MBP PROPERTIES PTY LTD (ACN 073 623 640) -v- BARNES [2026] WASC 276

[2026] WASC 276 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CIVIL CITATION : MBP PROPERTIES PTY LTD (ACN 073 623 640) - v- BARNES [2026] WASC 276 CORAM : SEAWARD J HEARD : 19 - 20 MAY 2025 & 3 JUNE 2025 DELIVERED : 16 JULY 2026 FILE NO/S : CIV 1920 of 2020 BETWEEN : MBP PROPERTIES PTY LTD (ACN 073 623 640) First Plaintiff KARIN ELIZABETH BERGSENG and PETER EDWARD MCCROHON Second Plaintiffs AND VIRGINIA ANNE BARNES Defendant VIRGINIA ANNE BARNES Plaintiff by counterclaim AND MBP PROPERTIES PTY LTD (ACN 073 623 640) First Defendant by counterclaim KARIN ELIZABETH BERGSENG and PETER EDWARD MCCROHON Second Defendants by counterclaim -- 1 of 97 -- [2026] WASC 276 Page 2 Catchwords: Property law - Property Law Act 1969 (WA) - Whether court should order a sale under s 126(2) of Property Law Act - Family arrangement - Whether there was a legally binding contract - Whether amount of $150,000 was a gift or loan - Division of estate - Proprietary estoppel - Whether there was an estoppel by encouragement or acquiescence - Whether there was a breach of fiduciary duties Legislation: Property Law Act 1969 (WA), s 126(2) Result: Judgment for plaintiffs Order for sale of property Counterclaim dismissed Category: B Representation: Counsel: First Plaintiff : Mr T O Coyle Second Plaintiffs : Mr T O Coyle Defendant : Mr R Nash Plaintiff by counterclaim : Mr R Nash First Defendant by counterclaim : Mr T O Coyle Second Defendants by counterclaim : Mr T O Coyle Solicitors: First Plaintiff : Rowe Bristol Lawyers Second Plaintiffs : Rowe Bristol Lawyers Defendant : Jebb Legal Plaintiff by counterclaim : Jebb Legal First Defendant by counterclaim : Rowe Bristol Lawyers Second Defendants by counterclaim : Rowe Bristol Lawyers -- 2 of 97 -- [2026] WASC 276 Page 3 Case(s) referred to in decision(s): Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [1982] QB 84 Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560 Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6] [2019] WASC 5 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Browne v Browne [No 2] [2017] WASC 375 Colorado Products Pty Ltd (in liq) [2014] NSWSC 789; (2014) 101 ACSR 233 Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1 Discount & Finance Ltd v Gehrig's NSW Wines Ltd (1940) 40 SR (NSW) 598 DM Drainage & Constructions Pty Ltd as Trustee for DM Unit Trust Trading as DM Civil v Karara Mining Ltd [No 6] [2021] WASC 410 Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 Fazio v Fazio [2012] WASCA 72 Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160 John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 Kramer v Stone [2024] HCA 48; (2024) 281 CLR 484 Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Unreported, FCA, 29 June 1995) Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 The Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 The Nominal Defendant v Cordin [2017] NSWCA 6; (2017) 79 MVR 210 Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 Wantagong Farms Pty Ltd v Bulle [2015] NSWSC 1603 Warren v Lawton [No 3] [2016] WASC 285 Watson v Foxman (1995) 49 NSWLR 315 -- 3 of 97 -- [2026] WASC 276 SEAWARD J Page 4 SEAWARD J: Introduction 1 This case involves, on its face, a relatively straightforward application by the plaintiffs under s 126(2) of the Property Law Act 1969 (WA) (Property Law Act) seeking an order that a property in Fletcher Road, Lesmurdie, be sold (Property). 2 The registered proprietors of the Property are the first plaintiff, MBP Properties Pty Ltd and the defendant, Virginia Barnes. MBP owns a 23/100 share in the Property as a tenant in common with Virginia, who owns a 77/100 share in the Property. 3 The second plaintiffs are the directors of MBP. The first named second plaintiff, Karin Bergseng, is the older sister of Virginia, and the second named second plaintiff, Peter McCrohon, is Karin's husband. 4 There are no encumbrances registered on the Property, and the duplicate certificate of title is held by Virginia. 5 MBP wishes to transfer its share in the Property to Karin and Peter, who then wish to sell their interest in the Property. Despite their requests, Virginia has declined to provide a copy of the duplicate certificate of title to the plaintiffs to facilitate the proposed transfer from MBP to Karin and Peter. 6 There is no dispute between the parties that the Property cannot be subdivided, and therefore partition of the Property is not a realistic prospect. 7 In these circumstances, the plaintiffs seek an order for production of the duplicate certificate of title, and an order for sale under s 126(2) of the Property Law Act. The defendant opposes both orders. 8 What complicates this deceptively simple claim is the factual background to the acquisition by MBP of its interest in the Property, and its continuing ownership of that interest. Both involve agreements or arrangements made between family members in 2007 and 2010. 9 The circumstances under which MBP acquired its interest in the Property arose out of Virginia's divorce in 2007 from her then husband. At this time, Virginia was the recipient of financial assistance from Karin and Peter, and also her mother, Marie Larsson. Marie died in 2009, and the terms and circumstances surrounding the distribution -- 4 of 97 -- [2026] WASC 276 SEAWARD J Page 5 of her estate in 2010 are also relevant to the respective cases of each party. 10 During the trial, the various individuals were referred to by their first names. For ease of understanding, I will do the same in these reasons. No disrespect is intended in so doing. Facts not in dispute 11 The following facts were not in dispute between the parties, and I therefore make the following findings of fact. 12 Virginia and her ex-husband William (Bill) Barnes have three children together, born in 1993, 1996 and 1998. 13 In 2006, Virginia and Bill owned the Property as joint tenants1 and lived in the Property with their three children, who were then aged approximately 14, 11 and 9 years of age. 14 In 2006, Marie was 89 years old and lived in a nursing home near Lesmurdie. Marie had previously lived in South Granville in New South Wales. Her husband died in 1977. Marie moved to Western Australia in either 2003 or 2004,2 and sold her residential property in New South Wales when she moved to Western Australia. 15 On 16 October 2003, Marie signed a general power of attorney pursuant to s 163B of the Conveyancing Act 1919 (NSW), appointing Karin and Virginia as her joint attorneys.3 16 In 2006, Karin and Peter lived in Sydney and were partners in a commercial law firm, originally known as MBP Legal, which was subsequently corporatised and restructured and is now known as CharterLaw.4 They have no children. 17 MBP is an Australian proprietary company, limited by shares. Karin and Peter are the directors of MBP.5 18 MBP is the trustee of The York Street Unit Trust, which was established on 23 April 1996.6 The sole unit holder of The York Street Unit Trust is MBP Superannuation Pty Ltd, in its capacity as trustee for 1 Exhibit 26. 2 Exhibit 82 [20]; Exhibit 92 [13]. 3 Exhibit 5. 4 Exhibit 84 [11]. 5 Exhibit 1. 6 Exhibit 84 [13]. -- 5 of 97 -- [2026] WASC 276 SEAWARD J Page 6 the MBP Superannuation Fund. This is a self-managed superannuation fund, established on 26 June 1995, and the only two members are Karin and Peter.7 19 Virginia separated from Bill at around the end of 2006 or the beginning of 2007. They were subsequently divorced in mid-2007 and Bill is now deceased. 20 At the time of their separation in March 2007, Virginia was working as a receptionist earning approximately $27,000 per annum, and Bill was working as a truck driver earning approximately $63,500 per annum.8 21 At the time of their divorce, the Property was estimated to be worth $520,000, and Virginia and Bill owed approximately $150,000 to their bank, secured by a mortgage over the Property. 22 As part of the property settlement associated with their divorce, Virginia agreed to acquire Bill's interest in the Property for $120,000. 23 There is no dispute that Virginia did not have sufficient funds at the time of her divorce to pay Bill the $120,000 for his share in the Property, or to pay the $150,000 owing on the mortgage. 24 As a result, Marie, Karin and Peter agreed to provide Virginia with financial assistance. 25 The precise terms of the agreement or arrangements between each of the family members is the subject of dispute. 26 What is not in dispute is that as a result of an agreement between Karin, Peter and Virginia, Karin and Peter paid $120,000 to Virginia's lawyers, which was used by Virginia as part of the settlement to purchase Bill's interest in the Property. Karin and Peter obtained the $120,000 by way of a bank loan from the National Australia Bank (NAB). The recipient of the loan was a different company in the MBP group of companies, but those details are not material. 27 It is also not in dispute that Marie agreed to advance Virginia the funds to pay off the $150,000 owing on the mortgage. However, there is a dispute as to whether that $150,000 was a loan, to be repaid out of Virginia's inheritance under Marie's estate, or a gift. 7 Exhibit 82 [9] - [10]; Exhibit 84 [13] - [14]. 8 Exhibit 92 [22]. -- 6 of 97 -- [2026] WASC 276 SEAWARD J Page 7 28 What is not in dispute is that by email dated 12 June 2007, Karin sent Virginia an acknowledgement of debt form. The email relevantly provided as follows:9 Attached is an acknowledgement of debt in relation to the money mum has lent/is lending you to pay out Members equity mortgage. Please fill in the exact amount when you know how much she is lending you then sign it. Can you please email me a copy. The reason for this is that on her death, the money she has lent you is taken as being part of her estate in which you and I share 50/50. When she dies you don't have to pay it back it is just taken into account in the total to be distributed to each of us. 29 The attached acknowledgement of debt form provided as follows: TO: MARIE LARSSON ACKNOWLEDGEMENT OF DEBT I, VIRGINIA ANNE BARNES, acknowledge that I am indebted to you in the sum of $ ............................................................... . which you have advanced to me for the purpose of discharging the mortgage over [redacted] Fletcher Road, Lesmurdie WA. DATED: June 2007 Signed by VIRGINIA ANNNE BARNES .......................................... 30 Virginia did not sign that acknowledgement of debt form. 31 It is also not in dispute that Virginia then used the $150,000 advanced by Marie to pay out the loan and discharge the mortgage over the Property. The $120,000 advanced by Karin and Peter was used to purchase Bill's interest in the Property, the title of which was transferred into Virginia's sole name.10 On 7 September 2007, Virginia then transferred a 23/100 share in the Property to MBP as tenants in common with Virginia retaining a 77/100 share in the Property.11 32 Marie died on 9 October 2009.12 9 Exhibit 32. 10 Exhibit 40. 11 Exhibit 46. 12 Exhibit 47. -- 7 of 97 -- [2026] WASC 276 SEAWARD J Page 8 33 Marie left a will made on 1 October 2003 which:13 (a) appointed Karin and Virginia as her joint executrices; (b) made a pecuniary bequest of $20,000 to Virginia; (c) forgave a debt of $30,000 owing by Karin; (d) acknowledges a gift she made to Virginia in the amount of $10,000 in the year 2000; and (d) left the balance of her estate to Karin and Virginia in equal shares. 34 On 13 November 2009, Karin completed an application for a grant of probate over Marie's will, and in so doing swore an affidavit and completed a rule 9B statement of assets and liabilities. Karin forwarded those documents to Virginia on 13 November 2009 for Virginia to also sign and file in the Supreme Court of Western Australia. Virginia completed the forms and lodged the application on or around 20 November 2009.14 35 That statement of assets and liabilities accompanying the application for a grant of probate provided as follows: Annexure 'A' STATEMENT OF ASSETS AND LIABILITIES Moveable Property Outside WA $ In WA $ Cash at Bank - CBA Kalamunda WA Account No. XXXXXXXXX603 (Sole) Cash Investment Account - CBA Kalamunda WA Account No. XXXXXXXXXXX935 Balance at Settlement date (Sole) Savings Maximiser Account - ING Direct BSB 923 100 Account No XXXX182 - Balance as at statement date (Sole) $25,500.41 $151,461.38 $43.45 13 Exhibit 13. 14 Exhibit 64, p 284; Exhibit 92 [61]. -- 8 of 97 -- [2026] WASC 276 SEAWARD J Page 9 Moveable Property Outside WA $ In WA $ Total Movable Nil $177,005.24 Immovable Property in Western Australia In WA $ Total Immovable Nil Total Assets in WA $177,005.24 Debts Outside WA $ In WA $ Total Debts Nil Nil 36 A copy of the grant of probate was not before the court, but other correspondence indicates that probate was granted on 4 December 2009.15 37 After probate was granted, there were communications between Karin and Virginia as to the distribution of Marie's estate. Those communications resulted in an agreement as to the distribution of Marie's estate. Again, the precise content and terms of that agreement is disputed. However, what is not disputed is that Marie's estate was distributed in around February 2010 as follows:16 (a) $143,000 was paid to Karin; and (b) the remainder (approximately $35,000) was split equally between two of Virginia's children. 38 The next set of events occurred in 2015, when Karin and Peter decided they wished to sell MBP's interest in the Property, and they wished Virginia to purchase that interest. 39 On 8 January 2015, Karin sent Virginia an email, attaching a letter from Peter (on MBP Legal letterhead).17 The letter is three and a half pages long, and outlines the circumstances surrounding both the 15 Exhibit 62, p 269. 16 Exhibit 92 [73]; Exhibit 56. 17 Exhibit 2. -- 9 of 97 -- [2026] WASC 276 SEAWARD J Page 10 advance of $120,000 to Virginia and the settlement of Marie's estate, from Karin and Peter's perspective. 40 The letter then goes on to request that Virginia purchase MBP's interest in the Property, and that this occur by the end of April 2015. The letter proposes that all three agree on a value for the Property, and Virginia pay Karin and Peter 23% of the value of the Property. The letter proposes that MBP's title will then be transferred to Virginia. 41 The letter goes on to identify a number of other properties in the Lesmurdie area found on real estate websites, and then states: For approximate calculation purposes, if the agreed market value of Fletcher Road is between $650K to $680K, then our 23% interest would be between $149,500 to $156,400. 42 The sending of this letter revealed differences in the respective parties' understanding of the agreements which had been made in the past. 43 Virginia called Karin and left a voicemail message in which she was angry and disputed that she needed to buy out Karin and Peter's share in the Property. 44 Further correspondence was then sent between the parties and/or their solicitors, with the result being that they were not able to reach an agreement in relation to Virginia's purchase of MBP's interest in the Property. Issues were also raised in the correspondence regarding MBP's interest in the Property and the distribution of Marie's estate. No resolution of these issues was reached in 2015. Virginia did not buy out MBP's interest in the Property and MBP continued to remain on the certificate of title as having a 23/100 share in the Property. No change was made to the distribution of Marie's estate. 45 The next series of events occurred from 2019, when Karin and Peter decided that they wanted to realise their investment in the Property with a view to retiring or semi-retiring. They decided to purchase MBP's interest in the Property. 46 On 24 December 2019, Karin and Peter's solicitor wrote to Virginia requesting a copy of the duplicate certificate of title for the purposes of this transfer.18 18 Exhibit 69. -- 10 of 97 -- [2026] WASC 276 SEAWARD J Page 11 47 On 21 January 2020, Karin and Peter signed a transfer of land form transferring MBP's interest in the Property to themselves as joint tenants, for consideration of $115,000.19 48 Further correspondence was exchanged between the parties and/or their solicitors in 2020. The result of this correspondence is that Virginia has declined to provide the duplicate certificate of title, and disputes MBP's interest in the Property and the plaintiffs' ability to seek orders under s 126(2) of the Property Law Act. Overview of the parties' cases Pleadings 49 The relevant pleadings are the: (a) re-amended statement of claim, dated 15 August 2023; (b) re-amended defence and counterclaim, dated 21 January 2025; and (c) re-amended reply and defence to counterclaim, dated 28 March 2025. 50 I will refer to these documents as, respectively, the statement of claim, the defence and counterclaim, and the reply. Plaintiffs' case 51 The plaintiffs' case is that in March 2007, Virginia, Karin and Peter agreed arrangements by which Karin and Peter would provide financial assistance to Virginia to enable her to buy-out Bill's interest in the Property (Buy Out Arrangements).20 52 The plaintiffs plead that the Buy Out Arrangements were as follows:21 (a) Karin and Peter would pay $120,000 to Virginia which Virginia would then use to settle her family law property settlement by paying this amount to Bill as the purchase price for Bill's interest in the Property; and 19 Exhibit 71. 20 Statement of claim [6]. 21 Statement of claim [6]. -- 11 of 97 -- [2026] WASC 276 SEAWARD J Page 12 (b) upon Virginia being registered as the sole registered proprietor of the Property, Virginia would transfer a 23/100th tenancy in common interest in the Property to a company controlled by Karin and Peter. 53 The plaintiffs particularise that the Buy Out Arrangements were agreed in a conversation between Karin and Virginia on 28 March 2007 in which:22 (a) Karin said that she and Peter would provide the sum of $120,000 to Virginia to purchase Bill's interest in the Property; (b) Karin said that the $120,000 would not be provided by way of a loan but would be paid as consideration for the purchase by a company controlled by Karin and Peter of a tenancy in common interest with Virginia in the Property. Karin said that the interest would be a 23/100th interest based on a valuation of the Property obtained by Virginia in or around December 2006 of $520,000; (c) Virginia agreed that she would give effect to such a transfer; and (d) Karin said that Virginia would not have to pay any rent for her occupation of the Property, but would be responsible for all maintenance and upkeep of the Property and for all rates and charges. 54 The plaintiffs also plead that in around mid-2007, Marie agreed, in discussions between Marie and Virginia, to provide financial assistance to Virginia in the amount of $150,000 which Virginia would use to discharge the mortgage secured over the Property, and which was to be treated as a loan against Virginia's entitlement under Marie's will (Advance Agreement).23 55 The plaintiffs' case is that in accordance with the Buy Out Arrangements and the Advance Agreement, in around early July 2007:24 (a) MBP paid $120,000 into the trust account of Virginia's lawyer; 22 Statement of claim [6]. 23 Statement of claim [6B]. 