Khuen-Kryk as Administrator of the Estate of the late Karl ADAM Khuen-Kryk v Williams - [2010] WADC 49

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: KHUEN-KRYK as Administrator of the Estate of the late KARL ADAM KHUEN-KRYK -v- WILLIAMS [2010] WADC 49

CORAM: WAGER DCJ

HEARD: 24-26 FEBRUARY 2010

DELIVERED : 15 APRIL 2010

FILE NO/S: CIV 1789 of 2008

BETWEEN: KELLI DIANE KHUEN-KRYK as Administrator of the Estate of the late KARL ADAM KHUEN-KRYK
Plaintiff
AND
ROBIN JOAN WILLIAMS
Defendant

Catchwords:

Contract - Possible renegotiation of written agreement - Requirement for consideration for amendment of agreement - Was conduct misleading or deceptive - Turns on its own facts

Legislation:

Fair Trading Act 1987 (WA)

Result:

Plaintiff's claim proven
Defendant to pay the plaintiff $200,000
Counterclaim dismissed

Representation:

Counsel:

Plaintiff: Mr S Sirett
Defendant: In person

Solicitors:

Plaintiff: Gibson Tovey & Associates
Defendant: Not applicable

Case(s) referred to in judgment(s):

Morton & Anor v Black (1988) 83 ALR 182
Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723
Subramaniam v Public Prosecutor [1956] 1 WLR 965

WAGER DCJ: Ms Williams agreed to purchase Mr Khuen‑Kryk's property at Nilgen together with his alpaca herd, tractor and buildings for $700,000. A condition of the agreement was that Mr Khuen‑Kryk would be able to continue to live on the property for the rest of his life. The acceptance of the agreement was subject to finance.
Ms Williams was unable to obtain finance due to the conditions attached to the sale and because the bank valued the property at $450,000 and would therefore not lend the sum of $700,000.
After the initial offer and acceptance fell through Ms Williams agreed unconditionally to purchase the land, buildings and improvements for $450,000. Ms Williams also signed a chattel agreement made between Mr Khuen‑Kryk and Ms Williams to purchase 29 alpacas and the tractor. The chattel agreement was conditional upon Mr Khuen‑Kryk being able to live at the property for the rest of his life.
The chattel agreement was for the sum of $250,000; the money to be paid at the rate of $2,500 per week commencing on 27 October 2006. The money was to be paid in full upon the sale and settlement of properties at 13 Harrow Place, Kewdale, Western Australia and/or 69 Oakley Road, Medina.
Ms Williams commenced making weekly payments and from 27 October 2006 until 30 March 2007 she paid $40,300. However only one payment of $5,000 was made in the month of February 2007 and on 21 March 2007 by agreement Ms Williams made the first of two reduced payments of $1,250. No further payment was made. The plaintiff claims that the sum of over $200,000 was due and owing on the chattel agreement. However, Ms Williams counterclaims that in December 2006 she became aware that Mr Khuen‑Kryk had sold three of her alpacas for a total sum of $2,000 without her knowledge. She claims she confronted Mr Khuen‑Kryk with the unauthorised sale and the possibility of taking legal action against him, and, after discussion, Mr Khuen‑Kryk agreed that the value of the alpacas the subject of the chattel agreement was only approximately $50,000 rather than $250,000. Ms Williams claims that Mr Khuen‑Kryk agreed to vary the chattel agreement accordingly and reduce the contract sum from $250,000 to $50,000.
Ms Williams also claims that she agreed to take no action in relation to Mr Khuen‑Kryk's unauthorised sale of the alpacas in consideration of the agreed reduction.
Ms Williams further claims that Mr Khuen‑Kryk had failed to facilitate the registration of the alpacas and the tractor to her name and that she therefore chose to defer payment of the final sum owing on the $50,000 being approximately $9,000, until the transfer had occurred.
Alternatively Ms Williams pleads that the sale of the alpacas and tractor occurred in the course of trade or in commerce as the expression is used in the Fair Trading Act 1987 (WA) and that the valuation originally given by Mr Khuen‑Kryk in relation to the sale of the chattels was deceptive or misleading.
Mr Khuen‑Kryk died on 1 May 2007. These proceedings are brought by the administrator of his estate, his daughter Kelli Khuen‑Kryk.
The plaintiff replies to the counterclaim that there was never a variation of the chattel agreement nor was the chattel agreement based on misleading or deceptive conduct by Mr Khuen‑Kryk. The plaintiff claims that the chattel agreement is a substitute transaction for the domestic sale of land and chattels because it brings the total price for the property, alpacas and tractor back to the original agreed price of $700,000. The plaintiff claims that it is implausible that Mr Khuen‑Kryk would agree to reduce the chattel agreement by $200,000 to $50,000 particularly because he paid more than $85,000 to buy the alpacas (that had been bred since purchase) in the first place. The plaintiff claims that there was never a subsequent agreement between Mr Khuen‑Kryk and Ms Williams to reduce the price of the alpacas and tractor to $50,000. The plaintiff submits that Ms Williams wrongly believed that once Mr Khuen‑Kryk died she was no longer bound to pay the outstanding sum relating to the chattel agreement and that this belief is prompting her counterclaim. The written contract, the plaintiff submits, is clear, unambiguous and enforceable.

