//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2026] NSWSC 1092
Supreme Court of NSW
2026-09-14
Slattery J
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Page v Page [2026] NSWSC 1092
Hearing dates: 10, 11 and 12 November 2025
Date of orders: 14 September 2026
Decision date: 14 September 2026
Jurisdiction: Equity
Before: Slattery J
Decision: See paragraph [213].
Catchwords: ESTOPPEL — Estoppel by representation — Detrimental reliance – Relief – the plaintiff and defendants acquire a residential property as tenants in common in March 2022 – the plaintiff is the mother of the first defendant, who is the life partner of the second defendant – the plaintiff and the defendants agreed to live together in the property – the plaintiff contributed approximately one third of the purchase price of the property – the defendants funded the other two thirds of the purchase price by borrowing and taking a mortgage over the property – unhappy differences arose between the parties after they moved in together – the plaintiff left the property in July 2023 – the parties agreed to sell the property – the plaintiff claimed she retained her one third of the property and now is entitled to its return – the defendants say that the plaintiff gifted her one third of the property to them as an “early inheritance” and that they relied upon her representation to that effect to acquire the property – whether the plaintiff is entitled to one third of the property or whether she is estopped from denying that she gifted one third of the property to the defendants – what equitable relief is appropriate in the circumstances.
Original judgment source is linked above.
Legislation Cited: Conveyancing Act 1919, s 66G
Cases Cited: Anson v Anson (2004) 12 BPR 22,303
Attorney General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557
Austin v Hornby (2011) 16 BPR 30,623
Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582
Baumgartner v Baumgartner (1987) 164 CLR 137
Blomley v Ryan (1956) 99 CLR 362
Bridgewater v Leahy (1998)194 CLR 457
Callow v Rupchev (2009) 14 BPR 27,533
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Commonwealth v Verwayen (1990) 170 CLR 394
DHJPM Pty Ltd v Blacktown Resources Ltd (2011) 83 NSWLR 728
Earl of Aylesford v Morris (1873) LR Ch App 484
Forgeard v Shanahan (1994) 35 NSWLR 206
Giumelli v Giumelli (1999) 196 CLR 101
Guest v Guest [2022] 3 WLR 911
Hill v Hill [2005] NSWSC 863
Jenkyns v Public Curator (Queensland) (1953) 90 CLR 113
Johnson v Smith [2010] NSWCA 306
Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392
King v Fister [2022] QCA 047
Kramer v Stone (2024) 281 CLR 484
Kriezis v Kriezis [2004] NSWSC 167
Maguire v Makaronis (1996) 188 CLR 449
Muschinski v Dodds (1985) 160 CLR 583
Nitopi v Nitopi (2022) 109 NSWLR 390
NSW Trustee and Guardian v Togias (2022) 110 NSWLR 86
Paciocco v Australia and New Zealand Banking Group Limited (2015) 236 FCR 199
Pavlis v Pavlis [2022] NSWCA 281
Payne v Rowe (2012) 16 BPR 30,869
Priestley v Priestley [2017] NSWCA 155
Sidhu v Van Dyke (2014) 251 CLR 505
Stephenson v Santos [2020] NSWCA 262
Thorne v Kennedy (2017) 263 CLR 85
Tonto Home Loans Australia Pty Ltd v Tavares; FirstMac Ltd v Di Benedetto; FirstMac Ltd v O’Donnell (2011) 15 BPR 29,699
Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
West v Mead (2003) 13 BPR 24,431
Wu v Ling [2016] NSWCA 322
Category: Principal judgment
Parties: Plaintiff: Lynn Maree Page
Defendant: Glenn David Page
Representation: Counsel:
Plaintiff: N. Simpson; A. Edye
Defendant: M. Klooster
Solicitors:
Plaintiff: Jennifer Ann Shaw, Bartier Perry Chambers
Defendant: Toufic Bazouni, NS Legal
File Number(s): 2023/234658
Publication restriction: No
The plaintiff, Lynn Page, is the mother of the first defendant, Glenn Page. The second defendant, Michelle Weyham, is Mr Page’s life partner. The parties’ intra-family dispute before this Court concerns the terms upon which the plaintiff and the defendants agreed to provide the capital to acquire a residential property together in the Sydney suburb of St Clair.
The parties agreed that the plaintiff could live in the property with the defendants after its purchase. But unhappy differences arose between them. In the end they could not live together. The plaintiff left the St Clair property in July 2023. Since then, she has resided elsewhere.
The parties now disagree about the terms of their original arrangement to acquire the St Clair property and what financial consequences should follow upon its sale. The parties all agreed by the time of the hearing that the property should be sold either by the appointment of trustees under Conveyancing Act 1919, s 66G or otherwise pursuant to a Court regulated process.
The plaintiff says she acquired the St Clair property with the defendants on the basis that she would give her one-third share of the property in her will to Glenn if she owned it but that in the meantime until she died it would be hers to dispose of as she wished. She now seeks the sale of the property to retrieve her one-third share as the relationship with the defendants has broken down.
The defendants say that the plaintiff gifted to them as “an early inheritance” the funds for what became her one-third share of the St Clair property. They say it was agreed that they would be responsible for paying off the mortgage, by which they sourced the funds to purchase their two-thirds share in the property. They say that they relied upon the plaintiff’s promise of giving them an early inheritance and that the plaintiff is now estopped from denying that she has gifted the property to them.
The parties referred to one another throughout the proceedings by their first names, and the Court will from time to time do the same in these reasons without intending any disrespect to any party.
Mr N. Simpson of counsel together with Mr A. Edye of counsel, instructed by Ms Jennifer Ann Shaw of Bartier Perry Chambers represented the plaintiff. Mr Klooster of counsel, instructed by Mr Toufic Bazouni of NS Legal represented the defendant.
The proceedings were originally set down for a five-day hearing. But the parties were arguing about approximately $200,000. A five-day hearing threatened to unnecessarily deplete their financial resources. With the cooperation of the legal representatives the Court was able to conclude the proceedings within three days.
Following below is a narrative of the relevant history. This narrative represents the Court’s findings on the matters covered, except to the extent that the context indicates that only the parties’ allegations are being recorded in these reasons. For reasons of economy this narrative does not always include reference to versions of the facts that have been rejected.
But before the narrative commences, some brief observation should be made about the credibility of the parties and the witnesses.
Lynn Maree Page. The plaintiff, Lynn, was a difficult witness to assess. She had a good recollection for dates and the financial details of her dealings with the defendants. Her general memory of the course of events was also superior, as was her grasp of the details of the transaction she had entered. She was prepared to make reasonable concessions. But her evidence of what she had discussed with Glenn and Michelle was distorted by hindsight and by her dislike of them, but important parts of it were accepted.
Glenn David Page. The first defendant was a bluff and strong-minded witness, who had his own firmly-stated recollection of what passed between himself and his mother before they purchased the St Clair property. He was reasonably reliable and like his mother he made frank concessions against interest. His evidence is mostly accepted, although it was substantially coloured by the dislike that had developed against Lynn. This made the Court cautious about accepting his evidence.
Michelle Louise Weyham. The second defendant was a generally reliable witness with a good memory. She was perceptive and organised, having managed a services business with several employees. She had a good grasp of relevant detail. She was prepared to make concessions where required and readily admitted the limits of her knowledge where that was appropriate. But by the time she gave evidence, Michelle had developed a profound dislike of Lynn. This came through in all her evidence. This made the Court cautious about accepting her evidence.
Other Witnesses. The other witnesses called were all friends of or acquainted with the defendants. Despite that the Court could not detect any pro-defendant bias in any of them. They were all credible and their evidence is generally accepted. These witnesses were Ms Lohin, Ms Cooper, Ms Stanford and Ms Karczewski.
At the time of the time of the hearing in July 2025 Lynn was 72 years old. She was in her late 60s when conversations commenced with Glenn and Michelle in late-2021 about their acquiring a property and moving in together.
Lynn had a difficult relationship Glenn for many years. They had been estranged from each other from about 2002 until reconciling in about 2018. Lynn has a daughter from whom she has been estranged since about 2007. Despite Lynn and Glenn’s reconciliation, the Court had an impression that they had difficulty in understanding one another’s outlook on life and had latent personality differences which they did not fully comprehend – leading to the surprising distrust and hostility that quickly exploded after they moved in together.
Lynn had retired many years before in 1996 and was beginning to suffer from ill health in 2021. The Court accepts that she had been diagnosed with late onset epilepsy in 2019. Lynn had a seizure in May 2021 causing her to suffer head and facial injuries and consequential disabilities. These included what was described as “brain fog”, which seems to be a shorthand description of a difficulty in processing information and engaging in effective reasoning. She also suffered from difficulty in being able to convert her thoughts into speech, from impediments in speaking, and from poor balance and coordination.
The defendants challenged whether in truth she suffered these disabilities at all. They contended that much of her behaviour could be explained by her habitual overindulgence in alcoholic beverages. She denied this. In the Court’s view Lynn suffers the medical disabilities that she claims but there is some basis to the defendants’ contentions that at times she drank alcohol excessively which affected her behaviour. But the Court does not accept the extreme picture of Lynn’s alcohol consumption that is painted by Glenn and Michelle. A more balanced picture of Lynn’s moderate alcohol consumption was presented by Lynn’s friend, Maria Lohin.
Ultimately, Lynn’s medical advice in December 2021 was that she should move into an aged care facility so she would not be living on her own. At the time Lynn was living on her own in her own property in the Sydney suburb of Plumpton.
Lynn felt she was not ready to go into an aged care facility, a factor giving renewed impetus to conversations that she was already having with Glenn and Michelle in the second half of 2021 about moving into a property with them. They expressed willingness to pursue such an arrangement and to watch out for her when she was living with them.
Before the parties moved in together in April 2022 Lynn had been living in her own property in the Sydney suburb of Plumpton. At the same time Glenn and Michelle were living in rented premises in Prospect, together with their two children, Bronte and Angus.
Glenn and Michelle and Lynn had many conversations about moving in together. They ultimately reached a consensus on many terms that their arrangement which are not disputed and which are set out in the next section of these reasons. What they said to one another in these conversations assists in understanding how their consensus came together. The parties covered a range of issues in their discussions.
Lynn said that she wanted to sell her house and use the proceeds of sale to assist Glenn and Michelle to purchase a property big enough for them all to live in. Glenn was concerned that Lynn should have enough money for the rest of her retirement and to fund her needs, if she needed to go into an aged care facility. Michelle indicated to Lynn that living with two teenagers could be noisy and busy. Michelle says that she suggested to Lynn that she obtain legal advice given the gravity of the decision that they were all making. But Michelle and Glenn accepted a situation in which they were aware Lynn probably did not have her own independent legal advice, separate from the lawyer that the parties jointly engaged to do the conveyancing on the acquisition of their joint property.
At the time these discussions commenced Glenn and Michelle were renting a property in the Sydney suburb of Prospect. They were attracted to the idea of purchasing a property. Lynn had substantial equity in her Plumpton property. A joint three-way purchase would give Glenn and Michelle immediate equity to assist their loan to valuation ratio for borrowing to acquire a house and gain a foothold in the property market. Their discussions with Lynn accelerated Glenn and Michelle’s consideration about buying a property. Before that they say they had been relatively content with renting and one day perhaps buying a house on their own. In the Court’s view they always wanted to buy a house which is consistent with their response to the idea of a joint purchase. They were certainly not committed to long-term renting. But the idea of living together emerged first. Early in their discussions the parties had reached an informal consensus that Lynn would move in with Glenn and Michelle’s family either into a larger rental property or at a home that they would decide to purchase together.
