Perman v Wentholt-Dwyer [2004] NSWSC 48

New South Wales Supreme Court

CITATION : Perman v Wentholt-Dwyer [2004] NSWSC 48 HEARING DATE(S) : 2.2.04, 3.2.04 JUDGMENT DATE : 12 February 2004 JURISDICTION: Equity JUDGMENT OF : Brownie AJ DECISION : See paragraph 41.

CATCHWORDS : Equity - unconscionable conduct. Conveyancing Act 1919 LEGISLATION CITED : Evidence Act 1995 Environmental Planning and Assessment Act 1979 Chalmers v Pardoe [1963] 1 WLR 677 Nelson v Nelson [1995] 184 CLR 538,613 CASES CITED : Fitzgerald v F J Leonhardt Pty Limited (1997) 189 CLR 235 and 250 Morris v Morris (1982) NSWLR 61 Cadorange Pty Limited (In Liq) v Tanga Holdings Pty Limited (1990) 20 NSWLR 26 Giumelli v Giumelli (1999) HCA 10 PARTIES : Gwendolyn Edith PERMAN v Lisette Wilhelmine WENTHOLT-DWYER FILE NUMBER(S) : SC 5085/02 COUNSEL : R C Freeman - Plaintiff J Laucis - Defendant SOLICITORS : Baker Deane & Nutt - Plaintiff CC Law - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BROWNIE AJ

