Bernhardt v Bernhardt

[2019] NSWSC 1632

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Bernhardt v Bernhardt [2019] NSWSC 1632

Hearing dates:

21 November 2019

Date of orders:

21 November 2019

Decision date:

21 November 2019

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

(1) Judgment for the plaintiff for possession of the land described in Folio Identifier Lot 1 Strata Plan 53223, being the land situated at and known as xxx xxxxx xxxxx, Forster in the State of New South Wales.

 

(2) Grant leave to issue a writ of possession forthwith.

 (3) Order the defendant to pay the plaintiff's costs of the proceedings.

Catchwords:

LAND LAW – Torrens title – Indefeasibility of title – registered proprietor entitled to possession

  LAND LAW – Conveyancing – Requirements of writing – Creation or disposition of interest in land – defendant a bare licensee

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 56
Conveyancing Act 1919 (NSW), ss 23C, 23D
Real Property Act 1900 (NSW), s 42
Uniform Civil Procedure Rules 2005 (NSW), rr 29.7, 42

Cases Cited:

Cowell v Rosehill Racecourse Company Limited (1937) 56 CLR 605; [1937] HCA 17
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7

Category:

Principal judgment

Parties:

Barbara Ann Bernhardt (Plaintiff)
Kim Bernhardt (Defendant)

Representation:

Counsel:
H Woods (Plaintiff)

  Solicitors:
Pryor Tzannes & Wallis

File Number(s):

2019/147373

Publication restriction:

Nil

Judgment

Introduction

1. Barbara Bernhardt (the plaintiff) is the registered proprietor of a property at Forster (the Property). She no longer lives in the Property and presently lives in an aged care facility. She is 86 years old. One of her daughters, Kim Bernhardt (the defendant), remains in residence of the Property, notwithstanding several requests by the plaintiff and her solicitors that she vacate the Property. The plaintiff has commenced these proceedings to obtain vacant possession of the Property so that it can be sold to meet various expenses she has incurred, including for her present accommodation. At the conclusion of the hearing I made the following orders in favour of the plaintiff: first, judgment for possession of the Property; second, leave to issue a writ of possession forthwith; and third, that the defendant pay the plaintiff’s costs. I indicated that I would provide reasons in due course. My reasons for making the orders are as follows.

The course of the proceedings

2. Because the defendant did not appear at the hearing on 21 November 2019 and, during the course of the hearing, sent an email to this Court seeking to explain her absence, it is necessary to set out the history of this matter in some detail.

3. The proceedings were commenced by statement of claim filed on 10 May 2019. The defendant filed a defence on 7 June 2019 in which she alleged that there was a “private agreement” between herself and the plaintiff “concerning the [Property]”, as a consequence of which she disputed the plaintiff’s claim for possession. When the matter came before Lonergan J for directions on 25 June 2019, the plaintiff was represented by Mr Daniele, her solicitor, and the defendant appeared in person.

4. Lonergan J offered to refer the defendant for pro bono assistance, which she declined. The plaintiff’s solicitor foreshadowed an application to strike out the defence. Her Honour made directions, including that each party file and serve an affidavit setting out her recollection of any arrangement she made with the other party regarding the continued occupation of the Property by the defendant. Each affidavit was to be filed and served by 12 July 2019.

5. The plaintiff filed and served an affidavit sworn 12 July 2019 in which she denied that there was any such arrangement. The relevant paragraphs of the affidavit are extracted below.

6. On 12 July 2019 the defendant swore an affidavit setting out her version of the arrangement. Although that affidavit was not read in the proceedings before me, Mr Woods, who appeared on behalf of the plaintiff, tendered a bundle of correspondence which comprised the plaintiff’s requests for particulars of the alleged arrangement and the defendant’s response, which are referred to in more detail below.

7. A further directions hearing on 31 July 2019 was adjourned as the defendant’s telephone connection was not consistent which impeded her participation.

8. On 6 August 2019 the matter came before Lonergan J for directions. Mr Woods appeared for the plaintiff. The defendant took part by telephone. Her Honour made directions for the further service of particulars, evidence and submissions and listed the matter for final hearing on 21 November 2019 with an estimate of one and a half days.

