Bernhardt v Bernhardt

The facts

1. The plaintiff, as sole registered proprietor, is entitled to exclusive possession of the Property. Notice has been given to the defendant, who is the only person in occupation of the Property. The defendant has refused to vacate the Property. These bare facts are sufficient to entitle the plaintiff to the orders sought. However, by reason of the defence filed and the particulars given, it is appropriate that I set out the background facts in some detail to explain why the defendant's purported defence would not defeat the plaintiff's claim even if she had appeared at the hearing to prosecute it.
2. The plaintiff, who was born in 1933, has two daughters: the defendant and Belinda. Until about May 2017 the plaintiff lived in a unit at Coogee (the Coogee Property) of which she was sole registered proprietor.
3. On 7 February 2017 the plaintiff executed an enduring power of attorney (the February 2017 EPA) which had been prepared by Mr Saivanidis on her instructions. She appointed her two daughters as her attorneys. Clause 4 of the February 2017 EPA provided: "This power of attorney operates once a medical practitioner considers that I am unable to manage my affairs, and provides a document to that effect."
4. I am satisfied that the condition specified in cl 4 has not yet been fulfilled. I accept the evidence of Mr Saivanidis, the plaintiff's solicitor, that the plaintiff has, at all material times, been capable of providing him with instructions.
5. In about February 2017, the plaintiff decided to sell the Coogee Property and instructed Mr Saivanidis' firm to act on her behalf. In February 2017 the plaintiff entered into a contract for sale of the Coogee Property.
6. In about March 2017, the plaintiff instructed Mr Saivanidis' firm to prepare a new will in which she would leave her whole estate to the defendant. To Mr Saivanidis's knowledge, the plaintiff's previous will, which had been executed on 9 February 1996 (the 1996 will), provided for her estate to be left equally to her two daughters. The plaintiff executed the new will on 20 March 2017 (the March 2017 will). She appointed Wendy Cruickshank as her executrix. The March 2017 will provided that the defendant was the sole beneficiary of the plaintiff's estate.
7. The sale of the Coogee Property settled on 22 May 2017. The proceeds of sale were held by Mr Saivanidis' firm in a trust account for the plaintiff's benefit, awaiting her instructions.
8. In about August 2017, Mr Saivanidis became concerned for the plaintiff's welfare and believed that the defendant was placing pressure on her to release the proceeds of sale of the Coogee Property. In September 2017, the plaintiff used the proceeds of sale of the Coogee Property to buy the Property. On about 29 September 2017, following the purchase of the Property, the defendant moved in to live with the plaintiff. I am satisfied, on the basis of Ms Cruikshank's evidence and the letter from Dr Hebbard, that the defendant continues to reside at the Property.
9. In November 2017, the plaintiff approached Mr Saivanidis' firm, requesting that Mr Saivanidis be appointed as her attorney and guardian. The request was made without his prior knowledge. His firm arranged for an independent solicitor to advise the plaintiff and witness her execution of the documents. The plaintiff also gave instructions for a new will which would provide for her estate to be divided equally between her daughters.
10. On 27 November 2017 the plaintiff revoked the February 2017 EPA and executed another enduring power of attorney (the November 2017 EPA), in which she appointed Mr Saivanidis as her attorney. It contained a term identical to the one in cl 4 of the February 2017 EPA. On that day the plaintiff also executed an appointment of enduring guardian, appointing Mr Saivanidis as her guardian and a new will which provided for her estate to be divided equally between her daughters (the November 2017 will).
11. On 6 February 2018, the plaintiff moved out of the Property and into a respite care facility. At about this time, Mr Saivanidis became aware that the plaintiff was no longer residing at, and did not want to return to, the Property. He sent Paul Crane, an employed solicitor at the firm, to visit the plaintiff to obtain her instructions as to her future care.
12. On 22 February 2018, the plaintiff revoked the November 2017 EPA and executed another enduring power of attorney in which she appointed Mr Saivanidis as her attorney (the February 2018 EPA). The February 2018 EPA was registered. Unlike in the February 2017 EPA and the November 2017 EPA, the February 2018 EPA provided for commencement in cl 4 as follows: "This power of attorney operates once the attorney/s have accepted their appointment by signing this document."