The plaintiff's evidence

Kelli Khuen-Kryk gives evidence that in 2006 she was aware that her father was terminally ill. Her father had lived in the area near the property at Nilgen and looked after alpacas for a number of years. In 2006 her father told her that he had sold the Nilgen property. She states that her father advised her that Ms Williams, the prospective purchaser of the property, could not get a loan for the full amount of the purchase price and so they had agreed to split the price in two and make a separate contract for the purchase of the alpacas and the tractor.
In October 2006 her father gave her a copy of the signed chattel agreement and asked her to look after it. He told her it was important to keep the agreement safe. Mr Khuen‑Kryk then bought a boat costing over $300,000.
Ms Kelli Khuen‑Kryk was aware that Ms Williams paid her father money by instalment after the chattel agreement was signed because he had rung Ms Williams from Ms Kelli Khuen‑Kryk's home when Kelli was present and he had spoken about the need for Ms Williams to make payment because he had large medical bills to pay.
Ms Kelli Khuen‑Kryk states that her father told Ms Williams on the telephone that the payments should continue.
Her father told Kelli that Ms Williams said that she was reducing the payments by half in February 2007 because her business was running slow and that he had agreed that she make payments of the half sum. Her father did not mention any other agreement or variation to the agreement or reduction of debt in respect of Ms Williams. Ms Kelli Khuen‑Kryk says that her father was functioning perfectly well until approximately two weeks before he passed away. He was going out on his boat, driving to Mandurah, shopping and looking after everyday things. He continued to look after his own affairs until just prior to his death in May 2007.
In cross‑examination Ms Kelli Khuen‑Kryk confirms that she was told of the half‑payments in February not March 2007. She was unaware of any representations that Mr Khuen‑Kryk had made to Ms Williams or to Ms Williams' family in relation to his family. Ms Khuen‑Kryk recalls meeting Ms Williams' son Scott and his partner at the property after her father died.
Ms Kathryn Khuen‑Kryk, who is also the daughter of Mr Khuen‑Kryk, gives evidence that she visited her father's property about three times each year to stay overnight and her father would come and stay with her at her home in Landsdale. Her father had told her of the sale of the Nilgen property and told her that the purchaser was not able to get all of the finance so he had agreed to a deal where the purchaser would pay him privately until one of her properties sold.
Kathryn Khuen‑Kryk says that she raised a concern with her father that the chattel agreement related to a large sum of money. She says that Mr Khuen‑Kryk assured her that it was fine because Ms Williams had a business and properties and once one of the properties sold money would go towards the payment of the chattel agreement.
Kathryn Khuen‑Kryk says that her father had given her a copy of the chattel agreement document. Her father told her that he had reduced the amount of the repayments Ms Williams had to make but he had not mentioned any other alteration or renegotiation.
After her father died Ms Kathryn Khuen‑Kryk rang Ms Williams in relation to the issue of outstanding payments due on the chattel agreement. Kathryn Khuen‑Kryk says that Ms Williams said as far as she was concerned he (Mr Khuen‑Kryk) had died and that she did not owe any more money. Kathryn Khuen‑Kryk says that Ms Williams said she did not want to pay for the alpacas and offered them back. Kathryn Khuen‑Kryk says that she said to Ms Williams that that was not really the intention of the contract.
Kathryn Khuen‑Kryk describes her father as living on his boat up until one month before he died.
In cross‑examination Kathryn Khuen‑Kryk says that she had said to Ms Williams on the telephone that the contract was not for the alpacas but for the rest of the property.
Kolin Khuen‑Kryk, son of Kelli Khuen‑Kryk and grandson of Mr Khuen‑Kryk says in evidence that he had been on his grandfather's Riviera boat on Christmas Day 2006 and in March 2007.
His grandfather had had to climb a ladder 9 or 10 feet high in order to reach the bridge to steer the boat. In cross‑examination he confirms that he could not recall visiting his grandfather between October and Christmas in 2006.
Trevor Lawler has lived near the Nilgen property at his own property at 680 Ocean Farm Drive, Nilgen since approximately June or July 2003. Mr Lawler says in evidence that in conversation Mr Khuen‑Kryk had suggested to him that Mr Lawler use alpacas to keep the grass down on his property. Mr Khuen‑Kryk brought six alpacas over to Mr Lawler's property in the first year Mr Lawler had the property, being 2003/2004, and left the alpacas with Mr Lawler.
In 2006 Mr Khuen‑Kryk told Mr Lawler that he had sold his Nilgen property lock, stock and barrel to Ms Williams.
On a date Mr Lawler agreed was 31 October 2006 he took his alpacas to the Nilgen property to be shorn. After shearing he agreed to purchase four of the alpacas from Ms Williams for $2,000 and he paid Scott Beaumaster, Ms Williams' son, the sum of $2,000 a couple of days after shearing.
Mr Lawler says that Mr Khuen‑Kryk was still staying at the Nilgen property at the time of the shearing and purchase.
In cross‑examination Mr Lawler denies having any agreement with Mr Khuen‑Kryk in relation to the purchase of the alpacas and confirms that his agreement was with Ms Williams.
Mr Peter Hockey says in evidence that he lived across the road from the Nilgen property and that he witnessed Mr Khuen‑Kryk's will that is dated 15 December 2006. Although Mr Hockey does not have any independent recollection of the precise date that he witnessed the will, he does not dispute that the date on the document of 15 December 2006 is correct.
Mr Hockey says that Mr Khuen‑Kryk drove to his property on the day when the will was signed in order to have Mr Hockey look at the will and be the witness. The will (Exhibit 16) is a typed document in a similar form to the chattel agreement.
Mr Ronald Francis Reid gives evidence that he had been an alpaca farmer for 16 years. His expertise as a registered member of the Australian Alpaca Association Inc, the register for alpaca breeders in Australia, was not challenged by Ms Williams.
Mr Reid had arranged for the transfer of ownership of an alpaca, Swan Valley Mist to Mr Khuen‑Kryk. Swan Valley Mist was the junior champion in 1996 when she was approximately 6 months old. Mr Reid says that an offspring of Swan Valley Mist sold for $53,000 in 2003/2004. He says that the price of alpacas has dropped quite a bit in recent years. He agrees that alpacas could sell for as low as $400 each, but he says that the price of an animal depends on its stock quality.

