Lawrence v Gunner; Gunner v Lawrence [2015] NSWSC 944 | Case summary

Lawrence v Gunner; Gunner v Lawrence [2015] NSWSC 944 | Case summary | Zoe

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TABLE OF Contents Introduction 1 Disposition of Mr Gunner's estate on his death 10 The plaintiffs' case - the alleged agreements 13 The Old Bar Agreement 17 The Beecroft Agreement 19 The Mt Colah Agreement 21 The 132 Clontarf Street Agreement 23 The 134 Clontarf Street Agreement 25 The alleged agreement of 27 January 2012 31 The alleged agreement of 18 March 2009 32 The relief sought in relation to the alleged agreements 35 Aspects of the course of the proceedings 41 The course of events - overview 57 The absence of a contradictor 63 Circumstances said to point to the probability of Mr and Mrs Lawrence's case 72 The alleged history of property dealings between Mr Lawrence and Mr Gunner prior to 2004 76 Mr Gunner's afflication with leukaemia 81 Mr and Mrs Lawrence's alleged residence in the "Blue House" 90 The course of events 96 Events leading to Mr and Mrs Lawrence's occupation of 134 Clontarf Street 96 The events of 18 March 2009 118 Events thereafter 138 Mr Lawrence's dealings with Mr Mirosevich 147 132 Clontarf Street 172 134 Clontarf Street 180 Beecroft 199 Mr Lawrence's dealings with Mr Searles 208 Purported rescission by Mrs Gunner of the Beecroft contract 220 Mrs Lawrence's application to the Guardianship Tribunal 230 The 27 January 2012 document 259 The "Declaration of Trust" 270 Resolution of dispute concerning the sale of Beecroft 279 The CTTT proceedings 300 Mr Lawrence's representations concerning Mr Gunner's death certificate 309 Decision 316 Inconsistency between Mr and Mrs Lawrence's claims and Mr Lawrence's conduct following Mr Gunner's death 319 The inherent improbability of Mr and Mrs Lawrence's case 325 Credit - Mr Lawrence 328 Absurd allegations 329 False statements to the Guardianship Tribunal 337 Cladestine purchase of the Beecroft property 344 The "loans affair" 347 The abandoned Braemar reliance evidence 362 Credit - Mrs Lawrence 368 Credit - Ms Pearson 379 Credit - Mrs Gunner 393 Partnership Act 1892 (NSW) 399 Mrs Gunner not "bound" by the agreements 408 The alleged agreement of 18 March 2009 411 Estoppel and constructive trust claims 419 Other bases on which Mrs Gunner resisted Mr and Mrs Lawrence's claims 426 Has Mrs Gunner "admitted" Mr and Mrs Lawrence's claim? 427 Mr Lawrence's quantum meruit claim 448 The process undertaken by Mr Lawrence to make out his quantum meruit claim 452 Mrs Gunner's cross-claim - possession of 134 Clontarf Street 494 Mrs Gunner's cross-claim - 134 Clontarf Street - land tax 526 Mrs Gunner's cross-claim - 134 Clontarf Street - loss of rent 529 Mrs Gunner's cross-claim - breach of fiduciary duty regarding the Beecroft property 538 Mrs Gunner's cross-claim - Old Bar property agreement 552 Mrs Gunner's cross-claim - Old Bar property equipment 559 Mrs Gunner's cross-claim - Deutz tractor mainentance and repair 562 Conclusion 564

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Introduction

The plaintiffs, Mr Wayne and Mrs Valerie Lawrence, are husband and wife. Mrs Lawrence is the identical twin sister of the defendant, Mrs Frances Gunner.
In or about November 1990, Mr Lawrence introduced Mrs Gunner (then known as Ms Frances Sanders) to Mr Norman Gunner. Mr and Mrs Gunner commenced living together in or about December 1990. They were married on 21 August 1999.
Mr Gunner died on 17 March 2009.
Mr Gunner had been a property developer and investor since about 1943. At the time of his death he owned over one hundred properties in Sydney and regional New South Wales, some of which he had purchased as long ago as 1950. On the date of his death, those properties were worth something in the order of $10 million.
Mrs Gunner gave evidence that she understood, from what Mr Gunner had told her, that Mr Gunner had always acted alone; that is, never with a partner.
During their 19 years together, Mr Gunner also arranged for some properties to be purchased in Mrs Gunner's name. One of those properties was a property at Tinonee. That property was purchased in 1998. It was Mr and Mrs Gunner's home from that date until Mr Gunner died, and remains Mrs Gunner's home to this day.
Included in Mr Gunner's property portfolio were the following: 1. 909 Old Bar Road, Old Bar, acquired in 1996; 2. 79-87 Malton Road, Beecroft, acquired in 1994; 3. 33-35 Rupert Street, Mt Colah, acquired in 1953; 4. 132 Clontarf Street, North Balgowlah, acquired between 1952 and 1960; and 5. 134 Clontarf Street, North Balgowlah, acquired in 1988.
The Old Bar, Beecroft, Mt Colah and 132 Clontarf Street properties were vacant land at the date of Mr Gunner's death.
There is a house erected on 134 Clontarf Street. Mr Gunner lived in that house from the time he purchased it in 1988 until 1993. From December 1990, Mrs Gunner also lived there. Thereafter, the house was vacant for some time. It was then occupied by a tenant, Ms Glynis Conlon. In the circumstances I describe below, Mr and Mrs Lawrence moved into the 134 Clontarf Street property in September 2006. They have lived there since, rent free, and assert an entitlement to remain in occupation "for as long as they want". By her cross-claim, Mrs Gunner seeks (amongst other things) possession of that property.

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The 134 Clontarf Street Agreement

Mr and Mrs Lawrence plead a further agreement, again made orally between Mr Lawrence and Mr Gunner "in or about 2004", concerning 134 Clontarf Street as follows: 1. Mr Lawrence would take steps to evict the tenant occupying the property at the time (Ms Conlan); 2. following eviction of the tenant, Mr and Mrs Lawrence could move into the property, renovate it and remain in occupation "for as long as they want"; 3. during occupation, Mr and Mrs Lawrence would pay council and water rates; 4. Mr and Mrs Lawrence would have the option of purchasing the property at market value; and 5. such "market value" was to be the average of market appraisals obtained by each of Mr Lawrence and Mr Gunner.
Mr Lawrence gave evidence of the following conversation with Mr Gunner "in the second half of 2004": Mr Gunner: "I have a tenant in 134 Clontarf Street. She is complaining about the state of the property. I want to evict the tenant. One reason I want to evict her is because this will help with the subdivision of 132 Clontarf Street. Another reason is so that I can…stay in the house when I visit Sydney to see my properties or get treatment at hospital. Mr Lawrence: I will make enquiries about how to evict the tenant."
Mr Lawrence said he made enquiries as to how to evict the tenant and "reported back" to Mr Gunner, who then said words to the effect "please take steps for the tenant to be evicted".
Mr Lawrence said he then had a conversation with Mr Gunner as follows: Mr Gunner: "Once you get the tenant out of 134 Clontarf Street, you and Valerie can move in. This will put you on site when you clear the land and then do the subdivision work at 132 Clontarf Street. Also, you can then look after 134 Clontarf Street. Mr Lawrence: Valerie and I are happy in our home in Davidson. We won't move into 134 Clontarf Street unless there is a permanent arrangement. I don't want you to be able to kick us out. Mr Gunner: You can stay there for as long as you like. When the subdivision of 132 Clontarf Street is complete, you can buy 134 Clontarf Street at today's value from your share of the profit. In the meantime, Valerie and you will have to pay council rates and water rates."
Mrs Lawrence alleged that, at around this time, she had the following conversation with Mrs Gunner: Mrs Gunner: "You and Wayne can move into our house at Balgowlah. Sara [Pearson; Mrs Lawrence's daughter] and Darryl [Ms Pearson's husband] can then move upstairs in the Davidson house. Mrs Lawrence: Wayne has told me that he will not move into the Balgowlah house unless it is permanent. Mrs Gunner: I have spoken with Norm. You and Wayne can stay in the Balgowlah house for as long as you like."
Mrs Gunner disputes the existence of any of these agreements and disputes that she had the conversation alleged by Mrs Lawrence.

[14]

The relief sought in relation to the alleged agreements

Mr and Mrs Lawrence claim damages for breach of contract on the basis of each of the Old Bar, Beecroft, Mt Colah, 132 Clontarf Street and 134 Clontarf Street Agreements, and/or equitable compensation in respect of the "subdivision developments" that have been sold by Mrs Gunner (the Mt Colah, Beecroft and 132 Clontarf Street properties). Mr and Mrs Lawrence also seek a "constructive trust in respect of" the Old Bar property "or alternatively equitable compensation".
They also seek specific performance of the alleged 27 January 2012 agreement concerning 134 Clontarf Street; namely, that Mrs Gunner transfer that property to Mrs Lawrence.
Mr and Mrs Lawrence further allege that upon Mr Gunner's death "or upon the grant of probate [sic]" to Mrs Gunner: 1. Mrs Gunner, "as executor [sic] of [Mr Gunner's] estate", was "bound by and had a duty to perform" each of the Old Bar, Beecroft, Mt Colah, 132 Clontarf Street and 134 Clontarf Street Agreements and; 2. each of those agreements is "enforceable" against Mrs Gunner "including for breach of contract or specific performance".
Mr and Mrs Lawrence allege: "Pursuant to s 45 of the Probate and Administration Act 1898 (NSW), upon the grant of probate to [Mrs Gunner], all real estate held by [Mr Gunner] in trust vested from the date of [Mr Gunner's] death in [Mrs Gunner], subject to the trusts and equities affecting the same."
Section 45 of the Probate and Administration Act 1898 (NSW) is in the following terms: "All real estate held by any person in trust or by way of mortgage, and vesting as aforesaid under this part, shall as from the death of such person vest in the person's executor or administrator, subject to the trusts and equities affecting the same."
Mrs Gunner disputes that any of the properties was the subject of any trust or equity in favour of Mr Lawrence, and thus that s 45 of the Probate and Administration Act is relevant to the issues in these proceedings. For the reasons I discuss below (see [409] and [410]), I agree.

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Aspects of the course of the proceedings

Mr and Mrs Lawrence commenced these proceedings by statement of claim filed on 5 September 2012. Earlier that year, on 21 February 2012, Mrs Gunner commenced proceedings against Mr and Mrs Lawrence in the Consumer, Trader and Tenancy Tribunal ("CTTT") seeking possession of the 134 Clontarf Street property. On 12 September 2012, following commencement of these proceedings, and with the consent of Mr and Mrs Lawrence, the CTTT proceedings were transferred to this Court to be heard with and abide the outcome of these proceedings.
When the proceedings commenced, Mr and Mrs Lawrence were represented by Mr Charles Hockey, solicitor, who had also appeared for them in the CTTT.
On 27 June 2013 Mr Hockey filed a notice of ceasing to act. Thereafter, until very shortly before the commencement of the hearing before me on 24 November 2014, Mr and Mrs Lawrence were self-represented. Mr Lawrence appeared on his own and Mrs Lawrence's behalf on various interlocutory applications before the Court.
In late March 2014, the Chief Judge in Equity asked me to case manage the proceedings. On 3 April 2014, I set the matter down for hearing before me commencing 24 November 2014. Thereafter, the proceedings were listed before me regularly. On those occasions, Mr Lawrence appeared for himself and Mrs Lawrence, and Mr Hourigan of counsel appeared for Mrs Gunner.
Several days before hearing commenced, Mr and Mrs Lawrence served an "Outline of Submissions". By then, they were represented by Mr Kingsley Liu of The People's Solicitors. Although Mr Liu signed the Outline of Submissions, they were prepared by Mr and Mrs Lawrence themselves. Indeed, the document concluded with the statement "prepared by the Plaintiffs, and signed by their solicitor".
At around that time, Mr Collins QC (who appeared with Mr Hourigan for Mrs Gunner at the hearing) circulated opening submissions on behalf of Mrs Gunner. In those submissions, Mr Collins said that "the whole of Mr Lawrence's extravagant story is in issue in these proceedings".
When the proceedings were called on for hearing on 24 November 2014, Mr King, of counsel, appeared (for the first time) for Mr and Mrs Lawrence.
Mr Collins cross-examined Mr Lawrence for the best part of five days.
It was clear from the tone and length of that cross-examination that, indeed, Mr Lawrence's credit, and evidence generally, was in issue.
Mr Collins did not, however, put to Mr Lawrence in terms that the conversations he said he had with Mr Gunner, said to give rise to the Old Bar, Mt Colah, Beecroft, 132 Clontarf Street and 134 Clontarf Street Agreements, did not take place.
The rule of practice known as the rule in Browne v Dunn (1893) 6 R 67 (HL) is a rule of fairness requiring that "if a court is to be invited to disbelieve a witness, the grounds upon which the evidence is to be disbelieved should be put to the witness in cross-examination so that the witness may have an opportunity to offer an explanation" (J D Heydon, Cross on Evidence, (Looseleaf Edition, LexisNexis Butterworths) at [17435]).
In Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1, Hunt J (as his Honour then was) said of the relevant practice at 22 to 23: "Firstly, it gives the witness the opportunity to deny the challenge on oath, to show his mettle under attack (so to speak), although this may often be of little value. Secondly, and far more significantly, it gives the party calling the witness the opportunity to call corroborative evidence which in the absence of such a challenge is unlikely to have been called. Thirdly, it gives the witness the opportunity both to explain or to qualify his own evidence in the light of the contradiction of which warning has been given and also, if he can, to explain or to qualify the other evidence upon which the challenge is to be based."
In this case, the second and third matters to which Hunt J referred do not arise. Mr Lawrence's position was that there were no witnesses to his conversations with Mr Gunner. He was therefore not in a position to call corroborative evidence or to fear direct contradiction of what he claimed Mr Gunner had said.
Further, the rule of practice does not apply "where the witness is on notice that the witness's version is in contest". Such notice can come from the other side's opening or the "general manner in which the case is conducted" (Cross on Evidence at [17445] (citations omitted)).
No fair reader of Mr Collins's cross-examination could accuse him of being "willing to wound, and yet afraid to strike" (per Wells J in Reid v Kerr (1974) 9 SASR 367 at 374, adopting the language of Alexander Pope).
Mr Collins could not have the benefit of instructions from Mr Gunner as contradictor to Mr Lawrence's account of events. In all the circumstances, I do not see that any unfairness was caused to Mr Lawrence by reason of the course that Mr Collins took.

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The course of events - overview

The critical questions for me to determine in these proceedings are whether, as Mr Lawrence contends, he entered the Old Bar, Beecroft, Mt Colah, 132 Clontarf Street and 134 Clontarf Street Agreements with Mr Gunner and whether, as both Mr and Mrs Lawrence claim, they entered the further agreement with Mrs Gunner on 18 March 2009.
An examination of the objectively established course of events points to the high improbability of the existence of the agreements with Mr Gunner for which Mr Lawrence contends; or, alternatively, to the conclusion that Mr Lawrence has never had a genuine belief that whatever conversations took place in or around 2004 formed the basis of any partnership, joint venture or other agreement which provided a foundation for any legal entitlements on his part.
Leaving aside the objective improbability of Mr Lawrence's case, many of the events that occurred prior to and over the course of proceedings reflect adversely on his credit, as well as that of Mrs Lawrence. An understanding of why that is so is best revealed by an examination of the events themselves. For that reason, I will defer detailed analysis of Mr and Mrs Lawrence's credit until after consideration of the course of events.
I record at this stage of the judgment however that, unlike Mr and Mrs Lawrence, I found Mrs Gunner to be a calm, credible and reliable witness. Mr and Mrs Lawrence gave evidence of numerous events and conversations that Mrs Gunner disputed. There were many inconsistencies between the evidence given by Mr and Mrs Lawrence, and also Mrs Lawrence's daughter, Ms Sara Pearson, on the one hand, and the corresponding evidence given by Mrs Gunner on the other; very often in circumstances where the witnesses could not have been mistaken about what really happened. For reasons which will emerge from my discussion of what occurred, my conclusion is that to the extent that there is any inconsistency between the evidence given by Mr Lawrence, Mrs Lawrence or Ms Pearson on the one hand, and Mrs Gunner on the other, I should prefer Mrs Gunner's evidence.
Thus, in what follows, where I set out Mrs Gunner's recollection of events and conversations, I prefer that recollection to the recollections of Mr and Mrs Lawrence and Ms Pearson, to the extent that they differ from that of Mrs Gunner. Because of the overall view I have come to as to the credibility and reliability of the evidence given by Mr and Mrs Lawrence, and to a lesser extent Ms Pearson, I do not find it necessary to address, separately, each and every one of these inconsistencies.
I will deal with the credit of each of Mr and Mrs Lawrence, Ms Pearson and Mrs Gunner further below (see [328] to [398]).

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The absence of a contradictor

Leaving aside questions of credit and of improbability arising from Mr and Mrs Lawrence's conduct after Mr Gunner died, there are other aspects of Mr and Mrs Lawrence's claim which cause me to approach their case with caution.
The plaintiffs' case depends, entirely, on acceptance of Mr Lawrence's evidence concerning his conversations with Mr Gunner. The agreement he alleges he reached with Mrs Gunner on 18 March 2009 to "continue on the same as your agreements with Norm" is contingent on there being, in fact, an agreement with Mr Gunner that could be "continued" (leaving aside, for the moment, any other difficulties that may be associated with this part of the plaintiffs' case).
Mr Lawrence did not assert the existence of any of the Old Bar, Beecroft, Mt Colah, 132 Clontarf Street or 134 Clontarf Street Agreements until May 2012 (that is, more than three years after Mr Gunner's death), and only then in the course of the proceedings commenced by Mrs Gunner in the CTTT to which I have referred.
There is no note or memorandum of the alleged agreements. There is no alleged witness to the agreements. Each agreement is alleged to have been made orally between Mr Lawrence and Mr Gunner "in or about 2004", in conversations at Mr and Mrs Gunner's Tinonee home when both Mrs Lawrence and Mrs Gunner were either "in the kitchen" or "out of the house on a walk". Initially, Mr Lawrence's evidence was that Mrs Gunner knew nothing of Mr Lawrence's alleged agreements with Mr Gunner (although, in cross-examination, when the implications of this evidence were explored, Mr Lawrence sought to retreat somewhat from this position. I deal with this further below).
Thus, there can be no direct contradictor of Mr and Mrs Lawrence's case.
At the time of the alleged agreements, Mr Gunner was 80 years of age and, to Mr and Mrs Lawrence's knowledge, seriously unwell with a limited life expectancy. Mr Gunner was diagnosed with chronic lymphatic leukaemia in late 2002 and was, by 2004, unwell and suffering severe hearing problems.
Mr Lawrence gave no evidence of having made any complaint between 2004 and Mr Gunner's death in 2009 concerning inactivity by Mr Gunner in relation to the developments the subject of the alleged agreements, nor of having had any communication at all with Mr Gunner in that period concerning the progress of any of the developments.
There is no evidence that Mr Lawrence ever described himself to any outside person as a partner or joint venturer of Mr Gunner. Although Mr Lawrence kept a detailed diary recording daily activities, he made no contemporaneous mention in that diary of any agreement with Mr Gunner. There is no evidence of any partnership account or formal record of any work done by Mr Lawrence as a partner, nor of any funds allocated to or monies borrowed for the subdivisions the subject of the alleged agreements. Mr Lawrence made no claim on Mr Gunner's estate.
In these circumstances, authority, and indeed common sense, requires that, quite apart from any questions of credit, Mr and Mrs Lawrence's case be examined with great care: see the cases summarised by Hallen J in Fulton v Fulton [2014] NSWSC 619 at [117] to [125].

