James v Barker

[2009] NSWSC 725

CITATION:	James v Barker [2009] NSWSC 725
HEARING DATE(S):	13, 14 and 15 July 2009
JUDGMENT DATE :	30 July 2009
JURISDICTION:	Equity
JUDGMENT OF:	Tamberlin AJ
DECISION:	(1) I direct the parties to provide Short Minutes of Order within 10 days reflecting the reasons given in this judgment. (2) The first defendant is to pay the plaintiff’s costs of the proceedings.
CATCHWORDS:	CONTRACT - Whether oral agreement reached between the parties to the effect that one party agreed not to sever joint tenancy - whether repudiations by one party - REAL PROPERTY - defences to applications for the appointment of trustees for sale under s 66G of the Conveyancing Act 1919 (NSW) - whether there can be agreement not to sever.
LEGISLATION CITED:	Conveyancing Act 1919 (NSW)
CATEGORY:	Principal judgment
CASES CITED:	Goyal v Chandra (2006) 68 NSWLR 313 Laurinda Pty Limited v Capalaba Park Shopping Centre Pty Limited (1989) 166 CLR 623 Nagatoa v Ford (1990) 19 NSWLR 72 Williams v Legg (1993) 29 NSWLR 687
TEXTS CITED:	Cheshire and Fifoot's Law on Contract, 8th Australian edition, Seddon and Ellinghaus (2002) at [21.11]
PARTIES:	Jennifer Elizabeth James (Plaintiff) Howard John Barker (First Defendant) The Registrar-General (Second Defendant)
FILE NUMBER(S):	SC 7568/2007
COUNSEL:	R D Wilson (Plaintiff) A Crossland (First Defendant)
SOLICITORS:	McGowan Solicitors (Plaintiff) L J Rickard (First Defendant) Submitting Appearance (Second Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ACTING JUSTICE TAMBERLIN

THURSDAY, 30 JULY 2009

& ANOR

JUDGMENT

1 HIS HONOUR: By Amended Statement of Claim, the plaintiff (“James”) seeks a declaration that she and the first defendant (“Barker”), as registered proprietors in equal shares as joint tenants in a property located at 3/7 Kenneth Street, Tamarama (“the Tamarama property”), entered into an agreement in about February 1999 not to sever the joint tenancy in the property or sell the property. The result was that the property would pass to the survivor of James and Barker and thereafter provide a home for their son, Justin Barker (“Justin”). For convenience I will use abbreviated references, to the relevant parties in this matter.

2 Alternatively, James seeks a declaration that Barker is estopped from severing the joint tenancy or taking any action to sell or otherwise deal with the property; or a declaration that James and Barker hold the property as equitable joint tenants in such proportions as the Court determines. Consequential restraining orders are sought against Barker severing the joint tenancy or selling the property or seeking orders for the appointment of trustees for sale of the property under s 66G of the Conveyancing Act 1919 (NSW) (“the Act”), together with an order that the Registrar-General be restrained from registering any dealings lodged by Barker purporting to sever the joint tenancy.

3 The main issue in the case is whether there was an agreement reached in February 1999 or representations made and relied on to the effect that Barker agreed not to sever the joint tenancy in the property and agreed to it passing to the survivor of himself and James such that it would provide a home for the survivor and the son of the de facto relationship Justin or whether he made repudiations to that effect which were relied on by James to her detriment. The issues turn on the respective credibility of the evidence adduced on behalf of James and Barker.

Background

4 In July 1979, Barker purchased the 3/7 Kenneth Street, Tamarama property for $79,000. He met and commenced a relationship with James in 1987 and on 10 July 1988 their son Justin was born. They separated in 1989.

5 On 14 March 1990, Barker transferred a one-half interest as joint tenant in the property to James which was then believed to have a value of about $180,000. There is no dispute that James then acquired one equal half interest as joint tenant in the property and assumed joint liability with Barker for the outstanding mortgage on the property at that time and, in return, waived future maintenance for Justin.

