Sabah Omari v Suzana Isaac and Adam Isaac [1993] ACTSC 91 (29 October 1993)

SUPREME COURT OF THE ACT

SABAH OMARI v. SUZANA ISAAC and ADAM ISAAC
No. SC419 of 1991
Number of pages - 18
Equity

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MILES CJ

CATCHWORDS

Equity - general principles - fraudulent misrepresentation - non-disclosure and concealment - purchase of sister's share in property while acting in the capacity of agent.

Equity - general principles - remedies - claim for damages for fraud.

Equity - Equitable remedies - alternative forms of relief - damages - equitable compensation.

Bennett v. Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408

Mouat v. Clark Boyce (1992) 2 NZLR 559

T.G. Youdan (ed) Equity, Fiduciaries and Trusts (1989) Ch 2

L. Aitken, "Developments in Equitable Compensation: Opportunity or Danger?" (1993) 67 ALJ 596

HEARING

CANBERRA, 1-4 and 7 June 1993
29:10:1993

Counsel for the plaintiff: Mr. B. Meagher

Solicitors for the plaintiff: Blake Dawson Waldron

Counsel for the defendants: Mr. C. Whitelaw

Solicitors for the defendants: Meyer Boettcher and Clapham

ORDER

THE COURT ORDERS THAT:
1. There be judgment for the plaintiff in the sum of $44,784 plus interest from 19 March 1991 to the date of judgment.

2. The caveat be removed from the title within seven days of the date of payment of the judgment sum.

3. Within fourteen days the parties bring in short minutes of order to give effect to this decision including quantification of the interest.

DECISION

MILES CJ At the heart of these proceedings are the following facts, allegations and claims. The plaintiff and the first defendant are sisters. The first defendant is married to the second defendant. On 19 March 1991 the plaintiff and the first defendant were registered as tenants in common of the leasehold estate of certain land at Kaleen. A house had been erected on that land. Each of them had made financial contribution to the acquisition of the land and the construction of the house. On that date the plaintiff signed a transfer of her interest in the leasehold. On 17 April 1991 the second defendant lodged the transfer at the Land Titles Office. On 30 April 1991 the defendants caused to be paid into the plaintiff's bank account the sum of $80,216.00. On 1 May 1991 the plaintiff lodged a caveat on the title.

2. There is no dispute that the plaintiff and defendants agreed in effect that the house and land should be sold, but they are in dispute as to how the sale price was or is to be determined. They are also in dispute about the identity of the proposed purchaser. The plaintiff claims that the defendants fraudulently induced her to believe that the transfer was or was to be to a third party. The defendants say that it was agreed between the plaintiff and the first defendant that the first and second defendants would purchase for the agreed sale/purchase price the plaintiff's interest in the property, together with the interest held by another sister, Mona, and that they stand willing to pay the balance of that purchase price.

3. It is difficult to characterise the nature of the plaintiff's claim as pleaded. Various forms of relief are claimed, ranging from judgment for liquidated damages for breach of contract to declarations of right and to orders under the Partition Act. The defendants seek by way of counterclaim an order that the caveat be removed.

4. The case turns largely on questions of fact. Although the issues raised on the pleadings are not precise, the ambit is such that it is appropriate first to decide on the facts, or most of the facts, and then to return to the issues arising on the pleadings and any question of law that needs to be determined.

Two sisters become tenants in common
5. The plaintiff and the first defendant were born in Lebanon. Suzana, the first defendant, is now about 32 years old and Sabah, the plaintiff, is about 28. They came to Australia with their family in their teenage years. They both speak English as if it were their native tongue. However, they converse between themselves in Arabic. Accordingly, the conversations that took place between them, and conversations that took place with and among other members of the family, were in Arabic. The evidence of such conversations necessarily involves a translation of the original conversations into English. Where the witness has given evidence in English, the translation has been made by the witness. Where the witness has given evidence through an interpreter (some of the evidence of the second defendant and the whole of that of the mother, Mariam Omari) the translation has been that of the interpreter.

6. The first defendant had the given name Fatmah. However, she became known in Australia as Suzie. After her marriage, and during the events in question, she took steps to change her name to Suzana Isaac, taking the surname then used by her husband. For the purposes of this judgment, it is appropriate to refer to the plaintiff as Sabah and to the first defendant as Suzana. The second defendant will be referred to as Adam Isaac.

7. The certificate of title is not in evidence. However, there is no dispute that the land in question is in the district or division of Kaleen, Section 60, Block 8, being the whole of the land in Volume 968, Folio 59. The land is situated at 44 Tyrrell Circuit, Kaleen. Sabah's evidence on the initial acquisition of the land, or strictly the leasehold estate in that land, is somewhat vague, which is not surprising as it took place in 1985 when she was only 19 or 20 years of age. Suzana's evidence on the issue is relatively clear and, subject to one potentially important aspect, is not disputed by Sabah. Suzana said, and I find it to be the case, that the land was originally one of two blocks purchased by a brother, Youssef Omari, at a government auction, sometime in February 1985. However, before the official documentation was carried out, Youssef directed that the lease issue in the names of the two sisters. Presumably, the certificate of title shows the names Sabah Omari and Fatmah Omari. It is alleged in the statement of claim and admitted in the defence that on 30 May 1985 Sabah and Suzana became registered proprietors as tenants in common of the land in question.

8. The purchase price paid at the time of the acquisition of the land was $40,500. Suzana paid one half. As to the other half, Sabah says that she paid it. Suzana says that Mona and Sabah together provided the funds for the other half. Both Sabah and Mona denied in their evidence that Mona contributed anything at all. Sabah also said in her evidence that she contributed her half from monies she already had. This is somewhat surprising in a young woman of 19 or 20 years of age who does not appear to have had assets of any substance or access to large sums of money. However, there is no evidence of any borrowing by any of the sisters in 1985. The onus is on the defendants to show that the title does not accurately reflect the interests of the registered proprietors. Mona's evidence is clear that she never contributed anything towards the purchase of the land. On the defendant's case Mona's interest in the land would have to be valued at some $60,000 in 1991. Although the accuracy of some of her evidence is open to doubt for reasons to which I will refer, there is no rational basis from which to reject her evidence that she disclaims any interest in the land in question.

