Goedemans v Perronnet
[2023] VSC 411
•20 July 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2021 00535
| ELIZABETH GOEDEMANS | Plaintiff/Defendant by Counterclaim |
| v | |
| INGRID PERRONNET | First Defendant/Plaintiff by Counterclaim |
| and | |
| FRÉDÉRIC MOSSON | Second Defendant |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 27–31 March, 3 April, 2 May 2023 |
DATE OF JUDGMENT: | 20 July 2023 |
CASE MAY BE CITED AS: | Goedemans v Perronnet |
MEDIUM NEUTRAL CITATION: | [2023] VSC 411 |
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DAMAGES – First defendant occupied plaintiff’s premises pursuant to license permitting her to undertake renovations subject to receiving plaintiff’s consent – First defendant undertook works without first obtaining consent – First defendant also undertook works with plaintiff’s consent which were substandard and/or undertaken without requisite permits – First defendant liable to pay damages to the plaintiff equivalent to the cost of rectification works.
TRUSTS – First defendant claiming declaration that plaintiff holds property subject to the first defendant’s 50 per cent interest in the property with the remaining 50 per cent to pass to the first defendant upon the plaintiff’s death – Claim based upon an agreement entered into between plaintiff and first defendant pursuant to which plaintiff agreed to first defendant being registered on title as having a 50 per cent interest as a tenant in common with the remaining 50 per cent to pass to the first defendant upon the plaintiff’s death – No agreement as alleged – Claim for declaration dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L Stanistreet | Meerkin & Apel |
| For the Defendants | Mr R Moore | Aptum Legal Pty Ltd |
HIS HONOUR:
Introduction
The plaintiff, Elizabeth Goedemans, is a 76-year-old retired nurse. Elizabeth has three children: Ingrid Perronnet (the first defendant and plaintiff by counterclaim), Xavier Perronnet, and Sandra Perronnet. Elizabeth’s partner is Joe Nowicki. Ingrid’s partner is the second defendant Frédéric Mosson. I shall refer to the individuals involved in this matter by their first names without any disrespect intended.
The primary claim brought by Elizabeth in her statement of claim filed 26 February 2021 was for possession of the property located at 5 Holyrood Street, Camberwell (‘No. 5’).[1] Since the filing of the statement of claim, Ingrid and Frédéric have vacated the premises. By her amended statement of claim (‘ASOC’) Elizabeth seeks damages for rectification of a number of works undertaken by the defendants to No. 5.
[1]More particularly described in Certificate of Title Volume 5498 Folio 534: CB2029, Historical Title Search.
The majority of the trial addressed Ingrid’s counterclaim. Ingrid alleges that, by reason of either an oral agreement entered into in April 2018 or a proprietary estoppel arising from the parties’ conduct, she is immediately entitled to a 50 per cent interest in No. 5, with the remaining 50 per cent interest to pass to her on Elizabeth’s death. Ingrid seeks declarations to give effect to the alleged agreement. For the reasons which follow I have concluded that there was no agreement between Elizabeth and Ingrid in April 2018, or at any time, that Elizabeth would transfer 50 per cent of her interest in No. 5 with the remaining 50 per cent to be transferred on Elizabeth’s death. I have concluded that Ingrid is liable to pay Elizabeth damages in the sum of $138,978.61 in respect of works undertaken by Ingrid whilst residing at No. 5 which were either substandard or undertaken without Elizabeth’s consent.
Background
No. 5 Holyrood Street, Camberwell
Elizabeth has been the sole registered proprietor of No. 5 since 1986. Initially, Elizabeth’s parents occupied the property. In 1999, Elizabeth moved into No. 5 to take care of her elderly parents. Extensive renovations were undertaken to expand the property, including the addition of a second floor and the extension of the ground floor.
Upon the completion of the renovations in 2000, Xavier moved into the property. Elizabeth’s parents resided on the ground floor, while Elizabeth and Xavier resided in the newly-renovated upstairs area. At this time, Ingrid had already moved out of home and did not reside at No. 5 with Elizabeth and Xavier.
In 2005, Sarah, Xavier’s then-girlfriend moved into No. 5. Xavier began contributing to the payment of utilities and other bills relating to the property. In 2007, Elizabeth’s parents moved to a nursing home. From this point, Xavier paid all outgoings relating to No. 5.
In 2009, Xavier and Sarah undertook renovations to No. 5 at their cost and with Elizabeth’s consent in order to prepare the house for the birth of their first child. Around this time, Elizabeth and Joe jointly purchased a property at 24 Napier Street, Rye (‘Napier Street Property’).[2]
[2]More particularly described in Certificate of Title Volume 9628 Folio 902: CB2250, Historical Title Search.
In 2011, Xavier and Sarah moved downstairs, with Elizabeth residing on the second floor of No. 5. Xavier and Sarah undertook further renovations to the house at their own expense and with Elizabeth’s consent.
While living at No. 5 with Elizabeth, Xavier and Sarah purchased a property in their own right in late 2013. The property, located at 1/999 Riversdale Road, Surrey Hills (‘Riversdale Road’),[3] was registered in Sarah’s name. The property has been rented out by Xavier and Sarah since being purchased in 2013.
[3]More particularly described in Certificate of Title Volume 9063 Folio 387: CB2274, Historical Title Search.
Ingrid Perronnet
Ingrid is Elizabeth’s daughter. She holds a Bachelor of Engineering from the University of Melbourne and a Bachelor of Laws from Deakin University. In 2004, she completed her articles at Phillips Fox. Elizabeth has never practised as a lawyer.
In 1999 Ingrid was involved in a white-water rafting accident. As a result she suffers from acute anxiety. In around 2002 she was diagnosed with post-traumatic stress disorder. It is common ground that following this accident, Ingrid became reliant on Elizabeth for emotional support. Ingrid became dependent on close proximity to Elizabeth for her emotional wellbeing. They had a very close relationship.
In December 2005, Ingrid married Lee Holland. They have two children. In 2008, Ingrid and Lee purchased two properties: the neighbouring house to Elizabeth, 7 Holyrood Street, Camberwell (‘No. 7’);[4] and, a property at 53 Charles Street, Rye (‘Charles Street Property’).[5] In around 2015, Ingrid carried out renovations at No. 7 including the conversion of an existing detached garage into a habitable attached studio.
[4]More particularly described in Certificate of Title Volume 5553 Folio 462: CB186, Historical Title Search.
[5]More particularly described in Certificate of Title Volume 9848 Folio 363: CB2256, Historical Title Search.
On 1 September 2017, Ingrid and Lee separated. They divorced in February 2019.
Events following Ingrid’s separation
In November 2017, Ingrid and her children, along with Elizabeth and Joe went on a holiday in France. It was on this trip that Ingrid first met Frédéric, although their romantic relationship did not commence until Ingrid travelled to France between October 2018 and early February 2019. Ingrid contends that during the trip she disclosed to Elizabeth that her and Lee had separated. Elizabeth denies finding out about Ingrid’s separation from Lee until after they returned from France in about February or March 2018.
In May 2018, Ingrid and her two children moved into No. 5.[6] Ingrid immediately began carrying out renovations to the property.[7] She sought to complete as many works as possible prior to her holiday to France in October 2018,[8] and prior to the finalisation of her divorce with Lee in February 2019 at which time she would lose access to their joint credit account.[9]
[6]Transcript of Proceedings, T 140 L 4–5 (28 March 2023).
[7]Ibid T 143 L 20–25; T 151 L 3–10.
[8]CB613, WhatsApp Message from Ingrid Perronnet to Linh Guzzardi dated 11 December 2018.
[9]Transcript of Proceedings, T 310 L 20 – T 311 L 13 (29 March 2023).
In October 2018, Ingrid again went on holiday to France. She was accompanied by her children as well as Elizabeth and Joe. During this trip Ingrid commenced her relationship with Frédéric. Ingrid and Elizabeth returned from France in early February 2019.[10] Upon Ingrid’s return to Australia, she continued a long-distance relationship with Frédéric.[11]
[10]Ibid T 164 L 5–6 (28 March 2023); T 240 L 18–22; T 292 L 25–26 (29 March 2023).
[11]Ibid T 154 L 2–3 (28 March 2023); Witness Statement of Ingrid Perronnet, [69].
