Buono v Mazzella - [2016] NSWSC 659

Supreme Court

New South Wales

Medium Neutral Citation: Buono v Mazzella [2016] NSWSC 659
Hearing dates: 26, 27, 28 & 29 April 2016
Date of orders: 26 May 2016
Decision date: 26 May 2016
Jurisdiction: Common Law
Before: Harrison AsJ
Decision:
Judgment:

(1) It is adjudged that the plaintiff/first cross defendant have possession of the property described in paragraph 1 of the statement of claim.

The Court orders that:

(2) The cross claim is dismissed.

(3) The cross claimant is to pay the first cross defendant’s costs of the cross claim.

(4) The defendant is to pay the plaintiff’s costs of these proceedings to date.
(5) Paragraphs 3 and 4 of the statement of claim are listed for directions before the Registrar at 9.00 am on Tuesday, 26 July 2016.
Catchwords:
REAL PROPERTY – possession of land – defendant resided in upstairs apartment – property owned by former mother in law – defendant only entitled to remain on property until adult children grew up and left – plaintiff entitled to possession
REAL PROPERTY – possession of land – defendant claims equitable or contractual relief in cross claim – resulting trust – constructive trust – equitable lien – equitable charge – proprietary estoppel – estoppel by conduct and promissory estoppel – contractual relationship entitling defendant to live on property forevermore – defendant did not establish factual bases for cross claim – cross claim dismissed
Cases Cited: Balfour v Balfour [1919] 2 KB 571
Calverley v Green (1984) 56 ALR 483
Cohen v Cohen (1929) 42 CLR 91
Jones v Padavatton [1969] 2 All ER 616
Muschinski v Dodds [1985] HCA 78; 160 CLR 583
Shepherd v Doolan [2005] NSWSC 42
Smilevska v Smilevska (No 2) [2016] NSWSC 397
The Commonwealth v Verwayan (1990) 170 CLR 394
Waltons Stores (Interstate) Ltd v Maher (1988) 76 ALR 513
Young v CAN 081 162 512 [2005] NSWSC 139
Texts Cited: JD Heydon and J Lehane, Jacobs’ Law of Trusts in Australia, (7th ed 2006, LexisNexis Butterworths)
Category: Principal judgment
Parties: Maddalena Buono (Plaintiff/First Cross Defendant)
Porfirio Mazzella (Defendant/Cross Claimant)
Julie-Anne Williams aka Nancy Buono (Second Cross Defendant)
Representation:
Counsel:
G Turner (Plaintiff/Cross Defendant)
Solicitors:
CKB Associates Lawyers (Plaintiff/Cross Defendant)
P Mazzella (Defendant/Cross Claimant in person)

File Number(s): 2015/137381
Publication restriction: Nil

Judgment

HER HONOUR: The plaintiff seeks possession of property (an upstairs flat) at XXX Road Willoughby. The defendant, her now ex son-in-law, remains in occupation together with his current wife and her child. He has cross claimed against the plaintiff seeking to remain in possession and other relief.
The plaintiff/first cross defendant is Maddalena Buono. The defendant/cross claimant is Porfirio Mazzella. The plaintiff, Salvatore Di Costanzo (the plaintiff’s partner), Luigi Balestriere, Madeline Mazzella (the defendant’s youngest) daughter and the defendant have all filed affidavit evidence. Julie-Anne Williams, also known as Nancy Buono and Nancy Williams, is the plaintiff’s (adopted) daughter, the ex-wife of the defendant and the mother of Madeline Mazzella. For ease of understanding and without meaning any disrespect, I shall refer to her as Nancy. She is the second cross defendant. She did not file any affidavit evidence. She appeared at this hearing but up until then had taken no part in the proceedings. She did not file an affidavit or a defence to the cross claim. She gave evidence and was cross examined. All witnesses gave evidence and were cross examined.
The plaintiff was represented by Mr G Turner of counsel and Mr S Barry, solicitor. Mr Mazzella was self-represented at the hearing. He used the services of an Italian interpreter throughout the hearing.
By statement of claim filed 8 May 2015, the plaintiff seeks judgment for the plaintiff for possession of the land comprised in Certificate of Title Folio Identifier B/XXXX being the land situated at and known as X XXXX Road, Willoughby; leave to issue a writ of possession forthwith; and reserve for further consideration the issue of damages and mesne profits after the issue of a writ for possession. The defendant does not dispute that on 2 December 2014, the plaintiff requested the defendant to vacate the property and that the defendant, together with his wife and step daughter remain in the property.

Background

The plaintiff is the owner of a property at XXXX Road, Willoughby (“the Willoughby property”). She is currently 80 years of age. In 1954, when she was aged 19 years, the plaintiff migrated to Australia with her family. In April 1958, aged 23, the plaintiff married Antonio Buono.
In about December 1963, the plaintiff and her husband adopted their daughter, Nancy who was born in 1962.

The Willoughby property

In 1965, the plaintiff and Antonio Buono purchased the Willoughby property in joint names. From about 1973, the Willoughby property was a single story dwelling which was divided into an attached one bedroom “granny flat” and the main home. The internal doors for entering the rooms which comprised the granny flat were closed off but could be re-opened if necessary. The main part of the ground floor at that time comprised of two bedrooms, a kitchen, lounge room, dining room, bathroom and laundry. The granny flat comprised one bedroom with an ensuite, a kitchen with a good size refrigerator and stove and a small lounge area. The granny flat was tenanted.
Nancy lived with the plaintiff and Antonio Buono in the Willoughby property until they moved to Italy in 1978.
In 1981, while they were still in Italy, the plaintiff and Antonio Buono separated. The plaintiff returned to Australia and moved back into the Willoughby property. Nancy came back to Australia and lived with the plaintiff for a while before moving out of home. In about March 1984, Nancy returned to Italy and lived with her father Antonio in his home on the island of Ischia.
In about 1983, she started a de facto relationship with her current partner Salvatore Di Costanzo (“Salvatore”). In that same year, Salvatore moved into the property to live with the plaintiff. From the time that Salvatore moved in with the plaintiff, they have occupied the main section of the home.
In 1985, the plaintiff and Antonio Buono divorced. That same year the plaintiff and Antonio Buono entered into a matrimonial property settlement. By transfers dated 20 November 1985 Antonio Buono transferred to the plaintiff his interests in the Willoughby property and an investment property in St Leonards.
Salvatore and the plaintiff still live together. Salvatore does not pay the plaintiff rent. They share food expenses and Salvatore provides handyman assistance for some jobs around the property. Salvatore and the plaintiff do not have any significant jointly owned assets. He has his own assets.
In 1984, Nancy met the defendant in Ischia, Italy. The defendant was born in Italy on 24 July 1955. He lived on the island of Ischia in Italy from the time he was born until 7 February 1987, except for a period between 1979 and 1984 when he moved to Germany and worked there as a chef.
In September 1984, Nancy and the defendant married. Before that date the plaintiff had returned to Sydney. Nancy and the defendant remained in Ischia living rent free in a two bedroom apartment owned by Nancy’s father, Antonio Buono. Nancy and the defendant went on to have four children during their marriage.
On 4 January 1986, the defendant and Nancy had their first child, Julianne, who was born in Italy. Before Julianne was born, Mr Buono offered Nancy and the defendant his house to live in in Italy. In around early 1986, the defendant and Nancy moved and lived in Mr Buono’s house. Also before Julianne was born, Nancy invited the plaintiff to come to Ischia around the time of the birth of her first child. In 1986 the plaintiff went to Ischia for three months to see Nancy, the defendant and their baby. She arrived in Italy shortly before the birth of Julianne and stayed in accommodation by herself. She spent a lot of time with Nancy and some time with the defendant.
The plaintiff says that a conversation between herself and Nancy took place when the defendant was present. The conversation was to the following effect:

“Nancy: “Mum, I am not happy here. I miss my family and friends. I want to come back to Sydney. The defendant is not working. There is not much work on the island. There are more jobs in Sydney.”
Plaintiff: “I can see that you are not happy.””
(Aff, 30/10/2015, [27(e)].)

The defendant’s version of a conversation around this time is that he, Nancy and the plaintiff had a discussion during which words were said to the following effect (in Italian):

“Plaintiff: “I know that Nancy is pregnant. Rio, you should come and live with us in Australia.”
Defendant: “I don't think so, I live in a beautiful part of Italy and have a good job here as a chef. Plus I don't like flying.”
Plaintiff: “I have a house and often live alone. I miss my daughter and my family. I would love for you all to come and live with me. I just want to keep my family close.”
Defendant: “Ok, if Nancy wants to.””
(Aff, 25/9/2015, [5].)

The defendant was not working at the time of Julianne’s birth as he says that he took time off work to help Nancy during her pregnancy. Before that time he claims to have worked running a taxi boat business with his father during the summer and as a chef during the winter. He also claims to have had savings from his previous work to allow him to take time off for the birth of their first child.
The defendant says that Antonio Buono allowed Nancy and him to live in the two bedroom apartment rent free as a wedding gift. On the third day of the hearing, he produced a document handwritten in Italian that had not been translated into English (Ex 1) which he says is evidence to show that Mr Buono gave him and Nancy the apartment as a wedding present. In cross examination the defendant asked Nancy:

“Q. INTERPRETER: You said earlier that we didn’t have anything, we didn’t own anything, but doesn’t this document show that we did have something, namely we had the apartment that was given to us by your father?
A. No, it’s not true. This document doesn't say that he gave us the apartment. This document says that we left the apartment to move over to my mother’s apartment, and we’d taken the key with us, that my father wanted the key back for the granny flat. And, plus, that's not his signature either.”
(T104.23-29.)

Nancy’s evidence is that it is a letter from Mr Buono requesting the return of the key to his apartment (Ex 1).
Sometime later while the plaintiff was still on the island of Ischia, Nancy said to the plaintiff words to the effect, “we have decided to come to Sydney. I have asked for the immigration forms from the consulate.” (Aff, 30/10/2015, [27].) After the plaintiff returned to Australia from Ischia, Nancy and the defendant organised the necessary immigration papers in Rome for the defendant and Julianne to come to Australia.
Later in 1986 the plaintiff had a telephone conversation with Nancy in Italian to the following effect:

“Nancy: “Mum, we got all of the immigration papers finalised and we can come to Sydney, but we have no money to pay the airfares. Can you pay the airfares for us? Also, we have nowhere to stay when we get to Sydney. Can we stay with you and Salvatore for a while?”
Plaintiff: “Okay. I will pay the airfares. You can stay with us for a little while.””
(Aff, 30/10/2015, [29].)