6 In 1994, James and Barker purchased as joint tenants in equal shares a property at 182 Liverpool Street, Sydney (“Darlinghurst”) for $178,000 using loan funds of $169,000 secured over Darlinghurst and the Tamarama property with James making a contribution to that purchase. The Darlinghurst property was then in need of repair and significant renovations were carried out over the ensuing five years in respect of which James incurred expenses and carried out extensive physical work on these repairs and upgrading. She assumed responsibility for the project and the renovations and lived together with Justin at Darlinghurst between late 1994 and April 1996 and from early 1997 until February 1998.

7 In late 1989, James and Justin moved out of the Tamarama property but in August 1998 they returned to live there.

8 On 9 December 1998, Barker wrote to James (Exhibit B) which relevantly reads:

“Dear Jenny,
This is just a short note to ask that we sit down and have a coffee while we discuss all of the various options and issues that I need to attend to. As a result of us having a short (30 min) meeting we should be able to resolve things like wills, bills, (TAX) super and hopefully those bills … and schools (Tudor House) also needs to be on the adgenda (sic).”

9 James met with Barker on 12 December 1998 (T 40.10) in which Mr Tim Dowling (“Dowling”), the then and now ex-partner of Barker was present, at which a disputed conversation took place during which Barker, according to James, said that he needed money for bills and wanted Darlinghurst sold. She says that he pressed for her as joint tenants to agree to the sale of Darlinghurst and he said “Tamarama would never be sold you can be assured of that” and that if Darlinghurst was sold and he were given half the proceeds then they could share the Tamarama property. James says that the conversation continued:

“A. Well, I said - I said to him, I said, ‘Look, I would rather buy you out of Tamarama because you are not - you haven't lived there for years.’ And at that time I said, ‘I would rather buy you out of Tamarama,’ and he said, ‘I don't - I don't want to sell Tamarama. I want to move back in there as well.’ So you see it was an unusual conversation. I remember exactly.”
(T 41.46)

Dowling has sworn an affidavit and given oral evidence as to that conversation filed in support of James.

10 The brother of Barker has also given evidence in relation to this conversation in support of Barker’s version of the conversation denying that it was on the terms stated by James.

11 On 22 February 1999, there was a further discussion between James and Barker in relation to the sale of Darlinghurst. The terms of this conversation are denied in substance by Barker but according to James the conversation was in the following terms:

“A. I said - he said, ‘Tamarama will never be sold,’ and I agreed. And he said, ’You will inherit it,’ and I said, ‘As long as Tamarama will never be sold, and it's our family home, and I don't mind you moving back in here, but you have got to be drug free. But I see this as our eventual home. Howard, do you understand.’ And he said, Yes.’ And I agree it will never be sold, and that was one hundred per cent, and that was it. He knew.

Q. Was there any mention of any other people in the conversation, or was it just a discussion about you and Howard?
A. It was about - well, it's about a home for Justin and I.

Q. What was said about Justin, if anything?
A. Basically, he said - we had a conversation, and he said - and I said, ‘Well, if you die, I inherit; if I die, you inherit.’ I said, ‘But I could get run over by a bus.’ And he said, he said to me, ‘That's unlikely,’ because he is not, you know, he is not very - he wasn't well, or he was always saying he was sick, so. And so I agreed to refinance, it would be paid out of his debts and put the - said, ‘I will refinance the property, your debts will be paid out. I will take an equal amount, and the rest of the money will go to fixing up Tamarama and fixing up Darlinghurst.’ That's to the best of my recall.

Q. Was there any discussion about who was going to pay for the mortgage with this refinance?
A. Yes.

Q. You tell us what was said?
A. I said to - because I said from this point on, then he said, ‘So you are going to pay everything from this point onwards.’ I said, ‘Yes, I will take over everything. I will even take over repayment of your mortgage, and when we refinance, I will pay any extra refinance costs, including your mortgage. Because your mortgage, if I inherit, I am going to have to pay for anyway.’