[22]

Events leading to Mr and Mrs Lawrence's occupation of 134 Clontarf Street

As I have set out above, Mr Lawrence alleges that "in the second half of 2004" he entered into the 134 Clontarf Street Agreement with Mr Gunner, pursuant to which he and Mrs Lawrence could stay there "for as long as they want".
On 9 February 2005, Mr Lawrence wrote a letter to the CTTT "[a]cting as Power of Attorney for Norman Gunner". The letter sought an urgent hearing for Mr Gunner's application for an order that the then tenant, Ms Conlon, vacate the property.
Mr Lawrence stated that before sending letters to the CTTT he asked Mr Gunner to "sign off on them".
Mr Lawrence's letter includes: "If the matter is now put over for a further 10 weeks to the hearing date, and then the tenant seeks a further 3 months as indicated this will cause substantial concern to the landlord because of his medical condition. Mr Gunner being 80 years of age and suffering from a life threatening disease of leukaemia and as advised to the Tribunal on 8 February 2005, that Mr Gunner is now required palative [sic] care 2 to 3 times per week under the supervision of a palative [sic] nurse, it is imperative that Mr Gunner puts his affairs in order prior to passing away. Mr Gunner is disturbed and worried as to the wellbeing of his wife not being able to obtain possession of their home."
On 29 March 2005, Mr Lawrence, again acting as "Power of Attorney for Norman Gunner", wrote to the "Tenant Advocate" acting for Ms Conlon as follows: "I would firstly like to advise you that the landlord Norman Gunner is 80 years old and is suffering from chronic leukaemia and is currently on Chemotherapy and his life expectancy is unknown but his doctor has told him to put is [sic] affairs in order. …the landlord was to obtain possession of his only home in Sydney on 18 January 2005. And since that date the landlord has been waiting possession of the property."
The clear import of these letters is that Mr Gunner required possession of the 134 Clontarf Street property, described as "his only home in Sydney", for his own use.
Mr Collins submitted this to be irreconcilable with Mr Lawrence's claim to have entered into the 134 Clontarf Street Agreement "sometime in 2004" because an element of that alleged agreement was that Mr and Mrs Lawrence would have life tenure at 134 Clontarf Street; whereas the above correspondence asserted that Mr Gunner required possession of the same property for his own use.
However, by February 2005, Mr and Mrs Gunner had been living at the Tinonee property for some six years. Mrs Gunner did not suggest in her evidence that, in February 2005, she and Mr Gunner were planning to move to 134 Clontarf Street on a full time basis (although Mrs Gunner did say that Mr Gunner said "we may have to move back [into 134 Clontarf Street] to deal with my illness"). It may be that Mr Gunner asked Mr Lawrence to assert to the CTTT that Mr Gunner wished to move back to 134 Clontarf Street as a ploy to evict the tenant. As Mr Collins accepted in final submissions, it may be that Mr Gunner was "putting his best foot forward".
For those reasons, I do not think that Mr Lawrence's correspondence of February and March 2005 is, itself, necessarily inconsistent with his claims concerning the 134 Clontarf Street Agreement.
So far as concerns Mr and Mrs Lawrence's occupation of 134 Clontarf Street, Mrs Gunner gave a very different account of events to that given by Mr and Mrs Lawrence (set out at [26] to [29] above). For the reasons I have set out above, I prefer Mrs Gunner's account of events.
Mrs Gunner said that from about mid 2005 Mrs Lawrence frequently asked her whether Mr Gunner would permit Mr and Mrs Lawrence to move into 134 Clontarf Street.
At that stage, Mr and Mrs Lawrence were living in a property that they owned in Davidson, together with Ms Pearson and her husband Darryl Pearson.
Mrs Gunner said that Mrs Lawrence stated: "Wayne and I really need to move out of the house. Sara and Darryl do not get on with Wayne and all the stress is affecting Sara's health. Sara and Darryl have nowhere else to go so I have convinced Wayne that we should find somewhere else to live."
Initially Mr Gunner refused, saying: "I do not think it is a good idea. We may have to move back to deal with my illness and in any event after my earlier dealings and difficulties with Wayne and David, I am concerned that we may have difficulty in getting Wayne out."
Mr Gunner's reference to his "earlier dealings and difficulties with Wayne and David" was evidently a reference to the dispute which had arisen earlier in relation to work performed by Mr Lawrence's son (see [78] above).
Nonetheless, Mrs Lawrence persisted with her request that Mr Gunner permit she and Mr Lawrence to move into 134 Clontarf Street.
In late 2005 or early 2006 Mr Gunner relented and, according to Mrs Gunner, said to her: "Okay then, but [I] am warning you that you will have trouble. We may need the house and if we don't need it I want to sell it. Tell them they can stay there but only for 6 months and they must pay all the outgoings including Council rates, water and sewerage rates and water use and land tax."
Mrs Gunner then telephoned Mrs Lawrence and that the following conversation took place: Mrs Gunner: "Norman has said it's ok for you and Wayne to move into 134 Clontarf Street but only for six (6) months if you pay all the rates, water use, land tax and your own telephone and electricity. Mrs Lawrence: Yes, that is fine. Mrs Gunner: We are not sure if we may need the house because of Norman's illness or if we will sell it so Norman does not want you there any longer than six months. Also, Norman said that if you want to live in the house rent free Wayne must carry out some repairs. Mrs Lawrence: Ok. What work does he want Wayne to carry out? Mrs Gunner: Repaint the pool, build a balcony and other general repairs. He wants the property in a good state to sell. Mrs Lawrence: Ok. I will let Wayne know."
Mr and Mrs Lawrence moved into 134 Clontarf Street in or about September 2006. As I have said, they remain in occupation of the property and, by reason of the 134 Clontarf Street Agreement, assert an entitlement to continue to reside in the property, rent free, for life.
Mrs Gunner said that in about March or April 2007 Mrs Lawrence telephoned Mrs Gunner and the following conversation took place: Mrs Lawrence: "We need an additional 6 months in the house to sort out our living arrangements. Sara and Darryl are still in our house and we are not sure what to do. Mrs Gunner: I will discuss it with Norman."
Mrs Gunner then had the following discussion with Mr Gunner: Mrs Gunner: "Valerie called me and asked if they could stay in the house for a further 6 months. She said they still haven't sorted out any other arrangements and Sara and Darryl are still living in their house at Davidson. Mr Gunner: I warned you this would happen. I do not agree but if you are going to let them you should at least get them to sign a six month lease otherwise you will have trouble getting them out. I have already told you that I do not trust Wayne."
Mrs Gunner said that Mr Gunner prepared a lease but Mr and Mrs Lawrence refused to sign it. Mrs Lawrence said to her: "Wayne and I will not sign a lease. If you want us to vacate you will have to give us at least six months' notice."

[23]

The events of 18 March 2009

Mr Gunner died on 17 March 2009, after a long illness.
Much time at the hearing was spent on the question of what role Mrs Gunner played in Mr Gunner's death. Mr and Mrs Lawrence, and Ms Pearson, claimed that Mrs Gunner deliberately delayed calling the ambulance which, ultimately, transported Mr Gunner to the Manning Rural Referral Hospital where he died. That matter is not relevant to any issue in the proceedings other than the question of the credit of Mr and Mrs Lawrence and Ms Pearson. I deal with that matter later in these reasons (see [332] to [336] below).
For the moment, I will simply record that Mr Gunner was admitted to the Manning Rural Referral Hospital at 4.45pm on 13 March 2009. He died at the hospital at 8.15pm on 17 March 2009.
As I have mentioned, Mr and Mrs Lawrence allege that the very next day, Mrs Gunner asked Mr Lawrence to "continue the work" that Mr Gunner had "asked" Mr Lawrence to do in relation to the Old Bar, Beecroft, Mt Colah and 132 Clontarf Street properties.
Mr Lawrence gave evidence that: "We arrived at [Mr and Mrs Gunner's home at Tinonee] in the morning [of 18 March 2009]. Shortly after we arrived, Frances [Mrs Gunner], Valerie [Mrs Lawrence] and I were in the lounge room. Frances walked up to me, hugged me and said words to the effect: 'Wayne, you do not have to worry. Everything will continue on the same as your agreements with Norm. I am proceeding forward with the subdivisions'."
Mrs Lawrence gave a similar account.
Mrs Gunner denied saying anything to this effect.
She said, and I accept, that although Mr and Mrs Lawrence did arrive at Tinonee on 18 March 2009, only Mrs Lawrence came into the house. Mrs Gunner said: "Valerie left Mr Lawrence outside and came into the house alone and asked if she could make Mr Lawrence a cup of tea, as he was leaving to go straight back home to Sydney".
That being so, the statement that Mr and Mrs Lawrence assert Mrs Gunner made to Mr Lawrence could not have been made.
A further difficulty with this aspect of Mr and Mrs Lawrence's case is that it was Mr Lawrence's contention that, during Mr Gunner's life, Mrs Gunner was not told of the alleged arrangements between Mr Lawrence and her late husband.
In their Outline of Submissions of 19 November 2014 (which, as I have stated, was prepared by the plaintiffs themselves and, for some reason, signed by their solicitor) the plaintiffs said: "Over the years Norman depended more on Wayne and did not discuss any business with the defendant".
In an affidavit Mr Lawrence swore: "On the occasions that Norman and I spoke with each other [about 'developments we were working on' and 'potential developments'], neither Valerie nor Frances was part of the conversation, the majority of our conversations were about matters concerning property developments."
Later in the same affidavit Mr Lawrence said: "In the second half of 2004 and in 2005, on the occasions that Valerie and I visited Norman and Frances in Tinonee, Norman and I spent a lot of time together. We often sat together on the back veranda of [the Tinonee property] talking with each other. On many of these occasions, Valerie and Frances were elsewhere, for example in the kitchen cooking a meal or out of the house on a walk".
In a later affidavit, Mr Lawrence said: "The evidence will show that [Mrs Gunner] had no involvement in the subdivision at Old Bar or any involvement between Norman Gunner and [Mr Lawrence]."
In cross-examination, Mr Collins took Mr Lawrence to the passage I have set out at [130]. The cross-examination continued: Q. "Is that true? A. Yes. Q. And, in general, what I suggest that you're endeavouring to convey to his Honour is that, so far as you were concerned, Frances Gunner didn't know any of the details of her husband's business affairs, particularly those that were concerned with you? A. She would have had knowledge of that, yes. Q. But isn't your position that she didn't know the details of her husband's business affairs? A. No, that's not correct. Q. You've never said anything along those lines? A. It's - she would have known about his business affairs, but what I'm saying here in my affidavit, which is different to the submissions, is, I'm saying on many occasions Valerie and Frances were elsewhere, for example, cooking in the kitchen or outside on a walk. Q. I understand that completely. But what I'm suggesting is that you told his Honour that Mrs Gunner didn't have any knowledge of her husband's business affairs, particularly those that you say involved you? A. Are you saying this [is] in the submissions? Q. No, I'm just asking you generally, Mr Lawrence. Don't worry about the submissions for a moment, we've seen what you've said there. 'Norman didn't discuss any business with the defendant'. That's in the submissions, isn't it? A. Yes. Q. Paragraph (x) page 4. That's true, isn't it, so far as you're concerned? A. Well, I may have left a word out, it's a submission and these submissions were prepared in a big hurry, just collating everything together and making one for notes for the solicitors to look at. So they were notes. They were submissions, but they were given to them to go them [sic] and everything like that. I may have left a word out here and there."
Later Mr Lawrence said: "Well, she must have had some sort of knowledge of the subdivisions, but what I'm saying to you is, that when me and Norm were discussing everything, we did it ourselves and they were in the kitchen or out the back walking. Frances was never sitting there with us to actually discuss the things we discussed about the four subdivisions."
When asked about the passage I have set out at [131] Mr Lawrence said: "I shouldn't have used the words 'the evidence will show'." And that: "I've made a mistake".
This evidence provides an example, in my opinion, of Mr Lawrence's preparedness to give such evidence as he thought would advance his case at a particular time. He first asserted that Mrs Gunner was ignorant of his alleged arrangements with Mr Gunner, no doubt to eliminate Mrs Gunner as a potential contradictor. When confronted with the tension between that position and his assertion that on 18 March 2009 Mrs Gunner asked him to "continue" those arrangements (implicit in which assertion was the proposition that Mrs Gunner did know of the arrangements), he was forced to dissemble.
Mr Collins put this aspect of the matter to Mr Lawrence in cross-examination: Q. "That being the state of things, you have given evidence in your affidavit that on 18 March 2009, the day after Norman died, you were in the lounge room at [the Tinonee property], and shortly after you arrived Frances walked up to you, hugged you and without any further ado just said, 'Wayne, you do not have to worry, everything will continue on the same as your agreements with Norm. I am proceeding forward with the subdivisions.' Remember giving that in your evidence, paragraph 210 in your affidavit of 30 May 2013? A. Correct. Q. This piece of evidence you've given concerns the lady who in the seven passages I've read to you you have told his Honour knew nothing of Norman's business arrangements at all and certainly nothing about the so-called partnership arrangements. Correct? A. Correct. Q. And this is the lady whom you told his Honour was always by chance either in the kitchen or out walking with her sister whenever you had an important conversation with Mr Gunner about property matters. A. Yes. Q. It just so happens, does it, that with monotonous regularity, whenever there was an important discussion between you and Norman, the two sisters were out walking? A. That's usually what happened. Q. That's fantastic, isn't it? A. Yes. Q. What I'm suggesting also is that it would not be possible for Mrs Gunner to go up to you and say everything will continue on the same as your agreements with Norm because on your own evidence she knew nothing whatever about them. Correct? A. She said she would carry on all the arrangements the same. Q. Please listen to my question. I'm saying it's not possible that she could have said such a thing because in your own evidence in the seven passages I've just read to you you've been at pains to tell his Honour that she knew nothing whatever about them. A. I stick to what I've said there. Q. But you'll agree with me, won't you, that if she said that, and we'll come to that issue I can assure you, if she said that she was talking about something of which she knew precisely nothing. A. She didn't know nothing. She knew she had the Beecroft properties. She knows what happened with the Beecroft properties. She knows about the Court case and everything, but she doesn't know every intricate little thing about it. Q. On your evidence here in this court she didn't know anything about the alleged agreements that you had with Norman about alleged partnerships. Correct? A. Me and Norman- Q. Please answer that important question. A. If you could ask me again. Q. On your own evidence here she didn't know anything about the details of your alleged partnership agreements with Norman Gunner, did she? A. The only way she would have known was through Valerie. Q. I beg your pardon? A. The only way she probably would have known, if she did know, it would have been through Valerie. Q. But Valerie was out walking too. A. She was."
I do not accept Mr or Mrs Lawrence's evidence about the events of 18 March 2009, and in particular that Mrs Gunner said anything to the effect alleged by Mr and Mrs Lawrence. This is significant in light of the emphasis placed by Mr and Mrs Lawrence on the alleged events of 18 March 2009.

[24]

Events thereafter

Mrs Gunner gave evidence that shortly after Mr Gunner's death, she said to Mrs Lawrence: "I'm going to list all the properties in Sydney for sale. I can't afford to keep them. The land tax is over a hundred thousand dollars a year for those properties alone. You and Wayne will have to move out of 134 Clontarf Street."
As I have said, letters of administration in respect of Mr Gunner's estate were granted to Mrs Gunner on 10 December 2009. By late February 2010, all of the properties formerly registered in Mr Gunner's name had been transferred into the name of Mrs Gunner.
In January 2010, Mrs Gunner engaged Mr Robert Chapman, the principal of the Ray White franchise in Taree, to manage her properties.
Mrs Gunner later appointed Mr Chapman to be her enduring guardian. I will return to this below.
Mrs Gunner gave evidence, which I accept, that between March and June 2010, Mrs Lawrence told her on numerous occasions: "Wayne would like to help you with the marketing of the Sydney properties. He said he would arrange for advertising and deal with all enquiries so you don't have to deal with any agents".
At around this time, Mr Lawrence, in telephone calls between Mrs Lawrence and Mrs Gunner, offered to engage a firm of surveyors, Rygate & Company Pty Ltd, to survey some of Mrs Gunner's properties, including the Beecroft property. Mrs Gunner accepted this offer.
In May 2010, Beecroft was put to auction. The property was passed in at $450,000.
In July 2010, Mrs Gunner agreed to allow Mr Lawrence to take over marketing of the properties. She said, and I accept: "As a result of Valerie's persistent requests and bearing in mind the assistance of Mr Lawrence in obtaining the Rygate surveys, for which I was grateful, and as the agents appointed at that time had not sold the Sydney properties, on or about July 2010, I allowed Mr Lawrence to assist me with marketing the properties for sale and in particular placing advertisements in various new prints [sic]. The advertisements were paid for by me."
In cross-examination, Mr Lawrence accepted that at around this time, he had taken over from Mrs Gunner as the first point of contact in relation to the sale of the various properties owned by Mrs Gunner, including Beecroft.

[25]