In 1986, the arrangement between the plaintiff and Nancy was that she and the defendant and their daughter could stay with the plaintiff and Salvatore for a while at the Willoughby property.
In 1986, the plaintiff was renting out the Willoughby property’s granny flat to a student. After the plaintiff spoke to Nancy about Nancy and her family staying with her and Salvatore, the plaintiff arranged for the student to move out. The plaintiff booked the defendant’s and Nancy’s flight and paid for their airfares and they arrived in Sydney.
In February 1987, when Nancy, the defendant and Julianne arrived in Sydney, the defendant says that he brought $15,000 cash with him, which he had withdrawn from his German bank account that he had opened when he worked as a chef in Germany from 1979 to 1984. Nancy’s evidence is that the defendant did not have savings of $15,000 when he came to Australia. The plaintiff’s evidence is that she was never aware that the defendant had any significant savings before arriving in Australia (T83.23-28).
In February 1987, Nancy, the defendant and their baby Julianne moved into the granny flat on the ground floor of the Willoughby property. In July 1987, Nancy and the defendant had a second child, Carlo Mazzella. After Carlo’s birth, the two children slept in the lounge room of the granny flat.

Purchase and sale of the Toronto property

The plaintiff’s father passed away in 1983. In 1988, the plaintiff received an inheritance of about $80,000 from his estate. In the middle of 1988, the plaintiff had a conversation with Nancy concerning Nancy’s living arrangements. The conversation was to the following effect:

“Plaintiff: “I received an inheritance from my late father and I want you to have your own home to live in. You can have up to $100,000.00 to buy a home.”
Nancy: “Thankyou. I will start looking.””
(Aff, 30/10/2015, [39].)

Thus in 1988, there was a further agreement between the plaintiff and Nancy, that Nancy could have up to $100,000 to buy her own home to live in.
Sometime later Nancy told the plaintiff that she had located a property at Blackalls Park near Toronto which was for sale for less than $100,000. The property was a four bedroom home on approximately 1700 m2 (“the Toronto property”). It consisted of a free standing house and a separate self-contained flat. A photograph of the Toronto property is shown in Ex A. The plaintiff inspected the Toronto property with Nancy and the defendant. In October 1988, the plaintiff and Nancy negotiated the purchase of the property at a purchase price of $88,000.
It was intended that the plaintiff, the defendant and Nancy each have a one third interest in the Toronto property. The defendant says that he paid one third of the purchase price plus acquisition costs of the Toronto property. The defendant’s evidence is that he had saved one third of the purchase price of the Toronto property prior to purchasing it. The plaintiff’s evidence is that the defendant paid a small holding deposit of about $100 to the selling agent and she paid the balance of the deposit when contracts for the purchase were exchanged. The plaintiff says that she paid the remainder of the purchase price together with stamp duty and legal fees. However, on this topic, the plaintiff is partially incorrect. At this hearing, the defendant produced two receipts issued to “Mr & Mrs Mazzella” from RM Henry & Son solicitors dated 6 and 13 October 1988 (Ex 2). The first receipt is in the name of “Mr & Mrs Mazzella” for the sum of $4,300 as “part deposit Mazzella purchase from Lilly”. The second receipt is in the name of “Nancy & Porfirio Mazzella” for the sum of $985.75 for “our account costs & disbursements Mazzella & Anor purchase from Lilly”. The defendant’s evidence is that he paid a one third share of $30,000 of the purchase price and the costs and disbursements totalling $5,285.75. I accept that the defendant paid the sum of $5,285.75 but no more. I shall make findings on this issue after have I referred to the parties’ credibility and the defendant’s work history later in this judgment.
On 2 December 1998, settlement of the purchase of the Toronto property took place. The property was purchased in the names of Porfirio Mazzella, Nancy Mazzella and Mrs Buono.
The defendant says that at that time it was not his intention to purchase the Toronto property to live in it but rather to buy it as an investment. He says that he did not discuss moving into the Toronto property with his family, the plaintiff, Nancy or anyone else.
Nancy and the defendant rented the Toronto property to tenants immediately after settlement for $9,000 per annum. From the rent payable, the costs of maintaining the property and land tax for both the Toronto property and a property at Summerland Point which belonged to the plaintiff were deducted. The plaintiff was provided the rental statement as she had to declare her one third share of the rent, less deductions from her income in her tax returns. She never received any rental payments from the Toronto property.
From time to time, Nancy and the defendant, together with their children, visited the Toronto property and stayed in the self-contained flat on that property.
In about the middle of 1989, the plaintiff and Nancy agree that they had a conversation. The plaintiff’s version is as follows:

“Plaintiff: “When are you and your family going to move into your home at Toronto?”
Nancy: “We are not ready to move up there on our own while the children are so young as we would like some help with childcare. We have actually rented out the property with a local real estate agent.””
(Aff, 30/10/2015, [47.)

Nancy’s version is that she replied, “We’re not ready yet. Can we stay a bit longer?” In evidence Nancy explained that their young son Carlo had medical problems and they had to remain close to the hospital and medical practitioners so she did not want to move to Toronto (T101.27-50; T102).
From 1987 to 1992, Nancy and the defendant continued living in the granny flat on the ground floor of the Willoughby property together with their two children, Julianne and Carlo. Salvatore and the plaintiff continued to live in the main area of the ground floor.
In 2000, following Nancy and the defendant’s divorce, the Toronto property was sold for $115,000. On or about 8 March 2000, settlement took place. The defendant gave evidence that he received his third share of the proceeds, being more than $50,000 (T176.32-34).

Financial position of the plaintiff

The plaintiff worked fulltime as a sewing machinist and later on as a catering assistant at the Mater hospital. From 1983, she worked as a school cleaner five days per week on a split shift from 6.00 am to 9.00 am and then from 2.30 pm to 6.00 pm. Prior to 1987, the plaintiff worked at Castlecrag Public School then she obtained work at the Castle Cove Public School where she continued working until she resigned at the end of 1994 when she was 59 years of age.
In or about early 1990, when the plaintiff was 55 years of age, she was earning approximately $18,000 per year. She was in good health. She owned the property at Willoughby as well as the investment property at St Leonards. The St Leonards property was un-renovated and it was occupied by tenants who paid her rent. In 1990, she also owned a one third share of the Toronto house but she was not receiving any rent from it. She expected that Nancy and the defendant would move into it with their children. She had savings of about $125,000.
In 1990, she planned to work until the age of 60 years. She was conscious at that time of the need to provide for her retirement. The rent from the St Leonards property at that time was not enough to pay her living expenses. Salvatore, aged about 61 years, was still working part time as a self-employed concreter. She thought that she would retire when she turned 60 years, around the same time that Salvatore intended to retire.

The Willoughby property

I now come to the central issues in dispute in these proceedings. These issues concern the conversations between the parties in relation to the renovations and living arrangements at the Willoughby property. The alleged agreements between the parties were made orally. There are no contemporaneous records of the alleged arrangements so the witnesses’ credibility is of importance. It is convenient that I now deal with the parties’ and the witnesses’ credibility.

Credibility

I closely observed all the witnesses when they gave evidence and were cross examined.

The plaintiff

The plaintiff relied upon her affidavits dated 27 August 2015, 30 October 2015 11 April 2016 and 18 April 2016. Overall, I accept her evidence as being truthful. She has a good memory of events and was unshaken in cross examination. She had receipts to verify her evidence as to payments made by her in relation to the Willoughby property. Her evidence was largely corroborated by Nancy and Salvatore. There is one matter of which she is partially mistaken. As referred to it earlier in this judgment, she is mistaken as to the amount of contributed by the defendant in relation to the Toronto property. Nonetheless, for these reasons, so far as the oral conversations are concerned between the plaintiff, Nancy and defendant, I prefer the plaintiff’s evidence over the defendant’s evidence.

Salvatore Di Costanzo

Salvatore Di Costanzo relied upon his affidavits dated 30 October 2015 and 18 April 2016. He is and has been the plaintiff’s partner for many years. He gave evidence and was cross examined with the assistance of an interpreter. He gave evidence in an expressive and engaging manner but nevertheless he answered the questions directly. However, he was not present when most of the conversations between the plaintiff, Nancy and the defendant took place concerning the occupation of the Willoughby property. Before he retired, he was a concreter. He carried out work on the renovations to the Willoughby property up to the end of the concreting stage. He largely corroborates the plaintiff’s evidence in relation to the work that the defendant carried out during the construction of the flat. I accept his evidence as being truthful.

Luigi Balestriere

The plaintiff also relied upon the affidavit of Luigi Balestriere dated 18 April 2016. He was the builder involved in the renovations. He was cross examined and gave similar evidence to Salvatore in relation to the work the defendant undertook during the building of the renovations when he was present. His evidence corroborates Salvatore’s. I accept his evidence.

Nancy – the second cross defendant

As previously stated, Nancy did not rely upon any affidavit evidence. She is the second cross defendant and was present in court throughout the hearing. She gave relatively short evidence in a forthright manner. Her evidence was logical and largely corroborated her mother’s evidence. I accept her evidence.

