Supreme Court New South Wales Medium Neutral Citation: Arambasic v Veza (No 4) [2014] NSWSC 1109 Hearing dates: 23 July 2014, 24 July 2014, 25 July 2014 Decision date: 18 August 2014 Jurisdiction: Common Law Before: Sackville AJA Decision: 1The claim by the second plaintiff (Dr White) against the Defendants be dismissed. 2Judgment for possession of the Property in favour of the first plaintiff (Mr Arambasic) against the Defendants. 3Judgment for Mr Arambasic against the Defendants on his claim for mesne profits. 4Judgment for second cross-claimant (Ms Veza) on her cross-claim against Dr White for damages for breach of contract. 5The Amended Cross-Claim otherwise be dismissed. 6Direct the Defendants to file and serve proposed additional short minutes of order within fourteen days, accompanied by brief written submissions, dealing with the following matters: (a) quantification of the damages (including interest) that should be awarded to Ms Veza on her claim against Dr White; (b) quantification of the amount that should be awarded to Mr Arambasic as mesne profits; (c) the period that should elapse before Mr Arambasic is given leave to issue a writ for possession of the Property; and (d) the costs of the proceedings. 7Mr Arambasic and Dr White, within a further fourteen days, file and serve proposed short minutes of order in lieu of those proposed by the Defendants, accompanied by brief written submissions as to the matters identified in Order 6. Catchwords: POSSESSION OF LAND - unregistered interest created by instalment contract of sale between registered proprietor and purchaser - instalment contract varied - registered proprietor transfers to a volunteer - whether volunteer fraudulent - whether volunteer takes title free from purchaser's unregistered interest CONTRACT - instalment contract for the sale of land - registered proprietor and purchaser agree to sell the land and divide proceeds - whether registered proprietor in breach of contract by declining an offer to purchase made by a third party and by transferring the property to a volunteer Legislation Cited: Conveyancing Act 1919 (NSW) Civil Procedure Act 2005 (NSW) Real Property Act 1900 (NSW) Cases Cited: Bahr v Nicolay (No 2) [1988] HCA 16; 164 CLR 604 Bogdanovic v Koteff (1988) 12 NSWLR 472 Chan v Cresdon Pty Ltd [1989] HCA 63; 168 CLR 242 Chang v Registrar of Titles [1976] HCA; 137 CLR 177 Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24, (1982) 149 CLR 337 Concut Pty Ltd v Warrell [2000] HCA 64, 176 ALR 693 Conlan (as Liquidator of Oakleigh Acquisitions Pty Ltd) v Registrar of Titles [2001] WASC 201; 24 WAR 299 Dan v Barclays Australia Ltd (1983) 46 ALR 437 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 Federal Commissioner of Taxation of the Commonwealth of Australia v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; 201 CLR 520 Gerard Cassegrain & Co Pty Limited v Cassegrain [2013] NSWCA 453; 305 ALR 612 Grey v Inland Revenue Commissioners [1960] AC 1 Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; 294 ALR 550 Khoury v Khouri [2006] NSWCA 184; 66 NSWLR 241 King v Smail [1958] VR 273 Maddison v Alderson (1883) 8 App Cas 467 McBride v Sandland [No 1] [1918] HCA 32; 25 CLR 69 PT Ltd v Maradona Pty Ltd (No 2) (1992) 27 NSWLR 241 Rasmussen v Rasmussen [1995] 1 VR 613 Regent v Millett [1976] HCA 40; 133 CLR 679 Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; 217 CLR 315 Willmott Growers Group Inc v Willmott Forests Ltd (Receivers and Managers appointed) (in liq) [2013] HCA 51; 304 ALR 80 Texts Cited: Peter Butt, Land Law, (6th ed 2010, Lawbook Co) Category: Principal judgment Parties: Steve Slobodan Arambasic (First Plaintiff/First Cross-Defendant) Jasmin White (Second Plaintiff/Second Cross-Defendant) Kaye Monique Veza (First Defendant/Second Cross-Claimant) Gary James Griffiths (Second Defendant/First Cross-Claimant) File Number(s): 2013/312662 Publication restriction: None Judgment 1SACKVILLE AJA: These proceedings arise out of transactions relating to a house and land located at Potch Street, Lightning Ridge (Property). There have been other proceedings between the parties in the Local Court at Lightning Ridge, but they have been discontinued. 2The parties to the present proceedings are as follows: * The first plaintiff (Mr Arambasic) is an opal cutter and has lived in Lightning Ridge for some time. He is the registered proprietor of the Property, but has never taken possession. Mr Arambasic became the registered proprietor on 3 January 2013, when he registered a transfer of the Property from the previous registered proprietor, the second plaintiff (Dr White). The transfer was expressed to be for a consideration of $1.00. Mr Arambasic says that he is presently homeless and is living in a caravan. * Dr White describes herself as a retired dentist, having previously conducted a dental surgery in Lightning Ridge. Over the years, she has owned a number of properties in Lightning Ridge and elsewhere. There is no dispute between the Plaintiffs and the Defendants as to whether Mr Arambasic and Dr White were de facto partners at the time the relevant transactions took place, but there is no dispute that they have had a close relationship and have jointly conducted an opal selling business. * The first defendant (Ms Veza) was employed by Dr White as a receptionist in the latter's dental surgery between 2004 and December 2009. Ms Veza and Dr White entered into a written agreement on 16 January 2006 entitled "Credit Contract and Instalment Payment Schedule" (Credit Contract). The Credit Contract was, in effect, an instalment contract for the purchase of the Property. Ms Veza and the second defendant (Mr Griffiths), her partner, took possession of the Property pursuant to the Credit Contract and have remained in possession ever since. 3Mr Arambasic claims to have an indefeasible title in the Property by virtue of his registration as proprietor. He says that, despite the stated consideration in the transfer of $1.00, he was in fact a purchaser for value from Dr White. Mr Arambasic contends that any interest the Defendants might have had in the Property (other than as "squatters") had been terminated prior to his registration and, in any event, as a good faith purchaser and registered proprietor, he is not bound by their interest. He seeks an order for possession of the Property. 4Dr White claims that the Defendants defaulted in their obligations to make payments under the Credit Contract and that she terminated the Credit Contract in June 2012. She seeks damages for breach of the Credit Contract and loss of her bargain. 5The Defendants say that the Credit Contract was terminated or modified well before Dr White's purported termination by an agreement made between Ms Veza and Dr White in May 2011. They contend that the effect of the agreement, constituted by an exchange of emails and a conversation at a meeting, was that the Property would be sold and the proceeds applied to pay out the respective entitlements of Dr White and the Defendants under the Credit Contract. Their case is that Dr White breached the 2011 agreement (to which I refer as the 2011 Sale Agreement) by frustrating a sale to a willing purchaser and transferring the Property for no consideration, or an undervalue, to Mr Arambasic. 6The Defendants argue that Mr Arambasic was guilty of fraud, in that he acted in concert with Dr White to defeat their interest in the Property. It follows, so they argue, that his interest cannot prevail against theirs, since fraud is an exception to the indefeasibility of title to which a registered proprietor is otherwise entitled. 7The legal dispute reflects a bitter falling out between the parties, especially between Ms Veza and Dr White. The falling out is apparently connected with an investigation by authorities into the conduct of Dr White's dental practice. The fact of the investigation has some relevance to the events that occurred, but the merits or otherwise of any allegations against Dr White have no bearing on the respective claims of the parties. Preliminary Points 8A number of points should be made about the proceedings. First, the Plaintiffs were not legally represented. At the hearing, I was informed that Dr White would speak for each of them. However, I formed a view at an early stage that the Plaintiffs' interests were not necessarily identical. For that reason, I gave Mr Arambasic an opportunity to ask questions of Ms Veza (the only witness who was cross-examined by the Plaintiffs) and to make submissions in addition to those made by Dr White. 9Mr Arambasic availed himself of the opportunity afforded to him but, not surprisingly in view of his lack of legal training and the fact that English is his second language, he added little to Dr White's cross-examination and submissions. Dr White also lacks legal training but she demonstrated a considerably better grasp of the issues in the case. She cross-examined Ms Veza at some length and made opening and closing submissions in writing. In addition, Dr White made submissions during the hearing in relation to a belated application by the Defendants to amend their pleadings, to which I refer later. 10Secondly, the pleadings filed by the parties lacked precision and were incomplete in certain respects. The Plaintiffs' amended statement of claim (ASC) also contained a good deal of irrelevant material. The deficiencies in the Defendants' pleadings led to an application by their counsel, Mr Jewell, on the third and final day of the hearing for leave to amend. 11Thirdly, much of the affidavit evidence relied on by the Plaintiffs was deficient in form. However, Mr Jewell sensibly did not object on this ground and pressed only a limited number of objections on other grounds. 12Fourthly, there were some gaps in the evidence that might have been readily filled if the parties had issued appropriate notices to produce or subpoenas prior to the hearing. While it is understandable that the parties did not do so, some of the evidentiary gaps remained unfilled. 13Fifthly, presumably because the Plaintiffs were unrepresented and the Defendants apparently have limited resources, the documentary evidence was not presented in a systematic way. Mr Jewell, who was briefed only shortly before the hearing on behalf of the Defendants, helpfully prepared a Court Book and a partial chronology. However, the Court Book did not incorporate all annexures or exhibits to affidavits. Moreover, some significant documents were not referred to either in oral evidence or submissions. 14Sixthly, the case gives rise to a number of legal issues. For understandable reasons, the parties were unable to provide much assistance on most of their issues. The Pleadings The Plaintiffs' Pleadings 15Although the ASC departed from the rules of pleading, the substance of each of the plaintiffs' pleaded causes of action is clear enough. 16Mr Arambasic pleads that he is the registered proprietor of the Property, by virtue of the registration on 3 January 2013 of a transfer of the Property executed by Dr White on 19 December 2012 (Transfer). He alleges that the Defendants are in possession of the Property, but are effectively "squatters" and have no right to occupation. Mr Arambasic seeks an order for possession of the Property and compensation or damages in respect of the Defendants' wrongful occupation from the date he became the registered proprietor until the date judgment is given. 17Dr White's cause of action against the Defendants is said to arise under the Credit Contract, whereby she agreed to sell the Property to the Defendants for $99,649.60, payable, with interest, by weekly instalments of $150.00 over a period of 25 years. Dr White alleges that the Defendants breached their obligations under the Credit Contract by failing to pay any weekly instalments after December 2009. She further alleges that she terminated the Credit Contract on 3 June 2012 (that is, prior to her transfer of the Property to Mr Arambasic). As I have noted, Dr White seeks damages in respect of the Defendants' breach of contract and (presumably) for loss of bargain. The Defendants' Pleadings 18The Defendants filed an amended defence (AD) to the ASC on 15 May 2014. The AD is not a model of clarity and, as I have noted, was the subject of an application to amend on the third day of the hearing. While I ultimately granted leave to the Defendants to file a further amended defence (FAD), it is convenient to commence with the terms of the AD. 19The Defendants admit that they entered into the Credit Contract with Dr White. They allege that they paid weekly instalments due under the Credit Contract until December 2009, when Dr White ceased to practise as a dentist in Lightning Ridge. (Although not specifically pleaded, it is common ground that Ms Veza ceased to receive any wages from Dr White in December 2009.) 20The AD pleads that thereafter the Defendants were unable to make contact with Dr White who had left Lightning Ridge, and thus they were unable to pay her the instalments due under the Credit Contract. They say that their attempts to contact Dr White continued until May 2011 (the AD inadvertently puts the date as May 2012). 21The AD pleads (at par 37) that Dr White and Ms Veza then: "...