From 25 June 2008 to 31 January 2019, Ingrid was the sole registered proprietor of No. 7.[12] In about May 2018, Xavier and Sarah agreed to buy No. 7 from Ingrid. Ingrid (as vendor) and Sarah (as purchaser) signed a contract of sale for No. 7 on 25 January 2019,[13] and Sarah became the sole registered proprietor of No. 7 on 31 January 2019.[14]
[12]CB2264–5, Historical Title Search.
[13]CB686–93, Contract of Sale dated 25 January 2019.
[14]CB2265, Historical Title Search.
Deterioration of Elizabeth and Ingrid’s relationship
In February 2019 Ingrid asked Elizabeth to help her clean Charles Street.[15] On 14 February 2019 Ingrid and Elizabeth attended the property. During their visit Ingrid overheard a telephone conversation between Elizabeth and Karin Anderson, a friend of Elizabeth’s.[16] The contents of the telephone conversation are in dispute. However, it is common ground that Ingrid became very distressed after overhearing the conversation.[17]
[15]Witness Statement of Elizabeth Goedemans filed 24 March 2023, [79]; Witness Statement of Ingrid Perronnet filed 24 March 2023, [70].
[16]Witness Statement of Elizabeth Goedemans filed 24 March 2023, [81].
[17]Witness Statement of Elizabeth Goedemans filed 24 March 2023, [81]–[85]; Witness Statement of Ingrid Perronnet filed 24 March 2023, [73], [76].
In April 2019, Ingrid travelled alone to France to visit Frédéric for a period of three weeks.[18] Frédéric accompanied Ingrid on her return to Australia and stayed for several weeks before returning to France.[19]
[18]Transcript of Proceedings, T 166 L 29–30; T 172 L 15–16 (28 March 2023); T 266 L 1–3 (29 March 2023).
[19]Ibid T 172 L 17–24 (28 March 2023); T 266 L 4–6; T 295 L 2–6 (29 March 2023).
On 3 June 2019, Ingrid installed a wall and lockable door near the foot of the staircase at the rear of No. 5.[20] As Elizabeth lived upstairs and Ingrid lived downstairs with her children, the locking of the door had the effect of preventing Elizabeth from accessing the downstairs of No. 5. There is conflicting evidence as to whether the door was permanently locked from the date of installation.
[20]CB1266, Facebook Message from Ingrid Perronnet to Christine Griffiths dated 3 June 2019.
In January 2020, Frédéric returned to Australia and moved into No. 5.[21] Ingrid continued to carry out renovations until around July 2020.[22] On 6 November 2020, Elizabeth’s solicitors wrote to Ingrid requesting that she and Frédéric vacate No. 5.
[21]Witness Statement of Elizabeth Goedemans filed 24 March 2023, [99].
[22]Witness Statement of Ingrid Perronnet filed 24 March 2023, [85].
In February 2022, there was a verbal altercation between Elizabeth, Ingrid and Frédéric. On 15 February 2022, the Magistrates’ Court of Victoria made ex parte Interim Family Violence Intervention Orders against Ingrid and Frédéric. On 17 February 2022, the police escorted Ingrid and Frédéric from No. 5. They have not returned to No. 5 since that date. On 12 September 2022, the Magistrates’ Court of Victoria made Final Family Violence Intervention Orders against Ingrid and Frédéric by consent for 12 months on the basis of there being no admission as to the matters alleged in either proceeding against Ingrid or Frédéric.
Counterclaim
By her claim Ingrid seeks declarations:
(i) That Elizabeth holds one half of her interest in No. 5 on trust for Ingrid, subject to Elizabeth’s right to reside at the property until her death; and
(ii) That Elizabeth holds her remaining interest in No. 5 on trust for Ingrid subject to Elizabeth’s right to reside at the property until her death.
The basis of the declaratory relief is an agreement alleged to have been entered into between Ingrid and Elizabeth in late April 2018. Ingrid alleges in her ASOC that on 28 April 2018 she entered into an agreement with Elizabeth whereby:
15.1 Ingrid would:
(a) sell 7 Holyrood Street to Xavier for $1,900,000 (sale price) being approximately $600,000 less than the market value of the property and the amount Ingrid needed to discharge all of her mortgages (including the mortgage over 7 Holyrood Street);
(b) pay for and carry out renovations and improvements to the Property;
(c) move into the Property with her children; and
(d) be entitled to live at the Property for the entirety of her life.
15.2 In return, Elizabeth would:
(a) transfer to Ingrid one-half of her registered interest in the Property; and
(b) transfer to Ingrid her remaining interest in the Property upon Elizabeth’s death.
Particulars
(1) The Agreement was partly oral and partly to be inferred from conduct.
(2) Insofar as the Agreement was oral, it comprised of conversations:
a. on 26 April 2018 between Ingrid and Elizabeth in the family room of 7 Holyrood Street;
b. on 26 April 2018, by way of a telephone conversation between Ingrid and Elizabeth;
c. on 27 April 2018, by way of a telephone conversation between Ingrid and Xavier; and
d. on or around 28 April 2018, by way of a telephone conversation between Ingrid and Elizabeth; to the effect alleged.
(3) Insofar as the Agreement was to be inferred from conduct, it was to be inferred from:
a. Ingrid transferring 7 Holyrood Street to Sarah, at Xavier’s direction, for $1,900,000.
b. Ingrid moving into the Property with her two children; and
c. Ingrid conducting the renovations and improvements to the Property as outlined at paragraph 16 below.[23]
Throughout the trial, this pleaded version of the agreement was referred to by all parties as ‘the deal’. Elizabeth denies entering into the deal.
[23]Counterclaim of the First Defendant filed 17 June 2022, [15.1]–[15.2].
Ingrid and her husband, Lee Holland, separated in September 2017. There is a conflict in the evidence as to when Elizabeth became aware of the separation. Ingrid gave evidence that she told Elizabeth of the separation in late 2017. Elizabeth gave evidence that she first became aware of the separation in February 2018, shortly after she and Ingrid returned from a holiday in France. It is not necessary to resolve this discrepancy. By February 2018 Elizabeth was aware of the separation. Elizabeth was also aware that Ingrid was very concerned about where she and her children were going to be living following her divorce because No. 7 was likely to have to be sold as part of a property settlement.[24] Ingrid had not been in paid employment since 2012[25] and was financially dependent upon her husband.
[24]Transcript of Proceedings, T 131 L 17–19 (28 March 2023); Witness Statement of Elizabeth Goedemans filed 24 March 2023, [39].
[25]Transcript of Proceedings, T 239 L 25 (29 March 2023).
It is common ground that Ingrid developed acute anxiety as a consequence of a white- water rafting accident in 1999.[26] It is also common ground that after the accident Ingrid became very emotionally dependent upon Elizabeth.[27] Ingrid and her husband purchased No. 7 in 2008.[28] Ingrid’s desire to live in the property next door to No. 5 was symptomatic of her emotional dependence upon her mother.
[26]Witness Statement of Ingrid Perronnet filed 24 March 2023, [17].
[27]Transcript of Proceedings, T 129 L 10-12 (28 March 2023).
[28]Witness Statement of Ingrid Perronnet filed 24 March 2023, [24].
Since 2005 Xavier and Sarah had been living at No. 5.[29] By late 2017 they had three children. Xavier, Sarah and their three children lived on the ground floor of No. 5, whilst Elizabeth lived upstairs.[30] In late 2013 Xavier and Sarah purchased 1/999 Riversdale Road, Surrey Hills.[31] This property was rented out. At no stage have Xavier and his family lived at this property.
[29]Transcript of Proceedings, T 201 L 16 (28 March 2023).
[30]Witness Statement of Xavier Perronnet filed 24 March 2023, [17], [26].
[31]Ibid [23].
On several occasions prior to late 2017 Xavier and Elizabeth discussed the prospect of Xavier purchasing No. 5 from Elizabeth.[32] Elizabeth told Xavier that she needed to sell No. 5 to raise funds for her retirement.[33] As at late 2017 Elizabeth was the sole registered proprietor of No. 5. Together with Joe, she also was the joint proprietor of the Napier Street Property.
[32]Ibid [20].
[33]Ibid.