The defendant

The defendant relied upon his affidavits dated 25 September 2015 and 25 January 2016. On 24 March 2016, a few weeks before the hearing, his solicitors filed a notice of ceasing to act. His pleadings and affidavits were drafted and filed by his former legal representatives, and from my reading of his pleadings and affidavits it is my view that his case was well prepared. I am also of the view that he would have received the benefit of legal advice up until a few weeks before the trial. He gave evidence, was cross examined and made submissions, all with the assistance of an interpreter.
Counsel for the plaintiff submitted that the defendant’s evidence is completely unreliable and provided numerous examples of inconsistencies in the defendant’s evidence, not all of which I think are germane to the central issues in dispute. Rather, my approach is to highlight a few examples that I think encapsulate the defendant’s approach to giving evidence in this Court. I have reluctantly come to the conclusion that he was not an impressive witness.
At times, when the defendant was confronted with discrepancies between his oral evidence and what was contained in his affidavits, he stated that he did not read his affidavits before he swore them (T109.11). When these allegations arose, I requested the interpreter to translate his affidavits to him in Italian. The interpreter did so. It is surprising that he swore these affidavits without them being translated.
Also when the defendant was confronted with an inconsistency between his oral evidence in this Court and the transcript of the evidence he had given before the Consumer, Trader and Tenancy Tribunal (“CTTT”), he justified it by saying the Tribunal monitor could have recorded anything they wanted (T151.1-12).
At times, he made exaggerated claims. When the defendant was confronted with his analysis regarding the fact that he did not have $80,000 available to spend on the Toronto property and the renovations to the Willoughby property he responded by asserting he in fact had close to $160,000 (T160.44). He did not produce any evidence as to how he could possibly have acquired the amount of $160,000. Similarly, in relation to the exaggerated claims, he gave evidence that he performed about 500 hours of work on the upstairs flat and that accorded with the evidence in his affidavit. However, when confronted with his evidence in the CTTT, he replied that he had worked 1000 hours (T144.3-8). Then he volunteered a figure of 2000 hours in the course of his cross examination (T147.17). Aside from this evidence being at odds with other witnesses who observed him working, he evidence on this topic is exaggerated and I do not accept it as being truthful.
This Court offered the defendant an opportunity to correct his evidence that was at odds with that contained in his affidavits when his re-examination commenced (T178.34-179.47) but he chose not to take that opportunity to do so.
Overall, I have reluctantly come to the conclusion that I cannot accept his evidence other than where it is undisputed or there is documentary or corroborating evidence to support it.
Counsel for the plaintiff submitted that a Jones v Dunkel ((1959) 101 CLR 298) inference should be made over his failure to call his former solicitor, Ms Jamie Goodwin, to explain what occurred, particularly with respect to the evidence contained in his affidavits concerning moving to Terrigal or the Entrance and buying a house because he submitted that the defendant must have told his solicitors about these facts. As the defendant was self-represented and it is doubtful he would have known about the requirements set out in Jones v Dunkel, I do not draw a Jones v Dunkel inference from his failure to call his solicitor to give evidence.

Madeline Mazzella

Nancy and the defendant’s youngest daughter Madeline Mazzella gave short evidence and was cross examined. I will refer to her evidence and credibility later in this judgment.

The plans for dual occupancy of the Willoughby property

In about 1988 or 1989, the plaintiff became aware that it was possible to obtain Council approval for dual occupancy on one block of land. In about 1990, the plaintiff spoke to her sister-in-law, Raffaella about the extension she had added to her home in Cremorne. Raffaella described the extension to the plaintiff and during the course of their discussion she said to the plaintiff, “it will cost about $100,000”.

Renovations to the Willoughby property

The plaintiff considered converting the Willoughby property into a dual occupancy for investment so that she could remain living in one part and rent out the other part. In early 1990, the plaintiff decided to make enquiries as to whether she could add another floor to her home in Willoughby and get rental income from the other part. At that time the plaintiff thought that her savings of about $125,000 would cover building costs of about $100,000 and leave her with money in the bank.
Nancy gave evidence that she walked in one night and heard the plaintiff and Salvatore discussing plans to do renovations. She recalled the plaintiff saying:

“A. …“That will be a good idea, we put a new extension on to the house,” and I said - I asked my mum, I said, “What is my stepfather, Salvatore, going to do some more extension to his place at Hornsby?” And she said, “No, no, we're thinking of doing that upstairs here.”
Q. Did she say why?
A. At that very moment, no.
Q. Did you become aware of why she wanted to do it?
A. No, because I wasn't interested.
Q. Did you ask whether when it was done, you could then move in with your family?
A. Yes.””
(T96.18-31)

The last answer seems inconsistent. If she was not interested as to the reason the dual occupancy plans were being made, why would she ask to live there? I find that the conversation in which Nancy asked whether she could move in there with her family occurred later.
The plaintiff consulted Mr Magnaco (“the first architect”) who told her that it was possible to have a first floor dual occupancy dwelling constructed. He estimated that it would cost approximately $100,000. Mr Magnaco prepared the plans for the upstairs dual occupancy extension. The plaintiff lodged a building application as owner/builder for the extension together with a development application with Willoughby Council.
The defendant says that on some occasions he accompanied the plaintiff when she went to the architect and to Willoughby Council and this forms part of the hours he has claimed in assisting with the renovation work. However, his own evidence was that he spoke very little English at this time so it seems unlikely that he had any active participation in these matters. Willoughby Council rejected the first set of plans and advised the plaintiff that she should submit amended plans if she wished to pursue the new application. Shortly after this application was made, Mr Magnaco retired due to health issues. The plaintiff then retained another architect (“the second architect”) who prepared new plans for the first floor extension. Willoughby Council approved the application for the first floor extension that comprised a of self-contained flat with a concrete slab floor, three bedrooms, kitchen, bathroom and living room.
Shortly after consulting the second architect, the plaintiff says that she had the following discussion with Nancy:

“Plaintiff: “I am thinking about building an upstairs apartment for my future. I have seen an architect who has prepared plans.” I showed Nancy a plan for the upstairs apartment. The conversation continued after she looked at the plan.
Nancy: “That sounds nice. It is a lot bigger than the granny flat. Can we move up there for a while? It would be good. Then you could still help me with the kids and [the defendant] and I could get a job and save some money.”
Plaintiff: “Yes, and when you move out to your home, I can rent out the apartment and live off [the] rent in my retirement.””
(Aff, 30/10/2015, [63].)

The effect of this conversation is that the plaintiff told Nancy that she and her family could move into the new flat for a while, but the plaintiff’s intention was ultimately to rent out the flat and live off the rent in her retirement. This is consistent with her prior evidence.
The defendant gave evidence that in about 1990 he and Nancy had a discussion with the plaintiff in Italian. His evidence of the conversation is as follows:

“Defendant: “We are looking at moving out, there is not much room for us here. We are going to look at getting a large house on the Central Coast, near the beach in The Entrance, Terrigal or around there and either renting it out for a little while to help pay it off faster or moving in.
Plaintiff: “I don't want you to take the children that far away from me. We want to build an apartment upstairs for your family, but you have to contribute money, labour and materials in respect of building the apartment, move your family into the apartment then you can live in that apartment forevermore.”
Nancy: “Ok”.
Defendant: “Ok, we will invest our money in the apartment instead for buying a new place in the Central Coast. I will contribute money, labour and materials and we will all live in the apartment to be built upstairs.””
(Aff, 25/9/2015, [9].)

The defendant also disputes that the plaintiff said to him that she intended to build the upstairs flat to earn rent from it and instead says that she had always told him words to the effect, “the flat is for you and your family to live in indefinitely. Just contribute with money and working”. (Aff, 25/1/2016, [28].)
However, the plaintiff’s evidence is that she never said that Nancy, the defendant and their children could live in the upstairs flat for evermore. The plaintiff says that it was her intention at that time that after a few years, she would rent out the upstairs flat and obtain rental income from it. The plaintiff’s version does not accord with that of the defendant. In cross examination, the defendant conceded that the plaintiff never said that he could live in the premises forevermore (T119.3; T120.9-17).
Later in cross examination, the defendant gave the following evidence:

“Q. I want to put to you, there was no discussion between you and [the plaintiff] about you getting a larger house on the Central Coast near the beach and The Entrance or at Terrigal, or around that area.
A. DEFENDANT: We already had the house in Toronto.
Q. Yes, and you agree with me, don’t you, that there was no conversation about you moving to the beach at The Entrance or Terrigal or somewhere round that area?
A. DEFENDANT: We didn’t have a house there.
Q. You never intended to move there, did you?
A. DEFENDANT: This was something between myself and my wife. It was not something that concerned her.
Q. Well, you agree with me, you never discussed it with [the plaintiff]?
A. DEFENDANT: The only thing we talked about was to build upstairs.
Q. So to the extent [that you] refer to a conversation with [the plaintiff] about moving to the Central Coast near the beach at The Entrance or Terrigal or around that area, it’s not accurate?
A. DEFENDANT: Yes, it’s not true.”
(T118.33-50-119.1-3).

In light of the defendant’s evidence, I find that the conversation with the plaintiff about buying a large house on the Central Coast did not take place. I do not accept the defendant’s evidence that he intended to move to a large house on the Central Coast.
Salvatore gave evidence in relation to a conversation that took place in 1990. This evidence was given through interpreters for Salvatore and the defendant. It is as follows:

“Q. DEFENDANT: Do you recall a conversation at the end of 1990 where you, your wife, myself and my wife discussed the building of an extension on the first floor?
A. Yes, but they were more involved than myself.
Q. DEFENDANT: In that conversation at the end of 1990 when the four of us talked about the extension, do you remember deciding that the extension was for our benefit, for us to--
…
Q. DEFENDANT: In that conversation I was referring to earlier, do you remember Mrs Magdalena Buono saying to the extension was going to be built for our benefit, for myself and my wife benefit?
A. Yes, to give him more room. The kids and the family.
Q. DEFENDANT: In the same conversation do you remember Mrs Magdalena Buono saying that I would have to contribute to the labour and - in the same conversation do you remember Mrs Magdalena Buono saying that my contribution will be to pay for some of the materials, and fittings, and contribute to labour?
A. Yes, but then we never received this contribution.
Q. DEFENDANT: When you say you never received the contribution, what do you mean specifically?
A. Never give us any money.”
(T75.39-46; T76.8-23.)