9. On 18 August 2019 the defendant sent an email to Lonergan J’s associate in which she indicated that she would provide her further evidence by “31 [sic] September 2019”.

10. In an email to the plaintiff’s solicitor dated 3 September 2019, the defendant provided particulars of the alleged private arrangement. These particulars are extracted in the narrative below.

11. At 10am on 21 November 2019, being the date allocated for the hearing, the defendant did not appear. My associate called the defendant’s name outside the court three times but there was no answer. My associate used the phone inside the courtroom to ring the defendant, using the mobile number set out on the defence but was told that the person was unavailable.

12. Mr Woods applied, pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 29.7(2)(a), for the matter to proceed in the absence of the defendant. I acceded to the application and gave reasons ex tempore. Mr Woods proceeded to read affidavits in support of the plaintiff’s claim. He also called Wendy Cruikshank who gave evidence that she had visited the Property last week and had spoken with a neighbour who had told her that he had seen the defendant recently and that it was her habit to drive into the garage without engaging with the neighbours. Mr Woods proceeded to make submissions as to why the plaintiff was entitled to the relief sought.

13. At 10.31am on the morning of the hearing while Mr Woods was in the course of making submissions, an email was forwarded by the Court’s enquiries email. The email, which had been received by the Court from the defendant at 8.39am, said:

“This is to confirm that I am presently waiting to see my GP as I am unable to attend court today.

As soon as I organise a scanned copy of the certificate I shall email that document to the court immediately.”

14. The email attached a letter from Dr Claire Hebbard dated 21 November 2019 which said:

“Kim [the defendant] is unable to attend her court proceedings today as she has been very anxious with the recent severe bushfires in the area. She has not been sleeping and is suffering from recurrent panic attacks that have been heightened by these court proceedings. Her Clinical Depression has also been exacerbation [sic] with the current recent severe stressors. The bushfires and trauma of potentially becoming homeless has triggered her PTSD. Please consider this during the court proceedings.”

15. Dr Hebbard’s letter identified the defendant’s address as the Property.

16. At this point, Mr Woods sought leave to re-open the plaintiff’s case to tender the particulars of the “private arrangement” provided by the defendant. He referred to the overriding purpose of the Civil Procedure Act 2005 (NSW) and the UCPR: namely, to “facilitate the just, quick, and cheap resolution of the real issues in the proceedings”: s 56 of the Civil Procedure Act. He submitted that the purpose would not be advanced by an adjournment of the proceedings since the defence, at its highest, did not amount to a defence to the plaintiff’s claim for possession. He also submitted that the plaintiff would be prejudiced by an adjournment because her health was precarious and she was troubled by the litigation and her inability to pay her debts until the house was sold with vacant possession.

17. I do not regard the defendant’s email as amounting to an application for an adjournment. At best, it is an explanation for her absence from the hearing. In any event, there is considerable force in Mr Woods’ submission that an adjournment would be futile because the defence relied upon does not amount to a defence to the plaintiff’s claim for possession. This is a case where summary judgment could have been ordered on this basis.

The facts

18. The plaintiff, as sole registered proprietor, is entitled to exclusive possession of the Property. Notice has been given to the defendant, who is the only person in occupation of the Property. The defendant has refused to vacate the Property. These bare facts are sufficient to entitle the plaintiff to the orders sought. However, by reason of the defence filed and the particulars given, it is appropriate that I set out the background facts in some detail to explain why the defendant’s purported defence would not defeat the plaintiff’s claim even if she had appeared at the hearing to prosecute it.

19. The plaintiff, who was born in 1933, has two daughters: the defendant and Belinda. Until about May 2017 the plaintiff lived in a unit at Coogee (the Coogee Property) of which she was sole registered proprietor.

20. On 7 February 2017 the plaintiff executed an enduring power of attorney (the February 2017 EPA) which had been prepared by Mr Saivanidis on her instructions. She appointed her two daughters as her attorneys. Clause 4 of the February 2017 EPA provided:

“This power of attorney operates once a medical practitioner considers that I am unable to manage my affairs, and provides a document to that effect.”

