Penya v Penya

[2025] NSWSC 805

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Penya v Penya [2025] NSWSC 805

Hearing dates:

8 – 11 October 2024

Date of orders:

23 July 2025

Decision date:

23 July 2025

Jurisdiction:

Equity - Real Property List

Before:

Williams J

Decision:

2023/143366

See orders at [218].

2023/33949

See orders at [219].

Catchwords:

ESTOPPEL – proprietary estoppel by encouragement – where plaintiff is the daughter of the defendants who are co-owners of property – where plaintiff claims the defendants made repeated representations to her that, if she worked full-time in the parents’ real estate business without pay, she would be “given” the property and the business within her parents’ lifetime – where plaintiff did work in the business without pay for approximately 22 years – where first defendant (father) has sold the rent roll of the business and, in separate proceedings, seeks an order under s 66G of the Conveyancing Act 1919 (NSW) for the sale of the property – where plaintiff claims the defendants are estopped from denying her alleged entitlement to have the property transferred to her, hold the property on constructive trust for her, and should account to her for proceeds of sale of the rent roll – Held: alleged representations were not made, proprietary estoppel claim fails

EQUITY – trusts – common intention constructive trusts – where plaintiff is the daughter of the defendants who are co-owners of property – where plaintiff claims the parties agreed or had the common intention that, if the plaintiff worked full-time in the parents’ real estate business without pay, she would be “given” the property and the business within her parents’ lifetime – where first defendant (father) has sold the rent roll of the business and, in separate proceedings, seeks an order under s 66G of the Conveyancing Act 1919 (NSW) for the sale of the property – where plaintiff claims the defendants hold the property on constructive trust for her and should account to her for proceeds of sale of the rent roll – Held: alleged common intention or agreement not established, constructive trust claim fails

EQUITY – trusts –constructive trust following failure of alleged joint endeavour – where plaintiff is the daughter of the defendants who are co-owners of property – where plaintiff claims the parties were engaged in a joint endeavour to “enhance the material wellbeing of their family” pursuant to which the plaintiff worked in the parents’ real estate business without pay – where plaintiff claims the defendants have received a windfall benefit arising from applying revenue of the business to repay loans secured against the property – where first defendant (father) seeks in separate proceedings an order under s 66G of the Conveyancing Act 1919 (NSW) for the sale of the property – where plaintiff claims the defendants hold the property on constructive trust for her – where subject property was acquired prior to the commencement of the alleged joint endeavour – Held: alleged understanding or joint endeavour not established, constructive trust claim fails

LAND LAW – co-ownership – statutory trust for sale – application by plaintiff (father) under s 66G of the Conveyancing Act 1919 (NSW) – where plaintiff and first defendant (mother) are co-owners of property – where first defendant has filed a submitting appearance – where claim by second defendant (daughter) that property is held on constructive trust for her fails – trustees for sale appointed – no question of principle

Legislation Cited:

Conveyancing Act 1919 (NSW), s 66G

Evidence Act 1995 (NSW), s 140

Cases Cited:

Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59

ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24

Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411

Foundas v Arambatzis [2020] NSWCA 47

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Galati v Deans [2023] NSWCA 13

Hellenic Property Holdings Pty Ltd v Makaritis [2025] NSWCA 13

Hogan v Baseden (1997) 8 BPR 15,723

John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451

Kramer v Stone (2024) 421 ALR 106; [2024] HCA 48

McKinlay v Woods [2024] NSWCA 122

Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102

Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78

Pascoe v Dyason [2011] NSWSC 1217

Singh v AKM Investments Group Pty Ltd [2024] NSWCA 268

Vacation Club Ltd v A GG Properties Pty Ltd (2019) 19 BPR 39,799; [2019] NSWSC 1357

Warner v Hung; In the matter of Bellpac Pty Ltd (receivers and managers appointed) (in liquidation) (No. 2) (2011) 197 ALR 56; [2011] FCA 1123

Watson v Foxman (1995) 49 NSWLR 315

Williams v Legg (1993) 29 NSWLR 687

Woodson (Sales) Pty Ltd v Woodson (Australia) Pty Ltd (1996) 7 BPR 14,685

Zhang v Metcalf [2020] NSWCA 228

Zugic v Vesuvius Australia Pty Ltd [2020] NSWSC 106

Texts Cited:

N/A

Category:

Principal judgment

Parties:

2023/143366
Paula-Marie Penya (Plaintiff)
Paul Penya (First Defendant)
Therese Penya (Second Defendant)

2023/33949
Paul Penya (Plaintiff)
Therese Penya (First Defendant)
Paula-Marie Penya (Second Defendant)

Representation:

2023/143366
Counsel:
Ms J Mee with Mr T Maybury (Plaintiff)
Mr G George (First Defendant)
Mr P Wallis (Second Defendant)

Solicitors:
Russell Kennedy Lawyers (Plaintiff)
Eaves Legal (First Defendant)
VRT Lawyers (Second Defendant)

2023/033949
Counsel:
Mr G George (Plaintiff)
Mr P Wallis (First Defendant)
Ms J Mee with Mr T Maybury (Second Defendant)

Solicitors:
Eaves Legal (Plaintiff)
VRT Lawyers (First Defendant)
Russell Kennedy Lawyers (Second Defendant)

File Number(s):

2023/143366
2023/33949

Publication restriction:

N/A

JUDGMENT

Introduction

1. These proceedings concern a dispute between family members over property at 11 Robinson Street, Eastlakes, New South Wales, being lots 28 and 30 in Deposited Plan DPXXX, and a dispute between father and daughter over the entitlement to the proceeds of sale of the rent roll of a real estate business founded by the father and in which the daughter claims to have worked without pay on the basis of certain promises.

2. Mr Paul Penya, and his former wife Ms Therese Penya, are the registered proprietors of the Eastlakes property as tenants in common. They purchased the property in October 1984, and lived there together with their daughter Ms Paula-Marie Penya until 1995 when Paul moved out of the property following the breakdown of the marriage between himself and Therese. Therese and Paula-Marie continued living in the property. In July 2004, Paula-Marie married Mr Andrea Pizzimento, who then moved into the property with Therese and Paula-Marie. Andrea and Paula-Marie continued living in the property with Therese after the birth of their children in August 2013 and November 2014.

3. Paul and Therese are the directors and shareholders of Matra Real Estate Pty Limited, which operated a real estate business in Matraville at all times relevant to these proceedings. Paul was the principal licensee in charge. Paula-Marie worked in the business from March 1996 until its rent roll was sold in 2018.

4. On 1 February 2023, Paul commenced proceeding no. 2023/33949 in this Court seeking an order pursuant to s 66G of the Conveyancing Act 1919 (NSW) for the appointment of trustees for the sale of the Eastlakes property (the s 66G proceedings).

5. On 4 May 2023, Paula-Marie commenced proceeding no. 2023/143366 against Paul and Therese claiming that her parents had promised to give her the Eastlakes property and the Matra Real Estate business in return for her working in the business without being paid a wage. Paula-Marie claims:

1. a declaration that Paul and Therese hold their interests in the Eastlakes property on constructive trust for her, and an order requiring them to transfer their interests in the Eastlakes property to her; and

2. an order that Paul account to her for the proceeds of sale of rent roll of the business.

6. Paula-Marie’s claims rely on the doctrine of proprietary estoppel by encouragement or, alternatively, common intention constructive trust or a constructive trust following the failure of an alleged joint endeavour. During closing submissions on the final day of the hearing, Paula-Marie abandoned her pleaded claim relying on the doctrine of promissory estoppel.

7. I will adopt the parties’ convention of referring to the proceedings commenced by Paula-Marie as the trust proceedings.

8. On 2 June 2023, Therese filed a submitting appearance in the trust proceedings, save in respect of costs.

9. Therese offers no opposition to the orders sought by Paul in the s 66G proceedings if Paula-Marie’s claims in the trust proceedings are not successful.

10. On the first day of the hearing, I acceded to Paula-Marie’s application to be joined as the second defendant to the s 66G proceedings.

11. For the reasons that follow, I have determined that Paula-Marie is not entitled to the relief claimed in the trust proceedings, and that orders should be made under s 66G of the Conveyancing Act for the appointment of trustees for sale of the Eastlakes property. I have considered all of the parties’ written and oral submissions in arriving at those conclusions.

12. In these reasons, I have adopted the parties’ convention of referring to themselves and to one another by their first names in order to avoid confusion by reason of their common surname. I have extended that convention to other family members who gave evidence in the proceedings. No disrespect is intended.

Salient evidence

13. Paul and Therese purchased the Eastlakes property in about October 1984 as joint tenants. As referred to later in these reasons, Paul severed the joint tenancy in about September 2022. Paul and Therese have held the property as tenants in common in equal shares since that time.

14. In 1986, Paul and Therese purchased the Matra Real Estate business. Paul and Therese are the directors and shareholders of Matra Real Estate Pty Ltd through which the business was operated. Therese played no active role in the business. Therese was working at Australia Post when she and Paul purchased the Eastlakes property and the Matra Real Estate business, and was still working at Australia Post at the time of the hearing.

15. At all times relevant to these proceedings, the Matra Real Estate business involved the sale of properties and the management of rental properties on behalf of landlords. The business earned commissions in respect of properties sold and management fees in respect of rental properties managed.

16. In about 1992 or 1993, Paula-Marie met Andrea. They formed a lasting relationship. They married in July 2004.

17. In 1995, Paula-Marie attended the Metropolitan Business College in Sydney to undertake a course. Paula-Marie worked in the Matra Real Estate business one day a week while studying at the College. Therese was hoping that this would lead to a role for Paula-Marie in the Matra Real Estate business. Therese gave evidence that, as the directors of Matra, she and Paul did not pay a wage to Paula-Marie for her part-time work during 1995. By way of explanation, Therese deposed:

“Paula is our only child and will be inheriting all of our assets. The main assets we have are the business Matra and the property. Paul and I often had discussions about this and said words to the effect:

Paul: ‘I’m not paying Paula because she will inherit everything anyway, she’s our only child.’

Paul: ‘When Paula is ready, she will take over the business, it’s all going to be hers one day anyway.’

Me: ‘Yes, Paula will get the house and the business, and everything else, she’s our only child, but you should still give her a wage.’”

18. Paul gave evidence denying that any such conversation occurred.

19. At the end of 1995, Paula-Marie was awarded an Advanced Certificate in Administration and Business Computing. She then accepted a temporary, casual position until March 1996 performing data entry and administrative work at a firm known as UPS.

20. At some stage in about 1995, Paul and Therese separated, and Paul moved out of the Eastlakes property.

21. Paula-Marie gave evidence that Paul asked her in March 1996 to start working full-time at Matra Real Estate. In her affidavit sworn on 9 August 2023, Paula-Marie deposed:

“24.   … Dad told me that he had two girls working for him who were not very good and it was costing him too much money to pay them a wage. I asked him what I would be paid to work full time. Dad told me that I wouldn’t get paid anything but it didn’t matter because everything was going to be mine anyway. He said that everything that he and Mum owned including the business and the Property would be mine, but if I needed money for anything I should just let him know and he would give me money, which he could do by getting a cash advance on his credit card. He said that I was their only child and he and Mum were going to give me everything. Dad said that if I worked in the business this would be like sacrificing my wage to get a business when he retired and also the house.