A house is built
9. Between the acquisition in 1985 and in about September 1987 a house was built on the land. It is a large house, suitable or almost suitable for dual occupancy, with four bedrooms and other rooms on the upper floor and three bedrooms together with double garage and other rooms on the ground floor. The cost of construction was about $140,000 to $150,000. The source of the funds is unclear. Suzana moved into the upper floor, which the two sisters regarded as essentially hers. They regarded the lower floor as essentially Sabah's. However, Sabah never lived there and it was let out to tenants. She continued to live with her mother at Flynn. Suzana collected the rents. There is a dispute about what she did with them. She says that she paid them to Sabah. Sabah says that she never received them and that Suzana applied them to outstanding bills for the construction of the house and towards its maintenance.

10. On 29 January 1987 the two sisters mortgaged their interests in the land to the National Australia Bank. On the same day they executed a document described in the oral evidence of Sabah as a guarantee and indemnity, whereby each guaranteed a "basic liability" of $10,000. It appears that also on the same day, the two sisters executed a similar document as guarantors for their sister Mona, another customer of the bank, in respect of a similar "basic liability" of $10,000. None of these documents was in evidence. When the question of their tender was raised during the cross-examination of Sabah, counsel for the defendants had them marked for identification only, disclaiming the suggestion that the documents were relevant (the disclaimer may have been associated with the failure of the defendants to disclose the documents on discovery).

11. The evidence of Suzana on this issue was precise. She said that she herself contributed $20,250 at the time of the acquisition of the land, that sum being one half of the purchase price. She said that Sabah and Mona between them contributed the other half. Suzana's evidence about money being borrowed later to pay for the construction of the house is supported by the suggestions put to Sabah in cross-examination and acquiesced in by Sabah when she perused the documents marked for identification already referred to. Accordingly, I find that it is likely that Sabah borrowed $10,000 on or about 29 January 1987 and contributed that sum to the cost of construction of the house. I further find that it is also likely that Sabah borrowed a further sum or sums, with the result that she contributed out of funds borrowed a total of $19,000 (as Suzana claimed) or $20,000 (as Sabah claimed) to the cost of construction of the house, in addition to her contribution of one half of the purchase price.

12. Although it is also likely that the other sister, Mona, borrowed $10,000 from the same bank on or about 29 January 1987 and that repayment of that loan was secured by guarantee from Sabah and Suzana, I am not convinced that Mona contributed that sum or any of it to the cost of the house. Mona denied in her evidence that she did so. Mona also asserted in her evidence that she had borrowed money from the National Australia Bank but that since a motor vehicle accident in 1990 she was unable to remember details. She said that she had bought a car and a motorcycle but that had nothing to do with her sisters. She also said that she lent the borrowed money to her friends and to her brother, Youssef.

13. Mona was not challenged on her assertion about the motor vehicle accident and consequent difficulty with memory. Having closely observed her in the witness box, I decline to draw any firm conclusion about all the details of her evidence and in particular about what she did with the loan of $10,000 in January 1987.

14. I note that when Mariam Omari, the mother of the sisters, gave evidence, nothing was put to her on behalf of the defendants to support any suggestion that Mona had contributed to the purchase price or to the cost of construction. Of course, it may well be that Mrs. Omari knew nothing of which admissible evidence could be given either to support or deny the suggestion that Mona had made any contribution. However, bearing in mind the defendant's case that Sabah acknowledged in conversations with other members of the family that Mona had an interest amounting to a one-fourth share in the house, it would be curious if Sabah had never made a similar acknowledgement to her mother.

15. Accordingly, I accept Mona's positive assertion that she did not contribute to the purchase price, and did not contribute to any of the costs of construction of the house. I reject Suzana's evidence to the contrary. I find that Mona had no interest in the land at all at any time.

16. I return to Suzana's claim as to the disposal of the rent which she collected in cash from the tenants of the lower half of the house between 1987 and some time before March 1991. Suzana said in her evidence that she paid the rents collected by her across to Sabah. Suzana also said that, although she gave receipts to the tenants, it was only "later on" that Sabah gave her receipts for the rents paid by her to Sabah. Suzana also said in her evidence that from that later point in time she kept a record of sorts of the rents paid to Sabah. However, none of the receipts or records, or copies of them, was produced in evidence and no explanation was given for their absence. In the normal course of events, one might have expected that documents of this nature would have been produced on behalf of the defendants. Whether or not they were disclosed on discovery, I do not know. Sabah said in evidence that all the rent collected was used for the purposes of paying for the costs of construction. In all the circumstances, the failure of the defendants to produce records relating to the rents alleged to have been collected by Suzana and paid by her to Sabah, is, in my view, a matter which enables inferences against the defendants on relevant issues to be the more easily drawn.

17. Suzana also said in her evidence that the initial bond money of $500 paid by the tenants was paid by her across to Sabah. This was denied by Sabah in her evidence.

18. Insofar as the defendants assert as part of their case that Suzana "performed extra work for which she was not financially recompensed", I find that the defendants have not discharged the onus on this issue. I find further that it is likely that at least from time to time after September 1987 the rents collected by Suzana on Sabah's behalf from the tenants in the lower half of the house were used to pay outstanding bills for the construction or maintenance of the house, including the grounds and garden.

19. Taking into account that Sabah never lived in the house at any time and that Suzana lived rent free in the top half from September 1987, and continues to do so with her husband apparently now living in the lower half, I am satisfied that the legal title of each of the two sisters as tenants in common in equal shares is not affected in any way by any alleged equitable interest that might have arisen as a result of one sister contributing a greater share of the purchase price or a greater share of the cost of construction or by a greater contribution to the maintenance of the house or any increase in its capital value. Indeed, counsel for the defendants was ultimately unable to identify any such equitable interest that might be established on the evidence.