Mr Lawrence's dealings with Mr Mirosevich

Mrs Gunner called Mr Dennis Mirosevich to give evidence.
Mr Mirosevich is a property developer who had dealings with Mr Lawrence concerning the Beecroft property. Mr Mirosevich impressed me as an honest witness. He presented as deeply aggrieved by the conduct of Mr Lawrence, but also of Mrs Gunner (concerning Mrs Gunner's rescission of a contract to sell the Beecroft property to a company, SLN Developments Pty Ltd, in which Mr Mirosevich and his wife were shareholders. I will return to this below). In the witness box, he was deeply critical of his treatment, as he saw it, at the hands of both Mr Lawrence and Mrs Gunner, and deeply upset at the predicament in which such conduct had placed him. Nonetheless, I have no reason to doubt that his account of his dealings with Mr Lawrence was truthful and accurate.
Mr Mirosevich and Mr Lawrence had had commercial dealings concerning a property at Magnus Street, Nelson Bay. That property was owned by Minsden Pty Ltd, a company associated with Mr Lawrence. At some time in 2008, a company associated with Mr Mirosevich, Dennis Homes Pty Ltd, contracted to purchase the Nelson Bay property from Minsden for $900,000.
Mr Mirosevich also had dealings with Mr Lawrence in early 2010. Mr Mirosevich was working for Ray White Real Estate in Port Stephens at that time. That firm acted for Mr Lawrence in relation to the sale of a property Mr Lawrence owned or had an interest in.
In September 2010 Mr Lawrence asked Mr Mirosevich for his opinion of the Beecroft property. Mr Lawrence said to Mr Mirosevich: "I have a property at Beecroft that I would like you to give me a valuation for."
Mr Mirosevich considered the matter and told Mr Lawrence that he thought the Beecroft property "was likely to be worth $1.5 million".
Mr Mirosevich subsequently became aware that the Beecroft property was owned by Mrs Gunner. Shortly thereafter he had this conversation with Mr Lawrence: Mr Lawrence: "Would you be interested in buying and developing the site? Mr Mirosevich: The better approach would be, given that you have indicated to me that you have an interest in the property, to enter into a joint venture agreement with you and Mrs Gunner so that I could then borrow against the Beecroft Property and develop the site with the profits to be shared. Mr Lawrence: Frances is desperate to sell as she has a tax bill that she needs to pay to the ATO."
In or about October 2010, Mrs Lawrence telephoned Mrs Gunner. The following conversation took place: Mrs Lawrence: "Wayne has received a good enquiry from the ads for the sale of the Beecroft property. Mrs Gunner: How much are they willing to pay? Mrs Lawrence: I don't know. Wayne is talking to a man named Dennis."
In November 2010 Mr Mirosevich arranged for a Mr Ian Lazar from Tripod Funds Management Pty Ltd to commission Alcon Lupton & Associates to conduct a valuation of the Beecroft property. Alcon Lupton & Associates provided a valuation dated 23 November 2010 which assessed the value of the Beecroft property at $1.5 million. Both Mr Mirosevich and Mr Lawrence received a copy of the valuation.
Between October and December 2010 Mrs Gunner regularly asked Mrs Lawrence how Mr Lawrence's negotiations for the sale of the Beecroft property were progressing. Mrs Lawrence replied saying words to the effect: "Wayne is still discussing the sale with Dennis. Things take time."
In about December 2010, Mrs Lawrence telephoned Mrs Gunner and said: "Wayne said I should call you and let you know that Councils were re-zoning vacant blocks in the area and that if properties do not have existing development approvals they will turn them into parks and other public open space and so you should sell the Beecroft Property quickly."
A short time later, in January 2011, Mr Lawrence came to Mr Mirosevich's office and the following conversation took place: Mr Lawrence: "Frances has to sell the Beecroft property urgently. She has a tax problem and she needs a quick unconditional sale. What is it worth to a buyer as an unconditional quick sale without a development approval? Mr Mirosevich: Given Council's negative attitude towards the development and that there is no guarantee that a substantial subdivision will be approved, I don't think any developer would be prepared to buy it for a price above what it is worth as a single residential block of land. Mr Lawrence: What do you think that would be? Mr Mirosevich: $600,000.00 Mr Lawrence: Do you have anyone that would sign an unconditional Contract and pay $600,000.00? Mr Mirosevich: At $600,000.00, I am sure I would because at that price there is no risk."
Shortly thereafter Mr Mirosevich again suggested to Mr Lawrence that a joint venture be undertaken between he, Mr Lawrence and Mrs Gunner.
The following conversation then took place between Mr Mirosevich and Mr Lawrence: Mr Lawrence: "No, I told you before, I will not work with Frances. Mr Mirosevich: Fine, I'll work with Frances and share my profit with you. Mr Lawrence: You don't know Frances. No one can deal with Frances. She is not all there and can't deal with the requirements of property development. She just needs the property sold unconditionally so she can pay her tax bill. Mr Mirosevich: Ok. How would the arrangement work? What are you proposing? Mr Lawrence: You will purchase the property in your SLN Developments company and I will take a 51% shareholding in your company and in return I will use my property at Nelson Bay as security to help raise the money to buy and develop the property. Mr Mirosevich: Ok, you can also be a director of SLN Developments. How much is your Nelson Bay property worth? Mr Lawrence: No, I will not be a Director, I am never a Director. The way I operate is that I become a majority shareholder and put money into the project. My Nelson Bay property is worth about $900,000."
Mr Mirosevich said that he and Mr Lawrence then: "…set about formalising our agreement which included transferring to Mr Lawrence 51% of the shares in SLN Developments and finalising documentation including Minutes of Meeting, setting out what was agreed between myself and Mr Lawrence and his wife Valerie".
The "Minutes of Meeting" of 21 January 2011 prepared by Mr Mirosevich recorded an agreement between Mr Lawrence and Mr Mirosevich that: 1. SLN Developments would be used to "undertake business deals involving" Mr Lawrence and Mr Mirosevich; 2. Mr Mirosevich would be the sole director and secretary; 3. no other directors or secretaries could be appointed without shareholder approval; 4. Mr Lawrence would acquire a 10 per cent shareholding in the company and Mrs Lawrence a further 41 per cent shareholding; 5. SLN Developments would purchase the Beecroft property for $600,000; 6. profits from the development or on-sale of the property would be divided between Mr and Mrs Lawrence and Mrs Mirosevich on an agreed basis.
In late January 2011, Mrs Lawrence telephoned Mrs Gunner and told her that Mr Lawrence "had negotiated a deal to sell the Beecroft property". The following conversation took place: Mrs Lawrence: "Wayne has sold Beecroft. Mrs Gunner: Oh finally. To that Dennis? What is he willing to pay? Mrs Lawrence: $600,000.00 with a 12 month delayed completion. Mrs Gunner: What? The property is valued at $1.8 million. Mrs Lawrence: Wayne said that potential buyers were concerned about the possibility of Council re-zoning part of the land and that it would have a big impact on the development of the land. Wayne said you are unlikely to get a better offer."
On 2 February 2011 Mr and Mrs Lawrence acquired a total of 51 per cent of the shares in SLN Developments.
The following day, 3 February 2011, Mrs Gunner exchanged contracts with SLN Developments to sell it the Beecroft property for $600,000. The contract provided for settlement 12 months later, on 3 February 2012, and for SLN Developments and its representatives to have "full access to the property to prepare for a Development Application".
Mr and Mrs Lawrence did not inform Mrs Gunner of their shareholding in SLN Developments. Mrs Gunner did not become aware of their shareholding until mid 2011, in the circumstances I set out below.
Thus, Mr and Mrs Lawrence encouraged Mrs Gunner to sell Beecroft to a company in which they held a 51 per cent shareholding without disclosing that interest to Mrs Gunner and, so far as Mr Lawrence is concerned, without making any assertion of the existence of the Beecroft Agreement.
Further, Mr Lawrence (through Mrs Lawrence) advised Mrs Gunner to sell Beecroft to "Dennis" for $600,000 when he knew it had been valued at $1.5 million (albeit subject to Mr Mirosevich's qualification at [158]).
I find Mr Lawrence's conduct in coming to this arrangement with Mr Mirosevich to be irreconcilable with him having a genuine belief in the existence of the Beecroft Agreement. If Mr Lawrence believed he was entitled to enforce the Beecroft Agreement, he would surely have asserted that right to Mrs Gunner. Instead, he told Mr Mirosevich that Mrs Gunner needed to sell Beecroft to meet a tax obligation, thus implicitly accepting, indeed asserting, Mrs Gunner's entitlement to the property. And he then sought to profit from the Beecroft land, not by asserting the existence of the Beecroft Agreement but, rather, by secretly (so far as Mrs Gunner was concerned) taking a 51 per cent interest (taking account of Mrs Lawrence's shareholding) in the purchase of it.
This was shabby conduct on the part of Mr Lawrence. It reflects badly on his credit. It points to the high improbability of his case concerning the Beecroft Agreement. It is also the basis of one of the claims Mrs Gunner makes in her cross-claim against Mr Lawrence (see [538] to [551] below).
There were further developments concerning the Beecroft contract between February 2011 and February 2012. I deal with those developments later in these reasons.

[26]

132 Clontarf Street

As I have mentioned, in July 2010 Mrs Gunner allowed Mr Lawrence to place advertisements for the sale of her Sydney properties on her behalf.
In July or August 2010, Mr Steven Painter from Attentus Subdivision Pty Ltd responded to the advertisement. Mrs Gunner asked Mr Painter to contact Mr Lawrence to obtain documents concerning the property but said to Mr Painter: "I would prefer that you do not discuss any of the financial aspects of the sale of 132 Clontarf Street with Mr Lawrence. All negotiations are to be directly with me."
In February 2011 Mrs Lawrence told Mrs Gunner that Mr Lawrence had done a "deal" with Mr Painter concerning 132 Clontarf Street.
Accordingly, on 16 March 2011 Mrs Gunner instructed her conveyancer to write to the solicitors acting for Attentus in the following terms: "We have been instructed that further negotiations have been taking place between [Attentus] and Mr Wayne Lawrence, the Vendor's brother-in-law. We have been advised that Mr Lawrence has agreed to the following: (i) $200,000 deposit to be paid… (ii) $1,400,000 to be paid…on completion. (iii) the balance of $600,000 is to [be] provided as Vendor Finance as the Purchaser is unable to procure sufficient funds to complete this purchase. (iv) the security for the Vendor finance is to be provided by Mr Wayne Lawrence NOT the Purchaser. … We have been instructed that our client does not agree and has not agreed to providing Vendor finance and is extremely upset that she was not involved in these negotiations. We have been instructed that as the Purchaser is having difficulty obtaining finance, our client is prepared to proceed with this sale as follows: (1) reduce the Purchase Price to $1,850,000…". [Emphasis in original]
On 17 March 2011 the solicitors acting for Attentus replied: "I further note that your client does not agree and has not agreed to providing Vendor finance and is upset that she was [not] involved in these proceedings. My clients regret causing any upset to your client but the situation is that they have dealt with Mr Wayne Morris [sic] for many months, initially in relation to a property in Beecroft as well as in relation to the [132 Clontarf Street] property. It was always assumed that your client and indeed yourself were being kept informed as negotiations continued. With respect to terms on which your client is prepared to proceed with the sale, as detailed in your letter of 16 March 2011, I am instructed to advise that my client agrees to proceed with the purchase on the basis of the terms set out in that letter."
This evidence reveals that, unbeknown to Mrs Gunner, and without her authority, Mr Lawrence had been negotiating with Attentus for the sale of Mrs Gunner's property at 132 Clontarf Street and, as part of that negotiation, was prepared to provide his property as security for vendor finance to be provided by Mrs Gunner.
Leaving aside the question of Mr Lawrence's authority to act this way, Mr Lawrence's conduct in purporting to negotiate a sale of 132 Clontarf Street to Attentus cannot be reconciled with him having a belief in the existence of the 132 Clontarf Street Agreement. If, as he now says, he was entitled to enforce such an agreement, why would he seek to negotiate the sale of 132 Clontarf Street to Attentus, rather than insist that Mrs Gunner honour his alleged entitlements under the 132 Clontarf Street Agreement?
I find this conduct a further reason for scepticism concerning Mr Lawrence's evidence.

[27]

134 Clontarf Street

On 9 February 2011, Mrs Gunner sent a "Notice to Vacate" 134 Clontarf Street to Mr and Mrs Lawrence in the following terms: "I, Frances Beatrice Gunner hereby give you, Valerie Lawrence and Wayne Lawrence [notice] to vacate my premises at 134 Clontarf Street, North Balgowlah NSW 2093 in 90 days as from 10th March 2011 to 7th June 2011."
Mr and Mrs Lawrence's response was, on or about 7 April 2011, to contact the Mental Health Unit in Taree seeking to refer Mrs Gunner to that unit on the basis that she was "manic".
The Mental Health Unit Assessment report dated 7 April 2011 includes the following: "Frances referred by her brother-in-law Lawrence and her identical twin, Valerie, Lawrence's wife… Frances has had 5 prior pysch admissions for mania. It is reported that Frances has a [Bipolar Affective Disorder] Frances married Norm some 19 years ago and her mental health was stable with Norm, and Frances did not take MH medication during this 19 year period. However, Norm died 2 years ago. When Norm was alive, the brother in law, Lawrence, managed Norm's affairs. When Norm died, Frances took over the management of her own affairs. It would appear that managing her affairs has been enormously stressful for Frances. Frances recently sold a property. After the sale was agreed, Frances then rang her conversancy [sic] person and reduced the price of the property by $200,000. When her niece Sara was recently visiting Frances, Sara reports that Frances is very quick to abuse people for example in the supermarket, that Frances spoke of driving the car off the road to kill both of them, and when going for a walk spoke to Sara that should she kill Sara in the woods Sara would never be found. Every indication that Frances is again manic. … [Mr and Mrs Lawrence are] concerned Frances may be suffering a manic phase of Bipolar illness, related to sale of property in Sydney that was divested significantly under-value."
Mrs Gunner was thereafter interviewed by an officer of the Mental Health Unit, who made the following observations about Mrs Gunner: "Engaged in conversation, willing to discuss circumstances and situation, reactive and appropriate… Logical in describing her current financial circumstances… No thought disorder evident… Orientated to time and place… Good insight…".
The report concluded that Mrs Gunner was not suffering any mental illness or disorder and did not have an "at risk mental state".
The report stated: "58 year old lady with history of Bipolar Affected Disorder, living alone after husband passed away in 2009. Currently managing several properties in the context of reducing tax burden and maintaining income from tenanted properties. Sister and brother-in-law apparently live on a property in Sydney owned by Mrs Gunner. Apart from possible elevation in mood no other apparent symptoms of mental illness, no risk of harm to self or others evidenced."
The report also noted that the unit had contacted Mrs Gunner's General Practitioner, Dr Trevor Banks, who reported that he had seen Mrs Gunner as recently as 31 March 2011 and that he had "no current concerns [for] Mrs Gunner's mental health state".
The report concluded: "No grounds to schedule Mrs Frances Gunner at this time."
I find it impossible to comprehend what rational basis could possibly have existed for Mr and Mrs Lawrence to have taken the course revealed by this evidence. According to the Mental Health Unit's report, the stated basis for Mr and Mrs Lawrence's concern about Mrs Gunner's mental state was her decision to sell a property "$200,000 below value agreed upon". Presumably this was a reference to Mrs Gunner's decision to sell 132 Clontarf Street to Attentus for $1,850,000, in the circumstances to which I have referred.
What is clear is that, knowing full well of Mrs Gunner's decision to sell 132 Clontarf Street to Attentus, and in the face of Mrs Gunner's demand for possession of 134 Clontarf Street, Mr Lawrence made no assertion as to the existence of the 132 Clontarf Street or 134 Clontarf Street Agreements. Rather, he and Mrs Lawrence acted as I have set out. If, as he now contends, he had reached an arrangement with Mr Gunner to the effect of the 132 Clontarf Street and 134 Clontarf Street Agreements, and if, as he says, Mrs Gunner had on 18 March 2009 agreed to continue or abide by those agreements, he surely would have agitated those matters at this point, rather than making the allegations summarised in the Mental Health Unit's report.
This is further evidence pointing against the probability of the existence of the agreements for which Mr and Mrs Lawrence now contend.
Mrs Gunner described her reaction to Mr and Mrs Lawrence's conduct in the following terms: "I was extremely surprised, hurt, disappointed and sad that they would take such a potentially life changing step to deprive me of my freedom and my right to deal with my own affairs. I was astonished that my sister would include herself in such actions. I consciously tried in my own mind to make excuses for her on the ground of what I thought must have been her desperate financial position with Mr Lawrence."
Nonetheless, Mrs Gunner achieved a reconciliation with her sister.
Mrs Gunner gave this evidence: "On or about mid April 2011, I received daily phone calls from Valerie in which she said that she and Mr Lawrence were in a desperate financial position and that they had not been able to sort out their living arrangements. I recall during the telephone conversations that Valerie said words to the effect: 'We are struggling for money and we cannot afford to move. Wayne will not give me any money. Can you help me out. Please let us stay.' As a result of these calls, and the impression of desperation I got from such calls, I felt obliged to help Valerie. She is my twin sister. Accordingly, I agreed to withdraw the Notice to Vacate and allow them to stay on until I sold the property."
Thus, on 18 April 2011 Mrs Gunner wrote to Mr and Mrs Lawrence: "I, Frances Beatrice Gunner, hereby cancel Letter to Vacate above premises, letter dated 9th February 2011".
Mrs Gunner gave this evidence: "On or about late April/early May 2011, I continued to receive telephone calls from Valerie and of course from time to time I made calls to her. In almost all of these calls she spoke of her 'desperate financial situation'. Even today, I recall feeling an overwhelming sense of obligation at that time to help my sister in spite of what she had done and in spite of my own and, when he was alive, Norman's feelings about Mr Lawrence."
That culminated in Mrs Gunner giving Mrs Lawrence two cheques for $50,000 and $100,000 dated 23 May 2011 and 17 June 2011 respectively which Mrs Gunner sent to Mrs Lawrence under cover of a note: "Enjoy your pocket money Lots of love Frances, Rex and Peppi".
Rex and Peppi were Mrs Gunner's pets.
This was by no means the first cash gift that Mr and Mrs Lawrence had received from Mr and Mrs Gunner, and from Mrs Gunner after Mr Gunner's death. Between March 2003 and July 2011, Mr and Mrs Gunner, and then Mrs Gunner, made cash gifts to Mr and Mrs Lawrence totalling $1,169,000. In addition, Mr and Mrs Gunner gave numerous gifts to Mr and Mrs Lawrence, and also to Mr and Ms Pearson. Those gifts included international business class travel, computers, motor vehicles, clothing, jewellery and, in Ms Pearson's case, horses. I set out the detail of those gifts and their relevance to the issues in these proceedings later in these reasons (see [380] and [487] to [492] below).

[28]

Beecroft

Also in April 2011, Mrs Gunner mentioned her sale of the Beecroft property to SLN Developments to Mr Chapman. As I have stated (see [140] above), Mrs Gunner had, in January 2010, appointed Mr Chapman to manage her properties.
Mrs Gunner and Mr Chapman had the following conversation: Mr Chapman: "Did you sell Beecroft? Mrs Gunner: Yes. Mr Chapman: How much did you sell it for? Mrs Gunner: $600,000. Mr Chapman: I feel that it is way too low. Perhaps you should see my friend Tony Marshall at Paton Hooke Lawyers and ask him to have a look at the contract."
Accordingly, in around May 2011 Mrs Gunner retained Mr Tony Marshall, of Paton Hooke Lawyers, to act for her.
Following Mr Gunner's death, Mrs Gunner had retained Elliot Tuthill Solicitors to act for her in relation to Mr Gunner's estate. However, so far as the evidence reveals, Mrs Gunner's retainer of Mr Marshall in May 2011 was the first time since Mr Gunner's death that Mrs Gunner sought and obtained legal advice about her position concerning the property portfolio that she had inherited, including the Old Bar, Beecroft, Mt Colah and Clontarf Street properties.
At around this time, on 20 May 2011, Mrs Gunner appointed Mr Chapman as her enduring guardian.
This appointment evidently caused deep distress to Mr and Mrs Lawrence, particularly Mrs Lawrence, who saw it as personal betrayal. It is no exaggeration to say that Mrs Lawrence became obsessed with her sister's appointment of Mr Chapman. That sentiment was revealed, most starkly, in an application that Mrs Lawrence made concerning Mrs Gunner to the Guardianship Tribunal, which I deal with later in these reasons.
What motivated Mrs Gunner to appoint Mr Chapman as her enduring guardian was not revealed in the evidence and has no relevance to any issue in the proceedings. In her affidavit evidence, Mrs Gunner retained a dignified silence on the topic.
In cross-examination, the only question Mr King asked Mrs Gunner on the subject was "whose idea was it for Mr Chapman to become your enduring guardian". Mrs Gunner responded "[m]ine", and there it was left.
Nothing in the evidence suggests that Mrs Gunner had any complaint to make about Mr Chapman's conduct while he was her enduring guardian, nor that there is any other reason to criticise Mr Chapman's conduct.