25.   Mum also told me around this time that I should go to work fulltime with Dad at Matra and said that it would be mine anyway just like the house.

26.   When I got home on the day I discussed this with Dad, I told Andrea about the conversation that I had with Dad about me working fulltime at Matra but not getting paid. I explained to Andrea that Mum and Dad had told me the business and the house would be mine. Andrea told me that he was not happy about the idea of me working for nothing because we needed money to live on. I told him that Dad had told me this was like sacrificing my wage to get a business and house afterwards and that I thought this was worth it. I told Andrea that working full time doing all the work that needed to be done in the business was going to be worth it in the end. While Andrea showed concern and said that this plan didn’t seem right to him, he accepted that I was willing to work at Matra as Dad had requested.

27.   After I began working fulltime at Matra in 1996, Mum and Dad frequently told me in conversations about the business or home that everything they owned including Matra and the Property would be mine. They each said that I would get the business when Dad retired. They said this when we were alone as well as in front of relatives and friends. It never occurred to me to question it because of how often they said this to me as their only child. They each made these statements to me on numerous occasions over the following years.”

22. In cross-examination, Paula-Marie adhered to her account of the conversation that she says she had with Paul as set out in paragraph 24 of her affidavit sworn on 9 August 2023. She recalled that the conversation took place at the Matra Real Estate office after her father had picked her up from work at UPS one day and taken her back to his office because he had something to do there.

23. In her affidavit sworn on 18 August 2023, Therese gave evidence that Paula-Marie had told her in about 1996 that she had asked Paul how much she would be paid for working full-time in the business, and that Paul had said she would not be paid but that this did not matter because she would end up with everything. According to Therese’s evidence, Paula-Marie asked Therese if she shared Paul’s view. Therese replied to Paula-Marie, “well yes you will end up with everything, you know that, everything will be yours” and “you should go and work full time with dad, learn the business from the ground up and one day it will all be yours”.

24. In his affidavits sworn on 8 August 2023 and 30 November 2023, Andrea deposed that Paula-Marie had told him in about 1995 that she had agreed with her parents that she would work full-time in the Matra Real Estate business and that, instead of being paid for that work, she would be given the business and the Eastlakes property in the future. Andrea told Paula-Marie that they needed money to live on. Paula-Marie told him that everything would work out. Andrea accepted this, but he continued to worry about it.

25. Paul gave evidence denying that he had a conversation with Paula-Marie to the effect referred to at [21] above. He gave a very different account of how Paula-Marie came to work at Matra Real Estate in 1996. According to Paul’s evidence, he returned from an overseas holiday to find that Therese had sacked the secretary employed in the business. Therese told him that Paula-Marie would be working there in her place. Paul deposed that he was “astounded” by this and argued with Therese about it, but Therese held firm. Therese gave evidence denying this. Asked in cross-examination why he didn’t simply tell Paula-Marie to leave, Paul said that she was his only daughter, he believed that she had been dismissed from her position at UPS, and it felt too hard to ask her to leave Matra Real Estate.

26. In cross-examination, Paul maintained his denial that he ever promised Paula-Marie the Matra Real Estate business or the Eastlakes property in return for working in the business without a wage or salary. Paul emphasised the cash payments that he did make to Paula-Marie while she was working at Matra Real Estate, and the investment properties that he helped her and Andrea accumulate over the years. As will be seen below, Paul made cash payments of about $1,000 to Paula-Marie each time he sold a property for Matra Real Estate. According to Paula-Marie’s evidence, those payments amounted to a total sum of about $79,000 over the whole of the period that she worked in the business. Paula-Marie and Andrea own four investment properties, three of which they purchased with financial support from Paul and Therese. Paul said that he did tell Paula-Marie that the business was going to be hers one day in any event, and that he would have trained her up in time for her to take it over if she had not been working there.

27. Paula-Marie gave evidence that, in 1997, she complained to her parents about the amount of work she was doing without being paid. In her affidavit sworn on 9 August 2023, Paula-Marie deposed that:

“37.   … Dad said that this was a small sacrifice for what I was going to end up with and I should remember that I’m going to end up with the business and the house as mine.

38.   Mum said that she agreed with Dad and that it would all be worth it and my working in the business was a small sacrifice for everything I would end up with in the end. Mum and Dad both said that the business and the house together will be worth a lot of money.”

28. Therese gave evidence of a similar conversation, although she recalls it taking place in early 1998.

29. Therese also gave evidence that she and Paul, in the presence of one another, made many similar statements to Paula-Marie over the years, and told her that she needed to get her real estate licence so that she could “take over the business when dad retires”.

30. Paul gave evidence denying that the conversations referred to at [27]-[29] above ever occurred.

31. In December 1997, Paula-Marie obtained a Certificate IV in Business in Property Management with Distinction. In December 1998, she obtained a Diploma of Business in Real Estate Management with Distinction.

32. Paul was the principal licensee in charge of the Matra Real Estate business and was its chief salesperson. Paula-Marie worked in the rental property management side of the business.

33. In her affidavit sworn on 9 August 2023, Paula-Marie gave evidence that she had many responsibilities, including dealing with tenants and landlords, conducting inspections for incoming and outgoing tenants, preparing leases, arranging maintenance, repairs and renovations for the properties under management, receiving rent from tenants, daily banking and book-keeping, preparing end of month statements, preparing material for and appearing at tribunal hearings in relation to disputes with tenants, dealing with evictions, and preparing Business Activity Statements for Matra Real Estate and any documents required by its accountant. According to Paula-Marie, the business did not have any other full-time workers, Paul did not come into the office on most days, and he contributed little to running of the business even when he was present.

28. According to Therese, Paula-Marie, and Andrea, Paula-Marie worked extremely hard. Paula-Marie described her workload as being the equivalent to what would ordinarily be done by three or four people.

29. In cross-examination, Paula-Marie acknowledged that Matra Real Estate’s rental property management business was very modest, with only about 30 properties on the rent roll, and that her job was simply to look after that modest rent roll and to do the accounts for the business.

30. According to Paul’s evidence, Paula-Maria often phoned in sick and did not come to work. When she was at the office, Paula-Marie did what she liked, when she liked, and spent much time chatting with friends on the phone or planning parties. Ms Irene Brennan was in a relationship with Paul for over 20 years from about late 1997 and worked at Matra Real Estate on an ad hoc basis from time to time from about 2003 onwards. Irene gave evidence that, in her experience, Paula-Marie typically worked in the office three days per week, that she frequently called in sick or arrived late, and that she left the office early on occasions to attend to personal appointments. Paul disputes Paula-Marie’s evidence that he did no work in the Matra Real Estate business.

31. Even according to the evidence of Paula-Marie, Andrea and Therese, Paula-Marie chose her own working hours. During the early 2000s, Paula-Marie worked in the business operated by Andrea’s family on Saturdays and reduced her days working at Matra Real Estate to four days per week so that she could have two days off per week. In the years after the birth of her children in 2013 and 2014, Paula-Marie did much of her work from home, going into the office only on some days or in the evenings after Andrea was home.

32. In her affidavit sworn on 9 August 2023, Paula-Maria deposed that:

“34.   … I was willing to work without pay because of the statements that Mum and Dad always made to me … and as a result of which I believed that I was going to end up with the business and the Property as my own.

35.   I never considered working anywhere else because the Matra business was going to be mine. The only exception to this is that from time to time Dad paid me small amounts of money from Matra on an ad hoc basis. I regularly asked Dad for money because I was always short of money as I wasn’t getting paid. Dad would usually make these payments when he had sold a property and received commission. The amounts Dad paid me varied from around $100 to around $1,000. I received payments of this kind about once a year with exceptions of payments of $2,000 and $5,000 in 2015 and 2016 when I sold properties myself and Dad was overseas. …

36.   I didn’t get any holiday pay, maternity leave, sick leave, long service leave, or any superannuation even though I had to do everything to run Matra on my own. Dad went overseas regularly and left me to run Matra.”

39. Andrea gave evidence that, in the years after Paula-Marie began working full-time in the business, he told her on more than one occasion that he was unhappy that she was working without being paid. On each occasion, Paula-Marie would say something like, “They are my parents and I trust them”.

40. Andrea also gave evidence that Paul said in his presence on many occasions over the years that Paula-Marie was going to be given the business and the Eastlakes property. Andrea recalled the details of one such occasion immediately after he and Paul had finished painting the Matra Real Estate Office in the early 2000s. According to Andrea’s evidence, Paul said to him in Paula-Marie’s presence: “Good job and you know it’s all going to be yours anyway”.

41. Paul gave evidence denying that he promised Paula-Marie the Eastlakes property in exchange for her work at Matra Real Estate. He acknowledged that he had discussed with Paula-Maria that, as his only daughter, she would get everything he owned when he died, including the Eastlakes property if he still owned it. Paul accepted that he may have mentioned the Eastlakes property specifically in these conversations. Over the years, he and Therese often said to Paula-Marie that she would one day inherit the business, and that she was being trained for that. Paula-Marie gave evidence in cross-examination that her parents talked about her inheriting their estates “[a]ll the time”. She maintained however, that they promised her that she would get the Eastlakes property and the Matra Real Estate business, not when they died, but when Paul retired. Paula-Marie denied that she understood that she would simply receive whatever property happened to comprise their estates when they died.

42. As I have already mentioned, Paula-Marie and Andrea married in July 2004, following which they lived at the one-bedroom property together with Therese.

43. In December 2004, Paula-Marie obtained her Real Estate Agent’s Licence.

44. According to Paul’s evidence, he and Therese had many discussions over the years about selling the Eastlakes property, but Therese did not wish to sell. In his affidavit sworn on 29 September 2023, Paul gave evidence of one conversation that he recalls having with Therese at some time after Paula-Marie and Andrea were married. According to Paul’s evidence, he told Therese that he wanted the property to be sold, but Therese told him that she wanted to continue living there with Paula-Marie and Andrea because she wanted to be living together with them when they had children so that she could be with her grandchildren and have company. Paul agreed that he could wait to get his share of the house, and that he could continue to pay the mortgage for the Eastlakes property in the meantime if Therese would pay some of the expenses, provided that the property would have to be sold when Paul needed capital for his retirement. Paul added that the business would be his, and Therese’s superannuation would be hers. According to Paul, Therese agreed that this was fair.

45. Paul adhered to this evidence in cross-examination, saying:

“There was an agreement that, when the time comes, that I finally needed to fund my retirement, the property is to be sold, or for her to look for the money to pay me off my share. In fact, I wasn’t asking for my actual share, I just said, ‘Give me at least to pay off my loan, and you can have the bloody property.’”

46. Paul gave evidence that he did not ask Therese to sell the Eastlakes property again until 2020. I refer to the evidence concerning that conversation and subsequent conversations at [81]-[84] below.

47. Therese gave evidence denying having any such conversation or making any such agreement with Paul. Therese gave evidence that she did have conversations with Paul in which they each said that Matra Real Estate would continue to pay the mortgage for the Eastlakes property and any outgoings. The business was also paying Paul’s rent before he purchased the unit in which he now lives, and later made the payments required to service the mortgage on Paul’s unit.

48. Paula-Marie gave evidence that she does not recall her parents ever informing her that they had made an agreement on the terms described in Paul’s evidence.

