the defendant of what her mother told her about what is found in Exhibit 4: Α...I was talking to her on the phone once, she actually told me that she had signed and she said on the paper it had written on it that it was a loan but when she went in - and she had got there and crossed it out and put it down as being a gift and had to sign it. (132.20) 25. The fact is that not even the legal advisors at trial knew what was in the document: (203.15-59). The defendant would have had to have been told by the plaintiff. The bank officer, Ms Ward, was not called until after the close of the defendant’s evidence and only after a belated application when the document became available. Exhibit 4 supports the defendant’s evidence that the monies were given to her as a gift. I accept that evidence. It was consistent with the plaintiff’s desire for the defendant to build a house and to look after her. I am satisfied that the plaintiff, the defendant and her husband, shared an amicable relationship up until August 1997. (137.39; 139.15). Thereafter the relationship deteriorated: (157.30). 26. At the meeting in early August, 1997, it has been established to my satisfaction that the defendant showed a willingness to repay the monies. She never suggested to her brothers that the monies were a gift. The explanation for this is clear. The defendant, I find, was attempting to give effect to the plaintiff’s request to keep the financial -- 10 of 12 -- 11 arrangements a secret from her siblings. The plaintiff said very little at the meeting. Obviously, she had briefed her sons Stephen and Leslie of her version of events. True to her word, the defendant went along with her mother’s wishes. At the first opportunity, she told her brothers her version. This evidence is not relied upon for its truth but as original evidence that she gave her version. In fact when the plaintiff found out, she reprimanded the defendant for telling her brothers. I accept the defendant’s evidence in this respect also. It showed conduct on the part of the plaintiff of helping her daughter when she needed her and attempting to keep the peace in the family by denying that any such gift of monies had been made. 27. After considering all of the evidence in this case, I accept the evidence of the defendant that the monies which she received from the plaintiff in the sum of $200,232.00 were given to her by way of a gift. Failure To Call Witnesses 28. Reference has been made already to the failure to call a witness from the bank. The plaintiff’s counsel suggested also that an adverse inference should be drawn against the defendant as the real estate agent, Mr. Greg Staines, was not called. Even if Mr. Staines gave evidence that he could not recall or denied the defendant had approached him about the listing of the home of the plaintiff, it is only one aspect of credit. It would not be decisive in the present case in light of Exhibit 4, and the general demeanour of the plaintiff and the defendant in the manner they gave their evidence. Any conversations of John La Greca with witnesses not in the presence of the defendant did not bind her and were inadmissible. Other evidence able to be given by him was of little consequence. 29. There were also conversations put to the plaintiff that she had extensive discussions with Joe Fetini, a builder, about building a home next to the defendant. Whatever the extent of these conversations, the fact remains that the plaintiff admitted that she bought the block of land next to the defendant in or about January, 1997. The only rational inference available is that she intended to build on it as some stage, depending upon her health: (134.44). Also, that conduct is consistent with her giving the defendant instructions to sell her house. The failure to call Mr. Fetini is of little consequence. -- 11 of 12 -- 12 Orders (a) The plaintiff’s action is dismissed. (b) It is further ordered that the plaintiff do pay the defendant’s costs of and incidental to the action including reserve costs, if any, to be assessed on the standard basis. -- 12 of 12 --