[E]ntered into a further verbal agreement for the settlement of their vendor finance arrangement on the following terms: (a) The property will be sold and the proceeds of sale will be disbursed as follows: i. The costs of sale; ii. The outstanding principal on the loan; and iii. [The Defendants] would be paid the surplus of the sale." 22The Defendants allege that Dr White made arrangements to list the Property with an agent in Lightning Ridge at a sale price of $180,000.00, but that she unilaterally lowered the sale price in January 2012 to $160,000.00. The Defendants plead that a purchaser offered to buy the Property on or about 11 May 2012 for $160,000.00 and paid a deposit of $16,000.00 to the agent. However, so the Defendants claim, on or about 23 August 2012 the purchaser, Ms Jackson, rescinded the offer by reason of Dr White's "undue delay". The AD then pleads execution of the transfer to Mr Arambasic. 23The Defendants' cause of action against Mr Arambasic is essentially pleaded in the AD and is incorporated by reference in their cross-claim. They contend that Mr Arambasic was aware that they were in possession of the property and that he knew of "the exact nature of [their interest]", although neither the AD nor the cross-claim identifies the precise nature of that interest. The Defendants further allege that the Plaintiffs acted in concert to transfer the Property to Mr Arambasic, both being aware of the Defendants' interest, and that Mr Arambasic registered the transfer to defeat their interest in the Property. Alternatively, the Defendants allege that Dr White directed Mr Arambasic to register his interest in the Property to defeat their interest. 24The Defendants plead that Mr Arambasic engaged in fraud within the meaning of s 42 of the Real Property Act 1900 (NSW) (RP Act) which broadly speaking, confers an indefeasible title on a registered proprietor of land, except in the case of fraud. The Defendants allege that Mr Arambasic was fraudulent in that, prior to registration, he: "(a) had notice and knowledge of the interests of the... defendants; (b) was aware of the vendor finance arrangement between [Dr White] and the defendants; (c) was aware that the... defendants had paid monies towards the satisfaction of the vendor finance agreement; (d) ... sought to defeat the interests of the... defendants." For these reasons, the Defendants allege that Mr Arambasic's interest in the Property is "defeasible". 25The Defendants' cross-claim repeats the allegations in the AD, but also pleads that Dr White "frustrated" the sale of the Property to a willing purchaser for $160,000.00 and that her conduct in frustrating the sale breached the agreement pleaded in par 37 of the AD. The cross-claim seeks damages of "approximately $70,000.00", being the net amount the Defendants would have received from the sale of the Property had it proceeded to completion. 26I granted leave at the hearing to the Defendants to incorporate the following paragraphs in the FAD and in an amended cross-claim (ACC) (the paragraph numbers are those in the FAD): "Breach of Contract 54. On about 4 May 2011, [Dr White] and [Ms Veza] agreed: (a) to sell the Property; and (b) the Credit Contract was terminated. (together Agreement to Sell). Particulars Emails dated 4 May 2011... 5 May 2011... 6 May 2011. 55. The terms of the Agreement to Sell were [sic] the Property was to be placed on the market for sale. 56. On or about 10 May 2011, [Dr White] and [Ms Veza] pursuant to the Agreement to sell the proceeds of the sale [sic] of the Property to be paid: (a) to the agent for the costs of sale; (b) to [Dr White] to satisfy the outstanding principal of the Credit Contact as at December 2009; and (c) any surplus to the defendants. Particulars Conversation between [Dr White] and [Ms Veza] at... Potch Street, Lightning Ridge. 57. On 11 May 2011, the Property was placed on the market for sale pursuant to the Agreement to Sell. 58. On 19 December 2012, [Dr White] transferred the Property to [Mr Arambasic] (Transfer). 59. The Transfer breached the Agreement to Sell. 60. In breach of the agreement alleged in paragraphs 54 and 56 [Dr White] is [sic] to pay the defendants [sic] damages. Particulars Money paid under the Credit Contract..." 27I granted leave to the Defendants to make these amendments despite the lateness of their application (and despite the ungrammatical drafting), because the additional paragraphs essentially seek to clarify and particularise the case already, if incompletely, pleaded in the AD and cross-claim. It is true that the additional paragraphs incorporate references to the email exchange of 4-6 May 2011 which is not expressly referred to in the AD. However, there has never been any dispute between the parties that the email exchange took place. In my view, neither of the Plaintiffs is relevantly prejudiced by the inclusion of the express reference to the emails in the pleadings. 28The additional paragraphs in the FAD also attempt to make it clear that the Defendants' contractual cause of action against Dr White relies on the transfer of the Property to Mr Arambasic, as well as on Dr White's conduct in frustrating the sale of the Property to the willing purchaser. Once again, there has never been a dispute that Dr White transferred the Property to Mr Arambasic, although there is a dispute about whether the transfer was for value or not. In the absence of any dispute that Dr White transferred the Property to Mr Arambasic, I do not think that the Defendants' reliance on that transaction to establish a breach of contract prejudices Dr White. 29For the sake of completeness, I note that the Defendants initially proposed amendments to the AD that, if permitted, would have raised fresh issues in the proceedings. I indicated to Mr Jewell that my preliminary view was that these proposed amendments, which in any event were not properly particularised, were likely to cause prejudice to the Plaintiffs and that leave was not likely to be given for them to be included in the FAD or the ACC. Mr Jewell chose not to pursue these proposed amendments. Submissions Mr Arambasic's Submissions 30Neither Dr White nor Mr Arambasic made submissions on his behalf that added materially to the pleadings. However, I understood his case to be that, whatever findings were made in relation to Dr White's conduct, he had acted in good faith in taking and registering the Transfer of the Property. Mr Arambasic relied on documentation which showed that he purchased the property from Dr White for $70,000.00, and that the purchase price was satisfied by a loan from Dr White secured by an unregistered mortgage over the Property. Mr Arambasic contended that, although the loan documentation made no reference to a deposit, in fact he had paid Dr White a deposit of $7,000.00 prior to the execution of the transfer. Mr Arambasic's evidence was that as from April 2013 (some three months after registration of the transfer) he paid monthly instalments of $235.00 to Dr White in conformity with his obligations under the loan agreement. 31Mr Arambasic accepted in his evidence that he was aware that the Defendants were in possession of the Property at the time he registered the transfer. However, he said that he believed that the Defendants were not entitled to remain in occupation because he had been told by Dr White that the Defendants had failed to comply with their obligations under the Credit Contract and that, accordingly, she had terminated the Contract. 32Mr Arambasic's position, in summary, was that he was a genuine purchaser for value of the freehold of the property. He had acted in good faith and his conduct could not be characterised as fraudulent. It followed that pursuant to s 42 of the RP Act, he acquired an indefeasible title to the Property and was entitled to possession as against the Defendants. This was so even if the Defendants retained an equitable interest in the Property, since that interest could not prevail against his title as the registered proprietor. Dr White's Submissions 33Dr White, in her submissions, rejected the attacks on her credit (although she expressly acknowledged in her final written submissions that she had deliberately lied on one occasion in her evidence). Dr White contended that: * she was entitled to enforce the Credit Contract according to its terms; * the Defendants breached the Credit Contract by failing to pay any of the instalments due after December 2009; * the exchange of emails and the conversation with Ms Veza in May 2011 did not constitute an enforceable agreement; * in any event, contrary to Ms Veza's evidence, Dr White did not agree in that conversation to forego her entitlement to arrears under the Credit Contract; * even if there was an enforceable agreement to sell the Property, Dr White had not frustrated the sale; * she validly terminated the Credit Contract on 3 June 2012 by reason of the Defendants' breach of the Credit Contract; * the subsequent sale of the Property to Mr Arambasic was a genuine commercial transaction in which he agreed to pay a fair price for the Property; and * she was entitled to damages by reason of the Defendants' breach of the Credit Contract. The Defendants' Submissions 34Mr Jewell submitted on behalf of the Defendants that neither Dr White nor Mr Arambasic should be accepted as a witness of truth. Mr Jewell also contended that Ms Veza's evidence should be preferred whenever it conflicted with that of Dr White or Mr Arambasic. 35On this basis, Mr Jewell submitted that the 2011 Sale Agreement was binding on the parties and included terms to the effect of those pleaded in the FAD and the ACC. Mr Jewell further submitted that a finding should be made that Mr Arambasic not only knew of the Defendants' interest in the Property, but had acted in concert with Dr White to defeat that interest. In the alternative, Mr Jewell contended that the absence of genuine consideration for the transfer of the Property to Mr Arambasic supported an inference that he had the dishonest intention of defeating the Defendants' interest in the Property by procuring his own registration as proprietor. 36Mr Jewell's submissions as to the legal consequences of these factual findings were not always clear and not necessarily entirely self-consistent. However, as I understood him, the legal consequences were as follows: * the Defendants' equitable interest in the Property created by the Credit Contract was replaced by the interest created under the 2011 Sale Agreement (although Mr Jewell did not identify precisely what that interest was); * Dr White breached the terms of the 2011 Sale Agreement by: (a)failing without good reason to give instructions to the estate agent to accept the offer of $160,000.00 made by Ms Jackson; and (b)unilaterally transferring the Property to Mr Arambasic for no consideration or, alternatively, a consideration which she knew to be wholly inadequate; * Mr Arambasic's registration as proprietor of the Property did not confer an indefeasible title on him because he had been guilty of fraud and thus his interest did not prevail over that of the defendants (however that interest was to be characterised); and * Dr White's claim for damages failed because the Credit Contract had been terminated by the 2011 Sale Agreement and, if that was not correct, Dr White had never validly terminated the Credit Contract. 37Rather curiously, Mr Jewell appeared to accept that there was an issue in the case as to whether the 2011 Sale Agreement was enforceable, insofar as its terms were not in writing and signed by Dr White. He adopted this stance because of the provisions of s 23C of the Conveyancing Act 1919 (NSW) (Conveyancing Act), notwithstanding that the Plaintiffs had not placed any express reliance upon that section in their pleadings or written submissions. Section 23C(1)(a) of the Conveyancing Act states as follows: "Subject to the provisions of this Act with respect to the creation of interests in land by parol: (a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent thereunto lawfully authorised in writing... or by operation of law..." 38Mr Jewell's answer to this self-imposed difficulty was that s 23C(1)(a) of the Conveyancing Act did not apply to the 2011 Sale Agreement because of the doctrine of part performance, which is preserved by s 23E(d) of the Conveyancing Act. He submitted that Dr White's actions in instructing the agent to sell the Property constituted acts of part performance of the 2011 Sale Agreement that rendered s 23C inapplicable to the Agreement. 39Mr Jewell did not take up my suggestion that the 2011 Sale Agreement, properly construed, may not have created or disposed of an interest in land. Nor did he submit that the emails exchanged between Ms Veza and Dr White satisfied the formal requirement of s 23C(1)(a) of the Conveyancing Act. 40Mr Jewell submitted that if the Defendants' case based on fraud against Mr Arambasic was not made out, he was a volunteer (that is, he had not provided any consideration for the transfer other than $1.00). Mr Jewell contended that a volunteer is not entitled to the benefits of indefeasibility conferred by s 42 of the RP Act. The Witnesses 41Affidavit evidence was given by Dr White, Mr Arambasic, Ms Veza and Ms Sorokoput, the estate agent with whom Dr White listed the Property for sale in May 2011. The deponents, except for Ms Sorokoput, were cross-examined. Dr White 42I formed a very unfavourable view of Dr White's evidence. In my opinion, she was willing to give answers that she considered would advance her case with little or no regard as to whether the evidence was truthful or accurate. I am therefore not prepared to accept her evidence unless it is uncontroversial, independently corroborated or against her own interests. 