49. Irene gave evidence that Paul told her on many occasions that when he had separated from Therese he didn’t want to stress Paula-Marie by changing their living arrangements so he did not mind Therese and Paula-Marie continuing to live in the Eastlakes property. However, he intended to sell his share of the Eastlakes property in order to fund his retirement when the time came for him to retire.

50. Paula-Marie and Andrea had their first child on 8 August 2013 – a son named Zane.

51. Both Paula-Marie and Andrea gave evidence of Andrea complaining to Paul in 2013, shortly after the birth of their eldest child, that Paula-Marie was working too hard. According to Andrea, Paul said to him: “What are you worried about you bastard, you already have my daughter, you’re both going to get the business and the house and everything that we own, stop complaining. You should work here too.” Paula-Marie gave a similar account of the conversation. Paul gave evidence denying that any such conversation occurred.

52. Paula-Marie and Andrea had their second child on 27 November 2014 – a son named Zach.

53. Andrea’s father, Mr Riccardo Pizzimento, gave evidence of a conversation that he had with Paul in November 2017 on the occasion of Zach’s birthday party, which Riccardo and his wife hosted at their home. According to Riccardo, he and Paul were discussing the granny flat that Riccardo was then in the process of building in his backyard for his son, Fabio. Paul said to Riccardo, “What about your daughter? You’re going to have to look after her too you know”. Riccardo replied that he was looking after his daughter, and that Paul should look after his own daughter and build something for Paula-Marie and Andrea. According to Riccardo, Paul replied: “Don’t worry about Paula. She’s getting everything, the house, the guns, everything, even the Rolexes.” Each of Andrea and Paula-Marie gave evidence that Riccardo had repeated the substance of this conversation to them soon after it occurred in November 2017. Riccardo gave evidence in cross-examination that, even before November 2017, Andrea had told him that Paula-Marie was going to inherit her parents’ home. However, he denied that he understood Paul to be referring in their November 2017 conversation to Paula-Marie’s inheritance when he died.

54. Paula-Marie was not paid a regular wage or salary during all of the years that she worked at Matra Real Estate from 1996 until 2018 when the sale of its rent roll was completed and the business effectively ceased trading, as referred to in more detail below.

55. As I have already mentioned, Matra Real Estate had a modest rent roll of about 30 properties. It earned gross management fees of about $18,000 a quarter from that rent roll. The expenses paid by the business amounted to approximately $11,500 per quarter, leaving it with net income of only about $6,500 per quarter or a little over $2,000 per month. According to Paul’s evidence and the evidence of Mr Edward Angyalosy who was the accountant for Matra Real Estate from about 2000, the business simply never had enough money in the bank to pay wages to Paula-Marie or to Paul. Paula-Marie gave evidence that Paul always wanted to avoid paying tax, so he would allocate some wages to her in the company accounts which would be declared in her tax return, but she would not in fact receive the money. Paula-Marie said that she followed Paul’s instructions in submitting personal tax returns declaring income that she had not received. Paul denied this.

56. Although neither Paul nor Paula-Marie was paid a wage or salary, the business made the payments necessary to service the mortgage over Paul’s unit in which he lived and also a loan of $192,000 that was secured against the Eastlakes property in which Therese and Paula-Marie were living. This arrangement continued until June 2017, long after Andrea began living there together with Paula-Marie in 2004 and after the birth of their two children in 2013 and 2014. Paul appears to have funded other living expenses by using a credit card which he paid out of the income of the business when there were sufficient funds.

57. As Paula-Marie acknowledged in cross-examination, the business could barely pay its way and was not being run in a way that was economically sound. Notwithstanding her insistence that she was doing all of the work and effectively running the business, Paula-Marie denied any responsibility for the poor management and financial position of the business. She attributed this state of affairs to Paul on the basis that he was the principal licensee in charge. It was put to Paula-Marie that she did not have much work to do in the business given the small number of properties under management. Paula-Marie disputed this.

58. As I have already mentioned, although she did not receive a regular wage or salary, Paula-Marie did receive cash payments of $1,000 or a little more whenever Paul sold a property. Over the years, these payments added up to about $79,000 according to Paula-Marie’s evidence.

59. Asked in cross-examination why he thought that Paula-Marie continued working at Matra Real Estate when she could have earned more money working elsewhere, Paul said: “I don’t know, maybe because she had, she, she felt lazy. At least with her daddy there she could do what she wants”.

60. Notwithstanding that he appears to have held a low opinion of Paula-Marie’s work ethic, Paul gave evidence that it was his sincere wish that Paula-Marie would take over the business by becoming the principal licensee when he retired. In cross-examination, Paul said that he would have handed the business over to Paula-Marie if she had been willing to take it on, without requiring her to pay for it, but that it was his intention that “she was going to run it, and pay off, maybe, whatever loans I had”.

61. By 2018, Paul had been wanting to retire for some time. As Paula-Marie acknowledged in cross-examination: “He always said he wanted to retire always”.

62. According to Irene’s evidence, Paul told her on several occasions that he wanted to retire but that Paula-Marie was not interested in starting to run the Matra Real Estate Business by herself.

63. Mr Angyalosy gave evidence that Paul told him on many occasions that before he eventually ceased work in 2018 that he felt too old, he wanted to retire, and he wanted Paula-Marie to take over the running of the business. Mr Angyalosy also gave evidence that he attended Matra Real Estate’s office about once a year to review their trust account records and, on many of those occasions over the years, he overheard conversations between Paul and Paula-Marie in which Paul offered the business to Paula-Marie, and she rejected that offer. Mr Angyalosy adhered to that evidence in cross-examination.

64. Therese gave evidence that Paula-Marie said to her on many occasions prior to 2018 that she wanted the business to be hers one day, and that she really wanted to take over the business when her children were older and both at school.

65. In his affidavit sworn on 29 September 2023, Paul gave evidence that he had a conversation with Paula-Marie in early 2018 in which he told her that he wanted to “get out of the business”, and that the business was hers. Paula-Marie replied: “I don’t want the business. I could not be bothered running it.”

66. Paula-Marie gave evidence denying that she had ever refused to take over the business, and denying that she told Paul that she could not be bothered running the business. According to Paula-Marie, she consistently told Paul that she wanted to wait until both of her sons were at school.

67. Paula-Marie deposed that Paul asked her in early 2018: “When are you going to take over because I want to retire already.” Paula-Marie told him: “I’m not ready yet. You have to wait until both my boys are at school.” Paul told her that he didn’t want to wait anymore, and she told him that it was “just a couple more years”. When Paul later told Paula-Marie that he wanted to retire by selling the rent roll of Matra Real Estate, she asked him not to do that because the rent roll was the only valuable asset of the business, and she wanted to take over the business and have the benefit of it, as she says Paul had always promised her. Paula-Marie deposed that: “All I needed was another year or so then I would have been child free during business hours and told Dad this over and over during 2018”.

68. In cross-examination, Paul maintained his denial that Paula-Marie told him that she wanted to wait until both her children were at school before taking over the business. According to Paul, Paula-Marie simply said that she didn’t want to take over. It was Therese who was saying to Paul that he should wait until the grandchildren were at school before expecting Paula-Marie to take over.

69. In his affidavit sworn on 29 September 2023, Paul deposed that he could not have waited another year to accommodate Paula-Marie, because he wanted and needed to retire due to his health problems, and he had been telling Paula-Marie this since 2014. Paul deposed that he had repeatedly asked Paula-Marie to take over the business, and she had consistently declined to do so.

70. In her affidavit sworn on 7 December 2023, Therese gave evidence that she had a conversation with Paula-Marie in 2018 in which Paula-Marie said to her that Paul wanted her to take over Matra Real Estate “but I’m not ready right now because the children are too little. He won’t wait so he’s going to sell it. But he’s told me that he will give me some money from the sale. I trust him.”

71. Paul sold the Matra Real Estate rent roll to Mr Geoff Gilles, the owner of Century 21 Real Estate at Matraville, in 2018. Therese and Paula-Marie both signed the sale contract at Paul’s request – Therese as a director of Matra Real Estate, and Paula-Marie as a party agreeing to be bound by a restraint of trade.

72. In her affidavit sworn on 9 August 2023, Paula-Marie deposed that she “just couldn’t believe or understand this as the rent roll was supposed to become mine as a crucial part of the business”. In her affidavit sworn on 7 December 2023, Paula-Marie deposed that, at the time she signed the contract for the sale of the rent roll, she felt “shocked and confused” and “overwhelmed” because Paul kept saying that it was such a good deal that they would be foolish not to sign it. In cross-examination, Paula-Marie went further and said that Paul had forced her to acquiesce in the sale of the rent roll. When asked to identify how he had “forced” her, Paula-Marie answered that he had said that it was “a good deal” and by telling her that she would be free from being at the beck and call of owners and tenants and she would be “free”. Paula-Marie did not seek legal advice at the time about what she now claims was a breach by Paul of promises that he had made to her concerning the business. Paul promised to pay her $20,000 out of the sale proceeds, but he did not in fact make that payment to her after the sale was completed.

73. In her affidavit sworn on 7 December 2023, Therese gave evidence that she signed the sale contract because “Paula had agreed to it” and because Paul promised to pay Therese some money that she says he owed to her. Therese was unhappy when Paul told him that he would be paying Paula-Marie $20,000 out of the sale proceeds because “it appeared to me that Paula wasn’t getting much from the sale of the Matra business, but she had accepted it and I understood that she would still eventually get the property”. Therese asked Paula-Marie, “Are you OK with this?”. Paula-Marie replied: “I trust Dad to do what he says.”

74. Paula-Marie gave evidence that it fell to her to prepare the property management files for handover to the purchaser after the contract was signed and the purchaser paid the deposit in September 2018. Paula-Marie described this as a “substantial amount of work”, which included creating a checklist and checking that each filed contained a set of keys to the property and various documents (including the tenancy application, residential tenancy agreement, condition report, rental bond advice lodgement, new tenant checklist, tenant trust ledger report, tenant status report, any rent increase letters, and a signed change of managing agent form), making a checklist to hand over to the purchaser in respect of each landlord, preparing new managing agent agreements between each landlord and the purchaser and arranging for the landlord to sign them, and setting up meetings between the purchaser and each landlord. Paula-Marie deposed that it took her a long time – two years – to do all of this, “partly because it was a lot of work and partly because, now looking back at it, I was having trouble letting go of the Matra business. It had been my only job and I considered it to be my business. I was having trouble letting go”. There is no evidence that the process of Paula-Marie “letting go” of what she considered to be “my business” prompted her to seek legal advice about any rights arising from the promises that she claims Paul had made to her over the years.

46. Paula-Marie gave evidence based on her review of Matra Real Estate’s accounts that the sale of the rent roll proceeded in three stages. Paul gave evidence that the purchaser ended up paying the sale price in three stages only because it took Paula-Marie such a long time to hand over the property management files. The purchase price was paid in three instalments: $71,627.40 paid by the purchaser to Matra Real Estate on 29 October 2018; $49,303.80 paid by the purchaser to Matra Real Estate on 24 February 2020; and $99,585.26 paid by the purchaser on 17 December 2020 by cheque made out to Paul rather than to Matra Real Estate. According to Paula-Marie’s evidence, Paul used significant amounts of the sale proceeds to pay amounts owing on credit cards that had been used to pay Matra Real Estate expenses and Paul’s personal expenses. With the exception of a sum of $5,000 that he paid to Paula-Marie, Paul retained the balance of the sale proceeds. He did not pay any money to Therese. Paula-Marie gave evidence that she had an argument with Paul in December 2020 when he told her that he would be keeping all of the money from the final instalment payment for the rent roll, and that there was not enough to pay anything to Therese or Paula-Marie. There is no evidence that Paula-Marie sought legal advice at that time.