In 2017 Xavier was the proprietor and manager of his own company, Rate My Agent. He received $4.7 million gross from the sale of two tranches of shares in the company in mid-2017 and February 2018.[34] The funds which he received put him in a position where he was able to proceed with the purchase of No. 5. In early 2018 he discussed a proposal with Elizabeth under which he would purchase No. 5 and the Napier Street Property at a discounted price. In return, Elizabeth and Joe would move to 1/999 Riversdale Road and live there rent-free for the rest of their lives.[35]
[34]Transcript of Proceedings, T 190 L 28–31 (28 March 2023).
[35]Transcript of Proceedings, T 189 L 26–31, T 190 L 1–7, T 127 L 9–12 (28 March 2023); Witness Statement of Xavier Perronnet filed 24 March 2023, [44]–[46].
I accept Elizabeth’s evidence that in or about February 2018 Ingrid proposed that she would move into No. 5 with her children. Shortly after Ingrid made this proposal Elizabeth spoke to Xavier and asked him not to proceed with the purchase of No. 5.[36] By the end of February 2018 the proposal for Xavier to purchase No. 5 had been abandoned to accommodate Ingrid’s wish to move into No. 5.
[36]Witness Statement of Elizabeth Goedemans filed 24 March 2023, [47], [49]; Witness Statement of Xavier Perronnet filed 24 March 2023, [57]–[58], [61].
I accept the evidence of Elizabeth and Xavier that within a few days of Xavier abandoning the proposed purchase of No. 5 a discussion took place between Ingrid, Xavier and Elizabeth in the kitchen of No. 5 regarding the arrangements for Ingrid and her children to move into No. 5 once Xavier and his family vacated the premises.[37] I also accept the evidence of Elizabeth and Xavier that during this meeting it was agreed that Ingrid would live at No. 5 on the same basis that Xavier and his family had lived there, namely, rent-free but with responsibility for payment of all bills.[38] During this meeting there was also discussion about Ingrid being able to undertake renovations once she moved into No. 5. It was agreed that Ingrid could undertake renovations subject to Elizabeth consenting to the proposed works.[39] When this meeting took place there was no timeline for Xavier and his family to vacate No. 5. I accept Xavier’s evidence that throughout March and April 2018 he and Sarah started researching prospective locations where they might purchase a house.[40] I also accept Xavier’s evidence that in late April 2018 he had a telephone conversation with Ingrid during which she asked him if he would consider purchasing No. 7. He declined this offer.[41]
[37]Witness Statement of Elizabeth Goedemans filed 24 March 2023, [51]–[54]; Witness Statement of Xavier Perronnet filed 24 March 2023, [65]–[69].
[38]Witness Statement of Xavier Perronnet filed 24 March 2023, [68], Witness Statement of Elizabeth Goedemans filed 24 March 2023, [53(b) and (c)].
[39]Witness Statement of Xavier Perronnet filed 24 March 2023, [78]–[79], Witness Statement of Elizabeth Goedemans filed 24 March 2023, [53(e)].
[40]Witness Statement of Xavier Perronnet filed 24 March 2023, [90].
[41]Ibid [92]–[93].
In early May 2018 Elizabeth asked Xavier whether he would reconsider purchasing No. 7 from Ingrid. Elizabeth told Xavier that she was saddened by the prospect of Xavier and his family moving away.[42] Following discussions between Xavier and Sarah they agreed to purchase No. 7.[43] Shortly thereafter Xavier told Ingrid that he was willing to purchase No. 7 and asked her what price she wanted. Ingrid told Xavier that she had a total of $1.9 million debt for No. 7 and Charles Street, Rye and wanted to receive a price for No. 7 which would clear this debt. Xavier agreed to pay this price, subject to obtaining a formal valuation. Ingrid agreed to this proposal.[44] It was further agreed between Ingrid and Xavier that the purchase of No. 7 would not be completed until after her property settlement with Lee was finalised.[45]
[42]Ibid [94].
[43]Ibid [95]–[96]; Witness Statement of Sarah Perronnet filed 24 March 2023, [41].
[44]Witness Statement of Xavier Perronnet filed 24 March 2023, [98]–[100].
[45]Ibid [101]; Witness Statement of Sarah Perronnet filed 24 March 2023, [54].
The findings set out above record the agreement which was reached between Ingrid, Xavier and Elizabeth as at May 2018 when Ingrid and her children moved into No. 5 and Xavier and his family moved into No. 7. I reject Ingrid’s evidence that on 26 April 2018 she had a conversation with Elizabeth at No. 7 during which Elizabeth told Ingrid that she had spoken to Xavier and ‘had worked it all out’.[46] I also reject Ingrid’s evidence that Elizabeth proposed that she would transfer a 50 per cent interest in No. 5 to Ingrid with the remaining 50 per cent interest to be transferred upon Elizabeth’s death, in exchange for Ingrid selling No. 7 to Xavier for $1.9 million, $600,000 less then market value, moving into No. 5 and paying for and carrying out renovations and improvements to No. 5.[47]
[46]Witness Statement of Ingrid Perronnet filed 24 March 2023, [50].
[47]Ibid at [51]; Transcript of Proceedings, T 257 L 22–31 (29 March 2023).
Elizabeth is asset rich and cash poor. Her only income is a $300 per week allowance from Joe.[48] In late 2017 Elizabeth entered into an agreement to sell No. 5 to Xavier to fund her retirement. In addition to selling No. 5 Ingrid agreed to transfer her half share in the Napier Street Property to Xavier for no payment in return for the right for her and Joe to live rent-free at 1/999 Riversdale Road for the rest of their lives. Joe’s 50 per cent share in the Napier Street Property was to be sold to Xavier for market value.
[48]Transcript of Proceedings, T 126 L 18–23 (28 March 2023).
Under the terms of the deal as alleged by Ingrid, Elizabeth was giving up the financial security which No. 5 provided her. At the time of the alleged deal Elizabeth was in her early 70s. The unchallenged evidence is that Elizabeth’s mother died at the age of 104 years in 2016.[49] Based on her mother’s age, at the time of the alleged deal, Elizabeth potentially had many years of life ahead of her. Under the alleged deal Elizabeth was giving up the ability to raise funds for her retirement from the sale of No. 5.
[49]Ibid T 162 L 19–20.
The immediate transfer of a 50 per cent interest in No. 5 required an amendment to the title to the property to record Ingrid as a tenant in common with a 50 per cent interest. The registration of this interest would have precluded Elizabeth from being able to sell the property. I do not accept that, in response to Ingrid’s changed circumstances arising from the breakdown of her marriage, Elizabeth was willing to surrender the financial security which the ownership of No. 5 provided her.
Further, the deal as alleged by Ingrid represents a very significant departure from Elizabeth’s testamentary intentions as recorded in her extant will at the time of the alleged deal.[50] That will had been executed on 23 January 2005. Under the terms of the will, subject to a life interest in favour of her elderly parents, Elizabeth bequeathed No. 5 to Xavier and her half share in the Napier Street Property to Ingrid. The bequest of No. 5 to Xavier was worth substantially more than the bequest of Elizabeth’s half share in the Napier Street Property to Ingrid. Ingrid was aware in April 2018 that under the terms of Elizabeth’s will No. 5 would be left to Xavier.[51] Ingrid gave evidence that No. 5 was always considered Xavier’s ‘because we all knew that he was going to get this house’.[52] Ingrid gave evidence that Elizabeth told her that she wanted to ‘switch’ the position of Xavier and Ingrid under the 2005 will because she believed that Ingrid now had greater need for financial assistance.[53] I reject this evidence. It was not referred to in Ingrid’s witness statement and was not put to Elizabeth in cross-examination.
[50]Exhibit D-2, Will dated 23 January 2005.
[51]Transcript of Proceedings, T 231 L 26–27 (29 March 2023).
[52]Ibid T 241 L 12–14.
[53]Ibid T 259 L 1–4.
In order to give effect to the deal two steps needed to be taken. First, the certificate of title for No. 5 had to be amended to record Ingrid’s 50 per cent interest as a tenant in common. Second, Elizabeth’s will had to be amended to provide for Elizabeth’s remaining 50 per cent interest in No. 5 to be bequeathed to Ingrid. Neither of these steps were taken. Ingrid took no steps to facilitate an amendment of Elizabeth’s will notwithstanding her awareness in June/July 2018 that Elizabeth’s had been hospitalised and her blood pressure was ‘very, very high’.[54]
[54]Ibid T 233 L 17.