24 Statement of claim [7] - [8]. -- 12 of 97 -- [2026] WASC 276 SEAWARD J Page 13 (b) Marie paid the $150,000 to Virginia's bank; (c) settlement of Bill's interest in the Property took place at which time $120,000 was paid to Bill and the transfer of Bill's interest in the Property to Virginia was registered; and (d) then on or about 7 September 2007, a transfer from Virginia to MBP of a 23/100th tenancy in common interest in the Property was registered.25 56 The plaintiffs then plead that on or around 31 October 2019, an oral agreement was entered into between MBP and Karin and Peter, whereby MBP agreed to sell its interest in the Property to Karin and Peter.26 57 On 21 January 2020, MBP executed a registrable transfer of its 23/100th share in the Property to Karin and Peter. Further, on 19 June 2020, Karin and Peter paid MBP the agreed purchase price of $115,000 to give effect to the sale and purchase of MBP's interest in the Property.27 58 The plaintiffs then plead that by letter dated 24 December 2019, the plaintiffs' solicitors wrote to Virginia informing her of the sale of MBP's interest in the Property to Karin and Peter, and asking Virginia to provide them with the duplicate certificate of title for the Property so as to enable the registration of the transfer of MBP's interest in the Property to Karin and Peter.28 The plaintiffs' solicitor wrote a further letter to Virginia on 14 February 2020, providing a copy of the 24 December 2019 letter, and again requested that the duplicate certificate of title be provided.29 59 The plaintiffs' case is that despite the requests, Virginia has failed or refused to deliver up the duplicate certificate of title for the Property to the plaintiffs' solicitors, and that in these circumstances:30 (a) Karin and Peter are parties interested in the Property within the meaning of s 126(2) of the Property Law Act; 25 Statement of claim [9]. 26 Statement of claim [10]. 27 Statement of claim [12] and [14]. 28 Statement of claim [11]. 29 Statement of claim [13]. 30 Statement of claim [15] - [18]. -- 13 of 97 -- [2026] WASC 276 SEAWARD J Page 14 (b) Karin and Peter wish to sell their right, title and interest in the Property upon the registration of the transfer of MBP's interest in the Property to Karin and Peter; and (c) a sale of the Property pursuant to s 126(2) of the Property Law Act would be for the benefit of parties interested, as it would enable Karin and Peter to be paid an amount representing their share in the Property. 60 In the prayer for relief, the plaintiffs claim: (a) an order directing Virginia to deliver up the duplicate certificate of title for the Property to the plaintiffs, so as to enable registration of the transfer of MBP's interest in the Property to Karin and Peter; (b) an order that the Property be sold and that the net proceeds of sale after payment of the costs of sale be paid to Karin and Peter and Virginia in such manner as this court determines; and (c) any consequential orders and directions as this court deems fit, as well as costs. Virginia's case 61 By way of overview, Virginia admits that she is refusing to provide the plaintiffs with the duplicate certificate of title for the Property. However, Virginia denies the plaintiffs' case for three broad reasons: (1) the relief sought, being an application for sale of the Property under s 126(2) of the Property Law Act to give effect to the sale agreement between MBP and Karin and Peter, is contrary to the agreements reached between Virginia, Marie, Karin and Peter; (2) the plaintiffs are estopped from seeking an order for a transfer of MBP's interest in the Property, or a sale of the Property, as it is contrary to Virginia's induced understanding that after the distribution of Marie's estate, the interest of MBP in the Property had been extinguished; and (3) in all the circumstances, it cannot be said that an order for the sale of the Property under s 126(2) of the Property Law Act would be for the benefit of the interested parties, and therefore -- 14 of 97 -- [2026] WASC 276 SEAWARD J Page 15 the court should not exercise its discretion under s 126(2) to order a sale. 62 Turning to each aspect of Virginia's defence in turn. Contrary to the agreements entered into 63 Virginia denies the plaintiffs' version of the various agreements entered into between Marie, Karin, Peter and Virginia. 64 Rather, Virginia's case is that in about early 2007, in the context of her impending divorce from Bill, Virginia, Marie and Karin orally agreed that:31 (a) Marie and Karin would provide financial support to Virginia to secure Virginia's, and her children's, future residence and security at the Property; (b) Marie would provide the funds to pay out the mortgage debt secured over the Property; (c) Karin would make arrangements for a nominated entity to advance funds to pay out Bill's interest in the Property; and (d) a minority interest in the Property would be transferred to the nominated entity in order to secure repayment of the amount of the funds advanced when the Property ceased to be Virginia's place of residence. (Family Arrangement) 65 Further, Virginia's case is that on about 28 March 2007, Karin (on behalf of her and Peter) and Virginia orally agreed in a conversation to the following arrangement:32 (a) Virginia would offer, by way of a matrimonial property settlement, to purchase Bill's interest in the Property for the sum of $120,000, representing a 23/100th interest in the Property; (b) the $120,000 would be provided by a nominated entity of Karin and Peter; (c) Virginia would not be required to repay the $120,000 or any interest thereon whilst she remained living at the Property; 31 Defence and counterclaim [4]. 32 Defence and counterclaim [5]. -- 15 of 97 -- [2026] WASC 276 SEAWARD J Page 16 (d) the $120,000 was being provided to give effect to the Family Arrangement; (e) the 23/100th interest in the Property would be registered in the name of the nominated entity as a tenant in common with Virginia; and (f) Karin would arrange for the preparation of a simple agreement between the nominated entity and Virginia setting out how the interest registered in the name of the nominated entity would be dealt with in the event of the death of Karin or Peter. (Agreed Arrangement) 66 Virginia also pleads that on or about 12 June 2007, Marie told her:33 (a) that the funds that Marie was advancing to her to pay out the mortgage over the Property were being advanced by way of a gift and not as a loan; and (b) that Virginia should not sign the acknowledgement of debt form sent to Virginia by Karin. 67 Virginia does not deny that the $120,000 was paid to her solicitors by Karin or that Marie paid the $150,000 to Virginia. However, Virginia pleads that these payments were made pursuant to the Family Arrangement, and pursuant to the discussions between Marie and Virginia on 12 June 2007.34 68 Virginia's case is that it was not agreed as part of the terms of the Family Arrangement, or the Agreed Arrangement that Virginia would be required to repay the amount paid by (ultimately) MBP for their interest in the Property whilst she was still living in the Property. 69 Virginia's case is that therefore in all the circumstances, a sale of MBP's interest in the Property to Karin and Peter is contrary to the Family Arrangement and is in breach of the Agreed Arrangements.35 33 Defence and counterclaim [7A]. 34 Defence and counterclaim [8] - [9]. 35 Defence and counterclaim [20] - [21]. -- 16 of 97 -- [2026] WASC 276 SEAWARD J Page 17 Estoppel 70 Virginia's estoppel case centres around the distribution of Marie's estate, and is a claim for estoppel by encouragement. 71 Virginia's case is that following Marie's death, Karin and Virginia were granted probate of Marie's will by the Supreme Court of Western Australia.36 72 Virginia pleads that Marie's estate comprised cash in the amount of $177,005.24, and that Karin attended to the administration and distribution of Marie's estate.37 73 Virginia's case is that the distribution made to Karin under Marie's will amounted to the repayment of MBP's interest in the Property, and the plaintiffs are estopped from denying this. The basis for that estoppel is as follows. 74 First, that by email dated 22 January 2010, Karin proposed to Virginia that Marie's estate be distributed as follows:38 (a) the sum of $140,000 be distributed to Karin on the basis that it would be used to refund the $120,000 comprising the sum advanced by MBP, together with interest in the amount of $20,000; and (b) the remaining balance of approximately $38,000 be paid to Virginia. (Proposal) 75 Virginia pleads that the Proposal was made by Karin in her own right and on behalf of MBP and Peter.39 76 Secondly, the Proposal was made in the following context:40 (a) Virginia had never signed the acknowledgement of debt form which Karin knew; 36 Defence and counterclaim [12]. 37 Defence and counterclaim [13] - [14]. 38 Defence and counterclaim [15]. 39 Defence and counterclaim [16]. 40 Defence and counterclaim [16A]. -- 17 of 97 -- [2026] WASC 276 SEAWARD J Page 18 (b) Marie had told Virginia that the funds advanced to pay out the mortgage over the Property were being advanced by way of a gift; (c) the statement of assets and liabilities prepared by Karin in support of the application for the grant of probate for Marie's estate did not refer to or include a debt of $150,000 owed by Virginia; (d) a prior letter sent by Karin to Virginia on 31 December 2009 in which Karin proposed: (i) the sum of $120,000 be distributed to Karin on the basis that it would be used to refund the $120,000 comprising the sum advanced by MBP; and (ii) Karin and Virginia share equally the balance of $58,000 in equal shares. 77 Thirdly, that by the Proposal made in this context, Virginia was induced to understand that the $120,000 paid by MBP, together with accrued interest thereon, was being repaid, and that MBP would cease to have any beneficial interest in the Property.41 78 Fourthly, in reliance on the Proposal and her induced understanding, Virginia acted to her detriment in that she:42 (a) did not seek a distribution of Marie's estate in accordance with the provisions of Marie's will; and (b) has not sought further provision from Marie's estate pursuant to s 7(1) of the Family Provision Act 1971 (WA). 79 Fifthly, MBP, Karin and Peter knew and intended Virginia to act in this manner.43 80 Virginia's estoppel case is therefore that forcing Virginia to provide the duplicate certificate of title to give effect to the sale of MBP's interest in the Property to Karin and Peter is contrary to the Proposal and Virginia's induced understanding; will occasion detriment 41 Defence and counterclaim [17]. 42 Defence and counterclaim [18]. 43 Defence and counterclaim [19]. -- 18 of 97 -- [2026] WASC 276 SEAWARD J Page 19 to Virginia who has acted in reliance on the induced understanding to her detriment; and is, in all the circumstances, unconscionable.44 Discretion 81 Finally, Virginia's case is that, in the above circumstances, the court should not exercise its discretion and make an order for sale under s 126(2) of the Property Law Act. Plaintiffs' reply 82 By way of reply, the plaintiffs: (a) deny the terms of the Family Arrangement as pleaded by Virginia;45 (b) deny the terms of the conversation between Karin and Virginia on 28 March 2007 as pleaded by Virginia;46 and (c) deny the alleged conversation between Marie and Virginia on 12 June 2007 as pleaded by Virginia.47 83 In relation to Marie's estate, the plaintiffs admit that the estate included cash in the amount of $177,005.24, but say that the estate also included the debt of $150,000 owed by Virginia.48 The plaintiffs' case is that through an oversight, Karin neglected to refer to this debt of $150,000 when preparing the statement of assets and liabilities in the probate application.49 84 Whilst the plaintiffs admit that Karin sent Virginia an email dated 22 January 2010, they deny the terms of the Proposal as pleaded by Virginia and the pleaded context of the Proposal.50 85 In relation to the pleaded context of the Proposal, the plaintiffs' case is that the plaintiffs:51 (a) do not admit that Virginia did not sign the acknowledgement of debt form, and deny that Karin knew that Virginia did not sign it; 44 Defence and counterclaim [20] - [21]. 45 Reply [2]. 46 Reply [3]. 47 Reply [3A]. 48 Reply [6]. 49 Reply [7]. 50 Reply [8] - [10]. 51 Reply [9A]. -- 19 of 97 -- [2026] WASC 276 SEAWARD J Page 20 (b) deny that Marie told Virginia that the $150,000 was advanced by way of a gift; (c) say that the failure to include the $150,000 loan in the statement of assets and liabilities was an oversight on Karin's behalf, and that Virginia did not rely on the incorrect statement of assets and liabilities at any material time in connection with her communications and arrangements with Karin in relation to the distribution of Marie's estate; and (d) accept that Karin sent a letter dated 31 December 2009 to Virginia, but say that in that letter: Karin proposed that the estate's funds of approximately $178,000 be distributed by a payment to her of $120,000 being the amount the plaintiff had paid for its 23/100th interest in the Property pursuant to the Buy Out Arrangements pleaded in paragraph 6 of the re-amended statement of claim, with the balance of approximately $58,000 being split equally with the defendant (Distribution Proposal); 86 The plaintiffs deny that the Proposal made in the context, as pleaded by Virginia, induced Virginia to understand that the $120,000 paid by MBP, together with accrued interest thereon, was being repaid, and that MBP would cease to have any beneficial interest in the Property.52 87 The plaintiffs plead further that:53 (a) the email sent by Karin to Virginia on 22 January 2010 reflected the Distribution Proposal and not the alleged Proposal as pleaded by Virginia, as was understood by Virginia at the time; and (b) on or around 28 January 2010, Karin had a conversation with Virginia regarding the distribution of Marie's estate, the details of which will be outlined later in these reasons, but which are consistent with the Distribution Proposal, and not the alleged Proposal as pleaded by Virginia. 88 The plaintiffs deny that Virginia acted to her detriment in the manner pleaded in reliance on the Proposal and her induced 52 Reply [10]. 53 Reply [11]. -- 20 of 97 -- [2026] WASC 276 SEAWARD J Page 21 understanding as pleaded, and deny that the plaintiffs knew and intended Virginia to act in that manner.54 89 The plaintiffs deny that the sale agreement between MBP and Karin and Peter is contrary to the Family Arrangement; is in breach of the Agreed Arrangements; or is contrary to the Proposal and Virginia's induced understanding.55 90 The plaintiffs also deny that in seeking to force Virginia to provide the duplicate certificate of title to give effect to the sale agreement between MBP and Karin and Peter:56 (a) Karin and Peter are acting in breach of the Agreed Arrangement; and (b) the plaintiffs' actions: (i) are contrary to the Proposal and Virginia's induced understanding; (ii) will occasion detriment to Virginia who has acted in reliance on the induced understanding; and (iii) are, in the premises, unconscionable. 91 The plaintiffs also plead by way of further answer to the defence and counterclaim, and to the allegation that Marie provided the $150,000 by way of a gift and not a loan, two further cases: a breach of fiduciary duties claim and their own estoppel claim. Breach of fiduciary duties claim 92 The plaintiffs' claim for breach of fiduciary duties is that:57 (a) as the joint donee of Marie's power of attorney, Virginia owed fiduciary obligations to Marie not to: (i) act in any way that gives rise to a conflict between her personal interests and those of Marie; (ii) use her position to obtain a profit or advantage or other benefit from Marie, 54 Reply [12] - [13]. 55 Reply [14]. 56 Reply [15]. 57 Reply [16]. -- 21 of 97 -- [2026] WASC 276 SEAWARD J Page 22 save with the prior and fully informed consent of Marie which in the circumstances required meaningful advice from an independent person; (b) Virginia entered into the Family Arrangement, agreed to accept the $150,000 from Marie by way of a gift, received the benefit of the $150,000 as a gift and effected or facilitated the transfer of the $150,000 to discharge the mortgage over the Property, without obtaining the fully informed consent of Marie; (c) in so doing, Virginia breached her fiduciary obligations owed to Marie in that: (i) Virginia had a conflict between her own interest in benefitting from the Family Arrangement and her duty owed to Marie pursuant to the power of attorney; further or alternatively (ii) Virginia profited from the transaction by her receipt of the $150,000; (d) and in these circumstances, Virginia was not entitled to receive and retain the benefit of the gift of the $150,000, and the $150,000 should be treated as a loan with the consequence that Virginia owed a debt of $150,000 (plus interest) to Marie's estate; and any claim by Virginia for an award of a greater amount from the estate pursuant to the Family Provision Act 1971 (WA) would have failed. 93 In response, Virginia says that the facts do not raise a question of breach of fiduciary duties as the plaintiffs' case is not that the gift was made to Virginia on Marie's behalf and acting as her attorney. Further, Virginia was not able to exercise the power of attorney on her own, as she was a joint attorney with Karin. Plaintiffs' estoppel claim 94 The plaintiffs' claim that if the $150,000 from Marie was a gift to Virginia, then Virginia is estopped from contending that Marie's $150,000 was provided to her by way of a gift and not a loan. 95 The plaintiffs' estoppel claim evolved over the course of the proceeding. -- 22 of 97 -- [2026] WASC 276 SEAWARD J Page 23 96 The pleaded estoppel claim relates to the advancement of the $120,000 and the purchase of MBP's interest in the Property. The pleaded claim is that:58 (a) Karin entered into the Buy Out Arrangement pursuant to an understanding that Marie would be providing the $150,000 by way of a loan repayable from Marie's estate, and not by way of a gift; (b) further or in the alternative, Virginia was aware that Karin had this understanding based on a number of pleaded conversations or events, that will be outlined later in these reasons; (c) Karin continued to have the understanding that the $150,000 was a gift as of: (i) early July 2007, when Karin paid $120,000 to Virginia's lawyers and Marie made arrangements for the $150,000 to be available to be paid to Virginia's Bank; and (ii) 4 July 2007, when settlement on the transfer of Bill's interest in the Property to Virginia took place by payment of the $120,000 and the $150,000; (iii) around 7 September 2007, when Virginia transferred a 23/100th interest in the Property to MBP; (d) Virginia was aware that Karin continued to hold the understanding that the $150,000 from Marie was a gift up to and including 7 September 2007; (e) if Karin had been informed by Virginia at any time prior to the finalisation of Virginia's settlement with Bill that Marie was gifting and not lending the $150,000 to Virginia, the plaintiffs would not have proceeded with the Buy Out Arrangement and would have required the transfer back to them of the $120,000; and (f) in those circumstances it would be unconscionable for Virginia to contend that the $150,000 was provided by Marie by way of a gift and not a loan. 58 Reply [16A] - [16G]. -- 23 of 97 -- [2026] WASC 276 SEAWARD J Page 24 97 In response, Virginia says that the plaintiffs are not able to establish an estoppel claim, relying on a number of the facts underpinning the claim, including that the agreement in relation to the $150,000 was made between Marie and Virginia, and did not involve Karin; it always remained open to Marie to alter her will in the future, or to choose to forgive the loan (if it was a loan); and there was no obligation assumed by Virginia not to make a claim against Marie's estate. 