47. Under cross-examination about the fact that she did not seek legal advice before signing the contract for the sale of the rent roll in 2018, Paula-Marie suggested that Paul only sold part of the rent roll in 2018, and that she was therefore unaware at the time that he had completely resiled from the promise that that she claims he made to her that the business would be hers. That evidence is irreconcilably inconsistent with the evidence given in her affidavits sworn on 9 August and 7 December 2023, in which Paula-Marie deposed that Paul told her in early September 2018 that he had sold “the Matra business”, and she protested: “But I thought Matra was going to be mine?” According to Paula-Marie’s 7 December 2023 affidavit, Paul replied: “Don’t be stupid. You can retire and stay home with your kids and enjoy life”.

48. As I have already mentioned, there is no evidence that Paula-Marie sought legal advice in September 2018 when the contract for the sale of the rent roll was signed, or at any time prior to December 2020 when Paula-Marie completed handing over the property management files and the purchaser paid the final instalment of the purchase price.

49. Paul retired when the rent roll was sold in September 2018. Following completion of the sale in December 2020, Matra Real Estate ceased trading.

50. As I have already mentioned, Paula-Marie gave evidence that Paul and Therese had promised her that the Eastlakes property and the Matra Real Estate business would be hers when Paul retired. [1] There is no evidence that Paula-Marie asked Paul or Therese to transfer the legal title to the property to her when Paul retired in September 2018, or at any time thereafter prior to the commencement of the trust proceedings.

    1. See [41] above.

51. In January 2020, Therese sent a text message to Paul asking him for a copy of the sale contract for the Matra Real Estate rent rolls. Therese’s message explained that her solicitor had asked her for the details, and that she (Therese) was asking Paul directly rather than going through his solicitor because “I don’t want to jeopardize the settlement in any way” and “so we can fix things between us” and “settle things peacefully coz otherwise it will only cost us a lot of money in legal fees”. Paul suggested that Therese should wait until the sale had been completed, and told her that it should have been completed already but that Paula-Marie was “taking her sweet time” and that the purchaser was complaining about the delays. Paul also wrote in his message to Therese that he had wanted to leave Matra Real Estate to Paula, but instead everything was “horrible”. Therese replied: “Well she had her babies & she had to look after them. And with no one at the office all those years the business could not grow. Let’s not stress over the past or what should have been. I just want to look after…” The rest of the copy Therese’s message that was tendered in evidence is illegible.

52. In his affidavit sworn on 29 September 2023, Paul gave evidence that he had a discussion with Therese in 2020 in which he told her that he wanted the Eastlakes property to be sold. Therese told him that it was not a good time to sell and suggested that they wait. Paul agreed to wait, but said that he would need his share of the property in a year or two. Therese agreed.

53. According to Paul’s evidence, he and Therese had several similar discussions during 2021 and 2022.

54. Paul adhered to this evidence in cross-examination, saying that whenever he raised with Therese the subject of selling the Eastlakes property, she would always insist that he should let her and Paula-Marie stay in the property for a while longer, and reassure him that she would sell or arrange for him to be paid out later.

55. Therese gave evidence denying having a conversation with Paul in 2020 in the terms that he recounted, and denying having similar discussions with him. According to Therese’s evidence, she never talked with Paul about selling the Eastlakes property to fund his retirement, and they never discussed selling the property and dividing the proceeds at all. Rather, they discussed on many occasions that the property would go to Paula-Marie.

56. Therese also gave evidence that she and Paul engaged solicitors with a view to entering into a formal financial separation agreement, many years after their divorce, in mid-2021. Therese asked Paul to settle by transferring the Eastlakes property into her sole name so that she could renovate it and make it more liveable for herself and Paula-Marie, Andrea and their two children. Paul initially said that this was “ok by me”, but later declined to transfer his interest in the property to Therese.

57. Paula-Marie gave evidence that Paul told her in October 2021 after he had been to see a solicitor together with Therese that, if he died, the house would automatically go to Therese even though they were divorced, and that he wanted his share to go to Paula-Marie if he died. Paul told Paula-Marie that he was going to have to see his solicitor about this because he did not want Therese to have “full control”.

58. In about November 2021, Paul gave Paula-Marie a copy of his will dated 23 August 2021, in which he bequeathed the whole of his estate to her. The will did not specifically refer to the Eastlakes property.

59. According to Therese’s evidence, Paul severed their joint tenancy in respect of the Eastlakes property in about September 2022 without telling her that he was going to do so. They now hold the title the property as tenants in common in equal shares.

60. According to Paula-Marie’s evidence, Paul told her that “he had ‘fixed up’ the ownership so it would be the same as what is in his Will and there would be no question that he would give everything that he had to me after he died”.

61. According to Paul’s evidence, he did tell Therese that he was planning to sever their joint tenancy during a conversation in mid-2022 when he again asked Therese to sell the Eastlakes property. By this time, Paul deposed that he had retired and had no income. Paul deposed that Therese refused to sell. Paul asked her: “What about our agreement?” Therese replied: “Too bad”. Paul then told her that he had received legal advice that he should sever the joint tenancy, and that the Supreme Court could make an order for the property to be sold. Therese replied: “You just try. I want this house to go to Paula”. Paul responded: “It’s not going to Paula. That was never our agreement.” Therese gave evidence denying that this conversation occurred.

62. In her two affidavits, Therese’s evidence was to the effect that she and Paul told Paula-Marie many times over the years that she would inherit the Eastlakes property and the business, and that the Eastlakes property and the business would go to Paula-Maria “in the end” or “one day” albeit that Paula-Maria was expected to take over the running of the business in the meantime when Paul retired. [2] Therese gave evidence for the first time in cross-examination – and after listening to Paula-Marie’s cross-examination – denying that she and Paul had discussed Paula-Marie inheriting the Eastlakes property and the business when they died.

    2. See [17], [23], [27]-[29], [64] and [73] above.

63. Therese said:

“Not when we die, before that, because she, she had a life to live and a family to live eventually, like we didn’t know it back then, but yeah, she – the house was for her and we were probably going to move to a smaller place to live in. It was like, yeah.”

93. When it was put to Therese that she and Paul would have required funds to move to a smaller place, and that their only wealth was tied up in the Eastlakes property, Therese said that she meant that she and Paul had discussed moving into the flat at the rear of the Eastlakes property.

94. The cross-examination continued:

“Q.   And what you understood Mr Penya meant when he said the words, ‘When Paula is ready she will take over the business, it’s all going to be hers one day anyway’, was that she would receive the business and perhaps the house when he died?

A.    No, not when he died, no.

Q.   Well you know Mr Penya quite well don’t you?

A.   Well I thought I did, yeah.

Q.   You know he wouldn’t give up an asset easily that he owned don’t you?

A.   To his daughter, yes, I thought he loved her and she did too.

Q.   Yes, but perhaps when he died but not before he died?

A.   Not necessarily.

…

Q.   You knew in 1995 or 1996 Mr Penya would not give up the Eastlakes house before his death, or he would not give his daughter the Eastlakes house before he died?

A.   Yes he would.

Q.   Well how would he do that?

A.   I don’t know but I did think about, but I didn’t think he would, he would wait for her, for him to die before he’d give it to her. That wasn’t like, we used to talk about it and that wasn’t what the plan was.

Q.   You used to talk about giving your estates to Paula didn’t you?

A.   Yes.

Q.   Any by estates it means whatever you’ve got when you die?

A.   Well that’s, that’s not what I thought, that’s not what I meant.”

95. Therese gave the following evidence towards the end of her cross-examination:

“Q.   You’ve got a keen interest in making sure they get the house, haven’t you?

A.    Absolutely, it’s just my life. They’re my life.”

96. On 1 February 2023, Paul commenced proceeding 2023/33949 in this Court seeking an order pursuant to s 66G of the Conveyancing Act 1919 (NSW) appointing trustees for the sale of the Eastlakes property. I refer to the events that occurred immediately after the commencement of those proceedings at [134]-[147] below.

97. At the time of the hearing, Andrea was 47 years old and Paula-Marie was just a few weeks shy of her 48th birthday. Paula-Marie had lived at the Eastlakes property ever since her parents purchased it when she was 10 years old. Andrea had lived there together with Paula-Marie and Therese ever since he and Paula-Marie married in July 2004. They had continued to live there with Therese following the birth of their sons, who were aged almost ten years and eleven years at the time of the hearing. The property has one bedroom, which Therese was occupying. Paula-Marie and Andrea were sharing with their sons the dining room which had been converted into a bedroom.

98. Paul and Therese remain the registered owners of the Eastlakes property because they did not finalise their financial affairs or enter into a property settlement following the end of their marriage in 1995. At the time of the hearing, the property was subject to a mortgage securing amounts owing under three loan accounts in the joint names of Paul and Therese: (1) ANZ Home Loan account no. ending in #072 (under which approximately $174,000 was owing); (2) ANZ Home Loan account no. ending in #152 (under which approximately $80,000 was owing); and (3) ANZ Account Equity Manager account no. ending in #336 (under which approximately $170,000 was owing).

99. According to the evidence given by Therese and Paula-Marie, the first loan mentioned above (#072) secures a loan initially in the amount of $192,000 that Paul and Therese took out against the security of the Eastlakes property in about 1994. As I have already mentioned, the repayments in respect of that loan were made out of the income of the Matra Real Estate business until June 2017. Therese has made those repayments out of her Australia Post income since June 2017.

100. According to the evidence given by Paula-Marie, the second loan mentioned above (#152) secures an amount that Paul and Therese borrowed in order to assist Paula-Marie and Andrea to purchase investment properties at Hillsdale in 2007, as referred to at [106]-[112] below.

101. According to the evidence given by Paula-Marie, the third loan mentioned above (#336) secures an amount that Paul and Therese borrowed in order to assist Paula-Marie and Andrea to purchase a commercial property as an investment in 2013. I refer to this investment at [113]-[119] below.

102. Paula-Marie did not pay rent or board during the years that she lived at the Eastlakes property before her marriage. In all of the years since they began living at the property together in July 2004, Paula-Marie and Andrea have never paid rent or board. In cross-examination, Paula-Marie said: “why would I pay rent when it was something that belongs to me or promised to me”. Similarly, Andrea said: “That’s her home. … why will she pay rent at her own place, I don’t understand?” Paula-Marie and Andrea have not contributed to servicing the mortgage over the Eastlakes property, with the exception of payments of $500 per month in respect of the $80,000 loan that assisted them to purchase the Hillsdale properties in 2007 and, since 2020, payments of $1,200 per month in respect of the $170,000 loan that assisted them to purchase their commercial property in 2013. Those payments do not appear to have reduced the principal amounts owing under those loans.