A proposal to sell the house
20. On 1 July 1990 Suzana married the second defendant, by then known as Adam Isaac. He was previously known as Adnam Isaac Achi or Adnam Isaac Elachi. Whether Suzana purported to assume her husband's surname immediately after marriage, is not clear, and does not need to be decided. What is clear, is that on 25 November 1990 an estate agent from Raine and Horne, Belconnen, furnished to "Mrs. Omari" a written "opinion of market worth" (a sort of informal valuation) of the house and land. The worth of the property was stated to be between $240,000 and $250,000.

21. There is a substantial conflict in the evidence of the events leading up to the obtaining of the opinion of market worth. Sabah said in her evidence that she had never seen it before the court hearing and in effect that she had never had anything to do with it. Suzana said in her evidence that in September 1990 at the house, she suggested to Sabah that Sabah buy "the property" from her and that Sabah authorised her to obtain a valuation of it. Suzana further said in her evidence that she showed the opinion of market worth to Sabah on the day she received it and that there was further discussion about a possible purchase by her and her husband. Her evidence was that this time her husband said, "We'll buy your - your and your sister's share". The effect of her evidence was that there was an agreement made there and then that Suzana and Adam Isaac would purchase the interests of Sabah and Mona using as a basis for the purchase price a valuation of the property of $245,000. From Sabah's and Mona's half share there was to be deducted $500 for the tenants' bond already received by Sabah and $1,000 for maintenance of the lower floor previously paid by Suzana. This evidence involves a shift from the previous suggestion in Suzana's evidence that the purchase was to be the purchase of Sabah's share by Suzana.

22. According to Suzana's evidence, she and her husband in February 1991 again raised with Sabah the question of their purchasing "Sabah and Mona's" share. Suzana claimed that she asked Sabah if Sabah wanted a valuation of the property, to which Sabah replied, "This one is fine", by which it is clear that the opinion of market worth of 24 November 1990 was being referred to. Sabah, however, denies that any such conversation took place.

A sister changes her name
23. It is clear that on 24 December 1990 at the Land Titles Office in Sydney, Suzana signed a document headed "Instrument Evidencing Change of Name", and that that document, or a photocopy of it, was registered in the Land Titles Office, Sydney. A photocopy is in evidence as part of Exhibit A. It shows that the document, or another copy of it, bears the seal of the Registrar General of New South Wales. It declares that Suzana Isaac, formerly called Fatmah Omari, of 55 Weaver Street, Erskine Park NSW, Public Servant, born at Beirut - Lebanon on 9 September 1961, abandons the use of the name Fatmah Omari and assumes the name of Suzana Isaac by which assumed name all persons thereafter may describe and address her. This is a curious document. The change of name which it purports to bring about was never drawn to the attention of Suzana's sisters or to her mother until these proceedings were under way. At the time the document was signed, Suzana was working as a public servant with the Australian Capital Territory Government. Her explanation about disclosing an address at Erskine Park (the home of her husband's parents) is not easy to accept. She claimed that she commuted from there to her work in Canberra. Why the document was registered at the Land Titles Office is also hard to understand as there is no evidence or suggestion of any dealing in land in New South Wales to which the change of name was relevant.

24. In January 1991 Suzana and her husband went to Perth then to Sydney and then returned to Canberra. Suzana was confined to hospital in Canberra for some days at the beginning of February and then again at the end of February.

A sister authorises a sale
25. Suzana and Adam Isaac said in their evidence that Adam caused an authority to be prepared to give effect to the agreement reached between them and Sabah. They said that Sabah read it and signed it at the house at Kaleen on 1 March 1991 and that her signature was witnessed by a student called Marta Gama who was living with them at the time and who has since returned to Mozambique.

26. The authority is Exhibit B and is in the following terms: "I, the undersigned SABAH OMARI of 8 Newland Street, Flynn, DO AUTHORISE FATMAH OMARI of 44 Tyrrell Circuit, Kaleen to arrange, sell and finalise contract for the sale of property at Block 8 Section 60 Kaleen for the price that FATMAH OMARI deems as acceptable.
(signature) Adnam (signature illegible)

SABAH OMARI WITNESS 1 WITNESS 2
DATED ON 1st OF March 1991."

27. Sabah gave an entirely different version of this aspect of the events. She said that the suggestion that there should be a sale in connection with the house came not from her but from Suzana and that it came in February 1991. She said that Suzana telephoned her at her mother's house and said that she wanted to sell the house at Kaleen in order to buy another block of land, that she had found a townhouse at Bruce Heights and paid a deposit on it and in order to purchase that townhouse it was necessary to sell the house at Kaleen. According to Sabah's evidence, Suzana said in the same telephone conversation that she had been offered $250,000 for the house, from which $8,000 would have to be deducted for agent's fees. According to Sabah's evidence she protested that the offer was too low, but Suzana insisted that $250,000 was "the most they'll pay". In cross-examination Sabah said that she asked Suzana who the third party was but that Suzana refused to say, asserting that Sabah had no right to know. The cross-examination did not seek to elicit the particular conversation in which this exchange was said to have taken place.

28. According to Sabah's evidence, Suzana rang her later at work and asked Sabah to meet her at the Kaleen house that evening in order to sign an authority for Suzana to sell the house to a third party. In cross-examination Sabah said that she complied with that request and signed the authority on 1 March 1991 (the date shown on the document) in the upstairs loungeroom in the house at Kaleen. Sabah denied that anyone was present except herself, Suzana and Adam Isaac and denied that the authority was witnessed by Marta Gama (she also denied knowing any such person).

29. Sabah's version of these events is supported to some extent by the evidence of her mother. Mariam Omari gave evidence through an interpreter. That makes the credibility of the witness more difficult to assess. However, the difficulty being recognised, the witness is no more entitled to be accepted and no more liable to be rejected by the fact that the evidence had to be translated. (If something turned on the fine meaning of words or phrases, that might create a particular difficulty with regard to acceptance, but fine meanings are not in question here.)

30. Mrs. Omari said in her evidence that at some time in 1991 Suzana (whom she called Fatmah) rang to say that she "didn't want to live with her sister anymore in Kaleen" and had bought a house for $120,000. Mrs. Omari further said in her evidence that she and Suzana had a "fight" over the telephone and that Suzana hung up on her. In cross-examination she added that, in what I understand to be the same conversation, Suzana said that she had put a deposit on the house in Bruce and needed to sell the house in Kaleen to pay for it. Mrs. Omari also added that she questioned the purchase of a home with no garden, to which Suzana responded that she wanted "this house".

