Supreme Court New South Wales Medium Neutral Citation: Anjoul v Anjoul [2021] NSWSC 592 Hearing dates: 15 February 2021 – 19 February 2021; final written submissions 11 March 2021 Decision date: 25 May 2021 Jurisdiction: Equity Before: Robb J Decision: See pars [265], [272], [278], [289], [300], [303], [306], [336], [345], [353] and [368]-[370]. A directions hearing will be fixed at which time the Court will consider the orders to be made to give effect to these reasons for judgment and, if appropriate, the future conduct of the proceedings Catchwords: BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — Residential building work — Consequences of failure to obtain contractor licence and insurance — Where the owner-builder defendant pleaded that the Act barred the plaintiff from being entitled to recover any money under a deed in respect of the residential building works because he did not have a contractor licence or insurance as required by the Act — Where the Court found that the Act did not prohibit the plaintiff from enforcing the deed if it was enforceable or from obtaining proper restitution if the deed was not unenforceable CONTRACTS — Remedies — Liquidated damages — Penalty — Where the defendant claimed that a term of the deed was a penalty and therefore unenforceable — Where the Court found that the provision was not a penalty because it could not properly be characterised as having the function of inducing performance of another provision of the deed CONTRACTS — Unjust contracts — Contracts Review Act 1980 (NSW) — Unjust — Where the plaintiff sought to enforce a deed of acknowledgement of debt — Where there was a material inequality of bargaining power between the plaintiff and defendant — Where the plaintiff exercised unfair pressure or unfair tactics in causing the defendant to enter into the deed — Where the Court found that provisions of the deed were unjust at the time the deed was entered into within the meaning of s 7 of the Act EQUITY — Equitable remedies — Restitution — Contract unenforceable — Where the plaintiff claimed in the alternative that the defendant held the property on constructive trust in favour of the plaintiff in proportion to the plaintiff's contributions to the renovation of the property — Where there was no joint endeavour between the parties in the sense of Muschinski v Dodds — Where the Court found that the plaintiff was not entitled to an equitable interest in the property on the basis of a partial constructive trust EQUITY — Unconscionable conduct — Special disability or disadvantage — Whether unconscientious advantage taken — Where the defendant claimed that her signature to a deed was the product of duress or undue influence or unconscionability, and that she signed the deed in reliance upon a representation by the plaintiff — Where the Court found that there was no relationship of influence between the plaintiff and defendant to establish undue influence — Where the Court found that the deed should be set aside in equity on the ground that it was procured by the plaintiff taking unconscionable advantage of the defendant's special disadvantage LAND LAW — Caveats — Caveatable interest — Where the defendant claimed that a deed executed by her did not grant a charge over the property in favour of the plaintiff to secure the payment of monies under the deed so that the plaintiff did not have a caveatable interest to support the caveat that he lodged — Where the Court found that the defendant's consent to the lodgement of the caveat demonstrated an intention that a charge would be created over the property by the lodgement RESTITUTION — Nature of restitutionary liability — Unjust enrichment — At the plaintiff's expense — Where the plaintiff's claim for the enforcement of a deed of acknowledgment of debt failed — Where the defendant disputed the amount claimed by the plaintiff — Where the defendant was not given an opportunity to verify the amount claimed — Where the plaintiff failed to provide proof at the hearing for the amount claimed — Where the defendant should not in principle enjoy the whole benefit of the renovation works for nothing — Where the Court found that the plaintiff may be entitled to restitution from the defendant for the reasonable costs of the residential building work done and materials supplied, and the value that his participation in the renovation added to the property Legislation Cited: Bankruptcy Act 1966 (Cth) Civil Procedure Act 2005 (NSW) Contracts Review Act 1980 (NSW) Home Building Act 1989 (NSW) Cases Cited: Antonovic v Volker (1986) 7 NSWLR 151 Big Kahuna Holdings Pty Ltd v Kitas [2012] NSWSC 615 Elders Rural Finance Ltd v Smith (1996) 41 NSWLR 296 Esanda Finance Corporation Ltd v Tong (1997) 41 NSWLR 482 Ford bht Watkinson v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR 42 Kay v Playup Australia Pty Ltd (2020) 19 BPR 40,037; [2020] NSWCA 33 Muschinski v Dodds (1985) 160 CLR 583 Perpetual Trustee Co Ltd v Khoshaba (2005) 14 BPR 26,639; [2006] NSWCA 41 Suncorp-Metway Ltd v Bellairs [2009] NSWSC 135 Ta Lee Investment Pty Ltd v Antonios [2019] NSWCA 24 Verduci v Golotta (2010) 15 BPR 28,865; [2010] NSWSC 506 Watson v Foxman (1995) 49 NSWLR 315 West v AGC (Advances) Ltd (1986) 5 NSWLR 610 Texts Cited: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed 2014, LexisNexis Butterworths) Category: Principal judgment Parties: Jerry Anjoul (plaintiff) Ashley Anjoul (defendant) Representation: Counsel: M Daniels (plaintiff) P Newton / M Collins (defendant) Solicitors: Laurence & Laurence Commercial Lawyers (plaintiff) Memcorp Lawyers (defendant) File Number(s): 2018 / 383865 Judgment 1. The plaintiff, Jerry Anjoul, was formally the brother-in-law of the defendant, Ashley Anjoul. The defendant's former husband is Anthony Anjoul. 2. As the parties did, and without meaning any disrespect, I will refer to these parties by their first names. 3. Jerry's claim against Ashley arises out of a substantial rebuilding of a residential property purchased by Ashley at Winston Hills, to which I will simply refer as the property. 4. Jerry's primary claim against Ashley was for orders enforcing a deed dated 14 November 2013 (the deed) between Jerry and Ashley under which Ashley acknowledged that she was indebted to Jerry in the amount of $700,000, increasing in accordance with the consumer price index and, according to Jerry, gave an equitable charge over the property to secure repayment of that amount to Jerry. The amount claimed by Jerry as at the date of the filing of his amended statement of claim on 2 April 2019 was $743,353.45. 5. Alternatively, Jerry sought a declaration that Ashley holds her interest in the property subject to a constructive trust in favour of Jerry in proportion to Jerry's contributions to the renovation of the property. 6. Finally, Jerry sought an order that Ashley make restitution to Jerry in the sum of $743,353.45. 7. Ashley has admitted that she signed the deed but said that her signature was a product of duress or undue influence or unconscionability, and that she signed the deed in reliance upon a representation by Jerry to the effect that the purpose of the deed was to protect the property from being seized by the NSW Crime Commission and that Jerry would never leave Ashley and her two children without a home. 8. Ashley alleged that the cost of any works carried out by Jerry at the property as well as any works and materials paid for by Jerry was not $700,000 and that she did not have an opportunity to independently verify that amount. 9. Ashley alleged that a term of the deed that accelerated the time when she was required to pay the amount, being $700,000 plus CPI increase, from the date when the property was sold to the date when she separated or divorced from Anthony was a penalty and unenforceable. 10. Further, Ashley claimed that the amount that Jerry sought to recover under the deed was irrecoverable by reason of the operation of the Home Building Act 1989 (NSW). 11. On 13 March 2020, Ashley filed a cross claim by which she sought an order declaring that the deed is void or unenforceable under the provisions of the Contracts Review Act 1980 (NSW), as well as an order that the deed be set aside under the provisions of the Australian Consumer Law on the basis of Jerry's unconscionable conduct. Background 1. Jerry gave evidence that he left school in 1997 and became a licensed drainer in 2000. By 2004, Jerry had become a licensed plumber, drainer and gasfitter. At that time, he started his own plumbing business. Jerry said that he did not gain his builder's licence until 2012, which is a circumstance relevant to Ashley's claim based upon the Home Building Act. 2. Ashley and Anthony married on 10 February 2008. Ashley gave evidence that she learned that Anthony had been convicted of two personal assaults. Ashley alleged that on one occasion, when the couple were living at a house that Ashley wrongly believed was owned by Anthony, the house was subject to a drive-by shooting. Anthony denied that the shooting incident had occurred, as well as many other details of the evidence given by Ashley concerning events that occurred before the purchase of the property. 3. Ashley said that she came to feel insecure living in the house, so they decided to acquire a new house in the Winston Hills area. 4. In due course, Ashley and Anthony found the property. It was an old and small house that required significant renovation. 5. It appears that on 23 November 2008, after the decision was made by Ashley and Anthony to acquire the property, Jerry paid the sum of $1,137.50 to Walsh & Sullivan First National as a holding deposit. 6. On 3 December 2008, Ashley entered into a contract to purchase the property for a price of $455,000, with a deposit of $45,500. 7. Ashley and Anthony agreed in their evidence that they had decided at the time that the property would have to be purchased solely in Ashley's name, as Anthony had a bad credit record and would not be able to borrow any money for the purchase. Ashley claimed in her evidence that, even though the property was in her sole name, she always regarded it as being the family home. 8. On 18 December 2008, Ashley signed a personal finance application to Westpac. The application disclosed that Ashley had assets totalling $108,846 and that her gross annual income was $76,000. 9. Ashley's evidence was that the finance application was arranged by Anthony, with the assistance of a finance broker known to Anthony. Anthony and the finance broker filled out the application and Ashley was simply asked by Anthony to sign the application, which she did. Anthony denied this version of events entirely. He said that Ashley made the application with the assistance of a finance broker whose name was given to her by Jerry, and that Anthony had nothing to do with the loan application. 10. Apparently, on 16 December 2008, Westpac made an offer to Ashley of a loan of $432,250, repayable in instalments over five years. On 18 December 2008, Ashley signed an acceptance of the loan offer. 11. On 18 December 2008, Ashley also executed a mortgage over the property in favour of Westpac. 12. Ashley gave the following evidence in her 30 August 2019 affidavit about the nature of her involvement in the design of the renovation of the property: 27 A short while later I drove with Anthony to see Danny Barakat who was an architect. There were some brief discussions about the type of renovation and the design. 28 Sometime after, I drove to the house and saw that the interior of the house had been gutted. Anthony was present and showed me around and gave me a brief tour of the house. We had a conversation to the following effect: Anthony This will be our room and ensuite with the walk-in; this is another bedroom; the bathroom will be here and there will be 2 other bedrooms; a hallway here; double garage here; from here on will be the extension with the open plan living with dining and kitchen. Over there is the outdoor area and the pool. Ashley Oh wow okay, it looks huge. 29 Following this, I would have sporadic conversations with Anthony where I would be asked to give basic input into paint colour selection, kitchen colour selection and the tile selection. On one occasion Anthony told me to meet him at Saba Tiles in Guildford where Anthony was showing me the tile selection he had made for the bathrooms. 30 On one occasion, Anthony brought home a few tile samples that were to be used on the floors in the remainder of the house. Towards the end of the renovation I made my only request into the design and construction and/or renovation of the house, which was a recess into the main shower wall to store my toiletries, and another recess in the lounge area for photos. 31 I was not involved in the selection or purchase of any of the appliances including the stove, Oven, windows, doors, taps or any other fitting or finish. 1. Anthony's evidence concerning Ashley's involvement in the design of the renovation completely contradicted the evidence given by Ashley. Anthony said in his 11 October 2019 affidavit, in response to Ashley's 30 August 2019 affidavit, that he did not go with Ashley to see Danny Barakat. Anthony met Mr Barakat subsequently when he came to the property, and both Ashley and Anthony took him around the building and the land and discussed what had to be done to the house. Anthony said that Ashley made the tile selection and that she selected "all of the colours and styles for the house" including "the paint colours, light fittings, tile type and colour, kitchen cabinets and appliances, taps, doors, windows and built-ins". 2. Danny Barakat of JND Design Group swore an affidavit on 30 September 2019. Mr Barakat said that he was introduced to Ashley and Anthony by Jerry, and that the first meeting took place at the property sometime during 2008. Those present were Mr Barakat, Ashley and Anthony. Mr Barakat's evidence was that Ashley did most of the talking when they discussed the proposals for the property and what had to be done to get development approval. Mr Barakat said that his instructions were given by Ashley. Mr Barakat made a draft plan and emailed it to Ashley for her comments. He then had a series of telephone conversations with Ashley over changes she wanted to make to the draft plan. There were two or three revisions to the plans. Ultimately, Ashley approved the revisions and Mr Barakat started to put together the development submission package. Once Mr Barakat had a partial draft of the development application form, he marked the spots where information had to be inserted by Ashley and sent it to her. Mr Barakat said that he inserted Anthony's name on the draft application form, but he could not remember why he had inserted Anthony's name and not Ashley's. 3. The evidence included a certificate apparently issued by Australian Owner Builders Pty Ltd dated 12 January 2009 in the name of Leanne Ward, Course Assessor, which stated: "This is to certify that Ashley Anjoul has successfully completed the Australian Owner Builders Course". This document was exhibited to Jerry's 29 June 2019 affidavit with the explanation that the document was "provided by the architect engaged by Ashley for the project". The architect was Mr Barakat, who described himself in his affidavit of 30 September 2019 as a building designer. 4. Ashley said in par 92 of her 30 August 2019 affidavit that she did not apply for an owner-builder permit and did not undertake an owner builder's course. She said that she did not see the certificate prior to reviewing Jerry's affidavit. 5. There was no evidence of the circumstances in which the certificate was issued, nor any independent evidence that Ashley undertook the course. 6. There was no evidence about how the course was conducted or what was required in order for the certificate to be issued. 7. Anthony's response, in his 11 October 2019 affidavit, to this evidence was to say that Ashley took a day off work to do the owner-builder's course, and when she came home she said to Anthony: "I passed the owner-builder's course." Anthony said that Ashley then showed him the certificate of completion. She also said that she would have to go to NSW Fair Trading in person to get the building permit, as she was required to produce her certificate and provide proof of identity. 8. On 16 January 2009, Anthony lodged a development application for the property with Parramatta City Council (the Council). The application stated that the estimated cost was $45,000. 9. Mr Barakat said in par 17 of his affidavit: As to the amount of $45,000.00 for the "estimated cost of the works" shown on [the application for development approval], the amount determines the council's application fee. The less put down as the costs, the lower the council's fee. The construction of the building, based upon my plans could not have been anywhere as low as $45,000.00. 1. The plans that were included with the application for development consent depict to a close approximation the final structure of the residence on the property, including the swimming pool. 2. Mr Raymond Mawad of RM Legal, solicitors, sent a letter to Ashley on 20 January 2009 in which he confirmed that settlement of the purchase of the property was completed on 14 January 2009. 3. Ashley said in par 26 of her 30 August 2019 affidavit that she was informed by Anthony that the contract had settled. 4. On 29 January 2009, a person by the name of Craig Bennett, on behalf of Lifestyle Homes, wrote a letter to the Council's Development Assessment Officer on the subject of the estimated costs of the proposed works. Mr Bennett said: The above proposed development will be extensively using recycled materials for the construction of the dwelling in a way of minimalising the environmental impact of such building works. The materials will be sourced free of charge to the owner Mr Anjoul and the labour costs will also be minimal as he is performing the plumbing works himself at no cost and the balance of the associated trades are family members who have committed to providing free labour, with the intention of providing Mr Anjoul and his family a financial benefit towards the renovation of his first home. With these factors in mind the estimated cost of the proposed works are $40,000.00. 1. Anthony was not competent to perform the plumbing works as he did not have a licence. 2. The documents produced by the Council on subpoena included a single page headed "JOB COST BREAKDOWN" (part exhibit D7). Although produced by the Council, the document does not have a received stamp, and it appears to be disconnected from whatever communication caused the document to be received by the Council. Both Jerry and Anthony claimed to know nothing about the document. The document contained the following information: As per your request, we have the pleasure in providing a job cost breakdown. Pool Excavation & removal $0 Steel & Concrete $3000 Pool Plumbing $0 Pebble Crete interior $2000 Pumps & equipment $1200 Coping material $400 Waterline tiling $0 Extension Excavation & removal $0 Steel & Concrete $10,000 Wall & roof framing materials $2000 Roof Covering $4000 Windows $4000 Balance second hand materials $0 External brickwork materials Second hand bricks $0 Brickwork labour $0 Internal linings materials $10,000 Fixout materials $2000 Internal ceramic tiling materials $0 Internal ceramic tiling labour $0 Plumbing labour $0 Plumbing materials $4000 Kitchen $3500 Painting materials $1000 1. The information in this document is broadly consistent with the statements made in Mr Bennett's letter to the Council. 2. On 16 March 2009, Mr Barakat wrote a letter to the Council in response to correspondence apparently received from the Council dated 27 February 2009. The letter enclosed a revised site and elevation plan that showed various levels and elevations, a landscape plan, and advice on various minor issues concerning the plans. 3. On 2 April 2019, the Council issued an Emergency Order in respect of the property on the basis that excavation work had been carried out without the Council's consent, and that the excavation was too close to the neighbours' boundaries. 4. On 9 April 2009, the Council issued to Anthony a Notice of Determination approving the development application subject to conditions. 5. On 14 April 2009, Ashley signed an application to NSW Fair Trading for an owner-builder permit under the Home Building Act. 6. Save as follows, the application was filled in by Ashley by hand. It is not clear whether Ashley ticked a number of boxes on the form that required acknowledgement of various facts and matters before the permit would be issued (extracted at par 52 below). 