The defendant's evidence

Ms Williams says in evidence that she met Mr Khuen‑Kryk in about July 2006 when her son Sean Beaumaster took her to see Mr Khuen‑Kryk's alpacas. She says that Mr Khuen‑Kryk's first words to her were "you know I am dying" and that he stated that he had outlived his prognosis by six months.
Mr Khuen‑Kryk and Ms Williams went on to discuss his decision to purchase a boat and her desire to buy the Nilgen property. Mr Khuen‑Kryk initially spoke of a price of $770,000 for the Nilgen property, alpacas, tractors, equipment and improvements however they agreed to $700,000 as the price. Ms Williams agreed that Mr Khuen‑Kryk could have a life tenancy on the Nilgen property after the settlement.
Ms Williams says that Mr Khuen‑Kryk said that he did not want to use a real estate agent to carry out the sale and settlement procedures. Mr Khuen‑Kryk drew up the offer and acceptance in late August 2006. The first offer and acceptance referred to the Nilgen land and included the sale of the alpacas and the tractor. A condition that Mr Khuen‑Kryk had a life tenancy on the property was also included in the offer and acceptance. The offer and acceptance was subject to the approval of bank finance in relation to the purchase.
Ms Williams says that after applying for finance through Mr Smallwood, her appointed mortgage broker, she was contacted by Mr Smallwood who said "the bank won't look at your offer and acceptance with these things added in". Ms Williams understands that Mr Smallwood's comments were references to the conditions on the offer and acceptance in relation to the alpacas, the tractor and the life lease. Ms Williams spoke to Mr Khuen‑Kryk about the rejection of finance. Mr Khuen‑Kryk then asked Ms Williams to seek finance approval without the "attachments". This reference to attachments is understood by Ms Williams to have related to the alpacas, the tractor and the life lease condition on the first offer and acceptance.
However, Ms Williams says that Mr Smallwood then advised that a bank valuation on the Nilgen property only came in at $450,000 and that therefore finance would not be approved for $700,000 in light of the valuation. Ms Williams says that she advised her son, Mr Beaumaster of the low valuation and that she then let Mr Khuen‑Kryk know that the valuation had come in low so she would have to call the deal off because the valuation had not reached the standards. That is, the condition of the offer and acceptance that finance would be approved had not been met.
Ms Williams says that after the offer and acceptance fell through, Mr Khuen‑Kryk still wanted settlement to occur quickly because he had already put a non‑refundable deposit on a boat that she later described as costing $300,000. Ms Williams and Mr Khuen‑Kryk then agreed to an unconditional offer and acceptance in relation to the Nilgen property for the sum of $450,000 and agreed that they would enter into a signed chattel agreement for the sale of the alpacas and the tractor for the sum of $250,000. The chattel agreement would also include the condition of Mr Khuen‑Kryk's life tenancy. There was no condition attached to the chattel agreement that interest be paid in relation to the sum outstanding. Ms Williams said that both she and Mr Khuen‑Kryk wrote the chattel agreement and then they signed it.
Ms Williams says in cross‑examination (T 69):
"I couldn't get the finance for the full 700,000 because it was all relying on the valuation of the property. From there Karl talked about buying the alpacas separately for the difference, and I – and I said, 'Well, yeah I wouldn't mind, but I don't know how I'd pay for them', and then went on about, you know, 'maybe you could pay for them'. My son, Scott, was there as well and he said his house was on the market. His house in Medina was on the market and he could help pay for them when it was sold.
....
In the meantime he said he needed to have something coming in, and that was when we agreed at 2500 a week, plus the life lease was in there anyway, which he was concerned about somewhere to live. Then KK actually typed it all up. We – we sort of wrote a couple of – each wrote a couple first, until we were happy with what it said, because he was really concerned about the life lease, that as soon as the property was mine, I'd kick him out. And like, you know, this just wasn't going to happen."
After settlement Ms Williams made arrangements for the alpacas that she had purchased to be shorn. It is agreed that this occurred on 31 October 2006. Mr Lawler, who had received alpacas from Mr Khuen‑Kryk in 2003/2004 brought the alpacas back to the Nilgen property so that they could be shorn with the alpacas at the Nilgen property. Following the shearing Mr Lawler negotiated with Ms Williams' son Sean Beaumaster in relation to the purchase of three or four alpacas for the agreed price of $2,000.00. This sum was paid by Mr Lawler to Ms Williams' son soon after 31 October 2006.
In early December 2006 Ms Williams was advised by her son Sean Beaumaster that one of her alpacas had died. On checking the herd at the Nilgen property, Ms Williams noticed that in fact three alpacas were missing. Ms Williams says that the following weekend or the weekend after that (being December 2006), Mr Khuen‑Kryk came to a barbecue at Sean Beaumaster's home. Ms Williams says that she and Mr Hey were also present. Ms Williams says that she confronted Mr Khuen‑Kryk at the barbecue and asked him what had happened to the three alpacas. She says that Mr Khuen‑Kryk admitted to her that he had sold the three alpacas for $2,000. Ms Williams gives no evidence in relation to the name of the person to whom the alpacas were sold or the details of the alpacas that were sold. No evidence of the details of the alleged sale was called by the defendant.
Specifically in relation to the conversation Ms Williams says in evidence (T 71):
"... The following week or the weekend after ... during the meal actually, I did confront him about the alpacas. I asked him if he knew – if he knew that there were three missing and if he knew what had happened, and he said he'd sold them. I jumped up ...
...
'Well, that doesn't seem right. I'm paying $250,000 for 29, with a tractor thrown in, and you're selling, you know three for $2000'. And I did get a bit cross with him and he did admit that he'd previously overpriced them. He told me that he had paid around about a hundred thousand for them, and I said, 'When?' He said, 'Oh, that was about six years ago', but he had had some births on the farm, and I believe he'd registered some of his births that he'd had on the farm. But, you know, going on – on the $2000, and the fact that they were pretty old, the ones that he had, we then agreed on the 50,000. ... I did call him in March about reducing the amount per – per week, for two or three weeks, because my cool room had broken down, and he agreed that that was all right to do that. I told him I'd make it up when money came in from Interflora, who's – I'm a member of, which comes in on the 19^th of every month for the work."
Ms Williams says at (T 72):
"I told him I would make it up when money came in from Interflora, who's – I'm a member of which comes in on the 19^th of every month for the work done the previous month and that I would fix – fix up the – you know, catch up then."
Ms Williams confirms that she intended, once paid by Interflora on the 19^th (a date consistent with 19March given that the difficulties with the cool room occurred in late February/early March), to pay the outstanding sum to Mr Khuen‑Kryk.
Ms Williams says that Mr Khuen-Kryk rang her at the end of March and told her that he needed money. She says that she arranged to give him $500, however this sum is not recorded and has never been part of the pleadings in this matter.