31. Mrs. Omari also gave evidence of a further telephone conversation some two weeks later, in which Suzana said that she had sold the house in Kaleen, that she had sold it to a Russian man with a wife of unknown nationality, and that an estate agent had said that the house was worth $250,000.

32. On the other hand, Suzana's version was to some extent supported by that of her husband. He said that upon obtaining the "valuation" from Raine and Horne, Suzana showed it to Sabah, and that after some discussion between the two women, Sabah agreed to a calculation of $121,000 after taking the bond money into account, and said that she did not want another valuation. This accords with Suzana's evidence about the oral agreement reached on 1 November 1990. He further said that on a later occasion, in February 1991, he spoke to Sabah at her place of work at Barton and again she accepted the existing valuation. He then got the English teacher to type out the authority. He produced the typed authority to Sabah at the house at Kaleen. He said that yet again he asked her if she wanted another valuation and that Sabah replied, "I'm happy with that" and signed the authority in front of Marta Gama.

33. Before trying to decide where the truth might lie in relation to the circumstances surrounding the written authority to sell, it is necessary to look at the evidence relating to some of the other matters in issue.

Someone has an idea for a business name
34. Adam Isaac was apparently in the cleaning business. He claimed in evidence that, on the occasion he spoke to Sabah at her place of work in February 1991 about the valuation, they also spoke about business matters. According to his evidence, Sabah told him that distributing pamphlets was easier than cleaning and that no experience was necessary to do it. He said in evidence that she then "brought a telephone book and she look for a name and put down the title". He said that she put down or constructed the name, "Capital Pamphlet Distributor", that he told her to add "this word" and that she wrote the name "Capital and Suburban Pamphlet Distributors" on a piece of paper. The piece of paper was not produced in evidence. He was not asked whether those precise English words were used in the conversation, or were written on the paper, or whether the Arabic equivalent was used. According to his evidence, it was after that conversation that he requested the English teacher to draw up the authority to sell.

35. Sabah, in her evidence, denied that any such conversation took place. The potential significance of the business name increases with the unfolding of events.

36. According to the evidence of Suzana and Adam Isaac, on Friday, 15 March 1991 they and Sabah travelled to Sydney in Sabah's car and stayed two nights at the home of Adam Isaac's parents at Erskine Park. On Saturday, 16 March 1991, according to the evidence of the defendants, there was a conversation in the living room at Erskine Park after lunch with other members of Adam Isaac's family. Adam Isaac's evidence was that his brother Gus asked him about news of his business in Canberra, that he, Adam, replied that he was about to start distributing newspapers and pamphlets, that his brother asked what he would call the business, to which Sabah made reply, referring to the name Capital and Suburban Pamphlet Distributors, and adding that she had "helped him put down the name". According to Adam Isaac's evidence, his father then said that there was a sum of $80,000 available whenever Adam wanted it and that it was "to buy Sabah's share and her sister".

37. Suzana's evidence on this aspect was similar to that of her husband. She further said that her husband had told her of a name, Capital and Suburban Pamphlet Distributors, in February when he was talking about the business. She said that her husband's father told them on the afternoon of 16 March 1991, "the money are available for you to use to get - to buy the other - the share - Sabah's share".

38. Similar evidence was also given by Ghassan Isaac Elachi (Gus), the brother of Adam Isaac. In particular he said that his father said on 16 April, "Adam, if you want to buy, you know, Sabah and other sister's share, the money is available". He also said that Sabah went to Sydney on a second occasion, 25 April 1991, for a wedding to be held the following day. (The defence witnesses also claimed that Sabah said in the same conversation that she was "sick of the cleaning business because all the family worked in cleaning".)

39. Sabah's evidence was greatly at variance with the evidence just summarised. She said that the only time she ever went to Sydney was after the signing of the transfer on 19 March, namely on 25 April and that it was for the purpose of a "function". She said that she travelled by coach. She flatly denied any trip to Sydney on 15 or 16 March and she flatly denied the conversation attributed to her and to Adam Isaac's father. She denied any conversation with Adam Isaac at her place of work relating to the proposed business name and said that she knew nothing of it until 19 March 1991 in circumstances about to be discussed.

A sister signs a transfer
40. Suzana and Adam Isaac gave evidence that on arrival back in Canberra in Sabah's car in the late afternoon of 17 March 1991, the three of them went to the house at Kaleen where Suzana produced a form of transfer which she had obtained previously from the Land Titles Office after making enquiries at the Citizens Advice Bureau.

41. According to Suzana, no conversation occurred during the partial completion of this document by Sabah.

42. With some assistance from her counsel, Suzana gave evidence that Sabah wrote in the space reserved for Transferor her own name, in the space reserved for Transferee the words "Capital and Suburban Pamphlet Distributors", and in the space reserved for Estate or Interest Being Transferred, the word "share". When asked in evidence-in-chief as to the "next thing" that Sabah wrote, Suzana replied, "the suburb, section and block" but added that the writing under the words "Volume, Folio" was inserted on 15 April. She went on to say that Sabah wrote the word "Nil" in the space reserved for Prior Interests, and the figure 60,000. (In fact what appears on the document is the monetary figure $60,000, and it appears in the space reserved for Consideration.)

43. At that stage of her evidence, Suzana spoke of the conversation already referred to in these reasons and alleged to have occurred prior to the visit to Erskine Park during which conversation Sabah is alleged to have said that she did not want to declare Mona's interest in the property. Suzana went on to say that after Sabah partially completed the form of transfer, the document remained with her and Adam and that the two sisters then arranged to meet on 19 March at the National Australia Bank, Civic.

44. Adam Isaac gave evidence that Sabah partially completed the form of transfer on 17 March as deposed to by Suzana. He said further that there was a conversation during the partial completing of the document, in the course of which conversation Sabah asked about whether to write "whole or share". Adam further said that Sabah added, "I will only write $60,000 because I don't want to put the name of my sister because she receives social security. I don't want to put the total figure". To this, according to Adam, Suzana replied that there was no problem.