7. In the box on the form requiring the insertion of the name of the Owner Builder Course Provider, someone other than Ashley inserted "Australian Owner Builders P/L". Ashley accepted in cross-examination that she inserted in the box "Leanne Ward". It appears that the date of issue of the certificate, "12/01/09" was also inserted by Ashley. It also appears that Ashley inserted the certificate number of the certificate of completion in the box provided in the application "Complying Development Certificate Number". 8. Ashley also inserted the Council's Development Application number. 9. The brief description of the work given on the form was: "Alterations and additions to the existing dwelling house, construction of an in ground swimming pool and rendering the exterior of the dwelling house". 10. The market value of the building work was stated to be $45,000. 11. Section 31(2)(d) of the Home Building Act provides that the Commissioner for Fair Trading must refuse an application for an owner-builder permit if the Commissioner is not satisfied that the applicant has completed any education or training, or holds any qualification, required by the Commissioner or the regulations for eligibility for the grant of an owner-builder permit. 12. The application form for the owner-builder permit contained the following statement: The following original documents (or certified copies) MUST be provided: … * Evidence of approved training if construction work will exceed $12,000 … 1. The form also summarised a number of aspects of the regulatory process created by the Home Building Act in cases where residential building work is carried out by a person with an owner-builder permit, as follows: 7 Do you understand that: * It is an offence for the holder of an owner builder permit to knowingly engage an unlicensed contractor, lend your permit to another person, or refuse to disclose names and addresses of contractors working on site? * … * If you engage a contractor to do work over $12,000 on your project, the contractor must take out home warranty insurance and give a certificate of insurance to you? * If and when you sell this dwelling within 6 years of completion of the work and the project was more than $12 000 (labour and materials), you must attach the following to the contract of sale: 1. a note that an owner-builder permit was issued in relation to the work and that the work done under the permit required home warranty insurance; and 2. the certificate of home warranty insurance. * … 1. Each of the boxes annexed to these questions that were marked "Yes" was ticked. 2. The form contained a statement that it could be lodged in person at, or by post to, any Fair Trading Centre. 3. The form signed by Ashley is stamped with an Office of Fair Trading received stamp dated 14 April 2009, which is the same date as the form. This tends to confirm that the application was lodged in person and not by mail. 4. On 14 April 2009, NSW Fair Trading issued an owner-builder permit to Ashley in respect of the property. 5. The owner-builder permit was expressed to be issued under the Home Building Act. It described the building work authorised as: "Alterations and additions to the existing dwelling house, construction of an inground swimming pool and rendering the exterior of the dwelling house". The permit cited the development consent number issued by the Council. 6. On 16 April 2009, Ashley signed a document that stated: "I Ashley Anjoul authorise Jerry Anjoul to pay council fees on my behalf". The document has facsimile transmission details of the National Australia Bank, which at the time was Ashley's employer. 7. A construction certificate in respect of the property was issued by Fitzgerald Building Certifiers with an approval date of 20 April 2009. The value of the work was stated to be $45,000. The notice of commencement of building work stated that the date of commencement of the building work was 22 April 2009. 8. Ashley gave evidence in her 30 August 2019 affidavit that from 2009 onwards she was fielding knocks on her door at the property from debt collection agencies and the Sheriff regarding monies Anthony owed to creditors. 9. Jerry gave the following evidence in his 29 June 2019 affidavit concerning the basis upon which he became involved in the redevelopment of the property: 19 I met Ashley and Anthony at the property. We had a conversation: Ashley: "I have had a proper look at it now. It is going to need a lot more than I thought." Myself: "What do you mean?" Ashley: "I thought I could just change the toilets, redo the bathroom, give it a paint. But looking at it, the house is just too small. I have always wanted a pool as well. Is there any chance you can help us out?" Myself: "What are you saying? Do you want me to pay for it all?" Ashley: "Yes. If you can. We will pay you back. Once it is all done, we will be able to refinance and pay you back." Myself: "I can't pay for it. You will have to do that. Try to get extra finance now, not after the works are completed." Ashley: "Ok. I will look for finance." During the same conversation or one shortly thereafter Ashley said to me: Ashley: "I don't know anything about getting a house built. I am going to have to rely on you for most of it." Myself: "I can help you organise the work." 1. Jerry added the following in par 26 of his affidavit: "It was not my intention to fund the renovations for Ashley and Anthony…" 2. Jerry then gave evidence of the course of the works, including enquiries that he made of Ashley as to how she was going with her application for finance for the renovation works. Jerry said, at par 31, that he told Ashley that the architect and certifier had been calling him about their fees and asked when Ashley would pay them. Jerry said that he said that they would have to be paid and that it was embarrassing for him and: "I will have to pay them if you don't." Later, after he had received further calls from the architect and certifier, he said to Ashley: "I will pay them, but you will have to pay me when the funds come through." Ashley agreed that she would pay him back. Jerry gave evidence that he had similar conversations with Ashley about the concrete supplier and the steel fixer. 3. Jerry said in his affidavit: 35 With the slab down, the major construction works commenced. I did the plumbing and drainage works. The other construction works were carried out by tradesmen who I contacted. [evidence rejected]. None of the tradesmen or suppliers invoiced me for their services and products. … 38 I continued to pay for all of the works after this conversation. I did not receive invoices from the suppliers and the tradesmen, [evidence rejected]. Suppliers and tradesmen were paid either by my giving to Ashley cheques to make payment or my providing plumbing or excavation services to them in exchange. 1. Ashley said in par 42 of her 30 August 2019 affidavit that there was never a discussion between Anthony and her as to how Anthony was financing the renovation. Ashley's case in her affidavit appeared to be that the question of whether, and if so how, Jerry was to be reimbursed for his participation in the renovation of the property was a matter between Jerry and Anthony, and Ashley understood that Anthony had access to funds from a property owned by him and a business that he operated. 2. However, the case put by Ashley's counsel was that the arrangement was from the outset that Jerry would not seek reimbursement as there was an agreement that materials would be sourced without cost, and that friends and family members would provide services free of charge. 3. Ashley did not tender any evidence of an objective nature capable of constituting an express agreement between Jerry and Ashley and Anthony, or either of them, that he would assist in the renovation of the property free of charge. 4. Jerry said that the building works were completed in about early 2010. 5. Jerry exhibited to his affidavit a schedule which he described in par 39 as "a schedule of the payments I made by cheque or by doing work in kind for the tradesmen" (the schedule). He said: "I prepared the schedule in about 2010 from handwritten notes I had made during the construction works and from my bank records. I no longer have the handwritten notes or bank records. I also do not have the invoices, [evidence rejected]". Jerry also said: 40 I have written on the schedule the names of the contractors and suppliers who carried out the works or supplied the materials. Where there is no name written on the schedule, I cannot recall who the supplier or contractor was. 1. The schedule set out the following table under a statement of the address of the property. The writing within the first two columns of the table was in typescript. The names of the suppliers in the third column beside the various entries in the table were in Jerry's handwriting. They were not written within the table but were written separately beside the table: Architect Structural engineer $31,500.00 JND ARCHITECTS Stormwater engineer Demolition and Excavation Truck Haulage $167,800.00 TANSUZ GROUP PTY LTD Concrete cutters Plumbers, drainers $28,000.00 Exact GROUP Electrician $36,700.00 Vision electricals Steel Fixers $6,800.00 Advanced Steel fixing Pest Control $2,800.00 Pestol Concrete $24,200.00 Bealewell Tree lopper $5,600.00 tall trees services Carpenter $67,500.00 Hasco carpentry Brick layers $18,200.00 Johns bricklaying Renderer $16,750.00 Brahim rendering Windo and glass $11,500.00 Trend windows Pool fencer $6,800.00 Mental rooder $18,600.00 Colourbond fencer $7,500.00 Buddies fencing Excavator with rock breaker $79,000.00 Exact Earthworx Kitchen and cabinet maker $27,150.00 Crystal Kitchens Wall and floor tiler $29,500.00 Exact tiling Painter $27,500.00 Simons painting Gyprocker $42,000.00 Kevin Gyprockers Lpg gasfitter $7,500.00 Exact Group Pool shotcretor $3,800.00 Shaun Landscaper $7,200.00 Exact Civil Shower screen contractor $5,300.00 Ceaser stone contractor $18,600.00 Saba stone Surveyor $5,420.00 W Buxton surveyors Total: $703,220.00 1. In cross-examination, Jerry was taken to a number of company and business name extracts that appeared to relate to some of the suppliers on the list. The extracts suggested that the companies or businesses were first registered a substantial time after the renovations to the property were completed. Jerry did not have an explanation for these revelations. This evidence suggested that the names of the suppliers may have been added to the schedule a considerable time after the table was prepared, or even that the table itself was prepared sometime after 2010. In final submissions, Jerry accepted that the list of suppliers was not reliable. 2. Jerry relied upon affidavit evidence from a number of people who provided their services to the renovation of the property. Those witnesses were not cross-examined by Ashley on their affidavits. 3. Mr Barakat said that he did not issue an invoice for the work that he did on the property. He wrote off the fees that he would have required, because Jerry carried out plumbing and drainage works at his request on Mr Barakat's parent's house, where he was living at the time. 4. This evidence highlights the significance of the fact that Jerry inserted the amount $31,500 against "Architect Structural engineer Stormwater engineer" in the schedule, but did not give any detailed evidence about how that sum was determined. Jerry said in evidence that the reason why he included the structural and stormwater engineering costs with the architectural costs was that he left it to the architect to retain those engineers. 5. Charbel Challita swore an affidavit on 30 September 2019. At the time the renovation of the property was carried out, Mr Challita was a director of Bealewell Pty Ltd which supplied materials for construction works, including concrete, steel and bricks. Mr Challita said that he agreed with Jerry that Jerry could use Bealewell's accounts for the purchase of concrete, bricks and steel as Ashley was an owner-builder and did not have any accounts with suppliers. Mr Challita said that Jerry said to him: "We can sort out an offset when I finish the job I am doing for you at…" Mr Challita could not remember with certainty the name of the job that Jerry was doing for him at the time. Mr Challita said that his best recollection was that Jerry was doing plumbing and drainage works on a 26 unit development at Homebush West for which Mr Challita's company was the builder. 6. Mr Challita annexed to his affidavit three delivery dockets issued by Boral and five delivery dockets issued by Hy-Tec Concrete addressed to Bealewell. The Boral delivery dockets do not bear the address of the Winston Hills property as the address for delivery. They appear to be for pickup although they give Jerry's name as the contact. The delivery dockets identified the quantities of the materials delivered but not the prices. Mr Challita said that the delivery dockets (which he wrongly called invoices) were for concrete and concrete bricks delivered to the property. The delivery dockets did not include reinforcing steel. Mr Challita said that he did not know whether there were other delivery dockets. The total amount of concrete delivered to the property, as calculated by Mr Challita from the delivery dockets was approximately 54m³. Mr Challita said that 54m³ of concrete means there was a substantial amount of excavation and concrete used in the construction of the house and the pool on the property. 7. In the schedule, Jerry has inserted the amount of $24,200 for concrete against the name Bealewell. 8. Mark Daou is a licensed electrician and a director of Vision Electrical Services Pty Ltd (Vision). Mr Daou said in his 1 October 2019 affidavit that Vision carried out the fitting of the electrical services to the property. Mr Daou agreed to do so at the request of Jerry. 9. Mr Daou gave the following evidence concerning his agreement with Jerry as to how Vision would be paid for the electrical work: 8 On a separate occasion shortly after the conversation in paragraph 7, Jerry and I discussed payment for the work. Jerry and I have over the years done work for each other on a bartering system, where we wrote off expenses against work the other had done. I do not recall if the work at the property was the first occasion, but I did not render an invoice to Jerry or Ashley, because Jerry had already or would in the future be doing plumbing and drainage works for me. I also carry on work renovating properties for myself. 1. In the schedule, Jerry inserted an amount for Electrician of $36,700 against a reference to Vision. Jerry did not give any explanation as to how the $36,700 was calculated. 2. It will be convenient to note that Mr Daou also gave evidence that, although he was introduced to the job by Jerry, he took instructions from Ashley as to what electrical services should be installed at the property and where they should be installed. Ashley was present on the site on a number of days while Mr Daou was there putting in the electrical services. 3. At par 33 of his 11 October 2019 affidavit, Jerry gave evidence in response to par 111 of Ashley's 30 August 2019 affidavit, in which Ashley gave evidence of a conversation she had with Danny Khoury, who is Jerry's maternal uncle and who operates the business Exact Tiling. That is the name of the wall and floor tiler for which a cost of $29,500 is included in the schedule. The evidence given by Ashley in par 111 of her affidavit was rejected on the ground that it was hearsay. However, Jerry's evidence in response to the evidence given by Ashley had already been read. The evidence given by Jerry was of a conversation with Mr Khoury in which Mr Khoury said that he had told Ashley that he did not get paid for the tiling work. The substance of the conversation was that Mr Khoury was not paid for the tiling that he did at the property because he was not required to pay for the plumbing that Jerry did at Mr Khoury's place. 4. Although Jerry only called evidence from a limited number of contractors who supplied services for the renovation of the property, and Jerry gave evidence of his arrangement with Mr Khoury, in all of those cases the arrangement involved a barter system in which Jerry supplied his plumbing services without cost in return for the suppliers providing their services for the renovation of the property on the same basis. 5. Mr Barakat, Mr Challita and Mr Daou did not provide any evidence to corroborate the value of the services or materials provided by them as inserted by Jerry in the schedule. 6. No explanation was provided in Jerry's case as to why only Mr Barakat, Mr Challita and Mr Daou have provided evidence in support of Jerry's case that he had incurred obligations to make payments or provide services in kind to suppliers who were involved in the renovation of the property. The Court does not know whether other suppliers and contractors were approached to give evidence. 7. It will be convenient at this point to deal with another aspect of the evidence concerning how the renovation of the property took place that is more relevant to the credibility of Ashley's evidence than it is to the conduct or the cost of the works. 8. At par 13 of her 20 November 2019 affidavit, Ashley denied ever meeting Mr Daou, and denied that the conversations deposed to by Mr Daou took place. In par 14, Ashley gave evidence of a conversation that she had on one occasion with Mr George Helou at the property, when Mr Helou, who was an electrician, was working on the house installing downlights. At the hearing, par 14 was not admitted into evidence as it was objected to by Jerry, and subsequently not read by Ashley (T132.46). Mr Helou's response to that evidence however had already been admitted. 9. The essence of Mr Helou's evidence was that he told Ashley in a telephone conversation that the only electrical work that he remembered doing at the property was putting in a temporary power pole before the house was demolished, and that he did not remember seeing Ashley at the property or doing any of the electrical work there. 10. Ashley said in par 109 of her 30 August 2019 affidavit that she did not receive any invoices from suppliers or tradesmen, nor did she ever receive or request cheques from Jerry to pay them. Ashley said that she was unaware as to what services in exchange were provided by Jerry and that she was of the belief that Anthony had family and friends who provided services for free. 11. Ashley said in par 112 of her affidavit that she and Anthony moved into the house in about September 2009, as the construction work had finished, and the house was ready to be lived in. She said: "Up to this point I had no contact or dealings with Jerry regarding the house or the construction and/or renovation at all". 12. Ashley said at par 120 of her 30 August 2019 affidavit that at no stage did she ever speak to Jerry regarding the construction or renovation of the home on the property and that she was only on site about four times throughout the construction period. 13. Jerry gave evidence that, from time to time after Ashley and Anthony moved into the home on the property, he asked Ashley to obtain additional funding on the security of the improved property in order to repay him, but that Ashley made excuses for not doing so. Ashley denied that these conversations took place. 14. Ashley's evidence was that she continued working as an administration and operations officer at the NAB Rhodes Contact Centre until early 2011. Her first daughter was born on 22 April 2011, and the second was born on 11 December 2012. As I understand it, Ashley has not worked since early 2011 and she was made redundant in early 2013. She said that her $50,000 redundancy payment was used to reduce the Westpac mortgage, but that was denied by Anthony. 15. Jerry said that, over the next several years from completion of the renovation, it became apparent to him that Ashley did not have and could not obtain the finance to repay him. In mid-2013, Jerry said that he was becoming very concerned that he might not get repaid. He also said that he was concerned that the marriage between Ashley and Anthony seemed to be having problems. 16. In October 2013, Jerry sought advice from his solicitor, Alison Eid at Legal One, and received advice that, if Ashley signed a deed of acknowledgement of the debt, he could lodge a caveat against the property. 17. Jerry gave evidence in pars 45 and 46 of his 29 June 2019 affidavit of conversations that he had with Ashley concerning her signing a deed of acknowledgement. Part of those conversations was that Jerry said to Ashley: "… You acknowledge the debt and give me security and I do not require payment unless you want to sell or the 2 of you split up". According to Jerry, Ashley responded: "I know I owe you the money. I will sign a Deed." 18. Jerry then said that, after he received the draft deed from Ms Eid, he "sent it to Ashley", and subsequently had a conversation with Ashley in which he advised her to see a solicitor and get the deed explained to her before she signed it. He said that Ashley replied that she would see Mr Mawad because he was her solicitor when she bought the property. 