By about December 2021, those conversations had matured into a consensus that they should purchase a property together as joint owners and live together. The Court accepts Glenn’s evidence that Lynn had described the possibility of her purchasing a house together and using the sale of proceeds of Lynn’s property in Plumpton as a “early inheritance” for Glenn. But as will be seen the parties had very different views of what this ambiguous expression meant.
The parties commenced looking for a property to buy together and they found the St Clair property. Lynn had previously engaged a solicitor, Ms Anjli Choudhary, to act for her and suggested that they all retain Ms Choudhary to act as the conveyancer and solicitor on the property purchase. That was also agreed, so they engaged Ms Choudary, who was then employed at Western Sydney Legal to undertake the conveyancing for the purchase of the property.
The Court accepts Glenn’s evidence that during these discussions Lynn informed him and Michelle that she had spoken to Ms Choudary about their joint purchase. But Glenn and Michelle were told that Ms Choudary was a legal practitioner acting for them all. At no stage did Lynn engage Ms Chowdhury or Western Sydney Legal to act for her independently in relation to the transactions the subject of these proceedings and Glenn and Michelle did not understand that Ms Chowdhury was advising Lynn separately from them.
It is not necessary to recount all the conversations that formed the mutual consensus among the parties to buy the St Clair property. Much of what was agreed is not in dispute. What was in dispute can be isolated. This narrative first sets out the main elements of the consensus which are not in contest. Then findings are made about the disputed parts of the parties’ dealings.
The Court accepts the following elements of Lynn’s version of what was agreed between the parties as they embarked on looking for a suitable property together. These elements were stipulated for by Lynn, and the Court accepts that Glenn and Michelle either agreed to them or acquiesced in them.
Lynn, Glenn and Michelle would purchase a property together as tenants-in-common for a maximum purchase price of $1,200,000 and after the purchase they would live in the property together.
Lynn would contribute one-third of the purchase price in cash from the proceeds of sale of her Plumpton property and she would not be required to contribute more than $400,000 to the acquisition of the jointly owned property.
Glenn and Michelle would contribute the other two-thirds of the purchase price up to $800,000, by obtaining a home loan in their names, which would be secured over the property the parties would acquire.
Michelle and Glenn, not Lynn, would be responsible for making mortgage payments on the home loan. Although this issue was initially in issue Glenn admitted it in cross-examination and the issue became uncontested.
Lynn would not be required to make any greater financial contribution than the $400,000 to the acquisition of the property, as she wished to conserve her limited funds for home care and other outgoings as she aged.
They would all be responsible for property outgoings, such as council rates and water rates (in the same proportions as their ownership of the property) as well as household consumables such as electricity and gas (of which Lynn would bear one quarter and Glenn and Michelle’s family three quarters).
Several matters were not discussed or not clearly agreed. Although one of the objectives of the joint purchase was to ensure that Lynn did not live on her own and could live during her lifetime at the St Clair property, there was no clear agreement about what would happen if the joint arrangements the parties had discussed became unworkable. This might happen if (a) Lynn needed to use or realise her share of the property because, for example, she wanted to enter an aged care facility, or (b) Glenn and Michelle wanted to sell the property during Lynn’s lifetime. Consequently the parties would be left working through such future scenarios. There was also no clear discussion about whether Glenn or Michelle would care for Lynn as she became less capable of looking after herself to delay her going into an aged care facility. The parties’ outlook seems to have been that these kinds of issues would look after themselves.
One other uncontested matter arose at this time. Whilst the parties were living together in January 2022 Lynn gave informal assistance to Glenn to assist him to apply for a home loan, to fund his contribution to the joint purchase. She agreed to pay out his car loan to reduce his liabilities to assist his home loan application. She paid $11,222.70 to him on 2 February 2022. There is no disagreement between the parties that Lynn should be credited with this sum in the final accounting between the parties.
The parties started to act on their discussions in the second half of 2021 and arranged to sell Lynn’s Plumpton property. The Plumpton property sale was initiated in November 2021 and settled on 17 January 2022. In anticipation of settlement in late December 2021 Lynn moved in with Glenn and Michelle at their Prospect rental property. At about this time conversations took place between the parties about their wills. Each party disputes the other’s version of these conversations. But the Court accepts substantial parts of both versions of these conversations, as is explained here, starting with Lynn’s version.
Lynn says that in “around January 2022” she had a conversation with Glenn and Michelle the substance of which was that “if we purchase a property together, we should all change our wills to protect each other as much as possible and that we might need some advice on it”. She says that she asked Michelle and Glenn hypothetically “what would happen if one of us were to die. What position would we be left in?”. The Court accepts that Lynn raised this issue and did not herself suggest that Michelle or Glenn leave their share of the property to her. The Court also accepts that the parties discussed that they should make some mutual arrangement to cover what would happen if one of them died. But Lynn does not go so far as to say that she ever promised Glenn that she would leave any property that they purchased to him.
This important practical consideration occurred to Lynn, who mused with Glenn that they might need “advice” about this subject. Lynn was worried about several matters: her right to stay in the house if Glenn or Michelle died; Glenn’s expectations if she died, given that her then will favoured her grandson, Ashley, not Glenn; and a general concern about what might happen because of her and Glenn’s past estrangement.
The parties did not identify the St Clair property for their joint purchase until after Lynn’s Plumpton property sale settled and she was living with Glenn and Michelle. Lynn says, and the Court accepts, that Glenn and Michelle were keen on this property, but Lynn had a degree of reluctance to purchase it because her part of the house was unrenovated and relatively small. Lynn did not clearly articulate her concerns about the suitability of the property. She says that this was because of her “brain fog and speech problems after my seizure”. Those factors probably played some part in her reticence. But a greater reason for her to suppress her concerns was that now she was living with Glenn and Michelle and to a degree dependent on them- maintaining their goodwill now had a direct impact on her day-to-day well-being.
The Court also accepts Glenn’s evidence that after Lynn moved into Glenn and Michelle’s property in Prospect, and shortly before they committed to the St Clair property, Glenn said to Lynn that he did not want to spend years paying off a house only for it to have to be sold after she died. In going into this subject Glenn was furthering the discussions that Lynn had initiated about their wills and joint living arrangements. But Glenn was also looking ahead to secure the advantage of inheriting his mother’s share of the house.
By the time Glenn raised this issue with Lynn, apart from her medical issues she was already at a practical disadvantage in dealing with him. She had sold her Plumpton property and was living with him and Michelle. Although she had control of the proceeds of sale of the Plumpton property, she was dependent upon maintaining Glenn’s goodwill to keep the household harmonious and to secure her immediate and longer-term accommodation choices. She had little practical room for manoeuvre to resist his request for this commitment from her.
The Court does not accept Lynn’s denial that she said to Glenn that she would change her will to give her interest in the property to him. As will be seen, she did change her will and that is only likely to have occurred after she said to Glenn that she would change it. The Court does not accept her account that she on**ly said that they should make some mutual arrangement to cover what would happen if one of them died.
Lynn’s statement nevertheless invited a commitment from Glenn about what would happen if he or Michelle died. Glenn never clearly gave that commitment back to Lynn. Lynn’s January 2022 statement was vague. Without legal advice to formulate a structure for their future living arrangements, these parties had trouble identifying exactly what the defendants needed to do by way of a counter promise to protect Lynn’s interests. The circumstances did not imply that the defendants should make a will in Lynn’s favour. She was older than them and they would no doubt wish to recognise one another and their own children in their wills. Lynn made clear that she did not want the property given to her in Glenn or Michelle’s wills. But from these discussions Glenn and Michelle left Lynn with a clear expectation or assumption that they would do something (probably in their wills) to secure her occupation of the property they were to purchase together during her lifetime. The defendants could have conferred a right of residence upon Lynn in their wills and agree to make any gift of their interest in the St Clair property to family members subject to that right of residence.
Glenn says that Lynn told him that the money she was to put towards a property would be his “early inheritance” and that she would give him the security of changing her will in his favour. He says he was prepared to take on the mortgage of the St Clair property and most of the other recurrent costs, because he understood that he would be receiving a gift from Lynn of her interest in the property, as an “early inheritance”. This was probably one of Glenn’s motivations, but another was that the arrangement they were making placed purchasing a home within his and Michelle’s immediate grasp.
The parties probably used in their conversations the expression “early inheritance” as a shorthand term to describe their arrangement. It is unclear who first used the expression. The Court accepts that it was used but is not confident that it was first used by Lynn, although Lynn certainly used it. Several independent witnesses attested to her using the expression including Ms Angela Karczewski, a friend of the defendants, who says Lynn used this expression in her presence in January 2023. But shorthand terms such as this to blur clear legal distinctions and in the Court’s view this one did. The parties attributed different meanings to the expression which they never clarified and which persisted right up until the hearing.
To Lynn the expression merely meant that Glenn would have the advantage during his lifetime of being able to purchase a property using capital that he would not otherwise receive until after Lynn’s death. That meaning had substance, because Lynn’s becoming a co-owner and a co-borrower with Glenn and Michelle contributed to them a real benefit of becoming homeowners.
But Glenn and Michelle initially said at the hearing that they interpreted the expression as meaning that Lynn unconditionally and immediately gifted beneficial ownership of her one third legal interest in the property to them. There was at least a superficial basis for Glenn to hold this view. In some of the contemporaneous correspondence Lynn also used the expression of providing a “gift” to Glenn and Michelle to describe what she was doing.
But Glenn admitted in evidence in response to questions from the Court that the expression “early inheritance” only meant to him that Lynn would give him her one-third interest in the house when she died. The Court does not accept that Glenn or Michelle ever thought that Lynn’s promise to them was any more than this. They did not assert in their contemporaneous correspondence that Lynn was making an unconditional inter vivos gift to them.
Other similar ambiguities existed in the parties’ communications. To the extent that in contemporaneous correspondence Lynn described what she was doing as giving a “gift” to Glenn and Michelle, by that she never meant any more than what she vaguely meant by “early inheritance”, or by giving a gift to Glenn in her will.
Lynn made a fresh will on 28 January 2022 with the assistance of Ms Choudhary, giving her estate to Glenn rather than Ashley. She made an entry in her diary on 28 January 2022 “solicitor – 12 PM – signed will”. Her will is dated that day. She showed the new will or a summary of it to Glenn not long afterwards. At that stage Lynn held in cash the proceeds of sale of her Plumpton property in the sum of $830,100.
The parties exchanged contracts to acquire the St Clair property on 29 January 2022. The purchase price was $1,150,000. The purchase of the St Clair property required a ten percent deposit of $115,000. A five per cent deposit of $57,500 was paid on exchange of contracts.
Lynn paid Western Sydney Legal Practice $450 on 2 February 2022 to formalise their retainer.
On 10 February 2022 the parties faced an important decision point for the purchase of the St Clair property. Ms Choudhary from Western Sydney Legal Practice warned them that the deposit would need to be paid by 5pm the following day, 11 February, as the vendor had not consented to any extension of the cooling off period for the purchase. This sets the scene for what happened on 11 February, the message sent by Glenn that morning.
On 11 February 2022 at 11.22am Glenn sent a text message to Lynn saying
“Hi mum can you send me a copy of your will I just need to know that we won’t have to sell the house to pay Ashley.”
This 11.22am text shows that when he was under pressure to fund the deposit, Glenn wanted to check that Lynn had changed her will before he committed himself. Michelle made clear that Lynn’s promise to change her will was communicated to her and she relied upon it as well in going into the property purchase. Glenn and Michelle were both keen to ensure that Lynn had changed her will before the contract became binding. As will be seen, they were less keen to commit to her request for security at the property if something happened to them.