Ingrid’s explanation for her failure to ensure that Elizabeth’s will was altered to record the deal, was as follows:
So when Xavier - Xavier had made an appointment with a solicitor for my divorce matter and he and Elizabeth - now, that would have been in May, early May 2019 [sic]. He went with mum to the solicitor, I didn’t go, I had a panic attack, I couldn’t go. So he and mum went to do this meeting where they talked about my financial position, but they talked the global - sorry, what we were globally going to be doing. And when they came back we were in the family room at number 7. They told me that they had been told that no transfer of houses, no documents like that could be done until after the consent orders for my divorce had been finalised. So effectively everything had to be put on hold in relation to that. And then when I went to the solicitors just before we went overseas, so the later part of the year, just before we went overseas to sign the last of the paperwork with this particular solicitor, my mum was there and Joe was there and as we were walking out the door she was talking to - she was saying, ‘Fine, I will see you soon. Actually, we will see you when we get back from France because we will need to see you do all the paperwork for number 5.’ So I thought we’re going to do - like, we couldn’t do it earlier, and as soon as it looked like we were going to get close to doing it, we were agreeing to go and see a solicitor early 2019. So that’s where we get to early 2019. And then, get back, I think I’m still in that belief, and then she says the deal’s off and then it becomes a nightmare of me trying to get her to do those changes. I attempted many times, I had conversations with her.[55]
[55]Ibid T 260 L 20 – T 261 L 20.
In effect, Ingrid’s explanation for her failure to take steps in 2018 to ensure that Elizabeth’s will recorded the deal is that she was acting on the advice of her solicitor, Ben Waterson. I reject this evidence. Ingrid’s account of the advice allegedly given to Xavier and Elizabeth in May 2018 was not put to either of them in cross-examination. Ingrid’s account of the meeting with the solicitor, together with Elizabeth and Joe in late 2018 was not put to either Elizabeth or Joe in cross-examination. Ingrid’s evidence regarding the advice was that ‘no transfer of houses, no documents like that could have been done until after the consent orders for the divorce had been finalised’.[56] An amendment to Elizabeth’s will to confer upon her a contingent interest in 50 per cent of No. 5 would not have been inconsistent with this advice.
[56]Ibid T 260 L 30 – T 261 L 1.
The failure to put Ingrid’s account of the advice provided by Mr Waterson during the meetings in May 2018 and late 2018 to Elizabeth, Xavier and Joe is sufficient, of itself, to reject Ingrid’s evidence. In addition, I infer that had Mr Waterson been called to give evidence, his evidence would not have assisted Ingrid’s case.
Mr Waterson could have been called to give evidence that he gave advice that there should be no amendment to Elizabeth’s will and no alteration to the certificate of title of No. 5 to record Ingrid as a tenant in common until after the finalisation of Ingrid’s divorce. Mr Moore, who appeared for Ingrid, submitted that no Jones v Dunkel[57] adverse inference could be drawn in circumstances where a client fails to call their solicitor. In support of this submission Mr Moore cited the judgment of Hodgson J in Standard Chartered Bank of Australia Ltd v Antico.[58] Ingrid disclosed the advice provided by Mr Waterson whilst giving evidence on the second day of the trial. Upon giving evidence which disclosed the advice any privilege attaching to the advice was waived.[59] Where there has been a waiver of privilege a Jones & Dunkel inference may be drawn from the failure of a party to call as a witness their solicitor.[60] I infer that if Mr Waterson had been called to give evidence, that evidence would not have assisted Ingrid’s counterclaim.
[57](1959) 101 CLR 298.
[58](1993) 36 NSWLR 87, 94.
[59]Mann v Carnell (1999) 201 CLR 1, 13 [28]; Evidence Act 2008 s 122.
[60]Cooper v Hobbs [2013] NSWCA 70, [60]–[74].
In rejecting Ingrid’s evidence as to the terms of the deal, I have had regard to several documents authored by Ingrid which record the deal in terms which are inconsistent with the pleaded version. As pleaded, the deal was entered into on 28 April 2018. On 1 May 2018 Ingrid sent a Facebook message to her close friend, Christine Griffiths, stating: ‘Selling Camberwell to Xavier, buying mum’s and keeping the beach house with a small debt. So now have to fix mums [sic] place with no $$$ so that’s going to be fun.’[61]
[61]CB1247–8, Facebook Message from Ingrid Perronnet to Christine Griffiths dated 1 May 2018.
In a Facebook message dated 10 September 2018 to her friend Sarah Castle,[62] Ingrid states: ‘Sold the house, bought my mums next door, doing a cheapish reno and got to keep the beach house.’
[62]CB430, Facebook Message from Ingrid Perronnet to Sarah Castle dated 10 September 2018.
In a WhatsApp message dated 11 December 2018 to her friend Linh Guzzardi,[63] Ingrid states: ‘House sold, bought mums next door, renovated as much as I could before we came here, and kept the beach house.’
[63]CB613, WhatsApp Message from Ingrid Perronnet to Linh Guzzardi dated 11 December 2018.
In the messages set out above Ingrid told her friends that she had bought No. 5. This is inconsistent with the pleaded version of the deal which makes no reference to any agreement that Ingrid would purchase No. 5.
In a WhatsApp message dated 17 October 2018 to her friend Megan Sleep,[64] when asked whether No 5 is hers, Ingrid states: ‘50% now and balance later. Rye outright with a small debt. Mum just worried a new guy will come along and try and take Camberwell so wants some control until later.’ This message is consistent with the pleaded version of the deal. However it is inconsistent with the three messages dated May, September and December 2017 in which Ingrid claimed to have bought No. 5. I place little evidentiary weight on the 17 October 2018 message.
[64]CB413-4, WhatsApp Message to Megan Sleep dated 17 October 2018.
29 May 2019 letter
On 29 May 2019 Ingrid completed an 8-page letter to Elizabeth.[65] The letter sets out Ingrid’s version of the deal. The letter includes the following:
Although you continue to state that you don’t remember the figures surrounding the agreement, I remember them clearly as we were talking about the only assets I had and we weren’t talking about small sums.
The agreement was as follows:
1. You indicated to me that you were going to give each of us $1m inheritance. Remember this was not my idea, this is what you decided and offered.
2. For Xavier is was [sic] going to be calculated by my selling No 7 to him at lesser value than its true value and you giving him half of your house in Rye. You calculated $600k from Camberwell and $400k from Rye giving a total of $1m.
3. For me you’d worked out that the amount I undersold No 7 to Xavier for ie $600k plus the $1m you were going to give me was roughly the value of half of no 5 and so I would go on title to that effect. We were going to sort out the documentation when we returned from France at the beginning of 2019.[66]
[65]CB 869–76, Letter from Ingrid Perronnet to Elizabeth Goedemans dated 29 May 2019.
[66]Ibid.
There are significant differences between the pleaded version of the deal and that which is set out in the letter of 29 May 2019. There is no mention in the 29 May letter of an agreement to transfer the remaining 50 per cent of Elizabeth’s interest in No. 5 upon her death. Nor is there any reference to an agreement that Ingrid would undertake renovations to No. 5. Further, the pleaded version of the deal makes no reference to Elizabeth having offered to give each of Xavier and Ingrid $1 million by way of inheritance.
As set out in the 29 May letter, when Elizabeth entered into the deal in late April 2018 she asked Ingrid to sell No. 7 to Xavier for $600,000 less than its market value. Ingrid gave evidence that on 28 April 2018 when Elizabeth proposed that Ingrid sell No. 7 to Xavier for $1.9 million, Elizabeth expressly stated that this was $600,000 less than market value.[67] Save for Ingrid’s account of her discussion with Elizabeth, there is no evidence to support a finding that in late April 2018 Elizabeth had any basis for belief that the market value of No. 7 was $2.5 million.
[67]Transcript of Proceedings, T 257 L 22–31 (29 March 2023).