[29]

Mr Lawrence's dealings with Mr Searles

Prior to Mr Gunner's death, Mr Lawrence dealt with a surveyor, Mr Mark Searles, concerning the Old Bar property. At that time, Mr Lawrence, purporting to act as Mr Gunner's "project manager", asked Mr Searles to consider what options were available to clear the land.
Mr Searles was called to give evidence by Mrs Gunner. I found him to be an honest witness. He had no interest in the outcome of these proceedings and I have no hesitation in accepting his evidence. Despite the fundamental inconsistency between his account of what passed between him and Mr Lawrence, and Mr Lawrence's claim in these proceedings, his evidence was barely challenged in cross-examination by Mr King.
Mr Searle said that in the second half of 2009, after Mr Gunner died, Mr Lawrence again contacted him purporting to provide instructions to proceed with the Old Bar project and "in particular to try and obtain development approval for the subdivision" of the Old Bar property.
In about September 2011, Mr Searles had a conversation with Mr Lawrence in the following terms: Mr Lawrence: "Mrs Gunner wants to sell the property once we have obtained development approval as she is not interested in developing the land. She might separate the existing cottage from the property and sell the balance of the property to a developer. I think you should purchase the property and develop it and I will help you negotiate a purchase price with Mrs Gunner. Mr Searles: I cannot afford it. Mr Lawrence: I will help you fund the project. Mr Searles: Okay. How would it work? Mr Lawrence: You should register a company to purchase and develop the land and I will fund the purchase. I will take a 51% share in your company in return for obtaining the funding to purchase. I will negotiate a reasonable price with Mrs Gunner for you. Mrs Gunner is not to know of my involvement with the project."
Mr King cross-examined Mr Searles but did not, in substance, challenge this evidence. In cross-examination Mr Searles gave this evidence: Q. "I suggest to you that [Mr Lawrence] said…that if you required funding support from him, he would be able to assist- A. No. Q. -through the company, or words to that effect? A. No. The situation was he knew I couldn't afford to do that myself. He wanted to have a majority share in that company and would fund the project. Q. But you would be the manager and the director? A. As the majority shareholder, Mr Lawrence would have had the say in what happened with that company. Q. I suggest to you that he said to you words to the effect that, if this project were to proceed - that is, after the sale of the land - it was not necessary for Mrs Gunner to know about those arrangements, or words to that effect? A. Well, I was told that Mrs Gunner wasn't to know about those arrangements. Q. I want to suggest to you that he said to you that, 'I will deal with or speak with Mrs Gunner'. Is that right? A. He would negotiate a price with Mrs Gunner for me, yes."
Earlier in the cross-examination Mr Searles had given this evidence: Q. "You were informed by Mr Lawrence, weren't you - that is, after Mr Gunner's death - that Mrs Gunner wasn't interested in construction but was rather interested in obtaining a development application for subdivision of the land at Old Bar into lots, with a view to resale? A. Yes. Initially we thought she would continue the subdivision, or Mr Gunner would continue the subdivision, but after Mr Gunner's…death, we didn't believe Mrs Gunner would continue; she would get the development application only."
This evidence reveals that what Mr Lawrence was proposing to Mr Searles in respect of the Old Bar property was similar to Mr Lawrence's proposal to Mr Mirosevich concerning the Beecroft property; namely, the purchase from Mrs Gunner of the property by a company in which Mr Lawrence held a majority shareholding but where a third party (Mr Searles in the case of Old Bar and Mr Mirosevich in the case of Beecroft) would be the director. In each case, Mr Lawrence's requirement was that his involvement in the purchase be concealed from Mrs Gunner.
I find this conduct irreconcilable with Mr Lawrence maintaining any honest belief in the binding nature of any agreement with Mr Gunner, and later Mrs Gunner, to the effect of the Old Bar Agreement.
Implicit in Mr Lawrence's proposal to Mr Searles was that Mr Lawrence understood that Mrs Gunner had title in the Old Bar property and was not obliged to participate with Mr Lawrence in a development of the property or to deliver to Mr Lawrence two lots from a subdivision resulting from such a development.
As Mr Collins said in final submissions: "…if Mr Lawrence genuinely believed that he had entered into a partnership with Mr Gunner and thereafter with Mrs Gunner upon the terms alleged in the Amended Statement of Claim then there is no reason why he would simply without a word, act in such a way as to extinguish all of the rights he said accrued to him under those partnership agreements. Neither would Mr Lawrence allow the 'partnership' land to somehow be treated as if he had re-vested in Mrs Gunner who would then receive the whole of the purchase price to the exclusion and to the extinguishment of the rights Mr Lawrence alleged he had. Neither would Mr Lawrence allow his 'rights' to the two blocks go begging as he eased his way into a new deal with Mr Searles which did not give him such rights or the equivalent of them. The only way the Searles / Lawrence conversation may be viewed is as a contemporaneous proof by the unprompted actions of Mr Lawrence that he had no partnership claims of any kind in respect of the Old Bar land and the best that he could cobble together by his wits was a new deal with an opportune new arrival on the scene, Mr Searles who was wise enough to decline to become involved."
Mr Searles said he did consider Mr Lawrence's proposal in September 2011, but decided not to proceed with it.
In my opinion, Mr Lawrence's dealings with Mr Searles, as well as those with Mr Mirosevich, point strongly to the conclusion that either Mr Lawrence's account of his conversations with Mr Gunner is not correct or, if the conversations did occur, they were not regarded by Mr Lawrence as constituting a basis upon which any legal rights could be asserted. They are also a further reason not to accept Mr and Mrs Lawrence's account of the conversations said to have occurred with Mrs Gunner on 18 March 2009.

[30]

Purported rescission by Mrs Gunner of the Beecroft contract

In the meantime, Mr Marshall, recently retained by Mrs Gunner, conducted a company search of SLN Developments and discovered Mr and Mrs Lawrence's 51 per cent shareholding.
On 28 September 2011, he wrote to SLN Developments' licensed conveyancer concerning the Beecroft property. Mr Marshall referred to the contract of 3 February 2011 and, in effect, invited SLN Developments to show cause why Mrs Gunner should not rescind that contract. He said: "SLN negotiated the key terms of the sale (including the price) with Mr Wayne Lawrence who represented Mrs Gunner's interests in the negotiations. Mr Lawrence is Mrs Gunner's brother in law. We are instructed that SLN was introduced to the property by Mr Lawrence, negotiated the terms of the sale with Mr Lawrence and had no price negotiations with Mrs Gunner or any agent of Mrs Gunner (other than Mr Lawrence). SLN knew that Mr Lawrence was representing Mrs Gunner's interests in the negotiations. As such, Mr Lawrence owed fiduciary duties to Mrs Gunner in connection with the sale of her property, not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict. It has recently come to Mrs Gunner's attention that on 2 February 2011 (being the day prior to the entry into the Sale Contract), Mr Lawrence and his wife were issued with shares in SLN, which together comprise 51% of SLN's issued shares. It has also recently come to Mrs Gunner's attention that as at the date of the Sale Contract, SLN had engaged Mr Lawrence as its project manager for the development of the Property. Further, it has recently come to Mrs Gunner's attention that the purchase price for the property specified in the Sale Contract of $600,000 is substantially below the true market value of the property as at the date of the contract. Our client has obtained an independent valuation which values the property at $1.8 million as at 3 February 2011. In the circumstances: (a) Mr Lawrence breached the fiduciary duties he owed to Mrs Gunner not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict without Mrs Gunner's fully informed consent; and (b) the Sale Contract has been made in breach of Mr Lawrence's fiduciary duty to Mrs Gunner, and SLN has received the benefit of the Sale Contract with actual or constructive notice of that breach. Accordingly, the Sale Contract is voidable and Mrs Gunner is entitled to rescind. We invite your client to respond to the above within 7 days of the date of this letter, following which Mrs Gunner will decide whether to exercise her right to rescind the Sale Contract."
At around this time, Mrs Gunner also gave instructions to Mr Marshall concerning 134 Clontarf Street.
On 19 October 2011 Mr Marshall sent Mr and Mrs Lawrence a Notice to Vacate. His letter included the following statement: "We understand that you have been occupying the property under an informal arrangement with our client. Our client has instructed us that she wishes to sell the property and in this regard you are formally put on notice that you will be required to vacate the property on or before the date that is 90 days from the date of this letter, namely by no later 16 January 2012."
The following day, 20 October 2011, there having been no reply to Mr Marshall's "show cause" letter of 28 September 2011, Mrs Gunner purported to rescind the 3 February 2011 contract with SLN Developments, substantially on the grounds set out in Mr Marshall's letter of 28 September 2011.
It was this action of Mrs Gunner that raised the ire of Mr Mirosevich to which I have referred.
On 20 October 2011, Mr Mirosevich sent an email to Mr Marshall demanding that Mrs Gunner withdraw the notice of rescission but adding: "Should the parties not agree on a solution I am prepared to at settlement, lodge additional to the $600,000 settlement payment a further figure at your discretion with my suggestion being another $600,000 to total $1,200,000 to be held in trust pending any litigation or dispute that we cannot reach [sic]."
As I set out below (see [279]), Mrs Gunner, SLN Developments and Mr Mirosevich ultimately did reach a compromise to this effect.
On 28 October 2011, notwithstanding Mrs Gunner's purported rescission of the Beecroft contract, SLN Developments contracted to sell the Beecroft property to a third party, Henlong Property Group Pty Ltd, for $2,178,000 (more than three times the purchase price from Mrs Gunner under the 3 February 2011 contract).
On either 28 October 2011 or 1 November 2011 (the "Acknowledgment of Rescission" document referred to below at [290] suggests it was the latter), for reasons not explained in the evidence, SLN Developments entered into an agreement with Minsden whereby, in effect, Minsden novated its contract with Dennis Homes for the sale of Minsden's property at Nelson Bay for $900,000 in favour of SLN Developments. Thus SLN Developments assumed the responsibility of purchaser of the Nelson Bay property. I will return to the Minsden/SLN Developments contract below.

[31]

Mrs Lawrence's application to the Guardianship Tribunal

Mr and Mrs Lawrence's response to Mrs Gunner's 19 October 2011 demand that they vacate 134 Clontarf Street, and purported rescission of the Beecroft contract on 20 October 2011, was not to assert the existence of the 134 Clontarf Street Agreement and their entitlement, by reason of that agreement, to occupy 134 Clontarf Street "for as long as they want".
Rather, Mr and Mrs Lawrence's response was to take the extraordinary, and in my opinion entirely unjustified, step of making an application to the Guardianship Tribunal to have Mrs Lawrence appointed as Mrs Gunner's Guardian and Financial Manager.
As a matter of formality, the application was made by Mrs Lawrence alone. However, cross-examination of Mr and Mrs Lawrence revealed that it was a joint endeavour. Mr Lawrence said the documents forwarded to the Guardianship Tribunal comprised "a composition of Valerie's concerns", but that "I would've composed them with Valerie".
Mrs Lawrence made that application on 26 October 2011. On that day, she filled out a pro-forma which asked the question: "How severe or advanced is the disability?"
Mrs Lawrence answered: "80% now because she is a twin. She can take my personality at any time."
In regard to that statement, Mr Lawrence gave this evidence in cross-examination: Q. "Now, if you look at the document that's talking about 80% - in other words, she's got an 80% disability. Just tell me this now: is it your sincere belief that Mrs Frances Gunner, sitting here in Court at the moment, has got an 80% mental disability? Is that your belief? A. No."
And yet Mr Lawrence was prepared to participate in the preparation of a document, sent to the Tribunal, which said just that.
In answer to the question "approximately how long has 'the person' had the disability?" Mrs Lawrence wrote: "Since the age of 26 years old. Has been in 5 mental hospitals over the years plus 3 prisons. She refuses to be assessed and does not accept her condition. She was on medication for years but stopped taking it 21 yrs ago."
In answer to the question "why do you think a guardian is needed?" Mrs Lawrence wrote: "Mrs Gunner has just recently got envolved [sic] with a real estate agent who is managing her rental properties (20 plus) and has only known the agent casually for 18 months. In addition to that the agent has taken my sister to his solicitor's office and signed her up making him her guardian. I am now concerned because that same agent and solicitor are becoming involved in partnerships and developments with Mrs Gunner. Mrs Gunner has been a wealthy widow for just over 2 years and her estate has diminished rapidly of over more than $2 million. Mrs Gunner's husband passed away on 17 March 2009. The agent is [sic] now convinced Mrs Gunner to buy his building for $800,000 and he will pay her back. And now the solicitor has advised Mrs Gunner to cancel a contract of sale as the agent wants to develop the property with Mrs Gunner as a partner. And this has put Mrs Gunner at risk now of damages of $2,450,000 as the contract was an unconditional contract. Mrs Gunner does not realise what she has done. At the moment Mrs Gunner is bordering on falling back into a mental state where she needs medication but she refuses to be assessed."
Mrs Lawrence's reference to Mrs Gunner recently becoming "involved" with a real estate agent is evidently a reference to Mr Chapman who, as I have mentioned, was appointed by Mrs Gunner in January 2010 to assist managing her property portfolio and in May 2011 as her enduring guardian.
On 11 November 2011 Mrs Lawrence wrote to the Guardianship Tribunal making a number of allegations concerning Mrs Gunner, principally to the effect that she lacked the capacity to manage her financial affairs and was not receiving "independent financial or legal advice".
Mrs Lawrence also alleged that Mrs Gunner: 1. "has been in three different prisons, one up in Darwin, Brisbane and Silverwater"; and 2. "was also a prostitute for a number of years".
No attempt was made before me by Mr or Mrs Lawrence to justify those scurrilous allegations.
An insight as to Mrs Lawrence's motivations in making the application to the Guardianship Tribunal is revealed in a letter that Mrs Lawrence sent Mrs Gunner on 31 December 2011. That letter was in the following terms: "I am writing to you to let you know why there is a tribunal hearing on 10 January 2012. The only reason why this tribunal is happening is when you first told me that you had appointed Rob Chapman as your Enduring Guardian. You have only known Rob Chapman for approximately 18 months who only looks after your rental properties. You also told me on numerous occasions that Rob Chapman was charging $50,000 per months [sic] on repairs to your properties. You complained all the time about this. And now he is your Enduring Guardian. You picked a stranger over your family to look after your well being and finances when needed. You deeply hurt your family by doing this. Frances I had no choice but to do what I am doing because I would have no say if anything happened to you medically or otherwise. Only Rob Chapman could make decisions re your well being. And this really hurts me. Also by [sic] what you are doing to your only family is very evil and is completely destroying the small family you have left. By doing what you are doing to me and Wayne you are also doing the same to Sara and Darryl. How can you be doing this to us? How can you live with yourself today knowing that you have never told Norm's family that he past [sic] away on 17 March 2009 because you told me that you were worried they would contest Norm's Will. How can you live with yourself Frances. Also Frances I believe that you have totally been brainwashed by Rob Chapman and Tony Marshall to go against your family. Frances wake up to yourself and see what you are doing."
That letter suggests that the matter that particularly aggrieved Mrs Lawrence was Mrs Gunner's appointment of Mr Chapman as her enduring guardian. Mrs Lawrence described that matter as being "the only reason why this tribunal is happening".
In cross-examination, Mr Lawrence said: "The primary reason for the Guardianship Tribunal was solely and wholly to do with Frances's enduring guardianship."
However, later in the cross-examination Mr Lawrence offered a different explanation. In an evidently unguarded moment, he said: "We didn't mean anything by it. I mean, it's a retaliation to what the letters we get back through [sic] from her legal advisor".
Although Mr Lawrence purported to "withdraw" that evidence shortly after giving it, I am satisfied that it represented his true position.
The "letters" from Mrs Gunner's "legal advisor" were obviously those sent by Mr Marshall purporting to rescind the Beecroft contract and giving Mr and Mrs Lawrence notice to vacate 134 Clontarf Street.
Thus, on 7 January 2012 Mrs Lawrence sent Mrs Gunner a Notice to Produce at the Guardianship Tribunal hearing. Amongst the documents sought to be produced were: "Copies of all correspondence, documents, emails, memo's [sic], financial statements between Rob Chapman, Ray White, Taree, Ray White, Neutral Bay, and between Paton [Hooke] Lawyers, Taree and Tony Marshall that you are in receipt of."
In my opinion, this confirms that the application to the Guardianship Tribunal was not, in truth, borne of any misguided concern Mr and Mrs Lawrence had for Mrs Gunner's financial welfare. It was "retaliation" for Mrs Gunner's assertion of her rights concerning Beecroft and 134 Clontarf Street. The application made no mention of the agreements for which Mr and Mrs Lawrence now contend, and provides further reason to doubt the existence of those agreements.
Mrs Lawrence's application to the Guardianship Tribunal was fixed for hearing in Port Macquarie on 10 January 2012. Mrs Gunner did not attend the hearing in person, as she was booked to have an operation and could not travel. She attended by telephone. Mr Marshall attended, but as a witness rather than Mrs Gunner's legal representative.
According to Mrs Lawrence, on the evening before the hearing, Mrs Gunner told Mrs Lawrence "I want you to withdraw the Guardianship Tribunal [application]". Mrs Lawrence replied "I will if you cancel the appointment of Rob Chapman as enduring guardian".
On the day of the hearing, the Tribunal consented to Mrs Lawrence withdrawing her application and noted that, before the Tribunal hearing had commenced, Mrs Gunner had executed a document revoking Mr Chapman's appointment.
Nonetheless, the Tribunal delivered "Reasons for Decision" which held that there was no basis for Mrs Lawrence's application for guardianship and financial management orders in respect of Mrs Gunner. The Tribunal stated: "In documents submitted to the Tribunal, Mrs Lawrence claimed that her sister, Mrs Gunner, had a history of mental illness. However, Mrs Lawrence did not provide any relevant clinical evidence to suggest that Mrs Gunner currently is a person with a disability. The Forster/Taree Community Mental Health Team submitted a document to the Tribunal showing that, after an assessment in April 2011, there were no grounds to schedule Mrs Gunner under the Mental Health Act. The Tribunal had before it the report prepared on 15 December 2011 by Mrs Gunner's general practitioner, Dr Trevor Banks. In that report, Dr Banks stated that a review of records of his practice back to 1995 revealed no evidence of irrational behaviour or mental illness. Further, in the three years that Dr Banks has known Mrs Gunner, she has not displayed any evidence of irrational behaviour or mental illness. Dr Banks also reported that Mr Sam Depalow, from the local Mental Health Unit, had confirmed on 7 April 2011 that he could find no evidence of mental illness. At the commencement of the hearing on 10 January 2012, Mrs Lawrence expressed concern that Mrs Gunner had appointed Mr Robert Chapman to be her enduring guardian. Mrs Lawrence claimed that, after hearing news of that appointment, she felt that she had been 'divorced and raped'. As was noted above, Mrs Gunner revoked the appointment of Mr Chapman on 10 January 2012. When asked by the Tribunal, Mrs Lawrence was completely unable to identify, or even to suggest, any matters on which Mrs Gunner now needs a guardian to make decisions on her behalf. Mrs Lawrence then indicated that she wished to withdraw her application for the appointment of a guardian for her sister. Mrs Gunner stated that she would be happy for Mrs Lawrence to withdraw the application. There was no evidence whatever before the Tribunal to suggest that Mrs Gunner is a person in need of a guardian. In these circumstances, the Tribunal consented to the withdrawal of the application for a guardianship order. The Tribunal did not make any formal findings on the question as to whether Mrs Gunner is a person in need of a guardian."
Immediately after the Guardianship Tribunal hearing, Mr and Mrs Lawrence drove to Mrs Gunner's Tinonee home and, to use Mrs Gunner's words, "attempted to reconcile with me".
During those discussions Mrs Lawrence spoke to Mrs Gunner about a house she had seen that "would go well being built on 134 Clontarf Street".
Despite Mrs Lawrence's conduct before and at the Guardianship Tribunal, Mrs Gunner stated that she thought Mrs Lawrence "appeared to be genuine and trying to reconcile our differences". Mrs Gunner added that Mrs Lawrence "was offering to stay with me at my Tinonee home to assist with my recovery after my operation in February".
Accordingly, notwithstanding all that had happened, Mrs Gunner had the following conversation with her sister: Mrs Gunner: "Why don't I have a granny flat built on 134 Clontarf Street? Mrs Lawrence: No that would not be good enough. We would need to build a little house where the swimming pool is currently located. Mrs Gunner: How much land would it require? Mrs Lawrence: Approximately 200 square metres. Mrs Gunner: That sounds okay. Mrs Lawrence: I will get Wayne to draft a letter and fax it to you to sign."

[32]

The 27 January 2012 document

At around this time, Mrs Lawrence faxed Mrs Gunner a "handwritten agreement". That document was not in evidence before me. However, Mrs Gunner said that it included a provision that Mrs Gunner give Mr and Mrs Lawrence a "life tenancy" at 134 Clontarf Street.
Mrs Gunner said she telephoned her sister and they had the following conversation: Mrs Lawrence: "Did you sign the agreement? Mrs Gunner: No. I am not happy with you staying for life. Mrs Lawrence: I will re-write it and fax it back to you."
In cross-examination, Mrs Lawrence said that she did not recall sending Mrs Gunner such a document, but did not deny it.
The document that Mrs Lawrence re-wrote and faxed back to Mrs Gunner on 27 January 2012 was in the following terms: "I Frances Beatrice Gunner hereby confirm and agree that Wayne and Valerie Lawrence can remain living as originally agreed at 134 Clontarf Street, North Balgowlah until such time as a subdivision is approved and a dwelling is erected. It is agreed between Frances Beatrice Gunner and Valerie Lawrence that a subdivision will be obtained in the swimming pool area for a house to be erected. I also give permission for Valerie Lawrence to design and lodge plans with Warringah Shire Council for the erection of a new home in the swimming pool area and will sign all documents to allow the subdivision to proceed. Valerie Lawrence is to pay all costs associated with the subdivision and building of the house. On completion of the subdivision Frances Gunner will sign all documents possible to ensure that the land is subdivided into 2 Lots and the said Lot transferred into the name of Valerie Lawrence. It is agreed that on the approval of the subdivision/house to be built Frances Gunner will sign all documents to enable Valerie Lawrence to pay the Stamp Duty prior to construction of the house. Valerie Lawrence will have a valuation carried out on the existing property. On that valuation Valerie Lawrence will pay the stamp duty required as per the Lot in the plan of subdivision and prior to the subdivision being registered Frances Gunner will sign all documents necessary."
Mrs Gunner gave evidence that: "As I was under a lot of stress at that time both with the breakdown of the relationship with my twin sister, the Guardianship hearing and my impending operation, and my concern regarding who would look after my dog and cat when I was in hospital, without seeking advice from my solicitor I agreed with Valerie to sign a document reflecting what we discussed."
Mr King submitted that this letter "should be enforced according to its terms" and that I should order specific performance of the promises Mrs Gunner is said to have made in it.
I do not accept that submission. The document records an informal, and, as it turns out, short-lived, arrangement between family members rather than a legally binding contract that was capable of specific performance.
The document must be seen in the context of Mrs Lawrence's earlier attempt to persuade Mrs Gunner to sign a handwritten document stating that Mr and Mrs Lawrence were to have a "life tenancy" at 134 Clontarf Street.
The effect of the 27 January 2012 document is to record Mrs Gunner's then confirmation and agreement that Mr and Mrs Lawrence could remain living at 134 Clontarf Street "until such time as a subdivision is approved and a dwelling is erected".
No consideration was given by Mr and Mrs Lawrence for that agreement. In any event, it is inconsistent with the 134 Clontarf Street Agreement which Mr Lawrence claims he reached with Mr Gunner in 2004 (which allegedly gave Mr and Mrs Lawrence occupation for life).
Shortly after Mrs Gunner signed the document, Mr and Mrs Lawrence submitted to her the "Declaration of Trust" document to which I refer below. As I discuss, such promise as Mrs Gunner made in the 27 January 2012 document was withdrawn by Mrs Gunner's solicitor's letter of 6 February 2012.