45. It should be noted that when being cross-examined on a different aspect of the case, Suzana said that Sabah "asked us for her to put $60,000 there". In the context of the cross-examination she could have meant only that Sabah made that request at the time Sabah was completing the transfer, that is, according to her, on 17 March. Subsequently, in that part of her evidence, she claimed that the figure of $60,000 was fixed in order "not to declare Mona's share for tax purposes". Suzana almost immediately modified "tax purposes" to "social security reasons".

46. Sabah's evidence was that there was no trip to or from Erskine Park at the time alleged by the others, no production or completion of any transfer on 17 March, and no conversations as just described. Sabah said in her evidence that, following the signature by her on 1 March 1991 of the authority to sell, she received a telephone call from Suzana asking her to meet with her to sign the transfer so that she could purchase the townhouse in Bruce. Sabah's evidence on that point was somewhat confused as to the chronological order. She went on to say that following the telephone call she met Suzana outside the National Australia Bank, Civic at about 12.50 p.m. on 19 March 1991.

47. It is common ground that the two sisters met at about that time on that date pursuant to a previous arrangement by telephone. Suzana and Adam Isaac say that Adam and Mona were also present when they met outside the bank.

48. Sabah denies that Adam and Mona were there to meet her. The two sisters agree that they went into the bank to obtain the services of a justice of the peace. Suzana says that they were accompanied at that stage by Adam Isaac. Sabah denies that they were so accompanied, although she does not dispute that they may have been joined by Adam or Mona or both at some stage during the events which immediately followed. In any event, no justice of the peace was available at the bank. There is a dispute about what happened in the bank relating to the completion of an application for registration of business name, a matter to which I shall return. Someone in the bank directed them to the City Square Post Office. The two sisters went there and eventually to a fabric shop on the first floor of the Canberra Centre, where a justice of the peace, Mr. Ganter, was in attendance. Mr. Ganter was not called to give evidence, but I do not think that anything turns on his absence, because from his point of view the events that occurred there would have been unremarkable to the point of being unmemorable. I do not regard either party as having failed to call him.

49. In the fabric shop Suzana produced the form of transfer. According to her, the transfer was already partly completed by Sabah. Her evidence on the partial completion has already been referred to. According to Sabah, this was the first time she had ever seen the transfer. It was, according to her, blank and she proceeded to complete it at the instruction of Suzana. In particular, according to Sabah, Suzana instructed her to write in the appropriate spaces the words "Capital and Suburban Pamphlet Distributors", the word "share", the particulars relating to the identification of the property (but not the reference to Volume and Folio), the figure $60,000, and the date. Before Sabah completed the space reserved for the name of the transferee, according to Sabah, Suzana told her that she did not know the names but "they wanted their business name put in there anyway". Sabah then signed the document and Mr. Ganter, after asking Sabah for some identification, added his signature as a witness. (That appears not to be in dispute.) Sabah said that she then returned the document to Suzana expecting her to lodge the document or otherwise do what was necessary to "proceed with the sale".

50. According to Suzana's evidence, Adam accompanied the two sisters into the bank before they set off for the post office. In the bank, according to her, she and Adam Isaac completed an application for the registration of the business name, "Canberra and Suburban Pamphlet Distributors". She said that whilst this was being done, Sabah stood and watched, and that when it was finished, she told Adam, "You go and register this business name and Sabah and I will go to the post office to get this transfer document signed". Adam's evidence is to a similar effect.

51. Sabah's evidence was that Adam was never present in the bank with her.

52. Suzana also said that she and Sabah rejoined Adam Isaac and Mona at the bank after the signing of the transfer document and that Sabah withdrew some money for Mona, after which Suzana and Adam Isaac separated from the two sisters.

53. Mona was not asked in her evidence anything at all about what happened on 19 March 1991. Nothing was put to Sabah in cross-examination to suggest that the further meeting at the bank took place.

54. Adam Isaac's evidence relating to the meeting at the bank is essentially the same as that of Suzana. He said further that when the two sisters left the bank to find a justice of the peace, he went and registered the business name by lodging the application which Suzana had completed whilst in the bank.

55. If the account given by the defendants is correct, Sabah must have known prior to signing the transfer that the defendants had completed an application for registration of the business name. The application for registration of the business name "Canberra and Suburban Pamphlet Distributors" is in evidence (Exhibit F) and clearly establishes that the document was lodged in the Registrar's office upon payment of $80 and at the time of 13.49 hours on 19 March 1991. The names of the applicants are shown as Adam Isaac and Suzana Isaac of 44 Tyrrell Circuit, Kaleen, and the proposed date of commencement of business is shown as 19 May 1991. The document purports to be signed by both applicants on 19 March 1991. It purports to be lodged not by Adam Isaac but by Suzana Isaac.

The transfer is altered - and registered
56. Sabah never saw the transfer after she parted company with Suzana on 19 March 1991. There is no reason to reject the evidence of Suzana and Adam Isaac on the question of what happened to the document, although the evidence is in some respects confusing. The evidence establishes the following facts.

57. After leaving Sabah at some time around 2 p.m. on 19 March 1991, Suzana and Adam Isaac went to the State Bank in Civic to try to arrange a loan of $40,000 on the security of the house. They then went to the Advance Bank for the same purpose. The application for the loan made to the State Bank stated that the purpose of the loan was "to purchase house and land at Kaleen".

58. On 26 March 1991 they took the signed and completed transfer to the Stamp Duties Office. They were acting on advice given by the Legal Advice Bureau that it was necessary to take the document to the Stamp Duties Office before lodging it at the Land Titles Office. Suzana claimed in her evidence that she had no idea that stamp duty was to be assessed on the figure stated as the consideration for the transfer and that she had no idea how much was to be paid. At the Stamp Duties Office Suzana wrote the words "Canberra and Suburban Pamphlet Distributors" in the space reserved for the transferee's signature. Suzana and Adam Isaac then placed their own signatures beneath those words and their signatures were witnessed by an officer of the Stamp Duties Office, Hope Nguyen. They paid the stamp duty of $1,015.00 after one or the other wrote a cheque for that amount. The transfer was then stamped.