12 February 2004

5085/02 Gwendolyn Edith PERMAN v Lisette Wilhelmine WENTHOLT-DWYER & ANOR JUDGMENT 1 HIS HONOUR: The plaintiff claims to be entitled to a charge or lien over some land owned by the first defendant, whom I will refer to as the defendant (the second defendant, Commonwealth Bank of Australia, which was the mortgagee of the land in question, was dismissed from the proceedings earlier, and it will not be necessary to mention it again). On the plaintiff's case the defendant promised to give the plaintiff a life interest in respect of "portion 68", part of the land owned by the defendant and thereafter the plaintiff, in the expectation that she had or would obtain that interest, spent money and effort improving the property with the knowledge and acquiescence of the defendant. A claim made earlier, that the plaintiff had a life interest, was not pressed, presumably because of the provisions of s 54A of the Conveyancing Act 1919. 2 The defendant is now the registered proprietor of an estate in fee simple of the land in Folio Identifier 1/874893. As a matter of history this represents the consolidation of nine separate portions of land, mentioned in various deposited plans. It is 8.459 hectares, or about 20.9 acres in size, and it is bordered on the west by the Deua River, and on the east by Araluen Road. It is about 26 kilometres from Moruya. The nine portions were consolidated in 1998 in circumstances that I will mention later. The land is perhaps best described as bushland. 3 The plaintiff and the defendant were formerly good friends, but they have been estranged for some time now. The plaintiff went to live on portion 68 in 1986, and has lived there ever since, in a bus, subject to a qualification I will explain later. 4 The defendant bought what is now the consolidated land on a date which is not established, but no later than 1979. In that year she entered into an arrangement with a friend, Mr Fortescue. That arrangement permitted Mr Fortescue to occupy portion 68, and he constructed a building there. He left the area in 1981, and then the defendant entered into an arrangement with another friend Ms Deirdre Schofield. That arrangement permitted Ms Schofield to occupy portion 68, and she extended the building that Mr Fortescue had erected, cleared some of the land, and dug a pit toilet. Ms Schofield then left about 1985, and in conversations that occurred in 1985 and 1986, the defendant entered into an arrangement permitting the plaintiff to occupy portion 86. 5 The principal area of contention relates to the terms of the arrangement between the plaintiff and the defendant. On the plaintiff's case, she bought a life estate in portion 86 from the defendant for the sum of $5,040, which sum the plaintiff paid to the defendant in about March 1986. On the defendant's case, she made an offer to the plaintiff that the plaintiff could "live in Diedre's old house", on the same terms that Mr Fortescue and Ms Schofield had lived there, that is that each of the three of them (Mr Fortescue, Ms Schofield and the plaintiff) would pay "a bond" which the defendant would refund if and when they left, that the four parties would live amicably, treat the land with respect and not have any guns on the property. The "bond" was to be repaid at the discretion of the defendant upon each of Mr Fortescue, Ms Schofield and the plaintiff leaving the property, having complied with the other terms of the arrangement. The amount of the bond was $5,000 in each case. (Nothing turns on the difference between $5,000 and $5,040.) Each of the three arrangements was made orally. 6 I admitted evidence about the terms of the first and second arrangements (those with Mr Fortescue and Ms Schofield) on the basis that there was a dispute between the plaintiff and the defendant as to what had been said between them in 1985 and 1986 (there being no one else present at the time), and since on the defendant's case, the arrangement made between the defendant and the plaintiff represented a continuation or a replacement of the earlier arrangements, evidence as to the terms of the earlier arrangements might rationally affect the assessment of the evidence concerning the terms of the third arrangement: s 55 of Evidence Act 1995. 7 In 1979 the defendant and Mr Fortescue were friends. They were both potters. He said that he moved to the property to help the defendant build her home, a pottery kiln, and a workshop. He said that the arrangement was that he "bought the right to live there", spending time, money and material on her property, and acquiring some stability and a place to live and work. He could not afford to pay rent, but by agreement paid her $2,000 and agreed to pay a further $20 per week until he had paid a total of $5,000. Before he left the property in 1981, he had built what he had called a small studio. He did not know Ms Schofield but was vaguely aware that someone moved in to portion 68 after he left, and that the incoming person was buying the studio. The defendant paid him $2,000, he said in 1985 although in fact it seems that he was paid this sum in 1986, out of the $5,040 that the plaintiff paid to the defendant. Mr Fortescue said that he did not actually pay to the defendant the whole of the $5,000 that was payable, and he did not remember how much he did pay. Again, there was no exploration of this detail in his evidence. 8 The defendant said of her arrangement with Mr Fortescue that she told him that he could live on the land now identified as portion 68 if he paid her a bond which she would refund if and when he left and if he lived there amicably, treated the land with respect and did not use guns there. She said that he paid her $5,000, but that when he left she paid him back $3,000, which was all the money that she had available at the time; and she owed him $2,000. 9 In cross-examination he agreed that he had used the word "bought" and the word "buying" in his affidavit, but said that he "did not consider it to be a buy or a sell in some senses". He did not remember the word "bond" having been used, and said that he thought that the money he had paid was refundable if he left the property. He said that he understood from a conversation he had with the defendant that the defendant had sold the studio to Ms Schofield. Ms Schofield was not called as a witness. The defendant described her having come to an arrangement with Ms Schofield, generally using the same form of words as she had used in respect of the arrangement with Mr Fortescue. The defendant accented the used of the word "bond", whilst the plaintiff denied that it had been used, and Mr Fortescue disavowed its use. On the other hand, the plaintiff attributed to the defendant the use of the expression "life estate" and the defendant denied that, and denied having "sold" anything to any of Mr Fortescue, Ms Schofield or the plaintiff. 10 Both Ms Schofield and the plaintiff are painters, and, it seems, they used the premises as a place in which to work, whilst the defendant and Mr Fortescue worked as potters. The defendant has a dwelling on one part of the land formerly called portion 69. The evidence does not disclose any detail about that, except that it is perhaps about 200 metres (Mr O'Dea said 400 metres) from the dwelling that the plaintiff started to erect on portion 68; and there are trees between the two locations that affectively screen each of them from the other. Portion 68 is about three acres in size. 11 Mr Fortescue originally constructed "a small timber clad pole building consisting of one room and a veranda". Later, Ms Schofield extended that building, cleared some land in the area and dug the pit toilet. By 1985, about the time Ms Schofield left, the plaintiff knew the property as she was a friend of the defendant, and as a visitor. There were conversations between the plaintiff and the defendant in 1985 and 1986. According to the plaintiff, the defendant asked the plaintiff if the plaintiff was interested in buying "the land Deirdre is on", and the plaintiff understood this to be reference to what can now be identified as portion 68, although apparently neither party knew at the time of the precise location of the boundaries of the different portions, or the size of portion 68. The defendant says that she did not know the term "portion 68". The plaintiff said that she would like to buy the land. 12 Later, on the plaintiff's account, there was a further conversation concerning the "purchase" of the land. The plaintiff asked the defendant what she got for the asking price, $5,040, and the defendant said: "A life estate. You can stay here until you die. That is the arrangement that Andrew [Fortescue] and Deirdre had. I will change my will so that you can stay here for your life ".