13. On 26 February 2018, Mr Saivanidis' firm received a copy of progress notes from the respite care facility where the plaintiff was residing. The notes recorded that the plaintiff told her carers that she did not want to go home to the defendant because she was verbally abusive to her.
14. On or about 28 February 2018, the plaintiff moved to the aged care facility where she now resides. On 8 March 2018, Mr Saivanidis visited the plaintiff to obtain her instructions, as a result of which he wrote to the defendant on 14 March 2018 to request that she not contact the plaintiff until at least the end of June 2018. The letter, which informed the defendant that the plaintiff's location would not be disclosed to her, concluded: "[The plaintiff] has requested we stress she still loves you and she will review her decision at the end of June and if she then feels she is able to cope, she will meet with you and hopefully establish a healthy ongoing relationship. Barbara has no intention of excluding you out of her life, she just needs time to recover her health and independence."
15. Mr Saivanidis conferred with the plaintiff again on 20 July 2018, at which time the plaintiff instructed him to sell the Property to repay her debts and pay her current living expenses. The firm confirmed the plaintiff's instructions in a letter dated 25 July 2018.
16. By letter dated 4 October 2018, Mr Saivanidis' firm wrote to the defendant informing her that the plaintiff wished to sell the Property and offering her the opportunity to purchase it. The letter concluded: "If you do not wish to purchase the Property then you agree to vacate the Property and leave the house and grounds in good repair and in a neat and tidy condition within 60 days of receiving this letter. If you do not reply to this letter within the next 14 days we will assume you have rejected this offer and will immediately commence the legal process to obtain vacant possession of the Property, which will be extremely expensive and stressful for all involved."
17. On 19 November 2018 the defendant sent an email to the plaintiff's solicitors in which she said, in part: "My mother and I have a private agreement. In that agreement, my mother gave me [the Property]. In that agreement, my mother promised me the aforesaid house. Written representation of this private agreement is evidenced in her Last Will and Testament, which was executed by your firm of which I am Executor and witnesses by several other people."
18. The plaintiff's solicitors sought the plaintiff's written instructions as to the following matters: "1 do you recall any private agreement with [the defendant] that you would give her [the Property]; 2 do you still require us to take legal proceedings to evict [the defendant] from the unit so that you can proceed with the sale of the unit; and 3 would you please confirm these instructions are given of your own free will and volition, free of any influence or suggestion from [Mr Saivanidis] or this firm."
19. The plaintiff responded on 29 November 2018: "In reply to your letter dated 22 November 2018, seeking written instruction[s] I state: 1. No, at no stage. But I corrected [the defendant] when she referred to the House as "hers" and reminded her that it was my House; 2. Yes. I instruct you to go ahead with the sale; and 3. I confirm these instructions are given of my own free will and volition, free of any influence or suggestion from [Mr Saivanidis] or this firm."
20. By letter dated 5 December 2018, the plaintiff's solicitors responded to the defendant by denying the allegation of private agreement and reiterated the plaintiff's request for vacant possession within seven days from the date of the letter.
21. As referred to above, the proceedings were commenced by statement of claim filed on 10 May 2019. On 15 May 2019, at 12.30pm, Peter Iverson, a process server, attempted to serve the defendant by going to the Property. He noticed a sign in the front window of the Property which said, "Legal Warning Notices - No Trespass - Stop Warning!". When he pressed the doorbell, knocked on the door and called out, there was no response. He observed mail addressed to each of the plaintiff and the defendant sticking out of the mailbox. Later that day, 1.07pm, he returned to the Property and affixed an envelope containing a "notice to occupier" to the front door. At 6.38pm that evening, Mr Iverson returned to the Property. He noticed that lights were on inside and that there was a pair of thongs outside the front door. The envelope was still stuck to the front door. He knocked several times and called out. While Mr Iverson was attempting to remove the envelope from the door, it was opened by a female, who denied that she was the defendant.