Ms Williams also says that she asked Mr Khuen‑Kryk for the third time on this occasion at the end of March 2007 for the registration papers in relation to the alpacas and for the written agreement in relation to the reduced sum for the chattels agreement. She states that he said "I'll have it the next time you see me".
Ms Williams did not make any further payments to Mr Khuen‑Kryk. She says that she learned that Mr Khuen‑Kryk had died on a date after his death in May 2007. Ms Williams says that one or two months after Mr Khuen‑Kryk's death she received a telephone call from Kathryn Khuen‑Kryk. She says (T 72):
"Kathy rang me, it would have been a month, it might have been two months afterwards, and wanted to know when I was going to pay the rest of the money. And I told her that as far as I was concerned, I didn't owe any more money, that Karl was dead and that we had renegotiated our terms. As it turns out, I did owe more money, because then I've only got proof of having paid just a little over 400,000. There's a little bit more than that."
In cross‑examination Ms Williams confirms that she had been involved in the floristry business as an owner operator for five or six years. She has a number of financial interests including a financial interest in Mr Hey's residence in Kewdale and she owns the property where her son Sean Beaumaster lives and works. She says that Mr Beaumaster was paying a mortgage on that property. Ms Williams denies having any knowledge of a role or of holding the office of committee member on a committee in her son's not‑for‑profit business venture.
Ms Williams states (T 86) in relation to the telephone call with Kathryn Khuen‑Kryk:
"I was surprised. I did - I didn't believe that the contract still existed after he died."
Ms Williams says that she told Kathryn Khuen‑Kryk that they had varied the agreement and she believed she had paid for the alpacas. However, when cross‑examined further, Ms Williams concedes that she did not remember the conversation with Kathryn Khuen‑Kryk exactly.
Ms Williams agrees that she sent two cheques of $1,250 to 46 Carnegie Loop, Cooloongup in March 2007. Both of the cheques were cashed. Although Ms Williams states that she could not locate Mr Khuen‑Kryk, she agrees that she did not make any enquiries at the Cooloongup address to find him nor did she attempt to make further payments.
Ms Williams says that the reason why she did not make any further payments or attempt to locate Mr Khuen‑Kryk was because she was waiting for information from him about a bank account so that direct debits could be made, however when this information was not forthcoming she still did not make any further inquiries nor did she attempt to make any further payment after March 2007.
It was put to Ms Williams in cross‑examination that her first defence that was filed in these proceedings at a time when she was self‑represented correctly and truly set out the position between her and Mr Khuen‑Kryk. In response to par 6 of the statement of claim, that pleads "on 27 October 2006 until 30 March 2008 the defendant has paid $40,300 in reduction of the purchase price of $250,000" Ms Williams answered in the defence:
"6.I continued to make payments after December 2006 and Mr Khuen‑Kryk and I were to renegotiate on the value of the said alpacas and tractor (he was very ill and could not find time to renegotiate or to transfer registration of the alpacas to me)."
Ms Williams states in cross‑examination that she understands that the word "renegotiate" means to get together and discuss something and work it out.
In response to detailed cross‑examination, Ms Williams says that despite her understanding of the word "renegotiate" and the fact that the defence was in her own handwriting, the defence was inaccurate and the agreement had gone beyond renegotiation. Ms Williams says that an agreement in relation to a reduced sum had been reached in mid‑December 2006. Ms Williams says that she drafted and filed an inaccurate defence because she had not obtained legal advice and was rushed into completing the defence believing that she had to do it immediately at the Registry.
It was also put to Ms Williams in cross‑examination that she did not mention the fact of consideration, that is, the outstanding sum in respect of the three alpacas, until after the issue of consideration had been brought to her attention in the submissions made by the plaintiff that were filed and served in this matter. It is submitted by the plaintiff that the consideration that arises from Mr Khuen‑Kryk's alleged sale of three alpacas is a recent invention.