98 In the plaintiffs' written opening submissions, this is the only estoppel that was referred to, and the plaintiffs submitted that the type of estoppel would depend upon the facts as found, and may be either promissory estoppel, estoppel by encouragement or conventional estoppel.59 99 However, in the plaintiffs' supplementary written opening submissions,60 and in their oral opening61 and closing submissions,62 the plaintiffs also advance a claim for estoppel by acquiescence directed to the distribution of Marie's estate, by submitting that the plaintiffs also continued to have the understanding that the $150,000 was a gift when the distribution of Marie's estate occurred in January 2010. Counsel for Virginia responded to this additional estoppel claim in his oral closing submissions in reply.63 100 The plaintiffs' supplementary written opening submissions also continue to refer to the estoppel by encouragement claim applying to the advancing of the $120,000 to purchase MBP's interest in the Property.64 101 In his oral closing submissions, counsel for the plaintiffs confirmed the estoppel claims to be two different estoppel claims. The first being the estoppel by encouragement claim in relation to the $120,000 advanced and the purchase of MBP's interest in the Property, and the second being the estoppel by acquiescence claim, directed towards the distribution of Marie's estate.65 The plaintiffs did 59 Plaintiffs' trial submissions, dated 12 May 2025 [50] - [57]. 60 Plaintiffs' supplementary trial submissions, undated [7] - [8]. 61 ts 48. 62 ts 248 - 249, 253. 63 ts 282. 64 Plaintiffs' supplementary trial submissions, undated [10]. 65 ts 275 - 276. -- 24 of 97 -- [2026] WASC 276 SEAWARD J Page 25 not advance a promissory estoppel or conventional estoppel claim. Counsel for Virginia also proceeded on this basis.66 102 In broad terms, the plaintiffs' estoppel by acquiescence claim is that: (a) Karin was mistaken as to her legal rights, which were that because Marie was loaning Virginia the $150,000 against her inheritance under Marie's will, Karin would obtain a greater share of Marie's estate than accorded with the terms of the will; (b) Karin relied upon the representation that the $150,000 was a loan from Marie against Virginia's inheritance under Marie's will in the course of doing an act, which was by agreeing the distribution of Marie's estate; (c) Virginia knew of: (i) her own rights in relation to the $150,000 (as a gift) which were contrary to Karin's rights or Karin's mistaken belief about those rights (as a loan); and (ii) Karin's mistaken belief about those rights (as a loan); (d) Virginia encouraged Karin, in the distribution of Marie's estate, by abstaining from asserting her legal rights in relation to the $150,000 and Marie's estate and by failing to tell Karin that Marie had, subsequent to their original discussions, decided to gift as opposed to loan Virginia the $150,000; and (e) Karin and the plaintiffs have suffered detriment - in the form of receiving less money under Marie's estate - from which Virginia will profit, because of Karin's mistake as to her rights and Virginia's acquiescence. Counterclaim 103 Virginia relies on her defence, and counterclaims seeking remedial relief in the form of:67 (a) a declaration that MBP, or alternatively Karin and Peter, hold the 23/100th interest in the Property on constructive trust for Virginia; and 66 ts 229. 67 Defence and counterclaim [24]. -- 25 of 97 -- [2026] WASC 276 SEAWARD J Page 26 (b) such other or alternative equitable relief as this court thinks fit. 104 The plaintiffs rely on their reply, and deny that Virginia is entitled to the relief sought in the counterclaim, or any relief.68 Issues 105 Underpinning the ultimate relief sought by the plaintiffs and Virginia are the following factual and legal issues: 1. What were the terms of the agreement made between the plaintiffs and Virginia in 2007 regarding MBP's acquisition of its interest in the Property, and is the order for sale contrary to that agreement? 2. Was the money Virginia received in 2007 from Marie a gift or a loan? 3. What was the effect of the distribution of Marie's estate - and are the plaintiffs estopped from denying that the distribution of Marie's estate constituted Virginia buying-back MBP's interest in the Property? 4. If the money Virginia received from Marie in 2007 was a gift, is Virginia estopped from denying that the money was a loan? 5. If the money Virginia received from Marie in 2007 was a gift, should that gift be set aside on the basis that it was procured via a breach of fiduciary duty? 5. In all the circumstances, should the court exercise its discretion to order a sale of the Property under s 126(2) of the Property Law Act? Witnesses 106 The trial proceeded by way of witness statements and cross-examination of the three witnesses: Karin, Peter and Virginia. Documents were also tendered either by consent or through the various witnesses. 68 Reply [17] - [18]. -- 26 of 97 -- [2026] WASC 276 SEAWARD J Page 27 Memory and the passage of time 107 Much of the evidence concerned conversations between Karin and Virginia which happened in 2007, 2009 and 2010. That is, some 15 to 18 years prior to the trial. The content of some of these conversations is disputed. 108 There are obvious limitations applicable to all witnesses when attempting to recall conversations and events from some time prior. 109 A number of authorities have considered and provided guidance as to how evidence in cases such as the present should be approached. See, by way of example, Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6],69 Watson v Foxman,70 and Colorado Products Pty Ltd (in liq).71 110 A helpful summary of the key principles is contained in the decision of Tottle J in Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6].72 I have set out the key principles relevant to the present case below: (e) In cases in which oral statements are relied upon to establish agreements or misrepresentations the words spoken must be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that the statements had contractual effect or were misleading. The court must recognise that human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed.73 (f) The credibility of a witness and his, or her, veracity may also be tested by reference to the objective facts proved independently of the evidence given, in particular by reference to the documents in the case. Reliance on contemporaneous documents is preferable in cases involving events which 69 Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6] [2019] WASC 5. 70 Watson v Foxman (1995) 49 NSWLR 315. 71 Colorado Products Pty Ltd (in liq) [2014] NSWSC 789; (2014) 101 ACSR 233 [10] - [11]. 72 Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6] [2019] WASC 5 [26]. 73 Watson v Foxman (1995) 49 NSWLR 315, 318 - 319. -- 27 of 97 -- [2026] WASC 276 SEAWARD J Page 28 occurred long before the litigation. Often the only safe course in such cases is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities and the contemporaneous documents. Documents will often provide valuable and, usually, more revealing, information than what may be flawed attempts at recollection of those facts by persons with an interest in the outcome of the litigation, this is particularly so when the documents are accepted as genuine and were prepared by a person with no reason to misstate the facts in the documents.74 (g) Contemporaneous statements and documents are likely to be a more accurate reflection of events than later statements when false memories can intrude, especially when the person recalling events has tried to assemble recollections logically so that what happened can have some rational explanation in the person's mind - memories are fluid and malleable being constantly rewritten whenever they are retrieved.75 (h) The court must be alive to reality that the spoken word is capable of bearing different and potentially opposed meanings depending on subtle differences of nuance and emphasis. An appreciation of the significance of nuance and emphasis must necessarily be considerably diminished if there is a significant elapse of time between the date when the conversation took place and the hearing at which the evidence of that conversation is given.76 (i) The court must recognise that: Memory is a constructive and reconstructive process. What is remembered about an event is shaped by how that event was experienced, by conditions prevailing during attempts to remember, and by events occurring between the experience and the attempted remembering. Memories can be altered, deleted and created by events that occur during and after the time of encoding, during the period of storage, and during any attempts at retrieval.77 111 I respectfully agree with these principles and have applied these in my approach to the evidence. 74 In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 [7]; Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 [15]; Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160 [157]. 75 The Nominal Defendant v Cordin [2017] NSWCA 6; (2017) 79 MVR 210 [171]. 76 Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Unreported, FCA, 29 June 1995), 122 - 123. 77 McClellan P, 'Who Is Telling the Truth? Psychology, Common Sense and the Law' (2006) 80 Australian Law Journal 655, 665 quoting a passage from Australian Psychological Society, Guidelines Relating to Recovered Memories (2000). -- 28 of 97 -- [2026] WASC 276 SEAWARD J Page 29 112 Often, in matters where the agreements or representations are made between family members, there are no contemporaneous documents to assist in determining the terms of an agreement, or against which to assess the oral evidence given by the witnesses. However, in the present case there are a number of contemporaneous email communications and other documents. 113 In general, I found all three witnesses did their best to recall the conversations and events which occurred between 2007 and 2010. However, there were some aspects of the evidence of Virginia and Karin which I did not accept. I address each of these later in these reasons. Karin's witness statements 114 It is necessary to make an observation about the witness statements of Karin, as it was a matter which was the subject of cross-examination. 115 Karin is a solicitor in New South Wales, and her witness statements adopted a procedure which is routinely adopted in that state of recounting oral conversations by identifying who is speaking and outlining the conversation as if the conversations actually occurred. Karin prefaced these identified oral conversations with the words, 'words to the following effect'. By way of example:78 In or about early 2007, Virginia rang me and we had a conversation in which we said words to the following effect: Virginia: Bill and I have separated. Karin: That's terrible. How are you and how are the boys holding up? Virginia: The boys are very upset of course as am I but I am also concerned about… 116 Karin was cross-examined about her approach in her witness statements. Karin confirmed that, notwithstanding the manner in which the conversations are recorded, her evidence was not that these were verbatim recollections of the precise words spoken in the conversations, but rather were her best reconstruction of the conversations. Karin's evidence is that she wrote her witness statements in the manner she did 78 Exhibit 82 [22]. -- 29 of 97 -- [2026] WASC 276 SEAWARD J Page 30 as that was the usual practice in New South Wales for drafting affidavits 'so it's not hearsay'.79 117 Karin accepted, in cross-examination, that these conversations happened some time ago, in 2007, 2009 and 2010. Karin accepted that she could not recall verbatim what was said in those conversations, but said she could recall contextually what was said. Karin accepted that after 13 years, there could be inaccuracies in her best reconstruction.80 Karin also accepted she did not keep contemporaneous notes of all of these conversations,81 although on some instances she did keep a note.82 Peter's evidence 118 Finally, it is necessary to make an observation about Peter's evidence. 119 Peter accepted that he did not have any direct discussions with Virginia or Marie in 2007 regarding the agreement to purchase the interest in the Property.83 120 However, Peter did have conversations with Karin, and Peter's witness statement detail his recollections of these conversations. 121 Part of Peter's evidence includes his conversations with Karin where he says that Karin told him various matters which had been discussed between Karin and Virginia. Peter's evidence about these conversations, and what Karin told him was discussed between her and Virginia, is not evidence of the truth of what was discussed between Virginia and Karin, or the truth of the underlying facts. However, Peter's evidence in this regard is relevant to his state of mind when agreeing to assist Virginia. Accordingly, when considering the evidence, I have included these aspects of Peter's evidence for this purpose. Evidence 122 In this section of my reasons, I have detailed the evidence before the court regarding the various key events and conversations. Included in this section are also some of the findings of fact I have made in 79 ts 103 - 104. See also 108 and 126. 80 ts 104. 81 ts 104. 82 For example, ts 105 and 109. 83 ts 141. -- 30 of 97 -- [2026] WASC 276 SEAWARD J Page 31 relation to that evidence. Other findings are made when considering the individual issues. Separation of Virginia and Bill and initial conversations 123 There is no dispute that in early 2007, Virginia telephoned Karin and told Karin that she and Bill had separated.84 124 Karin's evidence is that in that conversation, Virginia told her that she was concerned about what would happen to her and her children and asked Karin to help her. 125 Karin's evidence is that she told Virginia that she couldn't help her with family law, and told her to see a local family lawyer and take some advice. Karin's evidence is that she also said that she had a colleague in Sydney who knew something about family law, and if he is happy to have a look at Virginia's circumstances, he might be able to help. Karin's evidence is that Virginia agreed that this would be a good idea, and Karin indicated she would ask her colleague if he could help, and that she would get back to Virginia. 126 Virginia agrees that she had this conversation with Karin.85 127 Virginia's evidence is that she heavily relied on Karin for her advice, and that Karin generally took control of how best to finance Bill's payout, including trying to secure finance from a bank for Virginia.86 Virginia accepted that Karin did not give her any family law advice.87 128 On 19 February 2007, Karin sent Virginia an email telling her that Karin had an appointment with her colleague the next day, and requesting that Virginia provide various items of information regarding her financial circumstances, assets and details regarding the children. In that email, Karin also states that Virginia would have to go and see a lawyer eventually, but that Karin's colleague could guide her about this.88 129 Karin and Virginia then had a further telephone conversation where Virginia provided the various pieces of information to Karin.89 84 Exhibit 82 [22]; Exhibit 92 [23]; ts 153. 85 ts 153 -154. 86 Exhibit 92 [24]. 87 ts 153. 88 Exhibit 10. 89 ts 154. -- 31 of 97 -- [2026] WASC 276 SEAWARD J Page 32 Karin made notes on both a copy of the email and in a separate file note of Virginia's answers.90 Virginia's evidence is that she provided the answers to Karin at her work email.91 I do not consider anything turns on their different recollections of how the information was conveyed by Virginia to Karin. The relevant point is that the additional information was provided. 130 Karin's evidence is that Virginia subsequently told her that Karin's colleague gave her some general advice, and suggested that Virginia retain a family lawyer in WA.92 Virginia's evidence is that she never spoke to the family lawyer from Sydney;93 that a friend told her she needed to seek legal advice; and that she ended up obtaining her own family lawyer, being Mr Louis Durand, at Durand Gangemi.94 Again, nothing turns on who suggested Virginia obtain legal advice. 131 Virginia's evidence is that Karin dealt directly with Mr Durand about how her settlement was to be structured.95 Virginia's evidence is also that:96 Louis Durand dealt with Karin on much of the detail. I almost always deferred to Karin's advice on how to proceed. 132 However, Virginia did not go on in her evidence, either in her statements or oral evidence, to identify any specific or particular advice from Karin or Mr Durand in which she deferred to Karin. 133 Karin disputes that she ever provided Virginia with advice as to how her settlement with Bill was to be structured. Rather, Karin's evidence is that she had communications with Mr Durand about the $120,000 which she and Peter were advancing, and that she also sent communications to Mr Durand on behalf of Virginia at her request, because Virginia was working as a receptionist and had limited capacity to send emails or facsimiles during working hours.97 Those various communications are considered further below. 134 In all the circumstances, I am not satisfied that Karin ever gave Virginia legal advice as to how to proceed with her property settlement. 90 Exhibit 82 [24]; Exhibit 12; Exhibit 10. 91 Exhibit 92 [26]. 92 Exhibit 82 [25]. 93 ts 154. 94 ts 153. 95 Exhibit 92 [25]. 96 Exhibit 92 [28]. 97 Exhibit 83 [18] - [19]. -- 32 of 97 -- [2026] WASC 276 SEAWARD J Page 33 Rather, I find that Virginia and Karin discussed, as sisters, aspects of Virginia's property settlement and in so doing, Karin made some suggestions as to how Virginia might be able to buy-out Bill's interest and stay in the Property. However, no advice of any sort was given by Karin to Virginia. 