There was already some tension in their household. Glenn sent another text message shortly after what must have been a failed telephone call from him to Lynn, perhaps seeking an answer to the text message of 11:22 AM:
“U didn’t even say hello to me when I just called u back then you hung up on me. We are doing this because you asked us to do so we can look after you when u need it and uv been negative nasty n rude to us n that has to stop”
“Glenn: Shelbys ringing the solicitor n doing the email. The loan is approved.
Lynn: Congratulations. Do you have it in writing? Do you want me to send the deposit?
Glenn: Mum, I don’t want to argue the loan is approved if you want to go ahead with this house then u need to pay the deposit.
Lynn: Do you want to go ahead with it?
Glenn: Yes, I love you and I want to be there for you as u get older and the epilepsy worries me. This whole house buying thing has been very stressful for us all. I just want to be happy.
Lynn: I love you and I want you to have your own home and, as I kept saying, I’m very grateful to you both. I’m sending the deposit now.”
These exchanges show that Glenn and Michelle recognised the potential difficulties in living in a household with Lynn but a combination of concern for her welfare and the financial advantages of the arrangement for them motivated them to go ahead.
The same day Lynn paid the balance of the deposit of $54,636.58 (being $57,500 less a holding deposit of $2,875 previously paid by Glenn and Michelle, plus a bank fee of $11.58). That day Glenn and Michelle also obtained final approval for their loan for $910,350. This was more than the $800,000 that had been discussed that would be borrowed to fund their two thirds share of the purchase.
On 15 February 2022 Lynn, Glenn and Michelle all signed a document of instructions to Western Sydney Legal, that Glenn and Michelle would acquire the property as joint tenants and Lynn as a tenant-in-common with them and each of them holding a one-third share.
Glenn and Michelle engaged a mortgage broker, Mr David Seager from Pepper Money, to assist in securing finance for their portion of the purchase. Mr Seager’s affidavit was read in the defendants’ case. He was not cross-examined as he was deceased by the time of the hearing.
On 2 March 2022 Mr Seager informed Michelle that Lynn’s name would need to be “placed on the loan” as “she is also an owner of the property”. He also asked for financial information to show that Lynn could support the loan. The mortgage broker was probably passing on the lender’s requirements that the borrowers and the security provider should be identical, to avoid creating a third-party security with its additional legal requirements. Glenn and Michelle initially pushed back against the mortgage broker’s proposal and expressed surprise they had not been told about this requirement previously.
On 4 March 2022 at 9:40 am, Michelle forwarded Mr Seagar’s 2 March email to Ms Choudhary and copied the email to Lynn. Ms Choudhary quickly responded at 9:52 am that she could not give any assistance to her clients on this transaction, “with loans and the lending side of things and unfortunately will be unable to provide any advice in this regard”. Ms Choudhary suggested another broker they could possibly approach. This was clear notice to all the parties that none of them could expect advice from Ms Choudhary about their individual positions in relation to the loan obligations they were assuming. It was also clear notice to Glenn and Michelle that Lynn was unlikely to be given independent legal advice by Ms Choudhary in relation to any aspect of the loan obligations or other matters involved in this transaction other than the conveyancing.
On 4 March 2022 Mr Seager also telephoned Lynn and explained to her that she had to be a party to the mortgage because her name was on the title but that did not mean she had to contribute to the repayment of the mortgage loan.
At 2:10 pm Michelle emailed Lynn and Glenn indicating that “unfortunately we may not be able to buy a home together”, unless all three are on the title because “whoever is on the title is responsible for the mortgage”. Michelle suggested four options: (a) Lynn agrees to be a borrower and be responsible for the loan which Michelle described as “CRAZY”, (b) Lynn will not go on title but will have a side contract drawn up (if that is possible), (c) the parties should look for rental accommodation, and (d) the parties look for suitable assisted living accommodation for Lynn. Michelle’s rejection of option (a) as “crazy” stemmed from her and Glenn’s acceptance that their arrangement with Lynn was that she did not have any obligation to pay off the mortgage and should not be referred to in the loan document.
Further emails were sent during the afternoon. Then at 4:39 PM that day Lynn sent the following email to Ms Choudhary:
“Dear Anjli,
Thank you for the information about Mr Chand [the other mortgage broker Ms Choudhary had suggested]. Michelle spoke to him and he has advised that the three of us are able to have an agreement drawn up by a solicitor, after the beginning of the mortgage repayments, in which I would be named as a one third owner as well as Glenn and Michelle. They are also having wills drawn up naming me as having an entitlement to live in the property for the remainder of my life. As well as this, on their life insurance and superannuation I will be named as beneficiary to the extent of the outstanding mortgage over the property.
So would you please change our names on the purchase of the [St Clair property] contract to only name Glenn Page and Michelle Weyham.
I will be gifting the difference between the purchase price of the property plus stamp duty on the loan to Glenn and Michelle.
Kind regards,
Lynn Page.”
This email was much debated between the parties. Lynn denied typing and sending the email. The Court does not accept that denial, which did her no credit. The language of the email is like Lynn’s other emails in evidence, and she had the means and opportunity to send the email from her laptop and had sent similar emails to various parties from her laptop.
In any event, Lynn’s 4 March 4:39 pm email mostly supported her case and did little harm to it. Her statement about “gifting the difference between the purchase price of the property plus stamp duty on the loan to Glenn and Michelle” is consistent with her accepting she was bound to give her interest in the property to Glenn in her will. The words “I will be gifting” are consistent with gifting by will in the future. They do not exclusively import the idea of a present gift inter vivos. The email also importantly confirms that she understood that Glenn and Michelle had promised her that they would protect her right of residence in the St Clair property in their own wills and would take steps to protect her financial interests in relation to the mortgage in the event of their deaths. This is consistent with the Court’s findings about what was discussed between the parties. But as will be seen they were slow to do any of this.
On 7 March 2022, Mr Seager was again insistent that if Lynn wanted to have her name on the title, she would also have to be named as a party on the mortgage. Lynn wanted her name on the title to reflect her one-third share. As a result of further communications with the mortgage broker, Lynn was assured Glenn and Michelle had sufficient funds to pay out the mortgage so she would not be exposed to financial risk if she became a co-mortgagor.
The same morning at 8:48 am Ms Choudhary told Lynn that if she was providing funds for the purchase of the property it was important she remain on the certificate of title for her protection in the future. Then she added, “if you do wish to proceed with going on the loan with Glenn and Michelle you may need independent advice regarding the guarantee and for this, I can refer you to my friend” and she gave Lynn the name of another solicitor, a Mr Rick Gonzalez. Lynn was cross examined about this email but did not affirm that she had been given legal advice by Mr Gonzalez. Rather she indicated in her answer that she understood that she would only need legal advice if she was not going to be on the title and was only going to be a “guarantor”. When Ms Choudhary’s email was put to her she explained it as follows in her answer:
“Yes, because that’s what it would be. I had no intention of being a guarantor or anything, but that’s what, what she thought it would be if I did it that way. I would be going guarantor.”
“Thanks for your call this morning. As you have mentioned Lynn Page has agreed to have her name removed from title after receiving legal advice.”
But that is not what happened. Lynn ultimately remained on the title. This email did not assure to Glenn and Michelle that Lynn had legal advice from Mr Gonzalez about the transaction that ultimately proceeded with her name on the title. Mr Gonzalez did not communicate with them directly that Lynn had received legal advice about the transaction which proceeded, and Lynn did not obtain such advice from him. If such advice had been obtained it would presumably have said that at the very least before Lynn proceeded, she should obtain evidence that Michelle and Glenn had changed their wills or done something concrete to protect her interest in the property.
Michelle said she told Mr Seagar of Lynn’s promise to change her will. There is no record of this statement in Mr Segar’s affidavit, and his affidavit cannot be tested. But little can be inferred from its absence from Mr Seagar’s affidavit. The parties’ private arrangements did not need to be disclosed to the lender and would not necessarily have been discussed with the mortgage broker.
Lynn joined the loan application and provided her financial information to assist in obtaining loan approval. On 14 March all three parties signed a letter to Pepper Finance confirming that Glenn and Michelle currently had superannuation of over $250,000 which would be sufficient to pay out the mortgage on their retirement. However, Lynn was significantly exposed to a $900,000 mortgage liability in the short term. Depending on the direction of the property market this still represented a significant financial risk for her in going into this transaction.
Pepper Finance gave final approval for a loan amount of $910,350 on 17 March 2022 with all three parties as borrowers. Lynn signed the documents online on 19 March 2022 and signing by all parties was confirmed by Lynn to Ms Choudhary on 20 March 2022.
Lynn did not receive any independent legal or financial advice in relation to the Pepper Finance mortgage documents. But she is not seeking to set aside those agreements. Michelle and Glenn agreed to indemnify her against liability on the mortgage, and they have made all the mortgage repayments since. There is no issue about that in these proceedings.
Lynn remained confused about why she had to be a borrower. This probably was contributed to by her not having had independent legal and financial advice. She returned to this and said to Michelle several times later that the 20 March 2022 approval was incorrect, as she was not a borrower. But the Court accepts Michelle explained to Lynn on several occasions that she and Glenn would be responsible for making loan repayments, and that is indeed what occurred.
On or about 21 March 2022 Lynn was advised that Glenn and Michelle had applied to borrow $910,350, being $110,350 more than what she had understood was the agreed limit of their borrowings of $800,000 to contribute to the purchase. Lynn later took up the issue with Glenn and Michelle. The defendants told her that the additional amount had been borrowed to provide a fund for them to renovate the property and to meet other unexpected property related expenses.
The parties prepared for a planned settlement on 25 March 2022. Lynn paid $250,000 into Glenn and Michelle’s joint account for the major portion of her contribution to the purchase price. The property then settled on 25 March 2022. Lynn, Glenn and Michelle all moved into the property on 29 March 2022.
Post-settlement financial arrangements were finalised on 4 April 2022, when Lynn paid $92,515 into Glenn and Michelle’s joint account to complete her contribution to the purchase price. She had by then paid the following amounts: $397,151.58 (being $54,636.58 plus $250,000, plus $92,515) for her one-third interest in the property. The parties wrote up a joint document recording this within a few hundred dollars.
During her occupation of the St Clair property Lynn paid one-third of council rates, service charges for utilities, and repairs to the property, as requested by Glenn and Michelle from time to time. She did not make any mortgage repayments in accordance with their agreement.
Unhappy differences and misunderstandings arose almost immediately between the parties. It is unnecessary for the Court to attempt to cover all the personal disagreements between them. These disagreements were overlaid with mutual accusations and recriminations about how they had each ended up in such a close but unpleasant domestic situation. But some of them are mentioned below.
This led to an ultimate contest in the proceedings about who was responsible for Lynn leaving the property. Glenn and Michelle said that that Lynn had left voluntarily. Lynn said that she was forced out by the defendants’ hostility towards her. The Court concludes that the living arrangements between the parties had become mutually intolerable by the time Lynn left.
One deeply aggravating factor on Lynn’s side was her perception that Glenn and Michelle were failing to honour their side of the mutual arrangements by changing their wills to protect her right of residence. She had changed her will and was annoyed that they were not quickly volunteering to do the same for her. This disturbed her sense of safety and security at the property to a personal level that they seemed never to recognise.