43The clearest example of Dr White's willingness to give deliberately untruthful evidence was her assertion that she did not know who had purchased a property in Collarenebri from Mr Arambasic in November 2013 and that, indeed, she was not involved in the transfer of that property to the purchaser. When it was pointed out to her that she and a Ms Sultana had witnessed the transfer of the property executed by Mr Arambasic, Dr White said that Ms Sultana was a friend of hers but was not related, whether by marriage or otherwise. 44The evidence established that Ms Sultana was in fact married to the purchaser of the Collarenebri property, Mr Saifur Rahman. Moreover, Mr Rahman is Dr White's brother. When these matters were put to Dr White she acknowledged that she did know at the time that her brother was the purchaser of the Collarenebri property. 45Dr White was offered an opportunity in the witness box to explain why she gave false evidence. She was unable to do so. In her final written submissions, Dr White acknowledged that she had deliberately lied and offered an explanation for her actions. That explanation formed no part of the evidence and I pay no regard to it. There can be no doubt that the evidence given by Dr White in relation to the Collarenebri property was not only false, but deliberately false. 46A second, less straightforward but nonetheless striking example of Dr White's willingness to give untruthful evidence is provided by her responses to questions relating to moneys lent to her by Mr Arambasic. She was asked early in her cross-examination, on the first day of the hearing, to recall how much money Mr Arambasic had lent her since she had been injured in a motor vehicle accident in August 2011. She responded to the question by identifying a series of loans, giving the approximate amount of each loan ($3,500.00, $2,900.00, $4,500.00 and $2,200.00) and the month in which each loan had been made. What was particularly striking about this evidence was how quickly and confidently Dr White answered the question despite having earlier said that she had not "done the figures" to establish the amounts lent to her by Mr Arambasic. 47On the second day of the hearing, Dr White was asked to repeat the figures that she had given in evidence the previous day. She was unable or unwilling to do so. When reminded that she said one loan was for $3,500.00, she could not identify the month in which the loan had been made. She explained her inability or unwillingness to repeat her earlier evidence as due to the fact that she was under oath and did not want to give evidence that did not "match". 48This explanation was unconvincing. My clear impression was that Dr White had thought it to her advantage early in her evidence to give detailed figures without any regard to whether they were accurate or not. An alternative explanation is that she did recall the detailed figures on the second day, but decided that for some reason it was to her advantage not to repeat the evidence. In either case, her evidence was not truthful. 49Other aspects of Dr White's evidence were difficult to follow. For example, she claimed that she was "compelled" to offer the Property for sale at the "outrageous" price of $180,000 because the Defendants had placed the Caveat on the title. The email exchange of early May 2011, to which I refer later (at [86]-[88]) indicates that Dr White was content at that stage to put the Property up for sale in order to recoup the moneys owed to her. Insofar as the Defendants had any bargaining power as to the price at which the Property was to be offered, it was not because of the Caveat, but because (as Dr White knew) they had an underlying interest as purchasers of the Property, albeit under an instalment contract. After all, Dr White's interest in the Property, as she well appreciated, was limited to receiving the moneys due to her under the Credit Contract. Moreover, there is no support in Ms Sorokoput's uncontested evidence for Dr White's claim that she repeatedly asked the agent to reduce the selling price but that the agent refused to do so because the Caveat was on the title. On the contrary, Ms Sorokoput said that on or about 18 May 2011 she had been reassured by the solicitors then acting for Dr White that the Caveat presented no problem for the sale of the Property. 50A second example is Dr White's rather strange evidence that she was unsure whether the offer of $160,000.00 for the Property, which was made by a prospective purchaser (Ms Jackson) in May 2012, was genuine. The basis for this statement, as explained by Dr White, was that Ms Jackson was using the same lawyer as the Defendants and that Ms Jackson was a friend of the Defendants. Ms Veza denied that she knew Ms Jackson before the latter made her offer and there is no evidence that she did. Nor is there anything in the contemporaneous documentation or Ms Sorokoput's evidence to suggest that Ms Jackson's offer was not genuine. The role played by Jarratt in acting for more than one party may not have been wise, but is hardly indicative (as Dr White seemed to contend), of a conspiracy between the Defendants and Ms Jackson. 51A third example of Dr White's evidence that was difficult to follow concerns a letter she sent in her own name on 19 August 2013 demanding that the Defendants vacate the Property. When the letter was sent, Dr White had already transferred title to Mr Arambasic who had been making monthly payments to her in reduction of the mortgage loan from Dr White. So far as the documentation indicated, Dr White's interest in the Property was merely as an unregistered mortgagee. 52Dr White was asked in her evidence to explain why she sent the letter, given that she was not the proprietor of the Property. Her explanation made little sense. While I accept that Dr White's understanding of legal concepts is by no means complete, she is a person with considerable experience in property dealings and sophisticated enough to have drafted her own legal documentation on a number of occasions. In my opinion, she understood that from a legal perspective, her interest in the Property was only that of a mortgagee. The most plausible explanation for the letter is that, despite the registration of Mr Arambasic as proprietor, she regarded the Property as essentially hers and subject to her control and direction. Mr Arambasic 53Mr Arambasic created a very different impression in the witness box than did Dr White. Without intending any disrespect to him, it became clear that he had considerable difficulty in understanding the nature of transactions to which he was a party and in remembering what had apparently happened. In his evidence, he repeatedly deferred to Dr White and requested that she explain matters that he could not explain or to respond to questions to which he did not know the answer. 54Mr Arambasic's confusion was evident, for example, when he was asked why he thought that he would be in a better position than Dr White to remove the Defendants from the Property once he had purchased it. He repeatedly answered by saying that he had the "legal right" or a "clear title". When it was pointed out that, on his evidence, Dr White had enjoyed no success in recovering possession of the Property despite terminating the Credit Contract and removing the Defendants' Caveat, his answer was that the Defendants had been threatening towards Dr White. Mr Arambasic was not able to explain why he would be better placed, following registration of his transfer, to deal with any threats that might be made by the Defendants. (A lawyer might argue that Mr Arambasic, as the registered proprietor by virtue of the transfer from Dr White, was in a better legal position than Dr White herself to resist any claim by the Defendants, since she was a party to the Credit Contract. Mr Arambasic, however, did not purport to understand or rely on legal contentions of this kind). 55While Mr Arambasic's evidence may have been confused in parts, I formed the view that he was endeavouring to give truthful evidence and genuinely believed what he had been told by Dr White. For example, he said that at the time he signed the transfer of the Property in December 2013, he understood that the Defendants had lived there "for nearly five years without paying anybody anything" and that they were merely "squatters". This information, which was not accurate, could only have come from Dr White who, as Mr Arambasic indicated in his evidence, was his source of advice on these matters. In my opinion, Mr Arambasic believed what Dr White told him. 56Similarly, I accept Mr Arambasic's evidence that in or shortly before December 2012, he believed Dr White when she told him that she had terminated the Credit Contract and removed the Caveat from the title, thus ensuring that Mr Arambasic would receive a "clean title" for the Property. This information was supported by a printout of the certificate of title to the Property, seen by Mr Arambasic in November 2012, which showed that the title to the Property was clear of any caveat or mortgage. 57As I have indicated, the evidence strongly suggests that Mr Arambasic was heavily dependent on Dr White for advice on financial matters and in relation to the property dealings to which he was a party. Mr Arambasic acknowledged that he has difficulty with English and with "paperwork". 58Dr White herself said in evidence that Mr Arambasic "doesn't understand many things at all" and that "he comes to me quite often for advice", although she also claimed that he sought advice from friends in the Croatian community. In particular, Dr White agreed that Mr Arambasic would be unable to understand the transfer of the Property that he had signed unless someone assisted him. It is an inevitable conclusion from her evidence that Mr Arambasic could not be expected to understand the legal significance of the Loan Agreement and Mortgage Deed, which she drafted and signed without the benefit of any independent advice. 59In my view, Mr Arambasic was willing to assist Dr White to overcome what he understood to be her financial problems flowing from the injuries she sustained in her car accident. His assistance took the form from time to time of executing documents prepared by Dr White and put to him for signature, as well as lending or otherwise paying money to Dr White. 60An example involves the dealings with the Collarenebri property, to which reference has already been made. Mr Arambasic's evidence on this topic was particularly confused, but it appears that he registered a transfer of the Collarenebri property from Dr White for a nominal consideration and subsequently sold the property. (As has been seen, the purchaser was in fact Dr White's brother). Mr Arambasic said that he gave some or all of the proceeds of sale (he was not clear which) to Dr White in order to help her out. Mr Arambasic could not explain the point of the transaction to which he was a party or his role in those transactions. There is little doubt that he signed documents relating to the Collarenebri property to comply with requests made by Dr White without giving careful consideration to her reasons for making the requests or understanding what these reasons might have been. 61In summary, Mr Arambasic gave honest, if confused evidence. He believed what Dr White told him about the various dealings and had neither the means nor the inclination to question the accuracy of the information he was given. He executed documents at Dr White's request, some of which were prepared by her, without understanding clearly the legal consequences of doing so. He did not, however, act dishonestly. Nor did he intend to defeat any interest the Defendants had in the Property. So far as he was concerned, their interest was at an end when he signed the transfer of 19 December 2012. Ms Veza 62Ms Veza seemed to me to be recounting events as she understood them to have occurred. Her evidence was consistent with such contemporaneous documentation as was brought into existence. There were times in her cross-examination when she went beyond answering questions and slipped into the role of an advocate. I also think that she may have underplayed her reaction when served with certain documents by Mr Arambasic. Nonetheless, I formed the view that she was giving honest evidence and that her recollection of events was generally reasonably reliable. I have no hesitation in preferring her evidence when it conflicted with that of Dr White. Facts 63The following chronological account of the facts incorporates findings on some disputed factual matters. Not all of the documents identified in this account were referred to in oral evidence or submissions, although of course each forms part of the evidence. 64Mr Jewell identified an important factual issue to be whether Dr White and Mr Arambasic were, at all material times, in a de facto relationship. Both Dr White and Mr Arambasic denied that they were, at least after about 2008 (Mr Arambasic's evidence was ambiguous as to whether there had even been such a relationship). 