Ms Williams denies that the issue of the sale of the three alpacas is a recent invention and states that the information was disclosed to her solicitors in approximately June 2008, although no reference or pleading consistent with this version of events had been filed by the defendant.
Mr Smallwood, Ms Williams' mortgage broker gives evidence consistent with Ms Williams' understanding of the bank's attitude to finance in respect of the first offer and acceptance and confirms that he was advised that because the valuation for the Nilgen property was for the sum of $450,000, the bank would not lend the sum of $700,000.
Mr Sean Beaumaster states in evidence that he met and befriended Mr Khuen‑Kryk in approximately June or July 2006 and introduced Mr Khuen‑Kryk to his mother at the Nilgen property. Mr Beaumaster recalls Mr Khuen‑Kryk saying "I am dying" to his mother. Mr Beaumaster says that Ms Williams and Mr Khuen‑Kryk then negotiated the offer and acceptance in relation to the Nilgen property.
Mr Beaumaster states that the deal was to buy the place for $700,000 "lock, stock and barrel". He recalls his mother saying about a valuation of only $450,000 and that they would not take alpacas and the tractor into account in relation to the valuation.
Mr Beaumaster says that he was advised of the two agreements for the sale at Nilgen being $450,000 for the sale of land and the chattel agreement of $250,000. Mr Beaumaster confirms that Mr Lawler bought three or four alpacas for the sum of $2,000 after shearing in 2006 and that Mr Lawler paid the purchase price to someone on behalf of his mother.
Mr Beaumaster also confirms that Mr Khuen-Kryk came to his home for a barbeque in December 2006. He says in the context of his mother, Ms Williams (T 129):
"You – you were obviously angry. You let KK know you were angry. You told him he had no right to sell the alpacas. You told him that he'd broken the law in doing so, because they were yours. They weren't his to sell, and that you were going to get legal advice. And then KK abruptly apologised and said that he was sorry that he'd told you the alpacas were worth more than they were. And he was willing to renegotiate a deal on the alpacas after you mentioned to him how much he'd paid for them originally and what they were worth now. I remember the fee you settled on was $50,000."
Mr Beaumaster also confirms in evidence that he had asked Mr Khuen‑Kryk at some time for the registration papers in relation to the alpacas so that the alpacas could be bred.
Mr Beaumaster says that in March 2007 he was present with his mother when she asked about documentation for the renegotiated chattel agreement. He says that Mr Khuen‑Kryk said that he had been a bit sick with his medication and that he would get onto it as soon as possible. Mr Beaumaster says that soon after this time Mr Khuen‑Kryk's family came and advised that Mr Khuen‑Kryk had died.
In cross‑examination Mr Beaumaster confirms that his mother and Mr Hey are no longer committee members of his not‑for‑profit business. He acknowledges his mother's ownership of the property that he lives on and works at, however he states that he pays rent for the property.
Mr Taylor, an expert alpaca breeder, gives unchallenged evidence in relation to the price of alpacas. A single alpaca sells for $400, but alpacas vary in price and prices have dropped since the late 1990's. He says that alpaca prices have continued to go down from the year 2000 onwards.
Mr Edward Kim Hey, a long‑term friend of Ms Williams' who co‑owns a property with her at Kewdale, states that he attended a barbecue at Sean Beaumaster's home when Mr Beaumaster, Ms Williams and Mr Khuen‑Kryk were present in the middle of December 2007. He overheard discussions between Mr Khuen‑Kryk and Ms Williams in relation to the chattel agreement. At (T 143) Mr Hey's evidence is as follows:
"And from there what do you remember happening from when KK arrived? ‑ Well, we were having – sitting down talking, and then KK arrived. And you and KK started talking about the alpacas and you said there was – that one had died and there were three missing. And you asked KK what happened to the three other – other alpacas, and KK said that he had sold them for $2,000, to a farmer, and that you said that all was against the law and that you'd have to renegotiate your terms of your - - -
"So that's exactly how you remember things happening? ‑ Yeah, somewhere – yeah, along that lines.
And do you remember any other thing, apart from after – after any - - - ? ‑ Well, youse – you and KK started having a disagreement about it and I walked off and made a – went and made a cup of coffee. And when I come back, you and KK had decided to settle at 50,000, and that KK could live on the property until he died, and you had to pay with two hundred and – 2,500 a week."