Lynn says, and the Court accepts, that she realised very quickly that she had made a mistake in moving into Glenn and Michelle’s household. She complains of many small aggravations which accumulated into what she regarded as a major imposition on her and a departure from the concept of equally shared accommodation that she had expected. She complains of the following commencing from her first days in the house: Glenn and Michelle spreading the furniture and belongings all over the house and leaving no room for her furniture or kitchen utensils; hostility and personal comments from Glenn and Michelle’s children; being told to retire to her room; having her mail intercepted; verbal abuse including statements that she was “crazy”, “nuts”, had “dementia” and was a “drug addict”; failure to commit to repaying the car loan, and a failure to renovate her part of the property.
The Court cannot decide what happened with all these incidents but accepts that Lynn was subject to verbal abuse. She is likely to have faced verbal harassment because Michelle was quite prepared to write highly offensive emails into her (see below). The emails from Michelle support the inference that isolating Lynn in her room was used to deter her from causing what Glenn and Michelle perceived was being difficult.
But Lynn undoubtedly brough some of this on herself. She overused alcohol and was uncontrollably aggravating and aggressive towards other family members as well. Ms Karczewski, who lived with the family for many months when Lynn was in the household attests to this. But to the extent that she overindulged in alcohol allowance should be made for the likelihood that may have been contributed to by her perception of the way she was being treated.
Lynn’s overriding concern from the first is supported by her diary entry on 21 April 2022 a little over two weeks after she moved in. The diary entry says “I reminded Glenn again they need to make their wills, so I could stay if something happens to them. He didn’t answer me”. The diary entry captures the essence of what was the promise as perceived by Lynn: that the need to change their wills was “so I could stay if something happens to them”.
Lynn had clearly conveyed this is what she expected well before the transaction proceeded and she understood that it would be done. She needed a guarantee that in the worst-case scenario, if something happened to Glenn or Michelle her security of tenure in the St Clair property would not be disturbed. This diary entry seems to have been made after the parties had experienced an incident of early tension within the household, perhaps explaining why Lynn records “he didn’t answer me”.
Glenn and Michelle did not accept that they undertook to doing something for Lynn in their wills, but even if they did so undertake, they contended that parties ultimately must have abandoned the idea. In the Court’s view the idea was not abandoned but Lynn continued to convey her expectation that it would be honoured as part of their arrangements. Her diary entry of 21 April 2022 confirms the enduring significance to her of this commitment made by Michelle and Glenn.
**“**You had better seek legal advise and fast you need to leave. You’re a liability, an alcoholic and codine addict and going into this agreement we didn’t know that. Your (sic) a danger to yourself and others
Your also losing your mind and extremely narcissistic. You make life unbearable and because your life is miserable you try to make everyone else’s that way. You have tried to put a wedge between everyone, gossiping and planting bullshit stories that suit your agenda. And it won’t work. So you shouldn’t waste your breath. I have tried with you but your (sic) so nasty and rude to everyone except Ashley, and your days are filled with drinking and pill popping, you don’t have epilepsy at all you fall because your continually wasted and off balance. It’s necessary that your doctor is reported for prescribing all these medications of addiction. A blood test will prove this no problem.
Very sad you had a chance at having some sort of family life but it’s clear you think your (sic) entitled and above everyone but your just like the rest of us.
You know damn well that money was paid for the car and deducted from the total amount, what u (sic) have there in writing is what we were to pay you. Prior. But it’s easily recalculated which I will do. Bit this arrangement isn’t working so we will pay you out. Maybe you can go live with Ashley then he’ll also see what his grandmother really is.
I’ll wait to hear from your solicitor, till then stay in your part of the house. My kids don’t need your sour face and nasty comments in their faces and home.”
This message shows the fundamental breakdown in mutual courtesy and basic human respect. The ordinary family relationship between the plaintiff and the defendants have clearly been shattered by this time. This is not the only example by Michelle in particular making accusations of Lynn’s level of usage of alcohol and overuse of prescription analgesics. It is not necessary to cover the other accusations in text messages in any detail as this message is an unfortunate typical example.
Michelle conceded in cross-examination that this text message was pointed but she was generally unapologetic about sending it and says it reflected her genuine assessment of Lynn’s behaviour at the time.
Lynn submitted that the defendants’ offer to pay her out in this text message is inconsistent with the defendants’ case of an unconditional gift to them of her interest in the St Clair property. She submits that the offer demonstrates their recognition that Lynn had a continuing financial interest in the St Clair property. Lynn says this is the import of the statement “[b]ut this arrangement isn’t working, so we will pay you out”. Lynn also submits that this email shows that the defendants had a plan to remove her from the property by paying her to leave.
But the text message is merely the defendants attempting to settle their differences with Lynn, once trouble had arisen. It is not inconsistent with the defendants’ primary case that Lynn had gifted her one-third share to them. Such negotiations merely show that the defendants acknowledged that Lynn would require some funds to be persuaded to leave the St Clair property. The offer says little about the defendants’ belief in the merits of their case.
“File Note 5/7/22
Lynn upset – Glenn & wife are abusive to her and accusing her of being drunk taking drugs – they yell at her & abuse her.
She wants to sell her 1/3 share in home and move out – they are trying to buy her out.
She wants to [change] her will to leave everything to grandson Ashley.
She does not wish to leave anything to [Michelle] or Glenn.
She has mental capacity – there is no issue – she is fully coherent and is still sharp in mind. She suffers from epilepsy hence her unsteadyiness (sic) on her feet.
She was crying in the office- upset at the treatment of her by her son and his wife.”
The Court accepts that this is a reliable contemporaneous account of Lynn’s outlook. She was very upset and perceived that Glen and Michelle were being abusive to her. Michelle’s strongly worded and hostile text messages to Lynn at the time support Lynn’s perception that she was being “abused” by the defendants.
The defendant’s submissions have sought to downplay the level of abuse that Lynn was suffering and have suggested that she was being oversensitive. But the degree to which Lynn was objectively upset by events, the overall consistency of her evidence, together with the acerbic nature of Michelle’s emails, allow the Court to infer that she was subject to much of the abusive conduct of which she complains.
The disputes between the parties from this time on can be described more broadly. Many of their disputes were the predictable result of close living. Lynn wanted some say about who would come into the household and disapproved of the guests and acquaintances of the defendants’ children coming into or staying in the household without her approval. The defendants made increasingly pointed allegations that the plaintiff was drinking too much alcohol and taking excessive amounts of analgesics. They also contended that she was not as unwell as she claimed to be.
At one level the relationships had not reached the extremes of taking out apprehended violence orders against the other. But the plaintiff claimed that she felt her personal safety was in danger by being at the property and has said that is why she left. In answer to that Mr Klooster pointed to various diary entries which showed acts of kindness towards the plaintiff within the household whilst she was there, including offering gifts to her, and including her at Easter and Christmas. Similarly, Mr Klooster submitted there were indications in the text message evidence of Lynn making light of some of the conduct of the defendants. But in the Court’s view this was Lynn’s way of coping with the situation in which she found herself.
But as the authorities make clear, a search for someone to blame for the breakdown in a domestic relationship is often a fruitless task. In the Court’s view this case is no different from many others in which such a quest is pointless. On the one hand the plaintiff does not have to be fearing for her safety for the Court to find a breakdown in relationship an intolerable situation. On the other hand, occasional gestures of kindness by members of the defendants’ family does not establish that relationships have not broken down. The overall impression the Court has from the parties pointed text message correspondence and oral evidence is that relationships were so bad that living together was probably intolerable for these parties by no later than July 2022. It is a matter for continuing wonder that they survived together for another year.
The Court does not accept Mr Klooster’s submissions that there was no abuse of any kind directed by the defendants to the plaintiff and that she left at her own volition. Whatever the plaintiff’s conduct had been, the unapologetic sharpness of Michelle’s communications is evidence that the defendants were prepared to have the plaintiff pay a heavy emotional price for whatever wrongs she was perceived to have committed within the household.
Lynn finally left the property on 9 June 2023 and moved into supported accommodation. The defendants say that Lynn left the property voluntarily and that she was not in any way ousted from occupation.
Lynn says that just because she remained at the St Clair property between April 2022 and June 2023 does not indicate that that she was not suffering intolerable abuse from Glenn and Michelle. She moved into a women’s shelter from the St Clair property. This itself indicates that she then felt she needed to take less than comfortable emergency accommodation rather than stay and try and tolerate the atmosphere at the St Clair property any longer.
Lynn’s friend, Maria Lohin, helped her move out. That Glenn and Michelle did not help with the move indicates the depth the conflict had reached. During the move Ms Lohin observed that Lynn’s mattresses had not been set up properly. This tends to indicate that relations between the parties had been poor for so long that Lynn was using her own resources to make the best of her part of the house with little practical day-to-day assistance from Glenn and Michelle.
The claim and the cross-claim each contended for different versions of the agreement made between the parties in January 2022 and different relief. But they ultimately reached some common ground both on their substantive contest and in the relief sought.
In her amended statement of claim the plaintiff used pleas in estoppel by convention, undue influence and unconscionable conduct, to limit her liability on the mortgage, to deny that she had any obligation to give the St Clair property by will to Glenn, and to appoint trustees for sale to realise her one third interest in the property.
In their cross-claim the defendants, Glenn and Michelle, deployed pleas of estoppel by representation and a Baumgartner trust from a joint endeavour to maintain their version of what was agreed between the parties, including that Lynn had made an inter vivos gift of her one-third interest in the property to Glenn and had agreed to give the St Clair property by will to Glenn, but subject to terms that she could reside in the property “until such time as she is no longer capable of taking care as of herself”.
Many of the issues fell away, either from analysis of the pleadings or during the hearing. It was never an issue that it was agreed that the parties would purchase the property for no more than $1.2 million, taking a one-third interest each, with the plaintiff contributing up to $400,000 and the defendants borrowing on a first mortgage over the property to make up the balance. Ultimately the following other matters which were once more contentious were taken as having been agreed between the parties:
The defendants did not contest that they were wholly responsible for the mortgage payments and all liabilities under the mortgage and should indemnify the plaintiff against her liability to the mortgagee including any borrowings over $800,000. Michelle and Glenn have continued to pay the mortgage since the property was purchased. It was also agreed Lynn had derived no benefit from the mortgage.
The plaintiff would be responsible for one quarter of the consumables (such as electricity, water usage and other utilities) used at the property and the defendants three quarters. This reflected that Lynn was responsible for no more than one quarter of household expenditure compared to Glenn and Michelle and their family.
The defendants would be responsible for all other property related outgoings for the property including insurance and maintenance. The same division of the burden of expenditure was said to apply with respect to renovations to the St Clair property, but the property was never renovated.
The property must not be sold during the lifetime of the plaintiff, so she could live in it.
The parties also reached common ground as to aspects of the relief that should be granted. They agreed that the property needed to be sold. These reasons make suggestions as to how that can be done cost effectively.
They also agreed that the Court might grant Baumgartner trust relief based on a failed joint endeavour if no other relief were to be granted. But the plaintiff still pressed her claim for unconscionable conduct. The defendants continued to press their claim in estoppel by representation.
These claims are resolved here. But the Court has reached the view that it should grant Baumgartner relief based on the parties’ failed joint endeavour and has formulated that relief.
“A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage "which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests". The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring "victimisation", "unconscientious conduct", or "exploitation". Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.”
“What is clear is that, once the requisite elements of a special disadvantage, knowledge of that special disadvantage and improvidence of the transaction are established, there is at least an evidentiary onus on the stronger party to show that the transaction was fair, just and reasonable or it may more readily be concluded that the improvident transaction was procured by the unconscientious taking of advantage of that special disadvantage.”