According to Salvatore, a conversation did take place in 1990 in which the plaintiff said to the defendant that the extension was to be built for the benefit of him and his family and that the defendant was to pay for some of the materials and fittings and contribute labour. But Salvatore’s evidence is that the defendant never contributed any money. Salvatore also conceded that the plaintiff, Nancy and the defendant were more involved in the conversation than himself, so I prefer the plaintiff and Nancy’s evidence referred to earlier as to the living arrangements.
I accept that in 1990 there was an oral agreement between the plaintiff, Nancy and the defendant to the effect that the defendant, Nancy and their children could live in the flat until they moved into the Toronto property. At that time, the defendant and Nancy were having more children and the flat would be bigger than the granny flat where they were currently living. I also accept that a conversation took place in which the defendant agreed to contribute to the labour and pay for some of the materials and fittings.
From about July 1991 through to about September 1992, construction of the upstairs flat was carried out. It took approximately 14 months. The upstairs flat consists of four bedrooms, a lounge room, kitchen, bathroom and laundry together with parking, grounds and access areas and associated structures and utilities, including a roof, walls, stairs and floor slab structure, water meter, electricity meter, hot water tank, water storage tanks, pipe work, electrical cabling, water supplies and sewerage piping.
In early September 1992, the plaintiff requested that Willoughby Council conduct a final inspection of the building works. On 15 July 1993, the final Council inspection took place.

The defendant’s contributions – money and labour?

From around 1990 until 1992, the defendant says that he contributed around $50,000 to the renovations of the Willoughby property by purchasing materials, fixtures and fittings. So far as the construction of the upstairs flat is concerned, the defendant says that he paid for the costs of the kitchen fit out and appliances, bathroom, painting, light fittings, security door for front door, door handle hardware and paint for the external trimmings of the property (Aff, 25/9/2015, [20] and [21]; T155; T156). He also says he worked for at least 500 hours on the construction of the upstairs flat at the Willoughby property. The plaintiff disputes that the defendant contributed $50,000 and that he worked on the renovations for 500 hours.
In about early 1991, the plaintiff says that she spoke to Nancy about the bathroom fixtures for the upstairs flat. Their discussion was as follows:

“Nancy: “Mum, Porfirio and I would like to select some items for the bathroom that we like.”
Plaintiff: “I only want to put in plain fittings. If you want something more expensive then you will have to get them yourself.”
Nancy: “Okay Mum.””
(Aff, 30/10/2015, [66].)

I accept that this conversation took place.
The plaintiff gave evidence that she paid for the entire cost of the upstairs extension including architectural and engineering fees, labour and materials, planning permits and most of the finishes. She admits that Nancy and/or the defendant paid for the spa bath, toilet, bidet, vanity and tap ware, paint for the internal walls of the upstairs flat and a screen door for the entrance to the upstairs flat and that this cost approximately $3,235.
The plaintiff says that she did not ask the defendant or Nancy to purchase any items other than the bathroom fittings, which they insisted on buying themselves to their choosing, and the kitchen fit out including items such as cupboards, stove and sink. The plaintiff says that she paid for the floor tiles and wall tiles including splashbacks, including labour charges for the kitchen. (ff, 30/10/2015 [100(c)]. The plaintiff also says that she gave Nancy a cash allowance of about $6,000 for the price of a standard kitchen to be installed. She says that Nancy and the defendant wanted to design and choose the kitchen with the supplier to their own liking. The plaintiff agrees that the defendant and Nancy helped design the kitchen layout for the upstairs flat with the kitchen supplier of their choice. The plaintiff agrees that the cost of any other items that the defendant and Nancy purchased from 1990 to 1992 inclusive was less than $5,000. (Aff, 30/10/2015 [106]).
The plaintiff has provided copies of the customer records slips for the issue of bank cheques issued to the plaintiff by the Commonwealth Bank showing full or part payment of goods and services used in the construction of the upstairs flat. She has also obtained the bank cheques from her bank using funds in her bank account to pay for the bank cheques, including the bank cheque fees. The plaintiff has also searched her records for quotations, invoices, receipts and payment records for goods or services used in the construction of the flat which she paid for (Aff, 27/08/2015, Ex MBI).

In contrast, the defendant says that from time to time, from around 1990 until 1992, the plaintiff would tell him and Nancy what to buy. He would drive and assist in loading and unloading materials and fixtures purchased, but Nancy would do the talking as she spoke English and he did not at the time. Nancy made the deals and took the receipts. He says that he never took a copy of them as it was a family arrangement and he never thought he would be required to prove his contribution towards the construction of the flat. The defendant referred to invoices dated 1993, including invoices for goods relating to a kitchen fit out, spa bath and painting that are not related to the upstairs flat as the flat was completed before then and Nancy, the defendant and their children were already living in it by that time. The defendant says that he has searched through all of his records and has located only a few documents that relate to purchases he has made towards the flat and its upkeep. He did not keep receipts and invoices, for the reasons set out above, the only documents that he did keep were relevant warranty cards and manuals, where the product came with such documents.
The defendant gave evidence that from time to time during 1990 and 1992, when Nancy and he were going to buy something for the flat, for example bathroom appliances, the plaintiff said to him and Nancy (in Italian) words to the effect, “please put the invoice and order in my name so I can claim it on tax.” (Aff, 25/9/2015, [22].)
The defendant’s evidence is that when purchasing materials and fixtures and fittings for the flat, Nancy was usually with him as she spoke English fluently and he was still learning. He heard Nancy put invoices and orders in the plaintiff’s name despite them paying for the items. He says that all tax invoices and receipts were given to the plaintiff to enable her to claim those items on tax. The plaintiff denies requesting that Nancy or the defendant put invoices and orders in her name for items that they paid for. Her evidence is that she never claimed a tax deduction for any expense of the construction or fit out of the upstairs flat. I accept the plaintiff’s evidence.

The defendant’s work history

It is necessary to examine the defendant’s work history to ascertain whether he could have financially contributed to the construction of the flat. The defendant says that he raised the remainder of the money contributed throughout the building of the flat by working and using the rent moneys from the Toronto property. I do not accept the defendant’s evidence that he had $15,000 when he came to Australia. Neither Nancy nor the plaintiff was aware of this fact. Shortly after the defendant arrived in Sydney, on the advice of the plaintiff, he applied for and was granted unemployment benefits.
The defendant says that in 1988 and 1989 he worked in a local Lebanese restaurant at Willoughby for about six months. He also worked at a Mexican restaurant on Oxford Street, Sydney for three weeks (T166.32-51). However, the defendant admitted that his evidence of his work in the Lebanese restaurant, which was initially to the effect of 12 months’ work, was not correct. He conceded that he only worked eight months (T166.34). There is other evidence that demonstrates that he stated previously that he only worked five to six months at the Lebanese restaurant at Willoughby and another three weeks at the Mexican restaurant (Ex G; T165.39-T167.16).
The defendant also says that he worked together with Nancy as domestic help for Drs Holeck and their children. He says that in this role he did the cooking, handyman jobs and assisted with cleaning for a few hours a day and Nancy generally did the cleaning. He says that he worked there for five years until about 1993 and Nancy worked there for about nine years until about 1996. He says that Drs Holeck were flexible with his times when he needed to start later or leave earlier. He also says that he and Nancy brought the children with them when they worked as domestic help for the doctors at their home. The times he says that he did not mind their children was when he was working and could not bring the children with him to his place of work. After about 1989, the defendant’s evidence was that he was not employed and he has remained in receipt of social security benefits.
The defendant claims that in the five years between 1987 and 1992, he had earned large sums of money through his work activities in Australia. When confronted with the proposition that his earnings would not have been enough to fund his expenditures, he asserted that the expenditure of the $50,000 was over the period from 1990 to 1996, not 1992 as stated in his affidavit. (T155.30)
Counsel for the plaintiff submitted that these sorts of activities could not possibly have raised the sum of at least $65,000, which was required by 1992 for his one third share of the Toronto property, his contribution to the renovations of the Willoughby property and the family living expenses. Aside from some common ground between the parties in relation to the purchases for the kitchen, I do not accept that the defendant contributed by paying for materials.

The defendant’s contribution to labour on the Willoughby renovations

The plaintiff was assisted in the construction work by Salvatore. As previously stated, Salvatore assisted with the renovation work up to the end of the concreting stage. The plaintiff also engaged contractors to perform work.
The defendant’s evidence is that he conservatively estimates the number of hours that he spent labouring on the work site of the flat at 500 hours over two years. He increased his estimate to 1,000 hours in cross examination (T144-145). The renovation only took 12 months. However, the construction took place between July 1991 and August/September 1992.
The defendant says that he performed the following works:

(a) He assisted with removing the roof tiles, which took four days, and he was there for the entire four days assisting with removing the roof tiles.

(b) If he left the site during the works it was to go and do something for the construction, such as attending stores to purchase and collect construction materials. He only left the site during the works when he was asked by the plaintiff or Salvatore to purchase and/or collect materials for the construction. He left the work site from time to time when there was nothing for him to do, for example when the works were up to a stage when specialist trades were required and he could not help.

(c) He assisted with the removal of the roof timbers and tiles. He used a hammer to remove the nails that were holding the timber tiles in place and helped remove them.

(d) He helped with the brickwork by moving material and cement needed for the brickwork around the site and tidying up but he did not specifically work levelling the bricks as he did not have any experience in levelling brickwork.

(e) He assisted with the work required to construct the formwork for the first floor suspended slab by assisting with lifting and carrying the materials. He stood on the top floor with Mr Di Costanzo and together they received sheets handed up by two others from the ground floor. He assisted in laying the reinforcing steel on the formwork at Salvatore’s direction, but Salvatore secured the reinforcing steel into place and the defendant did not help as he did not have any experience in that.

(f) The concrete pump dumped the concrete onto one side of the formwork for the concrete slab up to where the boom for the pump could reach. The rest of the concrete was pumped into a wheelbarrow or trolley which the defendant used to distribute the concrete to those sections of the formwork which the pump could not reach. He also assisted with the additional concreting works by assisting with mixing concrete and distributing the concrete using a wheelbarrow or trolley to the areas where it was required.

(h) When materials such as concrete ran out he was asked by the plaintiff or Salvatore to leave the site to attend a store to purchase and/or collect more materials. He recalled going to the local hardware store on multiple occasions to purchase further materials such as concrete. Salvatore usually came with him. Sometimes Salvatore paid for the additional concrete or else the defendant did.

(i) He would often work later in the evenings after the other people on the site had left, as he stayed back to clean up the site and arrange the site for the work that was scheduled for the next day.

(j) He worked on the renovations the entire time. He says that he worked at his other jobs less during construction of the flat from 1990 to 1992 and did not find alternate employment. The construction took so long because Nancy and he were only able to pay money towards the construction of the flat as and when they came into some money. The plaintiff denies this is so.