It was not put to Elizabeth that she had been told by anybody that the market value of No. 7 was $2.5 million and that she proposed to Ingrid to sell No. 7 for $600,000 less than market value. It was put to Elizabeth in cross-examination that in February 2018 she had asked Joe what he thought the value of No. 7 would be and that in response Joe told Elizabeth ‘$2 million plus’.[68] It is common ground that prior to his retirement Joe had worked as a certified practising valuer for 57 years.[69] Elizabeth denied that any such discussion took place.[70] It was not put to Joe that he had any discussion with Elizabeth regarding the value of No. 7.
[68]Transcript of Proceedings, T 131 L 25–29 (28 March 2023).
[69]Witness Statement of Joseph Nowicki dated 24 March 2023, [3].
[70]Transcript of Proceedings, T 131 L 29 (28 March 2023).
There is no objective valuation evidence that in April 2018 No. 7 was valued at $2.5 million. In November 2021 Mr Matler prepared a valuation report on behalf of Elizabeth in which he stated that No. 7 was worth $1,795,000 in May 2018.[71] In July 2022 Mr Dudakov prepared a valuation report on behalf of Ingrid in which he stated that No. 7 was worth $2,250,000 in May 2018.[72] There is a difference of $250,000 (Dudakov) and $705,000 (Matler) between Elizabeth’s alleged understanding of the value of No. 7 and the valuation evidence in respect of No. 7.
[71]CB1588, Valuation Certificate of David Matler dated 19 November 2021.
[72]CB2169, Valuation of Brian Dudakov dated 24 June 2022.
The greater the discrepancy between the valuation evidence for No. 7 and Elizabeth’s alleged understanding, the less plausible is it that Joe would have told her that it was worth $2.5 million. Based on the evidence of Mr Dudakov and Mr Matler’s, there is a significant difference between Elizabeth’s alleged understanding of the value and the actual value. On the basis of Ingrid’s evidence, it was Joe who told Elizabeth that No. 7 was worth $2.5 million. I consider it highly unlikely that Joe, who worked as a certified practising valuer for 57 years prior to his retirement, would have valued No. 7 at $250,000 more than Mr Dudakov and $705,000 more than Mr Matler. I reject Ingrid’s evidence that Elizabeth told her in late April 2018 that the market value of No. 7 was $2.5 million.
It was put to Xavier in cross-examination that Elizabeth had told him that Joe had told her that No. 7 ‘was worth in excess of $2 million’. Xavier denied that Elizabeth said this.[73] It was not put to Xavier that he believed in late April 2018 that No. 7 was valued at $2.5 million.
[73]Transcript of Proceedings, T 194 L 27–29 (28 March 2023).
A critical underpinning of the deal as set out in the 29 May letter is that Elizabeth believed that No. 5 was valued at $3.2 million and No. 7 was valued at $2.5 million. These valuations provide the basis for the $1 million inheritance which Elizabeth is said to have offered Ingrid. There is no evidence to support a finding that Elizabeth believed that No. 5 was worth $3.2 million in April 2018. Ingrid gave no evidence of any discussion with Elizabeth in April 2018 or before that time during which Elizabeth had made any reference to No. 5 being valued at $3.2 million. Mr Matler valued No. 5 at $1,985,000 in May 2018.[74] Mr Dudakov valued No. 5 at $2.6 million in May 2018.[75] This evidence supports a finding that it is unlikely Elizabeth would have proposed putting Ingrid on the title of No. 5 as having a 50 per cent interest on the basis that $1 million inheritance plus the $600,000 discount on the market value of No. 7 equated to 50 per cent of a $3.2 million valuation of No. 5.
[74]CB1506, Valuation Certificate of David Matler dated 19 November 2021.
[75]CB2000, Valuation Report of Brian Dudakov dated 4 August 2021.
The only evidence of Elizabeth having believed that No. 7 was valued at $2.5 million in April 2018 is that which was provided by Ingrid herself. I reject that evidence. I accept the evidence of Elizabeth that she had no discussion with Ingrid in April 2018 regarding the value of No. 7. I accept Xavier’s evidence that he agreed with Ingrid that the purchase price of No. 7 would be $1.9 million subject to a market valuation prior to the purchase being completed. I accept his evidence that there was no discussion with either Elizabeth or Ingrid to the effect that the price of $1.9 million represented a discount to market value, let alone a discount of $600,000.
Ingrid gave evidence that she wrote the 29 May letter very quickly and that ‘at the time I wrote the letter, I was dumping all my thoughts and feelings onto the page. I did not review the letter’.[76] To the extent that this evidence is an attempt to downplay the evidentiary weight to be attributed to the 29 May letter, I reject the evidence. The section of the letter which sets out Ingrid’s account of the deal is unambiguous and prefaced with a statement: ‘although you continue to state that you don’t remember the figures surrounding the agreement, I remember them clearly and we were talking about the only assets I had and we weren’t talking about small sums’.[77]
[76]Witness Statement of Ingrid Perronnet dated 24 March 2023, [87].
[77]CB869, Letter from Ingrid Perronnet to Elizabeth Goedemans dated 29 May 2019.
Ingrid denied any attempt to downplay the contents of the 29 May letter. When this was suggested to her in cross-examination, she responded: ‘no, I’m not, I’m telling the truth.’[78] Further, Ingrid accepted that she had discussed the contents of the letter with her close friend, Christine Griffiths.[79] In a Facebook message to Ms Griffiths dated 31 May 2019 Ingrid writes that she has finished her letter to Elizabeth. Although the 29 May letter contains emotional language it set out clearly Ingrid’s version of the deal. Further, when considering the weight to be attached to the 29 May letter, I have regard to the fact that the letter is in fact a letter of demand which sought Elizabeth’s signed acknowledgement that Ingrid had invested the equivalent of $670,000 into No. 5. The letter concludes with the following:
[78]Transcript of Proceedings, T 281 L 18–19 (29 March 2023).
[79]Ibid T 281 L 21.
There are only two ways to move forward on this matter being either
That you sign this letter acknowledging and accepting that I have put in the equivalent of $670,000 into No. 5 and that this sum:
(a)is reimbursed upon your passing being first to be paid out of your estate, and
(b)is inflated in line with increases in property prices from 2018 until such time of reimbursement, and
(c)entitles me to use and live downstairs of No. 5 in exclusivity with my children as my own until No. 5 is called by the estate; or
(d)is reimbursed within the next 90 days so that I may live and move on.[80]
[80]CB875, Letter from Ingrid Perronnet to Elizabeth Goedemans dated 29 May 2019.
The version of the deal as set out in the 29 May letter is not credible. There is no objective evidence to support the contention that Elizabeth believed No. 5 to be worth $3.2 million and No. 7 to be worth $2.5 million. It is correct that the version of the deal as set out in the 29 May letter is not the pleaded version of the deal as set out in the counterclaim which underpins Ingrid’s claim for relief. Nevertheless, the fact that Ingrid set out in the 29 May letter a version of the deal which is not credible significantly undermines the weight which can be attributed to her evidence as to any agreement reached with Elizabeth in late April 2018.
Letter from Coote Family Lawyers
On 6 November 2020 Elizabeth’s solicitors, Meerkin & Apel wrote to Ingrid requesting that she vacate No. 5 no later than 1 February 2021.[81] On 1 December 2020 Ingrid’s solicitors, Coote Family Lawyers, responded to the letter of 6 November 2020.[82] The letter was written on the basis of Ingrid’s instructions.[83] The letter included the following:
The circumstances giving rise to our client’s occupation of the ground floor at 5 Holyrood Street, Camberwell (5 Holyrood Street) can be summarised as follows:
a. In 2017, our client separated from her former husband Lee Holland and they subsequently finalised a financial settlement. Our client and Mr Holland owned the adjacent property at 7 Holyrood Street, Camberwell (7 Holyrood Street) where they lived with their two children, Oliver and Josephine.
b. As part of our client’s financial settlement with Mr Holland, she was to retain 7 Holyrood Street which was then worth approximately $2.5 million, and a property in Charles Street, Rye. The properties were encumbered by registered mortgages with the total sum of $1.9 million owing. The Rye property was subsequently sold in March 2020 for $1,475,000 and the net sale proceeds were applied to pay various liabilities including a payment to Mr Holland. Our client retained net proceeds of about $900,000.
c. In about April 2018, your client proposed that our client and her children move into 5 Holyrood Street. At that time, your client’s son Xavier lived at 5 Holyrood Street with his family despite the property being in a squalid state. Your client asked our client to renovate 5 Holyrood Street given our client’s extensive experience and skills in home renovations.
d. As part of your client’s proposal, our client would sell 7 Holyrood Street to Xavier for the sum of $1.9 million, which was the amount required to discharge our client’s existing mortgages. This would enable Xavier to exchange residences and obtain a clear title to 7 Holyrood Street.
e. Your client promised our client that, in exchange for her selling 7 Holyrood Street to Xavier for a sum significantly below market value, and undertaking extensive renovations to 5 Holyrood Street, she would acquire a one-half interest in 5 Holyrood Street, which would be registered on title as joint proprietors. Your client explicitly told our client she would be able to remain living at 5 Holyrood Street for the remainder of her life, and that your client’s half share of the property would pass to our client upon her death, pursuant the right of survivorship.[84]
[81]CB1055, Letter from Meerkin & Apel to Ingrid Perronnet dated 6 November 2020.