19. Finally, Jerry said that he instructed his then solicitors to commence the current proceeding after he formed the view that Ashley and Anthony had separated and that they would not get back together. 20. Ashley's explanation of the circumstances in which she signed the deed was more complex. 21. On 11 October 2013 at about 3 PM, Ashley received a telephone call from Anthony to advise her that he had been stopped by police at a time when he had his 2½ year old daughter in the car. Ashley went to the scene in order to collect her daughter. When she arrived, she saw numerous police cars and police officers who stopped her from talking to Anthony. Ashley collected her daughter and took her home. Anthony was arrested and taken into custody. 22. On 13 October 2013, Ashley had a telephone conversation with Anthony. She was not then aware of the matters that Anthony had been charged with. 23. Sometime after this conversation, Ashley arranged to meet Anthony at Silverwater Metropolitan Remand and Reception Centre (Silverwater) with Jerry. There, according to Ashley, she was told by Anthony that there were a few charges and that "the main one is drugs". Ashley's evidence was that the conversation that took place included the following: 49 … Jerry There is a few things we need to do. Firstly we need to get a paper done to protect us from the Crimes Commission Anthony Yeah of course, do what you need to do and get it done ASAP Jerry How much is left on the mortgage at Winston Hills Ashley About $400,000 Anthony You know what put $700,000 and Ashley needs to go to RM Legal and sign the paper Jerry Yeah okay that should cover it Anthony Okay. Also, Ray needs to make sure I am his carer 1. In par 9 of his 11 October 2019 affidavit in reply, Jerry denied that the conversation took place as deposed to by Ashley, and in particular he said that there was no discussion about protection from any Crime Commission, how much was outstanding on the mortgage of the property, getting any paperwork signed by Ashley, or her seeing RM Legal. 2. Anthony made a similar denial at pars 65 to 70 of his 11 October 2019 affidavit, and said that the subject of the meeting was about how he could get bail and which legal firm to use. 3. Ashley gave more elaborate evidence of what took place at the Silverwater meeting in her 26 March 2020 affidavit. She explained that she had taken her daughters to see their father and that shortly after entering the room she became overcome with emotion and started to cry. She said that when Anthony was being taken away, she began to cry uncontrollably. 4. Ashley described her emotional circumstances at the time in the following way: 9 I left Jerry and drove the girls home. I was worried about Anthony's, my and our children's future. At the time I did not know how long he would be incarcerated for, what he had been charged with or what the outcome of the charges would be. I was tired. I was still breast feeding [her younger daughter]. [Ashley's elder daughter] was a toddler and walking and I needed to watch her constantly. From 11 October 2013 (when I picked [the elder daughter] up from Kleins Road and Anthony was arrested) until sometime after Anthony was released from prison (in or about May 2015) I felt nervous and sick in the stomach. I did not feel like eating. I missed meals and experienced difficulty sleeping. When I fell asleep, I often woke within an hour or two and found it difficult to get back to sleep. I found it difficult to concentrate. My moods fluctuated from anger to sadness. I was worried and felt I had no control over what was happening and going to happen to Anthony, the girls and me. Within days of Anthony's arrest, I noticed a change in [the elder daughter's] mood. She often became upset and cried. She often said to me "where is daddy". I did not know how to respond. In response, I said to [the elder daughter] "daddy's at work". She often tried to climb or clinged to me when I was breastfeeding, which is something I had not experienced before and disturbed [the younger daughter] and made breastfeeding more difficult… 1. On or about 21 October 2013, Ashley saw Dr Girgis-Dawoud (Dr Girgis), a general medical practitioner. 2. Dr Girgis prepared a GP Mental Health Treatment Plan for Ashley which is dated 21 October 2013. The plan recommended cognitive behavioural therapy and recorded that Ashley's diagnosis was acute reactive anxiety due to Anthony being under arrest. It recorded that Ashley suffered from reduced concentration, likely poor memory, depressed mood, anxiety and depressed affect and that she had a poor appetite and sleep problems. 3. On 25 October 2013, Dr Girgis wrote a reference for Ashley to see a psychologist, Ms Elize Olivier. 4. During 2013, Ashley saw Ms Olivier in her consultation room on 28 October 2013, 5 November 2013 and 18 November 2013. 5. In her 24 March 2020 affidavit, Ms Olivier gave the following evidence of her opinion as to Ashley's emotional condition based upon her first consultation with Ashley: 9 Based upon my training study and experience, the notes in the GP Mental Health Treatment Plan and my observations of Ms Anjoul, during our first session I assessed Ms Anjoul as presenting with symptoms of anxiety, depression and stress. Anxiety is a response to stress that causes psychological and cognitive changes. Anxious patients suffer from debilitating intrusive thoughts and feelings as well as dysregulated attention mechanisms [e.g., distractibility, impaired concentration. These symptoms have been linked to attentional bias for threat. Individuals with anxiety disorders or dispositional anxiety show a proclivity to detect and process threat-related information, which interferes with performance in various attentional tasks… 10 Based upon my training study and experience and assessment or diagnosis that Ms Anjoul presented with symptoms of anxiety, depression and stress, I provided counselling to Ms Anjoul. 1. Ms Olivier recorded in par 7 of her affidavit: "During the first consultation with Ms Anjoul I observed her and asked her questions and listened to her answers. I made notes during the consultation. She was coherent in her speech, although I observed she was tired, upset and at times crying. At times she was distraught…" 2. Arrangements were made for Ms Olivier to attend for cross-examination, but Jerry's legal representatives informed Ashley's representatives shortly before Ms Olivier was due to be called that she would not be required for cross-examination. 3. Ashley gave evidence that, after her first consultation with Ms Olivier, she had a conversation with Jerry during which she told him that she was seeing a counsellor and that she would need to go again. Jerry asked Ashley to ask the counsellor to write her a letter of support outlining her current mental state as it would be useful for Anthony's bail application. 4. In his 15 April 2020 affidavit in reply, Jerry denied that he had ever advised Ashley to see a counsellor or that he had the conversation with Ashley concerning the obtaining of a letter from Ms Olivier to support Anthony's bail application. He said that he did not know about the involvement of Ms Olivier until he saw Ashley's affidavit. 5. Ashley gave evidence that she saw Mr Mawad of RM Legal on two occasions. The first occurred about a week after the Silverwater visit, when she was asked by Jerry to see Mr Mawad "to sign some papers". 6. According to Ashley's 30 August 2019 affidavit, when Ashley met with Mr Mawad, she had a conversation with him that included the following concerning the draft deed: 52 … Mawad I just wanted to speak to you about this document. Do you know what it is? This is saying you owe Jerry $700,000 and if anything was to happen between you and Anthony and God forbid you separate or divorce, Jerry can use this against you. Ashley I don't feel comfortable signing it (crying) Mawad Yes, I can see that. I can't let you sign it if you are not comfortable. Please go and talk to Anthony before you sign anything 1. Ashley said that until this point she "was unaware what Jerry and Anthony referred to as the paper". 2. Ashley said that she left RM Legal in tears and immediately called Jerry on the phone and told him that she was not going to sign the deed. Ashley's evidence of the conversation included: 54 … Ashley I had no idea what this paper consisted of, and I really don't feel comfortable Jerry Ashley, you know why you have to do this. The last thing you want is for the Crimes Commission to come and take the house. Ashley Jerry, I am not comfortable in signing it. Jerry Ashley, to be honest, I will never leave you or your kids without a home. Ashley I don't know Jerry I'm still not comfortable Jerry Speak to Anthony and sort it out 1. Ashley's evidence was that sometime later she received a call from Anthony while he was in custody. Ashley gave the following evidence of the conversation: 55 … Anthony I spoke with Jerry, did you end up signing the paper? Ashley No! I don't feel comfortable signing it. Anthony Well you have no fucking choice! You have to go back and sign the fucking paper! Just remember where I am and where you are. I can't stop anything from happening to you or to your family while I'm in here. 1. Ashley said that she was very scared and felt threatened by Anthony. The tone of Anthony's voice was raised and sounded angry, aggressive and assertive. She perceived it to be a threat. 2. According to Ashley, a short time later she received a call from Jerry, who asked her to meet him at Mr Mawad's office. Ashley then gave the following evidence in her 30 August 2019 affidavit: 59 On 31 October 2013, I met Jerry in front of the RM Legal office before walking in and sitting in the waiting area of reception. A short while later, Mawad called Jerry and I into the meeting room and had a conversation to the following effect: Mawad Okay, so as we know Anthony is incarcerated and Jerry will be paying all of Anthony's legal costs. So Jerry wants a deed signed. Jerry And also in case the Crimes Commission comes after you for the house as part of Proceeds of Crime. We need to cover our back. Mawad Jerry, This isn't enough to defeat the Crimes Commission. You need something else. You need to go back to see your lawyer that drafted this. Jerry Okay, I'll do that. Leave it with me Mawad Ashley, I have written about defeating creditors in the advice to you. Ashley Okay 60 I signed the Deed at the behest of Anthony and Jerry but I didn't read the Deed. At this meeting, Mawad produced an acknowledgement of receipt of legal advice that outlined the issues discussed at the meeting which I didn't read. At this time I was not given a breakdown of what money was paid by Jerry or who the money was paid to… 61 I felt lonely and scared as Anthony was in custody and I had nobody to help me fend for me or my children. I felt alone and that if I didn't sign the deed, I had nobody to help get Anthony out of goal. I was also scared that if I didn't do what Anthony said something might happen to me. 1. Ashley provided an elaboration of the circumstances in which she signed the deed in her 26 March 2020 affidavit as follows: 16 … In my first affidavit I have done the best I can to set out the substance and effect of what was said at the meetings with Mr Mawad. I did not give instructions to anyone to prepare the deed. I did not make the appointments to see Mr Mawad or ask him to advise me in relation to the Deed. I was not given a copy of the Deed or the Acknowledgement of Receipt of Legal Advice prior to or at the meetings with Mr Mawad. At the time I signed the Deed and the Acknowledgement of Receipt of Legal Advice, I was tired, nervous, sad, scared and I felt alone. I felt sick in stomach. I found it difficult to concentrate. I was worried and felt I had no control over what was happening and going to happen to Anthony, the girls and me. Although I could hear what was being said I found it difficult to listen and comprehend what was being said. I believed what Jerry had previously said to me on the phone after the First Meeting with Mr Mawad. My overriding thoughts were about Anthony being in goal, my daughters and losing our home and what our future would be like. 1. In pars 13 and 16 of his 11 October 2019 reply affidavit, Jerry said that he did not see Mr Mawad with Ashley and that he was of the view that it was not proper for him to be there when she signed the deed. 2. On 5 November 2013, at the time of her second consultation with Ashley, Ms Olivier wrote a letter to the Presiding Magistrate which included the following: Ashley has been severely impacted by her husband's incarceration and presented with symptoms of anxiety, depression and stress. She has lost a substantial amount of weight, feels sad and finds it difficult to cope… Ashley is emotional and said she finds it difficult to cope with everyday tasks. Her two-year old daughter is also showing signs of distress and is showing signs of behaviour problems. I am concerned about Ashley's mental and physical health and the impact on her. 1. Ms Olivier also sent a report to Dr Girgis on 2 December 2013 in which she reported the same condition as she had to the Presiding Magistrate and said: "I focused on supportive therapy, client-focused therapy, using Cognitive Behavioural Therapy (CBT), mindfulness techniques and psycho-education to address all the issues…" 2. Jerry provided a detailed response to Ms Olivier's evidence in his 15 May 2020 affidavit. He explained that the mental circumstances of Ashley deposed to by Ms Oliver were not apparent to him. He said: 20 Whenever I saw Ashley up to and after the signing of the Deed, she appeared to be in good health. She was able to follow conversations and I had no reason to believe she was not aware of what she was doing or what was going on around her. From my observations of Ashley, I had no concern for her safety or wellbeing. I just formed the view that her marriage to Anthony was close to the breaking point. 1. On 20 November 2013, Ashley swore an affidavit for use by Anthony's lawyers for his bail application. The affidavit was laudatory of Anthony's personal characteristics, particularly as a husband and father, and also as a carer for Anthony's brother Ray. 2. On 27 November 2013, the Federal Circuit Court of Australia made a sequestration order in bankruptcy against Anthony. The parties did not give any evidence of the significance of the pending bankruptcy application to the circumstances in which Jerry sought and Ashley signed the deed. There is no evidence that Jerry was aware of the application, but it is not an irrational speculation that Jerry may have decided that it was necessary to obtain Ashley's execution of the deed because Anthony may have ceased to be able to reimburse Jerry if he was made bankrupt. Jerry claimed in cross-examination that he was not aware of the pending bankruptcy and denied that he had procured the deed in order to protect himself from Anthony's bankruptcy: see T75.43 and T76.4. However, as nothing was made of this possibility in Ashley's case, the speculation must be put aside. 3. According to Ashley, she and Anthony formally separated on 2 February 2018 and they were divorced on 13 July 2019. Anthony gave evidence that the couple separated in August 2015. 4. This is a convenient place to note that the evidence was in my view deficient on the issue of Anthony's role in the renovation of the property. Although Anthony was not licensed to carry out any of the work, there is a suggestion in the evidence that he may have had some experience with building work, and this may have been sufficient to have enabled him to participate in the management of the renovation with Jerry's advice and assistance. However, it was Jerry's case that Ashley was the manager of the renovation The Deed 1. As noted, Ashley signed the deed that is the subject of these proceedings on 31 October 2013. The deed was dated 14 November 2013 when it was signed by Jerry. The parties to the deed were Jerry and Ashley. 2. It will be appropriate to set out the terms of the operative part of the deed in full: RECITALS: A. Ashley is the registered proprietor of [the property]. B. Ashley is married to Jerry's brother, namely Anthony Anjoul, making her Jerry's sister in law. C. Ashley purchased the property in about early 2009. D. Jerry is a builder and plumber and carried out extensive renovations to the property. The property was gutted, leaving only two original walls standing. Jerry carried out a full renovation and rebuilding of the property. Jerry carried out much of the work himself, but also paid for other trades and materials for the internal and external works to the property. The cost to Jerry of carrying out the works to the property was $700,000. E. The parties hereto wish to document their agreement regarding repayment to Jerry of the amount of $700,000. OPERATIVE PART: 1. This Deed binds the heirs, executors, administrators, assigns and successors of each of the parties. 2. In the event of the death of either party then the debt outstanding and terms pursuant to this Deed shall be included in the deceased's statements of assets and liabilities. 3. Ashley hereby acknowledges that the cost of the works carried out by Jerry, and the costs of the works and materials paid by Jerry equal $700,000. Ashley has had an opportunity to independently verify this amount. 4. In consequence of the facts in the Recitals A and B, the parties hereto acknowledge and agree that upon the sale of the property Jerry is to be repaid the amount of $700,000, plus CPI for each year or part thereof that the amount of $700,000 has been outstanding, commencing 1.1.2010, prior to any monies being released to or as directed by Ashley. 5. In the event that the sale proceeds are insufficient to fully repay Jerry, then the amount outstanding after payment to Jerry will continue to be a loan owed to Jerry by Ashley. 6. Subject to clause 7 below, no repayments of the Principal Sum or any part thereof shall be required until the Property is sold or transferred. 7. In the event of a separation or divorce between Ashley and her husband, Anthony Anjoul, then the amount outstanding to Jerry, calculated in accordance with clause 4 herein, is due and payable immediately to Jerry, whether or not the property is sold. Jerry may commence recovery proceedings to recover the amount outstanding to him. 8. Jerry may at any time lodge a Caveat over the property to record his interest under this Deed. 9. Ashley consents to the registration of a Caveat over the Property by Jerry, and agrees to execute or upon demand from Jerry, procure the execution, of a Caveat on the Property. In the event that the sale proceeds for the Property are insufficient to fully repay Jerry, then Jerry will not be required to provide a Withdrawal of Caveat over the Property unless Ashley consents to the registration of a caveat over some other suitable security to secure the balance then outstanding to Jerry. 10. The laws in force in the State of New South Wales govern this deed. 11. The parties have each had the benefit of obtaining independent legal advice regarding the content of this document, and have executed this agreement before their legal representative. 1. It will also be appropriate at this stage to note the following aspects of the deed. 2. It may be inferred that Jerry gave instructions to his solicitor for the purpose of preparing the recitals to the deed. Recital D described Jerry as a builder and plumber who "carried out a full renovation and rebuilding of the property". That description more closely resembles Ashley's case as to Jerry's involvement in the renovation than it does to Jerry's. Particularly in his cross-examination, Jerry tried to paint Ashley as the de facto project manager, who retained the contractors and suppliers, became responsible for their payment, and attended the site regularly to give instructions concerning the work to be done. As noted above, it was Ashley's evidence that she only went to the property on about four occasions during the renovation. 3. In so far as Recital E refers to the parties wishing to document their agreement, there is no evidence that Jerry and Ashley made any antecedent agreement to the deed. That by itself may have been of no consequence, as it is not unknown for parties to enter into deeds that appear to state that the deeds record agreements that have been made, when in reality it is the deed that records the only agreement between the parties. 4. However, it is material that there is no evidence of any real negotiation between Jerry and Ashley as to the terms of the deed. The Court must conclude that, whenever Ashley was first presented with a document that constituted the draft deed, that was the first time that she could have become aware of the terms that had been inserted in the document by Jerry's lawyer. 