135 Virginia's evidence is that Bill was highly emotional during their separation, and she considered Bill was acting unreasonably. Virginia's evidence is that at one time, Bill threatened to burn down the Property, unless he was paid $120,000. Virginia's evidence is that she discussed this with Karin and told her that she wanted to pay Bill $120,000 to ensure she could 'move on'. Virginia's evidence is that her issue was how to pay Bill this amount and also pay out the mortgage over the Property.98 136 Karin's evidence is that between 19 February 2007 and March 2007, she and Virginia had numerous further telephone conversations, the general substance of which concerned Bill's behaviour, Virginia's financial position, and how Virginia might be able to stay in the Property with the children as well as pay Bill out of his share of the Property.99 137 Karin's recalls that in one conversation she expressed her concern for the family's future as it was clear that Virginia did not have the personal financial resources to stay in the Property and pay out Bill's interest without assistance, or to support the mortgage. Karin said to Virginia that she would speak to Peter to see if she and Peter might be able to assist Virginia financially.100 In her written statement, Virginia states that she recalls this conversation.101 However, in her oral evidence she could not remember.102 138 Karin's evidence is that she then spoke to Peter and provided him with Virginia's financial information, and asked whether he thought they could give Virginia some financial assistance so she could stay in the Property with the children. Karin's evidence was that Peter agreed to offer some financial assistance, but wanted the money back at some stage. Karin's evidence is that Peter said words to the effect that:103 98 Exhibit 92 [29] - [30]. 99 Exhibit 82 [28]. 100 Exhibit 82 [29]. 101 Exhibit 92 [27]. 102 ts 154. 103 Exhibit 82 [30]. -- 33 of 97 -- [2026] WASC 276 SEAWARD J Page 34 It is important that the boys have a stable environment while they are young and growing up. It would be best for them to stay in the family home with Virginia. They will be traumatised enough over the separation and their father moving out. If we can assist then they can stay in the house until the boys grow up and this will at least provide some stability for them. 139 Karin's evidence is that Peter wanted the arrangement 'well documented' as he didn't 'want to have an issue with Virginia in the future given that she has no commercial experience'.104 140 Peter's evidence about this conversation is broadly consistent with Karin's evidence, albeit that Peter recalls telling Karin that he would need to understand the extent of Bill's financial entitlement before he would commit to anything, but assuming Bill's entitlement was less than 50% he was, 'happy to assist within reason'.105 141 Peter's evidence is that over the next few weeks or so, Karin told him of other conversations she had with Virginia about the property settlement, but he cannot now recall the precise details of everything that Karin told him.106 Conversations between Karin and Virginia on 27 and 28 March 2007 142 Karin's evidence is that she then had two conversations with Virginia, on 27 March and 28 March 2007. Karin's evidence in her witness statement contains a detailed recounting of these two conversations. Karin's evidence is that these conversations followed a letter sent from Mr Durand to Virginia dated 26 March 2007 (which Virginia then faxed to Karin on 27 March 2007) regarding the terms of the property settlement.107 The letter referred to Virginia paying Bill the amount of $115,000. 143 In relation to the first conversation, Karin's evidence is that she had a conversation with Virginia in 'words to the following effect':108 Virginia: I have been talking to Bill and he wants $120,000 so I have agreed to increase the amount I will pay him from $115,000 to $120,000. The reason for the increase is because he has plans for what he wants to do with the money. He wants to buy a bus which he 104 Exhibit 82 [30]. 105 Exhibit 84 [16]. 106 Exhibit 84 [17]. 107 Exhibit 82 [34]; Exhibit 11. 108 Exhibit 82 [35]. -- 34 of 97 -- [2026] WASC 276 SEAWARD J Page 35 will live in. He doesn't want to buy another property. I want to pay him this amount although Durand has told me that this amount is in excess of what I should be paying. I just want to get this matter behind me. Karin: But you do realise don't you that to keep the house and to pay out Bill, you are going to need $270,000, not just $115,000 or $120,000 (whichever amount you finally pay Bill). You are going to need another $150,000 to pay out the Members Equity mortgage. Virginia: I will be able to borrow $110,000 from mum. I will reduce the existing mortgage by $100,000 and keep $10,000 as an emergency fund. I will then see if the bank will let me keep a mortgage of $50,000 which also means that I can establish my own credit rating again. Karin: So that's a total of $160,000 which would mean that Peter and I would need to provide $120,000. Virginia: Yes. Do you think Peter would agree to help me? Karin: I will speak to him tonight and run all of this by him again then get back to you. As you know we have already had a discussion about helping you out financially. Virginia: Great thanks. I really appreciate it. Karin: Also you have to understand that if mum lends you the money, this will be a loan from her against your 50% inheritance under her will. You won't have to pay any interest on her loan nor will you have to repay the loan. But when she does pass away, your share of the estate will be reduced by the amount of the loan. Virginia: Okay I understand and that sounds fair enough. I need the money now not when she passes away and she said she is happy to help. 144 Karin's evidence is that she then spoke to Peter that evening and told him that Virginia would need $270,000 to complete her property settlement, comprised of $120,000 to pay out Bill and $150,000 to pay out the mortgage over the Property. 145 Karin said that she told Peter that Marie would lend Virginia $110,000 and that Virginia might then take a new mortgage -- 35 of 97 -- [2026] WASC 276 SEAWARD J Page 36 herself for $50,000 which means she would have $160,000 and she would keep $10,000 of this as a safety net. Karin then asked Peter if he was still happy to provide financial assistance of $120,000.109 146 Karin's evidence is that Peter was happy to provide Virginia with $120,000, provided the NAB would lend Peter and Karin the money. Peter then requested that Karin make it clear to Virginia that they would need to apply for a loan to provide the financial assistance, as they did not have $120,000 in the bank.110 147 Karin's evidence is also that Peter told her that there was no point in lending Virginia the $120,000 because Virginia could not afford to pay any interest or repay principal and interest payments on a loan, as well as making mortgage payments to her bank.111 148 Therefore, Peter proposed that:112 I think we should tell her that, subject to us being able to borrow $120,000, we will provide the $120,000 to her on the basis that we buy out Bill's interest in the house. You will have to tell her that she will have to pay the rates, repairs and maintenance costs and general upkeep on the property with no contribution from us. 149 Peter's evidence is that in around late March 2007, he had a conversation with Karin which is broadly consistent with Karin's evidence regarding the March 2007 conversation, save that Peter's evidence is that he recalls some additional matters were also discussed.113 150 Peter's evidence is that he also recalls telling Karin that he would prefer that they bought Bill's remaining $120,000 interest in the Property, because they would be on the title and therefore would be likely to be able to recoup their money as Virginia could not sell the Property without their consent.114 151 Peter's evidence is that either he or Karin said that if the Property's agreed value was $520,000, then they would acquire a 23% interest in the Property by the payment of $120,000, which he and Karin agreed 109 Exhibit 82 [36]. 110 Exhibit 82 [36]. 111 Exhibit 82 [36]. 112 Exhibit 82 [36]. 113 Exhibit 84 [18]. 114 Exhibit 84 [18.3]. -- 36 of 97 -- [2026] WASC 276 SEAWARD J Page 37 would be a reasonable way to provide financial assistance to Virginia.115 152 Peter's evidence is that he asked Karin how Virginia would repay Marie's loan, and Karin informed him that it had been agreed that it would be paid out of Virginia's share of the estate when Marie died, and that Karin believed there would be enough money for this occur.116 153 Peter's evidence is also that he told Karin that they would need to borrow the $120,000 from the NAB, and he would work out how it would be funded and what entity would own the interest.117 154 Finally, Peter's evidence regarding this telephone conversation was that he told Karin to tell Virginia the following:118 I asked Karin to inform Virginia that we could borrow the money to buy Bill's interest in the Fletcher Road Property, but we would not be lending the money to Virginia. I asked Karin to explain to Virginia that: 18.8.1. This would mean that Karin and I would be part owners of the Property and we would own 23%. 18.8.2. We were not lending the $120,000 to Virginia so she could pay Bill, because Virginia couldn't afford to pay us interest, let alone repay the principal. Virginia would have to pay the rates, repairs and maintenance costs and general upkeep on the property and that we would not be contributing to these expenses. I asked Karin to make all of this crystal clear to Virginia. 155 Karin's evidence is that she then telephoned Virginia back on 28 March 2007 and had a conversation 'in words to the following effect':119 Karin: I spoke to Peter last night about your finances and showed him Durand's letter. Peter agreed that he was happy for us to assist you because he, like me, does not want to see the boys' lives disrupted at this young age any more than they are already and wants them to have as stable an environment as 115 Exhibit 84 [18.4]. 116 Exhibit 84 [18.5]. 117 Exhibit 84 [18.6]. 118 Exhibit 84 [18.7] - [18.9]. 119 Exhibit 82 [37]. -- 37 of 97 -- [2026] WASC 276 SEAWARD J Page 38 possible by keeping you and the boys in your family home while they are growing up. Karin: On that basis he said we would be able to provide you with financial assistance of $120,000. However, we don't have $120,000 in the bank so we have to apply to the NAB for a loan. Karin: If they lend us the money which we are sure they will, we don't want to lend you the money as we don't think you have the financial means to repay a loan or the interest on a loan from us as well as making mortgage payments to the bank. You will be looking after the boys and as you have said you will have to continue to work part time to make this work anyway. You have already told me that you can't rely on Bill making regular child support payments. So we would prefer to buy out Bill's interest in the house if you agree. We also thought that this will be an investment for us and we might make a return on our investment. Karin: It's likely that Peter and I will use a legal structure that we own to hold our interest and not buy it in our own names. Peter is working this out and I will let you know. Virginia: How is it going to work then? Karin: You told me that a local agent had valued the house before Christmas at $520,000. If we pay you $120,000 to pay out Bill then we would be buying a share in the house equal to 120/520, that is, a 23% interest. So on the basis that we buy the interest in the name of one of our entities, you and that entity would both be registered as owners of the house. Karin: You don't have to pay us any interest or rent but we will want you to keep paying all the rates and repairs and maintenance costs on the house. We will also want the money back at some stage. Karin: With the money mum lends you, whether it is $110,000 or some other amount, like I said yesterday, this will be a loan from her to you against your inheritance under mum's will. Also, if you use $100,000 to reduce your mortgage from $150,000 to $50,000 then you will have to pay interest to the bank on $50,000 and some principal. You will not have to pay mum interest but when mum passes away, the amount she lends you will come off your inheritance under her will. Yesterday you said you were okay with that and if that's still the case, then I will draw up a simple document called an acknowledgement of debt which I will send over to -- 38 of 97 -- [2026] WASC 276 SEAWARD J Page 39 you to sign once you know exactly how much mum is going to lend you. Virginia: Okay that all sounds okay. But that means you will own part of my house. So how do I get to own all of it again? Karin: At some stage you will have to buy out our interest in the house so then you will own 100% of it. Peter and I will have to consider this some more. Virginia: Can you ring Louis and also send him a fax to explain all of this to him because I can't remember all of this detail. I also want you to give him some other information in relation to the other matters he has asked me about in his fax. 156 Virginia's evidence in her witness statement is that she does not recall a telephone conversation like the one described by Karin as occurring on 27 March 2007, and she does not recall a conversation as detailed as Karin's evidence about this conversation in her witness statement. 157 Rather, Virginia's written evidence is that:120 I do recall having a conversation with her around the time she states during which she said words to the effect: (a) she told me I would need enough money to pay out Bill and pay off the mortgage; (b) if she and her husband, Peter, paid out Bill, they would take a share in the property and would need to be included on the title deed of the house; (c) that she was doing this for me and my sons, to ensure we were secure in our home; (d) that I could buy she and Peter out of their share in the house at a later stage; and (e) that if I borrowed money from Mum to pay off the mortgage, it would come off my inheritance. 158 However, in her oral evidence, Virginia said that:121 (a) she recalled telling Karin that Bill wanted $120,000 and that she had agreed to pay Bill that amount; 120 Exhibit 92 [32]. 121 ts 155 - 158. -- 39 of 97 -- [2026] WASC 276 SEAWARD J Page 40 (b) she did not remember Karin mentioning the figure of $270,000, but she accepted that this was the total amount she would need to pay out Bill; (c) she told Karin that she would borrow $110,000 from Marie; (d) she did not recall telling Karin that she would keep $10,000 as an emergency fund, and instead thought that this was Karin's idea; (e) she recalled saying that she would see if her bank would let her keep a mortgage of $50,000 which would establish her own credit rating again; (f) she agreed that Karin said this was a total of $160,000 which would mean that Karin and Peter would need to provide $120,000; (g) she recalled asking Karin if Peter would agree to help; (h) she recalled Karin saying that she would speak to Peter that night and then get back to her; and (i) agreed that Karin said that if Marie lent her the money, it would be a loan from Marie against Virginia's 50% inheritance under Marie's will. 159 Virginia's witness statement refers to only one conversation (see the reference to 'a conversation' above). However, in cross-examination, Virginia accepted that there must have been two conversations.122 160 Further, in relation to the second conversation, Virginia accepted that the following was said during this conversation:123 (a) Karin said that she had spoken with Peter and discussed potential financial assistance; (b) Karin said that Peter was happy to help and he didn't want to see the boys' lives disrupted at this young age; 122 ts 159, 186 - 188. 123 ts 159 - 163. -- 40 of 97 -- [2026] WASC 276 SEAWARD J Page 41 (c) Karin said that she and Peter were able to provide Virginia with $120,000, and that together with the loan from Marie, that would be enough to deal with the mortgage and pay out Bill; (d) Karin said that she and Peter would need to apply to the NAB to get a loan for the $120,000, which would then be used to pay out Bill's interest in the Property; (e) Karin said the $120,000 was not a loan to Virginia; (f) Karin and Peter would use a legal structure and purchase a 23% interest in the Property; (g) Virginia would not have to pay Karin and Peter interest or rent; (h) Karin said they would want the money back at some stage; (i) Karin said that the money loaned by Marie to Virginia, whether it is $110,000 or some other amount will be a loan from Marie to Virginia, against Virginia's inheritance under Marie's will. Karin also said that Virginia would not have to pay Marie interest, but the amount loaned by Marie would come off Virginia's inheritance; (j) Karin said that she would prepare a simple document called an acknowledgement of debt for Virginia to complete and sign once she knew exactly how much Marie was going to lend Virginia; (k) Virginia said that this would mean that Karin and Peter would own part of the Property, and then asked how she would get to own all of the Property again. Karin responded by saying that Virginia would need to buy out their interest in the Property, and that she and Peter would need to consider this some more; and (l) that Virginia then asked Karin to send Mr Durand this information in a facsimile because she couldn't remember all the details. -- 41 of 97 -- [2026] WASC 276 SEAWARD J Page 42 161 Virginia also accepted that there were no further discussions about the precise details or mechanics about when and how Virginia might buy back MBP's interest in the Property.124 Telephone conversation and correspondence with Mr Durand 162 Karin's evidence is that during the conversation on 28 March 2007, Virginia also asked her to give Mr Durand some other information and ask him some further questions. 163 Karin's evidence is that she made a handwritten file note of her conversation with Virginia. That file note is Exhibit 14, and it lists six different matters. It does not address all of the matters which Karin says were discussed in the conversation with Virginia. By way of summary, the handwritten file note: (1) asks for a copy of the draft consent orders (which were referred to, but not attached to, Mr Durand's letter dated 26 March 2007); (2) notes that the amount to be paid to Bill is now $120,000 (as opposed to $115,000 referred to in Mr Durand's letter); (3) notes that Bill's details have changed; (4) notes that a letter to Bill should accompany the draft consent orders, explaining the amount offered, how it is calculated and that it is generous; (5) states that: I will write re financial - arrangements > entity [unclear] will go on title + proportion as t in c - prepare ack debt - Agmt with VB re reacquisition of my proportion (6) asks what the $1,800 + GST referred to in Mr Durand's letter includes, and identifies the following additional matters: - preparation of Tfr - Stamping 124 ts 162. -- 42 of 97 -- [2026] WASC 276 SEAWARD J Page 43 - mtgee consent to my part o'ship and sending tfr to them for [unclear] fees 164 Karin's evidence is that she then rang Mr Durand, and she had a copy of the handwritten file note when she spoke to Mr Durand. Karin's evidence is that in that telephone conversation she told Mr Durand that Virginia and Karin had discussed his letter dated 26 March 2007, and Virginia had asked Karin to both call and fax Mr Durand to explain how she wanted to proceed with the property settlement with Karin, Peter and Marie's help.125 165 After their conversation, Karin then sent Mr Durand a facsimile dated 28 March 2007. That facsimile is Exhibit 15, and it relevantly provides as follows: I refer to our telephone conversation today. As Virginia is not in a position to email or fax to me a copy of the consent orders you have drafted, would you please email or fax a copy to me at your early convenience. In the meantime, I confirm that- 1. Virginia now wishes to make Bill an offer of $120,000 by way of property settlement … 4. As to the property settlement/transaction, my husband and I will be providing the funds to take Bill out of the family home. We will be buying this in the name of a discretionary trust the trustee of which is MBP Holdings Pty Ltd ABN [redacted]. It is this name which should appear on the Transfer document. I understand that we have to pay ad valorem duty on the Transfer. Please let me know how much this is at the appropriate time and I will transfer funds directly into your firm's trust account to cover this expense. 