Other general statements of legal principle should be noted. Unconscionability is a concept that is applied with considerable restraint, going beyond what is 'fair' or 'just' to circumstances which are highly unethical: Attorney General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557; [2005] NSWCA 261, at [120] – [121] per Spigelman CJ.
There are many statements to similar effect. One such comprehensive statement is that of Allsop P (with whom Bathurst CJ and Campbell JA agreed) in Tonto Home Loans Australia Pty Ltd v Tavares; FirstMac Ltd v Di Benedetto; FirstMac Ltd v O’Donnell (2011) 15 BPR 29,699; [2011] NSWCA 389 at [291], which also discusses how the concept of unfairness and unconscionability under statute may be differentiated from unconscionability at general law:
“Aspects of the content of the word "unconscionable" include the following: the conduct must demonstrate a high level of moral obloquy on the part of the person said to have acted unconscionably: Attorney General of New South Wales v World Best Holdings Ltd [2005] NSWCA 261; 63 NSWLR 557 at 583 [121]; the conduct must be irreconcilable with what is right or reasonable: Australian Securities and Investments Commission v National Exchange Pty Ltd [2005] FCAFC 226; 148 FCR 132 at 140 [30]; Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2002] FCA 62; 117 FCR 301 at 316-317 [44]; Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 262; factors similar to those that are relevant to the [Contracts Review Act] are relevant: Spina v Permanent Custodians Ltd [2009] NSWCA 206 at [124]; the concept of unconscionable in this context is wider than the general law and the provisions are intended to build on and not be constrained by cases at general law and equity: National Exchange at 140 [30]; the statutory provisions focus on the conduct of the person said to have acted unconscionably: National Exchange at 143 [44]. It is neither possible nor desirable to provide a comprehensive definition. The range of conduct is wide and can include bullying and thuggish behaviour, undue pressure, and unfair tactics, taking advantage of vulnerability or lack of understanding, trickery, or misleading conduct. A finding requires an examination of all the circumstances.”
Other authorities also speak to the great variety of circumstances in which equitable intervention to relieve against unconscionable conduct is available and the need for close scrutiny of the exact relationships established between the parties: Jenkyns v Public Curator (Queensland) (1953) 90 CLR 113; [1953] HCA 2 at 118-119 and Ka**kavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25 at [18] and Wu v Ling [2016] NSWCA 322 at [8] per Leeming JA (“Wu v Ling”). In Wu v Ling Leeming JA explained (at [7]) that one should not expect to find a bright line separating circumstances which place an impugned transaction inside or outside the reach of equitable principle. Leeming JA cited Lord Selborne’s rejection of the notion that there is an “indispensable condition of equitable relief”: Earl of Aylesford v Morris (1873) LR Ch App 484, at 491 and referring to Fullagar J’s statement in Blomley v Ryan (1956) 99 CLR 362, at 405, that the circumstances in which equitable relief will be granted “are a great variety and can hardly be satisfactorily classified”.
But this also means, as Leeming JA further explained in Wu v Ling (at [8]), that the absence of proof of immoral or dishonest motives is not sufficient to preclude equitable intervention: cf Johnson v Smith [2010] NSWCA 306 at [5] and [98] – [102]; and Paciocco v Australia and New Zealand Banking Group Limited (2015) 236 FCR 199; [2015] FCAFC 50 at [30].
The Plaintiff’s Unconscionable Conduct Case – Elements. Lynn’s claim for relief in her amended statement of claim for alleged unconscionable conduct emphasises several factors. Lynn was 69 years of age at the time of these transactions. She says that she was increasingly reliant upon Glenn and Michelle for her care and support and entrusted them with arranging the purchase of the St Clair property, which they did.
Lynn says that she did not have independent legal or financial advice, which left her vulnerable because of lack of clarity of how the future health care needs and the requirements for capital and ongoing living support would be provided for in the future. The Court accepts that she did not have independent legal or financial advice. Competent independent legal or financial advice would not have permitted her to go into this arrangement without more safeguards, particularly for her security of tenure, her rights within the household and how interest would be dealt with if she needed to go elsewhere including into an aged care facility.
Lynn also says that implicit in her living with Michelle and Glenn was the assumption that that they would look after her as she aged. But this obligation was not made clear in their agreement. Moreover, objectively it was short sighted in two ways. First, there could be a falling out between them, as in fact occurred. And second, Glenn and Michelle could not assure her that they would be fully able to look after her as she reached an advanced age.
Had she obtained independent legal and financial advice these issues would have been addressed in arm’s length discussions. The Court’s narrative of findings makes clear that such discussions between the parties never took place and the defendants must have appreciated that Western Sydney Legal was acting for them all only on the conveyance.
If the transaction between these parties were to be set aside at the suit of the plaintiff for unconscionable conduct, the Court would unwind the transaction and place the parties back in the position that they would have been had they not entered the transaction, whilst relieving the plaintiff of the unconscionable burden of the obligations upon her. She would be allowed to withdraw the transaction without any obligation to promise to give any part of the property by will to the defendants. That promise was procured as part of a package in which she sought to obtain security of tenure for the rest of her life at the St Clair property. That was the essence of the bargain. Equity would seek to put her back in the position both parties were in before this transaction. That would involve a sale of the property and a distribution of the proceeds of sale, one third to the plaintiff and two thirds to the defendants after adjusting to take account of the benefits the parties had obtained from their joint arrangements before the return of their respective shares to them.
The defendants submit that any case of unconscionable conduct the plaintiff brings against them must fail. They say that the agreement was not improvident from her point of view and they had an impression that Lynn obtained legal advice.
But the defendants had no assurance that Lynn had received legal advice and most of the available indications were that she had not. She had talked vaguely to them about seeing a solicitor. But they had no indication from her that she had consulted a solicitor. They had received no correspondence from an independent solicitor. Nor did they have any other assurance that she had consulted a solicitor.
This transaction was improvident for Lynn. She was tying up her sole asset in an inflexible financial arrangement ill-suited to all likely contingencies. Glenn and Michelle did not know completely what other assets Lynn had but they had reason to believe from what she said and the sale of her property that she was tying up her most substantial asset with them in this arrangement.
The transaction in its form should have been formalised to deal with its foreseeable contingencies. But it had some benefits for Lynn. She would have a place to stay for the rest of her life. She would be cared for by family at home. As she aged, she would have the company of younger family members.
There were, however, obvious gaps in the arrangement. These deficiencies might have been reduced if the parties had consulted a solicitor. One of these gaps was the parties’ failure to plan for what would happen to Lynn’s interest in the St Clair property, if she had to enter an aged care facility or to charge or otherwise deal with her interest in the property for her medical care or welfare. The improvidence of this gap is accentuated by the defendants’ cross-claim that the plaintiff was estopped from selling or otherwise disposing of her legal interest in the St Clair property during her lifetime.
Another gap was revealed by the events at this case. After Lynn and the defendants fell out and she left the property the parties’ agreement contained no mechanism for her to extract her investment from the property.
In the Court’s view both sides stumbled into this arrangement bringing with them a vague sense of goodwill towards the other but without fully thinking through the legal consequences of what they were doing. At one level the defendants were genuinely trying to help the plaintiff from good motives. They say that they did not take advantage of Lynn’s vulnerability by putting themselves in a position to deal with her property without her consent, and they did not seek to burden her with their external liabilities.
But they did insist on trying to enforce Lynn’s representation that she would change her will in their favour, without in any way acknowledging or honouring their own promise to change their wills to secure her right to stay in the St Clair property during her lifetime.
The defendants assured Lynn that her residence at the St Clair property would not be disturbed, even if something happened to either of them. Lynn says that she needed that assurance and that this was an important component of making their mutual accommodation arrangements. This part of Lynn’s case is persuasive. Lynn believed that based on what Glenn and Michelle said and did not stay that they had committed to change their wills to secure her residence at the St Clair property for the rest of her life. The plaintiff is unlikely to have been satisfied to commit $400,000 to this property without some assurance of that kind. In the Court’s view she stipulated for it and obtained it in principle – although it remained ill-defined right up until the hearing. Lynn continued to chase the defendants to “change their wills”. But her understanding of what changes they were going to make remained inchoate.
Combined with the improvidence and ill-formed protections in the transaction for Lynn, the defendants’ conduct in entering this transaction and seeking to enforce their side of this transaction without securing Lynn’s right to stay in the St Clair property was unconscionable. The transaction should be set aside and the plaintiff relieved from any obligation to make a will in the defendants’ favour. The defendants’ unconscionable conduct also contributed to the breakdown in the joint living arrangements between these parties in a way that cannot now be repaired.
Glenn and Michelle’s promissory estoppel case is based upon Lynn’s statements about changing her will. They say that those statements induced them to enter into this transaction. The Court has found that she did make statements to this effect. But the Court has found that the defendants’ conduct in the wider transaction in which Lynn made these statements was unconscionable and should be set aside. This section of these reasons briefly considers some difficulties that they would have faced even if the transaction had not been set aside for the defendants’ unconscionable conduct.
The requirements necessary to make out a case of promissory estoppel are explained in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; (1988) 76 ALR 513; (1988) 62 ALJR 110; [1988] HCA 7 at 419 and 404 (“Waltons Stores”) at 428-429 per Brennan J, Austotel Pty Ltd v Franklins Self*-S**erve Pty Ltd* (1989) 16 NSWLR 582; [1989] ANZ ConvR 621 at 601 per Priestley JA, in Giumelli v Giumelli (1999) 196 CLR 101; (1999) 161 ALR 473; (1999) 73 ALJR 547; [1999] HCA 10 (“Giumelli”) and more recently in Kramer v Stone (2024) 281 CLR 484; [2024] HCA 48 (“Kramer”) as follows:
one party (“the first party”) creates or encourages another party (“the second party”) to adopt a particular assumption or expectation that a particular legal relationship existed or would exist between them;
the second party relies upon that assumption or expectation;
the second party’s reliance is known or expected by the first party; and
the second party would suffer detriment if the assumption or expectation was not fulfilled by the first party.
If the first party then fails to act to avoid the detriment, then equity may intervene to grant appropriately moulded relief.
The governing principles in this field are also fully discussed by leading Equity text writers: cf JD Heydon, MJ Leeming and PG Turner, Meagher Gummow and Lehane’s Equity Doctrines and Remedies, 5th Edition, LexisNexis, 2025 (“Meagher Gummow and Lehane*”)* at [17-065] – [17-134] and M Evans, T Power and J Power Equity and Trusts, 5th Edition, LexisNexis Butterworths, 2024 (“Equity and Trusts”) at [18.25] – [18.86].
Lynn’s statements were a factor inducing the defendants to enter into this the transaction. They were ambivalent about whether they would continue renting or purchase a smaller place, before Lynn raised the idea of them all living in and owning a place together. Lynn’s promise was financially significant for them. Glenn brought this issue to Lynn’s attention and sought a commitment from her about it before proceeding.
But Lynn equally relied upon assurances from Glenn and Michelle that whatever happened to them she would be able to stay in the property for the rest of her life.
The defendants submit that the detriment they suffered from going into this transaction was that had they not purchased a home with Lynn that could accommodate both her and their teenage children they would have purchased a smaller place to accommodate only themselves and their children. They say that the latter opportunity was within their financial reach, but they forewent it. Glenn and Michelle say their choice was not between buying the St Clair property with Lynn and not buying a property at all. Their choice was between buying a house suitable for Lynn to share with their family or buying a house only for themselves and their children.