65I do not think it necessary to make a finding as to whether Dr White and Mr Arambasic were de facto partners. The important point is that there was clearly a close relationship between them, which extended to business affairs and, as I have found, Mr Arambasic's dependence on Dr White for advice in relation to transactions to which he was a party. 66In late 2005, the Defendants wished to purchase a home, but were unable to obtain finance for the purpose. Dr White offered to assist them. To that end, Dr White arranged to purchase the Property in her own name. The evidence does not reveal the purchase price or the circumstances in which Dr White acquired the Property. However, on 10 September 2005, the Defendants paid $10,000.00 to Dr White as "Deposit on House... Potch Street [Lightning] Ridge..." 67On 16 January 2006, Dr White and Ms Veza executed the Credit Contract. The Contract was drafted by a solicitor who acted for both parties. The Credit Contract named Dr White as the "Vendor" of the Property. Ms Veza was not expressly named as the "Purchaser" (at least in the version of the Credit Contract in evidence), but it would seem clear that she was intended to be the Purchaser. Although the case has been conducted on the basis that Mr Griffiths was also a party to the Credit Contract, he was not named as a party and does not appear to have executed it. For that reason, I proceed on the basis that the only parties to the Credit Contract were Dr White and Ms Veza. 68The Credit Contract stated that the "Balance Price" was $99,649.90. The expression "Balance Price" was defined to mean the balance of the price described in the terms of the "Contract for Sale". The latter expression was defined to include the Credit Contract itself. If there was a separate contract of sale executed by the parties, it was not in evidence. 69The Credit Contract provided that the Balance Price was to be paid by the Purchaser over a 25.165 year term by 1308 weekly instalments of $150.00. No reference was made in the Credit Contract to the deposit of $10,000.00 paid by the Defendants. The "Initial Annual Rate of Interest" was 7.32% per annum, but could be varied to reflect changes in bank interest rates. 70The Purchaser was entitled to take possession of the Property on the date that the Credit Contract was entered into. The Purchaser was responsible for all rates, taxes and insurance from that date and was to reimburse the Vendor for any rates and taxes in respect of the Property paid by her. 71Until the Balance Price was paid, the Vendor was to retain all title documents to the Property. The Purchaser was prohibited from assigning, charging or encumbering her interest in the Property until the Balance Price was paid. 72The Vendor recognised "the equitable caveatable interest of the Purchaser in the Property". The Purchaser was entitled to assign "his [sic] interest under the Contract to another person", provided that the Vendor consented and the Purchaser had complied with the provisions of the Credit Contract. 73Clause 8 of the Credit Contract dealt with "Default" as follows: "8.1 The following are events of default on the part of the Purchaser, for the purpose of this clause:- (i) The failure to pay an Instalment by the due date or to pay or reimburse Rates, Taxes and Insurance or to pay any other monies as they fall due or by the due date, which failure has not been rectified within 90 days of the due date or the date they fall due. ... 8.2 The Vendor must serve a notice of default upon the Purchaser if the Vendor is to [rely] upon a default under clause 8.1(i) to terminate the Contract. In this respect: (iv) In the event of a default under clause 8.1(i)...the notice of default may be of immediate effect. ... 8.3 If the Purchaser fails to comply with the notice of default served under clause 8.2, then the Vendor may serve a notice of termination of the Contract upon the Purchaser and the following shall apply:- (i) The Contract be terminated with immediate effect from the date of service of the notice of termination; (ii) The Purchaser give vacant possession of the property to the Vendor, in a clean, orderly, neat and attractive condition immediately; (iii) The Purchaser remove any caveat or other notification of interest upon the title to the property immediately; 8.4 The Purchaser shall be liable for all reasonable costs of the Vendor... in enforcing the provisions of clause 8.1, 8.2 and 8.3." 74Notwithstanding the provisions of the Credit Contract, the solicitor acting on behalf of Ms Veza did not lodge a caveat on the title to the Property to protect her interest. However, the defendants took possession of the Property. Thereafter Ms Veza paid the weekly instalments due under the Credit Contract out of wages paid to her by Dr White. 75On 11 February 2009, a different firm of solicitors, Jarratt, Webb & Graham Pty Ltd (Jarratt) lodged a caveat on the title to the Property on behalf of the Defendants (Caveat). The Caveat stated that the Defendants (not merely Ms Veza) had an "[e]quitable interest as a constructive trust" in the Property. This interest was said to arise by virtue of "a contract for sale of lands and credit contract and payment schedule" dated 16 January 2006. 76The Caveat stated that the Defendants' interest had been created by virtue of the following facts: "On [or] about 16 January 2006 Jasmine White as Vendor and lender entered into a sale of lands contract and loan agreement with [Mr] Griffiths and [Ms] Veza in relation to the sale of... Potch Street Lightning Ridge. The Purchasers and borrowers have repaid some of the borrowed money and now have an equitable interest in the house." 77In mid-December 2009, Dr White closed the Lightning Ridge surgery for the holiday break. According to Ms Veza, whose evidence I accept, she understood at the time that Dr White may have been under investigation by authorities in relation to the conduct of the dental practice. Nonetheless, Ms Veza expected the surgery to reopen in mid-January 2010 and that her employment would continue in the New Year. 78Contrary to Ms Veza's expectation, Dr White failed to reappear at the Lightning Ridge surgery in January 2010. Ms Veza then attempted to contact Dr White. She left a number of messages for Dr White at her Bourke dental surgery, which she had opened in October 2009. Ms Veza received no response to her messages. 79Ms Veza received no further wages from Dr White after 15 December 2009. She was never informed that her employment had been terminated. Dr White simply did not reappear in Lightning Ridge. 80Ms Veza made no further payments of the weekly instalments due under the Credit Contract after 15 December 2009. She said in her evidence that she was always prepared to keep paying the instalments even though she no longer received wages from Dr White. Her explanation for not making any further payments was that she had no way of communicating with or paying Dr White, since the latter was uncontactable and Ms Veza was not aware of her bank account details. 81I accept that Ms Veza would have continued to pay the weekly instalments under the Credit Contract had she been able readily to contact Dr White. I also accept that she attempted to contact Dr White in the manner she described. In my opinion, however, she could have made more strenuous efforts to communicate with Dr White, for example by travelling to Bourke (which is about three to four hours by car from Lightning Ridge) to attempt to resolve what was obviously an unsatisfactory situation. 82I do not accept that it would have been impossible for Ms Veza to tender the weekly instalments due under the Credit Contract, had she decided that it was essential to do so. On her own evidence, she was aware that Dr White maintained a dental surgery in Bourke and there is no obvious reason why she could not have forwarded the weekly instalments to Dr White at that address. Ms Veza was understandably resentful that her employment had effectively been terminated without notice and perhaps had other reasons for resentment. She took the view that if Dr White was not prepared to make herself available, she (Ms Veza) had no need to make special efforts to pay the instalments. 83Ms Veza was also obliged under the Credit Contract to pay all rates and taxes in respect of the Property. She paid Council rates for the period until October 2010 but not thereafter. Her explanation was that the Council refused to inform her of the amount of rates due because the Property was not in her name. I accept that Ms Veza made enquiries of the Council and received the responses to which she referred in her evidence. However, once again, if she was determined to pay the rates she could have done more to meet her obligations under the Credit Contract, for example by forwarding to the Council the amount she estimated would be due in respect of rates. 84The first contact between Ms Veza and Dr White after the latter left Lightning Ridge occurred on 4 May 2011, some seventeen months later. Ms Veza sent an email to Dr White at an email address associated with the opal business ("opalmyworld..."). According to Ms Veza, she obtained the email address from a pamphlet advertising the opal business. In fact, the email address had been used by Mr Arambasic for the purposes of the opal business. His practice, as he explained in evidence, was to advise Dr White of emails received at the "opalmyworld" address that were intended for her and to make them available to her. 85I accept that this was the first contact between Ms Veza and Dr White for a period of seventeen months. However, I do not think that it would have been unduly difficult for Ms Veza, had she wished to contact Dr White by email earlier, to have located the "opalmyworld" address and written to Dr White at that address. Whether Dr White would have responded to any such email is entirely another question. 86The first email in the exchange was sent by Ms Veza at 10.18 am on 4 May 2011. Ms Veza explained that the reference in the email to her belief that Dr White was in the United States stemmed from her knowledge that Dr White and Mr Arambasic travelled Arizona at about the same time each year in connection with their opal business. The email reads as follows: "Dear Jaz, I know its been awhile but to track you down is even harder, I believe you are in U.S.A. I need to talk to you regarding the house, I have been trying to keep up the rates, but because its not in my name, walgett shire will not send me the notices, therefore I have discussed with Gary [Griffiths], to sell the house and pay you out as soon as possible. I have rang my lawyer, the same lawyer that signed up the house [Sam Hegney]... they have instructed me to talk to you and agree to sell the house, once you give them permission to put it on the market, they will organise the sale of it and take out money owing to you. Jaz if you do not want to talk to me directly then contact Sam Hegney... or... Robert Jarrett... I think this is the best way to go for now, this way we both come out of it with our money, before we all lose the lot. Please dont ignore this, as its very important, and timing is everything at the moment, you don't have to do anything after that just give the o.k in writing I think, anyway they will let you know once you contact them other than that you can ring me at home... or call in, no fighting just want to call it quits and cut ties, and each go our seperate ways, all and all I want to thank you for my years at work at the surgery, and to let you no I did so love my job... Regards Kaye Veza." (I have not corrected the errors in this or the other emails.) 87Dr White replied within half an hour, as follows: "Dear Kaye, Thankyou for your E-mail, yes I am in USA at the moment and am comming back to Australia 7th of May 2011. Yes I would like to sell the house and finish all ties and move on with our lives. It would be good if you E-mail me in my E-mail address. my address is... I check my Email everyday. I am flying from here... to Australia on 5th of may. If you could reply me on my E-mail address. I will check it straight away. Hope you have a great day. May God bless you Best regards Jasmin" 88The third and fourth emails in the exchange were sent, respectively, by Ms Veza and Dr White within the next day or so: "Thanks Jaz for your quick reply, I'm glad you have agreed. I've sent a copy of the email to Sam, are you going to email him, or ring to tell him in person, so we can get things rolling on the matter, other than that call me when in the Ridge or at Surgery for any sorting out we have to do This will be a weight of both our minds Take care Kind Regards Kaye" ... "Hello Kaye, Thankyou for using my E-mail address to deal with this matter. It is good that you have sent a copy of my E-mail to Sam. ... you can give him... this E-mail address and he can contact me and sent me any documents that I require to see or sign... I will start checking my E-mail as soon as I reach Australia, I would like to complete the selling process as soon as possible also. You have a great day. God's blessing to you Kay. Best regards Jasmin" 89Shortly after Dr White returned to Australia, she and Ms Veza met at the Property. During that conversation, Ms Veza informed Dr White that she [Ms Veza] had been interviewed by investigators concerning possible irregularities at the dental surgery. Ms Veza also told Dr White that the investigators had indicated that it was possible that the Government would seek to repossess all assets in Dr White's name, including the Property. Ms Veza said to Dr White that, for that reason, it was necessary to sell the Property and for both she and Dr White to get their money out before any investigation was completed. 