[33]

The "Declaration of Trust"

On 1 February 2012 Mrs Lawrence telephoned Mrs Gunner and said: "Turn on your fax as I am about to send you a plan and picture of the proposed house."
Rather than sending Mrs Gunner a plan or picture, Mrs Lawrence faxed to Mrs Gunner a document called "Declaration of Trust" which stated that Mrs Lawrence (defined as "the Other Party") had performed undefined "Services" for which she had "not received any cash or other financial remuneration" from Mrs Gunner (defined as "the Trustee").
The document continued: "The Other Party has expended her own money and performed works on renovating the dwelling constructed on the Property [134 Clontarf Street] for which the Other Party has not received any cash or other financial remuneration from the Trustee. The reason for the Other Party not receiving any cash or other financial remuneration for her performance of the Services and for the expenditure of money and time spent in performing the renovation works to the Property has been that the Trustee has represented to the Other Party that the Trustee would convey to the Other Party an interest in the Property and that as a consequence thereof there now exists a constructive and/or resulting trust in favour of the Other Party whereby the Other Party holds a share of the Beneficial Interest in the Property. In order to record and properly document the share of ownership of the Beneficial Interest which the Other Party holds in the Property, the Trustee hereby acknowledges and declares that henceforth she will hold the Beneficial Interest in the Property for each of herself and the Other Party with that Beneficial Interest therein being in those proportions set forth in paragraph 3 of this Deed."
Paragraph 3 of the document provided for Mrs Gunner to have a 60 per cent share in the property and Mrs Lawrence to have a 40 per cent share.
Mrs Lawrence said in cross-examination that Mr Lawrence had organised for solicitors in Forestville to prepare the "Declaration of Trust". Those solicitors may very well have been Walker Hedges & Co, who were acting for Minsden on the sale of the Nelson Bay property to SLN Developments at around the same time (see [282] below). Mrs Lawrence agreed that she had not performed any "[s]ervices" for Mrs Gunner for which she might be entitled to "cash or other financial remuneration". Indeed, Mrs Lawrence said that she did not "have any input whatsoever in this deed".
It is obvious, and I find, that it was Mr Lawrence who was responsible for the creation of this document and for arranging for Mrs Lawrence to send it to Mrs Gunner.
I find Mr Lawrence's desire to have Mrs Gunner sign a document such as this to be irreconcilable with him having any honest belief of having entered into the 134 Clontarf Street Agreement. Had Mr Lawrence genuinely believed in February 2012 that he and Mr Gunner had previously entered into the 134 Clontarf Street Agreement, there would be simply no reason why he would seek to persuade Mrs Gunner to execute a document to the effect of the Declaration of Trust.
Mrs Gunner gave this evidence concerning the document: "Valerie and I had never discussed this. I was extremely annoyed that once again Mr Lawrence was seeking to trap me into signing legal documents that were not correct. I did not sign the deed and shortly after receiving it I received a telephone call from Valerie and she said words to the effect: 'You should have received an agreement on your fax. Wayne has asked if you could sign it immediately and fax it back'. I was extremely upset that once again Mr Lawrence had sought to try and manipulate me rather than allowing my twin sister and I to work things out between ourselves. I immediately telephoned my Solicitor and sent a copy of the unsigned proposed deed by fax to him and requested his assistance."
A short time later, on 6 February 2012, Mr Marshall wrote to Mr and Mrs Lawrence's then solicitors in the following terms: "We have become aware of a document dated 27 January 2012 signed by our client that purports to grant Mr & Mrs Lawrence a right to continue occupying 134 Clontarf Street until such time as the property can be subdivided and that our client will grant Mrs Lawrence a right to erect a house on the subdivided land and for the said land to be transferred to Mrs Lawrence. We are instructed that the offer set out in the said document is withdrawn and in any event it is not enforceable as it lacks any form of consideration. Our client has requested that any future documentation or requests by your client be forwarded through our office and that your client have no further contact with our client directly in relation to commercial or legal matters. Our client has subsequently received a form of Declaration of Trust from your clients which purports to detail the services that Mrs Lawrence has provided to our client which it is suggested is consideration for an equitable interest in our client's property. We are instructed to confirm that this document will not be executed by our client and any suggestion that your client has provided any services to our client or that they have an equitable interest in our client's property or any other personal or real property is categorically rejected. …As a matter of good faith, our client will permit your client a further 2 weeks to vacate the property and in this regard if they have not vacated the property by Friday 17 February 2012, we are instructed to immediately commence action to enforce our client's rights without further notice." [Emphasis in original]

[34]

Resolution of dispute concerning the sale of Beecroft

In the meantime, on 19 January 2012 Mr Marshall wrote to the solicitors acting for SLN Developments to inform them that Mrs Gunner was prepared to withdraw her purported rescission of the Beecroft contract provided that the purchase price under that contract was increased from $600,000 to $1.2 million. On behalf of SLN Developments, Mr Mirosevich agreed to this proposal. The agreement was documented in a Deed of Agreement made on 3 February 2012 between Mrs Gunner, Mr Mirosevich and SLN Developments.
In those circumstances, the sale from Mrs Gunner to SLN Developments of the Beecroft property settled on or about 3 February 2012 for a purchase price of $1.2 million.
On the same day, the on-sale by SLN Developments of the Beecroft property to Henlong for $2,178,000 settled.
On settlement, SLN Developments received from Henlong, amongst other cheques, a cheque in favour of itself for $555,720.64 and a cheque in favour of "Walker Hodges [sic] Trust Account" for $300,000. Walker Hedges & Co were Mr Lawrence's then solicitors. Evidently, they were acting for Minsden on the sale of the Nelson Bay property to SLN Developments.
As to the $300,000 cheque, in an email sent to SLN Developments' conveyancer on 25 January 2012, Mr Mirosevch said: "Also please organise as part payment to SLN Developments for Settlement of Beecroft, that Henlong Pty Ltd supply a non refundable cheque for $300,000 in name of 'Walker Hodges [sic] Trust Account'. Since Wayne Lawrence will be present at Settlement to hand over the Original DA Files; I ask that the $300,000 Bank cheque be handed to Wayne for Wayne to deliver to 'Walker Hodges and Son [sic]' as a 'non-refundable deposit or option fee' for…Magnus St, Nelson Bay".
Further, on 1 February 2012, two days before the settlement of both the sale of Beecroft from Mrs Gunner to SLN Developments and from SLN Developments to Henlong, Mr Mirosevich sent another email to SLN Developments' conveyancer directing that she ask Henlong to provide a cheque on settlement of $1.2 million in favour of Mrs Gunner. The email continued: "$300,000 being SLN Developments Part-Payment of Magnus St, Nelson Bay from Minsden Pty Limited (Details in previous email …). And remainder to SLN Developments".
Those instructions evidently reflected an agreement reached between SLN Developments and Minsden that, for reasons not revealed in the evidence, the deposit payable by SLN Developments to Minsden on the purchase by SLN Developments of the Nelson Bay property was to be increased to $300,000, and released forthwith to Minsden.
Thus, on 2 February 2012, Mr Mirosevich wrote to Walker Hedges & Co: "SLN Developments Pty Limited as Purchaser of property Lot 9, 62 Magnus Street, Nelson Bay from Minsden Pty Limited pursuant to Contract for Sale of Land dated 1 November, 2011 hereby directs you as follows: 1. The terms of the Contract for Sale have been varied by agreement between the Purchaser and the Vendor to provide that the deposit amount is changed to be the sum of $300,000.00. 2. A special condition is to be included in the Contract to provide that the deposit is non-refundable in any eventuality where the Contract does not proceed to completion including but not limited to where the Contract is rescinded as a result of any right of rescission on the part of the Purchaser. 3. The deposit is to be released forthwith to the Vendor and, for this purpose, you are specifically directed to release the deposit to the Vendor once you received same into your trust account."
In effect, SLN Developments agreed that the deposit it should pay Minsden in respect of the Nelson Bay purchase should be increased (from a figure not revealed in the evidence) to $300,000 and that SLN Developments would pay that amount to Minsden from the proceeds of its sale of the Beecroft property to Henlong, in the form of a bank cheque in favour of Mr Lawrence's solicitors, Walker Hedges & Co.
Settlement of the sale of Beecroft from Mrs Gunner to SLN Developments, and the on-sale from SLN Developments to Henlong, proceeded (evidently simultaneously) on 3 February 2012 on this basis. Mrs Gunner received, net, $1,166,345.20. SLN Developments received, net, $855,720.64, comprising the $300,000 bank cheque in favour of "Walker Hodges [sic] Trust Account" that Mr Lawrence was to receive on settlement, and the $555,720.64 that SLN Developments itself received.
On 13 February 2012, again for reasons not revealed in the evidence, SLN Developments and Minsden agreed to rescind the Nelson Bay contract and the $300,000 deposit to be forfeited to Minsden.
Thus, on 13 February 2012, Mr Mirosevich executed an "Acknowledgment of Rescission" on behalf of SLN Developments in the following terms: "RE: CONTRACT FOR SALE OF LAND IN RESPECT OF LOT 9, SP8600 BEING PROPERTY KNOWN AS…MAGNUS STREET, NELSON BAY CONTRACT DATE: 1 NOVEMBER, 2011 Each of Minsden Pty Limited as Vendor and SLN Developments Pty Ltd as Purchaser in the abovementioned Contract hereby acknowledge that, by mutual agreement made this day, the Contract for Sale is hereby rescinded. Each of the parties agree that the deposit of $300,000.00 paid by SLN Developments Pty Ltd pursuant to the terms of the Contract, as amended after the date of exchange, is as per the terms of that Contract to remain the property of Minsden Pty Limited and is not refundable by Minsden Pty Limited to SLN Developments Pty Ltd." [Emphasis in original]
The $300,000 deposit held by Minsden in respect of the sale by it to SLN Developments of the Nelson Bay property was, the evidence above suggests, received in the form of the "Walker Hodges [sic] Trust Account" cheque for $300,000 that Mr Lawrence collected on 3 February 2012 at the settlement of the on-sale by SLN Developments to Henlong of Beecroft.
Although no direct evidence of this was before me, there is no reason to doubt that that deposit was forfeited to Minsden in accordance with the 13 February 2012 Acknowledgement of Rescission.
The evidence before me did not reveal why SLN Developments and Minsden agreed to increase the deposit payable by SLN Developments in respect of the Nelson Bay purchase to $300,000 and then to, less than two weeks later, rescind the Nelson Bay contract.
At some time after the 3 February 2012 settlement, Mr Lawrence told Mr Mirosevich that he needed immediate payment of his "share" of the profit made by SLN Developments from the Beecroft transaction, in order to fund litigation against Mrs Gunner concerning her conduct in relation to that very transaction. Presumably, this was a reference to Mrs Gunner's purported rescission of the Beecroft contract. What claim Mr Lawrence might properly have against Mrs Gunner, in light of his failure to disclose his and Mrs Lawrence's interest in SLN Developments and the contents of the Deed of Agreement made between Mrs Gunner and SLN Developments on 3 February 2012, eludes me.
Thus, in his affidavit, Mr Mirosevich said: "In February 2012, after settlement of the abovementioned sales, Mr Lawrence said to me words to the following effect: Mr Lawrence: 'I need you to pay me my share of the profit. I need $300,000.00 immediately.' [Mr Mirosevich]: 'What about the tax?' Mr Lawrence: 'I need the money now. I will pay the tax when it is due.' I agreed to release $300,000.00 to Mr Lawrence. Within a week or so from the date I paid Mr Lawrence the $300,000.00, Mr Lawrence called me and said words to the following effect: Mr Lawrence: 'Dennis, I want you to pay the rest of my share of the profits to Valerie.' Although I remained concerned about the tax that would need to be paid by Mr Lawrence, I paid the additional $15,000.00 to Mr Lawrence's wife, Valerie."
My attention was not directed in final submissions to any direct evidence of these payments. However, Mr Collins's final written submissions proceeded on the basis that the $300,000 was paid to Minsden. That was also the effect of Mr Mirosevich's evidence in cross-examination.
The $300,000 paid to Mr Lawrence (albeit, evidently at his direction, to Minsden) following his discussion with Mr Mirosevich, and representing his share of the profit made by SLN Developments in its on-sale to Henlong, must have been a different payment (albeit, coincidentally in the same amount) from the $300,000 deposit paid by SLN Developments to Minsden in respect of the Nelson Bay transaction. Mr Lawrence did not suggest, and Mr King did not put to Mr Mirosevich, that the documents referred to above concerning the increase of the Nelson Bay deposit to $300,000 and its subsequent forfeiture to Minsden were confected to disguise a profit distribution by SLN Developments to Mr Lawrence. I see no reason to conclude that those transactions were not genuine commercial transactions. The reason they occurred was not explained in the evidence, no doubt because of their faint (at best) relevance to the issues in the proceedings.
I therefore find that the distribution of "profit" to Mr and Mrs Lawrence from the Beecroft sale of $315,000 was funded by the $555,720.64 received by SLN Developments on the settlement of its on-sale of Beecroft to Henlong.
I will return to the significance of these matters when I consider Mrs Gunner's cross-claim.

[35]

The CTTT proceedings

Mr and Mrs Lawrence did not vacate 134 Clontarf Street by 17 February 2012, as demanded in Mr Marshall's letter of 6 February 2012.
Consequently, on 21 February 2012, Mrs Gunner commenced proceedings in the CTTT against Mr and Mrs Lawrence seeking possession of 134 Clontarf Street.
On 15 May 2012, Mr and Mrs Lawrence filed submissions in answer to Mrs Gunner's claim for possession.
In those submissions, Mr and Mrs Lawrence asserted for the first time the existence of the Mt Colah, Old Bar, Beecroft, 132 Clontarf Street and 134 Clontarf Street Agreements between Mr Lawrence and Mr Gunner, as well as the 18 March 2009 Agreement with Mrs Gunner.
Mrs Gunner described her reaction to Mr and Mrs Lawrence making these allegations in the following terms: "I was horrified and it was beyond my belief when after more than three years after Norm had passed away, Mr Lawrence and Valerie claimed that there was a partnership agreement between Mr Lawrence and Norman, which is totally denied. Mr Lawrence and Valerie's claim was only commenced within days of the Consumer Trader and Tenancy Tribunal hearing in relation to the Notice to Vacate I had served on Mr Lawrence and Valerie in late 2011 [sic] requesting that they vacate my home at 134 Clontarf Street in order for me to sell it to, amongst other things, reduce land tax and assist the funding of the subdivision of the Mt Colah and Old Bar properties."
Mrs Gunner also said, and I accept, that: "I distinctly recall a telephone conversation between Valerie and myself in November 2012 during which words to the following effect were said: [Mrs Gunner]: 'Valerie, why are you doing this?' Valerie: 'Because you are trying to get us out of the house and you have taken us to the CTTT'."
The CTTT proceedings were listed for hearing on 13 September 2012.
On 5 September 2012 the plaintiffs commenced these proceedings.
As I have mentioned, in light of the commencement of these proceedings, on 12 September 2012 the CTTT vacated the 13 September 2012 hearing date, and ordered that the CTTT proceedings be transferred to this Court to be heard in conjunction with these proceedings. The CTTT also ordered that the CTTT proceedings be stayed pending final determination of these proceedings.

[38]

Inconsistency between Mr and Mrs Lawrence's claims and Mr Lawrence's conduct following Mr Gunner's death

My first reason for rejecting Mr and Mrs Lawrence's claims concerning the Old Bar, Beecroft, Mt Colah, 132 Clontarf Street and 134 Clontarf Street Agreements is the inconsistency between Mr Lawrence's evidence as to the existence of such agreements and his and Mrs Lawrence's conduct. These inconsistencies have been described in detail above, in the course of outlining the relevant events. They are: 1. Mr Lawrence's dealings with Mr Mirosevich concerning the Beecroft property (see [147] to [171] above); 2. Mr Lawrence's dealings with Mr Painter concerning 132 Clontarf Street (see [172] to [179] above); 3. Mr and Mrs Lawrence's response to Mrs Gunner's 9 February 2011 notice to vacate 134 Clontarf Street (namely, their referral of Mrs Gunner to the Mental Health Unit) (see [180] to [190] above); 4. Mr Lawrence's dealings with Mr Searles concerning the Old Bar property (see [208] to [219] above); 5. Mr and Mrs Lawrence's response to Mrs Gunner's purported rescission of the Beecroft contract and her 19 October 2011 notice to vacate 134 Clontarf Street (namely, their referral of Mrs Gunner to the Guardianship Tribunal) (see [230] to [258] above); 6. Mrs Lawrence's submission of the 27 January 2012 document to Mrs Gunner (see [259] to [269] above); and 7. Mr and Mrs Lawrence's attempt to have Mrs Gunner execute the 1 February 2012 "Declaration of Trust" (see [270] to [278] above).
For the reasons I have explained when discussing the course of events, I find the matters referred to in the preceding paragraph inconsistent, and indeed irreconcilable, with Mr and Mrs Lawrence having any genuine belief in the existence of the Old Bar, Beecroft, 132 Clontarf Street and 134 Clontarf Street Agreements. Although none of these matters concern the Mt Colah property itself, I find them also to be inconsistent with Mr and Mrs Lawrence having any genuine belief in the existence of an agreement concerning that property. If there was no Old Bar, Beecroft, 132 Clontarf Street and 134 Clontarf Street Agreements, it defies credulity to suggest that there was, only, a Mt Colah Agreement.
If, as Mr Lawrence claims, he did enter the various agreements with Mr Gunner for which he contends, and if he understood them to have the legal force that he claims, he would surely have asserted their existence at the time of each of these events.
Instead he behaved in an opportunistic way with various people, and in relation to various of the subject properties, to try to make as much as he could from the properties. His conduct was not only inconsistent with the existence of any of the alleged agreements, but for the most part also assumed Mrs Gunner's entitlement to those properties. Mrs Lawrence cannot be in any better position.
I find these matters alone sufficient to reject Mr and Mrs Lawrence's claims.
But there is more.