5. The statement in clause 3 that "Ashley had an opportunity to independently verify this amount", being the $700,000 for the cost of the works and materials paid for by Jerry, is plainly false as a statement of fact. 6. Jerry attempted to justify this statement in his 15 April 2020 affidavit at par 39 by saying that Ashley was able to verify the $700,000 figure because she had received invoices and she was able to verify the amount through the use of a quantity surveyor. 7. The suggestion that Ashley could have verified the $700,000 figure by using a quantity surveyor is, by reference to the timing and the cost that would have been involved, seemingly ridiculous. 8. In her evidence, Ashley denied that she received any invoices. That is a credible position for Ashley to have taken because the Court has not been provided with any invoices. Each of the three suppliers who were called by Jerry to give evidence said that they did not render invoices. Consequently, it would have been impossible for Ashley to verify the whole of the $700,000 figure on the basis of invoices. 9. Jerry did not give any evidence of providing a comprehensive explanation and justification to Ashley as to how the amount of $700,000 was made up. Equally, Jerry has not made any attempt to justify the $700,000 figure to the Court. As matters stand, the Court is unable to form a view as to the truth or reasonableness of the $700,000 figure. 10. Although Ashley was the sole registered proprietor of the property, it remains significant that the deed provided that Ashley was solely liable to repay Jerry, and that she would remain liable to him for any balance after the property had been sold. Furthermore, the deed gave Jerry an entitlement to lodge a caveat that he previously did not have. 11. Finally, the deed created the debt of $700,000 in a way that obviated the need for Jerry to substantiate the amounts that he had paid in cash or kind during the renovation of the property. The Caveat 1. It appears that, at the meeting with Mr Mawad on 31 October 2013, Ashley also signed a caveat that Jerry eventually caused to be lodged against the title to the property. Jerry signed the caveat on 14 November 2013. The caveat was apparently prepared for Jerry by Legal One. It claimed an "equitable interest" in the property by virtue of a deed of acknowledgement of debt dated 14 November 2013 between Jerry and Ashley. The facts relied upon were: The caveator carried out works to the property valued at approximately $700,000–. Mr Mawad's File Note 1. Jerry tendered a file note that was produced on subpoena by Mr Mawad that apparently relates to two meetings between Ashley and Mr Mawad on 31 October 2013. The file note is handwritten over three pages and is barely legible. The parties agreed to a transcription of most of the file note, which was in the following terms (Exhibit P5): 1 31/10/13 Morning @ 10:30 am Met w Ashly for 1 hour to discuss the deed of acknowledgement of debt. I told her that she does not owe the money but her husband but the property is in her name. She said she owns the property & that Jerry has paid "$700,000.00, towards the costs. She said that if it was not for Jerry there would not have a home. I told her if she separates from Anthony she will get nothing. She said that Jerry is owed the money & he has been extremely supportive. 2 She said that she needs his help especially that Anthony is in jail. I advised her that she should not sign the document. She said that she [query can't]. She said that Anthony will pay back the money when he is out. I advised her that if the property is sold & there is a shortfall in payment of the money Jerry can [query actually] bankrupt her. She wanted to sign then & there. I told her she should speak to Anthony & get back to me.. 3 She came back at 12:30 wanting to sign. - Signed her up [illegible] a quick acknowledgement - Told her that a caveat has been signed 1. The file note recorded that Mr Mawad advised Ashley that she did not owe the $700,000 to Jerry. It does not explain the basis of that advice. In particular, it is not known whether Mr Mawad took into account the effect of the Home Building Act. 2. The file note suggests that Ashley understood and accepted that Jerry had paid $700,000 towards the cost of the renovation of the property. 3. It also suggests that Ashley wanted to execute the deed both initially and at the second meeting on 31 October 2013. The Acknowledgement of Receipt of Legal Advice 1. During the meeting on 31 October 2013, Mr Mawad apparently arranged for Ashley to sign and date a document called "ACKNOWLEDGEMENT OF RECEIPT OF LEGAL ADVICE". The document was apparently not drafted by Ms Eid and must have been prepared by Mr Mawad. The wording of the document is as follows: I, Ashley Anjoul of [the property], did receive legal advice from Raymond Mawad of RM Legal with respect to the Deed of Acknowledgement of Debt for the sum of $700,000 in favour of Jerry Anjoul (my brother-in-law). I understand that by signing the Deed of Acknowledgement that I declare that I owe Jerry the sum of $700,000 plus interest compounding as per the CPI rates. I understand that a caveat will be lodged on the property by Jerry as security for the debt owing of $700,000.00. I freely, and voluntarily signed the deed of acknowledgement of debt as I truly owe Jerry the money being all costs of construction of [the property]. I understand if the property is sold in the future and there is a shortfall owing to Jerry then I will be personally responsible for payment of the shortfall sum and such sum will become a debt owing by me to Jerry. I understand that I have a first registered mortgage loan to Westpac in the sum of $400,000.00 approximately and that my property is worth approximately $1,100,000.00. I was advised by RM Legal that such acknowledgement is not a second registered mortgage where the sum of $700,000.00 is definitely guaranteed to be paid to Jerry if there is any litigation against me. I understand that if the caveat is created to defeat creditors, then the whole caveat may be held invalid by a court of law unless Jerry can prove and show evidence that he did in fact advance $700,000.00. 1. While the language of the acknowledgement is arguably expressed in somewhat extreme terms for a legal document ("I freely and voluntarily signed the deed of acknowledgement of debt as I truly owe…"), it is consistent with Ashley having a positive belief that she owed the $700,000 to Jerry. Absence of Mr Mawad 1. Mr Mawad was not called by either party to give evidence to the Court. 2. The Court was told by Jerry's counsel that both parties had subpoenaed Mr Mawad to give evidence, but each had decided not to call him. That was a forensic decision on both parties' part. 3. Jerry's counsel made assertions as to the inability of Mr Mawad to give evidence from recollection, and that the file note that had been tendered was the only material document from the documents produced by Mr Mawad on subpoena. The Court cannot act upon this information without Mr Mawad having been called and given the opportunity to explain his own position. It happens from time to time that parties are required to call witnesses in the position of solicitors to enable them to give evidence that they cannot recall relevant events, or to explain their filing system and usual practices. 4. I understand Jerry's position to be that it was Ashley's obligation to call Mr Mawad, as she retained him to advise her in respect of the execution of the deed. 5. On the other hand, Ashley claimed that Mr Mawad was the long-term Anjoul family solicitor, and that she had only attended upon him in respect of the execution of the deed because the appointments had been made on her behalf by Jerry. 6. As matters stand, the Court has been deprived of Mr Mawad's evidence on this subject, even in relation to whether he opened a file and whether he rendered a fee, and if so to whom did he send his account. Ashley's meetings with Mr Mawad 1. There are a significant number of uncertainties concerning how the Court should treat the evidence of Ashley's attendance upon Mr Mawad, as well as the documents that he apparently produced. 2. Jerry tendered the one file note apparently created on 31 October 2013 that recorded two attendances by Ashley on that date. There is no file note referring to the first attendance referred to by Ashley in her evidence. 3. There is no record in the file note that Jerry was present during the initial conference on 31 October 2013. It might be thought that Mr Mawad would have recorded Jerry's attendance if he was present, as it would be most unusual for a solicitor in Mr Mawad's position to attempt to give independent advice to Ashley in the presence of Jerry, who was the counterparty to the deed. 4. In the second paragraph of the file note, Mr Mawad records that he told Ashley that she did not owe the money. However, the additional words "but her husband put the property is (sic) in her name" seem to suggest that the reason why Ashley did not owe the money was something to do with Anthony having incurred the obligation to pay Jerry, and that the property being in Ashley's name was an ancillary matter. 5. There is no positive evidence that Mr Mawad advised Ashley about the possible application of the Home Building Act. As will be seen below, if Recital D to the deed had accurately described the manner in which the renovation of the property was carried out, the Act would have had the effect that Jerry would not have been entitled to recover the price of the works from Ashley. 6. It is unlikely that Ashley simply said that Jerry had paid $700,000 towards the costs of the renovation. It is now known as a fact that Jerry did not make payments as such in that amount. Ashley had no means of knowing that payments in that amount had been made. 7. There is no record in the file note of Mr Mawad interrogating Ashley, in order to obtain proper instructions as to what she knew about the payment for the renovations and how the amount of $700,000 had been substantiated by Jerry. 8. The acknowledgement of receipt of legal advice is also a strange document. From its terms, it looks more like it was drafted by Jerry's lawyer rather than Mr Mawad. 9. The acknowledgement records that Ashley freely and voluntarily signed the deed as she truly owed Jerry the money, which must have been a substantial overstatement of what Mr Mawad could have known from his instructions. 10. Mr Mawad did not include in the acknowledgement a record that he had given Ashley advice that she did not owe to Jerry the amount of the debt that would be created by the deed. 11. Finally, it is notable that the acknowledgement recorded that the amount of the loan to Westpac was $400,000, and that the approximate value of the property was $1,100,000. Consequently, the debt of $700,000 acknowledged by the deed would equal the full amount of Ashley's 'equity' in the property. That, by itself, made the deed a dangerous document for a person in Ashley's position to execute. Credibility of the principal witnesses 1. The most significant forensic issue in this matter is the identification of the real arrangement made between the parties concerning how the renovation of the property would be managed, and who would be responsible for paying for the renovation. 2. That is a subject upon which each party's case diametrically diverged from the other's. In essence, Jerry claims that Ashley promised to him that she would pay for all of the renovations. According to Jerry, contrary to that arrangement, Ashley did not provide the necessary funds so that Jerry had to compensate contractors by providing cheques to Ashley to meet contractors' invoices or by providing plumbing services to contractors as contra deals in lieu of the contractors being paid for their services in cash. Jerry's case was that he or his companies did limited parts of the renovation works and that, apart from Jerry providing advice to Ashley, Ashley project managed the renovation works, including by engaging contractors and managing the progress of the works. 3. The contrary case put by Ashley was that Jerry was a builder and plumber who carried out extensive renovations to the property, consisting of a full renovation and rebuilding of the property. This description of Jerry's involvement is taken from Recital D to the deed. Ashley's case was that she only visited the property on about four occasions during the course of the renovation works. According to Ashley, all of the design decisions were made by Anthony, save for a few trifling items. 4. The case propounded by Jerry conformed with his objective of enforcing Ashley's liability to pay him $700,000 plus CPI increases under the deed, and accordingly, Jerry sought to establish that Ashley was responsible for the project management of the renovation and had failed to reimburse Jerry for the costs of the renovation that had been met by Jerry in cash or by the provision of services both in the renovation and as contra deals to contractors. 5. Ashley's objective in the proceedings has been to establish an entitlement to retain ownership of the property without any obligation to pay any amount for the substantial renovation that took place. In order to escape any liability for the cost of the building works, Ashley sought to establish, for the purposes of the Home Building Act, that the renovation involved residential building work for which there was no written contract between Ashley and Jerry nor the necessary insurance so that Jerry was precluded by the Act from recovering the costs of the renovation works from Ashley. Ashley was aided in this endeavour by the description of Jerry's involvement in the renovation of the property set out in the recital to the deed. 6. The Court is faced with the necessity to determine whether either of these versions of the manner in which the renovation works were carried out is correct, and if not, what the reality was if that can still be determined. 7. That leads to the question of the credibility of the principal witnesses and whether the Court is able to prefer one version over another because it is prepared to accept the evidence of the witnesses on one side of the case in preference to the evidence given on behalf at the other. 8. It will be convenient to record, before I examine the evidence given by each witness, that all of Jerry, Anthony and Ashley appeared to me to give their evidence in a satisfactory manner, in respect of their demeanour and their responsiveness to the questions that they were asked in cross-examination. None of the three witnesses gave their evidence in a manner that caused me to conclude that the Court could confidently make findings based solely on the word of the witnesses, particularly where there was a possibility of inconsistency with the objective evidence. Though this is not a case where the Court could properly prefer the witnesses for one party over the other party's witnesses based on the manner in which the witnesses gave their evidence. Jerry's evidence 1. Jerry's case depended upon at least a substantial number of contractors and suppliers providing tax invoices that were paid by means of Jerry providing cheques on his accounts and giving those cheques to Ashley for the payment of invoices. 2. However, as recorded above, not a single invoice was tendered in evidence, and the three contractors or suppliers who were called to give evidence said that they were compensated by a barter arrangement with Jerry. 3. Even though the debts that Jerry claimed were paid by cheques drawn on his account were in respect of invoices allegedly issued in about 2009, it is strange that Jerry retained none of the invoices, if he understood the arrangement with Ashley was that, in due course, she would reimburse him for the money that he outlaid. 4. Jerry made no attempt at all in his evidence to substantiate the value of the work that he or his companies did in the renovation of the property or to compensate contractors by contra deals for the work that the contractors did or for the materials supplied. 5. I find Jerry's claim that Ashley project managed the renovation of the property to be questionable at best. Ashley was a young woman with a full-time administrative job. There was no evidence that she had building construction or program management experience. I do not accept that Ashley could have spent the time onsite necessary to engage and manage all of the contractors whose work was required, or to order all of the necessary materials. 6. Jerry's reliance on the list of payments that he claims to have made during the renovation of the property has also damaged his credibility. As mentioned above, the three contractors who gave evidence in Jerry's case all said that Jerry reimbursed them by providing services to them on a barter basis. Jerry had claimed that the contractors had issued invoices when they clearly did not. Jerry included relatively precise figures for the cost of the work done by the three contractors, without providing any explanation or verification of the amounts. Jerry provided no verification for the costs of the other contractors and suppliers, save to say that he prepared the list from notes that he had made from time to time but no longer has. As mentioned, Jerry accepted in submissions that some of the names that Jerry apparently subsequently added to the list of the contractors and suppliers were not accurate. The probative value of the list of payments is undermined by the manner in which it was produced and the lack of substantiation provided for it. 7. I also consider that it was to Jerry's discredit that he provided the draft deed to Ashley given his knowledge of Ashley's circumstances arising out of the incarceration of Anthony. The draft deed recited the manner in which Jerry had been involved in the renovation of the property in a way that was inconsistent with Jerry's evidence in these proceedings. The draft deed also falsely recited that Jerry and Ashley had already agreed that Jerry was entitled to be repaid $700,000. At the hearing, Jerry gave evidence that Ashley had agreed that she owed him for the cost of the works, but he did not give evidence that he explained to Ashley how the $700,000 was made up or that he provided her with any substantiation of his claim. Anthony's evidence 1. At the time the events relevant to these proceedings occurred, Anthony's interests were consistent with Ashley's, as the couple were married and the property was their family home. Since the time of those events, the couple have been divorced, and it is plain from the fact of Anthony giving evidence in Jerry's case, that his perception of his interests has changed. 2. Anthony, at T111.5, in response to a suggestion in cross-examination that the estimate of the cost of the renovation given to the Council of $45,000 was not a genuine estimate of the true costs, immediately responded by observing that the renovation was initially limited in scope, but it evolved and grew substantially over time. Anthony said that he gave the instructions to Mr Bennett that the estimated cost of the proposed works was $40,000, and said: … I did, because originally the renovation of the house isn't to what the plan is now. So the plans and the house now are two different things. 1. As it happened, when this evidence was given, I was looking at that part of the court book that contained the plans of the renovation works that were current at the time that the $45,000 cost estimate was provided to the Council. Anthony's evidence was disingenuous, as the $45,000 cost estimate was given at a time when the plans depicted the proposed renovation in substantially its final form. 2. Apart from the incident in Anthony's evidence concerning the significance of the $45,000 estimate of the cost of the renovation works to which reference has been made above, it is proper in assessing the credibility of Anthony's evidence to take into account the fact that he has been convicted of serious criminal offences for which he was imprisoned for a substantial time. The precise nature of the charges for which Anthony was convicted was not proved, but it is proper to infer that Anthony was prepared intentionally to commit serious offences against the criminal law, apparently at least including dealing in prohibited substances. 3. It is to Anthony's discredit that, as late as 24 May 2019, his trustee in bankruptcy had lodged an objection to Anthony's discharge from bankruptcy on the basis of his failure to comply with s 139U of the Bankruptcy Act 1966 (Cth), which required him to provide to the trustee after the end of each contribution assessment period during his bankruptcy particulars of various aspects of his income. That fact appears from a letter dated 24 May 2019 to Anthony from his trustee. 