Q. And was anything else said in the conversation you want to tell us about? The answer to that is either yes or no?
A. No, because I just think about what we went through, because we had to reach a consensus then.’ “
(T 45.33-46.18)

12 The Darlinghurst property was not sold until November 1999 and settlement took place on 21 January 2000 for a sale price of $431,000.

13 In May 1999, James and Barker refinanced the mortgage on Tamarama for a further $50,000 with the St George Bank, bringing the total incumbrance over the Tamarama property to $97,000 at that time.

14 In July or August, James purchased a property at 180 Liverpool Street in her own name and on her own behalf. This property adjoined the Darlinghurst property at 182 Liverpool Street and the transfer took place on 31 August 1999.

15 On 9 November 1999, James bought with her subsequent partner Aaron Gibson (“Gibson”) a unit at 5/7 Kenneth Street in the same block as the Tamarama property and the transfer of this property took place on 9 November 1999.

16 After settlement of the Darlinghurst sale on 21 January 2000 the proceeds were distributed as follows:

Transaction description	Amount ($)
Sale amount	431,000.00
Less
Mortgage payout	160,303.94
Agent commission	10,750.00
OSR (Land Tax 1998 – 2000)	2,368.00
Council adjustment	404.78
Water adjustment	210.20
174,036.92
Gross proceeds from sale	256,963.08
Finance cost	9,880.00
Net proceeds from sale	247,083.08
Gross distribution amount (50% share)	123,616.00

17 In 2003 and 2004, James and Barker refinanced the mortgage on Tamarama with the National Australia Bank on two separate occasions.

The case for James

18 James submits that the substance of the oral agreement on 22 February 1999 was that Barker agreed not to sell the Tamarama property and that it would pass to the survivor of Barker and James and then go to their son Justin, then aged 9, in consideration for her agreeing to the sale of Darlinghurst wherein she and Barker were joint tenants and also arranging to pay certain outstanding debts of Barker.

19 In broad terms James points to the probabilities and surrounding circumstances as at February 1999 which lend support to her evidence. First, James submits that in 1999 Barker transferred a half interest to her and by doing so showed a desire by Barker to provide a home for their son Justin.

20 Secondly, reliance is placed on the letter of 9 December 1998 which she says indicates that Barker was anxious at that time to clearly define the financial relationships between the parties as to their assets and to protect the position of Justin.

21 Thirdly, James refers to an alleged conversation on 12 December 1998 wherein, on her version, Barker says that Tamarama could be her home forever and would not be sold and that she would inherit that property.

22 Fourthly, she points out that in late 1998, Barker had debts to pay and was under financial pressure to sell Darlinghurst because his debts were mounting. It is consistent with this that he would promise not to sell Tamarama if she consented to sell Darlinghurst.

23 Fifthly, a promise not to sell Tamarama was in the interests of Barker because he thereby retained an interest in the Tamarama property and he would, depending on his survival, have inherited the Tamarama property and by agreeing not to sell Tamarama he could ensure that it would remain a home for himself and Justin. This outcome could not have been achieved by James buying him out and thereafter being free to sell the property. James also says that the evidence concerning the distribution of proceeds of the sale of 182 Liverpool Street was corroborated by the distribution which in fact took place whereby Barker received one half of the net proceeds of $87,000 after paying one year’s fees for Tudor House and paying out his car loan. Moreover, James also made a number of payments to meet his debts in accordance with the agreement.

24 James says she subsequently took over responsibility for the joint mortgages after 1999 pursuant to the February agreement.

25 In summary, she says that the above circumstances make her version of the events more probable and that her account of the arrangement should be accepted in preference to the version given by Barker. She points that she wanted some reciprocal benefit for agreeing to sell Darlinghurst to which she had become strongly attached as a result of the expenditure and work she had made on that property.