59. Suzana and Adam Isaac then took the stamped transfer to the Land Titles Office. An officer there told them something to the effect that a transfer could not be registered where the name of the transferee was shown as a business name. The officer may have said something also about having the business incorporated. Suzana and Adam Isaac at that stage understood the officer to mean that they needed a power of attorney, so they went to the Law Society, got a form of power of attorney, completed it (insofar as it could be completed appropriately) and lodged the power of attorney at the Land Titles Office on 2 April 1991. They returned to the Land Titles Office on 15 April 1991, presumably to collect the relevant documents that would have been registered in the meantime in the normal course of events. However, this time the officer told them, no doubt correctly, that the power of attorney procedure had been incorrect. She introduced them to the Deputy Registrar, Mr. Taylor. He informed them that it was necessary for them either to incorporate the business or to cross out the business name on the transfer and insert their own individual names. He also explained that the word "share" was inappropriate for the interest being transferred and that if the transfer was to be to them in their individual names, then it would be necessary for the transfer to show whether or not they took as joint tenants or tenants in common. He explained the difference between the two forms of tenancy. The other officer informed them of the volume and folio number to be inserted into the form of transfer.

60. In accordance with what they had been told by the Land Titles officers, Suzana struck out the words "City and Suburban Pamphlet Distributors" and inserted the words "Suzana Isaac and Adam Isaac" in the space reserved for name of Transferee. She also wrote the words "Joint tenants" in the space reserved for Form of Tenancy, and the figures 968-59 in the space reserved under the headings Volume and Folio. Suzana may have written the word "Nil" in the space reserved for Prior Interests: that appears to be of no consequence. Suzana also struck out the words "Capital and Suburban Pamphlet Distributors" in the space reserved for the signature of the transferee. (Her signature and that of Adam Isaac had already been inserted on the previous occasion.) She and Adam Isaac initialled the various alterations on the transfer. They were informed by the Land Titles officers that there was no need for the transferor to sign the documents as they, the named transferees, were the owners of the business. Suzana and Adam Isaac then took the transfer in its altered state back to the Stamp Duties Office where it received endorsements at some of the places where the alterations had been made on it. Suzana and Adam Isaac then returned to the Land Titles Office where the transfer was lodged and, no doubt in a state of considerable relief, they received a receipt for its lodgement.

61. According to Suzana, Adam Isaac telephoned Sabah on 16 April in her presence and told her that the transfer had been altered from the business name to the individual names. He also told Sabah that the money would be transferred to the account which Sabah had mentioned on 19 March.

62. Adam Isaac also said in his evidence that he told Sabah on 16 April about the alterations to the transfer but he added in his evidence that the conversation occurred at Sabah's place of work when he was re-delivering her car to her. Sabah was never asked about this either in chief or in cross-examination.

63. A curious feature of the case is that not only was the certificate of title not produced in evidence, there was no evidence about its production at the Land Titles Office to enable the memorial of transfer to be endorsed on it. Indeed there was no evidence at all as to its whereabouts. However, the transfer itself shows that it was registered at 10 a.m. on 17 April 1991.

64. Another feature of the case that was not the subject of oral evidence is that when the transfer was produced on subpoena by the Registrar of Titles, it was accompanied by a photocopy of the instrument evidencing change of name registered in the Land Titles Office, Sydney on 24 December 1990. Clearly, someone regarded it as necessary for Suzana to produce that document to the ACT Registrar of Titles in order to show that she was the same person as the person shown on the title as Fatmah Omari. However, nothing seems to turn on this aspect.

A caveat is lodged
65. The sum of $80,216 was deposited to Sabah's bank account on 30 April 1991. Payment was effected by two cheques dated 12 and 17 April drawn on an account operated by Suzana and Adam Isaac. The source of the funds in that account was Adam Isaac's father. Those cheques were not deposited until 30 April. According to Suzana, she telephoned Sabah on 30 April and told her that she and Adam Isaac had applied for a loan and the rest of the money would be deposited as soon as it became available and Sabah assented to that proposal.

66. According to Sabah's evidence, she spoke to Suzana at Erskine Park on 25 April and was told that the "couple" or the "people" were having financial problems but that the money should be paid within a fortnight.

67. When, by about the end of the first week or in the second week of April, the money had still not been paid, Sabah instructed a solicitor to investigate. As a result of such investigations, Sabah discovered for the first time that the transfer had been registered in the names of Suzana and Adam Isaac as transferees and that Suzana had taken the course of registering an instrument evidencing change of name. Sabah said in her evidence that she was unaware of any change of name until then. Accordingly, she instructed her solicitor to place a caveat on the title. She said that if she had known that the property was being transferred to her sister and brother-in-law, then she would never have agreed to it.

68. The caveat lodged on Sabah's behalf claims the following estate or interest:

"As tenant in common as to an undivided one half share arising as a
result of a resulting or constructive trust as the caveator's
signature to the Transfer to Suzana Isaac formerly known as Fatmah
Omari and Adam Isaac, entered 17 April 1991, Dealing No. 729352, was
obtained by a false and fraudulent representation by the transferee
as to the name of the transferee and the amount of the consideration
together with a total failure of the consideration for the Transfer."

Conclusions and findings
69. I have reviewed the whole of the evidence which I consider needs to be reviewed. I have stated findings which I have made during the course of reviewing the evidence and where it was possible to make findings at that stage. Other findings and conclusions have had to be postponed until the review of the evidence was complete. I turn now to those other findings and conclusions.

1. Demeanour
70. As a tribunal of fact I have found it impossible to be uninfluenced by the views formed as the case progressed of the veracity and reliability of the witnesses. I bear in mind the emerging body of opinion among some academic lawyers and some psychologists that a trial judge (and presumably a jury) is at a disadvantage in assessing these matters because he or she is affected, whether consciously or unconsciously, by such factors as cultural assumptions, body language, courtroom atmosphere and the like. However, by a process of observation in court of the witnesses, recollected in tranquillity out of court when assisted by a reading of the transcript and perusal of the documentary exhibits, I am left with no alternative than to express myself in well-worn and somewhat old-fashioned language: Where the evidence of the plaintiff and her witnesses conflicts with the evidence of the defendants and their witnesses, then I prefer the evidence of the plaintiff and her witnesses. That subjective impressionistic conclusion, however, is tentative and is to be weighed against conclusions that might be reached in a more reasoned and objective way.