4. The aspect of Anthony's evidence that I found to be most significant was the almost complete absence of any explanation of his positive involvement in the renovation or any explanation of what he was doing at the time, if he did not give any significant assistance to the renovation. 5. It may be that this lacuna in the evidence suited both Jerry's and Ashley's cases in so far as each party tried to establish that the other was almost solely responsible for the conduct of the renovation. 6. In making that observation, I acknowledge that Ashley said at T172.21: "Anthony renovated the house. I lived with him." Ashley did not however, in any positive way, attempt to establish what Anthony's role was in the renovation of the property. 7. The Court is therefore left to speculate as to what Anthony's role was. The probability is that Anthony cooperated with Jerry in a substantial way in managing the renovation project, but it is not possible for the Court to make any objective findings concerning Anthony's role. 8. In this negative way, Anthony's credit was undermined by an almost total failure to explain his role in relevant events in circumstances where it is most likely that he had at least a significant role. Ashley's evidence 1. Although, as I have said, Ashley gave most of her evidence in an apparently credible manner, there are significant aspects of her evidence that I am unable to accept. 2. In relation to the development of the plans for the renovation, Ashley insisted that Anthony gave the necessary instructions to Mr Barakat: T165.21-40. Ashley said: "I gave him brief input, but he was dealing with Anthony." I have already referred above to the fact that this evidence is inconsistent with the evidence given by Mr Barakat. 3. Further, Mr Daou, the electrician, gave evidence that he did not take any instructions from Jerry, but that directions came from Ashley. Mr Daou said he met Ashley at the property to get initial directions, and thereafter on more than one occasion for further instructions. 4. The evidence given by Mr Barakat and Mr Daou was not challenged by Ashley by cross examination of those witnesses. 5. Ashley insisted that she did not complete the owner builder's course: T167.22, T168.24 and T168.37. There is no doubt that the owner-builder's certificate was issued to Ashley and that it specifically stated that Ashley had successfully completed the Australian Owner Builders Course. Ashley signed the application to NSW Fair Trading for the issue of a permit and wrote Leanne Ward's name and the Council's development application number on the application. As I have observed above, the fact that the permit was issued on the same date as the application suggests that Ashley made the application personally to NSW Fair Trading. 6. If Ashley did not do the owner builders course personally, then who did? It is difficult to conceive of how Anthony or Jerry, as the only persons likely to do so, could have procured the issue of the certificate on some fraudulent basis. In any event, Ashley did not suggest to either witness in cross-examination that they in some way had impersonated Ashley for the purpose of doing the course, or had induced Leanne Ward to issue a false certificate. 7. I am also unable to believe that a young woman in Ashley's position, whose first home in her own name was being substantially renovated, would only have visited the property on four occasions during the course of the renovation. 8. Furthermore, it is improbable that Ashley had the minimal role that she claimed to have had in the planning of the renovation and the choice of materials, fixtures and fittings. Ashley's evidence was that at the time of the renovation, she had a satisfactory relationship with Anthony, and she did not attempt to prove that Anthony's character was so overwhelmingly dominant that he excluded Ashley, as his wife, from having any significant choice in the design of the matrimonial home. 9. Ashley said that she did not discuss with Anthony who was paying for the renovation: T171.13. She said that she expected that Anthony was paying: T171.24. Ashley said that this was her belief notwithstanding her evidence that creditors were pressing Anthony for the payment of debts and that the property was purchased in Ashley's name because Anthony had a bad credit rating: T172.6. 10. I am willing to accept that Ashley may have thought that Anthony had some access to funds to contribute to the cost of the renovation of the property, but I am not prepared to accept that she was entirely ignorant of and did not discuss with Anthony the issue of how the cost of the renovation was to be paid. 11. I have set out above, under the extract of Mr Mawad's 31 October 2013 file note, a number of observations on apparent inconsistencies between the content of the file note and Ashley's evidence of her meetings with Mr Mawad. As Mr Mawad was not called to explain his file note and be available for cross-examination, I will limit the weight that I give to the information in the file note. However, it remains relevant to the consideration of the credibility of the evidence given by Ashley that her evidence was inconsistent with the file note in a number of serious respects. That must cast doubt on the accuracy of Ashley's recollection of the meetings, although the file note does not justify a complete rejection of Ashley's evidence on that subject. 12. It is also appropriate to take into account the fact that the evidence given as to Ashley's physical, emotional and psychological state at the time that she signed the deed would naturally have the effect of diminishing her capacity to understand and remember the events that occurred during her meetings with Mr Mawad. Consequently, some element of inaccuracy in Ashley's recollection might be expected and be consistent with Ashley having tried to give truthful evidence at the hearing. The Court's findings 1. As I have explained above, the parties have propounded diametrically inconsistent cases on most issues in these proceedings. The principal result of Jerry having portrayed Ashley as the project manager for the renovation of the property, and Ashley having portrayed Jerry as the building contractor who conducted the works without any significant reference to Ashley, is that there is a fundamental lacuna in the evidence. There is very little evidence about how the works were actually undertaken, who managed them, which contractors did the work, and whether the price for work done and materials supplied was paid in cash or kind. In particular, there was little evidence concerning the detail required in order to determine how the Home Building Act applied to the circumstances of the renovation. I refer in particular to the requirements under the Act for written contracts, contractors to have relevant licences, and for requisite insurances to be obtained and certificates of insurance provided. 2. I add that there was a myriad of inconsistencies between the evidence given by the primary witnesses that cannot effectively be resolved by undertaking a complex analysis of the evidence. On many issues, the available evidence does not permit the Court to find the existence of facts contended for by the parties, as the fact-finding exercise would require an impermissible degree of speculation in the absence of satisfactory objective corroboration. Renovation of the property 1. The property was renovated in a substantial and apparently satisfactory way with the effect that its value will have been significantly increased. 2. Jerry did not enter into a formal contract with Ashley and Anthony, or either of them, on the basis that he would carry out or manage the renovation work and they would pay him an agreed price for the work. Ashley did not lead evidence capable of establishing that she and Jerry entered into a contract that obliged him to perform the renovation works on the property and that entitled him to payment of a price for undertaking those works. 3. Consequently, if s 7 of the Home Building Act required the parties to enter into a written contract that satisfied that section, no such written contract was made. In these circumstances, s 10 of the Act would have the effect that Jerry would not be entitled to damages or to enforce any other remedy in respect of a breach of contract by Ashley. 4. In fact, Jerry entered into a family arrangement that I find was made with both Ashley and Anthony. The objective of that arrangement was that a substantial renovation of the existing house on the property would be undertaken and that the costs of the renovation would be minimised by Jerry and other persons known to the family within the community to which the family belonged providing their services at cost or reduced fees, and that in some instances the price of services and materials would be paid by contra deals performed by Jerry and his companies. 5. The arrangement should not be characterised as being a joint endeavour between Jerry and Ashley and Anthony, or either of them, in the sense in which that term is used in the context of the creation of constructive trusts when a joint endeavour ends and the benefit of the endeavour is distributed between the participants in an inequitable manner. The arrangement was not in any real sense joint as it was always intended by the parties that Ashley, and through her Anthony, would remain the sole beneficiary of the arrangement. Jerry would not gain any interest in the property, nor would he profit from the arrangement. His interest was to be reimbursed for his effort and expenditure by mutual arrangement with Ashley and Anthony. 6. It was not part of the arrangement that Jerry and his companies would provide their services, either in the renovation of the property or in contra deals, without any payment or reimbursement from Ashley and Anthony. It was not part of the arrangement that Ashley and Anthony would enjoy the renovation of the property for free. 7. It was equally not part of the arrangement that Ashley and Anthony would be expected to pay a market or retail price for the renovation work. Although the parties did not explore in the evidence the commercial implications of the contra deals, it is probable that the objective of those deals was that the beneficiaries would obtain the benefit of the services or materials supplied at cost, which would have implications for the profits made from the arrangements and the taxes payable. The result is that the actual cost of the renovation of the property was probably a substantial markdown on the price that would have been payable under a building contract with an unrelated commercial builder. 8. I find it to be more probable than not that, in an inchoate way, a term of the arrangement was that Ashley and Anthony would either from their own resources or from borrowing further finance contribute funds to the renovation as it went along, but for reasons not explored, they did not or were unable to do so. It is probable that Ashley and Anthony persuaded Jerry at the outset that they would be able to contribute funds, and that, when they did not do so, Jerry was faced with the choice of ceasing the renovation or finding ways to muddle through by contributing his own funds and the services of himself and his companies. Out of family loyalty, Jerry chose the latter course. 9. Ashley made no attempt to prove that she or Anthony had actually contributed any of their own funds towards the cost of the renovation. As noted, Ashley said that she understood that the renovation was being entirely funded by Anthony. On the other hand, Jerry provided no objective evidence of any payments that he made towards the cost of the renovation. I find this to be a strange outcome, as a substantial portion of the cost of a renovation of the magnitude of that which was undertaken in respect of the property should, I would think, have been for the cost of materials provided by independent suppliers such as Boral and Hy-Tec Concrete. It is more probable than not that a substantial proportion of the cost of the renovation was required to be paid to independent suppliers of materials in cash. 10. On this issue, I am concerned about the fact that Ashley said she believed Anthony was paying for the renovations, and Jerry said that he paid but has not provided any proof of payment. There is also a lacuna in the evidence as to whether Anthony made any payments, or whether his eventual bankruptcy had any connection with debts incurred in relation to the renovation of the property. 11. It is clear that the owner-builder certificate was issued to Ashley. The evidence requires a finding on the balance of probabilities that Ashley took the steps necessary to obtain the certificate and that she understood that she was making an application to NSW Fair Trading for the issue of an owner-builder permit. 12. The fact that the application to the Council for a development approval was made in the name of Anthony gives support to the relatively obvious conclusion that Ashley and Anthony cooperated, as a married couple, in the planning and conduct of the renovation of the property. 13. The objective of Ashley having obtained the owner-builder permit was that Ashley could undertake the renovation of the property without having to enter into a building contract with an independent builder that would have had the consequence that Ashley would have had to pay the builder's profit. 14. I find that Ashley was aware of the purpose for obtaining the permit and that she understood that she was at least nominally the owner-builder. It may be that Ashley delegated responsibility for implementing the role of owner-builder to Anthony or Jerry in some respects, but I find that Ashley was responsible as the owner-builder. By responsible, I mean that Ashley was aware that the renovation work was being undertaken on the basis that she was an owner-builder, even if in fact she elected to delegate her responsibility to Anthony or Jerry. 15. The manner in which the parties conducted the proceedings makes it impossible for the Court to make findings as to which persons actually made decisions or took the steps necessary in the project management of the renovation. Whoever took those steps had Ashley's de facto authority to do so. 16. The renovation works in respect of the property constituted "residential building work" within the meaning of s 3 of the Home Building Act. 17. Any plumbing work carried out by Jerry as part of the renovation works in respect of the property fell within the meaning of "specialist work" in s 3 of the Home Building Act. 18. In so far as Jerry by himself or through his companies provided plumbing services for the renovation of the property, he did so with the necessary contractor licence as issued under s 19 and required by s 4(1)(a) of the Home Building Act. 19. It is more probable than not that because of the arrangement that the renovation works in respect of the property were carried out on the basis that Ashley was an owner-builder, the arrangement between Jerry and Ashley was that, whichever of them took the physical steps necessary to acquire contractor services and materials, that was done upon the basis of a mutual intention that the contracting party was Ashley, and if Jerry was the party who physically entered into contracts with suppliers for those purposes, he was acting on behalf of Ashley as the owner-builder for the purposes of the renovation. 20. In respect of the unknown possibility that Ashley may in fact have left it to Anthony to cooperate with Jerry for the purpose of managing the renovation of the property, I am satisfied that Anthony will have acted with the authority of Ashley as the owner-builder. 21. There is no evidence as to whether all of the contractors who must have participated in the renovation works for the property had any licences required by the Home Building Act, but it has not been established that any part of the works was undertaken by unlicensed contractors. 22. There is no evidence as to whether any contractors who participated in the renovation works had any insurance that was required by the Home Building Act, or whether certificates of insurance were obtained and provided to any necessary persons. 23. There is no evidence as to whether Ashley as owner-builder in respect of the renovation works obtained any insurance in respect of the works. 24. The evidence only establishes in a general way the works carried out and the materials supplied for the renovation of the property. There is no reliable evidence of the cost of any part of the works carried out by Jerry or by contractors or in respect of materials supplied. 25. If in fact Jerry paid any contractors or suppliers of materials, he did not do so in performance of a contract with Ashley that obliged him to supply those benefits. Rather, he did so in order to meet obligations incurred on behalf of Ashley as owner-builder. There is no evidence of Jerry actually having made payments of this type. 26. In cases where Jerry or his companies provided plumbing or other services to contractors who had performed work or supplied materials for the purposes of the renovation works, those services were provided in order to meet obligations incurred on behalf of Ashley as owner-builder. Although there is some evidence that Jerry provided services of this type, there is no evidence of the objective cost of the provision of those services to Jerry. 27. As time went by after the completion of the renovation, Ashley and Anthony failed to provide any substantial reimbursement to Jerry for the services provided by Jerry and his companies, or for any actual payments that Jerry in fact made towards the cost of the renovation of the property. It may be that Ashley's and Anthony's expectations that they would be able to reimburse Jerry were impeded by the fact that Ashley was retrenched after she left work in order to start a family, as well as whatever the unexplained circumstances were that ultimately led to Anthony being made bankrupt. Whatever the reasons were, Ashley was left with the benefit of a fully renovated property and Jerry was left without any reimbursement. Execution of the deed 1. The deed was executed by Ashley on 31 October 2013, and by Jerry on 14 November 2013. That was after Anthony was arrested on 11 October 2013 and before Anthony was made bankrupt on 27 November 2013. 2. The case presented by Jerry in his initial affidavit of 29 June 2019 was that he initiated the process that led to the execution of the deed because he had become concerned that he would not be repaid, and because it appeared that Ashley and Anthony were having marital problems as Ashley had stopped attending family gatherings: pars 42 and 43. Jerry's evidence was that he raised with Ashley the fact that he had not been reimbursed for years and that he could lose everything that he had spent if the property was sold or if Ashley and Anthony split up. After Ashley responded that she was not working and had no money and could only repay him if she sold the house, Jerry said that he needed security and that he had been advised that Ashley should sign a deed acknowledging the debt and giving him security. According to Jerry, Ashley simply responded: "I know I owe you the money. I will sign a Deed." 3. I do not accept that Jerry's evidence accurately states the circumstances in which Ashley agreed to sign the deed. 4. Ashley said in par 116 of her 30 August 2019 affidavit, in response to Jerry's claim that he perceived that her marriage to Anthony was having problems: "I say that my marriage was having problems. I was attending family gatherings until sometime in early in 2018 after the official separation between Anthony and I". The context suggests that Ashley intended the word "not" be inserted before the words "having problems", but if that is so, the evidence was not corrected. More significantly, as between Ashley and Anthony, the dispute was whether the separation occurred in 2018 or August 2015 when, according to Anthony, the couple separated by Anthony beginning to sleep in a separate bedroom. The evidence therefore leaves open the possibility that Jerry detected some deterioration in the relationship between Ashley and Anthony in the period leading up to October 2013, but it is improbable that this perception was the real cause of Jerry's decision to obtain from Ashley the benefit of the deed. 5. I find that the primary trigger for Jerry's decision to pursue a request that Ashley enter into the deed was the arrest of Anthony in circumstances where he was incarcerated and it had become clear that he would be charged with serious criminal offences that could lead to a substantial period of imprisonment. Jerry did not pursue obtaining an acknowledgement of debt from Ashley for about four years after the completion of the renovation of the property. The fact of Anthony's arrest some three weeks before the execution of the deed by Ashley cannot be seen as coincidental. As Ashley had by that time been unemployed for a number of years, the potential incarceration of Anthony created a significant risk that the only one of the couple who might have been capable of reimbursing Jerry would be prevented from doing so for a considerable period. 