103. According to evidence given by Paula-Marie, Andrea, and Therese, Paula-Marie and Andrea have made some payments towards the outgoings for the Eastlakes property, such as council rates, electricity and gas bills, water bills, and insurance. However, as Paula-Marie acknowledged in cross-examination, she and Andrea have relied on Therese to subsidise their living expenses, which has even included paying for some of their food. That left her and Andrea free to spend the cash sums that Paula-Marie received from Matra Real Estate, the income that Andrea has earned from time to time, and rental income from their investment properties, as they saw fit. Even though both of their children have been at school for some years, Paula-Marie was earning no income at the time of the hearing and Andrea was earning $25,000 per annum before tax. Therese was working at Australia Post, as she has done for the past 44 years, despite her age of almost 71 years and back pain and other ailments caused by standing long hours and lifting heavy parcels at work. Therese gave evidence that she had been hoping to retire when she turned 70 in 2023, but she needed to keep working and earning income in order to pay for the legal bills generated by these proceedings. It will be recalled that Therese filed a submitting appearance in the trust proceedings and does not oppose the appointment of trustees for sale of the Eastlakes property in the s 66G proceedings if Paula-Marie’s claims fail in the trust proceedings.

104. According to evidence given by Therese and Andrea, Paula-Marie and Andrea have contributed to the maintenance of the Eastlakes property over the years, including by carrying out internal and external painting, plumbing, landscaping and maintaining the garden. Andrea deposed that he made those contributions towards the maintenance of the property, not because he and Paula-Marie had been living there together with their children rent-free for the whole of their adult lives, but because he believed that the property was “going to be Paula’s one day”. However, according to Paula-Marie’s evidence, the house has leaks in the bathroom, rotting floorboards, mouldy ceilings and walls, holes in the internal and external mortar, rusty gutters, and a garage door that has fallen off. In short, Paula-Marie said: “It’s an old small house that is falling apart, but it’s mine.” Paula-Marie gave evidence attributing the state of the house to the inability of Paul and Therese to agree on a plan to renovate it. Paula-Marie is not prepared to renovate the house until the legal title to the property is in her name.

105. In 2001, Paula-Marie and Andrea purchased a unit at 3/502-504 Bunnerong Road, Matraville, New South Wales, for $285,000, using a distribution that Andrea had received from a family trust and taking out a loan to fund the balance of the purchase price. They continued to live rent-free at the Eastlakes property and rented out their Matraville unit. They used that rental income, together with income that Andrea earned from working in his parents’ business, to service the loan they had taken out to purchase the unit. According to Paula-Marie’s evidence, she and Andrea continued living at the Eastlakes property “as I considered it to be my house given what Mum and Dad had always promised me”.

106. In 2007, Paula-Marie and Andrea purchased units 5 and 6, 5 Podmore Place, Hillsdale, New South Wales, as investment properties. The total purchase price was $406,000 for the two properties, to which Paul and Therese contributed $80,000. Paula-Marie and Andrea financed the balance of the purchase price with a loan from a third-party lender, which they serviced from the rental income from the units and Andrea’s income.

107. Paula-Marie gave evidence that Paul told her at the time that they purchased the Hillsdale units that the $80,000 contribution was a gift to her and Andrea. Paula-Marie referred to a letter signed by Paul and dated 27 July 2007, which states:

“TO WHOM IT MAY CONCERN

I, Mr Paul Penya am willing to support my daughter, Mrs Paula-Marie Penya with the sum of $80,000.00 as a gift. This gift is non-repayable it is for helping her purchase two properties. One property is at 6/5 Podmore Place, Hillsdale NSW 2036 and the second is at 5/5 Podmore Place, Hillsdale NSW 2036.”

108. Paula-Marie gave evidence that Paul had subsequently insisted that she and Andrea repay the $80,000 in instalments of $500 per month. According to Paula-Marie, she and Andrea are continuing to pay those monthly instalments.

109. Therese gave evidence that she and Paul discussed borrowing $80,000 against the Eastlakes property in 2007 to assist Paula-Marie and Andrea to purchase the Hillsdale properties. Therese agreed with Paul that they should do that, and gave evidence that she “saw it as a ‘no-brainer’ to be able to use the property to help Paula acquire more property” because the Eastlakes property “was going to be Paula’s eventually”. According to Therese’s evidence, she considered that the $80,000 was a gift to Paula-Marie and Andrea. Paul initially said that Paula-Marie and Andrea would not need to pay back the $80,000, but later changed his mind. Therese did not take this up with Paul at the time because she did not want conflict with him.

110. Paul gave evidence denying that the $80,000 was a gift to Paula-Marie and Andrea, and denying the conversation referred to at [107] above. He wrote the letter “TO WHOM IT MAY CONCERN” so that Paula-Marie and Andrea could save money by avoiding paying for mortgage insurance. Paul accepted that he had lied in the letter to help Paula-Marie and Andrea to get an advantage from the bank. Paul was unrepentant about this, saying “bloody bank, they make enough money”.

111. As Paula-Marie acknowledged in cross-examination, she and Andrea could not have purchased the units at Hillsdale if they had not been living rent-free at the Eastlakes property, and without the $80,000 provided by Paul and Therese.

108. Paula-Marie and Andrea have had the benefit of the rental income received from the Hillsdale units since 2007.

109. In late 2012, Paula-Marie and Andrea purchased a commercial property at 474A Bunnerong Road, Matraville, which was located next door to Matra’s rented office. The purchase price was $572,000, including GST, and the deposit was $26,000. Therese gave them the deposit, as they did not have the funds themselves. Paula-Marie and Andrea used the services of a finance broker, Ms Yoko Chung, with whom Paul had an existing relationship. Ms Chung facilitated their application for a loan from ING Direct to finance their purchase of the commercial property. Paula-Marie signed a loan application form identifying Matra Real Estate as her employer and stating that her base income was $2,009.25 per month gross in addition to rental income of $5352.90 per month. Ms Chung, acting on behalf of Paula-Marie and Andrea, submitted that loan application, together with a letter from Matra Real Estate which stated that Paula-Marie was earning a wage of $423.076 per week and a payroll advice on letterhead of Matra Real Estate stating that she had earned $5,499.99 in the period from 1 July to 30 September 2012. Paula-Marie gave evidence in cross-examination that the information submitted to ING Direct concerning her income from Matra Real Estate was false. She accepted that the purpose of providing the letter and the payroll advice to ING Direct was to verify her earnings. However, she blamed the provision of the false information on Ms Chung and on Paul, saying that she trusted Ms Chung and left everything up to her, that Ms Chung was Paul’s broker, and that she (Paula-Marie) had acted in accordance with “dad’s instructions to me” in signing the loan application and allowing those documents to be submitted to ING Direct. Paula-Marie went so far as to say in cross-examination that Paul forced her and Andrea to purchase the commercial property. When it was pointed out to her that she had not suggested in any of her affidavits that Paul forced her to purchase that property, Paula-Marie answered: “I didn’t realise that you had to bring it up”. She denied that that it was a lie. When asked to identify how her father had forced her to buy the property, Paula-Marie answered that he had arranged for Ms Chung to do the paperwork, and he had told her for many years: “Always follow my instructions and you’ll be a rich little girl”. Paula-Marie said that Andrea had also been under Paul’s control because “dad’s the expert”. Paula-Marie denied that she had simply made up in the witness box the notion that she had bought the commercial property, and the earlier investment properties, because she was under Paul’s control and following his instructions. By contrast, Andrea gave evidence in cross-examination to the effect that he and Paula-Marie accepted Paul’s advice that the commercial property would be a good investment, but that it was their own decision to purchase the property.

110. Paula-Marie and Andrea’s purchase of the commercial property settled in April 2013. ING Direct had given them a loan, but not for the full amount they had applied for. This left them about $170,000 short of the funds needed to complete the purchase. Paul and Therese made up that shortfall by borrowing $170,000 against the security of the Eastlakes property.

111. In her first affidavit sworn on 9 August 2023, Paula-Marie deposed that Paul told her at the time that the $170,000 sum was a gift to her and Andrea. Paula-Marie complained that Paul subsequently required her to repay it over time by paying $1,200 per month against the amount owing under the mortgage secured against the Eastlakes property.

112. In her second affidavit sworn on 7 December 2023, Paula-Marie deposed that Ms Chung told her that ING Direct would not lend against the security of the commercial property, and that the maximum that she and Andrea could borrow against their existing three investment properties was $366,000. Paula-Marie knew that her parents had a line of credit for $170,000, and she telephoned Paul and asked his permission to use it. Paul agreed, saying “there is no problem with the money because the property is going to be yours anyway. It’s your bill.” Paula-Marie understood Paul to mean that, when the Eastlakes property was eventually transferred to her, she would be responsible for repaying the $170,000 loan secured against it.

113. Therese gave evidence that she agreed that she and Paul would borrow $170,000 against the security of the Eastlakes property to assist Paula-Marie and Andrea to purchase this commercial property, and that she understood based on her discussions with Paul at the time that the payment was to be a gift. Therese deposed that she was very upset that Paul later asked them to repay the money, but she “just let it go” because she believed that Paul would become angry if she confronted him about it and she “didn’t want any arguments”.

114. Paula-Marie gave evidence that she was worried at the time that she and Andrea were overcommitting themselves by purchasing the commercial property. In her affidavit sworn on 9 June 2023, Paula-Marie deposed:

“I had a conversation with Dad in which I said that Andrea and I couldn’t afford to purchase this property as I was not earning any money from Matra and even though I knew I was going to get the house and the business I had no money coming in at all. Dad said ‘What are you worried about Paula? Don’t worry about the money, let the bank managers lose sleep about that, not you’. He told me that everything was going to be mine anyway and instead of paying rent I would be putting money into my property. He told me I had nothing to worry about and I was going to be ‘a very rich little girl’ when I got everything from him and Mum.”

119. Paul gave evidence denying that this conversation occurred and denying that the $170,000 contribution to the purchase price of that property was intended as a gift to Paula-Marie and Andrea. According to Paul’s evidence, the purpose of the letter that he signed stating that it was a gift was to ensure that Paula-Marie and Andrea did not have to pay for mortgage insurance.

120. Paula-Marie gave evidence that Paul told her and Andrea that the commercial property was for sale and suggested that they buy it and move the Matra Real Estate office in there.

121. Paul gave evidence denying that there was any plan to move Matra Real Estate into the commercial property that Paula-Marie and Andrea purchased in 2013. According to Paul’s evidence, Matra Real Estate had a long-term lease over its existing premises at affordable rent.

122. According to Paul’s evidence, Paula-Marie and Andrea intended to move into their property themselves after they purchased it because it would be easier for Paula-Marie to continue working at Matra Real Estate after the birth of their first child if they were living next door. Paula-Marie mentioned a plan to move the Matra Real Estate business into the commercial part of the property in the future once she had taken over the management of the business.

123. According to Andrea’s evidence, there was discussion at the time that he and Paula-Marie purchased the commercial property about moving Matra Real Estate into the premises, and also about Andrea and Paula-Marie living in the premises. However, these were merely ideas, both of which they abandoned after further consideration.

124. Paula-Marie gave evidence that she and Andrea were unable to lease the commercial property until July 2020 because Paul stored his belongings in the property without their permission. She and Andrea therefore refused to make any repayments for the $170,000 loan that was secured against the Eastlakes property. They first began making those repayments in 2020 when the commercial property was leased. Paula-Marie exhibited to her affidavit sworn on 7 December 2023 photographs taken in 2018 and 2020 showing a desk, three chairs, two filing cabinets, two sets of shelves and some other miscellaneous items stored in one room of the commercial property.