26 Barker says that he never agreed to an expensive renovation of Liverpool Street and did not have enough money to pay for such an expensive renovation. According to his version of the conversation, James said she did not want anything more to do with him but wanted to sell Darlinghurst and buy him out of Tamarama and then purchase the place next door to Darlinghurst at 180 Liverpool Street. Barker says that she agreed to sell Darlinghurst first and then buy him out of Tamarama. He denied the terms of the conversations referred to by James in December 1998 and February 1999 were as stated by her. He says that he never promised not to sell Tamarama or sever the joint tenancy or that the survivor would inherit it. His case is that there was never any agreement to enter into a legally binding agreement. Alternatively, he says that if there was a legally binding agreement, it has been repudiated by James because she did not fulfil her obligations under the alleged agreement.

Legal principles

27 There is no substantial dispute between the parties as to the relevant legal principles. It is now well settled that “defences” can be raised in relation to applications for the appointment of trustees for sale under s 66G of the Act: see Ngatoa v Ford (1990) 19 NSWLR 72 per Needham J adopted by the Court of Appeal in Williams v Legg (1993) 29 NSWLR 687 at 691-692. In Goyal v Chandra (2006) 68 NSWLR 313 Brereton J observed at [23]:

“It seems to me that if one co-owner, and it matters not for present purposes whether he or she be joint tenant or tenants-in-common, binds himself or herself to deal with his or her interest only in a particular way – namely by transferring it or devising it, or leaving it to pass by way of survivorship to the other – that is not a restraint or alienation. The property itself remains alienable. The owner undertakes a personal obligation to deal with it only in a particular way. Anyone who enters into a contract for sale does that. Any owner of land who creates in another an equitable interest by way of proprietary estoppel does that. Such an agreement or arrangement is not void as a restraint or alienation. It follows that an agreement not to sever a joint tenancy is similarly not void as a restraint on alienation.”

28 At [26] his Honour continued:

“…there does not seem to be any reason in principle why an interest held by a co-owner jointly should not be capable of being dealt with in this manner, just as one held by a co-owner in common with another, if the joint tenants so agree, or if they reach some arrangement or understanding short of agreement which nonetheless gives rise to an equitable obligation to the same effect. In such circumstances, equity will enforce the obligation by disregarding a severance of the legal joint tenancy. “

29 At [29] his Honour also referred to the principles of equitable estoppel and observed that where one joint tenant has an expectation that he or she will acquire an interest by survivorship of the other and acts on that expectation to his or her detriment and the other party is implicated in the creation of the expectation and encourages reliance then normally it will be unconscionable for the encouraging party to act contrary to the expectation.

30 The principles as to what amounts to a repudiation of a contract are well settled. A repudiation will occur when a party clearly indicates an absence or willingness to perform contractual obligations. The expression is used in a number of senses. The emphasis however, is on the seriousness of the breach and the inferences which can be drawn from it in relation to the position taken by the alleged breaching party in respect of the contractual obligations. The term in question must be an important one. A breach of warranty or condition does not of itself give any automatic right to terminate but this will arise only when an absence of readiness or willingness can be inferred such as to show an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the obligations imposed or only if and when it suits: see Laurinda Pty Limited v Capalaba Park Shopping Centre Pty Limited (1989) 166 CLR 623 at [634]. Because of the seriousness and consequences of finding repudiation, courts do not lightly find that a breach will give rise to repudiation. By way of an example, if there is ambiguity as to the meaning of a condition of a contract and the parties are in dispute, a genuine insistence on a particular interpretation may not amount to a repudiation provided that the party is prepared to adhere to the contract as properly interpreted. The omission to perform a contract when performance is due may demonstrate unwillingness or inability to perform and therefore be a repudiation. See Cheshire and Fifoot’s Law on Contract, 8th Australian edition, Seddon and Ellinghaus (2002) at [21.11].

31 It was not suggested in the present case that I should not follow and apply those principles.

Reasoning

32 Essentially, this case turns on the relative credibility of James and Barker. The question is whether I should accept James’ version of the conversation as to what took place on 22 February 1999 or whether I should accept the version advanced by Barker.

33 This also involves a consideration of the evidence of other witnesses called in respect, namely Tim Dowling and Graham Barker.