21. I am satisfied that the condition specified in cl 4 has not yet been fulfilled. I accept the evidence of Mr Saivanidis, the plaintiff’s solicitor, that the plaintiff has, at all material times, been capable of providing him with instructions.

22. In about February 2017, the plaintiff decided to sell the Coogee Property and instructed Mr Saivanidis’ firm to act on her behalf. In February 2017 the plaintiff entered into a contract for sale of the Coogee Property.

23. In about March 2017, the plaintiff instructed Mr Saivanidis’ firm to prepare a new will in which she would leave her whole estate to the defendant. To Mr Saivanidis’s knowledge, the plaintiff’s previous will, which had been executed on 9 February 1996 (the 1996 will), provided for her estate to be left equally to her two daughters. The plaintiff executed the new will on 20 March 2017 (the March 2017 will). She appointed Wendy Cruickshank as her executrix. The March 2017 will provided that the defendant was the sole beneficiary of the plaintiff’s estate.

24. The sale of the Coogee Property settled on 22 May 2017. The proceeds of sale were held by Mr Saivanidis’ firm in a trust account for the plaintiff’s benefit, awaiting her instructions.

25. In about August 2017, Mr Saivanidis became concerned for the plaintiff’s welfare and believed that the defendant was placing pressure on her to release the proceeds of sale of the Coogee Property. In September 2017, the plaintiff used the proceeds of sale of the Coogee Property to buy the Property. On about 29 September 2017, following the purchase of the Property, the defendant moved in to live with the plaintiff. I am satisfied, on the basis of Ms Cruikshank’s evidence and the letter from Dr Hebbard, that the defendant continues to reside at the Property.

26. In November 2017, the plaintiff approached Mr Saivanidis’ firm, requesting that Mr Saivanidis be appointed as her attorney and guardian. The request was made without his prior knowledge. His firm arranged for an independent solicitor to advise the plaintiff and witness her execution of the documents. The plaintiff also gave instructions for a new will which would provide for her estate to be divided equally between her daughters.

27. On 27 November 2017 the plaintiff revoked the February 2017 EPA and executed another enduring power of attorney (the November 2017 EPA), in which she appointed Mr Saivanidis as her attorney. It contained a term identical to the one in cl 4 of the February 2017 EPA. On that day the plaintiff also executed an appointment of enduring guardian, appointing Mr Saivanidis as her guardian and a new will which provided for her estate to be divided equally between her daughters (the November 2017 will).

28. On 6 February 2018, the plaintiff moved out of the Property and into a respite care facility. At about this time, Mr Saivanidis became aware that the plaintiff was no longer residing at, and did not want to return to, the Property. He sent Paul Crane, an employed solicitor at the firm, to visit the plaintiff to obtain her instructions as to her future care.

29. On 22 February 2018, the plaintiff revoked the November 2017 EPA and executed another enduring power of attorney in which she appointed Mr Saivanidis as her attorney (the February 2018 EPA). The February 2018 EPA was registered. Unlike in the February 2017 EPA and the November 2017 EPA, the February 2018 EPA provided for commencement in cl 4 as follows:

“This power of attorney operates once the attorney/s have accepted their appointment by signing this document.”

30. On 26 February 2018, Mr Saivanidis’ firm received a copy of progress notes from the respite care facility where the plaintiff was residing. The notes recorded that the plaintiff told her carers that she did not want to go home to the defendant because she was verbally abusive to her.

31. On or about 28 February 2018, the plaintiff moved to the aged care facility where she now resides. On 8 March 2018, Mr Saivanidis visited the plaintiff to obtain her instructions, as a result of which he wrote to the defendant on 14 March 2018 to request that she not contact the plaintiff until at least the end of June 2018. The letter, which informed the defendant that the plaintiff’s location would not be disclosed to her, concluded:

“[The plaintiff] has requested we stress she still loves you and she will review her decision at the end of June and if she then feels she is able to cope, she will meet with you and hopefully establish a healthy ongoing relationship. Barbara has no intention of excluding you out of her life, she just needs time to recover her health and independence.”