The law

The plaintiff's case relies substantially on documents completed by the deceased, Mr Khuen‑Kryk. Evidence has been received of statements made by Mr Khuen‑Kryk as evidence of his state of mind at the relevant time. The evidence is not received as evidence of the truth of the statements themselves (Subramaniam v Public Prosecutor [1956] 1 WLR 965 at 969).
Evidence has also been led in relation to the existence of a renegotiated oral agreement and of Mr Khuen‑Kryk's declarations against pecuniary interest. The evidence, although received to assist in an assessment of the actions of others, is not received on the basis that the statements allegedly made were true.
The plaintiff claims that Ms Williams owes the outstanding sum due and owing under the chattel agreement. The chattel agreement is clear and unambiguous and was signed by both parties.
Ms Williams counterclaims that Mr Khuen‑Kryk agreed to a reduction of the chattel agreement sum to $50,000 from $250,000. It is well accepted law that consideration moving from Ms Williams to Mr Khuen‑Kryk is required in order for the agreement to be enforceable. It is submitted by Ms Williams that her decision not to take action against Mr Khuen‑Kryk for improperly selling the alpacas provides the required consideration.
Abandonment or promise of abandonment or even conduct signifying abandonment of a substantive claim suffices as consideration where there is either liability on the part of the claimant or a bona fide belief in that liability (see Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 at 737 per Santow J).
Ms Williams further counterclaims that the conduct engaged in by Mr Khuen‑Kryk was misleading or deceptive conduct in trade or commerce in contravention of s 10 of the Fair Trading Act 1987 (WA) and that Mr Khuen‑Kryk misrepresented the true value of the alpacas and the tractor.
Section 10(1) of the Act states:
"A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."
It is accepted at law that a farm can, in some circumstances, be engaged in trade or commerce (see Morton & Anor v Black(1988) 83 ALR 182 at 186).