Lynn submitted that there was no detriment founding the estoppel pleaded in Glenn and Michelle’s cross-claim. She submitted that any financial disadvantage Glenn and Michelle suffered from going into the transaction is more than compensated for by the increased capital gain they are likely to derive upon the sale of the St Clair property. Lynn submits that had they purchased a suitable property just for their family, they would have been likely to enjoy similar capital gains from the ownership of that property.
Lynn’s submission has considerable practical force. The defendants have purchased a property perhaps slightly larger than the property than they might perhaps otherwise have purchased, if they were able to proceed on their own without going into a joint arrangement with Lynn. They can reasonably be expected to have made approximately as much capital gain since March 2022 on this property, as they might have in purchasing a family home on their own. Moreover, the evidence does not clearly establish that they had sufficient capital to purchase appropriately sized real estate for their own family on their own without the assistance of the plaintiff’s capital contribution in a one third share of the St Clair property.
But the defendants may have suffered some detriment. They have lost an opportunity to buy a house on their own, free of the aggravation of another occupant or the opportunity to invest elsewhere. But valuing whether such losses of opportunity had any value would be very difficult. The defendants have incurred costs of going into this transaction and incurring expenditure on the St Clair property. But whether they could have invested profitably elsewhere is uncertain and they may have had to incur rental costs of maintaining other accommodation.
Although the defendants have suffered some financial detriment from relying upon the expectations raised by the plaintiff, their actual financial detriment would have been difficult to prove had this transaction not been set aside for unconscionability.
The extent of the detriment is relevant to considering the scope of any relief that might have been granted for the defendants’ promissory estoppel claim.
Consideration of detriment may be relevant to the remedy because slavish enforcement of the promise may be disproportionate to the detriment and may go much further than is necessary to put right the unconscionability inherent in the repudiation of the promise: Guest v Guest [2022] 3 WLR 911; [2022] UKSC 27 at [10] (“Guest”). Detriment is assessed at the time the party has induced the assumption, or expectation seeks to resile from it: D**HJPM Pty Ltd v Blacktown R**esources Ltd (2011) 83 NSWLR 728 at [72].
It was said in Walton’s Stores (at p 419) that a court of conscience goes no further than is necessary to prevent unconscionable conduct; see also Commonwealth v Verwayen (1990) 170 CLR 394 at 409. But in *Sidhu v Van Dyke (*2014) 251 CLR 505; (2014) 308 ALR 232; (2014) 88 ALJR 640; [2014] HCA 19 (at [85]), the High Court qualified and explained this statement by adding:
“where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party’s detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise.”
There are two views of what should constitute that detriment. The narrow view is that the relevant detriment is confined to detriment occasioned by reliance upon a promise that is not fulfilled. A broader view, exemplified by Guest and Kramer is that the relevant detriment is the loss that will result from the non-fulfilment of the representation or promise.
Here, in the Court’s view, even if the transaction had not been set aside for the defendants’ unconscionable conduct the only relief that would have been granted to give effect to the defendants’ case in promissory estoppel is to relieve them from the narrow financial detriment they have suffered from going into the transaction and to restore them to a position that would compensate them for committing to it but not to give effect more broadly to the promise that they allege was made to them. Much the same relief can be granted on Baumgartner principles, as is discussed below.
Several reasons would justify taking this course. Firstly, the defendants may be financially better off in the short term from taking the course that they did, and they have not demonstrated that they are clearly substantially worse off from having gone into the transaction.
Secondly, the defendants have enjoyed considerable benefits from the arrangement of the short term by occupying the house on their own for over three years pending the outcome of this litigation.
Thirdly, although motivated by goodwill, the defendants’ own situation here is not that of entirely innocent victims of Lynn’s misconduct. The present situation was substantially created by the defendants failing to honour an expectation they created that they would do something in their wills to secure Lynn’s position if something happened to them and to ensure that Lynn was independently advised so she could participate in arm’s-length negotiations with them.
Fourthly, the detriment relied upon here is not the life changing detriment demonstrated in cases such as Priestley v Priestley [2017] NSWCA 155, at [160] (“Priestley”) where Emmett AJA applied Sidhu, and explained how in cases of “life changing decisions and irreversible consequences” the nature of the detriment suffered may call for substantial fulfilment of the assumption upon which a promisee relied. Here the defendants have invested in the property by continuing to pay off the mortgage but the decision to invest in this house does not create the kind of life changing detriment that automatically calls for fulfilment of an assumption.
Finally, the Court’s findings make it impossible to make a grant of satisfactory relief in the promissory estoppel claim pleaded in the cross claim to require the plaintiff to gift her estate by will to the defendants. This is because such relief would have had to be subject to a condition that the plaintiff would be entitled to live in the household until her death. The Court would not grant such relief which would force the parties to endure a deeply hostile relationship.
In their cross-claim the defendants also seek relief on the basis this is a failed joint endeavour case to which the principles of Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 apply. The defendants’ pleadings clearly present such relief for consideration. In final submissions the parties accepted that this was an appropriate remedial structure for their respective claims.
Applicable Legal Principles. The elements of a joint endeavour, or Baumgartner*,* constructive trust may be shortly stated. In Baumgartner the High Court applied the general equitable principles that developed to decide the property entitlements of participants in failed commercial ventures to the breakdown of domestic relationships. Three elements must be identified to establish a Baumgartner constructive trust: the joint endeavour, premature failure of the joint endeavour and unconscionability.
First, there must be a joint enterprise or joint endeavour, which will often be in relation to the acquisition of property. Although there does not need to be an express or implied contract between the parties, some mutual benefit will be involved: Muschinski v Dodds (1985) 160 CLR 583 at 618 per Deane J and 618 King v Fister [2022] QCA 047 at [32] – [33]. Although the Baumgartner constructive trust is not based on the parties’ actual intentions, their intentions are nevertheless relevant to imposing the trust: Ste**phenson v Santos [2020] NSWCA 262 at [19]. The money or other property contributed by one party must be contributed for the purposes of the joint relationship or endeavour: NSW Trustee and Guardian v Togias (2022) 110 NSWLR 86 at [134].
Second, there should be premature failure of the joint endeavour without attributable blame. To assess whether there was premature termination of the joint endeavour the parties’ intentions about how long the relationship was expected to last is relevant: West v Mead (2003) 1 BPR 24,431, [2003] NSWSC 161 at [64]. In contrast to the common intention constructive trust, a joint endeavour constructive trust is not based on the actual or presumed intention of the parties involved but whether according to the principles of equity it would be a fraud on the party in question or contrary to equitable principle to deny the trust and retain beneficial ownership of the property: Austin v Hornby (2011) 16 BPR 30,623, [2011] NSWSC 1059 at [152].
The requirement of this element that the failure of the joint endeavour be “without attributable blame” does not mean the Court should attempt to work out which of the parties in the domestic relationship was at greater fault, rather the concept is applied with a degree of “tolerance”: Kriezi**s v Kriezi**s [2004] NSWSC 167 at [33]. Where personal relationships deteriorate and the sharing of a joint residence becomes intolerable to some residents there is generally no attributable blame attracting the need for equitable adjustment: Hill v Hill [2005] NSWSC 863 at [35].
The final element of a Baumgartner constructive trust is present when the legal owner of joint venture property denies the existence of a beneficial interest in the trust property and seeks to retain beneficial initial ownership of the trust property. Baumgartner at 149 and Pavlis v Pavlis [2022] NSWCA 281 at [44]. In deciding whether it would be unconscionable for a joint-venture party to retain assets courts are guided by equitable principles not by idiosyncratic, unstructured or untutored concepts of unconscionability: West v Mead (2003) 1 BPR 24,431, [2003] NSWSC 161 at [52].
Unconscionability arises because each of the parties to the relationship is contributing to the common pool of assets on the basis that the assets acquired will be used for their ongoing common benefit, so it may become unconscionable for the party with a disproportionate share of the assets which were built up to keep those assets when that party knows that was the basis on which the assets were being built up: West v Mead (2003) 1 BPR 24,431, [2003] NSWSC 161 at [62]. The time for assessing unconscionability is when the joint relationship or endeavour has concluded: Anson v Anson: (2004) 12 BPR 22,303; [2004] NSW SC 766 [36].
In this case many of the issues that feature in Baumgartner trust cases do not arise. Neither side is raising a contest about non-financial contributions to the St Clair property. The parties respective one third – two thirds’ interests in the St Clair property arising from their original contributions are agreed.
Granting Baumgartner Relief. Here both parties accept there was a joint endeavour in their agreement to acquire and hold the St Clair property. The Court’s findings indicate that their joint endeavour failed without attributable blame.
Moulding Baumgartner Relief. Principled Baumgartner relief would involve preventing the plaintiff and the defendants from each retaining a disproportionate share of the assets committed to the joint endeavour. But the question is what assumptions should be made before moulding relief to prevent one other party from engaging in the equitable fraud of maintaining a disproportionate share of the assets. Should the Court approach the moulding of relief and the distribution of the parties’ respective interests (a) on the basis that the joint endeavour had been fulfilled, or (b) on the basis that that the parties’ present positions be unwound without attempting to fulfil the terms of the joint endeavour? For several reasons the Court favours approach (b).
As to approach (a), one way of formulating a grant of Baumgartner relief is to assume that the promises the parties made in embarking on their joint endeavour had been performed and that the parties should be placed in the position that they would have been in if the joint endeavour had been performed. On that assumption Baumgartner relief would prevent the defendants from being able to retain their two thirds interest in the St Clair property without accommodating their coordinate obligation to accommodate the plaintiff in the property for the rest of her lifetime and subject to her sharing outgoings and other expenses in accordance with their agreement during her lifetime. A grant of Baumgartner relief in those circumstances would prevent the plaintiff from retaining her one third interest in the St Clair property without accepting that she should give the property by will to the defendants at her death and contribute her share of the outgoings on the property during her lifetime.
That assumption as the basis for Baumgartner relief would have involved ascertaining the value of the plaintiff’s life interest in the St Clair property (taking the market rental value of her occupation of the property less her agreed contributions to the upkeep of the property over her expected lifetime, discounted to their present value) and requiring the defendants to pay that ascertained sum to the plaintiff as the price, for example, of acquiring her share in the property.
But approach (b) is the appropriate basis to mould relief here. First and foremost granting Baumgartner relief and at the same time trying to give effect to their failed arrangement over the rest of the plaintiff’s lifetime would not be consistent with the Court’s findings as to the defendants’ unconscionable conduct.
Moreover a consideration favouring approach (b) is the short-lived period of the parties’ joint endeavour. The parties together attempted to perform their joint arrangement only for April 2022 until July 2023. This was a period of some 15 months. Moreover, in a practical sense the joint endeavour probably failed within the first 3 to 6 months given the hostility that immediately arose between the parties due partly to the defendants’ unconscionable conduct. Had it been fulfilled the joint endeavour involved a mutual plan lasting 15 or 20 years. Attempting to anticipate and justly allow for the vicissitudes of giving effect to such long-term joint-venture promises, which have failed so early, invite speculation about many uncertainties and risk causing injustice to one or other party.
Unwinding the joint endeavour and returning each party’s capital to the other can be achieved equitably, without attempting to give effect to their failed venture. This can be achieved by so far as possible placing them in the position that they would have been in had they not gone into the transaction. This involves returning the parties’ actual contributions back to them, whilst making appropriate adjustments for their use of their contributed joint capital in the meantime, to avoid one of the parties retaining a disproportionate share of the joint assets. The parties’ original contributions have not been altered greatly since the acquisition of the St Clair property and can readily be identified and distributed back. The parties have simplified granting relief on this basis by agreeing to sell the St Clair property and distribute the proceeds.