125. Paul gave evidence that Paula-Marie and Andrea began to renovate the property shortly after they purchased it. Andrea removed partitions, the bathroom, the laundry and a large part of the ceiling and flooring, cut off the connections to the water supply, removed the hot water system, and cut off electricity connections. According to Paul’s evidence, he declined Andrea’s requests to give him money to repair the property, and Andrea did not fix it up and reinstate the connections to water and electricity for several years. Paul deposed that the property remained vacant for that reason. He gave evidence denying that he prevented the property from being rented by storing his belongings in there.

126. Andrea’s evidence about the renovations corroborates Paul’s evidence. Andrea describes the work that he carried out demolishing internal walls, exposing parts of the ceiling, removing the toilet and shower, cutting of the water and electricity, and removing the hot water system. According to Andrea’s evidence, his aim was to provide a prospective tenant with an “empty shell” that the tenant could then develop and decorate according to their needs. Andrea deposed that he had not finished that work before his first child was born in August 2013, and the work remained unfinished while he spent time with his family. Andrea deposed that Paul began moving some furniture and other possessions into the property a few months later without permission, and that he then refused to move them.

127. Paula-Marie gave evidence attributing Andrea’s failure to complete the renovations after 2013 to the presence of Paul’s belongings stored in the commercial property. In cross-examination, Paula-Marie denied that it was within her and Andrea’s control to clear the property out and lease it. However, on Paula-Marie’s own evidence, many of Paul’s belongings were removed in 2019 when a prospective tenant rented a skip bin and threw Paul’s belongings in there. Paula-Marie deposed that Paul was present at the time. There is no evidence that he raised any objection to the commercial property being cleared.

128. One important detail that Paula-Marie omitted from her evidence, but which emerged during Andrea’s cross-examination, is that for the whole of the period after Paula-Marie and Andrea completed their purchase of the commercial property in 2013, Matra Real Estate was the agency with which they listed the property for rent. That is to say, the task of leasing the property was effectively in Paula-Marie’s hands for seven years before the property was leased.

129. In her affidavit sworn on 9 August 2023, Paula-Marie deposed:

“111.   I cannot move into any of my investment properties because I need the rental income to help cover my mortgage repayments. With all the recent interest rate rises, it has become much harder to make the payments.

112.   I also never had any opportunity to contribute to my superannuation. So I am treating the commercial property as my retirement plan. This investment will help fund my retirement.

113.   If we are made to move from the Property, we could not afford to buy or rent in the area because we are on just Andrea’s income. Because of this, I’ll have to remove my children from their school where they have made friends, remove them from their local soccer team which my husband coaches and move away from my in-laws who live near us.”

130. In her affidavit sworn on 7 December 2023, Paula-Marie deposed that she and Andrea do not wish to sell their investment properties because, if they did, they would receive net proceeds of approximately $832,000 after discharging the loans secured against the properties, paying the costs of sale, and paying capital gains tax. Paula-Marie deposed that this would not put them in a position to purchase a house in the current market, and they would be unable to borrow additional funds because she had no income and Andrea was earning $25,000 per annum before tax.

131. In her affidavit sworn on 4 October 2023, Paula-Marie acknowledged that she had incorrectly calculated the net sale proceeds that she and Andrea would receive if they sold their investment properties. Paula-Marie re-calculated the net sale proceeds as $2,096,000.

132. In her affidavit sworn on 9 August 2023, Paula-Marie deposed:

“I always relied on the promises from Dad and Mum that the business and house were going to be mine. If this was not stated to me I would have worked somewhere else to receive a wage. I also would have purchased my own home with my husband, rather than buying investment properties.”

133. Paula-Marie also deposed that the only thing that kept her working at Matra Real Estate while she was feeling “undervalued”, “used” and “unappreciated” by Paul was:

“… my expectation that as a result of the work I was doing I would end up owning a home for my children to live in and a business to give us income. This was my sacrifice.”

134. Paula-Marie adhered to that evidence in cross-examination, denying that it suited her to work at Matra Real Estate because it was an easy existence for her.

135. As I have already mentioned, Paul commenced proceedings in this Court on 1 February 2023 seeking an order pursuant to s 66G of the Conveyancing Act 1919 (NSW) appointing trustees for the sale of the Eastlakes property.

136. Therese was the sole defendant to those proceedings.

137. In her affidavit sworn on 7 December 2023, Paula-Marie gave evidence that she first became aware that Paul wanted to sell the Eastlakes property when Therese was served with the summons in early February 2023. Paula-Marie gave evidence in cross-examination that Paul told her that he would not require the property to be sold if she and Therese could pay him money. Paula-Marie and Andrea applied for a loan. Paula-Marie gave evidence that she could not remember how much they applied to borrow, but said that she wanted to see how much they would be able to borrow to pay Paul out.

138. On 12 February 2023, Therese wrote to Paul’s solicitor, Mr Robert Eaves of Eaves Legal, in the following terms:

“This letter is requesting if you could please consider postponing the Supreme Court hearing for this matter.

The reason I am requesting this is to give our daughter, Paula-Marie Penya time to arrange finance.

Our daughter will confirm with you and her father the loan approval amount from the bank as soon as she receives the confirmation in writing.

If you and Mr Penya agree could you please confirm this in writing by replying back to my daughter’s email address …”

139. In cross-examination, Therese had no independent recollection of writing this letter or the circumstances existing at that time. However, she accepted that she did write it, and that it bears her signature, and said that Paula-Marie would have been seeking a loan to buy-out Paul’s interest in the Eastlakes property only. Paula-Marie would not have needed to buy out Therese’s interest because “she knows that I would have given her everything that was mine”. Therese gave evidence that family is everything to her, and that she would do everything she possibly could to help Paula-Marie, Andrea and her grandchildren.

140. Paula-Marie’s loan application was not successful because she was earning no income and Andrea was not earning sufficient income to service the proposed loan.

141. Therese sought advice from Mr Robert Micallef, the principal of Robert Allan Property, about the marketing strategy and likely sale price for the Eastlakes property. Mr Micallef provided written advice to Therese on 22 March 2023. On the same day, Therese’s solicitor Ms Brooke Azar of VRT Legal wrote to Paul’s solicitor Mr Eaves enclosing proposed consent orders for the dismissal of the s 66G proceedings on terms that the Court noted the parties’ agreement: (1) to take all necessary steps to sell the Eastlakes property as soon as practicable, including appointing Mr Eaves to prepare a contract for sale, appointing Mr Micallef as the sales agent, and selling the property by public auction with a reserve price agreed between Paul and Therese or determined by Mr Micallef if they were unable to agree; and (2) to apply the sale proceeds by discharging the mortgage, paying the agent’s commission and advertising costs and other expenses, paying the legal costs relating to the sale, and paying the balance equally between Paul and Therese.

142. In his affidavit sworn on 29 September 2023, Paul deposed that he discussed the proposed orders with Therese, and that they both agreed to the sale of the Eastlakes property and the terms of the orders. However, at the directions hearing at which Paul had expected the orders to be made by consent, Therese’s solicitor informed Paul’s solicitor that solicitors representing Paula-Marie would be appearing to request that Paula-Marie be joined to the proceedings and that Paula-Marie intended to commence her own proceedings. Therese’s solicitor told Paul’s solicitor that Therese would therefore wait and see if the Court allowed Paula-Marie’s applications. According to Paul’s understanding, the Court gave leave for Paula-Marie to commence her proceedings, and the consent orders that he and Therese had agreed to were therefore not made.

143. Therese subsequently sent a text message to Paul in early April 2023 accusing him of “hurting Paula & your grandsons for the rest of their lives!!” by prosecuting his application for sale of the Eastlakes property pursuant to s 66G, imploring him to “do the right thing” by her and by Paula-Marie and her family by discontinuing the proceedings. Therese wrote to Paul that he should “[s]ettle your own life without asking anything from me & let your child and grandsons have their lives ahead of them. That’s what REAL LOVE would do!! That’s what I wanted to do for them. Not take anything away from them. And you want to leave Paula & her family & me in the street.” Therese continued: “Absolutely everybody is shocked at what you’re doing to Paula & me!! You have a few days to do the right thing. After then it would be too late. Pls just put your share of the house in my name so I can extend the house for Paula & your grandsons with my savings & don’t ask for anything more. Change your plans. You know you can & still survive. All our futures are in your hands & you can make us live happily or live miserably. Open your heart & mind to what God would want you to do.” Therese wrote to Paul that Paula-Marie and her family would otherwise “NEVER be able to afford a house EVER after this!!!”

144. Paula-Marie sought legal advice in late April 2023 after she told Paul that she could not pay him, and he told her that if she wanted the Eastlakes property she would have to sue him and Therese.

145. Paula-Marie commenced the trust proceedings on 4 May 2023.

146. Paul gave evidence that, in light of the events that have happened, he has revoked his 2021 will and has made a new will leaving all of his estate to Irene, who was his partner for many years and who he now describes as a good friend who continues to help him and to support him financially. In explaining this decision in cross-examination, Paul said:

“Well when I die, because of what happened and because of the fact that she’s been helping me all this time, I told her I, I want, I want her to inherit the unit which originally I wanted to give my daughter, but because of what has happened I, I just got sick of it. It was all take, take, take. When they need money, when I had money they could get it, but when I was out, no money, now I was the bad one. I made them millionaires, they were useless.”

147. Irene gave evidence that she was aware that Paul may leave her something in his will, but she considers his will to be his own business, she prefers not to know about it, she is more than capable of providing for herself, and she does not want the tension and friction that she believes will flow to her from Paul’s family if he leaves her part of his estate. Irene said:

163. Even assuming that the conversation did occur in the terms set out at [118] above, nothing was said in the conversation about when it was that “everything was going to be mine anyway”. The conversation contains no promise or representation by Paul that either the Matra Real Estate business or the Eastlakes property would be given to Paula-Marie prior to the death of Paul and Therese.

164. The evidence relevant to the fourth alleged promise particularised in paragraph 8(e) of the amended statement of claim is referred to at [86]-[89] above. This evidence is consistent only with Paula-Marie having been told that she would inherit Paul’s estate, including his share in the Eastlakes property if he still owned it, when he died. It provides no support for Paula-Marie’s claim to have been promised that she would be given the business or the Eastlakes property during Paul’s and Therese’s lifetime in return for her working in the business without a wage.

165. The evidence relevant to the fifth alleged promise particularised in paragraph 8(f) of the amended statement of claim is referred to at [85]-[90] above. That evidence does not support the pleaded representation that Therese would move out of the Eastlakes property after renovating it because it was Paula-Marie’s property. On the contrary, Therese intended to continue living at the property with Paula-Marie and her family after spending her superannuation funds renovating and expanding it.