2. Finding already made: The Mona anomaly
71. In relation to disputed matters, I have already found, for reasons stated, that Mona made no contribution to the original purchase. That finding suggests that any evidence that asserts that Mona contributed to the original purchase should be rejected. I so approach the evidence of Suzana and Adam Isaac that there was an oral agreement that Suzana would purchase the shares of Sabah and Mona and the evidence of Adam Isaac's brother to the effect that his father offered to finance the purchase of Mona's share in the property. I have little hesitation in rejecting the evidence of the defendants on that issue. The evidence of Adam on that issue was given almost like an afterthought. After reflection, I reject the brother's evidence on that issue also. Most of the evidence of the brother was given in a confident manner, but on that issue was somewhat halting.

72. Having regard to the absence of any suggestion to Mona during cross-examination that she was present during the events in Civic on 19 March 1991 and to my finding that she made no contribution to the property as alleged, I reject the evidence of Suzana and Adam Isaac that Mona was present in Civic as they allege.

3. Findings already made: Rents collected and work performed by Suzana
73. I have already stated that I reject Suzana's evidence that she paid over to Sabah rents collected on behalf of Sabah and performed extra work in relation to the construction and maintenance of the house for which she received no credit or financial recompense. I further conclude in the light of all the evidence that Suzana's testimony on those aspects was influenced by a desire to inflate the value of the alleged counter-claim. That further conclusion enables me more easily to reach other conclusions and draw inferences adverse to Suzana.

4. The alleged visit to Erskine Park on 15 and 16 March 1991 and the proposed business name
74. These issues are intertwined. I reject the account given by Suzana and Adam Isaac and Ghassan Isaac Elachi that there was a meeting at Erskine Park on those dates. Accordingly, I reject the evidence relating to a conversation said to have occurred there about a proposed business name. I also think that it is inherently unlikely that there was any conversation between Sabah and Adam Isaac about the proposed business name at any time in the circumstances alleged by him or at all. There is no reason advanced why Sabah should have evinced any interest in a pamphlet distributing business to be conducted by her sister and brother-in-law or why she should have taken active steps to select a business name to be registered by him or them.

5. The initiation and purpose of the proposed sale
75. I accept the evidence of Mariam Omari that her daughter Suzana, told her in 1991 that Suzana proposed to purchase a "home with no garden" (a term consistent with a description of a townhouse) in Bruce for $120,000 and that in order to finance the purchase she needed to sell the house at Kaleen which an agent had valued at $250,000 or thereabouts. This is in accordance with the evidence of Sabah, which I accept, that it was Suzana who suggested in February 1991 that the house at Kaleen be sold, and that the express purpose of the proposed sale was to finance the purchase of a townhouse at Bruce. I further accept the evidence of Sabah that Suzana told her that an offer of $250,000 had been made for the Kaleen house and that Sabah tried to persuade Suzana to hold out for a higher price but that Suzana insisted that the purchaser would go no higher. This finding is consistent with the authority to sell signed by Sabah on 1 March 1991 which left it open to Suzana to sell at a price which she deemed acceptable. I make no finding as to the signature of the second witness appearing on the authority, except to the extent that I find that the signature was not placed there by the student from Mozambique in the presence of Sabah.

76. I further find that the authority authorised Suzana to arrange a sale on Sabah's behalf of Sabah's one half interest in the property, on condition that Suzana also sold her one half interest to the same purchaser. The authority was limited to selling those interests, in other words, the whole of the property, at a price not less than $250,000. I further find that it was an implied term of the authority that the proceeds of sale would be divided equally among the two sisters. I further find that it was no part of the authority that the distribution of proceeds was to be adjusted for real or prospective agent's fees. I am not satisfied that Suzana (or her husband) incurred any agent's fees.

6. The completion of the transfer
77. The finding that there was no visit to Erskine Park on 15 and 16 March 1991 leads me to the further conclusion that the transfer was not partially completed at Kaleen in the late afternoon of 17 March 1991. It is inherently unlikely that the partial completion alleged to have been carried out by Sabah on that date was carried out in silence as Suzana alleged. Her evidence on that point contradicts that of Adam Isaac to some extent. It is also unlikely, in the absence of an explanation, that Sabah would have had with her the description of the property by block and section number. It is more likely that Suzana would have had the description of the property, particularly as she was the one who had sought and obtained the valuation, she was the one who had already sought advice from the Citizen's Advice Bureau on how to carry out the transaction and she was the one who had obtained a form of transfer for that purpose. It is more likely, in my view, that in the light of the findings already made, the first Sabah saw of the form of transfer was when it was produced to her by Suzana in the fabric shop on 19 March. Accordingly, Sabah's account of how it was completed is more acceptable than the account given by Suzana and, to the extent that Suzana's account is supported by him, the evidence of Adam Isaac. I find that Sabah completed the document as instructed by Suzana and that the name of the transferee was inserted by Sabah without that name being previously known to her. I further find that Suzana represented to Sabah that the purchaser was a third party and failed to disclose that she and Adam intended to register the name of the purchaser as a business name.

7. Events following the signing of the transfer
78. I find that the events relating to the registration of the business name on 19 March 1991 and to the subsequent stamping of the transfer, the attempts to register the transfer, the alteration of the transfer and the ultimate lodging and registration of the transfer all occurred essentially as deposed to by Suzana and Adam Isaac. I bear in mind that neither Sabah nor any of her witnesses were in a position to contradict anything that was said by Suzana and Adam Isaac on this aspect. Although the point was not the subject of any direct oral evidence, I find that the instrument evidencing change of name, or a copy of it, was lodged at the Land Titles Office at the same time as the lodgment of the transfer, probably at the suggestion, if not the insistence, of registry officials.