34 An affidavit was filed in support of James’ case by Dowling. He was a de facto partner of Barker between 1996 and 2006. He referred to a series of conversations in September 2003 and April 2004 whereby James said in the presence of Barker that James and Barker agreed that Tamarama was not to be sold and would pass to her and that she would not have more children and whatever she owned would go to Justin. He said that Barker made no comment on these matters. He also said that he had asked Barker on many occasions why he had not sold the property and Barker had said that the property would go to Justin and would not be sold.

35 Under cross-examination Dowling stated that his affidavit was prepared with the benefit of discussions with James in Cairns. He said that she tried to jog his memory about matters. He agreed in cross-examination that this relationship with Barker ended when Barker threw him out of the house and moved someone new in. He said that this was extremely painful to him and was a difficult period (T 156.16-156.24).

36 When questioned as to whether he actually remembered the references to wills and inheritance he accepted that it might have been suggested to him. In relation to the Tamarama property he agreed that his recollection was not good and at various points in his evidence he indicated that he was confused. In view of these matters and his prior relationship with Barker his evidence must be approached with some reservation. However, he adhered under detailed cross-examination as to the substance of his evidence as to statements about the intentions of Barker and I accept his evidence that Barker wished to provide for Justin and would not sell Tamarama. This provides some corroboration of the evidence of James.

37 In his evidence Graham Barker refers to a conversation with James in January 2007 which was to discuss his brother’s options because his brother needed finance to maintain his current residence in Cairns and he wanted James to either buy him out of the property at 3/7 Kenneth Street Tamarama or they would have to sell. He says James responded to the statements made by his brother by saying that she would be in a better position to buy his brother out of Tamarama once her shop was established at 182 Liverpool Street and she was able to find a buyer for it but at that time she needed Tamarama to keep the shop going and that it would be silly to sell the shop at that time. It is suggested that this conversation is inconsistent with the position that the unit would never be sold.

38 I do not think the evidence of Graham Barker affords any useful corroboration to Barker’s version of the arrangements in February 1999 having regard to the lapse in time and the inconclusive nature of the affidavit. The affidavit should be approached with some caution in view of the relationship between Barker and his brother.

39 In his oral evidence Barker conceded under cross-examination that his affidavit was false in relation to his denial that James had carried out work on the Tamarama property and also conceded that the statement was false in relation to the duration of his relationship with James (T 195.01-196.50).

40 These incorrect statements were made in an affidavit lodged by Barker in his application to remove a caveat lodged in respect of 3/7 Kenneth Street Tamarama in which she claimed an interest based on a claim for:

“Renovations on property b/N May and July 1988. Litigious interest – property in claim – de facto wife > 2 years.”

41 Although incorrect I do not consider that these statements in his 1990 affidavit reflect in any substantial adverse way on the credit of Barker in relation to the question of whether there was an agreement in February 1999 and whether it was carried out. This is because the renovations referred to in the caveat were agreed not to have been of any substance and the fact was that the parties had been together as at January 1990 for a relatively short period of less than three years. At best the incorrect statements disclose an exaggeration of these matters by Barker.

42 Although in some ways she was an unsatisfactory witness because she had a strong tendency not to answer questions but rather to make speeches in support of her case and to give her evidence in a highly emotionally charged way, I consider that the substance of her evidence as to the critical conversation on 22 February 1999 should be accepted. My reasons for this acceptance are as follows.

43 Both James and Barker’s, to their credit, clearly had a strong sense of responsibility in relation to Justin and wished to care for him both in his schooling and need for a home. This continuing concern and responsibility is shown in many ways in the evidence dating back to the transfer of the half interest by Barker in Tamarama to James in 1990. As at February 1999 Justin was only 10 years old. It is consistent with James’ version that both parties would want to provide a secure home for Justin.