22. On 23 May 2019 the plaintiff's solicitors gave Mr Iverson a photograph of the defendant whom he identified as the same woman who had opened the door to him on 10 May 2019.
23. On 25 May 2019, Mr Iverson returned to the Property. The security screen door was locked, all the blinds were drawn and he was unable to see inside. A sign had been erected beside the front door bell which said: "Private Property Keep Out!" Mr Iverson saw a pair of pink thongs outside the front door. He pressed the door bell, knocked on the door and called out but received no response. The mail had been cleared from the mailbox. Mr Iverson opined, in his affidavit of 30 May 2019, that the defendant was avoiding service and that if documents were left at the Property, they would come to her attention.
24. According to the notes kept by staff at the facility where the plaintiff resides, at 8.30pm on 11 or 12 August 2019, the defendant came to the facility to see the plaintiff. The defendant went into the plaintiff's room. The plaintiff told her that she did not want to talk to her. The defendant left the room, crying, and then left the facility.
25. In an email dated 3 September 2019, the defendant provided to the plaintiff's solicitors the following particulars of the alleged private arrangement with the plaintiff: "1. On or about February 2017, My Mother makes it clear to Belinda by phone that I am to have the house saying to her 'If I have to go to an aged care facility, then Kim will continue living in the house, it will be hers.' 2. On or about February 2017, My Mother said, 'Taking on the role of carer is a huge task for Kim and one that I really appreciate, Belinda.' My Mother said, 'It's fair that Kim gets the house'. She asked Belinda, 'Do you agree Belinda?' Belinda said 'Yes Mum'. My Mother said, 'It's the right thing to do, to make sure that whatever happens to me the house is to be Kim's', Belinda agreed. My Mother is very adamant that the three of us acknowledge our agreement. My Mother asks Belinda, 'Belinda, I want you to promise me.' Belinda said, 'Yes Mum I promise.' 3. On or about 13 February 2017, My Mother is discharged from the POWH. When we arrive home My Mother asks me to call Belinda. Again the three of us talk about My Mother's wishes for me to have the house. Belinda again agrees. 4. On or about 1 March 2017, My Mother talks about her dying at home and never having to go to an aged care facility. It is during this period that My Mother says, 'I don't know what I'd do without you Kim. You have been so kind. You're wonderful. Whatever happens to me I want to make sure you're safe and you have a home. And I need to discuss this with Belinda so that we all agree'. 5. On or about 2 March 2017, My Mother insists I call Belinda. During the conversation, My Mother says to Belinda, 'You agree don't you Belinda, that whatever happens to me, Kim will stay in the house? It will be hers. We all agree don't we?' My Mother asks me again do I agree. I said 'Yes'. Then Mum asks Belinda again and she also says, 'Yes'. My Mother is both firm and specific when she says, 'It's only fair Belinda. Kim is doing a fantastic job as my carer. If anything happens to me I want Kim to have the house.' 6. On or about 20 March 2017, Elias Kheir an agent of PT&W Law arrives to execute My Mother's last will and testament at Unit 2/108 Beach Street, Coogee, New South Wales. My Mother's friend and neighbour Robyn Renilson (retired) from Beach Street, Coogee, New South Wales is in attendance. Before witnessing, Mum shares with Robyn that Belinda and I promised and agreed that whatever happens to her I will stay and live in the house."
26. Mr Crane, an employed solicitor in Mr Saivanidis' firm, swore an affidavit on 17 September 2019 which established that the plaintiff's current cash reserves are insufficient to pay debts she owes to the aged care facility where she currently resides but the expected proceeds of sale of the Property will substantially exceed the amount of those debts.
27. Mr Daniele, an employed solicitor in Mr Saivanidis' firm, attempted to contact the defendant by email and telephone on 15 and 19 November 2019. She did not respond to the emails and the phone calls went through to her voicemail.