An Allowance for the Defendants’ Occupation of the St Clair Property. A preliminary question in quantifying Baumgartner relief is whether any allowance should be made for the defendants’ sole occupation of the property after the plaintiff departed in June 2023. In the calculation of what was a just distribution the parties were at issue about whether an allowance should be made for the defendants’ sole occupation of the property between Lynn’s departure and the sale of the property.
Resolution of such an issue is necessary because these parties are co-owners both at law and in equity. In equity, one co-owner is not liable to pay an occupation fee to a second co-owner unless (a) (following the law) the first co-owner excludes the second co-owner, and thereby becomes liable to pay occupation fee to the second co-owner, or (b) if the first co-owner in occupation claims an allowance in respect of improvements effected by that co-owner, equity will permit such an allowance on terms that the first co-owner is accountable for an occupation fee to the second co-owner: Forgeard v Shanahan (1994) 35 NSWLR 206.
Lynn claimed the defendants had by their conduct effectively ousted her from the St Clair property and that in the final calculation of sums due between the parties that she should be compensated for the defendants’ exclusive use of the St Clair property since July 2023. The parties referred the Court to the statements of principle on the question of ouster discussed in Callow v Rupchev (2009) 14 BPR 27,533.
Glenn and Michelle say in response to Lynn’s ouster claim that the Court should concentrate upon the events of 2023, which they submit found the inference that Lynn left the St Clair property voluntarily and not because of any misconduct on their part.
Lynn submits in the alternative that a forcible exclusion is not required to engage her right to an occupation fee. She says that if there is a breakdown in any kind of domestic relationship and one party moves out the Court does not have to try and sort out which party is in the wrong, because the result of the breakdown in relationships is that life in the joint property is so unpleasant that one or other party has to leave. Lynn claims an occupation fee on the basis she was in substance ousted from the property by the unpleasant situation created by Glenn and Michelle.
Lynn relied on Payne v Rowe (2012) 16 BPR 30,869; [2012] NSWSC 685 (“Payne v Rowe”) and Callow v Rupchev [2009] NSWCA 148 (“Callow v Rupchev”) insofar as the circumstances in which an occupation rent will be ordered.
The Court of Appeal observed in Callow v Rupchev that a breakdown of a domestic relationship without attributable fault on the part of either party does not necessarily amount to an actual ouster, but rather “an independent ground for charging the co-owner who remains with an occupation rent”: at [46]; Payne v Rowe at [111]. The Court of Appeal went on to find that:
“71. An occupation fee is chargeable, inter alia, where it is unreasonable to expect co-owners to continue to live under the same roof after a domestic relationship has collapsed, and one party moves out”:
“111. More recently, it has been held that, upon the breakdown of a domestic relationship, if it ceases to be reasonable or practicably sensible to expect the partners to co-occupy the one property, the one who remains in possession may be taken to do so to the exclusion of the other, and to be liable to pay an occupation fee: McKay v McKay [2008] NSWSC 177; BC200801670 at [51] per Brereton J; Callow v Rupchev (2009) 14 BPR 27,533 ; [2009] NSWCA 148; BC200905098 at [59]–[60] per Beazley and Basten JJA and Handley AJA. This is best seen not as a case of exclusion or ouster but as an independent ground on which the court may compensate a co-owner for the exclusive occupation enjoyed by another co-owner: Callow v Rupchev at [46].
- There is a question of how far the principle extends. In Callow v Rupchev the parties were in a de facto relationship. However, the court described the case as one where there had been a breakdown in a “domestic relationship”; and held that, in order to claim an occupation fee it was necessary for the party making the claim “to demonstrate affirmatively that it was unreasonable to expect him or her to return to the premises during that period [that is, the period for which the fee is claimed]”: at [74]. It was the fact that it was unreasonable to expect the party who had left to return that made it appropriate for the party who remained in occupation to pay a fee. Both the language used and the rationale advanced are not confined to cases where the parties are in a matrimonial or de facto relationship.
- P J Butt states the principle more broadly still in the latest edition of Land Law, 6th ed, Lawbook Co, Pyrmont, 2010, at [14 38.1]:
Logically, this “new” principle should not be limited to matrimonial or domestic relationships. Its underlying rationale is that the occupying co-owner cannot be liable for an occupation fee where the non-occupying co-owner is free to take up occupation but chooses not to. If, in the circumstances, it is unreasonable to expect the non-occupant to take up occupation, then fairness requires the occupying co-owner to compensate the non-occupant for the fact that one has enjoyment of the property but the other has not.
The extension of the principle beyond matrimonial or similar relationships has also been accepted in England in French v Barcham [2009] 1 WLR 1124 , where Blackburne J held that a trustee in bankruptcy was entitled to an occupation fee from the bankrupt’s wife for her continued occupation of the property after the making of the bankruptcy order. As Blackburne J stated (at [34]):
The essential point, in my view, is that when on inquiry it would be unreasonable, looking at the matter practically, to expect the co-owner who is not in occupation to exercise his right as a co-owner to take occupation of the property, for example because of the nature of the property or the identity and relationship to each other of the co-owners, it would normally be fair or equitable to charge the occupying co-owner an occupation rent …”
Ball JA observed that the relationship between the family members who were party to the proceedings (there being no marriage or de facto relationship between any of the parties) “was a domestic one of a type that is covered by the principle stated in Callow v Rupchev”: [114].
In the Court’s view the relationship between Lynn and the defendants had become so unpleasant that Lynn’s life had become intolerable by July 2023 and she was justified in leaving as it had “ceased to be reasonable or practicably sensible to expect the partners to co-occupy the one property”. I agree with respect with Ball JA’s approach and will apply here the principle stated in Callow v Rupchev requiring the defendants to account for an occupation fee for their use of the St Clair property after Lynn’s departure in July 2023.
The parties have agreed upon an appropriate weekly occupation fee from the date of Lynn’s departure up to the date of the trial of $38,000. This figure will need to be adjusted for the defendant’s further occupation of the St Clair property up to the date of judgment.
The Necessary Unwinding Adjustments. Granting relief to the plaintiff for unconscionable conduct leads to much the same outcome in this case as granting Baumgartner relief claimed by the defendants/cross-claimants. As the authorities in the next paragraph demonstrate, granting relief for unconscionable conduct involves doing practical justice to unwind the transaction and restoring the parties to the position they were in before the transaction occurred as best as can be done at the time of the hearing. Baumgartner relief involves ensuring that by the imposition of a constructive trust each party is prevented from retaining a disproportionate share of the assets of their joint endeavour.
The practice of the court of equity in granting relief where it sets aside a transaction for unconscionable conduct is to do what "is practically just", even though it cannot restore the parties precisely to the state they were in before the transaction: Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102, at 113 ("Vadasz"). This may involve in an appropriate case only partly setting aside a transaction or doing so subject to conditions to prevent one party obtaining an unwarranted benefit at the expense of the other, because one seeking the assistance of a court of equity must do equity: Bridgewater v Leahy (1998)194 CLR 457 at 494 [125]-[127], Maguire v Makaronis (1996) 188 CLR 449 at 474-5 and Vadasz at 114-115.
Applying these principles is assisted in this case by measure of agreement between the parties about some of the issues that will require adjustment to do practical justice to unwind the transaction and to restore the parties to the position they were in before their entry into the transaction.
The first agreed matter is that Glenn will be required to repay the car loan of $11,222.70, which will be deducted from the calculation of the net amount otherwise due to him.
The parties are also agreed that consumables, such as electricity and household expenses, should be borne up to 9 June 2023, the date that Lynn left the St Clair property as to ¼ by Lynn and as to ¾ by Glenn and Michelle. This agreement is justifiable in granting relief unwinding the parties' transactions not because that is what the parties agreed in 2022 (which they did) but because their actual consensus in 2022 was a reasonable estimate of their actual usage of these consumable items. Just what falls into the category of the consumables to be shared this way should readily be able to be ascertained. Anything which varies according to the usage of resources of the property or the occupancy of the property should be regarded as a consumable item to be born under this formula - ¼ by Lynn and ¾ by Glenn and Michelle way. Expenditures such as gas and electricity would be prime examples of such expenditure. Water rates (that is paying for a water connection) would not be a consumable item but water usage would be. With this guidance the parties should endeavour to agree upon the quantum of these items. There are other expenditures which the court identifies below that may be more closely related to maintaining the parties' respective interests in the St Clair property.
Four main elements feature in the logic of unwinding the parties' transaction and calculating the quantum of what should be paid to them upon the sale of the St Clair property. These three main elements are:
returning the parties' capital contributions,
apportioning the outgoings required to maintain the property, and
adjusting for disproportionate benefits enjoyed by one party.
In discussing these three main elements the Court does not, other than incidentally, set out here in detail the parties' competing submissions about what the appropriate course should be. This is because the Court's findings provide a basis for calculating the unwinding of the parties' transaction which is different in certain respects from both parties' submissions. Moreover, some integers in the Court's calculation may potentially require a reclassification of expenditures and outgoings that would alter the basis on which the parties' submissions were made. Thus, recounting the parties' detailed written submissions in these reasons would be of limited value.
Moreover, the parties' submissions included a detailed contest about whether and how effect might be given to the defendants' promissory estoppel case that there was an inheritance expectation created by Lynn and that promise is accelerated during the lifetime of the parties. The Court is not granting relief on that basis, and those calculations do not need to be considered.
(1) Returning the parties' capital contributions. The parties' capital contributions to the joint endeavour should be returned to them. They made capital contributions of different kinds. In the first stage of the calculation these capital contributions should be credited back to the parties. Lynn paid figure just under $400,000 for her one third share of the St Clair property. Glenn and Michelle made their capital contribution by paying down the mortgage for their two thirds share of the property. That should also be credited to them in the calculation.
This raises a sub-question. The sub-question is should the parties be compensated by having interest credited to them for their capital contributions as well as having the capital contributions returned. In the Court's view that sub-question should be answered in the negative. How each party chose to fund its capital contribution is a matter for that party and the interest paid by that party would depend in part on that party's credit worthiness and availability of other capital. These matters are essentially extraneous to the equitable adjustments required to unwind the joint-venture and should not found claims for interest or compensation by either party. Thus, in relation to Glenn and Michelle's fixed monthly mortgage payments (which partly comprised interest component and partly a capital component), they should only be credited with the capital component of these mortgage payments.
(2) Apportioning outgoings required to maintain ownership of the property. This element comprises two sub-issues. The first sub-issue is from whose share should the mortgage liability be deducted. The next question is how should other liabilities that were incurred to maintain ownership of the property be borne.
Should the mortgage liability be borne by Glenn and Michelle's share or by all three shares? The answer to this is that the mortgage liability should be borne by Glenn and Michelle's two thirds share. This conclusion is reached not because the parties agreed to this liability being shared in this way but because the mortgage was only necessary as a component of Glenn and Michelle's advance of capital to the joint endeavour. It should therefore be attributed to their share. It would disproportionately benefit Glenn and Michelle for some their borrowings to fund their two thirds share to be paid by Lynn who contributed her own capital to the joint endeavour venture separately. The parties' agreement about this is really a reflection of the underlying equity in treating the mortgage liability as apportioned to Glenn and Michelle's share.