6. The legitimacy of the deed must be determined having regard to the fact that its execution was procured by Jerry at a time when Ashley was required to deal with the practical and emotional consequences of the arrest of her husband for alleged serious criminal offences. 7. This was a time when Ashley had no significant personal income, when she was responsible for the care and upbringing of two very young daughters, and when she would be obliged to meet the mortgage repayments by herself, or with the help of family, in order to maintain her home. 8. I have already expressed my finding that there has been no substantiation of Jerry's claim that he and his companies incurred costs in cash or kind in implementing the renovation in an amount of about $700,000. 9. Nonetheless, the renovation was obviously substantial and apparently completed to a satisfactory standard. A cost of $700,000 might be reasonable if the work had been carried out under a building contract with a commercial builder. It is more significant that there was no substantiation of the actual equivalent cost having regard to the objective of the work being undertaken as an owner-builder on the basis that much of the necessary work would be carried out by family or associates on a basis of less than market or retail cost. 10. Ashley was provided with the draft deed by Jerry after it had been drafted by his solicitor and without there being any prior negotiation between the parties. 11. Ashley was not given any substantiation of the claimed $700,000 cost and there was in fact no evidence available at the time that was capable of substantiating that cost. 12. I am prepared to accept that Jerry's ability to substantiate the cost by objective evidence was significantly compromised by the fact that he had participated in the renovation as part of a family arrangement undertaken on the basis of trust, where Jerry could reasonably have assumed that his claim would in part be accepted on the basis of trust, and where he could be confident that Ashley and Anthony would readily negotiate appropriate amounts for the reimbursement of services provided by Jerry and his companies either in the renovation of the property or by way of contra deals with contractors. Although, as I have already said, it is surprising that Jerry did not keep copies of invoices and his banking records, it is much less surprising that he may not have prepared comprehensive records of the time and expense incurred by Jerry and his companies in carrying out works directly or indirectly concerned with the renovation. 13. On the one hand, Jerry did not provide substantiation to Ashley of the $700,000 figure in the deed, but on the other hand, Jerry was let down by Ashley and Anthony in respect of his inability to do so because that inability was the result of Jerry's misplaced trust in Ashley and Anthony. 14. A significant effect of Ashley executing the deed is that she abandoned her entitlement to subject Jerry to the need to provide objective proof of the actual costs incurred by him and his companies in carrying out the renovation work. 15. One effect of Ashley executing the deed was that she acknowledged that Jerry was entitled to substantially all of the value of the 'equity' in the property, after allowing for the outstanding balance of the loan from Westpac secured by the mortgage on the property. 16. In so far as the deed provided that the amount to which Jerry became entitled under the deed was payable in the event of a separation or divorce between Ashley and Anthony, Ashley subjected herself to the risk that Anthony's decisions could trigger the obligation to pay the amount payable to Jerry under the deed. 17. The deed also placed the whole liability for the amount payable under it on Ashley and entirely relieved Anthony, in the event that the proceeds of sale of the property were not sufficient to pay the amount owing under the deed. 18. I find that Ashley's physical, emotional and psychological state at and about the time that she executed the deed was as described by Ms Olivier, as is set out above in these reasons. As mentioned, Ms Olivier was not required for cross-examination and her evidence was not challenged by Jerry. 19. Having accepted Ms Olivier's expert evidence, I am prepared to accept in substance Ashley's description of her physical, emotional and psychological condition at the time she signed the deed, as is specifically set out at [105] and [122] above. 20. It is difficult to make a judgment concerning how Ashley presented in her dealings with Jerry. Contrary to Jerry's claim that Ashley did not appear to be significantly disturbed by the events surrounding Anthony's arrest, I consider it to be more probable than not that Jerry in fact appreciated that Ashley was suffering from a profound emotional disturbance in her life. Even if Jerry was in fact entirely insensitive to this reality, he was well aware that events had occurred that would naturally cause extreme shock and distress to an unemployed young wife and mother. 21. As a result of the fact that Mr Mawad was not called by any party to give evidence, the findings that I am prepared to make concerning Mr Mawad's involvement in the circumstances in which Ashley executed the deed are necessarily limited. 22. As I have recorded above, Mr Mawad's file note of his first meeting with Ashley on 31 October 2013 suggests that Ashley knew and accepted that Jerry had paid $700,000 for the renovation of the property and that he was entitled to be reimbursed. 23. However, as mentioned above, Ashley's physical, emotional and psychological state at the time was such as to make it difficult to attribute any conclusive significance to Ashley's apparent willingness to sign the deed. It is possible that she did so in order to protect her interest in the property from the consequences of Anthony's criminal behaviour, or because she trusted Jerry's alleged assurance that he would not take any action that left Ashley and her children without their home. The evidence is not sufficiently reliable to justify the Court in making a positive finding on the balance of probabilities that Ashley was told to sign the deed to avoid the property being liable to expropriation by the Crime Commission, or that Jerry made a definite promise to Ashley that he would not exercise the rights given to him by the deed. 24. Mr Mawad's file note does provide some corroboration for Ashley's claim that she spoke to Anthony before she returned to Mr Mawad's office to sign the deed. It is probable that Anthony influenced Ashley to execute the deed, although given Ashley's own evidence concerning her emotional condition, I am not able to make an objective judgment concerning the level of insistence or menace adopted by Anthony. The fact is that Anthony was on remand and facing serious criminal charges, and it is probable that he was influenced by this concern. 25. There does not appear to be any reason consistent with Ashley's own interests for her to have signed the deed in favour of Jerry at such a difficult time, rather than to leave it until her circumstances better enabled her to consider her position objectively. 26. On the balance of probabilities, Mr Mawad did not give Ashley an adequate explanation of the legal and practical issues involved in Jerry being able to prove that Ashley was liable to pay him some amount for his involvement in the renovation of the property. 27. I consider that Ashley's apparent willingness to sign the acknowledgement of receipt of legal advice containing the statement: "I freely, and voluntarily signed the deed of acknowledgement of debt as I truly owe Jerry the money being all costs of construction of [the property]" tends to contradict, rather than support, a finding that at the time Ashley genuinely believed on objective grounds that Jerry had paid $700,000 towards the renovation, and Ashley understood that she was liable to pay that amount herself alone to Jerry. My reason for this observation is that Jerry provided no evidence in his case at all of any attempt to prove objectively to Ashley that he or his companies had paid $700,000. 28. Although there was no conventional evidence of the value of the property in October 2013, it is likely that Mr Mawad accurately recorded in the acknowledgement of receipt of legal advice that Ashley informed him that the property was worth approximately $1,100,000 and the amount of the loan owed to Westpac that was then outstanding was $400,000. The unexplained equivalence of the 'equity' of $700,000 and the value of the debt owed to Jerry of $700,000 as expressed in the deed provides some rational support for the conclusion that the purpose of the deed was to protect the 'equity' rather than to acknowledge a debt freely and genuinely accepted by Ashley. Consideration 1. As Ashley admitted that she signed the deed, Jerry will be entitled to enforce the deed unless Ashley succeeds upon one of her claims that the deed is unenforceable or should be set aside as a result of the circumstances in which it was executed, or that for some other reason it does not have the effect contended for by Jerry. Does Ashley's liability arise under the deed? 1. Ashley made a submission that, even if the deed is enforceable, on its proper construction there is no debt of $700,000 payable by Ashley to Jerry. 2. This submission focused on the fact that Recital E referred to the parties wishing "to document their agreement regarding repayment to Jerry of the amount of $700,000", when the evidence established that there was no such prior agreement. Ashley also referred to the fact that clause 4 used the word "repaid" in respect of the amount of $700,000, and that the CPI increase was to be calculated on the basis "that the amount of $700,000 has been outstanding, commencing 1.1.2010". Ashley submitted that these references in the deed to events occurring before its execution were inconsistent with the evidence. 3. I do not accept Ashley's argument that these aspects of the deed have the effect that, on its proper construction, the deed did not oblige Ashley to pay Jerry $700,000. It explicitly did create this obligation. It is immaterial that Recital E may have been false in fact. If the deed is valid, then the content of Recital E will bind Ashley by an estoppel by deed. The deed will be effective in accordance with its terms even if those terms assume the existence of facts that are objectively untrue. 4. Ashley's subsidiary argument based on the words "then the amount outstanding… is due and payable immediately to Jerry" does not assist Ashley's argument, because it is possible that at the time of a separation or divorce between Ashley and Anthony some part of the $700,000 may already have been paid to Jerry. Does clause 8 of the deed create a charge over the property? 1. Ashley submitted that clause 8 of the deed on its proper construction did not grant a charge over the property to Jerry to secure the payment of the monies payable to him under the deed, so that Jerry did not have a caveatable interest to support the caveat that he has lodged against the title to the property. 2. It is convenient to repeat the terms of clause 8 of the deed, which provides: 8. Jerry may at any time lodge a Caveat over the property to record his interest under this Deed. 1. Ashley submitted that clause 8 merely conferred a right to lodge a caveat, and that the deed does not expressly charge the property with the amount claimed by Jerry. Ashley submitted that Jerry had no equitable interest in the property prior to the deed being signed. She relied upon the statements of principle in the Court of Appeal judgment in Ta Lee Investment Pty Ltd v Antonios [2019] NSWCA 24 at [92] to [98]. 2. The following matters are relevant to the question of whether clause 8 created a charge in favour of Jerry over the property. 3. First, clause 8 does not simply authorise Jerry to lodge a caveat. It expressly authorises him to do so "to record his interest under this Deed". If it were intended that Jerry's only interest was as an unsecured creditor, then the inclusion of clause 8 was otiose. The question of why it was included leads to the further question of what the interest was to which reference was made. The only sensible candidate is an implication that the interest was to be a charge created by the authorisation in clause 8. 4. The Caveat that was lodged by Jerry was signed by Ashley by way of consent to its registration. The Caveat claimed an "equitable interest" by virtue of the "Deed of Acknowledgement of Debt". The only rational way to interpret Ashley's act in consenting to the lodgement of the caveat is that she intended that a charge over the property would be created by the lodgement. 5. That this was Ashley's intention in fact is confirmed by the statement by Ashley in the Acknowledgement of Receipt of Legal Advice prepared by Mr Mawad where it is said: "I understand that a Caveat will be lodged on the property by Jerry as security for the debt owing of $700,000". Is clause 7 of the deed void as a penalty? 1. Clause 6 of the deed provided that, subject to clause 7, Ashley was not required to make any repayments under the deed until the property was sold or transferred. Clause 7 provided that, in the event of a separation or divorce between Ashley and Anthony, then the amount outstanding to Jerry would become due and payable immediately. 2. Ashley submitted that clause 7 is a penalty for the purpose of the doctrine of penalties and is therefore invalid, relying upon the Court of Appeal's decision in Kay v Playup Australia Pty Ltd [2020] NSWCA 33; (2020) 19 BPR 40,037 at [93], [96] and [99]. Ashley submitted that this case decided that the deprivation of an accrued contractual right can amount to a penalty for the purpose of the doctrine of penalties. 3. I reject Ashley's submission that clause 7 of the deed is an unenforceable penalty. First, as a matter of construction of the deed, clause 6 did not create in Ashley's favour an accrued contractual right only to have to pay the amount payable to Jerry under the deed at the time when the property was sold. Clause 6 is expressed to be subject to clause 7 so that, from the inception of the deed, the time for payment provided in clause 6 was subject to the possibility that clause 7 would require earlier payment, if the event stipulated in that clause occurred. The deed operated somewhat in the same way as some loan agreements that provide for repayment on stipulated dates in the normal course, but may include terms that accelerate the time for repayment if certain events occur that change the circumstances as between the lender and borrower. The events that trigger the acceleration of the repayment obligation may not involve any breach of a term of the loan agreement by the borrower. So also, in this case, the separation or divorce of Ashley and Anthony would not involve any breach of the deed, but would only change the circumstances relevant to the likelihood that Ashley would be able to pay the amount owing under the deed. 4. While it is true that in Kay v Playup Australia Pty Ltd, Brereton JA (with whom Macfarlan JA and Simpson AJA relevantly agreed) said at [93]: "In my opinion, therefore, the deprivation of accrued contractual rights can amount to a penalty for the purpose of the doctrine of penalties"; his Honour added (footnotes omitted): [94] A contractual provision may be said to be penal if its function is to operate in terrorem to induce performance (in respect of which phrase I respectfully agree with Staughton J's observation, in Export Credits Guarantee Department v Universal Oil Products Co, to the effect that it remains useful in identifying a true penalty, despite the dislike of the phrase expressed by Lord Radcliffe in Bridge v Campbell Discount Co Ltd, or as a punishment for default, in the sense that it imposes an additional or different liability upon default. The distinction of a penalty is twofold: first, it is collateral to the main promise and purpose of the contract; and secondly, it is intended to operate as a deterrent to failure to perform that main promise or purpose, by imposing an additional detriment on the obligor and conferring an additional benefit on the obligee in the event of default. 1. Clause 7 is not a penalty because it cannot properly be characterised as having the function of inducing performance of clause 6 of the deed. Is Jerry's claim unenforceable because of the Home Building Act? 1. Ashley submitted that, if it was otherwise valid, the deed did not oblige Ashley to pay any amount to Jerry because Jerry's claim for the price of the renovation works in respect of the property was unenforceable by operation of s 10(1)(b) and s 94(1) of the Home Building Act. 2. I accept that, if either or both of these provisions have the effect that Jerry's original claim against Ashley for remuneration and the costs of the renovation works was unenforceable, the claim could not be made enforceable by Jerry procuring Ashley to enter into the deed by which she made a separate promise to pay to Jerry the amount claimed by him. The sections of the Home Building Act have the effect that the contractor is not entitled to damages or to enforce any remedy under the building contract or in respect of any other right of action (including quantum meruit) irrespective of the particular legal arrangement, including the making of the deed in this case, that would otherwise oblige the homeowner to pay for the works. 3. Ashley's claim that s 10 of the Home Building Act applies was based upon the premise, for the purpose of s 10(1)(a), that Jerry had contracted to do residential building work that required a contractor licence within the meaning of s 19, when Jerry at the time was only issued with a licence as a plumber, drainer and gasfitter. Additionally, Ashley's case was based upon the premise that, for the purpose of s 10(1)(b), Jerry had carried out the residential building work under a contract to which s 7 applied, and that that contract was not in writing and did not have sufficient description of the work to which it related, as was required by s 7 of the Home Building Act. 4. Ashley's claim that s 94 of the Home Building Act applied was based upon the premise that a contract of insurance, as required by s 92, was not in force in the name of Jerry in relation to the renovation works. 5. It should be noted that, if s 94(1) of the Home Building Act operated to deny Jerry the right to recover the cost of the renovation works, by s 94(1A), the Court could permit Jerry to recover money in respect of that work on a quantum meruit basis if it considered it just and equitable to do so. This qualification, however, would not be relevant in the present case if s 10 of the Home Building Act imposed an absolute prohibition upon Jerry's entitlement to any remedy for non-payment by Ashley of the cost of the renovation works. 6. In this case, Jerry's own evidence was that he did not have a contractor's licence at the time, and there was no suggestion in the evidence that a contract in writing in the form required by s 7 of the Home Building Act was brought into existence between Jerry and Ashley. I also infer that Jerry did not do the residential building work constituted by the renovation of the property under a contract of insurance that complied with s 92 of the Home Building Act. 7. Ashley's case was substantially based on the content of Recital D of the deed, extracted at par 132 above. 8. Recital D describes the renovation works carried out by Jerry in expansive terms. However, on a proper construction, it does not recite that he did so under a contract with Ashley. Rather, it stated that Jerry carried out much of the work himself but added that he paid for other trades and materials. 9. I do not accept that the content of Recital D goes far enough to establish the criteria for the operation of ss 7, 10, 92 and 94 of the Home Building Act. Accordingly, even if the deed is found to be valid, Ashley's right to rely upon Recital D by reason of the principle of estoppel by deed would not be sufficient, by itself, to prove that the sections of the Home Building Act relied upon by Ashley had been activated. If the deed is set aside in accordance with the claims made by Ashley, then her right to rely upon an estoppel by deed would cease in any event. 10. On the evidence, Jerry did not carry out the renovation works in respect of the property under any contract between himself and Ashley. Nor was there any agreement that Ashley would pay Jerry for doing the renovation works as if he were a building contractor. 