90In her first affidavit, Ms Veza gave the following account of the conversation that then took place: "White: Listen, I need the loan repaid, I know you don't have the money, I think we should sell this property. Once it is sold, I will take what is left owing to me, and you and Gary can keep the rest. Myself: What do we do about the instalments over the last 2 years you were gone? White: Don't worry about the instalments I won't charge you for the two years I have been gone and I will just take what is owed to me up until 15 December 2009 and you and Gary can keep the rest of the money. Myself: That suits us well." 91Ms Veza was cross-examined by Dr White on this conversation and gave more detailed evidence about what was said. Her evidence included the following passages: "WITNESS: ... Now, then you [Dr White] said, "Okay." I said, "We need to talk about the money that has been owing on it". You agreed. You said, "Yes". I said to you that for the past two years roughly, or 17 months, whatever you have worked it out to, that you haven't been available, I have not... had a bank account from you or a rate notice. Then I find out that you are only three hours away from me the whole time working in the Bourke surgery. So to me there was no reason why you couldn't have kept all that information and given it to me so I could have kept up my payments. So we both agreed to sell the house and we also, in that conversation, agreed that you would dismiss the two years or 17 months of my non-payment because of your actions to stay away from me and not make contact, after I left numerous messages, and then to find out you were three hours away the whole time. HIS HONOUR Q: What we want is your account of the conversation? A. Yes, this is it. Q. You said that? A. Yes. So you and I said that we would no longer take the two years, that you agreed it was your responsibility, that you hadn't sent me a rate notice, that you never gave me a bank account, that I would only pay to 15 December 09. That we would put the house on the market, we would work out who owed what...You agreed that we would put the house on the market and you asked me to ring Maria Sorokoput [the agent] the next day to organise the meeting. After we concluded the sale of the house, talking about it... we rung Robert Jarratt [the solicitor] that very minute as well and we both talked to him on the phone that day as well, telling him what we had agreed. And he told us both that the money would be divvied up once the house was sold, the money would go into their trust account. We would work out how much I owed you, what was left to pay off the house, and any surplus or equity in the house would go to me... [DR WHITE] Q. Did we say that we will terminate that credit contract? A. No. Q. Did we say that we will change that credit contract? A. No. Q: Did we say we will do anything with that credit contract? A. Yes. Q. What did we say? A. We said that we will sell the house, that the money that was owed to you would come out of the house sale, that that would finalise any more business between you and I, and then I would have enough out of that to either put a deposit on another house or buy a camp. That was the whole idea of selling the house before Medicare took it." 92Ms Veza also gave evidence that nothing had been said in this conversation as to whether she would resume paying weekly instalments pending sale of the Property. The inference from her evidence is that she and Dr White understood from the conversation that Dr White would recoup the amount of the instalments falling due between the date of the conversation and the completion of the sale from the proceeds of sale, once the sale was completed. I accept both Dr White and Ms Veza had this understanding of the conversation that took place between them. 93Dr White did not dispute that a conversation had taken place with Ms Veza in which it was agreed that the Property would be sold and the proceeds divided. However, Dr White disputed that she had agreed to forego her entitlement to the moneys that had been unpaid in respect of the period since December 2009. Dr White also disputed that she had accepted that any surplus from the proceeds of sale after she had received the moneys due to her under the Credit Contract (other than those foregone) would be paid to Ms Veza. She said that all that was mentioned was that the proceeds would be divided in a "fair" way. 94Although Dr White did not strike me as somebody who would readily forego what she perceived to be her entitlements, I accept Ms Veza's account of the conversation insofar as it differed from that of Dr White. I do so partly because of my assessment of their respective credibility as witnesses. I also take into account the implausibility of the suggestion that nothing was said in the conversation about what was to happen to any surplus proceeds of sale, after Dr White had been paid in full the amounts due to her under the Credit Contract. It is difficult to believe that Ms Veza would not have said something about any surplus proceeds since (on Dr White's account) Ms Veza insisted on offering the Property at a price ($180,000.00) that was substantially higher than that recommended by the agent. Had the Property been sold at $180,000.00, there would have been a significant surplus to be considered. Furthermore, at this time there was no obvious reason why Dr White could reasonably have expected to share in any surplus (even though in her evidence she deemed to contemplate that it would have been fair for her to receive a share). Indeed, even a sale at the price ultimately offered by the prospective purchaser ($160,000.00), would have resulted in a significant amount over and above that needed to pay the amounts due to Dr White under the Credit Contract. 95I am aware that there is correspondence from Jarratt, when they were acting for the Defendants, suggesting that Dr White had agreed to forego arrears of "interest" rather than arrears of instalments. However, I think the likely explanation is that Ms Veza or the solicitors equated the instalments with interest. That interpretation is consistent with a letter of 3 July 2012 sent by Ms Veza to Dr White, to which I refer later (at [113] below). I do not think that the correspondence is inconsistent with Ms Veza's account. 96The day after the conversation between Dr White and Ms Veza, they met with Ms Sorokoput. Ms Veza and Dr White informed Ms Sorokoput that Dr White was the registered proprietor of the property but (somewhat inaccurately) that Ms Veza had a mortgage. For that reason, Dr White would sign the agency Agreement. Ms Sorokoput was also informed that both Ms Veza and Dr White wanted to sell the Property and obtain the moneys due to each of them. 97On 11 May 2011, Dr White and Ms Sorokoput entered into a written Exclusive Agency Agreement (Agency Agreement) for the sale of the Property. The Agency Agreement provided that the Property was to be offered with vacant possession at a price of $180,000.00. It recorded the Agent's opinion that the estimated selling price was $150,000.00-$155,000.00. The exclusive agency period was to be 11 May 2011 until 11 August 2011, but the agent was to retain a non-exclusive agency thereafter until terminated by notice. The Principal's solicitors were to be Jarratt. Ms Veza was not a party to the Agency Agreement. 98On 18 May 2011, Ms Sorokoput received a contract of sale from Jarratt. She noted that the contract revealed the Caveat on the title. She contacted Jarratt who informed her that there would be no issue with the sale of the Property, because the Caveat had been lodged by the firm to protect the unregistered interest of Ms Veza. 99Ms Sorokoput proceeded to market the property at $180,000.00, but without success. On 5 August 2011, Dr White wrote to Jarratt stating that there had been no interest in the Property, especially at "that price" (presumably $180,000.00). She expressed the view that this was not a problem for the Defendants as they were living on the Property "for free". Dr White advised Jarratt that the Defendants were in breach of the Credit Contract and that she was going to sue them for the arrears. At about this time, Dr White sustained significant injuries in a motor vehicle accident. 100Whether for this or other reasons, Dr White did not institute proceedings against the Defendants. However, in January 2012 she instructed Ms Sorokoput to reduce the selling price to $160,000.00. Dr White took this step without consulting the Defendants. 101About four months later, two separate potential purchasers suddenly showed interest in the Property. One of the two, Ms Jackson, offered $160,000.00. On 14 May 2012, Ms Jackson paid a deposit of $16,000.00 into Ms Sorokoput's trust account. 102On the same day, Ms Sorokoput forwarded a sales advice to Dr White. The advice recorded a sale price of $160,000.00, with a 90 day settlement period to be confirmed. The advice noted that the Vendor's solicitors were now Joseph Grassi & Associates (Grassi). This reflected Dr White's written notification earlier in the day that she had changed solicitors. She had also signed an authority directing Jarratt to forward all documents to Grassi. 103On 16 May 2012, Jarratt sent a letter to Grassi advising that Jarratt were acting for the Defendants and for Ms Jackson. The letter confirmed that Jarratt held: "... [I]nstructions to provide the withdrawal of caveat at completion on receipt of all mones owed to Veza and Griffiths and can inform that we would be willing to complete the matter on the condition that the withdrawal of caveat... be provided at completion. In order to avoid any conflict between all parties concerned we ask if you could please indicate the payout figure on the loan to Veza and Griffiths and the calculations used to derive this payout figure. Once we have received this payout figure we will seek instructions from Veza and Griffiths and if satisfactory, have the same reduced to writing and then seek instructions from Ms Jackson". 104Jarratt's letter prompted a reply from Grassi asserting that Jarratt was in a position of conflict of interest, since the firm had previously acted for Dr White. Jarratt responded on 21 May 2012 stating that they had acted for the Defendants from early 2009 and that Dr White herself had suggested that Jarratt draft the contract of sale in relation to the Property. The letter went on to say that subsequently Jarratt had received instructions to act for Ms Jackson but that "at this stage" there was no conflict. Jarratt suggested that the simplest option was for Dr White to provide a final payout figure and for the Defendants to make the final payment required to discharge their obligations. It is not clear whether Jarratt meant to convey that the payment should occur on settlement of the sale to Ms Jackson or at some other time. 105On 22 May 2012, Dr White wrote the first of a series of letters to the Defendants, purporting to give notice under cl 8.2 of the Credit Contract that they had defaulted under the terms of the Contract. The default was said to be constituted by the Defendants' failure to pay weekly instalments due after 15 December 2009 or to pay rates falling due after 14 April 2009. 106Each of these letters demanded payment of $46,997.00 as the amount said to be due by the Defendants under the Credit Contract. An annexure to each of the letters set out calculations supporting the claim. In fact, the calculations do not seem to be referable to the terms of the Credit Contract. They also include amounts for which there is no evidentiary support, such as outstanding rates of $8,500.00 and "debt collection" expenses of $6,000.00. (There is evidence that Dr White had been sued to judgment by Walgett Shire Council, but no evidence as to the make-up of the debt owed by her to the Council). As Dr White conceded when questioned about the figure of $46,997.00 in the course of her opening submissions, it is difficult to see how the Defendants could have owed as much as $46,997.00 by reason of their failure to pay weekly instalments of $150.00 and rates for a period of only approximately 29 months (assuming that the Defendants, or Ms Veza, were obliged to pay the whole of the arrears). 107On 3 June 2012, Dr White sent what purported to be a notice of termination of the Credit Contract to the Defendants. This document referred to each of the earlier notices of default in which "it was explained to you how you could remedy your defaults". The termination notice continued as follows: "One of the principle [sic] conditions was to be complied by you in order to keep the referenced contract in place, was to commence the regular weekly installment payment immediately, which you did not do and for that same reason the referenced contract between us is now terminated as per the clause 8.3(i) of that contract. Now according to clause 8.3(ii) and 8.3(iii) of the same contract could you please take the following actions: 1. Vacate the property within 14 days of this notice. You must leave the property in a clean, orderly, neat and attractive condition. 