5. MBPH will be acquiring a 120/520 interest as tenant in common In the property with Virginia. The 120 represents $120,000 being the amount we anticipate Bill will accept and the 520 represents the current market value of the property at $520,000. The proportion will of course vary according to the amount required to pay Bill out. 6. Virginia will not be required to repay this amount or to pay any interest or other amount to MBPH for this financial assistance, I will draw up a simple agreement between MBPH and Virginia 125 Exhibit 82 [39], [41]. -- 43 of 97 -- [2026] WASC 276 SEAWARD J Page 44 setting out the arrangement in the event of my death and/or that of my husband. At this stage, my husband's family is on a needs to know basis only and In fact knows nothing. We have no children ourselves. 7. The loan from our mother will be $110,000 and will be advanced by her against Virginia's inheritance. $100,000 will be used to reduce the existing loan of $150,000 and $10,000 will be retained by Virginia as an emergency fund. This loan will be interest free and repayable on demand or at the date of death of our mother. I will draw up a simple Acknowledgement of Debt for Virginia to sign. My husband and I are anxious that this matter settle amicably for those reasons explained to you during our telephone conversation. The interest on an additional $5,000 or $10,000 is negligible for us and not worth any angst it might cause my family. I appreciate your comments and concern regarding the amount we are prepared to pay Bill. I can also appreciate that a court might not look favourably upon an overpayment if the couple were being forced to sell the family home and to find alternative accommodation of a much less quality. However, it should be made clear that the circumstances here are different in that my sister will not be out of pocket and will be remaining in the matrimonial home with the financial assistance of her family. As to ongoing maintenance neither Virginia nor I can comment or guess what will eventuate. (emphasis in original) 166 Virginia recalls seeing a copy of Karin's facsimile to Mr Durand when it was posted to her by Mr Durand. Virginia's evidence is that Karin never mentioned the fax, but Virginia did read the document when she received it in the post and was 'reassured by her statement that if these arrangements were finalised Karin would draw up an agreement that would deal with what was to happen in the event that she and/or her husband Peter died, and that no interest was being charged'.126 167 Virginia did not give evidence that there was anything inaccurate in the facsimile. 168 I consider it unlikely that Karin would have sent the facsimile to Mr Durand, in the form it was, without first telling Virginia that she was going to do so. The facsimile expressly states that Virginia wishes to make Bill an offer of $120,000, and therefore it would be unlikely that Karin would send such a letter without Virginia agreeing. 126 Exhibit 92 [35]. -- 44 of 97 -- [2026] WASC 276 SEAWARD J Page 45 Virginia's evidence was also that she told Karin around this time that she was happy if Karin dealt with Mr Durand directly.127 Therefore, I find that it was more likely than not, that Virginia authorised Karin to send the facsimile to Mr Durand addressing these topics, even if Virginia did not see the facsimile first. Subsequent conversations 169 Karin's evidence is that between 28 March 2007 and 30 April 2007, she had several further conversations with Virginia about the provision of financial assistance and related matters. 170 Karin does not identify any specific conversations or dates, but her evidence is that Virginia told her that:128 (a) the amount she was going to pay Bill had still not been confirmed as $120,000 and it might be $115,000; (b) Virginia was going to approach Members Equity to see if they were prepared to lend Virginia the extra $50,000 she needed; and (c) if Members Equity would not loan her the money, Virginia would try the NAB, and if the NAB would not lend her the money, Virginia would ask Marie if she would loan her the $50,000. 171 Both Virginia and Karin agree that Virginia called Karin to tell her that Members Equity would not loan her the $50,000. Virginia recalls this conversation happening around May 2007, and Karin recalls it happening on 30 April 2007.129 Virginia's evidence is that Marie was present in her house at the time of the call. 172 Karin's evidence is that Virginia told her that Members Equity would not loan her the money, and that she asked Karin to speak to the NAB. Karin's evidence is that Virginia also said that she would send through the Members Equity details in case Karin wished to talk to them, and while Karin asked Virginia to send through the details, Karin said that she probably didn't need to talk to them.130 127 Exhibit 92 [33]. 128 Exhibit 82 [43]. 129 Exhibit 82 [44]; Exhibit 92 [40]. 130 Exhibit 82 [44]. -- 45 of 97 -- [2026] WASC 276 SEAWARD J Page 46 173 On 30 April 2007, Virginia sent Karin an email with the details of the Members Equity contact.131 Karin does not believe she had a conversation with the contact.132 174 Virginia does not dispute Karin's account of the conversation, and the existence of the email dates that conversation as occurring in April 2007, as opposed to May 2007. 175 Virginia's evidence is that at the time of this conversation she was very upset and Marie said to her words to the effect that Marie was concerned that Virginia may have to sell the Property. Virginia's evidence is that Marie said that she loved the Property and wanted to make sure Virginia and the children were secure.133 176 Virginia's evidence is that Marie asked her if there was anything she could do to help, and Virginia asked Marie:134 if I could borrow the money from her although I can't recall if I asked for a specific amount. Mum immediately said 'of course' but Mum then asked me why 'should it be a loan' and I responded that Karin had said that one option was to borrow money from Mum as an advance on my share of my inheritance. 177 Virginia's evidence is that:135 I recall Mum looking very sceptical. She said she would be happy to do whatever she could to help me. She asked me if there was anything else she could help me with. I said there was also a need to pay Bill his proportion of the settlement which was $120,000 and mum said 'take whatever you need just use my money, it's there for you and the kids'. 178 In cross-examination, Virginia accepted that the reference to Karin saying 'one option' was to borrow the money from Marie was inaccurate in so far as it conveyed a sense of there being different proposals. Virginia accepted that Karin had only made one proposal, being that she and Peter would buy an interest in the Property, and Virginia would borrow money from Marie.136 179 Virginia's evidence is that she then rang Karin to tell her that Marie was happy for Virginia to use her money to payout the mortgage 131 Exhibit 16. 132 Exhibit 82 [46]. 133 Exhibit 92 [41]. 134 Exhibit 92 [42]. 135 Exhibit 92 [43]. 136 ts 166. -- 46 of 97 -- [2026] WASC 276 SEAWARD J Page 47 and also provide the money to payout Bill.137 Virginia's evidence is that:138 I recall Karin saying to me that she and Peter had also thought of using Mum's money to pay Bill but decided that they would put up the money instead and take a share in the house just in case Mum's needs changed and her level of care required an extensive sum of money. Given Karin's knowledge and experience I didn't question this but I remained happy that I could see an end to the problem of paying out Bill. 180 Karin denies that she ever said this to Virginia.139 181 I consider it more likely than not that Virginia did ring Karin to tell her that Marie was happy for her money to be used to pay out the mortgage, as I consider Virginia would be likely to tell Karin this, given their previous discussions and the nature of Karin's proposal to Virginia. 182 I also do not consider much turns on whether Marie ever actually offered to also provide Virginia with the money to pay out Bill's interest in the Property, or Karin's response, as ultimately Virginia never seriously proposed that course of action, and was instead happy to proceed by way of Karin and Peter providing that money. 183 Karin accepted that she never spoke to Marie about providing financial assistance to Virginia.140 Attempts to obtain a loan from the NAB 184 On 30 April 2007, Karin then sent a detailed email to her bank manager at the NAB, explaining Virginia's position and inquiring about a loan to Virginia in the amount of $50,000 secured against Virginia's 78% interest in the Property, and the fees and monthly repayments.141 185 The bank manager responded by email dated 7 May 2007, setting out the interest rates and monthly repayments for loans of $50,000 and $115,000. Karin then forwarded the email chain to Virginia on the same day.142 137 Exhibit 92 [44]. 138 Exhibit 92 [45]. 139 Exhibit 83 [20]; ts 112. 140 ts 112 -114. 141 Exhibit 17. 142 Exhibit 18. -- 47 of 97 -- [2026] WASC 276 SEAWARD J Page 48 186 In the meantime, on 30 April 2007, consent orders had been filed with the Family Court in relation to the Property settlement. A copy of those consent orders is not before the court, but correspondence between the Family Court and Durand Gangemi, regarding some requisitions, identifies the date of the orders.143 187 On 17 May 2007, Virginia sent Karin an email asking if there was any 'news from your end?'.144 188 Karin's evidence is that between 17 May 2007 and 23 May 2007, she had at least two further conversations with Virginia and that her recollection was that parts of these conversations consisted of words to the following effect:145 51.1. Virginia's former husband was still being a nuisance at the house and harassing her and causing anxiety for Virginia and her sons to the extent that she was seeking a restraining order against him, 51.2. Virginia had finally decided to pay Bill $120,000 which amount would come from Peter and me, 51.3. Virginia now wanted to borrow only $30,000 from the NAB which meant that she would be borrowing $120,000 from Marie. 189 On 23 May 2007, Karin then emailed the NAB bank manager confirming that Virginia needed to borrow $30,000 and Karin and Peter needed to borrow $120,000, and advising that it was 'time to get this in place please'.146 190 In light of the email sent on 23 May 2007, I accept that Karin's account of these conversations is more likely than not. 191 There was then an exchange of correspondence between (variously) Karin, her NAB bank manager and Virginia, including Virginia completing an NAB loan application.147 Events on 12 June 2007 192 At some point in early June 2007, the Family Court made orders finalising Virginia and Bill's property settlement. 143 Exhibit 19. 144 Exhibit 20. 145 Exhibit 82 [51]. 146 Exhibit 21. 147 Exhibit 22 - 24. -- 48 of 97 -- [2026] WASC 276 SEAWARD J Page 49 193 That resulted in further correspondence regarding Virginia making the payments to Bill as required by the terms of the settlement. 194 The correspondence reveals that at first it remained the position that Virginia would obtain a $30,000 loan from the NAB, secured against the Property. However, on 8 June 2007, the NAB emailed Karin to advise that it was not possible for the NAB to take a tenants in common mortgage over the Property, and therefore any loan from the NAB to Virginia would need to be secured in some other manner. Three options were provided, including that Peter and Karin guarantee any loan to Virginia.148 195 Karin and Peter had a conversation about this email, and both agreed that they did not want to guarantee any of Virginia's debts.149 196 Karin's evidence is that on 12 June 2007, she had a conversation with Virginia where she explained that the NAB had given them three alternative options for financing the $30,000 loan, but none of these were acceptable to Karin and Peter. Karin's evidence is that she then told Virginia that she would need to ask Marie to loan her the money, and Virginia said that wouldn't be a problem and Marie would loan her the extra money. Karin then clarified with Virginia that the amount Marie would need to loan her was $150,000 and Virginia agreed.150 Karin did not make a file note of this conversation.151 197 Virginia's evidence is that she does not recall this telephone conversation. Further, her evidence is that:152 In light of what Mum had said to me I would never have confirmed to Karin that Mum was lending me the money. 198 Peter's evidence is that shortly after he discussed the NAB's email dated 8 June 2007, he had a conversation with Karin where she told him that Marie would lend Virginia the additional money.153 199 On 12 June 2007, at 9.40 am, Karin then sent her NAB manager an email making arrangements for their $120,000 loan, and also 148 Exhibit 27 and Exhibit 28. 149 Exhibit 84 [21]. 150 Exhibit 82 [62]. 151 ts 116. 152 Exhibit 92 [53]. 153 Exhibit 84 [21] - [22]. -- 49 of 97 -- [2026] WASC 276 SEAWARD J Page 50 advising that Virginia would not take the loan and Marie would be lending her the $30,000 instead.154 200 On 12 June 2007, at 10.15 am, Virginia sent Karin an email:155 (a) stating that she had transferred some additional money to Marie's bank account to cover the cost of the mortgage payout, and that she had asked the bank for the final mortgage payout figure; (b) stating that she did not want to pay Bill before the weekend; and (c) telling Karin that if she spoke or emailed Mr Durand, that Karin tell him that 'any day next week is good (has to be before Thursday at the latest anyhow)'. 201 Karin then, on that same day, sent Mr Durand an email at 12.59 pm. The email stated that Virginia had asked Karin to contact Mr Durand 'to confirm what stage this matter is up to and how we proceed from here'. In the email, Karin asked a series of questions including when the settlement would proceed, how the funds should be transferred, and providing the details of the MBP entity that would take the interest in the Property.156 202 On 12 June 2007, at 1.26 pm, Karin sent Virginia an email updating Virginia on her attempts to contact Mr Durand, and that she was waiting on Mr Durand to return her call. The email then stated:157 Attached is an acknowledgement of debt in relation to the money mum has lent/is lending you to pay out Members equity mortgage. Please fill in the exact amount when you know how much she is lending you then sign it. Can you please email me a copy. The reason for this is that on her death, the money she has lent you is taken as being part of her estate in which you and I share 50/50. When she dies you don't have to pay it back it is just taken into account in the total to be distributed to each of us. 203 The acknowledgement of debt provided: ACKNOWLEDGEMENT OF DEBT I, VIRGINIA ANNE BARNES, acknowledge that I am indebted to you in the sum of 154 Exhibit 29. 155 Exhibit 30. 156 Exhibit 31. 157 Exhibit 32. -- 50 of 97 -- [2026] WASC 276 SEAWARD J Page 51 $ ............................................................... . which you have advanced to me for the purpose of discharging the mortgage over [redacted], Lesmurdie WA. DATED: June 2007 Signed by VIRGINIA ANNNE BARNES ……………………………. 204 Karin's evidence is that she sent this email at some point after having the conversation with Virginia referred to in par [196] above. 205 Virginia's evidence is that she recalls receiving the email from Karin attaching the acknowledgement of debt form. Further, that Marie was with Virginia when she received this email and that she showed Marie the email. Virginia's evidence is that Marie said to her words to the following effect:158 (a) I am not going to lend you the money, you can have it. (b) I am so grateful for all that you had done for me and I couldn't imagine what would have become of me had I remained in Sydney and not come to Perth. (c) It was a silly idea of Karin's that I lend you the money. You need it, I am an old lady - what do I need all that money for? Your sister has a beautiful home and plenty of money, they don't need mine. (d) I have wanted to change my will to leave it to you and the kids anyway, so the money is yours. 206 Virginia says that she then asked Marie what she should do with the acknowledgement of debt attached to the email, and Marie told her not to sign it. Virginia asked Marie if 'she was sure about this and she said yes'.159 207 Virginia did not go on to sign the acknowledgement of debt and/or send a copy back to Karin. Virginia never replied to Karin's email. Virginia's case is that it was only at this point that Marie's money changed from being a loan to a gift.160 158 Exhibit 92 [49]. 159 Exhibit 92 [50] - [51]. 160 ts 198. -- 51 of 97 -- [2026] WASC 276 SEAWARD J Page 52 208 Virginia did not accept that the reason she didn't tell Karin was because she was concerned that Karin would not advance her the $120,000:161 Right. I will ask a slightly different question. Is it not the case that the reason why you didn't tell Karin is because you knew she would be very concerned about this complete change in the arrangements, and that might mean that she's not prepared to provide the $120,000?---I didn't consider any of that. Mum wanted to pay the $120,000 as well as the $150,000. If I ask you a slightly different question. Is it not true that the reason why you didn't tell Karin is because you knew Karen's $120,000 might be at risk?---No. I didn't know that. Well, had Karin ever told you that it didn't matter to her whether the mother's funds were being gifted or lent?---No. I don't recall that. She didn't. In fact, the only thing she ever said was that the 150 would be borrowed from your mother as an advance against your inheritance. That's the single way in which she referred to it. Is that not correct?--- Correct. Never any change?---No. And you knew, therefore, that the idea of it suddenly being gifted, not lent, would be a massive change from the way you currently talked about financial assistance of $120,000?---No. I didn't put - I wouldn't have thought that would have affected what they were doing. They were buying a share in the house, and that 120 was paying off the - - - No. I'm sorry. You're missing the point. The second element, as I talked to you before, was about your mother lending you $150,000, as it became, and this would be an advance against your inheritance. And you've agreed before that if that's the way it ended up, then the 150 would come out of your share of the estate?---Correct. So if it has been gifted, then that has that implication, does it not, that as and when the estate comes to be distributed, you're getting 50 per cent, as opposed to 50 per cent less than 150,000. That's obvious, isn't it?