32. Mr Saivanidis conferred with the plaintiff again on 20 July 2018, at which time the plaintiff instructed him to sell the Property to repay her debts and pay her current living expenses. The firm confirmed the plaintiff’s instructions in a letter dated 25 July 2018.

33. By letter dated 4 October 2018, Mr Saivanidis’ firm wrote to the defendant informing her that the plaintiff wished to sell the Property and offering her the opportunity to purchase it. The letter concluded:

“If you do not wish to purchase the Property then you agree to vacate the Property and leave the house and grounds in good repair and in a neat and tidy condition within 60 days of receiving this letter.

If you do not reply to this letter within the next 14 days we will assume you have rejected this offer and will immediately commence the legal process to obtain vacant possession of the Property, which will be extremely expensive and stressful for all involved.”

34. On 19 November 2018 the defendant sent an email to the plaintiff’s solicitors in which she said, in part:

“My mother and I have a private agreement. In that agreement, my mother gave me [the Property]. In that agreement, my mother promised me the aforesaid house. Written representation of this private agreement is evidenced in her Last Will and Testament, which was executed by your firm of which I am Executor and witnesses by several other people.”

35. The plaintiff’s solicitors sought the plaintiff’s written instructions as to the following matters:

“1   do you recall any private agreement with [the defendant] that you would give her [the Property];

2   do you still require us to take legal proceedings to evict [the defendant] from the unit so that you can proceed with the sale of the unit; and

3   would you please confirm these instructions are given of your own free will and volition, free of any influence or suggestion from [Mr Saivanidis] or this firm.”

36. The plaintiff responded on 29 November 2018:

“In reply to your letter dated 22 November 2018, seeking written instruction[s] I state:

1.   No, at no stage. But I corrected [the defendant] when she referred to the House as “hers” and reminded her that it was my House;

2.   Yes. I instruct you to go ahead with the sale; and

3.   I confirm these instructions are given of my own free will and volition, free of any influence or suggestion from [Mr Saivanidis] or this firm.”

37. By letter dated 5 December 2018, the plaintiff’s solicitors responded to the defendant by denying the allegation of private agreement and reiterated the plaintiff’s request for vacant possession within seven days from the date of the letter.

38. As referred to above, the proceedings were commenced by statement of claim filed on 10 May 2019. On 15 May 2019, at 12.30pm, Peter Iverson, a process server, attempted to serve the defendant by going to the Property. He noticed a sign in the front window of the Property which said, “Legal Warning Notices – No Trespass – Stop Warning!”. When he pressed the doorbell, knocked on the door and called out, there was no response. He observed mail addressed to each of the plaintiff and the defendant sticking out of the mailbox. Later that day, 1.07pm, he returned to the Property and affixed an envelope containing a “notice to occupier” to the front door. At 6.38pm that evening, Mr Iverson returned to the Property. He noticed that lights were on inside and that there was a pair of thongs outside the front door. The envelope was still stuck to the front door. He knocked several times and called out. While Mr Iverson was attempting to remove the envelope from the door, it was opened by a female, who denied that she was the defendant.

39. On 23 May 2019 the plaintiff’s solicitors gave Mr Iverson a photograph of the defendant whom he identified as the same woman who had opened the door to him on 10 May 2019.

40. On 25 May 2019, Mr Iverson returned to the Property. The security screen door was locked, all the blinds were drawn and he was unable to see inside. A sign had been erected beside the front door bell which said: “Private Property Keep Out!” Mr Iverson saw a pair of pink thongs outside the front door. He pressed the door bell, knocked on the door and called out but received no response. The mail had been cleared from the mailbox. Mr Iverson opined, in his affidavit of 30 May 2019, that the defendant was avoiding service and that if documents were left at the Property, they would come to her attention.