2. Withdraw your caveat on the property immediately. If you don't comply with the contract clauses mentioned above, then I will have to initiate a court case to enforce those actions, if that is the path of action we follow, you will be liable for all the legal and other associated costs as per clause 8.4 of the contract". (Emphasis in original.) 108On 7 June 2012, Dr White wrote to the Defendants again requesting them to remove the Caveat. She enclosed copies of the earlier correspondence. 109On 11 June 2012, Dr White wrote to Jarratt informing the firm that the Credit Contract had been terminated on 3 June 2012. The letter stated that the Defendants' Caveat was "not valid anymore" and asked for Jarratt's help in removing the Caveat. 110On 14 June 2014, Dr White prepared an Application for Preparation of a Lapsing Notice (Lapsing Application) in relation to the Caveat. Mr Arambasic witnessed Dr White's signature in the Lapsing Application. She requested Grassi to lodge the Application in Sydney on her behalf but by a letter dated 21 June 2012, Grassi declined to act, stating that the firm could not merely act as an agent but only as "instructing solicitors" (presumably meaning as principals). The letter recorded Mr Grassi had sought repeatedly, but without success, to meet with Dr White. 111While these events were taking place, Ms Sorokoput was seeking information from Grassi as to the status of the sale. Grassi responded to her enquiry on 28 June 2012, saying that the firm had received no instructions from Dr White. 112On the same day, Grassi advised Jarratt that Grassi was still awaiting instructions from Dr White in relation to the sale of the Property to Ms Jackson. 113On 3 July 2012, Ms Veza wrote a strongly worded letter to Dr White in which she stated that Dr White knew that: "all outstanding amounts would be ceased from the 15th of December 2009, because you're in hiding away from everybody and lying about where you were, I have no problem owing for the rest of the house on settlement of sale, but I will not be responsible for all the outstanding debt you are trying to claim from me which includes the sales and overdue fees". The letter also complained, among other matters, about Dr White dropping the price of the house by $20,000.00 without consulting with Ms Veza. The letter stated that a copy would be sent to her "lawyer", presumably meaning Jarratt. 114On the same day, Jarratt wrote to Grassi on behalf of Ms Jackson. The letter stated that Ms Jackson was prepared to wait a couple more weeks for the matter to proceed, but after that she would look for a new property. 115It appears that Dr White, having received a rebuff from Grassi, arranged for her brother, Mr Rahman, to lodge the Lapsing Application in Sydney, which he did. On 5 July 2012, the Registrar-General sent a notice under s 74J of the RP Act to Jarratt as the Defendants' solicitors, giving notice that the Caveat would lapse 21 days after service unless the Supreme Court ordered an extension of the operation of the Caveat. 116The evidence does not address the steps, if any, taken by Jarratt or the Defendants in response to the s 74J notice. However, a title search in evidence indicates by 21 November 2012 at the latest the Caveat had been removed from the title to the Property. 117On 12 July 2012, Dr White wrote to the Defendants, responding to Ms Veza's letter of 3 July 2012. Among other things, Dr White denied forfeiting any rights to "interest" that had accumulated since 15 December 2009. She also asserted that it had been agreed that pending the sale, the Defendants would have to keep paying instalments and rates. 118On 25 July 2012, Jarratt wrote a curious letter to Dr White as follows: "We write in relation to the above matter and confirm that we act on behalf of the Purchaser, [Ms] Jackson. As you are aware, we understand there are issues in relation to the sale and ask if you could advise us as to the current position as our client, the Purchaser, [is] not prepared to wait for this matter to proceed much longer. Please note that: 1. The Purchaser will require satisfaction that the equitable interest held by any other party is satisfied prior to exchange of Contracts. 2. The Purchaser will require a clear title on completion; Please also inform us of your legal representation as we understand Joseph Grassi & Associates is no longer acting on your behalf on this matter". 119The letter is curious because Jarratt had previously written to Grassi on behalf of the Defendants suggesting that an appropriate course was for the amount due by them to Dr White to be paid out of the proceeds of the sale to Ms Jackson, at which time the Caveat would be removed. There appears to be nothing in the evidence to indicate that at the time the letter of 25 July 2012 was written, Jarratt had ceased to act for the Defendants. No evidence was given by Ms Veza as to whether she had given any instructions to Jarratt concerning the removal of the Caveat. It is not clear, therefore, how the letter of 25 July 2012, apparently written at a time when Jarratt were their solicitors, was consistent with the Defendants' apparent interest in ensuring that the sale to Ms Jackson proceeded to completion. 120In late July or early August 2012, Dr White left Australia to visit Bangladesh. She returned to Australia in December 2012, but left again for Bangladesh in February 2013. On her second visit she remained in Bangladesh for approximately two months. 121On 23 August 2012, Ms Jackson requested Ms Sorokoput to return the deposit of $16,000.00 that she had paid in May 2012. Ms Sorokoput complied with the request and duly notified Dr White that she had done so. 122As I have noted, on or about 19 December 2012, Dr White and Mr Arambasic signed the transfer of the Property, as transferor and transferee respectively. The consideration expressed in the transfer was $1.00. After some equivocation, Dr White accepted in her evidence that she had given instructions to the solicitors who prepared the transfer. Both Dr White and Mr Arambasic gave evidence that it was the solicitor who advised them to insert a consideration of $1.00 in the transfer. I infer that the solicitor gave this advice because, on the instructions given to him, he understood that Mr Arambasic was not to be a purchaser for value but, in effect, was to receive a gift of the Property from Dr White. 123The transfer was subsequently stamped to record payment of stamp duty of $1,290.00. I accept Mr Arambasic's evidence that he paid this amount. 124Both Mr Arambasic and Dr White gave oral evidence that, prior to the signing of the transfer, he had paid a deposit of $7,000.00 in respect of his purchase of the Property. Mr Arambasic's affidavit evidence was, however, somewhat different. In his affidavit he said that he had paid about $7,000.00 earlier in the year to help Dr White purchase an air ticket for travel to Bangladesh. He did not suggest that this payment was intended to be a deposit in the purchase of the Property. 125It is difficult to reconcile the evidence of the payment of a deposit with the expressed consideration of $1.00 in the transfer. It is also difficult to reconcile with the terms of the Loan Agreement subsequently executed by Dr White and Mr Arambasic (see at [127] below), which makes no mention of a deposit. Dr White's explanation that she made a mistake when drafting the Loan Agreement was entirely unconvincing. I find that Mr Arambasic did not pay a deposit in respect of the Property prior to executing the transfer. 126At some stage, Dr White and Mr Arambasic executed a "Loan Agreement". This document bears a typed date of 12 December 2012 and was drafted by Dr White. I think it likely that this document was created after the transfer was executed and probably after it was registered. I have formed this view because it seems clear that the Loan Agreement was not shown to the solicitor at the time he prepared the transfer. Had he known of the Loan Agreement, it is hardly likely that he would have prepared a transfer recording a consideration of $1.00. I infer that the Loan Agreement was probably not executed until after the date the transfer was registered (3 January 2013) because the first monthly payment under the Loan Agreement was not made by Mr Arambasic until March 2013. Had the Loan Agreement been executed on the date it bears, the first monthly payment should have been made in January 2013. Neither Mr Arambasic nor Dr White explained why, if the Loan Agreement was executed on 12 December 2012, the first payment was not made for three months. 127Whenever the Loan Agreement was executed, it provided that Dr White, as the "Lender", promised to lend Mr Arambasic, as the "Borrower", the sum of $70,000.00. The loan was said to be for a term of 25 years and was to be repaid by consecutive monthly instalments of $235.00 on the first day of each month. The first instalment was due on the first day of the month following the date of execution of the Loan Agreement. 128The Loan Agreement was to be secured by "the property and land... known as... Potch Street Lightning Ridge". Clause 7 of the Loan Agreement provided as follows: "This loan Agreement is made in connection with the purchase of the security by the Borrower from the Lender. The Lender will transfer the title of the security to the Borrower upon the execution of this Agreement. The Lender will retain a security interest in the security property until payment of the full amount of the Loan is made by the Borrower. The Lender will be listed as a lender on the title to the security. The Borrower will do everything necessary to assist the lender in perfecting its security interest. Upon receiving full payment, the lender will remove its security interest from the title to the security." 129At some stage, Dr White and Mr Arambasic also executed a "Mortgage Deed" which identified the Property as the security provided by Mr Arambasic. Curiously enough, although it recited that the Mortgage was to secure the loan to Mr Arambasic of $70,000.00, the Mortgage Deed is dated 20 December 2012 (that is, eight days later than the date recorded in the Loan Agreement). I think it probable that the Mortgage Deed was executed at about the same time as the Loan Agreement. 130The transfer of the Property to Mr Arambasic was registered on 3 January 2013. He thereupon became registered as the holder of an encumbered fee simple estate in the Property. The Mortgage Deed was neither registered nor the subject of a caveat lodged on the title to the Property. 131As I have noted, under the terms of the Loan Agreement, the first monthly instalment was payable on 1 January 2013. Mr Arambasic said that he paid the first instalment of $235.00 in cash on 5 March 2013 and that he paid the same amount in cash to Dr White each month thereafter. This evidence is supported by receipts signed by Dr White, covering the period from March 2013 until July 2014. While I have some doubts as to the circumstances in which the receipts were created, I am prepared to accept that Mr Arambasic paid $235.00 to Dr White in each of the months to which the receipts relate. Legal Consequences 132The legal consequences of the facts as I have found them were not the subject of detailed analysis, either by the unrepresented Plaintiffs or the represented Defendants. I shall state, as briefly as I can, the consequences that seem to me to flow from my findings. The Credit Contract 133The effect of the Credit Contract, so long as Ms Veza complied with her obligations under the Contract, was to create an equitable interest in the Property in her favour. Whether Dr White, as the Vendor of the Property, could be described as a trustee of Property and Ms Veza as the beneficial owner, has been thought to depend on whether Ms Veza could have obtained a decree of specific performance of the Credit Contract: Chang v Registrar of Titles [1976] HCA 1; 137 CLR 177 at 184-185 per Mason J. However, as the High Court explained in Chan v Cresdon Pty Ltd [1989] HCA 63; 168 CLR 242, "specific performance" in this context is not confined merely to orders that compel the execution of an assurance to complete an executory contract. The expression "specific performance" includes the protection by injunction or otherwise of rights acquired under a contract: Chan at 252-253 per Mason CJ, Brennan, Deane and McHugh JJ; see also Willmott Growers Group Inc v Willmott Forests Ltd (Receivers and Managers appointed) (in liq) [2013] HCA 51; 304 ALR 80 at [159]-[160] per French CJ, Hayne, Kiefel and Gageler JJ; cf Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; 294 ALR 550 at [166]-[175] per McLure P (Newnes JA and Le Miere J agreeing). 134I have found that Ms Veza failed to pay weekly instalments and other amounts due under the Credit Contract after 15 December 2009. Dr White contributed to this failure by her disappearance from Lightning Ridge, her refusal to respond to Ms Veza's messages and the effective termination by her of Ms Veza's employment without notice. Nonetheless, for reasons I have explained, Ms Veza could have done more to ensure that she complied with her contractual obligations under the Credit Contract. 