Another sub-question arises as to how the component of the sum owed to the mortgagee beyond Glenn and Michelle's 2/3rds share should be apportioned. That is the sum of more than approximately $800,000 of the original mortgage borrowings, namely $110,350. The answer to that depends upon how the additional sum has been applied in fact and the Court's reasons do not yet make findings about that. If this is disputed, then the issue may need to be reserved for short further consideration. But if it can be established that this additional sum was reinvested into the property and repairs or maintenance in a way that may have added value to the property then the additional sum has not just been raised to fund the defendants' interest in the property but has potentially been applied to improve the property and may need to be credited in part as an additional contribution from Glenn and Michelle. Otherwise, any other part of this additional mortgage amount which was used by Glenn and Michelle for their own benefit will be brought to account as their liability.
The parties incurred other outgoings to maintain their ownership of the St Clair property or its value, which should be borne in the prospective proportions of their ownership, 1/3 to the plaintiff and 2/3 to the two defendants. These outgoings are direct contributions to maintaining the value of their ownership and would include council rates, the supply component of water rates, and probably insurance.
(3) Adjusting for disproportionate benefits enjoyed by one party. The disproportionate benefit that has been identified as having been enjoyed by one party is Glenn and Michelle's occupation of the St Clair property since 9 June 2023 without sharing with Lynn. They should have to compensate Lynn in the final accounting for that sum which the Court understands has been agreed up to the date of the hearing and therefore should not be difficult to calculate up to an agreed date of judgment.
Once these adjustments have taken place each of the parties should enjoy the benefit of such capital gain in the St Clair property as there has been since it was purchased in early 2022. Each party will take a one third share of the sale proceeds after the above adjustments have taken place.
Granting relief to the plaintiff for unconscionable conduct leads to much the same outcome in this case as granting Baumgartner relief claimed by the defendants/cross-claimants. As the authorities in the next paragraph demonstrate, granting relief for unconscionable conduct involves doing practical justice to unwind the transaction and restoring the parties to the position they were in before the transaction occurred as best as can be done at the time of the hearing. Baumgartner relief involves ensuring that by the imposition of a constructive trust each party is prevented from retaining a disproportionate share of the assets of their joint endeavour.
The practice of the court of equity in granting relief where it sets aside a transaction for unconscionable conduct is to do what “is practically just”, even though it cannot restore the parties precisely to the state they were in before the transaction: Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102, at 113 (“Vadasz”). This may involve in an appropriate case only partly setting aside a transaction or doing so subject to conditions to prevent one party obtaining an unwarranted benefit at the expense of the other, because one seeking the assistance of a court of equity must do equity: Bridgewater v Leahy (1998)194 CLR 457 at 494 [125]-[127], Maguire v Makaronis (1996) 188 CLR 449 at 474-5 and Vadasz at 114-115.
Applying these principles is assisted in this case by measure of agreement between the parties about some of the issues that will require adjustment to do practical justice to unwind the transaction and to restore the parties to the position they were in before their entry into the transaction.
The first agreed matter is that Glenn will be required to repay the car loan of $11,222.70, which will be deducted from the calculation of the net amount otherwise due to him.
The parties are also agreed that consumables, such as electricity and household expenses should be borne up to 9 June 2023, the date that Lynn left the St Clair property as to ¼ by Lynn and as to ¾ by Glenn and Michelle. This agreement is justifiable in granting relief unwinding the parties’ transactions not because that is what the parties agreed in 2022 (which they did) but because their actual consensus in 2022 was a reasonable estimate of their actual usage of these consumable items. Just what falls into the category of the consumables to be shared this way should readily be able to be ascertained. Anything which varies according to the usage of resources of the property or the occupancy of the property should be regarded as a consumable item to be born under this formula – ¼ by Lynn and ¾ by Glenn and Michelle way. Expenditures such as gas and electricity would be prime examples of such expenditure. Water rates (that is paying for a water connection) would not be a consumable item but water usage would be. With this guidance the parties should endeavour to agree upon the quantum of these items. There are other expenditures which the court identifies below that may be more closely related to maintaining the parties’ respective interests in the St Clair property.
Four main elements feature in the logic of unwinding the parties’ transaction and calculating the quantum of what should be paid to them upon the sale of the St Clair property. These three main elements are:
returning the parties’ capital contributions,
apportioning the outgoings required to maintain the property, and
adjusting for disproportionate benefits enjoyed by one party.
In discussing these three main elements the Court does not, other than incidentally, set out here in detail the parties’ competing submissions about what the appropriate course should be. This is because the Court’s findings provide a basis for calculating the unwinding the parties’ transaction which is different in certain respects from both parties’ submissions. Moreover, some integers in the Court’s calculation may potentially require a reclassification of expenditures and outgoings that would alter the basis on which the parties’ submissions were made. Thus, recounting the parties’ detailed written submissions in these reasons would be of limited value.
Moreover, the parties’ submissions included a detailed contest about whether and how effect might be given to the defendants’ promissory estoppel case that there was an inheritance expectation created by Lynn and that promise is accelerated during the lifetime of the parties. The Court is not granting relief on that basis, and those calculations do not need to be considered.
(1) Returning the parties’ capital contributions. The parties’ capital contributions to the joint endeavour should be returned to them. They made capital contributions of different kinds. In the first stage of the calculation these capital contributions should be credited back to the parties. Lynn paid figure just under $400,000 for her one third share of the St Clair property. Glenn and Michelle made their capital contribution by paying down the mortgage for their two thirds share of the property. That should also be credited to them in the calculation.
This raises a sub-question. The sub-question is should the parties be compensated by having interest credited to them for their capital contributions as well as having the capital contributions returned. In the Court’s view that sub-question should be answered in the negative. How each party chose to fund its capital contribution is a matter for that party and the interest paid by that party would depend in part on that party’s credit worthiness and availability of other capital. These matters are essentially extraneous to the equitable adjustments required to unwind the joint-venture and should not found claims for interest compensation by either party. Thus, in relation to Glenn and Michelle’s fixed monthly mortgage payments which partly comprised and interest component and partly a capital component. They should only be credited with the capital component of these mortgage payments.
(2) Apportioning outgoings required to maintain ownership of the property. This element comprises two sub- issues. The first sub-issue is from whose share should the mortgage liability be deducted. The next question is how should other liabilities that were incurred to maintain ownership of the property be borne.
Should the mortgage liability be borne by Glenn and Michelle’s share or by all three shares? The answer to this is that the mortgage liability should be borne by Glenn and Michelle’s two thirds share. This conclusion is reached not because the parties agreed to this liability being shared in this way but because the mortgage was only necessary as a component of Glenn and Michelle’s advance of capital to the joint endeavour. It should therefore be attributed to their share. It would disproportionately benefit Glenn and Michelle for some their borrowings to fund their two thirds share to be paid by Lynn who contributed her own capital to the joint endeavour venture separately. The parties’ agreement about this is really a reflection of the underlying equity in treating the mortgage liability is apportioned to Glenn and Michelle’s share.
A sub-question arises as to how the component of the sum owed to the mortgagee beyond Glenn and Michelle’s 2/3rds share should be apportioned. That is the sum of more than approximately $800,000 of the original mortgage borrowings, namely $110,350. The answer to that depends upon how the additional sum has been applied in fact and the Court’s reasons do not yet make findings about that. If this is disputed, then the issue may need to be reserved for short further consideration. But if it can be established that this additional sum was reinvested into the property and repairs or maintenance in a way that may have added value to the property then the additional sum has not just been raised to fund the defendants’ interest in the property but has potentially been applied to improve the property and may need to be credited in part as an additional contribution from Glenn and Michelle. Otherwise, any other part of this additional mortgage amount which was used by Glenn and Michelle for their own benefit will be brought to account as their liability.
The parties incurred other outgoings to maintain their ownership of the St Clair property or its value, which should be borne in the prospective proportions of their ownership, 1/3 to the plaintiff and two thirds the two defendants. These outgoings are direct contributions to maintaining the value of their ownership and would include council rates, the supply component of water rates, and probably insurance.
(3) Adjusting for disproportionate benefits enjoyed by one party. The disproportionate benefit that has been identified as having been enjoyed by one party is Glenn and Michelle’s occupation of the St Clair property since 9 June 2023 without sharing with Lynn. They should have to compensate Lynn in the final accounting for that sum which the Court understands has been agreed up to the date of the hearing and therefore should not be difficult to calculate up to an agreed date of judgment.
Once these adjustments have taken place each of the parties should enjoy the benefit of such capital gain in the St Clair property as there has been since it was purchased in early 2022. Each party will take a one third share of the sale proceeds after the above adjustments have taken place.
By the conclusion of the hearing, it was no longer disputed that the St Clair property would need to be sold. The parties recognised that the basic economics of their situation demanded such a result. The plaintiff had originally claimed in her amended statement of claim that a registered liquidator should be appointed as a trustee for sale of the property under Conveyancing Act, 1919 s 66G. But the Court was told that the nominee for that purpose would charge about $12,000 for the task. The Court pointed out the parties could probably substantially avoid that expenditure.
If the parties have not yet taken steps towards a sale, orders should be crafted (if necessary, with the assistance of the Court to resolve disagreements) to avoid the need to engage a professional trustee for sale. Suitable terms might be the following. One party could provide three names of prospective agents, with the other party selecting from among the three. The orders can provide that the sale will be by public auction fully advertised in accordance with the recommendations of the chosen agent. If any disagreement arises about the reserve price for the auction or whether an offer of sale by a private treaty before auction should be accepted, the matter can be brought back to Court at the suit of the party disagreeing with the agent’s recommendation. And the party whose position the Court rejects would pay the costs of the referral back to Court. Sale expenses can be jointly funded by the parties. Proceeds of sale may be paid into a controlled monies account subject to payment out in accordance with the Court’s orders.
The plaintiff sought other relief by way of exoneration from all external obligations under the first mortgage. The Court understands that defendants accept that they should exonerate the plaintiff from all such liability.
If any party considers that the Court has not in these reasons yet dealt with any claim for relief on the statement of claim or the cross-claim that should still be resolved based on the Court’s findings then such matters will be reserved for further consideration. The Court will also consider questions of costs once the full financial consequences of the Court’s findings and orders have been worked through.
For these reasons the Court makes the following orders and directions:
DIRECT that the parties bring in short minutes of order to give effect to these reasons including to achieve the sale of the St Clair property as economically as possible in accordance with the structure outlined in the reasons published today.
ORDER that the parties shall do all things necessary to prepare the St Clair property for sale within a reasonable time without the need to appoint trustees for sale.
RESERVE for further consideration the final calculation of the moneys to be distributed to the plaintiff and the defendants in accordance with these orders.
RESERVE for further consideration all questions of costs.
ADJOURN the proceedings for directions concerning any submissions in relation to costs and any other matters reserved for further consideration to Monday 28 September 2026 at 9:30 am, or to such other date as is arranged with the Associate to Slattery J.
**********
Page
Page
[2022] QCA 047
(2005) 63 NSWLR 557
(1989) 16 NSWLR 582
(1987) 164 CLR 137
(1956) 99 CLR 362
(1983) 151 CLR 447
(1990) 170 CLR 394
(2011) 83 NSWLR 728
(1994) 35 NSWLR 206
(1999) 196 CLR 101
(1953) 90 CLR 113
(2013) 250 CLR 392
(2024) 281 CLR 484
(1996) 188 CLR 449
(1985) 160 CLR 583
(2022) 109 NSWLR 390
(2022) 110 NSWLR 86
(2015) 236 FCR 199
(2014) 251 CLR 505
(2017) 263 CLR 85
(1995) 184 CLR 102
(1988) 164 CLR 387
(1996) 66 FCR 246
(1988) 76 ALR 513
(1988) 62 ALJR 110
(1999) 161 ALR 473
(1999) 73 ALJR 547
(2014) 308 ALR 232
(2014) 88 ALJR 640