[82]CB1059, Letter from Coote Family Lawyers to Elizabeth Goedemans dated 1 December 2020.
[83]Transcript of Proceedings, T 285 L 7–10 (29 March 2023).
[84]CB1059–60, Letter from Coote Family Lawyers to Elizabeth Goedemans dated 1 December 2020.
In the version of the deal set out above, there was no need for any amendment to Elizabeth’s will in order to bequeath to Ingrid her remaining 50 per cent interest in No. 5. No amendment was necessary because the remaining 50 per cent interest would pass to Ingrid pursuant to a right of survivorship as a consequence of Ingrid and Elizabeth being registered on title as joint proprietors. It is common ground that the reference to a right of survivorship is misconceived. Ingrid and Elizabeth could not have been registered on the title of No. 5 as joint proprietors because they did not jointly acquire No. 5. However, irrespective of whether the reference to a right of survivorship is misconceived, it is not consistent with Ingrid’s evidence explaining why Elizabeth’s will was not amended in 2018. In this regard, Ingrid gave evidence that she understood Elizabeth’s will had to be amended to provide for the transfer of the remaining 50 per cent interest in No. 5 upon Elizabeth’s death.[85] Her evidence as to why the will was not amended notwithstanding that she appreciated the need for amendment to Elizabeth’s will was that her solicitor had advised that nothing could be done in relation to No. 5 and No. 7 until after her divorce was finalised. This evidence is inconsistent with the statement in the letter from Coote Family Lawyers that Elizabeth ‘explicitly told’ Ingrid that she would be able ‘to remain living at 5 Holyrood Street for the remainder of her life, and that your client’s half share in the property would pass to our client upon her death, pursuant the right of survivorship’.[86]
[85]Transcript of Proceedings, T 260 L 1–5 (29 March 2023).
[86]CB1060, Letter from Coote Family Lawyers to Elizabeth Goedemans dated 1 December 2020.
The pleaded version of the deal differs from the version set out in the letter from Coote Family Lawyers. Although it is not relied upon as the basis for the relief sought in the counterclaim, I have had regard to the inconsistency between the version of the deal as set out in the letter, compared to the pleaded version. Ingrid’s evidence explaining her failure to seek an amendment to Elizabeth’s will in 2018 is not consistent with the letter from Coote Family Lawyers which was written on the basis of her instructions. I have had regard to this inconsistency when rejecting Ingrid’s explanation for her failure to seek an amendment of the will in 2018.
14 February 2019
It is common ground that there was a heated exchange between Ingrid and Elizabeth on 14 February 2019. They had gone to Charles Street, Rye to clean up the property. Elizabeth had a telephone conversation with Karin Anderson (‘Karin’) whilst at the property. Ingrid gave evidence that she overheard Elizabeth tell Karin, ‘the deal is off’.[87] Karin corroborated this evidence. She gave evidence that Elizabeth said to her words to the following effect:
The boyfriend is moving in. If the relationship breaks up I could lose the house. The deal is off because Ingrid has met someone.[88]
[87]Transcript of Proceedings, T 269 L 25–26 (29 March 2023).
[88]Witness Statement of Karin Anderson dated 24 March 2023, [30].
Both Ingrid and Elizabeth gave evidence that Ingrid was extremely upset when driving back to Melbourne with Elizabeth. It is common ground that whilst driving Ingrid called Elizabeth a thief and a liar and was shouting at her and crying.[89]
[89]Transcript of Proceedings, T 160 L 1–10, T 271 L 17–19 (28 March 2023).
Whilst it is common ground that on the afternoon of 14 February 2019 Ingrid was extremely upset, there is a significant difference between Ingrid and Elizabeth as to what Elizabeth actually said to Karin. Elizabeth’s version of the conversation with Karin is that she said that Ingrid and the children were going to return to France and live permanently with Frédéric.[90] She could not understand why Ingrid was so upset on the return trip to Melbourne. She denies that she said anything to Karin about the deal being off.[91]
[90]Ibid T 157 L 1–28.
[91]Ibid T 158 L 29.
It is improbable that Ingrid would have reacted so intensely if she had simply heard Elizabeth telling Karin that Ingrid was intending to move to France with her two children to live with Frédéric. It is more probable that Ingrid heard Elizabeth say something which she believed to be a breach of the agreement which had been entered into in early 2018. However, this simply begs the question as to what had been agreed in early 2018. I have concluded that in late February 2018 Elizabeth agreed with Ingrid that Ingrid and her two children could move into No. 5 and live there rent-free. No time limit was placed on this arrangement. Elizabeth agreed that Ingrid could undertake renovations to improve the amenity of the house for her and her children, subject to Elizabeth consenting to any works. I have also concluded that there was no agreement for Ingrid to be given a 50 per cent share of the property with the balance to pass on Elizabeth’s death.
The agreement between Ingrid and Elizabeth meant that Elizabeth would be sharing her house with Ingrid and her two children. The relationship between Frédéric and Ingrid changed the family dynamics which existed when the agreement was reached in late February 2018. By mid-February 2019 it was apparent to Elizabeth that Ingrid had entered into an intense relationship with Frédéric. The prospect of Frédéric moving into No. 5 meant that the family dynamics, which had operated throughout 2018, would be fundamentally altered.
On 14 February 2019 when Ingrid overheard Elizabeth speaking to Karin, she understood Elizabeth to be telling Karin that if Frédéric moved into No. 5 to live with Ingrid she no longer wanted Ingrid and her children to be living at No. 5. Ingrid’s response, calling her mother a thief and a liar was a product of her belief that she was being deprived of the opportunity to live at No. 5 notwithstanding the time and money she had invested in renovations to the ground floor of No. 5 since May 2018. At one level that response is understandable. However, it does not support a finding that Ingrid and Elizabeth agreed in April 2018 that Ingrid would have a 50 per cent share in No. 5 with the balance of Elizabeth’s interest to pass to Ingrid on her death.
Karin’s discussion with Joe about the terms of the deal
During the course of 2018 Joe spoke to Karin once or twice a month on the telephone for up to an hour at a time.[92] Karin gave evidence that in May 2018, during a telephone conversation, Joe said words to the following effect:
"I’m not happy about being forced to sell my part of the Rye property to Xavier";
[Regarding selling to Xavier] "I don’t have any choice"; and
"Are you aware of the deal? The deal is that Xavier is buying Ingrid’s house [7 Holyrood Street] at a discounted price and Ingrid will move in with Liz [at 5 Holyrood Street]. There’s going to be a tenants in common agreement between Liz and Ingrid. Ingrid’s name will go onto the title as owning a half share [of 5 Holyrood Street] and the remainder of the house will pass to Ingrid on Liz’s death. Ingrid will be renovating the house at her own cost".[93]
[92]Transcript of Proceedings, T 215 L 24 (29 March 2023).
[93]Witness Statement of Karin Anderson dated 24 March 2023, [21.1]–[21.3].
When asked in cross-examination whether he had said the words set out above, Joe replied: ‘Absolutely not, that’s a lie.’[94]
[94]Transcript of Proceedings, T 216 L 12–13, 19, 26 (29 March 2023).