44 The fact that shortly before the discussion in February Barker expressed in his letter of 9 December a desire to resolve and settle relative responsibilities in relation to “things like wills, taxes, super and financial obligations” is consistent with the version of the conversation given by James. He referred to an agenda. At that time, Barker was in need of funds and clearly wished to have Darlinghurst sold. James, because of the time, effort and moneys she had expended on Darlinghurst, was reluctant to agree to its sale and he needed to persuade her to agree. In view of this it is inherently likely that in order to persuade her to agree to the sale of Darlinghurst it would be seen as necessary by him to provide some reciprocal benefit or make some concession to James by way of which was described as a “sweetener”. This fits in with her seeking to obtain an agreement in respect of Tamarama of the kind for which she contends.

45 Barker also stood to gain a benefit under an agreement in the terms asserted by James in that as survivor he could be the sole owner, subject to the interests of Justin, and if Tamarama was not sold, the property would remain as a home for Justin. Also, if Barker were “bought out” by James this would not ensure a home for Justin because James could then sell it at any time. The financial needs of Barker in February 1999 were not so great that it was necessary to sell both Liverpool Street and Tamarama and on neither version was this contemplated.

46 It is reasonably clear on the evidence that as at February 1999 Tamarama was in an unsuitable state of repair and required expenditure and work to make it liveable. Having regard to this and the proposal to sell Darlinghurst as an investment property it seems likely that both parties should provide the moneys that would be expended on both properties.

47 Notwithstanding the submissions of Barker to the contrary, I am satisfied that the subsequent conduct of the parties after February 1999 lends support of a finding that the agreement was as she has alleged. James took over responsibility for the joint mortgage on the property after 1999 and this carries out her offer of February 1999. The cheque butts in evidence confirm that she paid moneys on behalf of Barker. James also claimed that there was discussion of refinancing Tamarama, and this was arranged in May 1999 for moneys to be spent on repairs and renovations.

48 The sale of Darlinghurst was completed in January 2000, Barker received one half of the net proceeds after the payment of school fees and after his car loan was paid out together with miscellaneous expenses. James did not pay the amount until he was “drug free” which was a condition of the conversation alleged by her in February 1999.

49 During the year 1999 James entered into two other property transactions as outlined above. She acquired an adjoining property to Darlinghurst, at 180 Liverpool Street, on 31 August 1999 in her own right. She also acquired together with her de facto partner Aaron Gibson 5/7 Kenneth Street, Tamarama in the same block as the unit 3 property. She also refinanced in the name of herself and Barker the mortgage on the 3/7 Tamarama property for an extra $50,000, bringing the total encumbrance over that property to $97,000. These actions are consistent with her agreement to refinance Tamarama as alleged in the February 1999 conversation.

50 Barker contends that events after February 1999 support the conclusion that there was no agreement in the terms asserted by James ever made. Alternatively, he says if such an agreement was made it had been breached because James has not acted in accordance with the undertakings and obligations set out in the agreement of February 1999.

51 The cheque butts and pass sheets for July 1999 support the conclusion that $33,000 of the $49,000 advanced by NAB was paid from the NAB account for the deposit on 180 Liverpool Street. When cross-examined on the source of funds for the purchase of 180 Liverpool Street James frankly acknowledged that some of the funds could have come from the refinancing of Tamarama but her recollection was that not more than half the refinancing went towards that purchase. This appears to be incorrect insofar as the deposit of $33,000 is concerned, but given that she had a number of bank accounts and the transcript records that the question wrongly referred to 182 Liverpool Street I do not consider this apparent mistake on her behalf materially affects her credit on the central question whether a legally binding contract was formed and on what terms and the ensuing question whether her conduct amounted to repudiation.

52 Having considered the cheque butts in evidence, I accept the evidence of James when she says that she expended substantial sums on 3/7 Kenneth Street, Tamarama and 182 Liverpool Street in the period after 1 February 1999 and that she paid moneys towards the debts of Barker in accordance with the terms of the agreement she claims existed.

53 Expenditure of funds by her on 182 Liverpool Street, which was to be sold and which would enhance the sale price, was in her financial interest. Also, if she or Barker were to keep Tamarama it was again in her interest to improve that property which was non-liveable in early 1999. The expenditure of these moneys on Tamarama and Darlinghurst was consistent with the performance of the undertaking she gave to expend moneys on the improvement of these two properties in the order of $15,000.