166. I reject as inherently improbable Therese’s evidence that Paul initially agreed in about mid-2021 to transfer the Eastlakes property into Therese’s sole name to facilitate her plan to pay for the renovations out of her superannuation so that she could continue living there with Paula-Marie and her family. [23] By mid-2021, Paul had been retired for three years and was in need of funds. His interest in the Eastlakes property was a significant asset, and it is highly improbable that he ever agreed to transfer it to Therese or give it to Paula-Marie on his retirement, as opposed to bequeathing her his estate in his will. That is so, notwithstanding that Paula-Marie had worked in the Matra Real Estate business without a regular wage. Paul had done the same thing. He had caused the income from the business to service the mortgage over his own unit, and also to service the mortgage secured against the Eastlakes property so that Therese, Paula-Marie and her family could continue living there. Paula-Marie and Andrea had been able to acquire four investment properties because they were given rent-free accommodation at the Eastlakes property, Therese subsidised their living expenses, and they received financial support from Paul and Therese to purchase the investment properties. Paul considered that he had made them millionaires. [24]

     23. See [85] above.

     24. See [54]-[59] and [97]-[131] above.

167. I accept as inherently probable Paul’s evidence that he had agreed with Therese not to sell the Eastlakes property at the time of their separation, provided that the property would be sold or Therese would buy out his interest in the property if Paul was in need of funds when he retired. I have not overlooked the medical evidence that Paul is suffering from mild cognitive impairment involving some memory loss. However, in addition to being inherently probable, Paul’s evidence is corroborated by Irene, who gave her evidence in a forthright but considered manner and without appearing to pay any attention to the consequences of her answers for Paul’s prospects of success in these proceedings. [25] Paul accepted that he may have referred specifically to the Eastlakes property when speaking with Paula-Marie about the assets that she would inherit after he died. [26] Paul gave evidence to the effect that he expected or hoped that Paula-Marie would cause the business to pay his expenses after he retired and she took over as principal licensee in charge, just as he had caused the business to fund the Eastlakes property in which she and her family had lived. [27] I infer that Paul envisaged that, in that scenario, and depending on the timing of his retirement, the Eastlakes property may not need to be sold during his lifetime. I reject the submission made on behalf of Paula-Marie that Paul’s reference to the Eastlakes property when speaking to her about her future inheritance is inconsistent with his evidence that he had an agreement with Therese that the Eastlakes property would be sold if needed funds after his retirement.

     25. See [49]and [147] above.

     26. See [41] above.

     27. See [60] above.

168. I reject Therese’s evidence denying that she and Paul ever discussed selling the Eastlakes property to enable him to realise his share to fund his retirement, and that they only ever discussed that the property would go to Paula-Marie. [28] That evidence is inconsistent with Therese’s immediate response to Paul’s commencement of the s 66G proceedings, which was to see if Paula-Marie could borrow money to buy Paul’s share of the property. [29] It is also inconsistent with Therese’s text message sent to Paul in early April 2023 (after Paula-Marie’s loan application had been rejected) in which Therese heaped emotional blackmail on Paul in an effort to dissuade him from continuing with the s 66G proceedings. Therese did not refer in that message to any previous discussion or agreement with Paul to the effect that the Eastlakes property was to be given Paula-Marie. [30] I reject the submission made by counsel on behalf of Paula-Marie that these responses were an example of Therese trying to “keep the peace”. The tone and substance of the text message do not reflect an attempt to keep the peace.

     28. See [84] above.

     29. See [138]-[139] above.

     30. See [143] above.

169. Viewing Paula-Marie’s proprietary estoppel claim as a whole, I reject her evidence that Paul and Therese made a promise or representation to her at any time that was capable of meaning, and that she reasonably interpreted as meaning, that she would be given the Eastlakes property and ownership of the business when Paul retired. [31] As counsel for Paul submitted, that evidence is strikingly inconsistent with the following objective facts.

     31. See [41] above; Zugic v Vesuvius Australia Pty Ltd [2020] NSWSC 106 at [272]-[275] (Ward CJ in Eq, as her Honour then was), discussing the requirement that a representation relied on as founding an equitable estoppel be clear and unequivocal.

170. First, Paula-Marie did not seek legal advice about asserting the claim that she now makes to the business or its sale proceeds at any time during the drawn-out process of completing the sale of the rent roll from September 2018 to December 2020. [32] Paula-Marie’s attempt to explain this in cross-examination by saying that she was under Paul’s “control” and that he had “forced” her to sign the contract, and by saying that she did not understand at the time that the whole rent roll was being sold, lack credibility. Paula-Marie’s evidence that Paul had “forced” her to sign the sale contract for the business emerged for the first time during cross-examination. When challenged, Paula-Marie was unable to identify any conduct by Paul that, viewed objectively, amounted to forcing her to sign that document, or to do anything in relation to the sale of the business. The same is true of Paula-Marie’s evidence that Paul “forced” her to buy investment properties and to lie to potential financiers when applying for loans. [33] I find that the notion that Paul “forced” Paula-Marie to do things was invented by her in cross-examination as a way of seeking to explain away her actions that are not consistent with her case in the trust proceedings. I reject those aspects of Paula-Marie’s evidence.

     32. See [74]-[77] above.

     33. See [113] above.

171. Second, Paula-Marie did not ask Paul and Therese to transfer the title to the Eastlakes property into her name when Paul retired or at any time thereafter before she commenced the trust proceedings. [34]

     34. See [78]-[79] above.

172. Third, Paula-Marie’s initial response to Paul commencing the s 66G proceedings was to apply for a loan to buy out his interest in the Eastlakes property. [35]

     35. See [137]-[140] above.

173. Fourth, Paula-Marie commenced the trust proceedings only after that loan application was unsuccessful and Paul told her that she would need to sue him if she wanted to have the Eastlakes property for herself. [36]

     36. See [144]-[145] above.

174. I reject the submission made on behalf of Paula-Marie inviting me to speculate that the third and fourth matters are attributable to Therese and Paula-Marie having received incorrect or inadequate legal advice at the time. Paula-Marie did not offer that explanation when cross-examined about these matters.

175. I reject the submission made on behalf of Paula-Marie that the alleged promises must have been made, because that is the only explanation for Paula-Marie working in the Matra Real Estate business without a wage for 26 years. As I explain at [193] below, I consider that there is another explanation for Paula-Marie’s conduct.

176. For all of those reasons, Paula-Marie has failed to establish the first necessary element of her proprietary estoppel claim – a clear and unequivocal promise made to her by Paul and Therese that, if she worked full-time in the Matra Real Estate business without pay, then they would give her the business and the Eastlakes property during their lifetime. Paula-Marie’s proprietary estoppel claim therefore fails. Paul is not estopped from seeking an order under s 66G of the Conveyancing Act for sale of the Eastlakes property, and Therese and Paul do not hold the property on constructive trust for Paula-Marie. Nor does the doctrine of proprietary estoppel operate to require Paul to account to Paula-Marie for the proceeds of sale of the rent roll of the Matra Real Estate business.

177. That conclusion renders it unnecessary to address the second to fourth elements of the proprietary estoppel claim. [37] If it had been necessary to address those elements, I would have held that at least the third and fourth elements were not satisfied for the following reasons.

     37. See [156] above.

178. I reject Paula-Marie’s evidence that she worked at Matra Real Estate without being paid a wage in reliance on the alleged promises, which I have found were not made to Paula-Marie in any event. [38] Paula-Marie’s evidence that she was doing the work of three or four people in managing a rent roll of only about 30 properties lacks credibility. I find that Paula-Marie, Andrea and Therese grossly exaggerated the extent of Paula-Marie’s work in the small business that made no profits. [39] Contrary to Paula-Marie’s evidence, I find on the balance of probabilities that Paula-Marie continued working at Matra Real Estate because it was a relatively easy existence for her given the very modest size of the rent roll which she did not grow in more than 20 years of working there, [40] and her ability to arrange her working hours in a way that suited her life, [41] in circumstances where she and Andrea were accumulating investment properties with financial assistance from Paul and Therese while they and their children lived rent-free at the Eastlakes property and Therese subsidised their other living expenses leaving them free to spend Andrea’s income and the income from their investment properties as they saw fit. [42] I accept the submission made by counsel for Paul to that effect.

     38. See [38] and [132]-[134] above.

     39. See [32]-[35] and [55]-[57] above.

     40. See [55]-[58] above.

     41. See [37] above.

     42. See [97]-[131] above.

179. As counsel for Paul submitted, the relevant detriment is not a loss attributable merely to the non-fulfilment of the alleged promise. The relevant detriment is that which is occasioned by acting on the faith of the alleged promise. [43] It was not submitted on behalf of Paula-Marie that this was a case in which she had made life-changing decisions with irreversible consequences in reliance on the alleged promise. Paula-Marie has not led evidence establishing that she has suffered detriment by working at Matra Real Estate and living at the Eastlakes property without paying rent while Therese subsidised her family’s living expenses she and Andrea acquired four investment properties with financial support from Paul and Therese, compared to the alternative course that she articulated in her evidence of working elsewhere and receiving a wage, and buying a home together with Andrea rather than buying investment properties. [44] Their investment properties would realise approximately $2,096,000 after discharging all mortgages and paying all selling costs if sold now. Contrary to the submissions made on behalf of Paula-Marie, the evidence does not support an inference that she would have been better off taking the alternative course that she identified. Indeed, it is highly doubtful that the alternative course would have been more beneficial. Paula-Marie would likely have received a modest wage and commensurately modest superannuation working in another business to the same extent that she worked at Matra Real Estate, noting that her work at Matra Real Estate did not contribute to any identifiable growth or improvement in the dismal financial performance of the business in all the years that she worked there and claimed to be effectively running it, and that she preferred to limit her working hours in the office after she became a mother in 2013. The weight of the evidence suggests that Andrea has earned either a modest wage or no wage during each year of their married life. The evidence does not establish that they could have afforded to purchase a home together, particularly if they were having to pay their own living expenses. Even assuming that Paula-Marie would have been willing to work somewhere else (noting that there is no evidence that she has sought other employment from 2020 when both of her children were enrolled in school), and even assuming that she and Andrea would have found a way to purchase their own home, there is no evidence that would support an inference that this would have been more beneficial to Paula-Marie than the gains that she and Andrea have made by purchasing their investment properties. I reject the submissions to the contrary made by counsel for Paula-Marie.

     43. Kramer v Stone [2024] HCA 48 at [40] (Gageler CJ, Gordon, Edelman and Beech-Jones JJ).

     44. See [132] above.

180. I reject the submission made on behalf of Paula-Marie that the investment properties are “ultimately a red herring”. The investment properties are relevant for the reasons explained at [181], [193] and [194] above.

181. For completeness, I acknowledge the submission made by counsel for Paula-Marie that, if the Court does not find that Paul and Therese promised to give the Eastlakes property and the business to Paula-Marie in their lifetimes in return for her working the business without a wage, then the representations that were made should be interpreted as a commitment to preserve the Eastlakes property and the business for Paula-Marie to inherit on their death. I accept the submission made on behalf of Paul that this is beyond the scope of Paula-Marie’s pleaded case, including her amendments in respect of which she was granted leave on the first day of the hearing. I accept the submission that Paul would be denied procedural fairness if he were required to meet that unpleaded case introduced through submissions immediately prior to the commencement of the hearing.

Paula-Marie’s common intention constructive trust claim

197. Paula-Marie pleads that it should inferred from the alleged representations referred to at [149] above and from Paula-Marie’s conduct referred to at [152] above that it was agreed or it was the common intention of Paul, Therese and Paula-Marie during the period from about 1996 to 2022 that, if Paula-Marie worked full time in the Matra Real Estate business without being paid, “then she would be given the home and the business”.

198. Paula-Marie pleads that, by taking the actions referred to at [152] above, she acted to her detriment on the basis of that agreement or common intention.