Joe gave evidence that the first time he used the phrase ‘tenant in common’ when speaking to Karin was in November 2020 after he had received an email from Ingrid dated 7 August 2020 responding to a request from Joe to be reimbursed for payments which he had made for council rates on No. 5.[95] Ingrid’s email included the following:
Council rates for 2020/2021 are yet to be issued and are not due until 12 February 2021 at which time mum and a I can address them as per our obligations as tenants in common.[96]
[95]CB1013, Email from Ingrid Perronnet to Joe Nowicki dated 7 August 2023; Transcript of Proceedings, T 217 L 17–19 (29 March 2023).
[96]CB1013, Email from Ingrid Perronnet to Joe Nowicki dated 7 August 2023.
Joe’s evidence is that upon receipt of the 7 August 2020 email he became aware for the first time that Ingrid was claiming an interest in No. 5 as a tenant in common.[97] Karin accepted that, based on Joe’s telephone records, she did have a telephone conversation with Joe on 18 November 2020 for 50 minutes and 24 seconds, albeit she could not recall the matters they discussed.[98] He gave evidence that he told Karin during the 18 November telephone call that he was shocked to read in Ingrid’s 7 August email that she was claiming to be a tenant in common with Elizabeth.[99] I accept this evidence.
[97]Witness Statement of Joseph Nowicki dated 24 March 2023, [77]; Transcript of Proceedings, T 218 L 10–13 (29 March 2023).
[98]Transcript of Proceedings, T 332 L 24–31, T 333 L 4–7 (30 March 2023).
[99]Witness Statement of Joseph Nowicki dated 24 March 2023, [86].
There is a significant discrepancy between the recollections of Joe and Karin as to when Joe first used to the phrase ‘tenant in common’. I prefer Joe’s recollection of events to that of Karin. As set out earlier in this judgment, in late 2017 Elizabeth, Joe and Xavier had agreed in principle that Xavier would purchase No. 5 from Elizabeth and that Elizabeth would use the proceeds of the sale to fund her retirement. Elizabeth and Joe’s property in Rye would be sold to Xavier and in return Elizabeth and Joe would be entitled to live rent-free at 1/999 Riversdale Road for the rest of their lives. Joe did in fact sell his half share in the Napier Street Property to Xavier for $400,000. If Joe had been aware in May 2018 that Ingrid was claiming a 50 per cent interest in No. 5 this would have had a significant impact upon his plans for the future with Elizabeth. In particular, if Ingrid was registered on the title of No. 5 as a tenant in common, Elizabeth would not have been able to sell No. 5 to raise funds for her retirement. It is unlikely that in May 2018 Joe would have told Karin that Ingrid and Elizabeth would be tenants in common, without expressing concern about the potential adverse impact upon himself and Elizabeth. I accept Joe’s evidence that the first time he became aware of Ingrid’s claim to have an interest in No. 5 as a tenant in common was when he received Ingrid’s email of 7 August 2020.
In weighing the conflicting evidence of Joe and Karin, I have also had regard to a ‘to whom it may concern’ letter written by Karin and forwarded to Ingrid’s lawyers on 17 August 2020.[100] Karin gave evidence that she first turned her mind to recalling her May 2018 discussion with Joe when drafting the ‘to whom it may concern’ letter.[101] The section of the letter which sets out the conversation with Joe is as follows:
[100]Exhibit D-4, Undated letter by Karin Anderson with attached email dated 17 August 2020, entitled, ‘To whom it may concern.’
[101]Transcript of Proceedings, T 344 L 1–9 (30 March 2023).
I remember Joe Nowicki ringing me and voicing his disappointment that he would be forced to relinquish his half of the holiday home in Rye.
He was disappointed that he was virtually selling it at cost having spent a considerable amount of his own funds very recently to make extensive improvements to the house including installing heating and cooling throughout the house.
Of particular concern was his magnificent workshop/studio at the rear of the property as well as the garden, which he knew would now fall into neglect given Xaviers [sic] track record.
He then said it was because Liz did not want to pass away holding any assets for her family to fight over.
The way I understood it, was that Liz’s half of the holiday home was to be gifted to her son and Joe’s half purchased by her son at a heavily discounted value.
He then elaborated on a deal Liz was to enter into with her daughter Ingrid, whereby the son would purchase Ingrid’s house for a discounted amount.
Ingrid’s house was pristine, Ingrid also having recently spent a lot of time, money and effort expanding the footprint of it.
Ingrid’s part of the deal was for her and her children to move in with her mother, renovate the house (at her cost) and her name be placed on the title as Tenants in Common with her mother.
I had only heard the term Tenants in Common but wasn’t really aware what it meant until Joe elaborated.[102]
[102]Ibid.
Karin’s understanding of the agreement does not fully accord with Ingrid’s version of the deal as pleaded in her counterclaim. Karin makes no reference to Ingrid receiving 50 per cent of Elizabeth’s interest in No. 5 upon her death. Also, the statement that Joe’s half interest in the Napier Street Property would be purchased by Xavier at a heavily discounted value does not accord with Joe’s unchallenged evidence that the property was independently valued at $800,000 and Xavier paid a market price of $400,000 for Joe’s 50 per cent interest.[103]
[103]Transcript of Proceedings, T 214 L 24 – T 215 L 2 (29 March 2023).
Karin’s evidence as to the terms of the agreement between Ingrid and Elizabeth is secondhand hearsay. Her evidence is based on her recollection of a telephone conversation with Joe in which he recounted his recollection of a discussion with Elizabeth, during which Elizabeth had conveyed to Joe the terms of the agreement with Ingrid. There is no evidence that Joe directly participated in any discussions with Elizabeth and Ingrid at the time they reached their agreement. If, contrary to the findings set out above, I had accepted Karin’s evidence regarding her discussion with Joe, I would have accorded that evidence little weight.
Conclusion as to counterclaim
Ingrid has failed to establish that in late April 2018, or at any time, she reached an agreement with Elizabeth on the terms pleaded at [15] of the defence and counterclaim. There was no agreement that Ingrid would purchase No. 7 for $600,000 less than its market value. Ingrid did sell No. 7 for $1.9 million. However, this price was negotiated directly between Ingrid and Xavier. There was no discussion between Ingrid and Xavier to the effect that this price was $600,000 less than market value. There was an agreement between Ingrid and Elizabeth that Ingrid and her two children could move into No. 5 and live there rent-free. There was no time limit placed on the period they could live in the house. Elizabeth agreed that Ingrid could undertake renovations of No. 5, subject to first obtaining her consent. I accept Elizabeth’s submission that the agreement conferred upon Ingrid a licence to reside at No. 5. There was no agreement that Elizabeth would transfer to Ingrid 50 per cent of her interest in No. 5 and would subsequently transfer the remaining 50 per cent upon her death.
As Ingrid has failed to establish the agreement as pleaded in [15] of her counterclaim, her claim based on proprietary estoppel must also be rejected. Elizabeth did not make a representation and promise as alleged. There is no basis for granting Ingrid any of the relief sought in the counterclaim.
Elizabeth’s Claim
Elizabeth claims that while Ingrid and Frédéric resided at No. 5 renovations were undertaken in breach of Ingrid’s licence to occupy the premises, or further, were done without Elizabeth’s consent. Elizabeth also alleges that works undertaken following the issuing of a formal notice to vacate the property in November 2020 were done as a trespasser. While Frédéric is named as a defendant to the claim, Elizabeth does not press any damages claim against him.[104]
[104]Plaintiff’s Submissions dated 24 April 2023, [151].
Elizabeth alleges that the works undertaken by Ingrid were either done without her consent, or were carried out to an unacceptable standard or in breach of planning regulations. Elizabeth claims the costs of rectifying the works and relies on the report of Mr David James dated 23 March 2022. Mr James quantifies the cost of the rectification works at $142,372. His evidence as to the cost of the rectification works was not challenged.
The works undertaken by Ingrid during the relevant period were extensive and ranged from minor to major renovations. The most significant renovation was the conversion of the garage at No. 5 into a habitable studio space. Elizabeth claims compensation of $54,970 in relation to the garage. Mr James’ unchallenged evidence was that rectification works in respect of the garage would cost $54,970. It is common ground that Ingrid’s renovation of the garage required a planning permit.[105] No permit was obtained. Mr Moore conceded that Ingrid is liable to pay for the rectification of the garage.[106] Absent this concession I would in any event have concluded that Ingrid is liable to pay Elizabeth $54,970 for rectification works in respect of the garage.
[105]Statement of Agreed Facts date 16 March 2023, [10].