11. I do not accept that Ashley has established that the sections of the Home Building Act upon which she has relied apply to the residential building work that may have been done in the renovation of the property, in so far as that work may have been done by Jerry. 12. Ashley's case almost entirely ignored the fact that she was granted an owner-builder permit under s 30(1) of the Home Building Act. Ashley in substance denied undertaking the owner-builder's course or applying for the owner-builder permit, and said that she had no significant involvement in the project management of the renovation works and that she did not even make frequent visits to the property. 13. As I have explained above, both parties pursued relatively extreme cases. Jerry sought to enforce the deed though provided limited evidence of the circumstances in which the renovation works were done. Ashley's case was that Jerry fully carried out the renovation works with some possible, unexplained, involvement of Anthony. There was very little evidence as to how the renovation works were actually carried out, what the respective involvement of Jerry, Anthony and Ashley was, what contracts were entered into with third parties, and what payments were made or contract work done. 14. Nevertheless, I am satisfied that there was no contract between Jerry and Ashley, and that that fact must have been understood by Ashley. Even in the absence of evidence permitting detailed findings concerning the true nature of the arrangement, I am satisfied that it was understood as between Jerry and Ashley that the renovation works would be carried out on the basis that Ashley held an owner-builder permit. However much Ashley may in fact have delegated her responsibilities as owner-builder to Jerry or Anthony, she remained responsible, and I find that more probably than not she understood that she was the owner-builder. 15. As the holder of an owner-builder permit, Ashley was authorised by s 32 of the Home Building Act to do such residential building work as was described in the permit on the land specified in the permit, and was required to comply with the conditions applicable to the permit. 16. Section 32AA of the Home Building Act prohibited Ashley, as the holder of an owner-builder permit, from contracting with another person for the purpose of that person doing any residential building work (or any part of the work) for Ashley unless that person was the holder of a contractor licence to do work of that kind. 17. In so far as Jerry agreed to do plumbing work for Ashley, the requirement in s 32AA was probably satisfied as Jerry held the contractor licence relevant to that specialist work. There is no evidence as to whether or not any other contractors held the relevant contractor licences, but there is no reason for the Court to infer that they did not. 18. Section 92(1) of the Home Building Act, which prohibits a person doing residential building work under a contract unless the requisite contract of insurance is on foot and a certificate of insurance has been provided to the other party, extends by reason of s 92(6) to residential building work that is also owner-builder work. As I understand the operation of s 92 as it applies to residential building work that is also owner-builder work, the holder of the owner-builder permit is not required to obtain insurance complying with the Act in respect of the whole of the residential building work, but each contractor who does work under a contract with the owner-builder is required to obtain insurance that complies with the Home Building Act. 19. It may be doubted in the present case whether all or any of the contractors who did work as part of the renovation works on the property held the required insurance or gave the necessary insurance certificates to Ashley, or to Jerry on behalf of Ashley. Evidence concerning the circumstances in which such contracts were entered into, and whether they were directly with Ashley or with Jerry on behalf of Ashley is absent. There is some likelihood that the required insurances were not obtained, given that it appears that the objective of the parties was to undertake the renovation works on the basis of Ashley's owner-builder permit in the least expensive way possible. However, the state of the evidence leaves this question as a matter for speculation only. 20. Even if non-compliance by any of the contractors with the insurance requirement imposed by s 92(1) of the Home Building Act had the effect under sub-sec (2) that the contractors were prohibited from demanding or receiving payment under the contracts, the exception provided for in sub-sec (2) would entitle the contractors to recover money in respect of the work done on a quantum meruit basis under s 94(1A) if the Court considered it just and equitable to permit that recovery. 21. There is the further consideration that, to the extent that Jerry paid contractors for their work or provided contract plumbing services in exchange for work done by contractors, Jerry was satisfying claims that the contractors had against Ashley, rather than satisfying obligations that he owed in his personal capacity to the contractors. Though the evidence is scant on this subject, it is more probable than not that even if Jerry entered into contracts with contractors in his own name, he did so as agent for Ashley given that he did not have a builder's licence, that Ashley had an owner-builder permit, and that Ashley was the sole proprietor of the property. As such, Jerry's claims for reimbursement by Ashley for satisfying her obligations to contractors are not claims that are prohibited by the Home Building Act. 22. For these reasons, I reject Ashley's claim that the Home Building Act prohibits Jerry enforcing the deed if it is enforceable, or prohibits him from obtaining proper restitution if the deed is unenforceable. Should the deed be set aside, and if so on what terms? 1. Ashley claims that the deed should be set aside by order under the Contracts Review Act, or alternatively that it was entered into in circumstances that make it liable to be set aside by application of relevant equitable principles. 2. It will be convenient to make a number of observations, and to discuss the Court's findings generally relevant to the question of whether the deed should be set aside, before I address the terms of the Contracts Review Act and the applicable equitable principles. 3. As I stated above when setting out the facts that I have found, I am not satisfied that if the deed is set aside, Jerry would be entitled to an equitable interest in the property on the basis that Ashley holds the property partially on a constructive trust in favour of Jerry founded upon Jerry's contributions to the renovation of the property. As explained above, I do not think that it is realistic to describe the arrangement between Jerry, Ashley and Anthony as being that of a joint endeavour. In Muschinski v Dodds (1985) 160 CLR 583, Deane J said at 618: Both common law and equity recognize that, where money or other property is paid or applied on the basis of some consensual joint relationship or endeavour which fails without attributable blame, it will often be inappropriate simply to draw a line leaving assets and liabilities to be owned and borne according to where they may prima facie lie, as a matter of law, at the time of the failure… 1. In this case, the arrangement between Jerry and Ashley cannot properly be characterised as a consensual joint relationship or endeavour which has failed without attributable blame. 2. Jerry has not established his alternative case that Ashley make restitution to him in the sum of $743,353.45 because, if the deed is set aside, there is no persuasive evidence that the value of the renovation works carried out by Jerry was $743,353.45. That sum, in any event, is not the value of the renovation works, but the cost asserted, but not proved, by Jerry plus CPI increases to 2 April 2019. 3. Jerry may nonetheless be entitled to be paid some amount by Ashley to make restitution to him for the work done and materials supplied, as well as the value that his participation in the renovation added to the property. That entitlement is not to be considered in isolation from the fact that Ashley executed the deed. If Ashley establishes a ground for setting aside the deed, the Court may make an order to that effect conditional upon Ashley doing equity by paying a proper amount of compensation to Jerry. That is an issue that will be dealt with after the defences raised by Ashley have been considered. 4. Jerry has not attempted to quantify any alternative claim to his claim to be paid the $743,353.45 plus CPI increases until the date of judgment. There is a question as to whether Jerry should be given a further opportunity to try to quantify an alternative claim for compensation. Ashley has submitted that Jerry should not be given that opportunity and that he should have lead evidence to prove any alternative entitlement that he claimed at the hearing. That is also a matter that will be considered below. 5. As noted in the introduction to these reasons, Ashley pleaded that the deed should be set aside because her signature was a product of duress or undue influence or unconscionability, and that she signed the deed in reliance upon a representation by Jerry to the effect that the purpose of the deed was to protect the property from being seized by the NSW Crime Commission and that Jerry would never leave Ashley and her two children without a home. 6. It will be convenient to make a number of observations that will have the effect of narrowing the field of legal issues that must be considered in evaluating the defences raised by Ashley. 7. First, as I have not found the credibility of any of the three principal witnesses entirely satisfactory, I do not have the confidence to make findings that specific statements were made to Ashley by Jerry or Anthony where Ashley's evidence was that those statements were made, but where Jerry and Anthony have denied making those statements. Ashley has not satisfied me that Jerry and Anthony told her that she must execute the deed to protect the 'equity' in the property from the NSW Crime Commission. Further, I am not persuaded that Jerry assured Ashley that he would never leave Ashley and her two children without a home: see Watson v Foxman (1995) 49 NSWLR 315 at 318-319. 8. I am also not persuaded on the issue of the number of meetings Ashley had with Mr Mawad, whether or not Jerry was present at any of those meetings, or what happened at those meetings. 9. The issue of whether Ashley is entitled to an order setting aside the deed must be determined on the basis of more general considerations such as the fact that Ashley was not given proof that the renovation works had cost $700,000, that she was not given any real opportunity to negotiate, that she was unemployed and responsible for herself and her two young daughters, that her husband had been incarcerated and expected to be charged with serious criminal offences that might lead to a lengthy period of imprisonment, and that this all understandably created in Ashley the physical, emotional and psychological turmoil that I have found existed at the time. 10. The issue must also be determined having regard to the fact that it was not in Ashley's interests to sign the deed, at least unless and until she was given independent advice that she was liable to pay Jerry some amount that had been objectively established and agreed. It might then have been in Ashley's interests to have signed the deed, as it gave her some forbearance of the need to make payment until the property was sold, or Ashley and Anthony separated or divorced. Even then, there would be a question as to why separation or divorce should trigger the obligation to make payment, and why the obligation should fall solely on Ashley. In the circumstances, it is more probable than not that it was Anthony's arrest and prospects of long-term imprisonment that triggered Jerry's campaign to persuade Ashley to sign the deed. Application of the Contracts Review Act 1. It will be appropriate to set out the material terms of the Contracts Review Act as well as a brief consideration of how those terms are to be applied. First, s 7 sets out the relief that may be ordered: 7 Principal relief (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part, (c) it may make an order varying, in whole or in part, any provision of the contract, … (2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order. … 1. Where the Court is satisfied that relief may be given under the Contracts Review Act, it is empowered to grant ancillary relief as follows: 8 Ancillary relief Schedule 1 has effect with respect to the ancillary relief that may be granted by the Court in relation to an application for relief under this Act. 1. The ancillary relief that may be relevant to the circumstances of the present case is as follows: Schedule 1 Ancillary relief 1 Where the Court makes a decision or order under section 7, it may also make such orders as may be just in the circumstances for or with respect to any consequential or related matter, including orders for or with respect to: … (b) the payment of money (whether or not by way of compensation) to a party to the contract, … and such orders in connection with the proceedings as may be just in the circumstances. 2 The Court may make orders under this Schedule on such terms and conditions (if any) as the Court thinks fit. … 1. Where the Court finds that a provision of a contract was unjust in the circumstances at the time it was made, the Court may refuse to enforce the contract or declare it void in whole or in part. If such an order is made, the Court may, as an ancillary order, require a party to the contract to make a payment of money to the other. The Court may also make such other ancillary orders as it thinks just in the circumstances. 2. Section 9 of the Contracts Review Act sets out a list of matters that are to be taken into account in determining whether the provision of a contract is unjust in the circumstances relating to the contract at the time it was made. It is mandatory for the Court to have regard to the public interest and to all the circumstances of the case. Section 9(2) requires the Court to have regard to specified matters to the extent that they are relevant to the circumstances, but the list of matters is given on a non-exclusive basis. The relevant parts of s 9 are: 9 Matters to be considered by Court (1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: (a) whether or not there was any material inequality in bargaining power between the parties to the contract, (b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation, (c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract, (d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract, (e) whether or not: (i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or (ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented, because of his or her age or the state of his or her physical or mental capacity, … (h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act, (i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect, (j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act: (i) by any other party to the contract, (ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or (iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract, … 1. In West v AGC (Advances) Ltd (1986) 5 NSWLR 610 at 619-620, McHugh JA said: Section 7(1) of the Act provides that, where the Supreme Court "finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result" make certain orders or refuse to enforce the contract. Section 4 defines "unjust" to include "unconscionable, harsh or oppressive". Injustice has a corresponding meaning. In determining whether a contract or a provision of the contract is unjust for the purposes of s 7(1), the court is directed by s 9(1) to "have regard to the public interest and to all the circumstances of the case" including the consequences or results arising in the event of compliance or non-compliance with any provision of the contract. Section 9(4), however, directs that the court shall not have regard "to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made". Section 9(2) sets out specific matters to which, to the extent that they are relevant to the circumstances, the court is to have regard. They include for present purposes whether there was any material inequality in bargaining power between the parties; whether the contract was subject to negotiation or whether it was reasonably practicable to negotiate for the alteration or rejection of any provision; whether or not any provisions of the contract were reasonably necessary for the protection of the legitimate interests of any party; the relative economic circumstances, educational background and literacy of the parties to the contract (other than a corporation); whether or not and when independent legal or other expert advice was obtained; the extent to which the legal and practical effect of the contract was accurately explained; whether undue influence or unfair pressure or tactics was exerted; the conduct of the parties in relation to similar contracts or courses of dealing to which any of them has been a party; and the commercial setting, purpose and effect of the contract. In determining whether it is just to grant relief in respect of an unjust provision the court may also have regard to the conduct of the parties to the proceedings "in relation to the performance of the contract since it was made" (s 9(5)). 1. A contract or a provision of the contract may be shown to have been unjust at the time it was made without it being demonstrated that it was unconscionable: see for example Elders Rural Finance Ltd v Smith (1996) 41 NSWLR 296 at 302 per Mahoney P. Although some of the factors described in s 9(2) of the Contracts Review Act are such that it would necessarily be clear to the party against whom an order is sought under the Act that the factor existed, the Act does not expressly require that the party be aware of the factor: see for example West v AGC (Advances) Limited (above) at 620; Antonovic v Volker (1986) 7 NSWLR 151 at 156; Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41 at [76] and [115]-[119]; (2005) 14 BPR 26,639 at 26,652 and 26,658-9and Ford bht Watkinson v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR 42 at 66-7. 2. In Suncorp-Metway Ltd v Bellairs [2009] NSWSC 135 at [57], Rothman J held, by reference to authority: "Ultimately, the terms of the contract must, either by their very nature or by the circumstances that gave rise to them be contrary to the ordinary standards of fair play". Strictly, it is the contract or a provision of the contract that must be unjust, not the conduct of one of the parties in procuring the contract. However, as some of the factors listed in s 9(2) demonstrate, the nature of the conduct of the party against whom the order under the Contracts Review Act is sought may justify a finding of unjustness. 3. There is authority for the proposition that the Court should grant such relief as is the minimum necessary to avoid the injustice: see Esanda Finance Corporation Ltd v Tong (1997) 41 NSWLR 482, Verduci v Golotta [2010] NSWSC 506 at [53] and [66]; (2010) 15 BPR 28,865 and Big Kahuna Holdings Pty Ltd v Kitas [2012] NSWSC 615 at [149]. 4. Ashley claimed in par 26 of her cross claim that the deed in its entirety was unjust in the circumstances and should be set aside. 5. The circumstances upon which Ashley relied to establish the unjustness of the deed were listed in par 25 of the cross claim. 6. The factors in sub-pars 25(i) to (l) concern the fact that clauses 3 and 4 of the deed fixed the cost of the works and materials at $700,000 and required Ashley to repay that amount. Ashley claimed that the cost was not in fact $700,000, that she had not in fact reached an agreement to that effect with Jerry, and that she did not have an opportunity to independently verify the amount. 7. I find that the provisions of the deed fixing the cost at $700,000 and requiring Ashley to pay that sum to Jerry in the circumstances set out in clause 7 were unjust at the time the deed was entered into within the meaning of s 7 of the Contracts Review Act. 8. That is primarily because the deed recorded that Ashley had agreed to the cost of $700,000 when she had not done so, when she was not given an opportunity to negotiate an agreement as to the cost, when she was not given any substantiation of the cost, and when in fact the evidence does not establish that any adequate substantiation existed at the date the deed was made. 9. In terms of the factors listed in s 9(2) of the Contracts Review Act, I find that, because of Ashley's physical, emotional and psychological condition, there was a material inequality of bargaining power between Jerry and Ashley (see s 9(2)(a)); the provisions of the deed were not the subject of negotiation before it was executed (see s 9(2)(b)); and it was not reasonably practicable for Ashley to negotiate for the alteration of the terms of the deed or reject its provisions (see s 9(2)(c)). I also consider that Ashley's circumstances had the effect that she was not reasonably able to protect her interests (see s 9(2)(e)(i)). Although it does not seem that, in the strict sense, Jerry exercised undue influence over Ashley, the circumstances justify a finding that Jerry exercised unfair pressure or unfair tactics in causing Ashley to enter into the deed at the time that he did (see s 9(2)(j)(i)). 