8. Was there fraud?
79. I find that the alteration to the transfer involving the striking out of the business name as purchaser and the substitution of the names of the defendants was not done dishonestly, but was done simply in order to comply with the requirements of lodgement and registration of which the defendants were largely ignorant. It was not the intention of the defendants to alter the documents in order to change the identity of the purchaser. Although that might have been the understandable interpretation of events on the part of Sabah immediately before she gave instructions to have the caveat placed on the title, she was mistaken in this regard. That interpretation would have meant a serious case of fraud, the procurement by Suzana of a transfer to herself and her husband of the share of her sister in a property held by both as tenants in common, where the document constituting the transfer identified someone else as the transferee.

80. I turn then to what happened in relation to the completion and signing of the transfer. After due consideration of the evidence and the findings already made and of the seriousness of the charge, I have little difficulty reaching a conclusion that there was dishonesty on the part of Suzana. She induced Sabah to complete and sign the transfer without disclosing that the transferee named by her was simply a title to be used by her and her husband in relation to a proposed business. Although I am not persuaded that, in agreeing verbally with Suzana that the house and land should be sold to a third party for about $250,000 (I shall discuss the exact figure in a moment), Sabah was induced to part with her interest at an undervalue, I accept Sabah's evidence that she thought that the property could command a higher price and that she told Suzana so. I accept the effect of Sabah's evidence that, if she had been informed that the transfer of her share was to be executed, not in order to sell the home and land to an insistent third party, but to enable her sister and her sister's husband to enjoy the benefit of her share in that house and land, and in consequence the practical benefit of the whole of the property, Sabah would not have been party to the transaction and would not have signed the transfer. It is unnecessary to draw any firm conclusion on the genuineness or otherwise of Suzana's representation that a sale of the house and land would enable Suzana to buy a townhouse at Bruce. It is clear that at the time of inducing Sabah to complete and sign the transfer that representation continued to be effective, but was no longer true even if it were once true. Suzana must have known that the representation previously made in this regard about her own intention was not true at the time of the completion and signing of the transfer by Sabah.

81. No claim was made in the pleadings on behalf of the plaintiff that either or both of the defendants stood in a fiduciary relationship to Sabah and I do not intend to enter into a discussion of that potential issue. It is sufficient, in my view, to observe that, having induced Sabah to agree to the sale of her share in the property of which they were tenants in common, each of a one half interest, at a price which Suzana claimed to be negotiated by her with a prospective purchaser of the whole of the property, and in failing to disclose that she and her husband would be the recipients of the benefits of the transfer, Suzana procured the completion of the transfer fraudulently.

82. The inference is clearly to be drawn that Adam Isaac was a party to the deception practised by his wife upon her sister in this regard.

83. The transfer is therefore liable to be set aside for fraud. Alternatively, damages or "equitable compensation" may be awarded in lieu.

84. In view of the virtual concession by counsel for the defendants that, if the facts were found in favour of the plaintiff, along the lines on which I have found them, then the plaintiff would be entitled to damages, (the quantum of such damages being still in issue) there is little point in discussing the doctrinal basis of the award of such damages. It is sufficient, I think, to acknowledge that the basis is more easily discernible if there is a breach of fiduciary duty: see Bennett v. Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408, but where the possible basis lies in tort (for instance the tort of deceit) or breach of contract it is not always necessary to identify the exact basis. In Mouat v. Clark Boyce (1992) 2 NZLR 559, Cooke P said at 565-566:

"What is important is the substance of the duty falling on the
particular defendant in the particular circumstances, to ascertain
which it may be necessary to consider various possible sources -
tort, contract, equity, statute. Once the substance has been
identified, questions of breach and remedy remain. ..... For breach
of these duties, now that common law and equity are mingled, the
Court has available the full range of remedies, including damages or
compensation and restitutionary remedies such as an account of
profits. What is most appropriate to the particular facts may be
granted ....."

85. There is a full discussion of the developments in this area by Gummow J extracurially in T.G. Youdan (ed) Equity, Fiduciaries and Trusts (1989) Ch 2, and by L. Aitken in "Developments in Equitable Compensation: Opportunity or Danger?" (1993) 67 ALJ 596.

9. Relief to be granted
86. A number of alternative forms of relief were sought in the statement of claim. In view of the evidence that the property was worth approximately $250,000, it was not argued on behalf of the plaintiff that an appropriate order involved more than allowing the transfer to stand, despite its unconscionability, and awarding the plaintiff the unpaid balance of one half of the value of the property, together with an appropriate award of interest thereon. Suzana, at the end of her evidence, volunteered that this would be a fair solution, but she claimed that the value agreed upon was $20,000 less than that claimed by the plaintiff. I have already found that the agreed value was $250,000 and that that reflected the true value. Counsel for the defendants submitted that no interest should be payable. However, there is no reason at all why the defendants should not have to pay interest on the unpaid balance. They have continued to have the use of the house ever since the completion of the transfer and if they complain of not being able to sell, dispose of or otherwise deal with the property because of the caveat, the problem is entirely of their making.

87. At the time the transfer was registered the plaintiff was entitled to $125,000, one half of the value then of the house and land. No agent's fees were incurred and, as I have already stated, there was no agreement that prospective agent's fees were to be deducted before dividing the proceeds of sale. It would be entirely inequitable if such were taken into account at this stage in determining the rights of the parties. It is also entirely proper that the defendants bear the costs of stamp duty and registration.

88. Bearing in mind that the defendants have paid to the plaintiff before proceedings commenced the sum of $80,216, the balance owing is $44,784. There will accordingly be judgment for the plaintiff in the sum of $44,784, together with interest at the rates appropriate to the practice of the Court from 19 March 1991 to the date of judgment. The caveat is to be removed from the title within seven days of the date of payment of the judgment sum.

89. Unless the parties wish to be heard, I propose to order that the defendants pay the whole of the plaintiff's costs of the claim and counter-claim. Having regard to the nature and complexity of the factual issues and the resolution of those issues overwhelmingly in favour of the plaintiff, the costs are to be paid on the full Supreme Court scale. I allow the parties fourteen days to bring in short minutes of order to give effect to this decision including quantification of the interest.