[106]Transcript of Proceedings, T 475 L 23–30 (2 May 2023).
Ingrid does not deny that she undertook the renovations at the property, but claims that the renovations were done with Elizabeth’s consent or acquiescence. Ingrid claims that her mother frequently discussed and participated in the renovation works.[107]
[107]Witness Statement of Ingrid Perronnet filed 24 March 2023, [84].
Elizabeth gave evidence that she did consent to a number of the items of renovation, but did so under duress. Mr Stanistreet, who appeared for Elizabeth, submitted that in respect of works that were carried out to an unacceptable standard or in breach of planning regulations, Elizabeth’s consent was irrelevant and that an entitlement to compensation flowed from the defective nature of the works.[108] I accept this submission.
[108]Plaintiff’s Submissions dated 24 April 2023, [160].
Mr James’ Report
Mr James’ report addresses 68 items. He assessed the cost of rectifying or otherwise bringing the items up to standard. In doing so, Mr James considered the quality of the works and set out the costs of rectification.
The first category of works addressed by Mr James are works carried out to an unacceptable standard or contrary to relevant building regulations. Mr James considered that 39 of the 68 items were in this category and required rectification to bring them up to an acceptable standard.[109] Mr James provided costings for each of these items. The second category consists of 12 items which Mr James considered to be works of an acceptable standard.[110] The third category contains 17 items where the works were of a satisfactory standard and do not require rectification.[111] No claim for damages is made in respect of this third category.
[109]These items are: 1.1(a); 1.2(a), 1.2(c)-(d); 1.3(a); 1.4(a); 1.7(e), (i); 1.8(i)-(j); (l); 1.9(s); 1.10(l)-(n), (t); 1.11(m); 1.12(h)-(m); 1.13(e), (h); 1.15(l), (s)-(t); 1.16(c), (g)-(h); 1.17(c); 1.18(e); 1.19(b)-(d); 1.20, 1.21, 1.22.
[110]These items are: 1.5(a); 1.6(a); 1.11(n); 1.15(b), (d)–(g), (n), (p); 1.18(f); 1.19(a).
[111]These items are: 1.7(h); 1.10(o), (q)-(r); 1.11(b), (f)-(g), (i); 1.13(g), (j); 1.15(i)-(j); 1.17(i); 1.18(c)-(d); 1.19(e)-(f).
Substandard Works
The first category concerns 39 items which Mr James considered to have been undertaken to an unacceptable standard. Mr James’ findings in respect of these 39 items were not challenged. He concluded that the cost of the rectification works in respect of these 39 items is $127,522.17. This figure includes the $54,970 for rectification works in respect of the garage.
Elizabeth contends that works carried out by Ingrid to an unacceptable standard (in addition to those works which were contrary to relevant building regulations) constitute a breach of licence, for which she is entitled to rectification damages. The issue of whether damages should be awarded where the works undertaken were not to a professional standard, albeit not contrary to building regulations, was sufficiently disclosed by the oral submissions, the written submissions and the schedule of renovations and improvements.[112] Both parties addressed that question.[113]
[112]Cf McSteen v Architects Registration Board of Victoria [2018] VSCA 96, [9], [37].
[113]Plaintiff’s Submissions dated 24 April 2023, [165]–[170]; First Defendant’s Submissions dated 24 April 2023, [100]–[106]; Transcript of Proceedings, T 396 L 20 – T 399 L 4; T 420 L 4–12; T 424 L 9–27; T 426 L 1–11 (3 April 2023).
Where a contract involves the execution of works, the law implies a warranty of quality requiring reasonable care in doing the works.[114] The ordinary measure of damages for defective works is the costs of reinstatement.[115] The works undertaken by Ingrid at No. 5 were not pursuant to the terms of a contract but rather a license pursuant to which she occupied the premises. It was an implied term of the license that any works which Elizabeth consented to had to be carried out to a reasonable standard. I reject Mr Moore’s submission that Elizabeth’s consent to the works, regardless of whether they were substandard, constitutes a valid defence to her claim for rectification damages.
[114]Helicopter Sales (Aust) Pty Ltd v Rotor-Work Pty Ltd (1974) 132 CLR 1, 8 (Stephen J, Mason J agreeing).
[115]Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272, 285–8 [13]–[16] (‘Tabcorp’).
Works of an acceptable standard undertaken without Elizabeth’s consent
The second category of works addressed by Mr James comprises items which were undertaken to an acceptable standard but without Elizabeth’s consent. An example is Mr James’ finding with respect to works undertaken by Ingrid with respect to a decorative fireplace:
I am advised that the owner was unaware of this work being carried out and are [sic] not pleased that the decorative fireplace has been disposed of. She believes that the change of use of the room did not warrant the removal of the fireplace. She is of the opinion that the fireplace (or similar) should be replaced. The removal has detracted from the appeal of the property.[116]
[116]CB1883, Report of Mr James Wilson dated 13 May 2022.
Even though the second category of works were undertaken to an acceptable standard, Elizabeth is entitled to rectification damages if the works were undertaken without her consent. In Tabcorp Holdings Ltd v Bowen Investments Pty Ltd, the High Court stated:
So here, the Landlord was contractually entitled to the preservation of the premises without alterations not consented to; its measure of damages is the loss sustained by the failure of the Tenant to perform that obligation; and that loss is the cost of restoring the premises to the condition in which they would have been if the obligation had not been breached.[117]
Ingrid’s occupancy of No. 5 was pursuant to a license. An express term of that license was that Ingrid would not undertake renovations unless Elizabeth consented to the works. I accept Elizabeth’s evidence that Ingrid was permitted to carry out works on No. 5 with her consent, as Xavier and Sarah had previously done.[118] I reject Ingrid’s evidence that Elizabeth ‘left it completely open’ to Ingrid as to what renovations would be undertaken.[119]
[117]Tabcorp (n 115) 287 [15].
[118]Witness Statement of Elizabeth Goedemans filed 24 March 2023, [59].
[119]Transcript of Proceedings, T 253 L 25–27 (29 March 2023).
As the second category of works are not considered by Mr James to be defective, Elizabeth’s entitlement to damages is contingent upon her establishing that she did not consent to the relevant works. Elizabeth’s evidence regarding her consent to the various works is contained in an annexure to her witness statement, with a table of the works including a column indicating whether she consented to the relevant works. There are 12 items in this category of works. Mr James identified the cost of rectification, albeit he made no finding that the works were substandard. Elizabeth’s evidence was that she consented to three of the items being undertaken. It was not put to Elizabeth that she consented to the other nine items.
The three items of works which Elizabeth consented to are described as follows:
(a) 1.5(a): Installed EMF (electromagnetic field) film on the windows and external doors;
(b) 1.6(a): Installed EMF sheeting;
(c) 1.19(a): Prepared and painted eastern and northern exterior walls and windows with EMF paint.
Elizabeth gave evidence that, although she consented to these works being undertaken, she did so under duress from Ingrid. It was not put to Ingrid that she had subjected Elizabeth to duress in respect of the three items set out above. There is insufficient evidence to conclude that Elizabeth’s capacity to consent to those works was impaired.
Based on Mr James’ report, the cost of rectification of the works undertaken by Ingrid which were of an acceptable standard but which were undertaken without Elizabeth’s consent is $7,630. Mr James then applied a contingency rate of 5 per cent, a builder’s margin of 30 per cent and GST at 10 per cent. This results in a total rectification cost of $11,456.44.
Conclusion: rectification damages
Mr James concluded that the total cost of rectification for the works undertaken by Ingrid is $142,372. Elizabeth is entitled to damages to rectify all items pleaded in her amended statement of claim, save for items 1.5(a), 1.6(a), 1.19(a). Mr James calculated the rectification costs of these items at $2,260. He then applied a contingency rate of 5 per cent, a builder’s margin of 30 per cent and GST at 10 per cent. This results in a total rectification cost of $3,393.39. This sum is to be subtracted from $142,372. Elizabeth is entitled to damages totalling $138,978.61.
Conclusion: claim and counterclaim
Ingrid shall be ordered to pay Elizabeth damages in the sum of $138,978.61. Ingrid’s counterclaim will be dismissed. I shall provide the parties with an opportunity to make submissions as to the costs of the proceeding.
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