[41]

Absurd allegations

Mr Lawrence made a large number of extraordinary allegations about Mrs Gunner.
For example, Mr Lawrence alleged that Mrs Gunner had, as long ago as the 1980s, manipulated Mr Lawrence's business partners. Thus he stated, in one of his affidavits: "An inference can be drawn from the 1980s through to 1993 that [Mrs Gunner] had pre planned every step that [Mrs Gunner] on each of the occasions ensured that [Mrs Gunner] would move any partner of [Mr Lawrence] away from [Mr Lawrence]."
When asked about this statement in cross-examination, Mr Lawrence said: A: "I'm saying, in the context of that every partner that I had in the 80s through to 1993, Frances would always end up going out with them and moving in with them. And after that they would move away from the dealings that we previously had that were alright. Q. So she pre-planned all of that? A. I can't adhere to [sic] that she pre-planned it, but I'm just saying it would, an inference was, to me, an inference is it doesn't make sense. That it happens repeatedly, all the time."
As I have mentioned, Mr Lawrence also alleged that Mrs Gunner deliberately contributed to her husband's death. Thus, in an affidavit Mr Lawrence said: "On 13 March 2009 the evidence will now show that [Mrs Gunner] deliberately delayed calling an ambulance during that day which placed Norman when arriving at the hospital in a delirious state and requiring immediate medical attention. … The evidence will show that by [Mrs Gunner] delaying calling the ambulance to provide Norman with medical treatment the septicaemia will likely be the cause of Norman's death rather than his [leukaemia] condition." … It should be noted that Norman did not pass away because of his [leukaemia] condition. The wife had a motive by delaying phoning for an ambulance on the day of 13 March 2009 until the late afternoon. By delaying the ambulance to the critical point would circumvent Norman passing away at home and passed away in hospital. The motive to the wife was potentially $20,000,000M in Norman Gunner's estate."
In cross-examination Mr Collins took Mr Lawrence to his statement, set out above, that Mr Gunner did not die because of his leukaemia condition. The following evidence ensued: Q: "How on earth would you know? A. I wouldn't know, would I."
In cross-examination, Mr Lawrence was asked upon what basis he made that allegation. He said: "All of this stems from thing and one thing only. It all stems to the fact is, that Frances conveyed to us in all certain terms that she had called the ambulance by 10 o'clock in the morning, and she - apparently she - I can't say what a third person said, but Valerie said that Frances said that the ambulance had just arrived at 10 o'clock in the morning and I believe that Frances didn't ring Valerie all day and we were worried about what was happening to Norm. So all of this stems from that."
Mr Lawrence gave the following further evidence in response to questions from me: Q. "Did you mean that Frances delayed calling the ambulance so that Norm would die at home or so that he would die at the hospital? A. No, that he'd end up not getting to hospital in time. That's what I meant. It - why did- Q. That's what you reckon Frances' motivation was. Seriously, is it? A. What I'm saying is that - that, why did she tell us one thing and something else happened? That's all I'm saying there. Q. But you're going further here. You're not just asking a rhetorical question here, you're expressing an opinion which is a very seriously - which reflects very seriously on Mrs Gunner, doesn't it? A. It only [reflects] on Mrs Gunner if - all of this stems from one thing and one thing only. We- Q. Don't tell me that again. I'm asking you what you meant by this. A. I've told you what I've meant by that. Maybe the fact is that we wanted to know why the delay for six hours when Norm needed help. That's all I'm asking. Why was there delay? Valerie was worried- Q. You can see, surely, that you went much further than asking that question in this paragraph, surely. A. In what way? MR COLLINS: I don't think we're going to get any further with that, your Honour, so I'm going to pass away from it."
Mr Lawrence's preparedness, in the circumstances, to conclude that Mrs Gunner had deliberately delayed calling the ambulance with a view to inheriting Mr Gunner's estate bespeaks an irrationality of mind on the part of Mr Lawrence that causes me deep disquiet concerning his evidence generally.

[43]

Clandestine purchase of the Beecroft property

I have set out the circumstances in which Mr Lawrence acquired a shareholding in SLN Developments, failed to reveal that shareholding to Mrs Gunner, and then arranged, in company with Mr Mirosevich, to on-sell the Beecroft property to Henlong at a profit.
Mr Collins put the matter, somewhat colourfully, as follows: "This deliberate, planned, concealed deception of Mrs Gunner calmly documented by the directions of the First Plaintiff is revealing for a number of significant reasons. Leaving aside for the moment its importance to the cross claim, this episode shows an unqualified conscious recognition by the First Plaintiff that Mrs Gunner was the absolute owner of the Beecroft land and his failure to ventilate any claim whatever whilst he guilefully schemed to make money out of his fiduciary position is a complete answer to the concocted case he now brings to the court. Mr Lawrence's guile, the careful preparation of the documents evidencing his scheme, the deliberate corporate planning designed to dupe Frances, his concealment of these measures from her, his later lies in affidavits suggesting that she and her solicitors knew about the share transfers, demonstrate him to be a man driven by greed and prepared to enlist deception to satisfy that greed and to do so coldly without consideration for Frances in the middle of statements to a man who offered to bring Frances in on the deal but Frances "was not all there". This particular transaction shows all of the recurrent features of Mr Lawrence's business credo. Above all, the plan to acquire the company which was to purchase the land from Mrs Gunner is an effective refutation of any suggestion that Mr Lawrence had any interest in that land."
I accept this submission. Not only was Mr Lawrence's conduct inconsistent with him having any genuine belief of any agreement with Mr Gunner of the kind for which he now contends, it shows that he was prepared to seek to make a profit for himself (through his shareholding in SLN Developments) from the sale of the property that he now claims he was helping Mrs Gunner to develop. Again, this reflects poorly on his credit as a witness.

[44]

The "loans affair"

A revealing insight into Mr Lawrence's credibility was given by his evidence in relation to the question of whether Mrs Gunner had ever lent him money.
Early in the cross-examination, Mr Lawrence gave the following evidence: Q. "There's no question, of course, of Mrs Gunner ever lending you any money, is there? A. No. Q. You're quite sure about that, aren't you? A. Yes."
Mr Collins then took Mr Lawrence to an affidavit he swore in proceedings brought against him in this Court by the liquidator of Lawrence Waterhouse Pty Ltd (in liquidation).
Mr Lawrence had annexed to that affidavit a schedule which set out his "explanation" for various payments made to that company.
One of those payments involved a cheque for $14,331 in favour of the company from Mrs Gunner. In the schedule, Mr Lawrence stated that the relevant cheque butt notation was "Flight Centre Payment for UK trip tickets" and that the "[e]xplanation" for the payment was "Gunner Loan A/C/Lawrence".
Mr Lawrence gave this evidence: Q. "14,331. That was a cash advance to you by Mrs Gunner, was it? A. Yes, it was. Q. Do you have any intention of ever paying any of these amounts back to her, by the way. A. That was a gift. Q. But you've put it down as a loan, haven't you? A. We need to- Q. Please, just answer that question. A. No, no, I need to correct something here, because we're all here in the room now, and I need to correct something there because it's leading down a track where it's against what I'm saying. Now, just because I've got dyslexic, I've got to put up with that, and it's a condition that you're born with. So therefore I need to explain exactly what that means. Now- HIS HONOUR Q. Just explain this to me. If this was a cash gift from Mrs Gunner, why did you call it a loan? A. It's a third - it's gone to a third section. I haven't called it as a loan from Mrs Gunner, I've called- Q. Well, why did you use the words 'Gunner loan account/Lawrence'? A. So I can register where I got the cheque from. I've got to have a record of where I got the cheque from. I can't- Q. This was part of the evidence, was it, that you were adducing in the proceedings brought against you by the liquidator of Lawrence Waterhouse? A. That's right."
A short time later Mr Lawrence gave this evidence, initially in response to questions from me and then in response to Mr Collins: "HIS HONOUR Q. Mr Lawrence, just focus on this question and see if you can answer it. If the $14,331 was a gift from Mrs Gunner why did you call it a loan in this document? A. I called it a loan because I knew where it had come from. Q. But it wasn't a loan? A. But it's a- Q. Is that right, it wasn't a loan? A. No, the liquidator - you've got to put it in context. The liquidator - if I said that was a gift or said it's something else the liquidator would be able to claim it back. Q. Well, I think that's the point that's being made, Mr Lawrence. A. No, it's a loan. Q. I think what is being suggested is that you've either falsely told me that Mrs Gunner made no loans to you, or you're falsely telling the liquidator that she did. I think that's what's coming. So what do you say about that? Which is it? A. Well, this is the first time I've ever heard that Mrs Gunner - if you go to Mrs Gunner's affidavit she says they're all gifts. So who's lying? Is it Mrs Gunner or me? One of us [is] lying. I can't be lying because the money - she would never have given me $14,000, she would have given it to Valerie. The only reason we put it in that account, so we can use the overdraft and everything within that account. MR COLLINS Q. I'm driven to ask you this. Could you, for the life of me, explain how you have just leapt from your earlier answers to advancing the proposition in connection with this payment that Mrs Gunner is lying? Where on earth did that come from? A. Mrs Gunner provided this as a gift. Q. Yes. But how on earth can you, under oath, leap from that to the proposition that either you're lying or she's lying? She's got nothing to do with this. A. But the point that you're making here is, you're putting forward, 'The fact is this was a loan from [Mrs] Gunner.' It wasn't a loan. I'm explaining to you. You asked me a question. Q. I'm putting forward that you put forward that it's a loan from [Mrs] Gunner and, just so that you're in no doubt about it, I'm going to be submitting that you are telling lies. You started yesterday afternoon telling lies, and I'm suggesting you've followed it up today. A. Well, I reject that."
And so it went on.
Later in the cross-examination, Mr Lawrence was taken to an affidavit he had sworn in the Lawrence Waterhouse proceedings in which he stated that he had paid into Lawrence Waterhouse money "that had been provided to me by my sister in law, Frances Gunner. She provided the monies to me as a loan and I placed them into Lawrence Waterhouse". Mr Lawrence then set out seven payments totalling $130,627, each of which was described as "loan to W Lawrence".
In cross-examination, Mr Collins again put to Mr Lawrence that these statements were inconsistent with the evidence he had given before me to the effect that Mrs Gunner had never loaned him money.
Mr Lawrence gave this evidence: Q. "Let's go back to it again. Do you agree that the sentence that you have said in this affidavit was true under oath? 'She provided the monies to me as a loan'. A. They were not provided to me as a loan. Q. Is this sentence, then, false, is it? 'She provided the monies…'. A. It's not false. Q. It's not false? A. No, it's an error in an affidavit."
A short time later, Mr Lawrence gave this evidence: Q. "Is it true to say that Frances Gunner provided the $130,627 in the schedule to you as a loan? Is that true or is it false? A. (No verbal reply) Q. Surely you can answer that question. A. This document was prepared by the solicitor and I couldn't have - it's prepared from another document and it's got there, 'Loan to Lawrence.' What about it? It doesn't say who the loan came from. Q. It does. A. It just says 'loan'. Q. I'm sorry, does it not? 'She,' Frances Gunner, 'provided the monies to me,' being you, Wayne Lawrence. That's what it says, isn't it? A. No. I'm not going to twist words, or anything like that. What I'm saying to you is, I know what was done. I have been through a court case in it. I've had my audit and I've come out clean at the other side. Q. Yes. We've heard all that. I still demand that you answer this question: Is it true or is it false that Frances Gunner provided the $130,627 to you as a loan? Is that true or is it false? A. Frances did not provide me a loan and there must be an error in that - the way it's worded. Q. So that statement is false, is it not? A. It's not intended to be false." And later: Q. "Just listen very carefully, please. I want to know whether it is true or false that Frances Gunner provided the $130,627 to you as a loan. Surely you can answer that. A. It is not false in the sense of being false. It is a mistake in the affidavit. Q. It's wrong, is it? A. No, it's not wrong. It's the truth."
Mr Lawrence was prepared in these proceedings to characterise payments made to him (or companies with which he was associated) by Mrs Gunner as gifts. But in the Lawrence Waterhouse proceedings, he characterised the same payments as loans due to his apprehension, which he volunteered in the passage I have set out at [353], that if he told the liquidator that the payments were gifts, the liquidator would claim an entitlement to the funds.
When confronted with the tension between these two positions, Mr Lawrence was either unable to appreciate the true position (namely, that he was giving inconsistent evidence) or gave disingenuous evidence before me.
Either way, it reveals Mr Lawrence to be a most unreliable witness.

[45]

The abandoned Braemar reliance evidence

In their amended statement of claim, Mr and Mrs Lawrence alleged that in June 2004, in reliance on the Old Bar Agreement, the Beecroft Agreement, the Mt Colah Agreement and the 132 Clontarf Street Agreement, Mr Lawrence "took steps to reduce his involvement in a property development in Braemar, and by doing so gave up the opportunity to make additional profits".
Ultimately, that claim was abandoned by Mr King, after Mr Collins made clear in his cross-examination of Mr Lawrence that the allegation could not be made out. This was for the simple reason that the "steps" that Mr Lawrence took to "reduce his involvement" in the Braemar property development took place in June 2004, whereas he alleged that his agreements with Mr Gunner were made towards the end of 2004 or the beginning of 2005.
The particular steps that Mr Lawrence claimed he took were summarised in an affidavit he swore shortly before the commencement of the proceedings as follows: "If I had not entered into the oral agreements with Norman in 2004 and 2005 concerning 132 Clontarf Street, the Beecroft Land, the Mount Colah Land and the Old Bar Land explained in my affidavit dated 30 May 20[13] I would have: a) completed the subdivision of the Remaining Land into six lots; b) then engaged Hotondo Southern Highlands to build houses on the six lots; and c) then sold the six lots with houses on them. Because I had entered into the oral agreements with Norman in 2004 and 2005, I did not have time to do this work. For this reason, on I [sic] sold the Remaining Land to Hotondo Southern Highland[s] for $625,000. Hotondo Sothern [sic] Highland[s] then completed the subdivision, built houses on the remaining six lots, and sold the houses. Based on my observations, the houses Hotondo Southern Highlands built on the six lots have the same design and specifications as those attached to the letter from Hotondo Southern Highlands to me dated 10 February 2006."
However, in an affidavit that Mr Lawrence swore in separate proceedings involving his former joint venturers in the Braemar development in the District Court of NSW, Mr Lawrence gave a different account of why he did not proceed with the Braemar development.
In that affidavit, he alleged that the reason he did not proceed with the Braemar development was that his former partners, in breach of their obligations under a deed entered into to settle an anterior dispute concerning Braemar, had failed to deliver to Mr Lawrence plans and other documents allegedly necessary for the "commencement of construction of the remaining development" at Braemar.
This is another example of Mr Lawrence swearing to the truth of whatever he thinks is necessary to suit the purpose at hand.

[46]

Credit - Mrs Lawrence

Although Mrs Lawrence purported to give evidence corroborative of that of Mr Lawrence, I do not accept her as an independent witness. Mrs Lawrence is, of course, one of the plaintiffs and not independent in that sense. Moreover, the circumstances in which Mrs Lawrence prepared both Mr Lawrence's and her own affidavits show that, to adopt Mr Collins's language, she "offers no independent way to the truth".
As I have mentioned, until shortly before the commencement of these proceedings Mr and Mrs Lawrence were self-represented.
Mr Lawrence's first affidavit, which contained some 270 paragraphs and was almost 56 pages in length, was sworn on 30 May 2013. Thereafter he swore affidavits on 27 June 2013, 17 February 2014, 6 March 2014, 11 April 2014, 6 June 2014, 10 June 2014, 4 August 2014 (two affidavits), 2 September 2014, 25 September 2014, 26 September 2014 (five affidavits), and 20 November 2014.
Mrs Lawrence's first affidavit was sworn on 25 May 2013. She subsequently served affidavits sworn on 11 April 2014 (two affidavits), 6 June 2014 (containing some 552 paragraphs and extending over 100 pages) and 4 August 2014.
The evidence revealed that there was close cooperation between Mr and Mrs Lawrence in the preparation of their affidavits.
Mr Lawrence dictated his affidavits to Mrs Lawrence, who typed the affidavits as he dictated.
Mr Collins put the matter this way in his closing submissions: "From all of those references in the evidence the court is able to view a picture of the closest collaboration between the two Plaintiffs, husband and wife. In the first instance everything the First Plaintiff says in his affidavits and his submissions and other documents he prepares is written out or dictated by him to his wife who then types it and never or hardly ever challenges his view of events. One supposes that if the contents of Mr Lawrence's affidavits and other documents were everyday objective and unspectacular renditions of the ordinary then it might not be of any significance that Mrs Lawrence did not comment upon them but it is the extraordinary nature of the material that passed from him unquestioned to her, was then included in his affidavits and then retailed in her evidence that causes the real problem in this case. It would be a powerful conscious and subconscious influence upon any person who was placed in the Second Plaintiff's position. However the Second Plaintiff was no mere amanuensis. She was the wife of the First Plaintiff and a co-Plaintiff in the proceedings. In those circumstances the combined work of the two was in effect carried out in such a way so as to ensure they put their best foot forward in a unified way. It defies belief to conclude that having received, typed and corrected rendition after rendition of her husband's evidence that in this bitter context, she would then calmly sit down and advance a different version. In fact it is not possible to find a different version advanced by the Second Plaintiff."
I accept the submissions contained within this passage. I do not regard Mr or Mrs Lawrence as being reliably corroborative of the other. In substance, Mr Lawrence's version of events has become the evidence of both.
Mrs Lawrence was, of course, on Mr Lawrence's account of it, invariably either in the kitchen or out walking with Mrs Gunner on each of the occasions when Mr Gunner allegedly made the agreements with Mr Lawrence for which he now contends. She was thus unable to corroborate Mr Lawrence's evidence on the critical question of the making of the agreements.
I have set out above details of Mrs Lawrence's involvement in the Guardianship Tribunal application, her participation in the delivery to Mrs Gunner of the 27 January 2012 document and her delivery to Mrs Gunner of the Declaration of Trust.
In my opinion, these matters reflect very badly on Mrs Lawrence. They show that, in concert with her husband, she was prepared to make statements she must have known to be false, and prepare documents that she must have known did not reflect any true state of affairs between her, her husband and her sister.

[47]

Credit - Ms Pearson

As I have said, Ms Pearson is the daughter of Mrs Lawrence and stepdaughter of Mr Lawrence; and thus Mrs Gunner's niece.
Over the years, Mrs Gunner had shown much kindness and generosity to Ms Pearson and her husband. Amongst other things, Mrs Gunner purchased for Ms Pearson a $167,000 horse float, a $30,000 car, a $4,000 station wagon and four horses, as well as jewellery, cash and other items. She also gave Ms Pearson a Mercedes Benz four-wheel drive vehicle which originally cost Mrs Gunner something in the order of $99,000. She gave Mr Pearson a $36,000 Harley Davidson motorbike, an $8,000 trail bike and a $27,000 tractor.
Ms Pearson did not give evidence of any matter directly relevant to the existence of the agreements for which Mr and Mrs Lawrence contend, nor to Mr Lawrence's alternative claim in quantum meruit (which I deal with below).
Ms Pearson did, however, give evidence which was extremely critical of her aunt, including evidence purportedly corroborative of that of Mr and Mrs Lawrence's concerning Mrs Gunner's alleged delay in calling an ambulance to transport Mr Gunner to hospital immediately prior to his death.
Mr Collins's cross-examination revealed that Ms Pearson had no direct knowledge of the matter. Yet, she was adamant that Mrs Gunner had deliberately delayed calling the ambulance.
In one of her affidavits she said on this topic: "The delay by [Mrs Gunner] in not calling for an ambulance straight away when Norman was in a critical condition and in light of the Amended Death Certificate Norman must have really suffered all day in bed."
The "amended" death certificate to which Ms Pearson referred could only have been Mr Gunner's death certificate, as amended by the doctors at Manning Rural Referral Hospital in May 2014 following Mr Lawrence's misguided representations on that topic (see [309] to [315] above).
Yet in cross-examination, Ms Pearson was clear that "I don't know anything about an amended death certificate".
So far as concerns the preparation of her affidavits, Ms Pearson said that she "wrote everything down on a piece of paper" and that Mrs Lawrence "typed it into the computer". She said "one of them was done over the phone".
It seems obvious to me that Mr or Mrs Lawrence embellished whatever draft Ms Pearson provided them by adding a reference to an "amended" death certificate, but that Ms Pearson was nonetheless prepared to attest to the truth of the matter.
Mr Collins submitted that Ms Pearson was a "seriously troubled and unbalanced young woman". Mr Collins pointed to Ms Pearson's assertions that Mrs Gunner had offered her $650,000 to "lie" for her in these proceedings, that Mrs Gunner has "cycles of hate", that Mrs Gunner told her she was "going to get a divorce" and wanted Mr Gunner "dead", that Mrs Gunner had "arranged for the killing of my two horses because they were eating the cattle's feed", and that Mrs Gunner told her she was going to "get a hit man to have [Mr Lawrence] killed".
Mrs Gunner denied each of these wildly improbable allegations and I accept her denial.
I think it clear that, like Mrs Lawrence, Ms Pearson's evidence "offers no independent way to the truth" (again to adopt Mr Collins's words).
She also gave evidence concerning Mrs Gunner's then solicitor, Mr Marshall, with which I will deal, separately, below.