10. Because of the incomplete nature of the evidence concerning Mr Mawad's involvement in the transaction and the advice that he may have given to Ashley, I make no findings about the application of s 9(2)(h) or (i) of the Contracts Review Act. 11. There is also a basis for concluding that the provision in clause 7 requiring Ashley to pay the $700,000 to Jerry if she and Anthony separated or divorced, whether or not the property had been sold, was also unjust. Equally, it might be argued that clause 7 was unjust in so far as it obliged Ashley alone to pay the $700,000 to Jerry, even if the price of the property when sold was not sufficient to pay that amount after the prior repayment of the mortgage secured on the property. 12. However, it is not necessary to make separate determinations concerning whether any provisions in the deed, other than those that provide for the payment of the $700,000, are separately unjust in the circumstances in which they were included in the deed. If the Court refuses to enforce the provisions in the deed relating to the $700,000 payment under s 7 of the Contracts Review Act, or declares those provisions void, then the whole of the deed will cease to have any operative effect, and consequently the logical result would be for the Court to decline to enforce the whole of the deed, or declare it wholly void. 13. It follows, for completeness, that I accept that the evidence establishes a number of the other factors relied upon by Ashley as listed in par 25 of the cross claim. Using the sub-paragraphs in the cross claim, I accept that (a) Ashley had not previously been provided with a copy of the deed; (b) the provisions of the deed were not the subject of negotiation; (e)(ii) and (iii) Ashley suffered from acute reactive anxiety and depression and was tired, nervous, sad and scared, and found it difficult to concentrate. It may also be legitimate to find (h), that Ashley was fearful that if she did not sign the deed, she or her family may be harmed. 14. Because, for the reasons that I have set out above, I have generally not been prepared to accept aspects of Ashley's evidence where it is required that the Court take her at her word in relation to specific events for which there is no corroboration, I am not prepared to find that (c) Ashley did not read the deed; (e)(iv) Ashley was unable to comprehend or understand the advice given to her in relation to the deed; (f) Ashley had not received independent legal advice; or (g) Ashley relied upon Jerry's representations. 15. The final factor relied upon by Ashley, as stated in par 25(m) of the cross claim, was that Jerry was not entitled to recover any money in respect of the building works because he did not have a contractor licence as required by ss 4 and 5 of the Home Building Act, and he did not have insurance as required by s 92 of that Act. 16. As I have found that Ashley has not made out her case that the amount claimed by Jerry is not recoverable because of the operation of the Home Building Act, this factor is not directly relevant to the issue of whether any aspect of the deed was unjust for the purposes of the Contracts Review Act. 17. I conclude that the Court should make an order that will have the effect that the deed is not enforceable in its terms against Ashley. Application of equitable principles 1. Ashley's reliance upon duress does not involve a suggestion that Jerry's conduct induced in Ashley a fear that paralysed her will and deprived her of the capacity to freely decide whether or not to sign the deed, in the sense that duress is understood at common law. 2. Ashley does not claim that there was a relationship of influence between Ashley and Jerry such that a presumption arises that Ashley signed the deed under the undue influence of Jerry. 3. It will be convenient to set out the submissions made on behalf of Ashley, in par 6 of her response to Jerry's supplemental outline of closing submissions, in order to understand the basis of Ashley's case that equitable principles justify the making of an order that the deed be set aside: a. relief on the ground of 'unconscionable conduct' is usually taken to refer to the class of case in which a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from some special disability or is placed in some special situation of disadvantage… Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will be granted when such advantage is taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his best interest: Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, Mason J at 461. At 474-475 Deane J explained the nature of special disadvantage, its significance to a finding of unconscionable conduct and the principles relating to undue influence. b. The defendant was under a special disability and at a situational disadvantage. The plaintiff was aware of the defendant's special disability and situational disadvantage. The defendant's husband was in custody on criminal charges. She was unsure and concerned about her, her husband's and their children's future. She was solely responsible for their infant and 2½ year old daughter. This disability and situation was known to the plaintiff. There was an absence of any reasonable degree of equality between them. The Deed purported to impose a considerable liability on the defendant. The circumstances and haste in which the Deed was thrust upon the defendant would have pointed in the mind of a reasonable person in the position of the plaintiff that she did not have the opportunity to give proper consideration to the Deed: Lopwell Pty Ltd v Clarke [2009] NSWCA 165 at [57] c. The evidence objectively establishes that the Deed ought to be set aside on the grounds of undue influence (actual or presumptive) and unconscionable conduct based on an unconscientious taking advantage of the defendant's special disability or special disadvantage. 1. I am not satisfied in the present case that Ashley has established, to use the words of the learned editors of Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (5th ed 2014, LexisNexis Butterworths) at [15-105], that Jerry 'had come to occupy or assume a position of ascendancy, power or domination over Ashley and that Ashley had taken a position of dependence or subjection'. In my view, evidence of that power relationship is missing. I therefore do not accept in this case that a relationship of influence, as such, existed between Jerry and Ashley, so that there is a presumption that Ashley signed the deed while acting under Jerry's undue influence. 2. However, I am satisfied that the Court should set aside the deed as a catching and unconscientious bargain, in the sense explained in Meagher Gummow and Lehane at [16-010] as follows: The jurisdiction is a branch of the general equitable jurisdiction in fraud. It is raised 'whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands'. … It will be seen that the essence of these situations is (a) parties who meet on unequal terms, (b) the stronger party takes advantage of this, (c) to obtain a beneficial bargain. When this is shown by the weaker party, the onus will pass to the stronger party to show that the conduct was fair, just and reasonable… Some expansion in these principles occurred in Amadio's case, where the majority of the High Court (Mason, Wilson and Deane JJ) held that it was sufficient to attract their operation that instead of actual knowledge of the plaintiff's special disadvantage in relation to an intended transaction the defendant was merely aware of the possibility that the situation might exist or of facts that would raise that possibility in the mind of any reasonable person; in either case equity will intervene if the defendant takes unfair advantage of a superior bargaining power or position by entering into that transaction… Mason J in Amadio's case was at pains to emphasise that the mere circumstance that there was some difference in the bargaining power of the parties was not enough; 'the disabling condition or circumstance [must be] one which seriously affects the ability of the innocent party to make a judgment as to his own best interests'… Those decisions also confirmed that what was required was a precise examination of all of the salient facts, rather than seeking to place the case into any particular category; as Gleeson CJ said in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd, although categories may be adopted as a convenient method of exposition of an underlying principle, they may be misunderstood and so come to supplant the principle. 1. I am satisfied that the circumstances as I have found them above establish that, in the period leading up to her signing of the deed, Ashley was at a special disadvantage in dealing with Jerry. Jerry took an unconscientious advantage of Ashley's special disadvantage, particularly in so far as he gained a secured right to be paid $700,000 plus CPI, without having to prove the cost or value of the work done or materials supplied by him. Jerry was fully aware of most of the objective circumstances that put Ashley at a special disadvantage. Jerry must have known, or reasonably expected from the objective circumstances, that Ashley suffered from a seriously reduced physical, emotional and psychological condition. I do not accept that Jerry was unaware of Ashley's distress. 2. The evidence put before the Court was inadequate to persuade me that Ashley received effective independent legal advice from Mr Mawad that obviated the effect of her special disadvantage. Mr Mawad's file note and the acknowledgement of receipt of legal advice are not sufficient, without substantial further elaboration by Mr Mawad, to establish what advice was given to Ashley or its adequacy. 3. It is pertinent at this point to note the following statement of principle in Meagher Gummow and Lehane at [16-035], as it is relevant to the terms upon which the Court should make an order setting aside the deed: … The equity which arises once an unconscionable dealing is established may in some circumstances be satisfied only by setting aside the entire dealing… In other cases, the equity will be satisfied by less: by partial rescission, or imposing a term that the plaintiff do equity. 1. I therefore find that Ashley has established her case for an order that the deed be set aside in equity on the ground that it was procured by Jerry taking unconscionable advantage of a special disadvantage from which Ashley suffered at the time she executed the deed. Should a condition be imposed on the order setting aside the deed? 1. Ashley has succeeded in establishing that the deed was an unjust contract for the purposes of s 7 of the Contracts Review Act. The deed is thus liable to be declared void. Ashley has also succeeded in her case that the deed ought to be set aside in equity. 2. If orders to that effect were made by the Court without qualification, Ashley would enjoy the whole benefit of the renovation works in respect of the property without being required to make any payment. 3. The Court has power under s 7 of the Contracts Review Act to vary the deed rather than to set it aside, and the ancillary power of the Court under s 8 would extend to the Court making such orders as may be just in the circumstances, including with respect to the payment of money to a party to the deed. I have referred above to the proposition that the Court should grant such relief as is the minimum necessary to avoid the injustice. 4. Equally, where the Court is justified in setting aside an agreement on the ground that it is an unconscionable dealing, equity may impose a term that the party seeking the order do equity. 5. The question is whether, in the present case, justice requires that the Court only order that the deed is void, or that the Court order it be set aside on the condition that Ashley pay Jerry some appropriate amount of compensation for his effort and expenditure in the conduct of the renovation works. 6. In his amended statement of claim, Jerry included a claim that Ashley make restitution to him, but he only did so in the amount that would have been payable to him if the deed had been declared to be valid and enforceable. 7. Jerry sought to quantify his entitlement by relying upon the schedule of costs that is discussed above at [69] and [70] and following. The evidence relied upon by Jerry was not sufficient to establish that the payments made by Jerry from his own funds, and the value of the work done by him either in respect of the renovation works on the property or in contra works for contractors who were not paid by Ashley, were in the amounts set out in Jerry's schedule. Yet it is the case that the schedule was admitted into evidence. 8. I am satisfied that, in principle, Ashley should not enjoy the whole benefit of the renovation works for nothing, and that Jerry ought to be paid some reasonable amount of compensation for his expenditure and efforts. The issue is whether Jerry should be wholly denied that compensation because he did not satisfactorily prove the appropriate amount of the compensation at the hearing that has been concluded. 9. Ashley has strenuously opposed the proposition that Jerry should be given any further entitlement to quantify an appropriate amount of compensation. She takes the stance that it was for Jerry to make out his alternative case for compensation and to quantify the appropriate amount at the hearing. Ashley submits that as he has not done that, the proper course for the Court to take is to simply dismiss Jerry's claim. 10. There are a number of reasons why I am not at this time prepared to take that course. 11. The first reason is that Ashley has come to equity but has never offered to do equity. Ashley's case was that the Home Building Act had the effect of excluding Jerry's right to receive any compensation, and Ashley has failed in that claim. 12. Ashley has not at any time proffered an alternative basis for Jerry to receive any compensation, or made any offer to compensate him. 13. As an ancillary matter, Jerry's solicitors made a request to Ashley's solicitors that Ashley give access to the property to a quantity surveyor retained by Jerry for the purpose of the preparation of evidence as to the reasonable cost of the work done in the renovation of the property. Ashley's solicitor rejected that request. That rejection had the consequence of inhibiting Jerry's ability to make out an alternative case for compensation to his reliance on the enforcement of the deed. Although it is true that Jerry did not implement the threat made by his solicitor that Jerry would file a notice of motion seeking an order that the quantity surveyor be given access to the property, it remains the fact that Ashley's denial of access to the property by the quantity surveyor was not in my view reasonable. 14. It is appropriate for the Court to take into account a number of factors relevant to the forensic reality of Jerry conducting an alternative case for payment of compensation to his case based upon the enforcement of the deed. 15. First, the substantial forensic effort necessary to conduct and defend the alternative case and the consequent legal costs incurred would have been wholly wasted if Jerry had succeeded in his primary claim for the enforcement of the deed, or Ashley had succeeded in her claim under the Home Building Act that Jerry was not entitled to recover any amount in respect of the renovation works for the property. 16. Secondly, the exercise in proving the payments made by Jerry and the value of the work done by him are inherently extremely complex. It is obvious that Jerry has been confronted by substantial forensic difficulties. That reality must be understood in the context that I have found that Jerry did not agree to participate in the renovation works at his own cost. It is more probable than not that Ashley and Anthony agreed to make the necessary payments for the renovation works given that the arrangement was that the various aspects of the works would be carried out in a way that reduced the costs as much as possible. Over a period of a number of years, Ashley failed to make any payments to Jerry, and as I have noted above, it is to some extent understandable that Jerry did not retain all of the records that he would have kept if the arrangement was at arm's length. Furthermore, it is possible that the passage of time during which Ashley did not make any payments towards the costs of the renovation works reduced the availability of records to Jerry. 17. I doubt that it was ever realistic for Jerry to attempt to quantify an alternative claim for reasonable compensation in the proceedings to date. That is because the cost of the forensic effort necessary to quantify the compensation would likely have been wasted unless the basis for the assessment of quantification was first established judicially. There are too many potential alternative ways to determine an amount of compensation that would be reasonable to justify Jerry being required to bring forth evidence at the hearing to quantify the potential different approaches to the determination of compensation. 18. The reality of this observation is in some respects demonstrated by Jerry's proposal in his final written submissions that the Court make case management orders for the assessment of equitable compensation to be paid by Ashley to Jerry as a condition to any order setting aside the deed. 19. In outline, Jerry proposed orders that an experienced professional quantity surveyor be appointed to "report on the reasonable costs and expenditure of works (Works) carried out or paid for by the Plaintiff/Cross Defendant at the property". Jerry proposed that the works be identified by reference to the scope of works in Annexure A to the proposed orders "and any other relevant documents". Jerry proposed an order that the quantity surveyor utilise "construction industry index figures and standard costs guidance (i.e., Rawlinsons or Cordell) for the relevant period under assessment". 20. The orders proposed by Jerry were in response to a suggestion made by the Court in submissions that it might be appropriate for the Court to entertain a further application for the quantification of an appropriate amount of compensation to be paid by Ashley to Jerry. 21. However, it is arguable that the proposed quantity surveyor's report will not by itself provide a proper basis for the determination of any compensation that Ashley should be ordered to pay to Jerry. The reason is that the quantity surveyor's report would determine a reasonable value for the renovation works on the basis that all contractors supplied services and materials on an arm's length basis. That basis is likely to a considerable extent to be inconsistent with the real arrangement between Jerry and Ashley as to how the renovation works would be carried out. That arrangement was that as much of the works as possible would be undertaken or paid for under arrangements that did not require Ashley to pay the full market price for the renovation. 22. It is not clear that it will remain possible for the Court to make orders for the continuation of the proceedings in a manner that will make the determination of a fair amount of compensation to be payable by Ashley to Jerry to be determined in a manner that is consistent with the application of s 56 of the Civil Procedure Act 2005 (NSW). It may be that forensic decisions made by Jerry during the course of the proceedings to date will impede the ability of the Court and the parties to conduct a cost effective and fair determination of a proper amount of compensation. 23. In these circumstances, I will not at this stage determine the question of whether the deed should be declared void or set aside unconditionally or upon a condition that Ashley pay an appropriate amount of compensation to Jerry. 24. I will give the parties an opportunity to make submissions on this subject after they have been given time to consider these reasons for judgment. For that purpose, I will arrange for my Associate to fix a time for a directions hearing to consider the future of these proceedings. 25. In due course, it will also be necessary for the parties to address the costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 May 2021