--- Had it been a loan, but it wasn't a loan. No. But I'm saying there's a real difference between a loan and a gift of $150,000, in circumstances where the loan is to be repaid from your share of the estate. There's a big difference, isn't there, between a loan of that sort from your mother and a gift?---Yes. There is a big difference. 161 ts 168 - 169. -- 52 of 97 -- [2026] WASC 276 SEAWARD J Page 53 And you didn't tell your sister?---I didn't think to - I just wasn't thinking about that at the time. And I suggest to you that it did occur to you, and you didn't tell her because you were concerned she might not want to go ahead with any financial assistance?---No. I never considered that either. Sorry. 209 Later on 12 June 2007, Karin received a telephone call from Mr Durand, who told her that Virginia's property settlement with Bill would occur sometime in the following week, and that he would give Karin three days' notice to organise the money.162 Mr Durand said he was waiting on the final mortgage payout figure, and would have someone in his office email Karin his trust account details and that he would also send Karin a transfer form to sign. Karin made a file note of this conversation.163 210 Following this telephone call, Karin sent Virginia a further email at 1.35 pm where she updated Virginia on the telephone conversation with Mr Durand.164 211 When the various emails sent on 12 June 2007 are considered in chronological order, I consider it more likely than not that Karin and Virginia did have a conversation as outlined by Karin in par [196] above. Chronologically, Karin and Peter had received the email from the NAB on 8 June 2007, advising that any loan to Virginia could not be secured by a mortgage over a tenants in common share of the Property. Given this had been the previous option both Virginia and Karin were working towards, it would have been necessary for Karin to call Virginia to explain this. At this stage, the other option previously discussed between Karin and Virginia that was still a possibility, was Marie loaning Virginia the additional money. Therefore, I consider it more likely than not that Karin would have said this to Virginia. I also consider it more likely than not that Virginia would have agreed, given this was another option still on the table. This is consistent with the subsequent email sent by Karin, including sending Virginia the email attaching the acknowledgement of debt later that day. On Virginia's evidence, Marie did not tell Virginia she was gifting her the money until later on 12 June 2007, when Virginia read the email attaching the acknowledgement of debt form. 162 Exhibit 82 [67]. 163 Exhibit 33. 164 Exhibit 34. -- 53 of 97 -- [2026] WASC 276 SEAWARD J Page 54 NAB loan to Karin and Peter 212 Karin and Peter then continued with the process to obtain the $120,000 loan from the NAB. The drawdown for that loan occurred on 18 June 2007.165 Payment by Marie 213 Virginia's evidence is that in or around mid-June 2007, Marie transferred the $150,000 to Mr Durand. Virginia's evidence is that she and Marie went to Marie's bank in Kalamunda, and the money was transferred by the bank teller.166 214 The precise date of the transfer is unclear, as on 2 July 2007, Mr Durand sent a letter to Karin (cc'd to Virginia) advising that the first stage of the property settlement would take place on 4 July 2007, and requesting funds to discharge the mortgage, to pay out Bill and to cover Mr Durand's legal fees be paid into his trust account 'possibly today'.167 This suggests that the $150,000 may not have been transferred by that date. However, there is no dispute that Marie did arrange for the transfer of the $150,000. Payment by Karin and transfer of the 23/100 interest 215 On 20 June 2007, Mr Durand sent Karin a letter (cc'd to Virginia) providing a copy of a Transfer of Land form for the transfer of the 23/100 interest in the Property, and instructions for its completion. The letter explained that it was first necessary to transfer the Property into Virginia's sole name, and then this second transfer would be registered.168 216 Further correspondence then took place between Karin and Mr Durand, including Karin providing an amended and signed version of the Transfer of Land form changing the corporate transferee to MBP.169 217 Karin's bank then transferred the $120,000 to Mr Durand's trust account on or about 2 July 2007.170 165 Exhibit 94; Exhibit 79; Exhibit 81. 166 Exhibit 92 [46]. 167 Exhibit 37. 168 Exhibit 35. 169 Exhibit 36; Exhibit 37; Exhibit 84 [24] - [25]. 170 Exhibit 38; Exhibit 84 [26]. -- 54 of 97 -- [2026] WASC 276 SEAWARD J Page 55 218 On 18 July 2007, Mr Durand sent a letter to Virginia (cc'd to Karin), providing an update on the property settlement and attaching a settlement statement. The letter stated that Bill's interest in the Property had now been transferred to Virginia, and that it was still necessary to transfer the 23/100 interest to MBP. The letter stated that a stamp duty assessment would be made by the Valuer General, and once that was paid the transfer could take place.171 219 The settlement statement attached to that letter notes that the monies deposited in Mr Durand's trust account were: 1. From MBP Properties Pty Ltd 120,000.00 2. From MBP Properties Pty Ltd 15,000.00 220 There is no dispute that the $150,000 was deposited by Marie, and not MBP Properties. Karin's evidence is that she made a note to this effect on her copy of the settlement statement once received.172 221 On 21 August 2007, Mr Durand advised Karin of the amount of stamp duty to be paid,173 and the stamp duty was then paid on or about 22 August 2007.174 222 On 24 September 2007, Mr Durand sent Karin a letter (cc'd to Virginia) confirming that the transfer was complete and that the duplicate certificate of title would be delivered to Virginia.175 The administration of Marie's estate Preparation of the probate application 223 Following Marie's death in October 2009, Karin prepared the application for probate of Marie's estate, with Virginia's agreement.176 224 Peter was not involved in the probate application or the administration of Marie's estate.177 225 On 5 November 2009, Karin emailed Virginia explaining that she had commenced preparing the probate application, but needed some additional information. Karin told Virginia that once the application 171 Exhibit 40. 172 Exhibit 82 [76]. 173 Exhibit 41. 174 Exhibit 44. 175 Exhibit 46. 176 Exhibit 82 [89]; Exhibit 92 [57]. 177 Exhibit 84 [32]. -- 55 of 97 -- [2026] WASC 276 SEAWARD J Page 56 was complete, she would print and sign the application and send it to Virginia for her to co-sign. Karin said that she would include a cheque for the filing fee, and asked that Virginia file the application in the court.178 226 By letter dated 13 November 2009, Karin sent Virginia a letter attaching a copy of the probate application and all supporting documents, and instructions for Virginia to sign and file the application.179 227 Karin's evidence is that she made a mistake when preparing the application, by not including the $150,000 from Marie as a debt owing to Marie's estate. Karin's explanation is that it was an oversight, that she did not give any thought to the matter, and if she had done so, then she would have included it in the application.180 Karin said she did not realise she had made this error until she read a letter from Virginia's lawyer in 2015.181 She and Peter then took steps to attempt to rectify this error by proposing that Karin and Virginia swear an affidavit correcting the error, but Virginia did not agree to this approach.182 228 Karin's evidence is that Virginia did not suggest any changes to the probate application in 2009.183 The probate application was later lodged by Virginia and probate granted. Division of the estate 229 On 23 December 2009, the Commonwealth Bank wrote to Karin attaching details of the amounts in Marie's bank accounts as at the date of her death, enclosing an 'Authority to Release Assets from a Deceased Estate' form for Virginia to complete and requesting written disbursement instructions from Karin and Virginia. Karin completed section 1 and part of section 2 of the form.184 230 Karin then sent Virginia a letter dated 31 December 2009, attaching the letter from the Commonwealth Bank and the partly completed form. The letter noted that the account balances were those as at 9 October 2009 and were therefore slightly different to the current 178 Exhibit 48. 179 Exhibit 49. 180 Exhibit 82 [91]. 181 Exhibit 83 [23]. 182 Exhibit 83 [23] - [25]; Exhibit 84 [36] - [38]. 183 Exhibit 82 [92]. 184 Exhibit 50. -- 56 of 97 -- [2026] WASC 276 SEAWARD J Page 57 balances. Nothing turns on this. The letter provided instructions for completing the release form, and then went on to provide as follows:185 Then we have to write to the CBA and tell them how we want them to pay out the credit funds in mum's accounts. There should be around $25,500.41 in the Passbook account plus any accrued interest and $151,928.21 plus accrued interest in the Cash Investment account. This makes a total of approximately $177,428.21 plus interest plus St George cheque plus ING. Say $178,000. Of this amount I need to get back the $120,000 which I used to pay out Bill which leaves a balance of $58,000. I would like to suggest that we split this 50/50. Once we have confirmed payment details, I will draft a letter to send to the CBA and email this to you so you can sign it and send it back to me. I still have the St George cheque for $289.42 and perhaps I should have given this to the CBA to deposit when I saw them. I will go to see them again over the holidays to see what to do with it. 231 Virginia's evidence is that she had not considered the terms of Marie's will in any detail, and thought that Karin's suggestion in this letter was fair and would ensure that she again became the sole owner of her home.186 232 Between 22 January 2010 and 28 January 2010, Karin and Virginia exchanged emails regarding the distribution of Marie's estate. There was also at least one telephone call. 233 On 22 January 2010, Karin emailed Virginia and leaving aside presently irrelevant matters, said as follows:187 As to the split up of the estate apart from the $120K, I wanted to try to recoup some of the interest we have paid on the $120K loan we took out with NAB in June 2007 to pay out Bill. If we repay the loan in Feb 2010 we will have paid approximately $20,000 in interest. We also paid approx. $3,000 in legal transaction costs at the time of the transfer and payment to Bill. So if you like, I will take the $120,000 to pay off the loan plus $20,000 of the balance towards our expenses which will give you approximately $38,000. 234 Virginia responded by email dated 27 January 2010 sent at 11.57 am, and relevantly said:188 185 Exhibit 51. 186 Exhibit 92 [63]. 187 Exhibit 52. 188 Exhibit 53. -- 57 of 97 -- [2026] WASC 276 SEAWARD J Page 58 … as to the money I owe you for paying bill I don't have any probs with that as long as you then take your name off my mortgage as agreed originally that that would be done once debt paid. I have made an appointment to see mums banker on Friday to get the paper signed and will give you details of where my portion of the money is to be banked. 235 In her oral evidence, Virginia accepted that the reference to the mortgage in this letter was incorrect, as there was no mortgage over the Property. Rather, Virginia's evidence is that what she should have said was the title deeds, and that she had used the wrong words.189 I accept Virginia's evidence on this issue. There was never a mortgage over the Property after the property settlement, and it has never been suggested by Virginia that there was. 236 Karin responded on the same day at 3.15 pm, and said:190 Hi Gin The only thing with the $120K is that you aren't repaying me. I am getting the money as part of my share of mum's estate. 237 Virginia then responded on 28 January 2010 as follows:191 Hi Karin, So what difference does that make you are still being repaid remember the person that didn't want anything ??? was prepared to sign a stat dec. a few years ago to that effect. If you have forgotten ask Claire she was with us at the time. Any way if that's the way you want to be that's fine by me. I was the one that looked after Mum and made sure she was happy at the end. 238 Karin's evidence is that on 28 January 2010 she telephoned Virginia to discuss the distribution of Marie's estate. Karin's evidence is that they had a conversation in words to the following effect:192 Karin: The reason I am calling is because we need to discuss and agree on the distribution of mum's estate and we can't do that properly by emailing back and forth. I have explained my position and I will explain it again. Karin: Peter and I did not lend you any money. As you know there is no mortgage on your house or you wouldn't have the title deed. We agreed to pay you $120,000 so 189 ts 204 - 205. 190 Exhibit 54. 191 Exhibit 54. 192 Exhibit 82 [101]. -- 58 of 97 -- [2026] WASC 276 SEAWARD J Page 59 that you could pay out Bill on your property settlement on the understanding that we would then acquire a 23% interest in your house. You had no trouble understanding that at the time and your lawyer undertook the transactions and prepared the documents. Karin: So there is no debt owing by you to us for you to repay. I simply want my share or at least part of my share of mum's estate so that Peter and I can repay NAB bank debt. I told you at the time that we had to borrow the $120,000 from the NAB as we did not have the money in the bank. Virginia: I am not happy. You will remember you said to me that if at the time of mum's death you did not need any of mum's money, you would let me have your share. Karin: I don't recall whether I said that or not and even if I did it is irrelevant and also no longer the case because I do need the money. We have just been through a GFC and I need my share of the estate to repay bank debt. I am not going to fight with you about it. You have already had the benefit of $150,000 of mum's money when she made you a loan in 2007 to pay out your house mortgage. We discussed all of this at the time and I sent you an Acknowledgement of Debt in relation to mum's loan. Virginia: But I didn't sign it and send it back. Karin: I know that and I forgot to follow you up but that doesn't change anything. I shouldn't have had to follow you up. I trusted you. Both you and I know that mum lent you the money to pay out your mortgage with Bill. You didn't object at the time nor have you objected since. Even now you are not denying that mum lent you the money. You are just saying that you did not sign the acknowledgement of debt. Karin: You also told me that mum had given you $30,000 to buy a new car and I didn't complain about that. So you've had $180,000 of mum's estate and I've had nothing. So I want at least part of my share of mum's estate so that I can use it to pay out our NAB loan. You can have the remaining balance whatever it is. Virginia: Okay if that's the way you want it to be. 239 Karin did not make a note of this conversation at the time. -- 59 of 97 -- [2026] WASC 276 SEAWARD J Page 60 240 Virginia does not agree that a conversation happened on 28 January 2010. Virginia says that she and Karin emailed each other on that day, and she doesn't believe there were any calls.193 Virginia says that she was annoyed with Karin that day after she had emailed Karin, and doesn't think she would have taken a call from Karin that night, especially given they had 'sorted all that out in the afternoon'.194 241 Rather, Virginia's evidence is that after receiving Karin's email on 22 January 2010, she called Karin the next day and said:195 67. … I wasn't happy she was going to take more money from Mum's estate and that what she was proposing was a total backflip on her letter dated 31 Dec 2009. 68. I questioned her as to why she was now not going 50/50 and Karin said to me that she wanted to pay out her loan to her bank. I then said to her that she should now take her name off the mortgage and she said no. I ended the conversation abruptly as I was confused and upset and felt she was taking advantage of my circumstances to recoup her interest charges when I thought she had agreed not to charge interest. 242 Virginia's evidence is that she was 'really cranky' having read the email dated 22 January 2010, as Karin was taking additional money from the estate for legal costs and interest.196 243 Virginia's evidence was that she 'wasn't up for an argument with Karin', and proceeded on the basis that 'Karin would not only repay the $120,000 loan but also take her interest payments as she set out in the bank disbursement'.197 244 Virginia's evidence is that she did not understand the difference between her statement in her email dated 27 January 2010 sent at 11.57 am that Karin take her name off the 'mortgage', and Karin's response in the email sent on the same day at 3.15 pm.198 245 Virginia's evidence is that:199 In agreeing to the distribution of the Estate as Karin proposed I took it that I had regained complete ownership of my home through the 193 Exhibit 92 [72]. 194 ts 190, 206 - 207. 195 Exhibit 92. 196 ts 203. 197 Exhibit 92 [69]. 198 Exhibit 92 [70] - [71]. 199 Exhibit 92 [74]. -- 60 of 97 -- [2026] WASC 276 SEAWARD J Page 61 repayment of the moneys invested by Karin and Peter, including interest they said was charged on their loan, and at no time until I received Peter's email in January 2015 was I ever aware of any concern regarding the value of Mum's estate. 246 Karin did not accept that Virginia understood from these emails that the money Karin was receiving from Marie's estate was to pay back Karin and Peter's investment in the Property.200 However, Karin did accept that she saw the question of whether the money was being used to repay the investment as a significant issue, and that is why she sent her email on 27 January 2010 at 3.15 pm, and (on Karin's case) had the conversation on 28 January 2010.201 247 Karin does not recall a conversation with Virginia on 23 January 2010, and has no record of a conversation on that day. Karin's evidence is that she believes Virginia is referring to the telephone conversation on 28 January 2010.202 248 In all the circumstances, I am satisfied that it is more likely than not that a telephone conversation did take place between Karin and Virginia on around 28 January 2010 in terms consistent with Karin's evidence. 249 I consider that Karin is likely to have made such a telephone call as the emails exchanged on 22, 27 and 28 January 2010, revealed that there may be some disconnect or misunderstanding on Virginia's part about what Karin was proposing. In circumstances where the subject matter of the communications concerned (at least in part) the distribution of Marie's estate and the consequences of what that meant in terms of MBP's interest in the Property, I consider that Karin, being a lawyer, would want to discuss what was being proposed and clarify any disconnect or misunderstandings on Virginia's behalf. I consider it more likely than not that this conversation would occur after the emails on 27 and 28 January 2010, as it is these emails which reveal the potential disconnect or misunderstanding, as opposed to Karin's email on 22 January 2010. 