[49]

Partnership Act 1892 (NSW)

There is a further difficulty with Mr and Mrs Lawrence's case.
Even if I were satisfied that that Mr Gunner did make the agreements for which Mr and Mrs Lawrence contend, any such arrangements would have amounted to partnerships between Mr Gunner and Mr Lawrence for the purposes of s 1(1) of the Partnership Act 1892 (NSW). Section 1(1) provides: "Partnership is the relation which exists between persons carrying on a business in common with a view of profit…".
In the original iteration of their statement of claim, Mr and Mrs Lawrence described each of the Old Bar, Beecroft, Mt Colah, 132 Clontarf Street and 134 Clontarf Street Agreements as "a partnership". However, by their amended statement of claim filed in Court during the hearing, the agreements were described as "a partnership or joint venture or contractual agreement".
That change in nomenclature cannot, in my opinion, alter the fact that the arrangements that Mr Lawrence claims he entered into with Mr Gunner satisfy the definition of "partnership" in s 1(1) of the Partnership Act. However else they might be described, they were (if they existed) partnerships.
That being so, any alleged agreement was governed by s 33(1) of the Partnership Act, which provides: "Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner."
Mr King contended that there was such an agreement between the putative partners so as to enliven the opening words of s 33(1) ("subject to any agreement between the partners").
However, that cannot be. The members of a two person partnership cannot agree that, on the death of one, the partnership survives. That is because, once one member of a two person partnership dies, there can no longer be any relationship which exists between "persons" carrying on a business in common with a view of profit.
Of course, multi-person partnerships can, and often do, agree that if anyone of them dies, the partnership remains in existence between the survivors. But that is not this case.
Thus, if, contrary to my findings, there was a partnership between Mr Gunner and Mr Lawrence, it was dissolved on Mr Gunner's death. Mr Lawrence's rights, as a surviving partner, would be confined to a distribution of partnership property under ss 39 and 44 of the Partnership Act. Mr Lawrence makes no such claim in these proceedings.

[51]

The alleged agreement of 18 March 2009

As I have set out above, Mr and Mrs Lawrence claim that on 18 March 2009, the day after Mr Gunner died, Mrs Gunner said to them something to the effect that "everything will continue on the same as your agreements with Norm" (see [122] above).
As I have concluded that there were no "agreements with Norm", this aspect of Mr and Mrs Lawrence's claim cannot take their case any further. There were no arrangements for Mrs Gunner to "continue".
In any event, I have set out above my reasons for not accepting Mr and Mrs Lawrence's evidence about this matter.
First, Mrs Gunner denied saying any such thing, and I prefer her evidence to that of Mr and Mrs Lawrence. Further, Mrs Gunner denied that Mr Lawrence was even present on 18 March 2009. I accept that evidence over the denials of Mr and Mrs Lawrence.
Second, even if I were to accept that Mr Lawrence was present, it was (at least originally) his case that Mrs Gunner was ignorant of his alleged agreements with Mr Gunner. He said that Mrs Gunner and Mrs Lawrence were either out walking or working in the kitchen every time the subject arose, and that Mr Gunner did not discuss his business with Mrs Gunner. No doubt, Mr Lawrence adopted that position to avoid any difficulty that might arise from Mrs Gunner giving evidence that, during Mr Gunner's life, she had not heard of any such arrangements. However that may be, it is obvious that Mrs Gunner could not, a day after her husband died, have said to Mr and Mrs Lawrence that "everything will continue" in accordance with arrangements of which she was ignorant.
Third, as I have mentioned, Mr and Mrs Lawrence did not assert the existence of any such statement by Mrs Gunner until they filed their defence in the CTTT proceedings in May 2012. All of the matters I have set out above concerning the irreconcilability of Mr Lawrence's claims concerning the alleged 2004 agreements and his subsequent conduct apply with equal force to Mr and Mrs Lawrence's claims concerning the alleged 18 March 2009 agreement.
Fourth, if Mrs Gunner did say anything on 18 March 2009, it was said in the context of Mr Gunner's death the day before, Mrs Gunner's grief at the death of her partner of 19 years and husband of almost ten years, and (presumably) Mrs Gunner's desire that her identical twin sister and (if he was present) brother in law comfort her. In those circumstances, I am not prepared to find that whatever was said (if anything at all) was intended by anyone present to form the basis of any legally binding relationship.
For those reasons, I do not accept Mr and Mrs Lawrence's case concerning the alleged 18 March 2009 agreement.

[54]

Has Mrs Gunner "admitted" Mr and Mrs Lawrence's claim?

I have mentioned that, in around May 2011, Mrs Gunner retained Mr Tony Marshall as her solicitor.
During her cross-examination, Mrs Lawrence said that her daughter, Ms Pearson, had said that Mr Marshall had been following Ms Pearson while driving Mrs Gunner's car.
Mr Collins took the matter up with Ms Pearson in cross-examination (she had not mentioned it in her affidavits).
Ms Pearson said that she had seen Mr Marshall drive "slowly past my house". She said: "I was out washing my car. He saw me. He slowed down. He was already slowed down. He saw me, I looked and he sped off up the road."
Ms Pearson said that on another occasion: "I was on Mona Vale Road heading up towards my horse, to pull onto Terry Hills, and I noticed a Range Rover behind me, and he pulled up behind me and went past me. I pulled over in front of the group of shops and I looked and I got out of my car and I pointed at him and he did a right and a right to speed out and it had 'super charged' on the back, and we don't see many super charged".
Ms Pearson claimed to recognise the Range Rover that Mr Marshall was allegedly driving as belonging to Mrs Gunner.
Later Ms Pearson said that Mr Marshall had also driven "twice past the house" in a white Mercedes Benz.
Mr Marshall served an affidavit dealing with this aspect of the matter but, ultimately, the affidavit was not read.
Mr Collins put the matter this way in closing submissions: "After Mr Marshall had sworn an affidavit dealing with the Pearson allegation the Plaintiffs then made a wholesale attempt to open up the whole case again through a raft of subpoenas tacked onto Mr Marshall's affidavit. Having the best interests of the Defendant in mind Mr Marshall was entitled to decide not to assist in that purpose and to close down the Plaintiffs' repeated efforts to obfuscate and delay. Mr Marshall has referred the Pearson affidavit to the Law Society together with a transcript of evidence and a copy of his affidavit. He has also spoken with an officer of the Law Society. The wild allegation that Mr Marshall has subverted the course of justice (Plaintiffs' submissions) has no basis in fact or in law."
I have no reason to doubt that Mr Marshall has taken the course Mr Collins described.
The fact remains, however, that in these proceedings, Ms Pearson's evidence about Mr Marshall's conduct is uncontradicted.
Mr King submitted that the relevance of this material was that Mrs Gunner had made an "implied admission" of the plaintiffs' case.
In that regard, Mr King referred to the observations of the High Court in Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361, where Heydon, Crennan and Bell JJ said at [64]: "Depending on the circumstances, when a party lies, or destroys or conceals evidence, or attempts to destroy or conceal evidence, or suborns witnesses, or calls testimony known to be false, or fails to comply with court orders for the production of evidence (like subpoenas or orders to answer interrogatories), or misleads persons in authority about who the party is, or flees, the conduct can be variously described as an implied admission or circumstantial evidence permitting an adverse inference."
As I understood it, Mr King's proposition was that, in the circumstances I have described, Mrs Gunner attempted to suborn Ms Pearson by instructing Mr Marshall to "stalk her", and also by attempting to bribe her to give false evidence against Mr Lawrence.
Thus, in closing written submissions Mr King said: "It turned out that [Mrs Gunner] also engaged Mr Marshall to stalk Ms Pearson, consistently with this evidence of seeking by extra-judicial means, i.e. to frighten her out of giving evidence in this Court for her own purposes and thereby to mislead the Court." [Citations omitted]
In earlier submissions, Mr King said that Mrs Gunner went: "…so far as to attempt to discourage a potential vulnerable witness for [Mr and Mrs Lawrence] well known to [Mrs Gunner] by her solicitor Mr Marshall by shadowing and intimidating Sara for which there was no explanation". [Citations omitted]
However, Mr King did not put to Mrs Gunner in cross-examination that she had given instructions to Mr Marshall to behave in this manner.
I took this matter up with Mr King in final submissions. Mr King said: "That question going directly to the instructions of the defendant to her solicitor is privileged and wasn't put, so far as I can tell, and I think would have been rejected, and no inference can be drawn from the rejection of a question going to privilege."
Mr King's position thus appeared to be that he did not put to Mrs Gunner that she instructed Mr Marshall to "stalk" (Mr King's language) Ms Pearson because he apprehended that any such question would have been objected to on the basis of legal client privilege. However, that apprehension was not, in my opinion, any reason not to put the proposition to Mrs Gunner, especially in circumstances where the proposition was included in final submissions. It may be that no objection would have been taken to the question in order to allow Mrs Gunner the chance to deny the proposition (if she was in a position to do so).
Unlike Mr Lawrence, who must have known from the manner of Mr Collins's cross-examination that his case was under challenge (see [48] to [56] above), Mrs Gunner had no reason to believe during Mr King's cross-examination that Mr and Mrs Lawrence's case was that she had acted in the manner the subject of Mr King's submission.
In those circumstances, I am not prepared to make a finding adverse to Mrs Gunner's interest.

[55]

Mr Lawrence's quantum meruit claim

Alternative to his claim arising from the alleged agreements, Mr Lawrence brings a "quantum meruit" claim.
The claim is set out at par 106 of the amended statement of claim in the following terms: "Further or alternatively to paragraphs 7 to 11 and 25 and 26 herein and the claims made relating thereto in this Statement of Claim as amended [Mr Lawrence] claims against [Mrs Gunner] the sum of $781,551 in indebitatus assumpsit being quantum meruit or a reasonable sum for work done and services provided as follows: a. by [Mr Lawrence] in respect of the projects agreed with the late Norman Gunner in the sum of $403,075.50 up to March 2009 and alleged at paragraphs 7 to 11 of the Statement of Claim as amended the benefit of which was adopted or obtained by [Mrs Gunner] after March 2009 or for which debt [Mrs Gunner] as his legal representative is responsible; Particulars Skill and labour expended of 2,510 hours [$150,600 at $60 per hour as set out in the affidavit of [Mr Lawrence] sworn 27 June 2013 plus use of tractor for 166 weeks [$252,475.50 as set out in the tractor hire invoice Ex 2] b. by [Mr Lawrence] in respect of the said projects after March 2009 in the sum of $378,475.50; Particulars Skill and labour expended of 2,100 hours [$126,000 at $60 per hour as set out in the affidavit of [Mr Lawrence] sworn 27 June 2013] plus use of tractor and other equipment provided by [Mr Lawrence] for 166 weeks [$252,475.50 as set out in the tractor hire invoice Ex 2] c. alternatively, the sum of $781,551, the sum reasonably owing to [Mr Lawrence] in respect of work done and services provided to the late Norman Gunner and to herself in respect of the development projects."
It is common ground that Mr Lawrence's claim is restitutionary (rather than contractual) in nature, and is confined to the work Mr Lawrence claims to have done in relation to the five properties in question. A wider claim (in respect of "Other Gunner Properties") was made in final submissions. It was, however, outside the pleadings, and ultimately not pressed by Mr King.
The relevant principle is summarised in K Mason, J W Carter and G J Tolhurst, Restitution Law in Australia, (2nd ed 2008, LexisNexis Butterworths) at [914] as follows: "The claim for the reasonable value of work done or services rendered is still referred to as a 'quantum meruit' even though no longer based on the fictional implied contract to pay. Now, in order for the restitutionary claim for reasonable remuneration to be available, the requirements of unjust enrichment must be satisfied. From that perspective, the services or work done must constitute a benefit, and the circumstances must be such as to show that it was unjust for the defendant to receive (or retain) the benefit without rewarding the plaintiff." See also Deane J in Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256 to 257.

[56]

The process undertaken by Mr Lawrence to make out his quantum meruit claim

The amount originally claimed by Mr Lawrence, $781,551, as particularised at par 106 of the amended statement of claim, was summarised by the plaintiff as follows: "(a) 2004-March 2009 2,520 hours labour [at $60 per hour] ($150,600.00)2 [sic: $151,200] 166 weeks tractor dry hire ($252,475.50) [sic: $252,476.04] ($1,520.94 per week) Total: $403,075.50 [sic: $403,676.04] (b) After 2009 2,100 hours labour [at $60 per hour] ($126,000.00) 166 weeks tractor dry hire [at $1,520.94 per week] ([$]252,475.50) [sic: $252,476.04] Total: $378,475.50 [sic: $378,476.04] TOTAL CLAIM $781,551.00402 [sic: $782,152.08]". [Emphasis in original]
Thus Mr Lawrence particularised his claim by reference to work done prior to March 2009 (when Mr Gunner died) and thereafter.
In another document, included as an annexure to Mr King's closing submissions of 21 January 2015, and headed "Schedule as to Quantum" Mr Lawrence claimed: "Reimbursement for skill and labour expended of 11,667 hours (approx $700,000 over 5 years at $60 per hour) plus hire of tractor 2005/2011 for 7,000 hours (approx $496,200 at $70 per hour)".
Another document annexed to Mr King's submissions was 14 pages long and entitled "Various Items of Work Done by Wayne Lawrence for Gunners [Referred to in Affidavits/Exhibits]". That document purported to be a summary of the references in the plaintiffs' evidence to work done by Mr Lawrence (although many of the items set out did not in fact refer to evidence in the proceedings).
A further document annexed to Mr King's submissions comprised some 110 pages and was entitled "Work Done by Wayne Lawrence". According to that document, between 2005 and 2010 Mr Lawrence performed 9,257 hours of work referrable to one or other of the five properties in question in these proceedings, as well as work in relation to other properties owned by Mrs Gunner.
The "Work Done by Wayne Lawrence" document was said to be based on Mr Lawrence's diaries.
Mr Lawrence claimed to have undertaken the following process to calculate the amount of work that he had done for Mr and Mrs Gunner's benefit: 1. he identified items in his diary which he thought were related to work he had done for Mr Gunner; 2. he then wrote "Norm" or something similar at the top of the relevant page of the diary; 3. he then tried to connect those diary entries to other documents (such as, I would infer, his credit card statements or telephone accounts, extracts of which were tendered on behalf of the plaintiffs); and 4. he then endeavoured to recall what association there was between the diary entry and those documents.
In cross-examination, Mr Lawrence agreed that this process of reasoning on his part had the result that there was no evidence before the Court that would enable independent verification of his quantum meruit claim.
Even a cursory comparison of Mr Lawrence's diaries with his "Work Done by Wayne Lawrence" document shows the latter to be an unreliable, wildly exaggerated guide to what work Mr Lawrence, in fact, did.
In his reply submissions, in the course of advocating Mr Lawrence's position in relation to his diary and the "Work Done by Wayne Lawrence" document, Mr King drew attention to Mr Lawrence's diary entry of 23 June 2006, as an example "taken at random".
At the top of that diary entry, Mr Lawrence has written "Balgowlah today Norm". That heading was made by Mr Lawrence many years after 23 June 2006, when he was engaging in the process that I have described at [458] above.
One part of the 23 June 2006 diary entry reads: "Work over @ Balgowlah today fixing House".
That note appears to be a reference to work done at 134 Clontarf Street.
There is no other entry in the diary for that date which, on its face, refers to work done at 134 Clontarf Street. Mr King submitted that three entries reading "$1404.50", "cost of concrete - 4,000 - $169" and "black $149" related to "site works at Clontarf done that day". However, this is not apparent from the face of the diary note.
Mr King concluded: "Significantly, half of these entries record work done and services provided for the benefit of Mr Gunner and through the land work done and services provided for the benefit of [Mrs Gunner] herself".
However, inconsistently with that submission, the relevant reference in the "Work Done by Wayne Lawrence" document for 23 June 2006 asserts that on that day, Mr Lawrence worked eight hours ("one day is based on 8 hour[s] on average") at North Balgowlah (that is, at either 132 or 134 Clontarf Street) "cleaning, taking rubbish to tip".
That description is also given in that document for work done on each of 20, 21, 22, 24, 25, 26, 27, 28, 29 and 30 June 2006. Each page of Mr Lawrence's diary for those days includes Mr Lawrence's ex post facto heading "Balgowlah today Norm" or simply "Norm", and records many activities other than work at "Balgowlah". Some diary entries (those for 22, 25 and 30 June 2006) contain no reference at all to work done at Balgowlah (apart from the heading "Balgowlah today Norm").
Mr Hourigan, who conducted this part of the argument on behalf of Mrs Gunner, told me that there were over 1,200 days referred to in the "Work Done by Wayne Lawrence" document, and that in some 340 cases there was no corresponding contemporaneous note in Mr Lawrence's diary of work done. Mr Hourigan told me that there were some 370 other days where there was either no corresponding entry in Mr Lawrence's diary to a "Gunner matter" at all or entries directly inconsistent with Mr Lawrence having done work for Mr or Mrs Gunner on the day in question.
I have not conducted an analysis of the "Work Done by Wayne Lawrence" document and Mr Lawrence's diaries sufficient to enable me to verify the precise figures Mr Hourigan mentioned. However, my own, more limited comparison of the documents is consistent with Mr Hourigan's submission, as is my analysis of the "random entry" of 23 June 2006 to which Mr King referred. In those circumstances, I am not satisfied that the "Work Done by Wayne Lawrence" document is of any probative value.
Perhaps recognising the difficulty he faced with this kind of material, on 2 December 2014 (the seventh day of the hearing) Mr King filed in Court a notice of motion seeking, amongst other things, an order that: "The issues of quantification of the Plaintiffs' claims as set out in [paragraph 106 of the amended statement of claim] be referred to an officer of the Court or such other person as is appointed by the Court for assessment".
During final oral submissions, which took place on 5, 6 and 7 May 2015, Mr King moved on that motion.
In order to consider whether there was any merit in taking that course, on 7 May 2015 I directed that the plaintiffs serve a document in the nature of a Scott Schedule setting out, in chronological order, and separately in relation to each of the Old Bar, Mt Colah, Beecroft, 132 Clontarf Street and 134 Clontarf Street properties, all of the items of work claimed by way of quantum meruit and proven in the evidence, including the items set out in the "Various Items of Work Done by Wayne Lawrence for Gunners" document together with: 1. the date of the work alleged to have been done; 2. a brief description of that work; 3. a reference to the evidence where such work is described (being either an exhibit tendered in the proceedings, a passage from the plaintiffs' affidavits which was admitted to evidence in the proceedings or a passage from the transcript); and 4. the amount claimed for each such item of work, and a reference to the evidence justifying the allocation of that amount to that item of work.
The Scott Schedule document produced on behalf of Mr and Mrs Lawrence in response to those directions did not, to any significant extent, take the matter further.
On occasion, that document did not set out the precise date of the work alleged to have been done but, rather, referred to work done in a date range (for example "2005 - 2011" or "2004 - 2009").
For the most part, the document did not set out the amount claimed for each item of work, but merely stated the time said to have been spent on the work; principally by reference to Mr Lawrence's diary.
Indeed, in relation to 134 Clontarf Street, and notwithstanding the issues to which I have referred with Mr King's "taken at random" diary entry of 23 June 2006, the Scott Schedule document repeated, for the whole period of 19 to 30 June 2006, the claims for full days' work purportedly based on Mr Lawrence's diary entries.
The Scott Schedule contains almost no reference to any evidence in the proceedings that would justify the allocation of any particular hourly or daily monetary rate to the work alleged to have been done.
Further, there are claims for work done which, plainly, are not justified by the evidence to which reference is made.
For example, a claim is made for three days' work between 13 and 15 May 2009 described as "filed the review for cost assessment re Neil Handley". As I have mentioned at [19] above, Mr Handley was a neighbour of Mr Gunner at Beecroft who commenced proceedings against Mr Gunner in this Court. The evidence relied on to justify that claim in the Scott Schedule is Mr Lawrence's diary. The diary does contain what appears to be a contemporaneous entry from 14 May 2009 referring to the "filing" (evidently in Court) of a "review for costs assessment". But that day's diary entry contains numerous other references and does not suggest that the "filing" took anything like the whole of the day. The diary entries for 13 and 15 May 2009 contain numerous entries, but make no reference to any such "filing". The assertion that three days' work was done is simply unsustainable.
In the response to the Scott Schedule, Mrs Gunner's legal representatives have identified numerous other occasions where there is no diary entry that matches the description of the work now claimed to have been done, and where the hours claimed for work done is an obvious exaggeration and unable to be calculated from or derived from the diary entry relied upon.
In those circumstances, and in light of this highly unsatisfactory and unreliable material, I am not in a position to make any assessment of Mr Lawrence's quantum meruit claim.
I am not prepared to accede to Mr King's submission that Mr Lawrence's quantum meruit claim should now be referred out for assessment.
Mr Lawrence has had every chance in these proceedings to make out this aspect of his case. The matter has occupied some 16 days of court time. Mr and Mrs Lawrence have filed voluminous evidence. By making the directions referred to at [473] above, I endeavoured to give Mr Lawrence a final chance to show, at least, that there was sufficiently probative material available to him to justify further consideration of his claim. He has failed to do that, and I am not prepared to allow the matter to proceed further. The notice of motion of 2 December 2014 should in due course be dismissed.
In any event, I see a further fundamental hurdle in the way of this claim. Mr Lawrence must show that, in all the circumstances, it would be unjust for Mrs Gunner to receive and retain the benefit of such work as Mr Lawrence has done for her, or in her interest, without reward.
In that regard, Mr and Mrs Lawrence have lived rent free at 134 Clontarf Street since September 2006; almost nine years.
Not only that, but they have received the benefit of Mrs Gunner's extraordinary generosity over the years. I have mentioned some of that generosity above (for example, Mrs Gunner's gift of $150,000 in May and June 2011, shortly after the dismissal by the Mental Health Unit of Mr and Mrs Lawrence's application that she be "scheduled").
Between March 2003 and July 2011, Mr and Mrs Gunner, and then Mrs Gunner, made cash gifts to Mr and Mrs Lawrence totalling $1,169,000.
The cash gifts were as follows: Date Amount 25 March 2003 $50,000 10 June 2004 $10,000 8 November 2004 $20,000 10 January 2005 $10,000 15 March 2005 $10,000 11 April 2005 $10,000 8 August 2005 $20,000 19 October 2005 $10,000 29 December 2005 $20,000 13 January 2006 $30,000 25 January 2006 $5,000 2 March 2006 $30,000 25 April 2006 $20,000 7 June 2006 $20,000 8 August 2006 $20,000 25 September 2006 $4,000 4 October 2006 $5,800 7 November 2006 $14,000 4 April 2007 $60,000 10 April 2007 $10,000 11 April 2007 $10,000 11 July 2007 $10,000 13 September 2007 $90,000 2 October 2007 $10,000 2 October 2007 $25,000 26 November 2007 $20,000 14 October 2008 $20,000 31 March 2009 $10,000 31 March 2009 $5,000 12 May 2009 $20,000 28 May 2009 $10,000 26 June 2009 $10,200 26 June 2009 $10,000 4 August 2009 $6,000 11 September 2009 $70,000 4 November 2009 $10,000 4 November 2009 $10,000 21 April 2010 $50,000 31 December 2010 $10,000 31 December 2010 $10,000 2 February 2011 $10,000 2 February 2011 $10,000 9 March 2011 $10,000 9 March 2011 $10,000 24 May 2011 $50,000 2 June 2011 $100,000 21 June 2011 $100,000 27 June 2011 $50,000 6 July 2011 $34,000 TOTAL $1,169,000