135It may have been open to Dr White to serve a notice of default on Ms Veza pursuant to cl 8.2(iv) of the Credit Contract, once her default had continued for at least ninety days. Had such a notice of default been served, it could have been expressed to be of "immediate effect", thus opening the way to Dr White issuing and serving a notice of termination under cl 8.3(i) of the Credit Contract. 136However, Dr White did not serve a notice of default prior to the 2011 Sale Agreement, nor did she purport to terminate the Credit Contract before the date the parties entered into that Agreement. Had Dr White served a notice of default followed by a notice of termination, an issue may have arisen as to whether Ms Veza was entitled to relief against the forfeiture of her interest under the Credit Contract. Any such claim by Ms Veza would have required her to show that intervention is required to relieve against "unconscientious conduct": Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; 217 CLR 315 at [59]-[60] per curiam. Since Dr White contributed to Ms Veza's breach of the Credit Contract, the latter may well have succeeded in obtaining relief from forfeiture and thus the restoration of her equitable interest in the Property. But as the Credit Contract was not terminated prior to the 2011 Sale Agreement it is not necessary to decide this question. 2011 Sale Agreement 137The exchange of emails and the conversation between Dr White and Ms Veza that took place in early May 2011, together with the subsequent discussion with Ms Sorokoput, constituted an agreement that was intended by the parties to be legally binding on them. Each of Dr White and Ms Veza was a party to the Credit Contract and each had an interest in the Property by virtue of the terms of that Contract. While they had not been in overt dispute prior to the May 2011 Sale Agreement (due to Dr White's uncontactability), there were pressing issues concerning the Credit Contract that needed to be resolved between them. The 2011 Sale Agreement addressed, albeit in an informal manner, these issues and did so in a manner that had important financial consequences for each party. 138The 2011 Sale Agreement incorporated a number of express terms: (a)The parties agreed that the Property would be sold and, to that end, would be placed in the hands of Ms Sorokoput as the agent. (b)Since Dr White was registered as the proprietor of the Property, she would enter into an agency agreement with Ms Sorokoput. (c)The Property would initially be marketed at an asking price of $180,000.00, on the basis that the purchaser would obtain vacant possession on completion of the contract of sale, but the asking price could be varied by mutual agreement between Dr White and Ms Veza. (d)Dr White agreed to forego her entitlement to arrears of weekly payments and other amounts due by Ms Veza under the Credit Contract as at 4 May 2011. (e)The parties agreed that the net proceeds from the sale of the Property would be applied in the first instance to pay Dr White all moneys due to her under the Credit Contract at the date the sale was completed, other than the arrears identified in (d). (f)Ms Veza would not be required to pay weekly instalments or outgoings in respect of the Property pending its sale, but Dr White would be reimbursed out of the net proceeds of sale for the amounts payable under the Credit Contract between 4 May 2011 and the completion of the contract of sale. (g)Any surplus from the net proceeds of sale after payment of the amounts due to Dr White would be payable to Ms Veza on completion of the contract of sale. 139Since the May 2011 Agreement was concluded in conversations between Dr White and Ms Veza and was not reduced to writing, it is not surprising that the parties did not specifically address all issues that are likely to have been the subject of express terms in a formal, written contract. Nonetheless, on the principles governing implied contractual terms stated by Mason J in Codelfa Construction Pty Ltd v State Rail Authority [1982] HCA 24; 149 CLR 337 at 347, the 2011 Sale Agreement included an number of implied terms. Each of these is necessary to give the 2011 Sale Agreement (or the Credit Contract as amended by the 2011 Sale Agreement) "business efficacy" and goes "without saying". 140The implied terms of the 2011 Sale Agreement included the following: (h) Each of the parties would use her best endeavours to facilitate the sale of the Property at a reasonable price and, except for proper legal cause, would do nothing to hinder or prevent such a sale. (i) If a prospective purchaser made a genuine offer to purchase the Property at a reasonable price, allowing for customary negotiations between the agent and the potential purchaser, Dr White would accept the offer and execute a contract of sale of the Property on the usual terms and conditions as recommended by her solicitor. (j) Ms Veza would remain in possession of the Property pending the sale but would take all steps necessary to remove the Caveat on completion of the contract of sale and would, if required, give an undertaking to that effect to the Purchaser. 141The May 2011 Agreement constituted a separate contract to the Credit Contract. Where a second contract alters an existing contract, it is a question of construction as to whether the second contract brings the first to an end and replaces it, or whether the second contract leaves the first standing, subject to the alteration: Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; 201 CLR 520 at [22] per Gleeson CJ, Gaudron, McHugh and Hayne JJ; Concut Pty Ltd v Warrell [2000] HCA 64, 176 ALR 693 at [19] per Gleeson CJ, Gaudron and Gummow JJ. Variation of a contract may take the form of rescinding some terms of the existing contract, but if the variation is to rescind the whole of the existing contract the rescission must be express or a matter of necessary implication. The determining factor is the intention of the parties, as disclosed by the contract as varied: Dan v Barclays Australia Ltd (1983) 46 ALR 437 at 448 per Wilson and Dawson JJ. 142In my opinion, the effect of the 2011 Sale Agreement was not to rescind the Credit Contract but to vary it. The terms of the 2011 Sale Agreement assume the continuation of the Credit Contract, but provide a mechanism for the parties to realise their respective interests in the Property. Those interests were to be calculated in accordance with the provisions of the Credit Contract, subject to one qualification. The qualification was that Dr White agreed to forego her entitlement to arrears of weekly instalments and outgoings and to defer her entitlement to future weekly instalments and outgoings pending the sale of the Property. Ms Veza was to continue in possession pursuant to her rights under the Credit Contract pending the sale and Dr White's entitlements, subject to the agreed variations, were to be those specified by reference to the terms of the Credit Contract. Section 23C of the Conveyancing Act 143On this analysis, despite Mr Jewell's reluctance to embrace the proposition, the 2011 Sale Agreement did not involve the creation or disposition of an interest in land within the meaning of s 23C of the Conveyancing Act. The word "disposition" is to be given its ordinary meaning and in determining whether there has been a disposition regard is to be had to the intention of the parties and the result of the agreement, rather than the precise mechanism by which the intention is fulfilled: PT Ltd v Maradona Pty Ltd (No 2) (1992) 27 NSWLR 241 at [249] per Giles J, citing Grey v Inland Revenue Commissioners [1960] AC 1 at [12]-[13] per Viscount Simonds; at [15] per Lord Radcliffe. 144After the parties entered into the 2011 Sale Agreement, Dr White remained the registered proprietor of the Property and held the legal fee simple estate, just as she had before the Agreement. Ms Veza retained the same equitable interest she had acquired by virtue of the Credit Contract. Before and after the May 2011 Agreement, Dr White's legal estate was subject to Ms Veza's interest in the property since Dr White's own actions created that interest: Bahr v Nicholay (No 2) [1988] HCA 16; 164 CLR 604 at 653-656, per Brennan J. 145The variations to the Credit Contract merely involved an agreed mechanism for realising the parties' respective interests, although the variations altered the monetary value of Dr White's entitlements under the Credit Contract. Neither party disposed of her interest in the Property, either in whole or in part. Accordingly, s 23C(1)(a) of the Conveyancing Act does not apply to the 2011 Sale Agreement and the absence of writing does not prevent the Agreement being enforceable. 146Having reached this conclusion, it is not necessary to consider whether, if s 23C(1)(a) of the Conveyancing Act applied to the 2011 Sale Agreement, Ms Veza could rely upon the doctrine of part performance. If she could invoke the doctrine, she would be entitled to enforce the 2011 Sale Agreement or, more accurately, to charge Dr White on the equities created by the acts of part performance done in execution of the 2011 Sale Agreement, even if it did involve the disposition of interests in land: Maddison v Alderson (1883) 8 App Cas 467 at 475 per Earl of Selborne LC. 147In order to rely on the doctrine of part performance, Ms Veza would need to show that she had done acts under and by force of the 2011 Sale Agreement that are unequivocally and in their own nature referable to a contract of the general nature of that alleged by her in the proceedings: Regent v Millett [1976] HCA 40; 133 CLR 679 at 682-683 per Gibbs J (Stephen, Mason, Jacobs and Murphy JJ agreeing). This principle has not proved easy to apply to particular fact situations and, indeed, it has been said that the "whole law of part performance is established by judicial authority, and discerning underlying principle is an obscure process": Khoury v Khouri [2006] NSWCA 184; 66 NSWLR 241 at [90] per Bryson JA. It is clear, however, that the mere retention of possession of the Property by Ms Veza and her continuing non-payment of weekly instalments pending sale of the Property would not constitute part performance of the 2011 Sale Agreement. Those acts (or omissions) are explicable on grounds other than the existence of a contract between Dr White and Ms Veza of the general kind alleged by the latter: Maddison v Alderson at 478, 480; McBride v Sandland [1918] HCA 32; 25 CLR 69 at 78-79 per Isaacs and Rich JJ. 148A more difficult question arises in determining whether Ms Veza's conduct in consenting to Dr White, as principal, entering into the agency agreement with Ms Sorokoput to market the Property for sale with vacant possession satisfies the test for part performance. If it were necessary to decide this question, I would be inclined to conclude that the acts were done by Ms Veza in pursuance of the 2011 Sale Agreement and are explicable only on the basis that the parties had entered into an agreement to attempt to sell the Property to a third party and to divide the proceeds of sale between them. Given that at the time these events occurred, the Credit Contract had not been terminated, there is no obvious basis on which Ms Veza would have consented to Dr White entering into an agency agreement in her own name for the sale of the Property with vacant possession, other than an agreement of the kind alleged in the proceedings by Ms Veza. Nonetheless, for the reasons I have given, it is not necessary to resolve this question. Did Dr White Breach the Credit Contract? 149In January 2012, Dr White instructed Ms Sorokoput to market the Property at a price of $160,000.00, instead of the price of $180,000.00 which had earlier been agreed. By doing so, regardless of whether Dr White's unilateral action constituted a breach of the 2011 Sale Agreement, she accepted that $160,000.00 was a reasonable price at which the Property could be sold. 150On 14 May 2012, Ms Jackson offered to purchase the Property for $160,000.00 and paid a deposit of $16,000.00 to the agent. The offer was genuine and at a reasonable price. Accordingly, it enlivened an obligation on Dr White under the 2011 Sale Agreement to use her best endeavours to accept the offer and to ensure that any contract of sale with Ms Jackson proceeded to completion. 151Instead of accepting Ms Jackson's offer, Dr White attempted to terminate the Credit Contract and to remove the Caveat from the title to the Property. To this end she served notices of default on Ms Veza in May 2012. These, however, were not valid notices of default under the Credit Contract. They were not valid because the 2011 Sale Agreement altered Ms Veza's obligations under the Credit Contract and, in particular, relieved her from the obligation to pay arrears of weekly instalments and other amounts pending the sale of the Property. The Agreement also relieved her of the obligation to continue paying weekly instalments until the Property was sold. Accordingly her failure to pay arrears or to resume paying the weekly instalments did not constitute a default under the Credit Contract. 