Findings

The chattel agreement

The chattel agreement was entered into between Mr Khuen‑Kryk and Ms Williams because Ms Williams could not secure bank finance for $700,000 in respect of the Nilgen property and the chattels.
Ms Williams does not give any evidence of any specific discussion in relation to valuation of property before the second agreements were reached. There has been no evidence of any discussion between the parties suggesting that Mr Khuen‑Kryk was offering the land for $450,000 and that the alpacas and the tractor were worth $250,000 and that that was the reason why they were being offered for sale for that sum. The only evidence of any valuation being suggested by Mr Khuen‑Kryk is of the valuation for all of the property involved being an agreed total sum of $700,000. I find that the two contracts being the land agreement and the chattel agreement represent a pragmatic agreement reached between the parties because they wanted to proceed with the sale. Given the bank's assessment in relation to value two agreements were drafted to reflect the amount of money that the bank would lend in respect of the purchase of land (being $450,000) and the total sum that the two had previously agreed would be the total purchase price for the Nilgen property and chattels ($250,000), being a total of $700,000. The pragmatic nature of the agreement is further reflected by the fact that the chattel agreement does not require that any interest be paid by Ms Williams consistent with Ms Williams' circumstances at the time of signing and it also accommodates Mr Khuen‑Kryk's request that he be able to reside at the Nilgen property for what remained of his life.
There is no evidence of the market value of either the tractor or of the alpacas at the time when the chattel agreement was entered into, however this is of little relevance because there is no evidence at all in this trial that Mr Khuen‑Kryk ever said or held out to Ms Williams that the combined value of the tractor and the alpacas was $250,000. There is no evidence that any representation as to value was made at the time when the chattel agreement was signed.
Ms Williams has counterclaimed that Mr Khuen‑Kryk's conduct was misleading or deceptive. Although I accept for the purposes of the submission made that in some cases a hobby farm or small land holding can be a property that is engaged in trade or commerce, there is no evidence that Ms Williams ever intended to run the Nilgen property as a business or to use it for trade or commerce. Accordingly, I am not satisfied on the evidence that the Nilgen property and related dealings do fall within the jurisdiction of the Fair Trading Act. However, if I am wrong in my conclusion, then even if the property was used for trade or commerce, there is no evidence of any representation being made in relation to the value of the relevant chattels. I find that there has been no misrepresentation of the value of the alpacas or of the value of the tractor by Mr Khuen‑Kryk.
The chattel agreement is a typed document. The parties do not dispute its contents. It is clear and unambiguous and it is signed by both parties. The chattel agreement is in the same format as Mr Khuen‑Kryk's will that has been tendered in evidence. Mr Khuen‑Kryk's will is dated 19 December 2006. There is no reason not to accept that it was signed and witnessed by Mr Hockey on that date.
Mr Hockey gives evidence, consistent with the evidence of Mr Khuen‑Kryk's family members and of Ms Williams that at the time that the will was signed, Mr Khuen‑Kryk appeared well and was physically able to attend Mr Hockey's home and to conduct himself appropriately. Mr Hey's evidence is that the barbeque at Mr Beaumaster's home where Ms Williams and Mr Khuen‑Kryk discussed the value of the alpacas and the review of the chattel agreement was in mid December 2006, therefore occurring at approximately the same time period as the signing of the will. I conclude from these facts that Mr Khuen‑Kryk was relatively fit and of sound mind at the time he spoke to Ms Williams at the barbecue.
Ms Williams says that Mr Khuen‑Kryk did not want to engage an agent in relation to the drafting of the first offer and acceptance for the Nilgen property and that a number of drafts were created before the document was signed. Mr Khuen‑Kryk also drafted his will. All documents drafted by Mr Khuen‑Kryk are clear in their terms. I draw the inference from these facts that Mr Khuen‑Kryk was aware of the importance of a written document and the need to draft a clear written document and that he was capable of signing a written document at the time of the alleged variation.

The consideration

Up until a date after the plaintiff's submissions were filed and served on the defendant, the defendant had not pleaded any alleged consideration for the reduction of the monetary value of the chattel agreement the subject of the counterclaim.
There is a significant similarity between the sale of alpacas to Mr Lawler (three or four alpacas for $2,000 at the Nilgen property) that occurred after 31 October 2006 and the sale alleged to have been made by Mr Khuen‑Kryk of three alpacas for $2,000 at the Nilgen property in early December 2006. Mr Khuen‑Kryk was present at the property at the time when Ms Williams, through her son, was paid by Mr Lawler for the alpacas. Mr Khuen‑Kryk was well aware of Ms Williams' ownership of the alpacas.
Although the similar nature of the sales alleged raises suspicions as to whether a second sale of alpacas ever occurred, I accept that, in the absence of evidence from Mr Khuen‑Kryk, a sale may have taken place.
If however the alpacas had been sold by Mr Khuen‑Kryk in December 2006 and Mr Khuen‑Kryk was confronted by Ms Williams about his actions then it would have been easy for him to have reimbursed Ms Williams the sum of $2,000 given that exhibits show that in December 2006 Mr Khuen‑Kryk had over $100,000 in the bank. I do not accept that being advised of the $2,000 debt alone would have prompted Mr Khuen‑Kryk to give Ms Williams a reduction in the sum that she owed him of $200,000.
I do accept that a sale of alpacas may have prompted discussions in relation to the value of the alpacas at the Nilgen property. The expert evidence in relation to the value of alpacas is that values can vary substantially. On Ms Williams' evidence, Mr Khuen‑Kryk had originally purchased the alpacas for approximately $100,000 and the alpacas had been bred. The agreement also related to a tractor of unknown value. I therefore accept that, consistent with the evidence of Ms Williams, Mr Beaumaster and Mr Hey, there may have been some discussion in relation to the value of alpacas between Mr Khuen‑Kryk and Ms Williams in December 2006. I am not satisfied that Ms Williams' assertion that she would not take legal action against Mr Khuen‑Kryk in relation to the sale of the alpacas for $2,000 provided consideration to decrease the agreed sum.