The defendant’s evidence is that he worked on the construction of the flat with Salvatore and two of his relatives. He says that he assisted Salvatore in preparing the areas where concrete was to be laid and transporting concrete from the concrete truck to the areas to be concreted. Salvatore completed the concrete slabs by smoothing them out.
This evidence is at odds with that of the plaintiff, Salvatore and Mr Balestriere, the builder. The plaintiff admits that the defendant did perform some work in respect of the painting of the internal walls of the upstairs flat but she did not see the defendant performing other work around the building site. She saw him occasionally standing round the building site talking in Italian to some of the workers before he left the building site.
Salvatore’s evidence is that it was necessary to remove the existing roof by removing the tiles and the wooden support frame supporting them. He says it took four days to remove the roof tiles and that they were removed by him, his cousin Frank Balestriere and his son Luigi, not the defendant. According to Salvatore, the defendant would assist for a couple of hours each day, after which the defendant would say to him words to the effect, “I have got to do something now” or “I have to go somewhere” and he would then leave. Salvatore says that the roof timbers were removed over a period of two days by himself, Frank and Luigi and the defendant did not assist them (Aff, 30/10/2015, [18]). I accept Salvatore’s evidence.
Salvatore also says that the defendant did not assist with any aspect of the work required to construct the formwork for the first floor slab and he did not assist with the placement of the reinforcing steel for the slab (Aff, 30/10/2015, [24]). Salvatore never saw the defendant or anyone else using a wheelbarrow or trolley to move concrete around the slab or its formwork as the concrete was delivered from the ground via a concrete pump. Salvatore’s evidence is that he had his own business as a concreter and ordered the concrete for the first floor slab, the car spaces and paths from his concrete supplier (Aff, 30/10/2015, [26]-[32]).
While both Salvatore and the defendant gave evidence with the assistance of interpreters, for ease of understanding, I have substituted the names of the witnesses in this next part of the transcript otherwise it does not make sense.
Salvatore gave the following evidence in cross examination:

“Q. DEFENDANT: Did we go, you and I, together to buy materials to build the concrete slab around the house? Did we go to buy material together?
A. No.
Q. DEFENDANT: Did we ever go together to buy sand cement?
A. No.
Q. DEFENDANT: When we built the stairs outside the - the stairs that lead to the extension, who did you build it with?
A. I did it by myself..(not transcribable)..helped me to lay the cement.
Q. DEFENDANT: Put to you that you don't remember that I was there and helping you, and you don’t remember that you went a number of times, at least eight times, together to buy material for the building work?
A. You never came to buy material with me and moreover you only help me for half an hour one time to do the stairs and then you just run away.
Q. DEFENDANT: So now you say that I was there with you when you build the stairs. Before you said that I was not.
A. Only for half an hour, and then he disappeared.
Q. DEFENDANT: I put it to you that the concrete pump was not used to build the stairs, that we together, you and I, mixed the concrete to build the staircase.
A. It is not - it is not true. We didnt build anything together, and I ordered the pump and the cement, and the pump was - cost me $600.
Q. DEFENDANT: I put it to you that the concrete pump you organised was for the ceiling, so the extension for the under-roof, not for the stairs.
A. It was also for the stairs. The pump came twice.
Q. DEFENDANT: I put it to you that the concrete pump could not have been used to build the stairs. The stairs have been there, built over - in stages, and the pump was never used for it.
A. I say that - I say that we used the pump because you cannot carry the cement on your shoulders to go upstairs.
Q. DEFENDANT: I put it to you that we built it together, in stages, and you can build it in stages because, when you build the first few steps - and then after a week, when it is hard, you can then walk on those steps, carrying up the concrete to build another stage of the stairs.
A. No, I - I say this is not true. The cement was ordered, it was brought there. I paid for the pump and everything else.”
(T76.47-77.41).

The plaintiff’s evidence is that the defendant did not deliver materials from a supplier to the property as the defendant did not a heavy vehicle driver licence. According to her the building materials were mostly delivered to the site directly by the supplier, although Salvatore would sometimes drive his own large truck to collect items from suppliers, but she did not see Salvatore ever being assisted by the defendant in these tasks. I prefer and accept the evidence of Salvatore and the plaintiff to that of the defendant. The defendant did not collect and deliver materials from the suppliers.
Mr Balestriere (the builder) gave evidence that the defendant assisted from time to time on the site. His said that the defendant started work but regularly left the worksite. Mr Balestriere said that the defendant never worked on site for a full day; sometimes the defendant left the site to take one of his children to school or to collect them; he had no experience in the building trade; he only performed general labouring duties; he worked on site for an average of two to three hours per day; the defendant was never asked in Mr Balestriere’s presence to purchase or pickup buildings supplies for the renovations; he never collected supplies of concrete; and on at least one occasion, after leaving the site for between two and three hours, the defendant returned to the site after lunchtime still eating his lunch while Mr Balestriere, his father and Salvatore had not taken a lunch break that day. There were also no wheelbarrows or trolleys used during the concrete pour to spread or distribute concrete by the defendant or anyone else (Aff, 18/4/2016, [6]-[9]).
In cross examination, Mr Balestriere gave the following evidence:

“Q. DEFENDANT: Was I helping you working on the roof for the tiles and the removal of the frame on those days?
A. On and off. Not complete days, I mean, not all day completely. You would disappear for a couple of hours, we'd have to yell to get you to come out. No the idea was that we do it in a hurry because once you have no roof, you've got to cover it. And so urgency is very important, make sure - we had to pick a one week window to remove the roof where it was not going to rain.
(T63.18-24)
…
Q. DEFENDANT: Can you confirm that I helped your uncle building the staircase that leads to the first floor?
A. I wasn't there when it was it built.
Q. DEFENDANT: Did you build with your father the wall next to the staircase leading upstairs?
A. No.
Q. This brick wall outside.
A. No. I didn't do any brick - the only brick work I did on that place was from the ceiling joists, to the under side of the slab.
Q. From downstairs.
A. No. When we removed the roof we had to bridge a gap between the ceiling joist, the downstairs ceiling, and to bring it up to the level of the under side of the slab. That's the only brick work I did on that place.
Q. DEFENDANT: I thought I saw you building that wall with your father and so you could then confirm that I helped your father building the stairs.
A. No I wasn't there because I left
DEFENDANT: No, no. I not there, no, no, no. I called the father for building. No, no.”
(T63.34-64.8.)

I prefer and accept Mr Balestriere’s evidence over that of the defendant.
I accept that the defendant did some painting and performed a small amount of labouring work but the total amount of work performed is nowhere near 500 hours.

Occupancy of the upstairs flat

In July 1992, Nancy, the defendant and their two children moved into the upstairs flat. The extensions to the Willoughby property are shown in Ex B. It is common ground that at about the time that Nancy, the defendant and the children moved upstairs the plaintiff had a conversation with the defendant and Nancy, saying, “You can pay the water rates for the property.” (Aff, 30/10/2015, [75].) They agreed to do so. The water rates were paid from that time up until about 2014 when the plaintiff redirected the rates notices to herself.
In August 1992, the plaintiff received a notice from Willoughby City Council dated 31 July 1992 advising her that certain works were still required to be performed for the construction of the upstairs flat, including construction of a balustrade on the stairway from the ground to the first floor and the provision of three separate car parking spaces on the property.
Madeline Mazzella says that from time to time when she was growing up, Nancy, the defendant and the plaintiff discussed the upstairs flat in front of her. During those conversations she says that the plaintiff said words to the effect:

“The upstairs apartment is your family home. It was built and paid for by Rio for Rio, Nancy and the children.” (Aff, 25/9/2016, [5].)

Madeline was almost five when her mother and father separated. She says the discussion referred to above would have taken place after the upstairs flat was built in 1992 or 1993. She remembers the discussions with her grandmother and Zio (Salvatore) and the neighbours and guests that would come around and they would talk about how upstairs was built as their family home. She has no recollection of any conversations that took place before her mother moved out (T183.45-184.1-50). While she deposed that her mother was present during the conversations, she later conceded that she was not. The plaintiff says that she never said to Madeline words to the effect that the upstairs flat was owned by her father or her mother, or that it was their family home. The plaintiff says that she always owned the entire property and the flat that she had built.
The plaintiff says that between 1992 and 1994, she visited the upstairs flat infrequently. She went into the flat on a few occasions when she was returning her young grandchildren after they had been with her for child minding downstairs. On most occasions that she returned her grandchildren, the defendant met them inside the front door at the foot of the stairway which leads up to the upstairs flat. After 1998, the plaintiff did not go into the flat. She says that she was not welcome by the defendant beyond the bottom front door of the flat.
I accept Madeline’s evidence, but when properly understood, it is that while she was growing up she was told that the upstairs flat was her family home, but not by her mother or the plaintiff.

Enclosing the upstairs rear terrace

In about 1993, Nancy spoke to the plaintiff about the idea of enclosing the upstairs rear terrace and converting it into a laundry and second bathroom. During the course of that conversation they said:

“Nancy: “Mum, the back terrace is cold and windy and we really need our own laundry and another bathroom. Can you pay someone to close it in for us?”
Plaintiff: “Is this what you want?”
Nancy: “Yes, it would be better for the kids too.”
Plaintiff: “Okay I will see what I can do.””
(Aff, 30/10/2015, [77].)

A little later the plaintiff was informed that the cost of enclosing the upstairs rear terrace and converting it into a laundry and second bathroom was $7,000. Salvatore says that he paid $7,000 for those works.
On 21 August 1992, Nancy and the defendant’s third child, Madeline Mazzella was born. On 18 March 1994, Nancy and the defendant’s fourth child, Gabriella Mazzella was born.
The defendant says that in around early 1996 (not 1993), the plaintiff said words to him in Italian to the effect, “You should enclose that open space upstairs and build a laundry.” (Aff, 25/9/2015, [31].) His version is that in August 1996, Nancy and he paid for alterations to the upstairs flat, which involved closing an open space to make an extra room and building a tiled laundry with a shower and toilet.
The defendant’s evidence is that he did not receive money from Salvatore to pay for the works enclosing the balcony or any other work. At around that time he says the plaintiff asked him to pay for these works and that he paid $5,000 for the enclosure of the balcony and the laundry installation. The plaintiff also paid for the shower and toilet to be installed in the laundry area and the window. I prefer and accept Salvatore’s evidence that he paid for these works and that the defendant did not.
In 2014, the plaintiff received a notice from Willoughby City Council requiring demolition of the works enclosing the upstairs rear terrace and laundry, a second bathroom conversion and reinstatement of the approved plans. A photograph of the above is shown in Ex 1. This remedial work has yet to be carried out.