[58]

Mrs Gunner's cross-claim - possession of 134 Clontarf Street

Mr and Mrs Lawrence have lived at 134 Clontarf Street, rent free, since September 2006; almost nine years.
Mrs Gunner's evidence as to the circumstances in which Mr and Mrs Lawrence came to occupy 134 Clontarf Street is set out at [105] to [117] above. I accept Mrs Gunner's evidence. It cannot be reconciled with that of Mr and Mrs Lawrence, which I reject.
I have also rejected the submission made by Mr King that the letter that Mrs Gunner signed on 27 January 2012 should be "enforced according to its terms" (see [259] to [268] above).
By his letter of 6 February 2012 (set out at [278] above), Mr Marshall reiterated Mrs Gunner's demand that Mr and Mrs Lawrence vacate 134 Clontarf Street.
On 21 February 2012, Mrs Gunner commenced proceedings in the CTTT against Mr and Mrs Lawrence seeking possession of 134 Clontarf Street.
The basis on which Mr and Mrs Lawrence resisted that claim was their assertion of the existence of the 134 Clontarf Street Agreement.
For the reasons I set out above, I am not satisfied that any such agreement was made between Mr and Mrs Lawrence and Mr Gunner, or later Mrs Gunner.
Accordingly, I am satisfied that Mr and Mrs Lawrence have no entitlement to continue in occupation of 134 Clontarf Street.
By her cross-claim in these proceedings, Mrs Gunner seeks judgment for possession against Mr and Mrs Lawrence.
Mr King submitted that Mrs Gunner's claim for possession is "barred" by s 119 of the Residential Tenancies Act 2010 (NSW). Section 119 is in the following terms: "A landlord or former landlord must not commence proceedings against a tenant or former tenant of the landlord in the Supreme Court, the District Court or the Local Court to obtain recovery of possession of residential premises subject to a residential tenancy agreement."
It is common ground that Mr and Mrs Lawrence occupy 134 Clontarf Street pursuant to a "residential tenancy agreement" for the purpose of s 119 (being "an agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence": s 13(1) of the Residential Tenancies Act. The "value" here is Mr and Mrs Lawrence's promise to pay outgoings and to effect repairs: see [113] above).
However, in my opinion, by bringing a cross-claim in these proceedings, Mrs Gunner has not "commenced" proceedings contrary to the prohibition in s 119.
The bringing of a cross-claim in proceedings is not "commencing proceedings" in the relevant sense. A cross-claim can only be filed as part of existing proceedings.
Uniform Civil Procedure Rules r 6.2 deals with "how proceedings [are] commenced", and states that: "…a person may commence proceedings in the court by filing a statement of claim or a summons."
Cross-claims are dealt with in a separate part of the rules, namely in Pt 9. Part 9 provides that a party may "make" a cross-claim in proceedings "commenced" by statement of claim or by summons (see UCPR r 9.1).
It is Mr and Mrs Lawrence who "commenced" these proceedings by statement of claim on 5 September 2012. By bringing a cross-claim in the proceedings "commenced" by Mr and Mrs Lawrence, Mrs Gunner has not herself "commenced" separate proceedings against Mr and Mrs Lawrence for recovery of possession of 134 Clontarf Street.
The proceedings that Mrs Gunner did "commence" were those in the CTTT. As I have mentioned, those proceedings were listed for hearing in the CTTT on 13 September 2012. On 12 September 2012, because of the commencement by Mr and Mrs Lawrence of these proceedings, and with their consent, the CTTT vacated the 13 September 2012 hearing date in order that the CTTT proceedings be transferred to this Court to be heard in conjunction with the current proceedings.
Mr King disputed "the existence of such consent or of such orders having effect" and submitted that "the making of the orders by consent or otherwise has not been proved".
However, the CTTT file is now part of this Court's records, and reveals that not only did Mr and Mrs Lawrence consent to the orders, but that on 11 September 2012 their then solicitor, Mr Hockey, forwarded the consent orders to the CTTT. The orders were signed by both him and Mr Marshall under cover of a letter which stated: "The parties have agreed to transfer the CTTT proceedings to the Supreme Court to be heard together with [these proceedings]".
The orders made by the CTTT on 12 September 2012 were as follows: "1. The hearing listed for 13 September 2012 is vacated. 2. The proceedings to be transferred to the Supreme Court to be heard in conjunction with [these proceedings]. 3. The proceedings to be stayed until final determination of [these proceedings]."
Those orders were evidently made in reliance on s 23(1) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) ("the CTTT Act") which was in the following terms: "If the parties in any Tribunal proceedings so agree, or if the Tribunal of its own motion or on the application of a party so directs, the proceedings are: (a) to be transferred to a court (in accordance with the rules of that court) that has jurisdiction in the matter, and (b) to continue before that court as if they had been instituted there."
The CTTT Act was repealed by s 3(a) of the Civil and Administrative Legislation (Repeal and Amendment) Act 2013 (NSW) with effect from 1 January 2014. On that date, the NSW Civil and Administrative Tribunal ("NCAT") came into existence and took over the functions of, amongst other tribunals, the CTTT. However, the CTTT Act was in force at the time of the 12 September 2012 consent orders and was the governing legislation on that date. There is, in any event, an equivalent provision to s 23(1) of the CTTT Act in the Civil and Administrative Tribunal Act 2013 (NSW) so far as concerns proceedings in the Consumer and Commercial Division of NCAT (see Pt 6 in Sch 4 of the Civil and Administrative Tribunal Act).
The CTTT's power under s 23 of the CTTT Act (and NCAT's power now under the equivalent provision to which I have referred) is to transfer its proceedings to a court "that has jurisdiction in the matter".
I do not consider that the effect of s 119 of the Residential Tenancies Act 2010 is to prevent this Court from having jurisdiction to deal with this matter. In Whiteford v Commonwealth of Australia (1995) 38 NSWLR 100, Kirby P (as his Honour then was) (with whom Sheller JA agreed) held the predecessor to s 119 (s 71 of the Residential Tenancies Act 1987 (NSW) which was relevantly indistinguishable from s 119) creates a defence to proceedings brought contrary to the terms of the section but "should not be read as denying jurisdiction to the Supreme Court" (at 106; per Sheller JA at 114). That decision was applied by Ward J (as her Honour then was) in Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 40, in circumstances similar to those in this case; namely, where a lessor commenced proceedings against a lessee in the CTTT and where, on the lessee's application, the CTTT proceedings were transferred to this Court (at [18]).
However, as Davies J observed in Aboriginal Housing Company Ltd v Kaye-Engel (No. 3) [2014] NSWSC 718, s 81 of the Residential Tenancies Act 2010 (which sets out circumstances of termination of residential tenancies) also requires consideration.
Section 81 of the Residential Tenancies Act 2010 is in the following terms: "(1) Termination only as set out in Act A residential tenancy agreement terminates only in the circumstances set out in this Act. (2) Termination by notice and vacant possession A residential tenancy agreement terminates if a landlord or tenant gives a termination notice in accordance with this Act and the tenant gives vacant possession of the residential premises. (3) Termination by order of Tribunal A residential tenancy agreement terminates if the Tribunal makes an order terminating the agreement under this Act. (4) Other legal reasons for termination A residential tenancy agreement terminates if any of the following occurs: (a) a person having superior title (such as a head landlord) to that of the landlord becomes entitled to possession of the residential premises, (b) a mortgagee of the residential premises becomes entitled to possession of the premises to the exclusion of the tenant, (c) a person who succeeds to the title of the landlord becomes entitled to possession of the residential premises to the exclusion of the tenant, (d) the tenant abandons the residential premises, (e) the tenant gives up possession of the residential premises with the landlord's consent, whether or not that consent is subsequently withdrawn, (f) the interests of the landlord and tenant become vested in the one person (merger), (g) disclaimer occurs (such as when the tenant's repudiation of the tenancy is accepted by the landlord)." [Emphasis in original]
As Davies J said, at [19]: "Section 81…sets out the only circumstances in which a residential tenancy agreement terminates. None of those circumstances allow for an order of any court but only an order by the Tribunal".
Significantly, and most unfortunately, s 81 does not confer power on a court to terminate a residential tenancy agreement, even if the CTTT or NCAT has transferred proceedings to that court pursuant to the provisions I have mentioned.
Section 83 of the Residential Tenancies Act 2010 provides that if the Tribunal makes an order under s 81 terminating a residential tenancy agreement, it "must also make an order for possession" of the premises specifying a date on which the order takes effect. This suggests a legislative contemplation that an order for possession may not be made unless an order for termination of the residential tenancy has already been made.
In Aboriginal Housing Company Ltd v Kaye-Engel, Davies J at [21] (although cf [30]) expressed the tentative view that the effect of s 81 is that the CTTT did not (and NCAT does not) have power under s 23 of the CTTT Act (and its successor) to transfer proceedings to this (or any other) Court for the reason that the Court does not have "jurisdiction" for the purpose of that section. If that is what Davies J was meaning to convey, I would respectfully disagree. Although, by reason of s 81, only the Tribunal has power to terminate a residential tenancy agreement, I do not think it follows that a court, and this Court in particular, has no jurisdiction otherwise to adjudicate on a dispute concerning a residential tenancy agreement: see [517] above.
My present inclination is that I should make a declaration as to Mrs Gunner's entitlement to have the residential tenancy agreement between her and Mr and Mrs Lawrence terminated and to have an order for possession, and remit the matter to NCAT for the making of an order under ss 81 and 83 of the Residential Tenancy Act 2010 in accordance with these reasons. This was the course adopted, albeit by consent, by Davies J in Aboriginal Housing Company Ltd v Kaye-Engel.
The parties have, however, not had an opportunity to make submissions in this aspect of the matter; neither counsel drew my attention to ss 81 and 83, or to Davies J's decision. I will therefore defer further consideration of this question and give the parties an opportunity to address it.

[61]

Mrs Gunner's cross-claim - breach of fiduciary duty regarding the Beecroft property

I have set out above the details of Mr Lawrence's dealings with Mr Mirosevich concerning the purchase by SLN Developments of the Beecroft property, Mrs Gunner's purported rescission of the Beecroft contract with SLN Developments, the resolution of that dispute and the concurrent settlement on 3 February 2012 of the sale by Mrs Gunner of Beecroft to SLN Developments at the increased price of $1.2 million and the on-sale by SLN Developments of that property to Henlong for $2.178 million.
That evidence establishes that, in around July 2010, Mr Lawrence agreed to act on Mrs Gunner's behalf in relation to the sale of her Sydney properties, including Beecroft.
Mrs Gunner trusted Mr Lawrence to act in her interests in relation to her properties. At that point, she had been widowed for a little over a year and needed to sell property to deal with a looming land tax liability. Mr Lawrence was, and is, married to her identical twin sister.
A relationship of trust and confidence therefore existed between Mrs Gunner and Mr Lawrence such as to impose on Mr Lawrence a fiduciary duty. In her cross-claim, Mrs Gunner claims that Mr Lawrence breached that duty.
In the well-known passage in Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; 156 CLR 41, Mason J (in what is said to be "generally seen as an important and correct statement of principle": J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane's Equity: Doctrines & Remedies, (5th ed 2014, LexisNexis Butterworths) at [5.005]) said, at 96 and 97: "The accepted fiduciary relationships are sometimes referred to as relationships of trust and confidence or confidential relations (cf. Phipps v Boardman [1967] 2 AC 46 at 127), viz., trustee and beneficiary, agent and principal, solicitor and client, employee and employer, director and company, and partners. The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position. The expressions 'for', 'on behalf of' and 'in the interests of' signify that the fiduciary acts in a 'representative' character in the exercise of his responsibility… It is partly because the fiduciary's exercise of the power or discretion can adversely affect the interests of the person to whom the duty is owed and because the latter is at the mercy of the former that the fiduciary comes under a duty to exercise his power or discretion in the interests of the person to whom it is owed…".
Later, Mason J said, at 107 and 108: "The principle…is that the fiduciary cannot be permitted to retain a profit or benefit which he has obtained by reason of his breach of fiduciary duty (Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 393; Queensland Mines Ltd v Hudson (1978) 52 ALJR 399 at 401). A fiduciary is liable to account for a profit or benefit if it was obtained (1) in circumstances where there was a conflict, or possible conflict of interest and duty, or (2) by reason of the fiduciary position or by reason of the fiduciary taking advantage of opportunity or knowledge which he derived in consequence of his occupation of the fiduciary position. … Any profit or benefit obtained by a fiduciary in either of the two situations already described is held by him as a constructive trustee (Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342 at 350). …Once it is established that the fiduciary is liable to account for a profit or benefit which he has obtained there can be no objection to his being held to account as a constructive trustee of that profit or benefit. It can make no difference that it was not his duty to obtain the profit or benefit for the person to whom the duty was owed. What is important is that the advantage has accrued to him in breach of his fiduciary duty or by his misuse of his fiduciary position. The consequence is that he must account for it and in equity the appropriate remedy is by means of a constructive trust."
Following his discussion with Mr Mirosevich in September 2010 concerning the Beecroft property (see [151] - [153] above), Mr Lawrence, through Mrs Lawrence, told Mrs Gunner he had received a "good enquiry" (see [154] above) and, in December 2010, told Mrs Gunner that she should sell Beecroft "quickly" because "councils were re-zoning vacant blocks in the area" (see [157] above). In late January 2011, Mrs Lawrence told Mrs Gunner that "Wayne has sold Beecroft" for $600,000, and that because of "council re-zoning" which would have a "big impact on development of the land", Mrs Gunner was "unlikely to get a better offer" (see [163] above).
That led to Mrs Gunner agreeing to sell Beecroft to SLN Developments for $600,000.
Mr and Mrs Lawrence persuaded, or at least encouraged, Mrs Gunner to sell the Beecroft property to SLN Developments for $600,000 without disclosing their shareholding in SLN Developments (acquired the day before exchange of contracts). Nor did they disclose that, only months before, the property had been valued by Alcon Lupton & Associates at $1.5 million.
In those circumstances, Mr and Mrs Lawrence have made a profit where there was the clearest conflict between their interests as majority shareholders in SLN Developments (in acquiring the Beecroft property as cheaply as possible), and their duty to act in Mrs Gunner's interests (to obtain, on her behalf, the best price reasonably obtainable). They did not disclose to Mrs Gunner their clear interest in the transaction. No question arose of Mrs Gunner giving her informed consent to Mr and Mrs Lawrence's position of conflict. They deliberately kept her in the dark.
The profit that Mr and Mrs Lawrence have made is the $315,000 paid to them in the circumstances which I have set out at [294] to [298] above.
The fact that Mr Lawrence caused his share of the profit to be paid to Minsden, effectively his alter ego in the circumstances, is, in my opinion, beside the point (for example see Palmer J in Pedersen v Larcombe [2008] NSWSC 1362 at [497]). The only basis on which Mr and Mrs Lawrence could claim to have a "profit" from the on-sale of the Beecroft property by SLN Developments to Henlong was as shareholders in SLN Developments. That is the capacity in which they received the $315,000 to which Mr Misosevich referred.
I do not accept Mr King's submission that the $315,000 received by Mr and Mrs Lawrence was comprised in part of $300,000 belonging to Minsden by reason of the rescission of the Nelson Bay contract with SLN Developments. For the reasons I have set out at [297] above, I have concluded that two amounts of $300,000 were paid out of the proceeds of SLN Developments' on-sale of Beecroft to Henlong. One amount of $300,000 was paid to Walker Hedges & Co (Mr Lawrence's then solicitors, who were evidently acting for Minsden on the Nelson Bay sale) on settlement of the Beecroft sale. The second amount was paid to Mr Lawrence (albeit, at his direction, also to Minsden) after settlement, and following Mr Lawrence's conversation with Mr Mirosevich set out at [295] above.
Mr and Mrs Lawrence hold that $315,000 on constructive trust for Mrs Gunner and must now account to her for it.

Lawrence v Gunner; Gunner v Lawrence

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