250 Given the content of the emails on 27 and 28 January 2010, I am also satisfied that it is more likely than not that the conversation proceeded in a manner consistent with Karin's evidence, as Karin's 200 ts 125 -126. 201 ts 126 - 127. 202 Exhibit 83 [21]. -- 61 of 97 -- [2026] WASC 276 SEAWARD J Page 62 description of the conversation addresses the potential disconnect or misunderstanding. Disbursement of the estate funds 251 On 1 February 2010, Virginia sent Karin a handwritten letter. That letter is date stamped as being received on 3 February 2010. In the letter, Virginia says that she had taken the form to Marie's banker, and had it signed. Further, that Marie's banker wanted Karin to 'sign the disbursement form'. Attached to this letter was a copy of the Commonwealth Bank letter dated 23 December 2009 and a signed copy of the 'Authority to Release Assets from a Deceased Estate' form.203 252 Also attached to the letter was a document dated 28 January 2010 providing instructions for the disbursement of Marie's funds. There was also a date stamp at the top of the document which is difficult to read. The date stamp says 'received' and 'Kalamunda WA' with a date of either 23 January 2010 or 29 January 2010. The relevant typed part of the document states that the funds were to be divided as follows: $120,000 Mrs Karin McCrohon (ne Berseng) (repayment of loan) $20,000 Mrs Karin McCrohon (ne Berseng) (repayment of loan) $3,000 Mrs Karin McCrohon (ne Berseng) (legal fees applied to loan) Total $143,000.00 All other monies remaining to be split equally into the following Accounts; Master [redacted] Barnes XXXXXXXX6982 Master [redacted] Barnes XXXXXXXX6835 (emphasis in original) 253 There is also handwriting on the form, changing Karin's name to Karin Berseng by crossing out the words 'Mrs' and 'McCrohon (ne Berseng)' each time they appear, and writing the word 'Berseng' each time. There is then a handwritten notation saying that: Karin amended + signed this form as requested by Virginia - refer to highlighted parts. 203 Exhibit 55. -- 62 of 97 -- [2026] WASC 276 SEAWARD J Page 63 254 Finally, the '3' in the amount of $3,000 is handwritten. Both Virginia and Karin signed the disbursement form. 255 Karin's evidence is that the bank prepared the disbursement form, and Karin did not. Karin's evidence is that she assumed it was prepared by the bank based on Karin's email to Virginia dated 22 January 2010.204 256 Karin then sent a letter to the Commonwealth Bank dated 4 February 2010.205 That letter states as follows: We refer to your letter of 23 December 2009 and now enclose the following 1. Original executed Authority to Release Assets from A Deceased Estate, 2. Original executed Disbursement of the Late Marie Larsson's Estate authority form prepared by CBA Kalamunda WA. I have amended the form to reflect my correct name. 3. Cheque issued by St George Bank in favour of the Estate of the Late M. Larsson for $289.42 which is to be deposited into the new account which the Kalamunda WA branch has set up, and 4. Original business card of Deb Oliver, Customer Service Specialist at the Kalamunda WA branch of CBA - I note that she assisted my sister, Virginia Barnes with this matter. We understand that there is nothing further you require in this matter and that upon receipt of the enclosed documents and the signed release form from ING which my sister, Virginia Barnes, will send to you, you will be in a position to distribute the estate in accordance with the Disbursement authority. 257 The copy of the disbursement form attached to this letter is the same as that attached to the copy attached to the handwritten letter sent by Virginia to Karin, including all the handwritten annotations/amendments, save that: (a) the date stamp is clearer, and reads 29 January 2010; and (b) the annotation: 'Karin amended + signed this form as requested by Virginia - refer to highlighted parts' is not included. 204 ts 130 - 131. 205 Exhibit 56. -- 63 of 97 -- [2026] WASC 276 SEAWARD J Page 64 258 On 17 February 2010, the sum of $143,000 was deposited into one of Karin and Peter's accounts.206 259 There was some confusion during the cross-examination of Karin as to when the disbursement form was signed by Karin.207 Karin did not believe that she signed the form on 28 January 2010, although accepted that it was possible. Karin thought she signed it earlier. Karin also recalled a blank form originally being provided to them by the bank. However, a copy of a blank version of the form is not included in any of the exhibits, including attached to the copy of the letter sent by the bank on 23 December 2009, or in the copy of the letter sent by Karin on 31 December 2009. 260 When the documents are considered chronologically, I consider it more likely than not that Virginia signed the disbursement form on 28 or 29 January 2010 in the bank in Kalamunda, and then posted it, attached to the handwritten letter, on 1 February 2010. Karin then received the letter and the disbursement form on 3 February 2010, and amended and signed the disbursement form, before sending it to the Commonwealth Bank, with the other documents, on 4 February 2010. 261 Further, at some point Karin has made a copy of the various documents, and made an annotation on the copy of the disbursement form that Karin has retained, stating that she amended and signed the disbursement form as requested by Virginia. 262 I consider the above is more likely than Karin somehow being able to sign the disbursement form on 28 or 29 January 2010, when she was not in Kalamunda on those dates. Further, the lack of a copy of the disbursement form in the letters dated 23 December 2009 and 31 December 2009 suggests that it had not been prepared or signed as at those dates. Finally, in the handwritten letter sent by Virginia to Karin on 1 February 2010, Virginia instructs Karin to sign the disbursement form, which would not be necessary if Karin had already signed the form. Property Law Act - legal principles 263 Section 126 of the Property Law Act falls within Pt XIV, which is headed 'Partition of land and division of chattels'. Section 126 contains a number of subsections authorising the court to make various orders, 206 Exhibit 57. 207 ts 119 - 122. -- 64 of 97 -- [2026] WASC 276 SEAWARD J Page 65 including directing a sale of land. Section 127 concerns how the proceeds of any sale may be applied. 264 Section 126(2) provides as follows: The Court may, if it thinks fit, on the request of any party interested, and notwithstanding the dissent or disability of any other party, direct a sale in any case where it appears to the Court that, by reason of the nature of the land, or of the number of the parties interested or presumptively interested therein, or of the absence or disability of any of those parties, or of any other circumstance, a sale of the land would be for the benefit of the parties interested. 265 Section 126(3) also provides as follows: The Court may also, if it thinks fit, on the request of any party interested, direct that the land be sold, unless the other parties interested, or some of them, undertake to purchase the share of the party requesting a sale; and, on such an undertaking being given, may direct a valuation of the share of the party requesting a sale. 266 The power in s 126(1) of the Property Law Act is not available here, as MBP does not have a half share or more interest in the Property. 267 The power in s 126(2) can only be exercised if the court is satisfied that a sale of the land would be 'for the benefit of the parties interested'. 268 In Warren v Lawton [No 3],208 Le Miere J considered the history of s 126, and explained that the reference to a sale being for the benefit of the parties interested, is made by reference to the alternative relief of partition of the land, and not to maintaining the status quo. His Honour described the question for the court as follows: Therefore, the question for the court is whether having regard to the nature of the land, the number of the parties interested therein or any other circumstance, a sale would be more beneficial to the parties than a division of the land. 269 If the court considers that it would be to the benefit of the parties to order a sale, the court then has a discretion as to whether to order the sale.209 208 Warren v Lawton [No 3] [2016] WASC 285 [216] - [218]. 209 Warren v Lawton [No 3] [2016] WASC 285 [213] - [214]. -- 65 of 97 -- [2026] WASC 276 SEAWARD J Page 66 270 Exercise of the power therefore involves a consideration of all the circumstances surrounding the land, including the parties 'interested or presumptively interested' in the land. The order may be made notwithstanding the dissent of any other party. 271 In considering the plaintiffs' application for an order for sale under s 126(2), it is therefore necessary to have regard to all the circumstances. The various issues identified in par [105] above are all relevant to the assessment of whether the court should exercise its discretion under s 126(2). For example, if a sale would be contrary to the terms of any agreement between Virginia and Karin and Peter (issue 1), or alternatively, if MBP holds its interest in the Property on trust for Virginia (issue 3), then these may be factors against ordering a sale. Ultimately, the court retains a discretion as to whether to order a sale. Issue 1 - what were the terms of the agreement regarding MBP's purchase of its interest in the Property? Overview 272 Virginia's case is that an order for sale under the Property Law Act is contrary to the terms of the agreement between herself and Karin and Peter regarding the purchase by MBP of its interest in the Property. 273 On the facts, issue 1 raises a number of questions, including: (a) whether a legally binding contract was agreed between the parties; and (b) if so, the terms of that contract. 274 In the event that a legally binding contract was agreed between the parties, then its terms will be a relevant and significant factor in the exercise of the discretion under s 126(2) of the Property Law Act. 275 However, even if a legally binding contract was not agreed between the parties, the terms of any legally unenforceable 'family agreement' and the content of the discussions between Virginia and Karin may still be matters which are relevant to the exercise of the discretion under s 126(2). Therefore, it remains necessary to ascertain what was or what was not agreed as between Virginia, Karin and Peter. -- 66 of 97 -- [2026] WASC 276 SEAWARD J Page 67 Was there a contract? 276 The parties' submissions proceeded on the basis that the agreement as reached between Virginia, Karin and Peter was legally binding. 277 In Australia, the existence of a contract is determined using the objective theory of contract. 278 The present case does not involve a written, or formal, contract. Rather, it is an oral or informal contract, and therefore it is necessary that I feel an actual persuasion that an agreement was reached.210 279 On the evidence, there is no dispute that the requirements of an agreement (in the form of an offer from Karin and acceptance from Virginia) and consideration are satisfied. The evidence of both Karin and Virginia establishes that Karin and Peter offered to provide Virginia with $120,000 to pay out Bill's interest in the Property, in return for Virginia providing Karin and Peter with a 23/100th interest in the Property as a tenant in common. 280 The two related issues which arise on the facts are: (a) whether there was an intention to create legal relations between Virginia and Karin and Peter, and (b) whether there was certainty of terms. Legal principles 281 An agreement may be made which the parties intend to honour, but which is not legally enforceable. Therefore, an intention to enter into a legally binding agreement is a necessary element of formation of a contract. 282 Further, a contract will be void for uncertainty if, relevantly, the essential or critical terms of the bargain have not been agreed upon, and therefore the agreement is 'incomplete'.211 283 When determining whether there was an intention to create a legally binding agreement, the court may take account of the subject matter of the agreement, the status of the parties to it, their relationship to one another and other surrounding circumstances. The test of intention is objective, and it requires an objective assessment of the 210 John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 [94]; Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, 362. 211 Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 [6], [139] - [140]. -- 67 of 97 -- [2026] WASC 276 SEAWARD J Page 68 state of affairs between the parties. It is not a search for the uncommunicated subjective motives or intentions of the parties.212 284 When determining whether a contract is incomplete, it is necessary to apply the ordinary principles of contractual construction to ascertain the terms of the contract (both express and implied), and then consider whether any proven omission constitutes an essential term of the contract. Whether a term is an essential term is a question of fact to be determined by reference to the nature, object and purpose of the intended contract in order to determine what the parties regard, or would ordinarily be expected to regard, as matters to be covered by their contract.213 285 For the purposes of determining whether a binding agreement has been reached by the parties, the court may take into account the dealings and communications between the parties after, as well as before, the formation of the alleged agreement.214 There was a legally binding contract 286 In all the circumstances, I feel an actual persuasion that there was an intention to create a legally binding agreement. I have taken account of the fact that the parties involved were related. However, whilst Karin and Peter were only helping Virginia because she was family, the agreement was entered into against the background of the need for Virginia to enter into a property settlement with Bill. 287 Further, the agreement consisted of a serious legal transaction with legal ramifications for Virginia, Karin, Peter and Bill. Not only were Karin and Peter supplying the money to buy-out Bill's interest in the Property, but they were purchasing an interest (through MBP) in the Property as a tenant in common. This was not a situation where Karin and Peter provided money by way of a gift, with a request (but no expectation) of the money being repaid. Rather, Karin and Peter were purchasing, and Virginia was selling, an interest in the Property. 288 Finally, the parties' subsequent conduct, including proceeding with the property settlement on the basis of the agreement, and engaging in the formal legal process of transferring the interest is consistent with a common intention that the agreement was legally binding. 212 Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 [25]. 213 Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 [9]. 214 Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 [110]. -- 68 of 97 -- [2026] WASC 276 SEAWARD J Page 69 289 I also feel an actual persuasion that the agreement is not void for uncertainty. 290 The evidence given by each of Karin, Peter and Virginia establishes that the parties agreed as follows: (a) Karin and Peter agreed to purchase Bill's interest in the Property for the amount of $120,000; (b) in return, an entity nominated by Karin and Peter (ultimately MBP) would obtain a 23/100th interest in the Property as a tenant in common with Virginia; (c) Karin and Peter would obtain a loan for the $120,000 to pay Bill, but the $120,000 was not a loan to Virginia; (d) Virginia would not be required to pay interest or rent to Karin and Peter; (e) Virginia would be responsible for the maintenance and repairs of the Property, as well as all rates; (f) Karin and Peter would want their money back at some stage; and (g) if Virginia wanted to own the entirety of the Property again, she would need to buy-out MBP's interest in the Property. 291 However, what was not the subject of an express agreement between the parties, was when Karin and Peter would want their money back, or how or when Virginia would or could buy-out MBP's interest in the Property, or at what price. 292 I do not consider these matters to be essential terms of the agreement. Rather they are incidental to the essential terms of the bargain, which were the buy-out of Bill's interest in the Property, for the sum of $120,000, in return for a 23/100th share in the Property, which Virginia could buy-back at a later stage. The nature and object of the agreement was to buy-out Bill's interest in the Property as part of the property settlement, so that Virginia and her children could remain in the Property. The essential terms for that bargain were all agreed. 293 The parties did not agree that Virginia must buy-back MBP's interest in the Property, only that she could if she wanted to. In those circumstances, I do not consider the mechanism by which this could -- 69 of 97 -- [2026] WASC 276 SEAWARD J Page 70 occur would ordinarily be expected to be regarded as a matter to be covered in the contract. 294 For completeness, I observe that there is also a dispute about whether it was a term of the contract that Virginia would not be 'forced' to buy-out MBP's interest in the Property whilst she was still living in the Property. However, this is not relevant to the question of whether the contract was complete and is a matter considered subsequently in these reasons. Was there a term of the contract that Virginia would not be required to buy-out MBP's interest whilst she lived in the Property? 295 In the defence Virginia pleads that it was agreed that Virginia would not be required to repay the $120,000 or any interest thereon whilst she remained living at the Property.215 This is denied by the plaintiffs.216 296 Virginia's case is that the purpose of Karin and Peter buying out Bill's interest in the Property was to ensure that Virginia and her three children would not have to sell the Property and would have a home to live in. Virginia's case is that MBP's interest in the Property was acquired as part of a non-commercial family arrangement, and it was implicit from the context and the conversations that Virginia would not be 'forced' to either sell the Property or buy-out MBP's interest in the Property, whilst she was still living in the Property.217 297 Resolution of this issue requires consideration of the evidence given by each of the parties regarding the conversations concerning the provision of the $120,000. 298 Neither Karin nor Virginia gave any evidence that it was discussed or agreed between them during their telephone conversations that: (a) MBP, Karin or Peter would not sell or otherwise realise MBP's interest in the Property after it was purchased, whilst Virginia was living in the Property; (b) MBP, Karin or Peter would not request that Virginia buy-out MBP's interest in the Property whilst she was living in the Property; or 215 Defence and counterclaim [5(c)]. 216 Reply [3]. 217 ts 220. -- 70 of 97 -- [2026] WASC 276 SEAWARD J Page 71 (c) MBP, Karin or Peter would not bring an application under s 126 of the Property Law Act, whilst Virginia was living in the Property. 