The Summerland Point property

The dealings in relation to this property do not involve the defendant and are of limited relevance. The evidence is that Nancy was the owner of property at Summerland Point between 1993 and 1999 but had bought that property with funds lent to her by the plaintiff.
Following the passing of the plaintiff’s mother in late 1992, she received an inheritance in 1993 of approximately $70,000. In early 1994, the plaintiff had a discussion with Nancy with words to the effect:

“Plaintiff: “I inherited some money from my mother. I was thinking of loaning it to you to buy a property to help you for your future. What do you think?”
Nancy: “Okay. That sounds like a good idea.”
Plaintiff: “I can afford to loan you about $100,000.00. Do you want to go looking for a good property?”
Nancy: “Okay. I will.””
(Aff, 30/10/2015, [83].)

Shortly after that Nancy informed the plaintiff that she had found a property at Summerland Point. Nancy negotiated to purchase of the property for $105,000.
The plaintiff lent Nancy $113,930 to fund the purchase of the Summerland Point property. Nancy and the plaintiff entered into a deed of loan agreement dated 27 June 1994, which documented an advance of $113,930, interest free.
On 17 June 1999, when Nancy finally separated from the defendant, she transferred the Summerland Point property back to the plaintiff with the consideration being expressed as satisfaction of the loan.

Consent custody orders

It is now necessary to determine what arrangements were made between the plaintiff and the defendant after Nancy and the defendant separated and Nancy left the flat. The plaintiff gave evidence in support of the defendant’s application in court proceedings for custody of his and Nancy’s children. Nancy had also sought custody of their children.
On 25 October 2000, by consent the Family Court of Australia ordered that the defendant become the principal carer for his and Nancy’s children. The plaintiff’s evidence in support of the defendant’s application for custody of his and Nancy’s children was that she had observed over the years that the defendant was a patient, loving and caring person; he had always been very patient with Nancy and their children; she had never seen him hit the children or his daughter; and he would cook all the meals for her daughter and the children and was always concerned when her daughter would not eat her meals, saying to her, “You have to eat”. He did most of the housework and was the primary parenting figure in the care of the children during Nancy and the defendant’s marriage (Plaintiff Aff, Local Court, 1/08/1997, [19]).
At the hearing in this Court, the plaintiff was asked:

“Q. DEFENDANT: How come when I divorced my wife, you signed the statement in favour of me gaining custody of the children?
A. I did, I did sign the thing for the children. Because they only had one parent at the time. And it was the mother [estranged from] the children, they already suffered, up to that would be the only one to give them a bit support. That’s all.”
(T35.8-12.)

The defendant says that since 1992, he has continuously carried out maintenance to the flat, including day to day maintenance, repainting the internal areas every three years and purchasing replacement appliances and bathroom fixtures and fittings when previous ones have become broken or unusable. He has not produced any evidence to support this assertion.
The plaintiff says that she does not know what maintenance and other works the defendant and/or Nancy performed to the upstairs flat after they moved in in about July 1992. From late 1994 onwards, the plaintiff was not invited to the upstairs flat by Nancy or the defendant. She would escort her grandchildren to the top of the stairs after they had been downstairs in her care and after 1997, did not enter the upstairs flat at all. In May 1997, Nancy left the upstairs flat. The defendant and their children remained in occupation of the flat but the plaintiff was not welcome there. Without some supporting documentation or photographs showing the internal areas, I do not accept the defendant’s evidence.

Dispute over supply of electricity and water

From about August 2012, the plaintiff noticed signs of water damage to the living room ceiling of the downstairs section of the home in which she and Salvatore lived.
The plaintiff arranged for a plumber to investigate the cause of the water damage. She says the plumber knocked on the door of the upstairs flat and spoke to the defendant saying words to the effect, “there is a leak from a pipe upstairs. I am a plumber. Can I please have a look at the plumbing?” The defendant said words to the effect: “no” and denied permission for the plumber to have access to the upstairs flat. The plumber was unable to fix the leak.
By January 2013, the condition of the ceiling of the downstairs lounge room was becoming worse and the ceiling was in danger of collapse. The plaintiff called a plumber. The plumber capped off the pipe externally. The leaking into the upstairs ceiling stopped. She notified her building insurer of the problem with the ceiling. A representative of NRMA attended the property. He knocked on the door to the upstairs flat and said to the defendant words to the effect, “can I come in to inspect the faulty water pipes.” The defendant said, “no”. The insurer’s representative was denied access to the upstairs flat.
On one occasion the plaintiff says that she saw an unknown man up a ladder near the pipes at her property. She asked him to stop as she did not know who he was. She informed him that she was the owner and that she had her own plumber. The plaintiff says that she is not aware of any other occasion that the defendant retained a plumber and she denies that she refused any other plumber access to the land.
The plaintiff admits that she purchased from the electricity supplier a padlock for the meter box several years ago for security. At the time that she purchased the lock the sales person said to her words to the effect, “all of our staff and electricians have a key for this lock to access the meter box.” She denies that she turned off the electricity supply to the upstairs flat. If the electricity metre box is locked, I accept that the defendant is unable to access the box because he does not have a key to the metre box.

The CTTT proceedings

Since 2012, the plaintiff has commenced proceedings on a number of occasions in the CTTT against the defendant seeking to have him removed from the flat. On one occasion the application was refused on the basis that the defendant was not a residential tenant.
On 15 June 2012, the defendant lodged a caveat against the title to the Willoughby property. The parties have made some agreement in relation to the caveat.

Summary of findings

In 1986, the plaintiff had a telephone conversation with Nancy in which Nancy said that she and her family had nowhere to stay when they arrive in Sydney and asked if they could stay with her and Salvatore for a while. The plaintiff replied that they could stay with her and Salvatore for a little while.
The plaintiff and Nancy agree that in the middle of 1989 they had a conversation in which the plaintiff said “When are you and your family going to move into your home at Toronto?”, to which Nancy replied that they had already rented out the Toronto property through a local real estate agent and they were not ready to move to Toronto on their own while the children were still young as they would like some help with childcare and asked if they could stay a bit longer. The plaintiff wanted Nancy and the defendant and their family to move to the Toronto property.
In 1990, the plaintiff and Nancy had a conversation in which the plaintiff said that Nancy and her family could move into the upstairs flat for a while but it was the plaintiff’s intention to ultimately rent out the upstairs flat and live off the rent in her retirement.
When the plaintiff gave evidence in support of the defendant in family law proceedings, she did so because he was the only one to give her grandchildren a bit of support. She allowed the defendant and her grandchildren to live in the upstairs flat until the last of the grandchildren left home. So far as the defendant’s financial and labour contributions are concerned, there was no agreement that the plaintiff could reside in the flat forever. I find that he and Nancy contributed $3,325 for the spa bath, toilet, bidet, vanity and tap ware, paint for the internal walls of the upstairs flat and a screen door for the entrance to the upstairs flat. The plaintiff also conceded that the defendant may have contributed a further $5,000, so that the defendant’s total monetary contribution amounted to $8,325, although some of these funds may have been Nancy’s. So far as the labour the defendant says that he provided is concerned, it is difficult to assess an hourly figure, but I find that he did only a few hours of manual labour assisting in the building process and some painting.
The plaintiff permitted the defendant and her grandchildren to live in the flat until the last grandchild left home and that occurred in 2012. I accept that the plaintiff’s youngest grandchild returned to the flat for a short time in 2015 but this occurred after the plaintiff had commenced proceedings in the CTTT seeking to have the defendant evicted from the flat.

The defence and cross claim

The relief claimed

On 18 June 2015, the defendant filed a defence to the plaintiff's statement of claim which pleads essentially similar matters as those contained in the cross claim. By cross claim filed 23 June 2015, the defendant seeks declarations, firstly, that the plaintiff holds beneficial title to the property or such other parts of the property as the Court sees fit for the benefit of the defendant, or the defendant and Nancy together (“beneficial title”); secondly, that the defendant, or the defendant and Nancy together, hold a life estate in relation to the upstairs flat and associate works (“the works”) (“life estate”); thirdly, that the plaintiff holds a life estate on trust in relation to the upstairs flat and the works on behalf of the defendant, or the defendant and Nancy together (“life estate on trust”); and fourthly, that the defendant has an equitable charge or equitable lien against the property for a just and equitable amount with respect to the contributions, losses and detriment suffered by the defendant (“equitable charge or lien”).
The defendant seeks orders that within 28 days the parties do all things and sign all documents reasonably necessary to register on the title to the property with the NSW Land and Property Information Department the defendant’s proprietary interests; within 28 days the plaintiff produce to the defendant the original certificate of title to the property; that the Registrar of the Court be empowered to sign on behalf of each of the parties all documents to register the defendant’s interests in the property; further, and in the alternative, payment of equitable compensation; in the alternative, the plaintiff give an account of profits; further, and in the alternative, specific performance of the contract by which the defendant is entitled to occupy the upstairs flat and the works for such period as the Court determines; and, in the alternative, damages.
The defendant claims that the plaintiff represented to him and Nancy that if they assisted the plaintiff by contributing money, labour and materials in respect of building a flat above the ground floor structure at her property and conducted the works in relation to the upstairs flat, moved their family into the upstairs flat and paid water rates, then they could live in the upstairs flat forevermore. The defendant also claims that the plaintiff wanted to benefit the defendant, Nancy and their present and future children. The defendant claims these representations were made orally and were express and implied. He says the express and implied oral representations were made in conversations involving the plaintiff, the defendant and Nancy at the property in about 1990 before architect plans for the upstairs flat were drawn up.
The defendant also claims he relied on these representations in the following ways:

The defendant and Nancy refrained from purchasing a large house and land on the Central Coast by the beach and moving there with their children, which prevented the plaintiff from renting out the apartment;

In 1990, the defendant and Nancy liaised with architects to design the apartment and the works;

Between 1990 and 1992, the defendant and Nancy paid more than $50,000 towards the construction of the apartment and the works;

Between 1990 and 1992, the defendant assisted in building the apartment and the works. This involved assisting Salvatore with all excavation and concreting works and constructing stairs, conducting demolition works, removal of the prior existing roof, conducting general labouring, painting all of the structures inside and out and purchasing, collecting and organising materials, fixtures and fittings;

Between 1990 and 1992, the defendant and Nancy purchased fixtures and fittings including all paint, appliances, spa bath, bidet, shower, vanity, toilet, tap ware and door fittings;

The defendant, or the defendant and Nancy together, lost the capital growth from acquiring a property on the Central Coast by the beach because they did not invest in or purchase such a property in reliance on the plaintiff's representations;

The defendant now does not have financial resources or capacity to afford to acquire property on the Central Coast;

The defendant did not find alternative employment while he worked on the construction of the upstairs flat and the works;

The defendant paid the water for the property and the electricity and telephone for the upstairs flat;

In August 1996, the defendant and Nancy paid for alterations to the upstairs flat, enclosing an open space to make an extra room;

Since 1992, the defendant has continuously carried out maintenance at the property including day to day maintenance and painting; and

Since 1992 the defendant has paid for and installed replacement appliances and bathroom fittings when the previous ones have become broken or unusable.