54 In relation to the purchase of 5/7 Kenneth Street, Tamarama I am satisfied that she borrowed $35,000 on or about 9 November 1999 and that this sum was repaid in January 2000 from the proceeds of sale of 182 Liverpool Street and that there was nothing in these transactions to reflect adversely on her credit.

55 Counsel made an attack on the credit of James on the basis that she had said on 22 February 1999 that she could not afford to buy out Barker’s share of 3/7 Kenneth Tamarama, yet later in the year she acquired two further properties before Darlinghurst was sold. The evidence is that she had other assets which she did not then want to sell, namely some Telstra shares of about $19,000 and a term deposit given to her by her father that she did not wish to break in an amount of $80,000. The evidence is that she bought 5/7 Kenneth Street, Tamarama jointly with Aaron Gibson. I am not satisfied that her credit is adversely affected because there is a reasonable explanation for not using those funds to buy out Barker’s share of 3/7 Kenneth Street, Tamarama.

56 In the light of the testimony of James and the bank statements in evidence for October/November 2000, I am satisfied that the credits to her account in October 1999 came mainly from moneys paid to her by her partner Aaron Gibson in this period. The oral testimony and the documentation in this matter do not tie-up precisely but having regard to the weight of the evidence and the inherent probabilities I am satisfied that after 22 February 1999 she took steps which were consistent with the substance of the terms of the arrangement allegedly made with Barker and that on the figures available and on her oral testimony she did spend substantial sums on the two jointly held properties with Barker in the order of $15,000 as agreed. I note that the bank statements of October and November have the name “Aaron” handwritten next to two substantial deposits crediting the joint NAB account and these lend support to James’ assertion that Gibson was repaying her for moneys she had lent him for the purchase of his share of 5/7 Kenneth Street, Tamarama. On their face these handwritten notes appear to have been entered at or about the date of the statements and there was no submission to the contrary. Nevertheless, her conduct after February strongly supports the conclusion that there was a legally binding agreement in the terms alleged by her.

57 I am not persuaded that there was any repudiation of the contract in the terms asserted by her because the substance of the obligation she assumed in February 1999 in relation to payments was to pay the debts of Barker which she did; to keep $15,000 for herself which she did; and, to expend $15,000 on renovating 3/7 Kenneth Street, Tamarama and 182 Liverpool Street which I am also satisfied that she did. It was not an essential term of the contract which I find existed that the moneys for improving the two properties should come solely from the $50,000 refinancing of 3/7 Kenneth Street or from any particular source but rather that she should make those payments. More specifically, I am not persuaded that even if the money came from another source that this was of sufficient seriousness as to indicate any repudiation of the February agreement.

58 Accordingly, for the above reasons I find that on or about 22 February 1999 Barker and James entered into a contract on the following terms:

59 The property at 182 Liverpool Street was to be sold and the property, 3/7 Kenneth Street, Tamarama would not be sold but should pass to the survivor and thereafter to Justin. The Tamarama property was to be refinanced in an amount in the order of $50,000 and the plaintiff would receive $15,000 and would pay $15,000 to the defendant and the balance would be paid to restore and repair the properties at 182 Liverpool Street and 3/7 Kenneth Street. The plaintiff would assume responsibility for the mortgage on the Tamarama property. From the proceeds of 182 Liverpool Street, the defendant would pay one year of school fees for Justin. After this payment of school fees the parties would divide the net proceeds of sale equally.

60 I am not satisfied that the defendant has made out a case as to non-performance on the part of James nor has he established any breach of the agreement which would amount to a repudiation by showing any intention not to perform the agreement.

61 In view of the conclusion I have reached in relation to the existence of a contract it is not necessary for me to consider the alternative submissions advanced for James based on estoppel and the constructive trust.

62 I direct the parties to provide Short Minutes of Order within 10 days reflecting the reasons given in this judgment.

63 The first defendant is to pay the plaintiff’s costs of the proceedings.

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