41. According to the notes kept by staff at the facility where the plaintiff resides, at 8.30pm on 11 or 12 August 2019, the defendant came to the facility to see the plaintiff. The defendant went into the plaintiff’s room. The plaintiff told her that she did not want to talk to her. The defendant left the room, crying, and then left the facility.

42. In an email dated 3 September 2019, the defendant provided to the plaintiff’s solicitors the following particulars of the alleged private arrangement with the plaintiff:

“1.    On or about February 2017, My Mother makes it clear to Belinda by phone that I am to have the house saying to her ‘If I have to go to an aged care facility, then Kim will continue living in the house, it will be hers.’

2.    On or about February 2017, My Mother said, ‘Taking on the role of carer is a huge task for Kim and one that I really appreciate, Belinda.’ My Mother said, ‘It's fair that Kim gets the house’. She asked Belinda, ‘Do you agree Belinda?’ Belinda said ‘Yes Mum’. My Mother said, ‘It's the right thing to do, to make sure that whatever happens to me the house is to be Kim's’, Belinda agreed. My Mother is very adamant that the three of us acknowledge our agreement. My Mother asks Belinda, ‘Belinda, I want you to promise me.’ Belinda said, ‘Yes Mum I promise.’

3.    On or about 13 February 2017, My Mother is discharged from the POWH. When we arrive home My Mother asks me to call Belinda. Again the three of us talk about My Mother's wishes for me to have the house. Belinda again agrees.

4.    On or about 1 March 2017, My Mother talks about her dying at home and never having to go to an aged care facility. It is during this period that My Mother says, ‘I don't know what I'd do without you Kim. You have been so kind. You're wonderful. Whatever happens to me I want to make sure you're safe and you have a home. And I need to discuss this with Belinda so that we all agree’.

5.    On or about 2 March 2017, My Mother insists I call Belinda. During the conversation, My Mother says to Belinda, ‘You agree don't you Belinda, that whatever happens to me, Kim will stay in the house? It will be hers. We all agree don't we?’ My Mother asks me again do I agree. I said ‘Yes’. Then Mum asks Belinda again and she also says, ‘Yes’. My Mother is both firm and specific when she says, ‘It's only fair Belinda. Kim is doing a fantastic job as my carer. If anything happens to me I want Kim to have the house.’

6.    On or about 20 March 2017, Elias Kheir an agent of PT&W Law arrives to execute My Mother's last will and testament at Unit 2/108 Beach Street, Coogee, New South Wales. My Mother's friend and neighbour Robyn Renilson (retired) from Beach Street, Coogee, New South Wales is in attendance. Before witnessing, Mum shares with Robyn that Belinda and I promised and agreed that whatever happens to her I will stay and live in the house.”

43. Mr Crane, an employed solicitor in Mr Saivanidis’ firm, swore an affidavit on 17 September 2019 which established that the plaintiff’s current cash reserves are insufficient to pay debts she owes to the aged care facility where she currently resides but the expected proceeds of sale of the Property will substantially exceed the amount of those debts.

44. Mr Daniele, an employed solicitor in Mr Saivanidis’ firm, attempted to contact the defendant by email and telephone on 15 and 19 November 2019. She did not respond to the emails and the phone calls went through to her voicemail.

Consideration

45. It appears that the defendant contends that, by reason of a private arrangement between herself and the plaintiff, she has an interest in the Property which entitles her to possession of the Property to the exclusion of the plaintiff, or at least to the exclusion of the rest of the world apart from the plaintiff. The parties’ positions on this issue are as follows.

46. The plaintiff’s evidence in her affidavit of 5 July 2019 is:

“20   To the best of my knowledge and belief, Kim refuses to vacate the Forster Property.

21   I understand that Kim alleges that she and I have a private agreement whereby I agreed to give her the Forster Property. I deny this. I have never agreed to give to Kim the Forster Property. I also did not have a conversation with Kim to the effect that the Forster Property belonged, or would belong at any time, to her.

22   At various times while Kim and I were residing together at the Forster Property, Kim would often refer to the Forster Property as ‘her unit’ or ‘our unit', however I would always correct her and tell her words to the effect of ‘it is my unit’.