The defendant has not proved on the balance of probabilities any of the matters he claims he did in reliance on the representations, other than that he and Nancy paid $3,325 for the spa bath, toilet, bidet, vanity and tap ware, paint for the internal walls of the upstairs flat and a screen door for the entrance to the flat and he and Nancy may have contributed up to $5,000 towards items and materials for the upstairs flat as well as a contribution of some painting and a small amount of labouring work. I also accept that the defendant and Nancy paid the water rates until 1997 and after Nancy left he paid the rates until 2014 when the plaintiff redirected the notices to herself.
The defendant claims the addition of the upstairs flat and the works have increased the value of the property as compared to the condition of the property before the upstairs flat and the works were carried out.
The plaintiff does not admit that she made the representations the defendant claims. Nor does she admit the defendant or Nancy relied on the representations as alleged. Nancy has not filed any pleadings or affidavits or sought any relief from the plaintiff.
The defendant makes further claims that are denied by the plaintiff.
Earlier I made findings that the plaintiff did not make the representations the defendant claims she did. I have not made any findings that the defendant relied on those representations in the manner in which he claims. Overall I have made findings that the defendant and Nancy expended $8,325 on the property and the defendant provided some labour and carried out some painting. I will now determine whether the defendant has any entitlement to the orders he seeks in the cross claim.

Resulting trust

The defendant claims that he was in a family relationship with the plaintiff and Nancy at the time of the representations, the construction or modification of the upstairs flat and the works and the carrying out of maintenance to the property as set out above. He claims that he pooled his financial resources and labour with the resources of the plaintiff and Nancy for the plaintiff to acquire property, being the upstairs flat and the works, and that from 1990 there was a common intention that they would benefit from the acquisition of the upstairs flat and the works. The defendant claims that he, or he and Nancy together, contributed to the acquisition of the upstairs flat and the works. Therefore, a resulting trust or trusts arose between 1990 and 1996 and the plaintiff holds beneficial title to the upstairs flat and the works on trust for the defendant or for the defendant and Nancy.
The classic statement of the principles of constructive trusts is set out in Calverley v Green (1984) 56 ALR 483. Gibbs CJ at 485 stated the presumptions as follows:

“Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, ie, a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others.”

Counsel for the plaintiff referred to JD Heydon and J Lehane, Jacobs’ Law of Trusts in Australia, (7th ed 2006, LexisNexis Butterworths) at 252 where it states that, as a matter of orthodox legal theory, a resulting trust does not arise where one person merely expends time and money on another person's property.
At all times, the plaintiff has been the registered owner of the entire property which the defendant claims to have an interest. He did not contribute to the purchase of property which could give rise to a resulting trust. Accordingly, the defendant’s claim that the plaintiff holds beneficial title in the property on trust for the defendant or for the defendant and Nancy on the basis of a resulting trust must fail.

Remedial constructive trust

The defendant pleads that on the basis of the plaintiff’s representations, he and Nancy relied on these representations. These circumstances he says gives rise to the resulting trust and he says that it would be unconscionable for the plaintiff to retain the legal and equitable title to the whole of the property, including the upstairs flat and the work and the benefit of the upstairs flat and the work included in the renovations to the exclusion of the defendant. The defendant submitted this Court should grant relief by way of declaration that the plaintiff holds the beneficial title to the upstairs flat and the works in a constructive trust, in whole or in part, for the defendant or for the defendant and Nancy.
The plaintiff submitted that in the circumstances of this case there is no unconscionability on the part of the plaintiff in seeking to recover possession, as she gave notice to the defendant as early as 2011 (Mazzella Aff, 23/3/2015, Annexure “F”), his relationship with Nancy came to an end in 1997 but he was permitted to remain in the flat with his children until they came of age and they started to leave in 2005, with the last one leaving in April 2015. The plaintiff submitted that the defendant has had plenty of time to organise his affairs and he has since remarried and his new wife and her child have moved into the upstairs flat.
The legal principles in relation to a constructive trust that arises from a common intention between parties were set out by Deane J in Muschinski v Dodds [1985] HCA 78; 160 CLR 583 at 619:

“Like most of the traditional doctrines of equity, it operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct. The circumstances giving rise to the operation of the principle were broadly identified by Lord Cairns LC, speaking for the Court of Appeal in Chancery, in Atwood v Maude: where 'the case is one in which, using the words of Lord Cottenham in Hirst v Tolson, a payment has been made by anticipation of something afterwards to be enjoyed (and) where ... circumstances arise so that future enjoyment is denied'. Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do.” (Citations omitted).

In Smilevska v Smilevska (No 2) [2016] NSWSC 397 (“Smilevska”), Slattery J noted at [160] that “unsconscionability is the touchstone of the creation of such a constructive trust.” His Honour then referred to Shepherd v Doolan [2005] NSWSC 42 at [30] where White J held:

“The ultimate basis for the imposition of a constructive trust is that it would be unconscionable for the holder of the legal title to the property to assert that he holds it free of any beneficial interest in the claimant. However, although “unconscionability” is the underlying basis upon which equity will intervene, it is not itself a sufficient description of the principles upon which equity does so. Equitable rights do not arise merely because the Court considers it fair in all the proven circumstances that the legal owner of property should hold it, or a portion of it, for the benefit of another.” (Citation omitted).”

It is my view that the defendant’s claim in relation to a constructive trust must fail for a number of reasons. They are, firstly, there was no common intention that the plaintiff intended that the defendant or Nancy should benefit from the renovations to the property. I have made findings that the plaintiff made no representations to the defendant to the effect that he or Nancy would have any interest in the property. The effect of the representations that were made in 1990 was limited to the plaintiff allowing Nancy and her family to occupy the premises until they moved into the Toronto property and, after the defendant and Nancy separated, until the children grew up and left home. Secondly, the contributions he and Nancy made amounted to $8,325. Those contributions could not have been made in anticipation of something because there was no basis for such anticipation. Once the grandchildren left the upstairs flat it was not unconscionable for the plaintiff to no longer permit the defendant to reside in the upstairs flat. It is my view that the defendant is not entitled to a beneficial interest in the property on the basis of a constructive trust.

Equitable charge or equitable lien

The defendant further claims he is entitled to an equitable charge or equitable lien over the property on the basis of the plaintiff’s representations to him and Nancy and their reliance upon them. He claims that it would be unconscionable for the plaintiff to retain the legal and equitable title to the whole of the property and the benefit of the upstairs flat and the works to his exclusion. Accordingly, he says the Court should declare that he should have the benefit of an equitable charge or an equitable lien against the property for such amount as is just and equitable in respect of the contributions, losses and detriment suffered by him.
An equitable lien may arise when a person expends money in respect of property in the mistaken belief that he or she will acquire an interest in the property and the owner has, with knowledge of that mistake, allowed the expenditure to be made: see Young v CAN 081 162 512 [2005] NSWSC 139, per Gzell J.
An equitable charge may arise in circumstances where a plaintiff spends money on the property of a defendant “in the expectation, induced or encouraged by the defendants that he would be able to live there indefinitely as a member of their family”: see Morris v Morris [1982] 1 NSWLR 61, 63 per McClelland J. The defendant in such a case would not be entitled to retain the benefit of the money spent since to do so would be unconscionable.
It is my view that the plaintiff did not induce the defendant to expend money on the upstairs flat with a promise of an interest in the Willoughby property. The agreement in 1990 between the parties was an oral agreement between the plaintiff, Nancy and the defendant to the effect that the defendant, Nancy and their children could live in the upstairs flat until they moved into the Toronto property and a conversation took place in which the defendant agreed to contribute to the labour and pay for some of the materials and fittings. There was never a promise that the defendant would be granted an interest in the property. The plaintiff said to Nancy that she wanted to rent the upstairs flat after a few years in order to support herself in retirement. There is no basis for granting these remedies. In these circumstances the defendant is not entitled to an equitable charge or equitable lien over the property.

Proprietary estoppel, estoppel by conduct and promissory estoppel

The defendant claims that he performed the acts set out above in reliance on the representations made by the plaintiff and that the plaintiff allowed him to act in such a manner, therefore she should be estopped by her conduct from resiling from the representations under the principles of proprietary estoppel or estoppel by conduct. Further, and in the alternative, he claims that if the plaintiff is allowed to resile from her representations, the defendant will suffer detriment, being the loss of actions, money and effort and the opportunity cost of not buying other premises on the Central Coast. The defendant submitted the plaintiff should be estopped from resiling from the representations under the principles of promissory estoppel.
So far as estoppel by conduct and proprietary estoppel are concerned, the plaintiff submitted that there were no relevant representations made by her to the defendant, she was allowed to resile from her original agreement as her grandchildren had grown up and left the property and the defendant was no longer married to Nancy and there was no expectation that the defendant would obtain a proprietary interest in the property.
In The Commonwealth v Verwayan (1990) 170 CLR 394, Mason CJ at 409 set out the principles of estoppel by conduct:

“At common law the principle of estoppel by conduct or representation (“estoppel in pais”) provided that protection by preventing the party estopped from unjustly departing from an assumption of fact which his conduct had caused another party to adopt or accept for the purpose of their legal relations: Grundt (76); Thompson . Palmer (77); Waltons Stores (78). But it was well established that, in order to support an estoppel by conduct, the representation (or assumption) must be a representation of an existing fact, a promise or representation of intention to do something being insufficient for that purpose: Yorkshire Insurance Co v Craine (79).”