152Even if Ms Veza was in breach of the Credit Contract, the purported notices of default were not valid. They identified Ms Veza's default as her failure to pay weekly instalments since 15 December 2009 and to pay rates and other outgoings after 14 April 2009. The evidence does not support Dr White's claim that the outgoings had not been paid since April 2009. More importantly, the notices of default demanded that Ms Veza remedy the breaches by paying the sum of $46,997.00 to Dr White. On no view was that amount due under the Credit Contract on the dates the notices were served on Ms Veza. 153It follows that Dr White's purported termination of the Credit Contract on 3 June was not effective. It is not necessary to decide whether the purported termination constituted a repudiation by Dr White of her obligations under the Credit Contract. It is enough to conclude that the Credit Contract, as amended, continued in force and Ms Veza retained her interest in the Property. 154Dr White made no effort to accept Ms Jackson's offer at any time during the period of over three months the offer remained open. A possible inference from the evidence from Dr White did not accept the offer because she believed that, if she could terminate Ms Veza's interest in the Property, she (Dr White) would receive the benefit of the entire purchase price in the event of a sale of the Property. But as this proposition was not put to Dr White in cross-examination, I refrain from making a finding to that effect. 155Whatever Dr White's motivation, her refusal or failure to take any steps to accept Ms Jackson's offer breached her obligations under the 2011 Sale Agreement. As a consequence of her breach, Ms Veza lost the benefit of a sale of the Property at $160,000.00. Had the offer been accepted and both parties to the 2011 Sale Agreement had complied with their obligations, I infer that the contract of sale would have proceeded to completion. 156I referred earlier to the letter of 25 July 2012, in which Jarratt stated that Ms Jackson required the "equitable interest held by any other party" to be satisfied before contracts were exchanged. This letter was written after Ms Jackson's offer had been open for over two months. There is nothing in the evidence to indicate that, prior to the letter being written, the existence of the Caveat was regarded as Ms Jackson or her solicitor as an impediment to an exchange of contracts. Indeed in an earlier letter, Jarratt had said that the Caveat could be removed on completion of the sale to Ms Jackson. In any event, it is likely that the perceived difficulty arose because of Dr White's own conduct in seeking to terminate the Credit Contract without having a valid basis for doing so. 157Having succeeded in removing the Caveat from the title to the Property, Dr White executed the transfer in favour of Mr Arambasic. At the time the transfer was executed, there was no agreement in place between Mr Arambasic and Dr White for the sale of the Property to him. Nor had Mr Arambasic paid a deposit in respect of any purchase of the Property by him. Dr White's intention at the time was accurately recorded in the transfer itself, namely to transfer the fee simple estate to Mr Arambasic for a nominal consideration of $1.00. 158The evidence does not enable me to make a finding as to Dr White's motivation for taking this course of action. It may have been connected with the investigations under way into her dental practice. She may also have believed that registration of the transfer to Mr Arambasic would improve her position in any dispute with Ms Veza, since she (Dr White) knew that Mr Arambasic would act in accordance with her wishes. Regardless of Dr White's motivation, the execution of the transfer by her and the registration of the transfer in favour of Mr Arambasic, with her assistance and approval, constituted a breach of the 2011 Sale Agreement. Mr Arambasic's Position as Registered Proprietor 159I have found that the Loan Agreement and Mortgage Deed executed by Dr White and Mr Arambasic were created by her after the transfer to Mr Arambasic was executed and registered. She took this course because she perceived an advantage in having documentation that recorded a sale of the Property for $70,000.00, rather than a mere transfer for a nominal consideration. At the time she created these documents and at the time the transfer was executed and registered, Dr White well appreciated that the Property had previously attracted at least one genuine offer of $160,000.00. 160Mr Arambasic did not understand the documents he signed or witnessed. He believed when he signed the transfer that the Defendants' interest in the Property, whatever it was, had been terminated because Dr White told him so. He also believed that as a result of the transfer he would acquire title to the Property and have a place to live. 161At the time the transfer was executed, Mr Arambasic had not agreed to pay $70,000.00 or any other amount to Dr White as the consideration for the transfer. Mr Arambasic came to believe that he was purchasing the Property for $70,000.00 when he later executed the loan documentation. He formed that belief because of what Dr White told him at the time. 162For a registered proprietor of Torrens system land to be guilty of fraud within the meaning of s 42 of the RP Act, he or she must have acted with actual fraud or moral turpitude: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 at [192] per Mason CJ, Gummow, Callinan, Heydon and Crennan JJ; Gerard Cassegrain & Co Pty Ltd v Cassegrain [2013] NSWCA 453; 305 ALR 612 at [13]-[14] per Beazley P (and cases cited there). Whatever might have been Dr White's intention in securing Mr Arambasic's registration as proprietor, he did not act dishonestly or with moral turpitude. As Mr Jewell did not suggest that any fraud on the part of Dr White could be attributed to Mr Arambasic on the basis of principles of agency, I do not address that possibility: cf Cassegrain at [19]-[43]. 163At the time Mr Arambasic became registered as proprietor of the Property he had not agreed to pay anything to Dr White, other than the nominal sum of $1.00, as consideration for the acquisition of his interest. While there are uncertainties as to the precise meaning of "volunteer" (as to which see Conlan (as Liquidator of Oakleigh Acquisitions Pty Ltd) v Registrar of Titles [2001] WASC 201; 24 WAR 299 at [201] ff per Owen J), Mr Arambasic was a volunteer for present purposes. 164The New South Wales Court of Appeal has held that a volunteer, in that case a beneficiary under a will, who obtains registration as proprietor of Torrens system land takes free from prior unregistered equities: Bogdanovic v Koteff (1988) 12 NSWLR 472. The same view has been taken in Western Australia (Conlan v Registrar of Titles), but not in Victoria: King v Smail [1958] VR 273; Rasmussen v Rusmussen [1995] 1 VR 613. Although I think there is much to be said for the Victorian view, I am bound by the decision in Bogdanovic v Koteff. 165In Bogdanovic v Koteff Priestly JA (with whom Hope and Samuels JJ agreed) left open (at 480) the question whether a volunteer who knows of a third party's equitable interest before he (the volunteer) obtains registration would take the legal title free from the outstanding equitable interest. In the present case, Mr Arambasic knew that the Defendants were in possession of the Property, but he believed that Dr White had validly terminated the Credit Contract and that the Defendants were merely "squatters". He did not know that Ms Veza retained her interest in the Property under the Credit Contract as amended by the 2011 Sale Agreement. 166On general law principles, Mr Arambasic had constructive notice of Ms Veza's interest in the Property at the time he obtained registration of the transfer, because the Defendants were in possession of the Property: P Butt, Land Law (6th ed, 2010, Lawbook Co) at [19 75]-[19 76]; Conveyancing Act s 164. However, the reasoning in Bogdanovic v Koteff does not support the proposition that a volunteer who has mere constructive notice of an outstanding equitable interest will be denied the benefits of indefeasibility. Indeed, although the Court in that case found (at 476) that the volunteer had no "notice" of the equitable interest claimed by the plaintiff, she was in possession of the property at the time the volunteer became registered as proprietor of the fee simple estate. It is difficult to see why in those circumstances the volunteer would not have had constructive notice of the plaintiff's interest in the property. 167It follows that unless and until the law in New South Wales is changed, Mr Arambasic, despite being a volunteer, acquired an indefeasible title upon registration that prevailed against the unregistered equitable interest of Ms Veza. Disposition of the proceedings 168Dr White has not made out her claim for damages for breach of the Credit Contract or loss of bargain. Her claim must be dismissed. 169Ms Veza (but not Mr Griffiths) has made out the claim against Dr White for breach of the 2011 Sale Agreement. Ms Veza is entitled to damages for Dr White's breach of contract. 170The parties' submissions did not deal with the quantum of damages to which Ms Veza is entitled. It seems to me that the appropriate measure is the difference between the net sale price that would have been realised if the sale to Ms Jackson had been completed and the amount due to Dr White under the Credit Contract (as amended by the 2011 Sale Agreement). These amounts should be calculated as at 14 August 2012, that is three months from the date Ms Jackson made her offer for the Property. Interest should run in Ms Veza's favour on the award of damages from 14 August 2012 until the date of judgment. 171I assess the net sale price of the Property at $153,500.00, being the value of the offer made by Ms Jackson ($160,000.00) less the commission that would have been charged by Ms Sorokoput ($5,500.00) and legal fees and other outgoings (which I estimate at $1,000.00). It will be necessary for a calculation to be done to determine the total amount due under the Credit Contract as at 14 August 2012, after making due allowance for Dr White's agreement to forego arrears of instalments and other outgoings accruing between 15 December 2009 and 4 May 2011. The amount so calculated should be deducted from the net sale price to ascertain the quantum of damages to which Ms Veza is entitled. It will be necessary to include interest in the calculation. 172Mr Arambasic is entitled to judgment for possession of the Property against the Defendants: Civil Procedure Act 2005 (NSW) s 92. I am inclined to allow the Defendants a reasonably generous period for them to organise alternative accommodation before leave is granted to Mr Arambasic to issue a writ for possession of the Property. 173Mr Arambasic is entitled to a modest award of mesne profits in respect of the Defendants' wrongful possession of the Property after he became registered as proprietor on 3 January 2013. The award should cover the period between 3 January 2013 and the date of judgment. 174I recognise that injustice may be occasioned to the Defendants if, as is possible, it proves difficult for Ms Veza to enforce her judgment against Dr White and she is unable to obtain the benefit of Dr White's contractual and proprietary entitlements as against Mr Arambasic. It is appropriate to point out, however, that Ms Veza's interest in the Property may well have been protected had she taken the necessary steps to obtain an order from the Supreme Court under s 74J(1)(a) of the RP Act extending the operation of the Caveat. Any such order would have prevented registration of a transfer from Dr White to Mr Arambasic, whether expressed to be for valuable consideration or otherwise. I am not able to determine the reasons why Ms Veza did not attempt to extend the operation of the Caveat as the Defendants adduced no evidence to explain their apparent inaction. 175The orders that I intend to make are as follows: 1Dr White's claim against the Defendants be dismissed. 2Judgment for possession of the Property in favour of Mr Arambasic against the Defendants. 3Judgment for Mr Arambasic against the Defendants on his claim for mesne profits. 4Judgment for Ms Veza on her cross-claim against Dr White for damages for breach of contract. 5The Amended Cross-Claim otherwise be dismissed. 6Direct the Defendants to file and serve proposed additional short minutes of order within fourteen days, accompanied by brief written submissions, dealing with the following matters: (a) quantification of the damages (including interest) that should be awarded to Ms Veza on her claim against Dr White; (b) quantification of the amount that should be awarded to Mr Arambasic as mesne profits; (c) the period that should elapse before Mr Arambasic is given leave to issue a writ for possession of the Property; and (d) the costs of the proceedings. 7Mr Arambasic and Dr White, within a further fourteen days, file and serve proposed short minutes of order in lieu of those proposed by the Defendants, accompanied by brief written submissions as to the matters identified in Order 6. ********** 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: 18 August 2014