199. Paula-Marie claims that it follows that Paul and Therese hold their interests in the Eastlakes property on constructive trust for her, and that Paul is liable to account to her for the proceeds of sale of the rent roll.

200. For all of the reasons explained at [157]-[194] above, Paula-Marie has failed to establish the alleged representations from which she contends that the alleged common intention or agreement should be inferred. Without those alleged representations being established, Paula-Marie’s conduct referred to at [152] above does not support the alleged agreement or common intention. Paula-Marie’s common intention constructive trust claim fails for those reasons. Even if the alleged common intention or agreement had been established, I would not have been satisfied that Paula-Marie had acted to her detriment on the basis of that intention or agreement for the reasons explained at [193]-[194] above.

201. In the circumstances, it is not necessary for me to consider whether there is available under Australian law a common intention constructive trust which may be found in circumstances where proprietary estoppel has been rejected. [45]

     45. Galati v Deans [2023] NSWCA 13 at [57]-[61] (White JA) and [148]-[149] (Basten AJA, Macfarlan JA agreeing), and the authorities there referred to.

Paula-Marie’s claim for a constructive trust following the failure of an alleged joint endeavour

202. Paula-Marie’s alternative claim for relief based on what her pleading described as a “joint endeavour constructive trust” required her to demonstrate: [46]

1. the formation of a joint endeavour;

2. the acquisition of property pursuant to that joint endeavour; and

3. premature termination of the joint endeavour, without fault of any party, leaving one party with a legal interest which that party was not intended to enjoy beneficially in the circumstances. Equity will not permit that party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for them to do so.

   46. Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 at 620 (Deane J); Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 at 148 (Mason CJ, Wilson and Deane JJ); McKinlay v Woods [2024] NSWCA 122 at [80]-[85] (Leeming JA, White JA and Griffiths JA agreeing).

203. It is necessary to identify the nature, scope and purpose of the alleged understanding between the parties that is said to constitute the joint endeavour, although the scope of that understanding may change from time to time. [47]

     47. Zhang v Metcalf [2020] NSWCA 228 at [57] (Gleeson JA, Payne and White JJA agreeing); McKinlay v Woods [2024] NSWCA 122 at [89] (Leeming JA, White JA and Griffiths JA agreeing); Hellenic Property Holdings Pty Ltd v Makaritis [2025] NSWCA 13 at [81] (Mitchelmore JA, Basten and Griffiths AJJA agreeing).

204. Paula-Marie pleads that it should inferred from the alleged representations referred to at [149] above and from Paula-Marie’s conduct referred to at [152] above that there was “a joint endeavour” between Paul, Therese and Paula-Marie during the period from about 1996 to 2022 “to enhance the material wellbeing of their family through the home and the business”.

205. Paula-Marie claims to have made contributions to that joint endeavour by her actions referred to at [152] above and by “contributing domestically over a substantial period of time”. Paula-Marie pleads that her contributions in the form of unpaid labour for the business and domestically increased the money available to maintain the home.

206. Paula-Marie pleads that it follows that Paul and Therese hold their interests in the Eastlakes property on constructive trust for her, and that Paul is liable to account to her for the proceeds of sale of the rent roll.

203. This claim was not addressed in Paula-Marie’s written submissions, save for a statement that the Court should find, based on the whole of the evidence, that “the contributions between Paula-Marie, Paul and Therese were all designed to enhance the material well-being of their family through the Property and the Business”.

204. Counsel for Paula-Marie did not address the claim in closing submissions at all, until I asked the question of what was meant by the pleading that there was “a joint endeavour … to enhance the material wellbeing of their family through the home and the business”. Counsel for Paula-Marie then submitted that the claim meant that the “whole endeavour was Paula working in the business, whereby the fruits of that labour would be applied to pay off the loan on the property” and that Paul and Therese would receive a “windfall” unless the Court declares that they hold the Eastlakes property on constructive trust for Paula-Marie.

205. I reject those submissions for the following reasons.

206. First, the Eastlakes property was acquired many years before the commencement of the alleged joint endeavour.

207. Second, the representations that I have found were made – to the effect that Paula-Marie would inherit the whole of her parents’ assets when they died – do not give rise to a probable inference that the parties had an understanding along the lines submitted (which I note departed from what had been pleaded). Indeed, the conduct of Therese and Paula-Marie during the first two months after Paul commenced the s 66G proceedings, as referred to at [137]-[143] and [184] above, is inconsistent with the existence of the alleged joint endeavour.

208. Third, I reject the premise of the submission, which was that Paula-Marie did all or most of the work in the business. [48]

     48. See [193] above.

209. Fourth, Paula-Marie’s claim ignores: (1) the financial contributions that were made to towards servicing the loans secured against the Eastlakes property by Paul (though his own unpaid labour at Matra Real Estate) and by Therese (from her Australia Post salary after June 2017); (2) the benefit that Paula-Marie derived from the Eastlakes property being used as security for the loans taken out by Paul and Therese to assist Paula-Marie and her husband to purchase their investment units at Hillsdale in 2007 and to purchase their commercial property in 2013; and (3) the benefit that Paula-Marie and her husband derived from being permitted to live at the Eastlakes property without paying rent, which put them in a financial position to service their borrowings that financed their acquisition of their investment properties. Even if the first and second elements referred to at [202] above were established (and they are not), Paula-Marie has not articulated any reason why it would be unconscionable for Paul and Therese to have the benefit of the Eastlakes property in circumstances where she and Andrea have the benefit of their investment properties which they estimate would yield $2,096,000 if they sold them, after discharging all mortgages and paying all selling costs.

Paul’s section 66G claim

214. Section 66G of the Conveyancing Act confers a discretion on the Court to make an order appointing trustees for sale. It is well established that the grounds on which the Court will ordinarily decline to make such an order are limited. Those grounds include where the order would be inconsistent with a proprietary right, or a contractual or fiduciary obligation or an equitable or conventional estoppel against the application. There is no general jurisdiction to refuse to grant an order under s 66G on the basis of alleged hardship or unfairness. [49]

     49. Williams v Legg (1993) 29 NSWLR 687 at 691-693 (Handley, Sheller and Cripps JJA); Hogan v Baseden (1997) 8 BPR 15,723 at 15,723 (Mason P) and 15,726 (Beazley P, as Her Excellency then was, Stein JA agreeing); Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 at [36]-[43] (Tobias AJA, Bergin CJ in Eq agreeing) and [71] (Emmett AJA) (Ferella); Foundas v Arambatzis [2020] NSWCA 47 at [62]-[63] (White JA, Bell P, as the Chief Justice then was, and Basten JA agreeing).

215. It is for a co-owner who opposes the making of an order under s 66G to establish a reason why the order should not be made. [50]

     50. Woodson (Sales) Pty Ltd v Woodson (Australia) Pty Ltd (1996) 7 BPR 14,685 at 14,701 (Santow J, as his Honour then was); Vacation Club Ltd v A GG Properties Pty Ltd (2019) 19 BPR 39,799; [2019] NSWSC 1357 at [33] (Darke J). See also Pascoe v Dyason [2011] NSWSC 1217 at [7] (Black J), which was cited with approval in Ferella at [36].

216. Neither Paula-Marie nor Therese raised any opposition to the orders sought by Paul under s 66G save for Paula-Marie’s claim that the Eastlakes property is held on constructive trust for her. Nor did they wish to be heard in relation to the identity of the trustees for sale. Paul’s proposed trustees – Mr John Lloyd, solicitor, and Mr Geoff Gilles, real estate agent – have each sworn affidavits consenting to be appointed as trustees.

217. As Paula-Marie’s claim has failed, orders should be made substantially in the terms sought by Paul in his summons filed in the s 66G proceedings. The summons did not specifically address how the sale proceeds are to be applied, but neither Paul nor Therese suggested that the loans secured by the mortgage registered against the title to the Eastlakes property should not be paid out of the sale proceeds to discharge the mortgage on settlement. Nor was there any suggestion that the balance of the sale proceeds should not be divided between Paul and Therese equally after payment of the trustees’ costs incurred in selling the property (including any legal costs), and the trustees’ reasonable remuneration. For abundant caution, I will make an order requiring Therese and Paula-Marie to vacate the Eastlakes property seven days prior to the completion of any contract for the sale of the property entered into by the trustees. Neither Paul nor Therese sought an order under s 66I of the Conveyancing Act and I will reserve liberty for them to do so within 14 days out of abundant caution. I will also grant liberty to the trustees to apply for any order or direction for the purpose of the discharge of their duties under the statutory trust for sale, and for approval of their remuneration in the event that it is not agreed by Paul and Therese as the co-owners of the property.

Orders

218. For all of the foregoing reasons, the orders of the Court in proceeding no. 2023/143366 (the trust proceedings) are:

1. Proceedings dismissed, save in relation to the question of costs which is reserved for further consideration and determination on the papers.

2. Direct the parties to bring in short minutes of order within 14 days in relation to the costs of these proceedings.

3. In the event that the parties are unable to reach agreement in relation to the costs of the proceedings, direct that the short minutes in order (2) are to be in the form of a joint document identifying the position of each party, accompanied by a written submission of each party in support of their position being no more than three pages length.

219. For all of the foregoing reasons, the orders of the Court in proceeding no. 2023/33949 (the s 66G proceedings) are:

1. Order pursuant to s 66G of the Conveyancing Act 1919 (NSW) that the whole of the land at 11 Robinson Street, Eastlakes, New South Wales, being lots 28 and 30 in Deposited Plan DPXXXX (the Property) be vested in Mr John Lloyd, solicitor, and Mr Geoff Gilles, real estate agent (the Trustees), subject to encumbrances affecting the entirety, on the statutory trust for sale as defined in s 66F(2)(a) of that Act.

2. Order that the defendants provide to the Trustees vacant possession of the property no later than seven days prior to the date for completion of any contract for sale of the Property entered into by the Trustees.

3. Order that, upon the sale of the Property, the sale proceeds be applied as follows:

1. first, in discharging the mortgage registered on the title to the Property;

2. second, in payment of the costs reasonably and properly incurred by the Trustees in selling the Property;

3. third, in payment of the Trustees’ reasonable remuneration in an amount agreed by the plaintiff and the first defendant in writing or, in the absence of agreement, in an amount approved by the Court; and

4. fourth, by paying the balance to the plaintiff and the first defendant in equal shares.

4. Grant liberty to the plaintiff and the first defendant to apply for any order pursuant to s 66I of the Conveyancing Act 1919 (NSW) by notice of motion filed within 14 days of the date of these orders.

5. Grant liberty to the Trustees to apply on no less than three days’ notice to the parties for:

1. any order or direction in connection with the discharge of their duties under the statutory trust for sale; and/or,

2. an order approving their remuneration in the event that it is not agreed by the plaintiff and the first defendant.

6. Costs reserved for further consideration and determination on the papers.

7. Direct the parties to bring in short minutes of order within 14 days in relation to the costs of these proceedings.

8. In the event that the parties are unable to reach agreement in relation to the costs of the proceedings, direct that the short minutes in order (7) above are to be in the form of a joint document identifying the position of each party, accompanied by a written submission of each party in support of their position being no more than three pages length.

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Endnotes

Amendments

23 July 2025 - Typographical error

23 July 2025 - Typographical error

Decision last updated: 08 August 2025