In Smilevska, Slattery J succinctly set out the principles of proprietary estoppel at [111] to [112]:

“111 The principles of equitable and proprietary estoppel have recently been restated: Sidhu v Van Dyke [2014] HCA 19; 251 CLR 505…; Pratt; Bulle; Hardie; Duic v Duic [2013] NSWCA 42…; Waddell v Waddell [2012] NSWCA 214; 292 ALR 788…; and Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483….
112 The necessary elements of a proprietary estoppel are well established. The plaintiff must show: (1) the owner of property encouraged or induced in the plaintiff an expectation of obtaining an interest in property; (2) the expectation has arisen reasonably from the defendant's conduct; (3) knowledge by the defendant of the plaintiff’s expectation or belief; (4) the plaintiff altered his or her position in reliance on the expectation; (5) the plaintiff would suffer an identifiable detriment from his or her change of position were the expectation not fulfilled; (6) the circumstances render it unconscionable for the defendant to disappoint the expectation.”

Turning to promissory estoppel, the plaintiff submitted that, on the facts of this case there was no basis upon which the defendant could have assumed that a legal relationship existed or would exist between the plaintiff and himself or that she would not be free to withdraw.
The fundamental principles of promissory estoppel were set out in Waltons Stores (Interstate) Ltd v Maher (1988) 76 ALR 513 (“Waltons Stores”) by Mason CJ and Wilson J at 524:

“One may therefore discern in the cases a common thread which links them together, namely, the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has “played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it”: per Dixon J in Grundt [v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641], at 675; see also Thompson [v Palmer (1933) 49 CLR 507], at 547. Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption.”

Counsel for the plaintiff also referred to the reasons of Brennan J in Waltons Stores at 542, where he said:

“In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed or expected that a particular legal relationship exists between the plaintiff and the defendant or that a particular legal relationship will exist between them and, in the latter case, that the defendant is not free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.”

Common to each form of estoppel is the inducement or encouragement of an expectation or assumption by one person in another. In the present case, at the highest, in 1997 after Nancy left, the plaintiff permitted the defendant and her grandchildren to live in the upstairs flat until the last grandchild left home and that event occurred in 2012. So far as the defendant’s claim that he will suffer the loss of the opportunity cost of buying a property on the Central Coast, the plaintiff never knew of his plan to do so and the defendant has admitted that he did not tell her about it. Further, the defendant could not have bought the property on the Central Coast in 1990 as he did not have the financial means to do so. The defendant is not entitled to the relief sought on the basis of proprietary estoppel, estoppel by conduct or promissory estoppel.

Contractual claim

Finally, the defendant claims that the representations amounted to an offer by the plaintiff to the defendant to enter into a contract with the defendant, or the defendant and Nancy. He pleaded that the contract was wholly oral and the terms were express and implied. The terms were contained in the conversations between the plaintiff, the defendant and Nancy at the property in about 1990. The defendant and the plaintiff each partially performed the agreement. The defendant made the contributions to the property as set out above and the plaintiff allowed the defendant and Nancy to live in the property together with their children. The defendant seeks specific performance of this agreement. In the alternative, the defendant seeks damages. The particulars of the loss and damage included not purchasing a property on the Central Coast, the cost of renting alternative accommodation, loss of moneys paid by the defendant and Nancy towards the construction of the upstairs flat and the works and the purchase of fixtures and fittings, loss of time and effort in contributing labour and time in respect of the construction of the upstairs flat and the works, loss of monies paid by the defendant and Nancy towards alterations of the upstairs flat and the works in August 1996 (the enclosure of the balcony) and the cost of replacing appliances and bathroom fixtures.
Counsel for the plaintiff submitted that it is clear there was never an intention to enter into any legally binding contract and that this was merely a family dealing between family members based on need, love and affection. Counsel for the plaintiff referred to Balfour v Balfour [1919] 2 KB 571, Cohen v Cohen (1929) 42 CLR 91 and Jones v Padavatton [1969] 2 All ER 616 in support of the proposition that members of family relationships are presumed not to intend to create contractual relationships in their dealings.
In Jones v Padavatton, Salmon LJ stated (at 621):

“…[A]s a rule when arrangements are made between close relations, for example, between husband and wife, parent and child or uncle and nephew in relation to an allowance, there is a presumption against an intention of creating any legal relationship. This is not a presumption of law, but of fact. It derives from experience of life and human nature which shows that in such circumstances men and woman usually do not intend to create legal rights and obligations, but intend to rely solely on family ties of mutual trust and affection. This has all been explained by Lord Justice Atkin in his celebrated judgment In Balfour v Balfour ([1919] 2 KB 571, 578-580; [1918-19 All ER Rep 860 at pp 864, 865). There may, however, be circumstances in which this presumption, like all other presumptions of fact, can be rebutted. Mr Dillon has drawn our attention to two cases in which it was, Shadwell v. Shadwell ((1860) 9 CBNS 159), and Parker v Clark ([1960] 1 All ER 93; [1960] WLR 236). The former was a curious case. It was decided by Erle CJ, and Keating J, (Byles J, dissenting) on a pleading point, and depended largely upon the true construction of a letter written by an uncle to his nephew. I confess that I should have decided it without hesitation in accordance with the views of Byles J. But this is of no consequence. Shadwell v Shadwell laid down no principle of law relevant to what we have to decide; it merely illustrated what could never, I think, be seriously doubted, viz., that there may be circumstances in which arrangements between close relatives are intended to have the force of law.”

Even if there were an agreement (as alleged by the defendant, which there was not) it is unlikely there would have been any intention to create legal relations between the defendant and the plaintiff on the basis of them being in a family relationship. The defendant relies on the occurrence of conversations between the defendant and the plaintiff that constituted an agreement entitling him to the right to stay in the property for evermore. As previously mentioned, the conversations as alleged by the defendant never took place. There was no such agreement between the plaintiff and the defendant. This claim in contract fails.
The cross claimant’s claims in the cross claim fail. The cross claim should be dismissed.

Conclusion

The first cross defendant is entitled to possession of the property. The cross claim is dismissed.
Costs are discretionary. Costs usually follow the event. The cross claimant is to pay the cross defendant’s costs of the cross claim. However, the relief sought in the statement of claim has not been finalised. Paragraphs 3 and 4 of the statement of claim seek damages and mesne profits and those paragraphs are listed for directions before the Registrar at 9.00 am on Tuesday, 26 July 2016. The defendant is to pay the plaintiff’s costs of these proceedings to date.

Judgment:

(1) It is adjudged that the plaintiff/first cross defendant have possession of the property described in paragraph 1 of the statement of claim.

The Court orders that:

(2) The cross claim is dismissed.

(3) The cross claimant is to pay the first cross defendant’s costs of the cross claim.

(4) The defendant is to pay the plaintiff’s costs of these proceedings to date.

(5) Paragraphs 3 and 4 of the statement of claim are listed for directions before the Registrar at 9.00 am on Tuesday, 26 July 2016.

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Decision last updated: 26 May 2016

Medium Neutral Citation:	Buono v Mazzella [2016] NSWSC 659
Hearing dates:	26, 27, 28 & 29 April 2016
Date of orders:	26 May 2016
Decision date:	26 May 2016
Jurisdiction:	Common Law
Before:	Harrison AsJ
Decision:	Judgment: (1) It is adjudged that the plaintiff/first cross defendant have possession of the property described in paragraph 1 of the statement of claim. The Court orders that: (2) The cross claim is dismissed. (3) The cross claimant is to pay the first cross defendant’s costs of the cross claim. (4) The defendant is to pay the plaintiff’s costs of these proceedings to date. (5) Paragraphs 3 and 4 of the statement of claim are listed for directions before the Registrar at 9.00 am on Tuesday, 26 July 2016.
Catchwords:	REAL PROPERTY – possession of land – defendant resided in upstairs apartment – property owned by former mother in law – defendant only entitled to remain on property until adult children grew up and left – plaintiff entitled to possession REAL PROPERTY – possession of land – defendant claims equitable or contractual relief in cross claim – resulting trust – constructive trust – equitable lien – equitable charge – proprietary estoppel – estoppel by conduct and promissory estoppel – contractual relationship entitling defendant to live on property forevermore – defendant did not establish factual bases for cross claim – cross claim dismissed
Cases Cited:	Balfour v Balfour [1919] 2 KB 571 Calverley v Green (1984) 56 ALR 483 Cohen v Cohen (1929) 42 CLR 91 Jones v Padavatton [1969] 2 All ER 616 Muschinski v Dodds [1985] HCA 78; 160 CLR 583 Shepherd v Doolan [2005] NSWSC 42 Smilevska v Smilevska (No 2) [2016] NSWSC 397 The Commonwealth v Verwayan (1990) 170 CLR 394 Waltons Stores (Interstate) Ltd v Maher (1988) 76 ALR 513 Young v CAN 081 162 512 [2005] NSWSC 139
Texts Cited:	JD Heydon and J Lehane, Jacobs’ Law of Trusts in Australia, (7th ed 2006, LexisNexis Butterworths)
Category:	Principal judgment
Parties:	Maddalena Buono (Plaintiff/First Cross Defendant) Porfirio Mazzella (Defendant/Cross Claimant) Julie-Anne Williams aka Nancy Buono (Second Cross Defendant)
Representation:	Counsel: G Turner (Plaintiff/Cross Defendant) Solicitors: CKB Associates Lawyers (Plaintiff/Cross Defendant) P Mazzella (Defendant/Cross Claimant in person)
File Number(s):	2015/137381
Publication restriction:	Nil