Was the chattel agreement varied?

Ms Williams says that the agreement was varied so that the sum due and owing was $50,000, not $250,000. The evidence of Mr Beaumaster and of Mr Hey, both of whom had a financial relationship with Ms Williams, is ambiguous. Both refer to discussions of $50,000 being owed by Ms Williams to Mr Khuen‑Kryk, however it is unclear from the evidence whether $50,000 was discussed as being owed from December (that is, $50,000 on top of the $17,500 that had been paid already) or whether $50,000 was the total sum agreed as due and owing. The greater sum ($67,500) is more consistent with the sum paid by Mr Khuen‑Kryk for the alpacas than the lesser sum. Even if I am wrong in my factual findings in respect of consideration, then I am not satisfied that there was an agreement in respect of $50,000 in total in relation to the chattel agreement in or after December 2006. There is no evidence that Ms Williams herself tried to draft or have Mr Khuen‑Kryk sign a written agreement that she had provided in relation to a reduced sum despite Ms Williams speaking to Mr Khuen‑Kryk on a number of occasions, posting cheques to him that were cashed and speaking to him on the telephone on dates after December 2006.
There was no written agreement in relation to a variation. Mr Khuen‑Kryk's daughters did not receive documents relating to a variation nor were they told of a variation.

At the time when these proceedings commenced and Ms Williams was self‑represented, she filed a defence that referred to a renegotiation of the chattel agreement after December 2006.. Ms Williams understands that renegotiation means to get together and discuss something and work it out. It is not Ms Williams' understanding that to renegotiate means to have reached a final agreement. I accept that Ms Williams may not have understood the importance of filing a defence in court proceedings and that she may have been rushing at the time when the defence was filed, however the word "renegotiate" and the meaning of it as understood by Ms Williams was clear and would not have required reflection or advice. I am not satisfied that discussion between the parties had reached the stage of being an agreement as opposed to a discussion about renegotiation.
There is no evidence from which I can be satisfied that a final agreement for the total sum of $50,000 was reached in December 2006. I do not accept that there was a variation of the chattel agreement in December 2006.

Deferral of payment

Ms Williams failed to pay weekly payments of $2,500 in February 2007 and renegotiated a decreased payment in March 2007. Ms Williams says in evidence that she told Mr Khuen‑Kryk that she would make up the money when payment came in to her florist business from Interflora on the 19^th of every month for the work done the previous month. It appears that Ms Williams was speaking of the month of March, however no sum was ever paid to Mr Khuen‑Kryk to bring the monthly total for the month of February or for the month of March to $10,000 for either month.
Ms Williams was aware that cheques sent to Mr Khuen‑Kryk at the Landsdale address had been cashed however she did not write to him at the address, or attempt to telephone him or to locate him to advise that she was withholding payment until the transfer had been carried out. Ms Williams understood that Mr Khuen‑Kryk had no immediate family and that he was going to die soon. Ms Williams cannot recall the exact words of a telephone conversation with Kathryn Khuen‑Kryk after Mr Khuen‑Kryk died, however, she agrees in cross‑examination that she was surprised about the requirement to pay the sum outstanding. Kathryn Khuen‑Kryk describes Ms Williams as saying to her on the telephone after Mr Khuen‑Kryk's death that as far as she was concerned, Mr Khuen‑Kryk had died and that she (Ms Williams) did not owe any more money.
I find that the reason why Ms Williams stopped making payments was because she believed that Mr Khuen‑Kryk was unlikely to attempt to claim the outstanding sum given his ill health and that she believed that because he did not have any immediate family, the debt would be extinguished upon his death. This is clearly not the case.
I find the plaintiff's claim proven and I order the defendant to pay the sum of $200,000 to the plaintiff. The counterclaim is dismissed.