Consideration

1. It appears that the defendant contends that, by reason of a private arrangement between herself and the plaintiff, she has an interest in the Property which entitles her to possession of the Property to the exclusion of the plaintiff, or at least to the exclusion of the rest of the world apart from the plaintiff. The parties' positions on this issue are as follows.
2. The plaintiff's evidence in her affidavit of 5 July 2019 is: "20 To the best of my knowledge and belief, Kim refuses to vacate the Forster Property. 21 I understand that Kim alleges that she and I have a private agreement whereby I agreed to give her the Forster Property. I deny this. I have never agreed to give to Kim the Forster Property. I also did not have a conversation with Kim to the effect that the Forster Property belonged, or would belong at any time, to her. 22 At various times while Kim and I were residing together at the Forster Property, Kim would often refer to the Forster Property as 'her unit' or 'our unit', however I would always correct her and tell her words to the effect of 'it is my unit'. 23 The Forster Property is my only asset and I would not have agreed and have not agreed to give it to Kim at any time. 24 I have instructed my lawyers to commence these legal proceedings seeking orders for Kim to vacate the Forster Property so that I can sell it."
3. There is a conflict between the plaintiff's evidence set out above and the version given by the defendant in the particulars extracted above. I have seen and heard neither the plaintiff nor the defendant give evidence. However, it is, in my view, noteworthy that the conversations which are alleged to have given rise to the "private arrangement" pre-dated the purchase of the Property and occurred at a time when the plaintiff was still living in the Coogee Property. It is difficult to accept that the plaintiff made statements about the Property in February 2017 when, at that time, the plaintiff was still living in the Coogee Property and would not enter into a contract to buy the Property until about September 2017.
4. Further, it is also significant that the statements alleged to have been made by the plaintiff to the defendant were made shortly prior to 20 March 2017 when the defendant became the sole beneficiary under the plaintiff's will. She remained the sole beneficiary for the following period of about eight months until the plaintiff executed the November 2017 will which, once again, provided for her estate to be divided equally between her daughters. It is possible that the plaintiff told the defendant that she would inherit her mother's estate and that, upon the purchase of the Property, the defendant assumed that the Property would be hers, as it would have been had the plaintiff died before executing the November 2017 will. This scenario is consistent with the defendant's statement in her email dated 19 November 2019 extracted above, which seeks to use the March 2017 will to corroborate the oral statements.
5. The starting point is that the plaintiff, as the registered proprietor of the Property, has a "paramount" estate: s 42 of the Real Property Act 1900 (NSW).
6. The defendant claimed an interest in the Property on the basis of oral statements alleged to have been made to her by the plaintiff in February 2017. I reject the defendant's contention, in her email dated 19 November 2019, that the March 2017 will constituted written evidence of the oral statements. Subject to presently irrelevant exceptions, a testator is free to change his or her will at any time before death as long as the testator has testamentary capacity.
7. Even if the version given by the defendant were to be accepted at its highest, it would not be sufficient either to give her an interest in the Property or provide a defence to the plaintiff's claim for possession. The oral statements alleged to have been made by the plaintiff to the defendant were incapable of having the effect for which the defendant contended. Section 23C of the Conveyancing Act 1919 (NSW) requires instruments which create an interest in land to be in writing. Section 23D of the Conveyancing Act provides that interests created orally and not put in writing and signed shall have the "force and effect of interests at will only". Thus, the defendant has, at best, a bare licence, which is revocable at will or on reasonable notice: Cowell v Rosehill Racecourse Company Limited (1937) 56 CLR 605 at 630-631 (Dixon J); [1937] HCA 17.
8. Further, although s 23C of the Conveyancing Act does not exclude the law relating to trusts, there is no room for a constructive trust in the present case as the Property was purchased entirely with funds provided by the plaintiff from the proceeds of the Coogee Property. Nor was any representation made by the plaintiff from which it would be unconscionable from her to depart or upon which it would be reasonable for the defendant to rely: cf. Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-429 (Brennan J); [1988] HCA 7.
9. For these reasons, the defendant has not raised an arguable defence to the plaintiff's claim. Any right to possession which she may have had amounted to no more than a bare licence, which has been terminated by reasonable notice.
10. Accordingly, the plaintiff is entitled to a judgment for possession. As the plaintiff has a right to immediate possession, she is entitled to have a writ of possession forthwith.

Costs

1. The plaintiff has been wholly successful. There is no reason why costs ought not follow the event in accordance with the general rule: UCPR, r 42.1.

Orders

1. For the reasons given above, I made the following orders at the conclusion of the hearing on 21 November 2019: 1. Judgment for the plaintiff for possession of the land described in Folio Identifier Lot 1 Strata Plan 53223, being the land situated at and known as xxxx xxxxx xxxx, Forster in the State of New South Wales. 2. Grant leave to issue a writ of possession forthwith. 3. Order the defendant to pay the plaintiff's costs of the proceedings.

Amendments 25 November 2019 - [44] typographical error corrected. 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: 25 November 2019