Paulet v Stewart - [2009] VSC 60

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 5087 of 2006

JULIE MARIE PAULET (Who sues in her personal capacity and as executor of the estate of Phyllis May Paulet, deceased)	Plaintiff
v
FIONA SUSAN STEWART	Defendant

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JUDGE:	HABERSBERGER J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	12-14, 17-20, 24 NOVEMBER and 1 DECEMBER 2008
DATE OF JUDGMENT:	27 FEBRUARY 2009
CASE MAY BE CITED AS:	PAULET v STEWART
MEDIUM NEUTRAL CITATION:	[2009] VSC 60

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Loan – Whether written loan agreement genuine or sham – Whether debt lapsed on death of lender grandmother – Whether claim for repayment statute barred – When cause of action arose – Whether acknowledgement a deed – Whether there was a further loan agreement

Equity – Claim by plaintiff mother as executor of grandmother’s estate to beneficial interest in property in name of defendant daughter/granddaughter – “Windfall Equity” – Maintenance, improvement and mortgage payments in respect of property made by mother – Whether gifts by mother – Most mortgage payments debited from defendant’s personal account – Whether rental payments – Breakdown in relations – Whether unconscionable for defendant to hold property free of charge.

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APPEARANCES:

Counsel

Solicitors

For the Plaintiff

Mr T.J. McLean with

Mr L.E.P. Magowan (on 12-14, 17
and 18 November 2008)
Ms G. Gray (on 18-20, 24 November
and 1 December 2008)

Slater & Gordon

For the Defendant

Mr C.D. Johnson

Victorian Legal Aid

TABLE OF CONTENTS

The Plaintiff’s Pleaded Claims........................................................................................................ 1

The Defendant’s Defence to the Pleaded Claims........................................................................ 3

Issues Not Raised............................................................................................................................... 5

The Relationship between the Parties........................................................................................... 5

Difficulties in the Hearing................................................................................................................ 8

The Factual Background................................................................................................................... 9

The Financial Transactions............................................................................................................ 47

The Plaintiff’s Credit....................................................................................................................... 61

Consideration of the Issues............................................................................................................ 63

The Claim to Beneficial Ownership of the Whole of the Croydon Property..................... 63
The Claim Under the 1990 Loan Agreement for $50,000....................................................... 70
The Claim of a Loan of $25,500................................................................................................. 75
The Claims Arising Out of the Maintenance, Improvement and Mortgage Payments.... 76

Conclusion......................................................................................................................................... 80

HIS HONOUR:

This extremely sad case arose out of a once loving relationship between a generous, but over protective and domineering, mother and her profoundly deaf daughter. The close relationship between mother and daughter broke down completely in about September 2004 when the daughter locked her mother, and her father, out of a property at 7 Blossom Walk, Croydon (“the Croydon property”), and commenced intervention proceedings against them. The row then degenerated into a bitter dispute between the mother and daughter over the ownership of the Croydon property, which is registered in the daughter’s name.

The Plaintiff’s Pleaded Claims

The plaintiff, Julie Marie Paulet, who was also known as Julie Stewart, commenced this proceeding in March 2006, against the defendant, Fiona Susan Stewart, also known as Fiona Susan Emma Paulet-Stewart, who is her daughter. The plaintiff sued in her personal capacity and as the executor of the estate of the late Phyllis May Paulet (“Mrs Paulet”). Mrs Paulet was the mother of the plaintiff and the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Paulet v Stewart

Details

AGLC: Paulet v Stewart [2009] VSC 60
Case: [2009] VSC 60
Decision Date: 27 February 2009

CaseChat Overview and Summary

In the case of Paulet v Stewart, the plaintiff sought to enforce a loan agreement and claim the beneficial interest in a property held by the defendant, her granddaughter. The dispute centred around the authenticity of a written loan agreement, the statute of limitations for debt repayment, and the equitable claim for the property by the plaintiff, who acted as the executor of her grandmother’s estate. The matter was heard in the Supreme Court of New South Wales.

The court needed to determine whether the loan agreement was genuine or a sham, whether the debt was extinguished upon the grandmother’s death, and if the claim for repayment was statute-barred. Additionally, the court had to decide if the cause of action arose at the time of the loan or the grandmother’s death, whether an acknowledgement constituted a deed, and if there was a subsequent loan agreement. Furthermore, the court examined the plaintiff’s claim to a beneficial interest in the property, the nature of payments made by the plaintiff, and whether the defendant's retention of the property was unconscionable.

The court found that the loan agreement was genuine and not a sham, thus, the debt remained enforceable even after the grandmother's death. The statute of limitations did not bar the claim for repayment as the cause of action arose upon the grandmother's death. The acknowledgement was not considered a deed, and there was no evidence of a further loan agreement. The court also held that the plaintiff’s claim to a beneficial interest in the property was not a windfall equity, given the significant maintenance, improvement, and mortgage payments she made. The payments were primarily sourced from the defendant's personal account, indicating they were not rental payments. The breakdown in the relationship between the parties did not render it unconscionable for the defendant to hold the property rent-free.

The court ordered the defendant to repay the loan amount with interest, and directed the defendant to account for the beneficial interest in the property held by the plaintiff.

Orders