23   The Forster Property is my only asset and I would not have agreed and have not agreed to give it to Kim at any time.

24   I have instructed my lawyers to commence these legal proceedings seeking orders for Kim to vacate the Forster Property so that I can sell it.”

47. There is a conflict between the plaintiff’s evidence set out above and the version given by the defendant in the particulars extracted above. I have seen and heard neither the plaintiff nor the defendant give evidence. However, it is, in my view, noteworthy that the conversations which are alleged to have given rise to the “private arrangement” pre-dated the purchase of the Property and occurred at a time when the plaintiff was still living in the Coogee Property. It is difficult to accept that the plaintiff made statements about the Property in February 2017 when, at that time, the plaintiff was still living in the Coogee Property and would not enter into a contract to buy the Property until about September 2017.

48. Further, it is also significant that the statements alleged to have been made by the plaintiff to the defendant were made shortly prior to 20 March 2017 when the defendant became the sole beneficiary under the plaintiff’s will. She remained the sole beneficiary for the following period of about eight months until the plaintiff executed the November 2017 will which, once again, provided for her estate to be divided equally between her daughters. It is possible that the plaintiff told the defendant that she would inherit her mother’s estate and that, upon the purchase of the Property, the defendant assumed that the Property would be hers, as it would have been had the plaintiff died before executing the November 2017 will. This scenario is consistent with the defendant’s statement in her email dated 19 November 2019 extracted above, which seeks to use the March 2017 will to corroborate the oral statements.

49. The starting point is that the plaintiff, as the registered proprietor of the Property, has a “paramount” estate: s 42 of the Real Property Act 1900 (NSW).

50. The defendant claimed an interest in the Property on the basis of oral statements alleged to have been made to her by the plaintiff in February 2017. I reject the defendant’s contention, in her email dated 19 November 2019, that the March 2017 will constituted written evidence of the oral statements. Subject to presently irrelevant exceptions, a testator is free to change his or her will at any time before death as long as the testator has testamentary capacity.

51. Even if the version given by the defendant were to be accepted at its highest, it would not be sufficient either to give her an interest in the Property or provide a defence to the plaintiff’s claim for possession. The oral statements alleged to have been made by the plaintiff to the defendant were incapable of having the effect for which the defendant contended. Section 23C of the Conveyancing Act 1919 (NSW) requires instruments which create an interest in land to be in writing. Section 23D of the Conveyancing Act provides that interests created orally and not put in writing and signed shall have the “force and effect of interests at will only”. Thus, the defendant has, at best, a bare licence, which is revocable at will or on reasonable notice: Cowell v Rosehill Racecourse Company Limited (1937) 56 CLR 605 at 630-631 (Dixon J); [1937] HCA 17.

52. Further, although s 23C of the Conveyancing Act does not exclude the law relating to trusts, there is no room for a constructive trust in the present case as the Property was purchased entirely with funds provided by the plaintiff from the proceeds of the Coogee Property. Nor was any representation made by the plaintiff from which it would be unconscionable from her to depart or upon which it would be reasonable for the defendant to rely: cf. Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-429 (Brennan J); [1988] HCA 7.

53. For these reasons, the defendant has not raised an arguable defence to the plaintiff’s claim. Any right to possession which she may have had amounted to no more than a bare licence, which has been terminated by reasonable notice.

54. Accordingly, the plaintiff is entitled to a judgment for possession. As the plaintiff has a right to immediate possession, she is entitled to have a writ of possession forthwith.

Costs

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

Orders

56. For the reasons given above, I made the following orders at the conclusion of the hearing on 21 November 2019:

1. Judgment for the plaintiff for possession of the land described in Folio Identifier Lot 1 Strata Plan 53223, being the land situated at and known as xxxx xxxxx xxxx, Forster in the State of New South Wales.

2. Grant leave to issue a writ of possession forthwith.

3. Order the defendant to pay the plaintiff's costs of the proceedings.

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Amendments

25 November 2019 - [44] typographical error corrected.

Decision last updated: 25 November 2019