299 Rather, both Karin and Virginia's evidence is that they orally discussed and agreed that if Virginia wanted to obtain full ownership of the Property, she would need to buy-out Karin and Peter. Karin and Virginia both gave evidence that Karin said that Peter and 'I will have to consider this some more'. Further, both Karin and Virginia gave evidence that Karin and Peter would want their money back 'at some stage'. 300 Both Karin and Virginia accept that there were never any further discussions about Virginia buying-back MBP's interest in the Property. 301 Therefore, based on the evidence given as to the oral conversations between Karin and Virginia, I am not satisfied that any express term was agreed between the parties that Virginia would not be 'forced' to either sell or buy-out MBP's interest in the Property, whilst she was still living in the Property. 302 I am also not satisfied that any express term was agreed between the parties that MBP could not sell its interest in the Property; or ask Virginia to buy-out MBP's interest in the Property; or make an application under s 126 of the Property Law Act; or otherwise deal with its interest whilst Virginia was living at the Property. Rather, the parties' agreement was silent on what MBP could do with its interest in the Property. 303 However, I understand Virginia's submission, and the reference to 'implicit', to be that such a term may be inferred from the circumstances surrounding the agreement, and also the facsimile sent by Karin to Mr Durand on 28 March 2007 (Exhibit 15). 304 In terms of the surrounding circumstances, Virginia relies on the fact that the purpose of the agreement was to assist Virginia and her children in the context of Virginia and Bill's separation. Further, that the purpose of the agreement was to enable Virginia and the children to remain in the Property, and ensure that they would not be forced to sell the Property and either struggle to find another home, or be required to purchase a less suitable home. Virginia relies on her financial circumstances at the time of the separation, being that she worked part-time and was earning only around $27,000 per year. -- 71 of 97 -- [2026] WASC 276 SEAWARD J Page 72 305 I accept that this is the background to the parties entering into their agreement. However, I do not accept that this means that it must be inferred that a term of that agreement was that MBP could not sell, realise or otherwise deal with its interest in the Property (including by way of making an application under s 126 of the Property Law Act) whilst Virginia was living in the Property. The effect of such a term would be an effective veto by Virginia over any dealings by MBP, Karin and Peter over their interest in the Property for as long as Virginia lived in the Property, however long that may be. It was not discussed how long Virginia would live in the Property, and the effect of the term sought to be inferred is to grant Virginia a potentially indefinite veto over MBP selling, or otherwise dealing with, its interest in the Property. Not only was this not discussed, but it is inconsistent with the agreement that Karin and Peter would want their money back at some stage. 306 In terms of Exhibit 15, Virginia relies on par [6] which provides as follows: 6. Virginia will not be required to repay this amount or to pay any interest or other amount to MBPH for this financial assistance, I will draw up a simple agreement between MBPH and Virginia setting out the arrangement in·the event of my death and/or that of my husband. At this stage, my husband's family is on a needs to know basis only and In fact knows nothing. We have no children ourselves. 307 Virginia also relies on the penultimate (un-numbered) paragraph which provides: My husband and I are anxious that this matter settle amicably for those reasons explained to you during our telephone conversation. The interest on an additional $5,000 or $10,000 is negligible for us and not worth any angst it might cause my family. I appreciate your comments and concern regarding the amount we are prepared to pay Bill. I can also appreciate that a court might not look favourably upon an overpayment if the couple were being forced to sell the family home and to find alternative accommodation of a much less quality. However, it should be made clear that the circumstances here are different in that my sister will not be out of pocket and will be remaining in the matrimonial home with the financial assistance of her family. As to ongoing maintenance neither Virginia nor I can comment or guess what will eventuate. 308 Virginia submits that from these paragraphs it is clear that it was not being contemplated that Virginia could be 'forced' to sell the -- 72 of 97 -- [2026] WASC 276 SEAWARD J Page 73 Property or be forced to pay back the investment whilst she was still living in the Property, and that it was securing a place for her ongoing residence.218 309 It is first relevant to observe that the facsimile was sent by Karin to a third party, being Virginia's family lawyer. Whilst dated 28 March 2007, being the date of one of the key conversations between Karin and Virginia, it does not purport to be a written contract, or a contemporaneous note of their conversation or even a heads of agreement type document. Rather, it is a unilateral communication from one party to a third party, after the purported contract had been concluded. 310 In these circumstances, whilst the facsimile would not be relevant to ascertain or construe the terms of a written contract, I can have regard to the facsimile as subsequent conduct for the purposes of ascertaining the terms of the oral contract between the parties.219 311 I do not accept Virginia's submissions regarding the meaning of and significance of par [6] of the facsimile. 312 The reference in par [6] to Virginia not being 'required to repay this amount or to pay any interest or other amount' for 'the financial assistance' is consistent with the agreement reached between Karin and Virginia that the $120,000 was not a loan to Virginia, and that instead Karin and Peter were purchasing an interest in the Property. 313 Further, the paragraph, and the letter as a whole, says nothing about what MBP could or could not do with its interest in the Property once acquired. The letter at no point says that it was agreed that MBP would not sell or otherwise realise its interest in the Property whilst Virginia was living in the Property, or that MBP would never make an application under s 126 of the Property Law Act. 314 In the penultimate (and unnumbered) paragraph of the letter, Karin says that 'my sister will not be out of pocket and will be remaining in the matrimonial home with the financial assistance of her family'. For the same reasons as outlined above in relation to par [6], I do not consider this sentence, when read in the context of the paragraph and the letter as a whole, supports Virginia's submissions. 218 ts 222. 219 Fazio v Fazio [2012] WASCA 72 [192] - [195]. -- 73 of 97 -- [2026] WASC 276 SEAWARD J Page 74 315 Finally, par [6] of the letter says that Karin would 'draw up a simple agreement' setting out the arrangement in the event of Karin or Peter's death. Nothing in this sentence supports Virginia's case. Rather, this sentence suggests that no agreement had been reached about what would happen in that specific fact scenario. Issue 2 - was Marie's $150,000 a gift or a loan? 316 A factual issue which arises on the evidence is whether the $150,000 from Marie was a gift or a loan. Both parties rely on this fact as part of their respective cases. 317 I find that as part of the context leading up to the agreement between Karin and Virginia, it was discussed and agreed as between them that Virginia would obtain a loan from Marie for the $150,000 that she needed to pay off the mortgage over the Property. 318 This was not disputed and is evident from the telephone conversations and emails between Karin and Virginia, and in particular the email from Karin on 12 June 2007, where she attached the acknowledgement of debt form. 319 I also find that it was also discussed and agreed that this loan would be a loan against Virginia's inheritance under Marie's will. This was not disputed by Virginia. 320 However, Virginia's case is that this initial position changed, and on 12 June 2007, after receiving the email attaching the acknowledgement of debt, Marie told Virginia that she would gift, and not loan, Virginia the $150,000. 321 In light of Marie's death, the court does not have any evidence from Marie regarding her intentions in relation to the $150,000. Further, Karin did not discuss the $150,000 with Marie. 322 Virginia was cross-examined about the $150,000, and did not alter her evidence that the $150,000 started as a loan, but then became a gift on 12 June 2007. 323 I accept Virginia's evidence in this regard, as although it is not corroborated, it is plausible in all the circumstances. 324 At the time of the payment of the $150,000 by Marie, Virginia was separating from Bill. Virginia was working part-time, and earning only $27,000 per year. She also had three school-aged children to look -- 74 of 97 -- [2026] WASC 276 SEAWARD J Page 75 after. It is not disputed that Virginia would not have been able to buy-out Bill's interest in the Property, and pay off the mortgage, without the assistance of her family. 325 Virginia's evidence is that the separation from Bill was difficult, in terms of Bill's behaviour, and Karin accepts that this is what Virginia told her at the time. 326 Virginia's evidence is also that during the period of the separation, she 'was very upset and worried';220 that she 'wasn't in a good state of mind and was continually upset';221 her 'state of mind at the time was one of confusion and desperation;222 and she 'had a lot on her plate trying to keep the children's lives as normal as possible'.223 In circumstances where Marie was living in close proximity to Virginia, and was routinely spending her weekends with Virginia and the family,224 I consider it more likely than not that Marie would have been aware of Virginia's money issues, anxiety and desperation during this period of time. 327 In these circumstances, I consider it plausible and consistent with human experience that Marie, as Virginia's mother, would want to assist her if she could to ensure that Virginia and her children were able to continue to live in the Property, and/or were able to afford somewhere to live. 328 That Marie would gift, as opposed to loan, the $150,000 is also consistent with Marie's past actions where she had previously provided financial assistance to both Virginia and Karin. In 2000, Marie gifted Virginia $10,000,225 and in December 2006, Marie purchased Virginia a second-hand car for $21,500 when Virginia's car broke down.226 Further, in 1991, Marie loaned Karin $30,000 to assist with establishing her law firm.227 In her will, made on 1 October 2003, Marie forgave that debt.228 329 In those circumstances, I find that on 12 June 2007, after receiving and discussing Karin's email attaching the acknowledgement of debt 220 Exhibit 92 [24]. 221 Exhibit 92 [33]. 222 Exhibit 92 [37]. 223 Exhibit 92 [37]. 224 Exhibit 92 [16]. 225 Exhibit 13. 226 Exhibit 92 [18]. 227 Exhibit 82 [16]; Exhibit 3. 228 Exhibit 13. -- 75 of 97 -- [2026] WASC 276 SEAWARD J Page 76 form, Marie told Virginia that she would gift her the $150,000 instead of loaning her the money. 330 I also find that Virginia did not tell Karin that Marie was gifting her the $150,000 until the letter from her lawyer dated 24 April 2015.229 331 Virginia accepted in cross-examination that she did not 'verbally' tell Karin about the change from Marie gifting to loaning her the $150,000.230 This is consistent with the emails before the court and Virginia and Karin's evidence of their telephone conversations. 332 In her oral evidence, Virginia said that whilst she did not 'verbally' tell Karin about the change, she did tell her by not signing the acknowledgement of debt form and sending it back as had been requested by Karin in her email on 12 June 2007. Virginia's evidence in this regard was as follows:231 And it's true, isn't it, that your mother never suggested or asked you not to tell Karin about the gifting?---Mum never asked me not to tell her, no. That was your choice, wasn't it?---But I did tell her, not verbally, I didn't sign the acknowledgement of debt. She never questioned me where that was. … And you're saying - it's your case, isn't it, that merely by the fact of not returning that signed acknowledgement, that was, as you put it, a communication to Karin that the funds were being gifted and not lent?-- -I didn't think about telling her, I just didn't sign it. I was just so happy and relieved for what was going on and the help I was getting from my family. I didn't think to ring up and go, 'Mum's giving me the money.' But you had a discussion with Karin on - back in paragraph 40 - 45, mid-May 2007, where you raised this notion of your mother gifting you the money and Karin said no. So you knew it was an important issue for Karin, didn't you?---To be honest, I never thought about an important issue to Karin. I was singly-minded trying to get myself out of a hole with the mortgage and the repayment to Bill, and keep the family together and deal with my own pain. So verbally, no, I didn't ring my sister and say that. 229 Exhibit 62. 230 ts 197. 231 ts 196 - 197. See also ts 168. -- 76 of 97 -- [2026] WASC 276 SEAWARD J Page 77 333 When asked if she agreed that she should have told Karin, Virginia's answer was:232 But you agree she should have been told, don't you?---Well, I think she was told. Yes, and you say that she was told because you're accepting that she should have been told, is that right?---Would you not chase - why would she not chase up the acknowledgement of debt? Why would she not ring me and say, 'Where is that? What's going on?' Is that because - - -?---She prepared the probate document. She didn't list it there. In no time was I ever asked for that. 334 Virginia was also cross-examined about this issue by reference to December 2009 and the distribution of Marie's estate. Virginia accepted that as at December 2009, she had not told Karin that the $150,000 was a gift and not a loan. Virginia's evidence in this regard was as follows:233 As of this date, so we are now at December 2009, it remained the case, didn't it, that you had still not told Karin about your mother's funds coming by way of gift and not loan?---No. I hadn't mentioned it. I hadn't signed the acknowledgement of debt. She had never asked me for it. It just never came up. Can I suggest to you that you knew very well as of 31 December 2009 that Karin was still proceeding on the basis that you had borrowed the 150 from your mother and not gifted it?---No. You had never told Karin about the alleged gift, had you?---No. You had never told her that she should understand from you not signing and returning the acknowledgement of debt that the funds were not being lent?---No. That never - the conversation never came up. Never came up?---The acknowledgement of debt never came up. She never asked me where it was, why haven't you signed it. The acknowledgement of debt was supposed to be a record or confirmation of a loan agreement between you and your mother?---That is right. That is what it was supposed to be?---And there was no loan. … 232 ts 197. 233 ts 171 - 172. -- 77 of 97 -- [2026] WASC 276 SEAWARD J Page 78 COYLE, MR: You knew, didn't you, that you were being asked to sign the acknowledgement of debt as a record of what Karin had understood was what was going to happen, ie, the funds were to be provided by your mother as a loan?---There was no loan. My mother gave me the money. No. I am asking you a different question?---There was no need to sign the - - - I am asking you - - -?--- - - - acknowledgement of debt. Sorry. I am asking you - - -?---There was no debt. I am asking you a different question. You understood, didn't you, that upon your receipt of that acknowledgement of debt, you were being asked to sign a document to record and reflect an arrangement already in place, in other words, a loan?---There was no loan. Now, yes. I know you are saying that. But if there was no loan, why didn't you tell Karin you don't need to sign this because it is not a loan any more?---I don't know why I never mentioned it. 335 Virginia was further cross-examined about the 31 December 2009 letter as follows:234 As and when you read that letter, was it part of your understanding that Karin, who had written the letter, continued to believe that your mother's money had been lent and not gifted?---I don't know what she believed. I never gave it another thought once --- So, that wasn't part of your state of mind, you didn't have that understanding? Let me - I will start again. When you read that letter, did you have any understanding at all about whether or not Karin, when sending that letter - when drafting that letter - had in mind that the $150,000 was a loan and not a gift?---No, I didn't. And is that in part because, as you've said many times, having not returned the acknowledgement of debt, not having received the chase-up, you were content to see that as a communication to Karin that the funds weren't a loan anymore?---I never gave it another thought, to be honest, after it was paid. I just moved on to the next issue. It never came up. She never asked me for it. There was just so much going on. Did you not have cause to wonder about precisely what you had in mind and how it was all going to work?---No, I didn't. 336 I did not find Virginia's evidence on this issue to be persuasive. I do not accept that failing to complete an acknowledgement of debt 234 ts 202 - 203. -- 78 of 97 -- [2026] WASC 276 SEAWARD J Page 79 form, and failing to send it back to Karin, could in anyway be considered to be advising Karin that Marie had decided to gift, as opposed to loan, her the $150,000. The form did not require Karin to sign it, and Karin was not waiting on the form for any other steps in the property settlement process. The fact that Karin did not 'follow-up' her email with Virginia and ask for a copy of the signed form does not indicate Karin had any knowledge about the change in the basis upon which Marie was providing the $150,000. 337 Further, during the telephone conversation between Karin and Virginia on 28 January 2010, Karin expressly raised the fact that Marie had loaned Virginia the $150,000. When Virginia protested that she had not signed the acknowledgement of debt form, Karin explained that not signing the form did not change anything, and that Virginia was not saying the money wasn't a loan, only that she didn't sign the form. Virginia did not refute this. 338 In these circumstances, I find that Virginia made a deliberate decision not to tell Karin that Marie had gifted her the $150,000, and did not tell Karin that the $150,000 would no longer come off Virginia's inheritance under Marie's will. I do not accept that in not completing the acknowledgement of debt form Virginia honestly thought that she was somehow 'telling' Karin about the fact that Marie had decided to gift, as opposed to loan, her the $150,000. 339 I also do not find it persuasive that in these circumstances, when Marie's estate came to be distributed, Virginia did not understand that Karin would still be proceeding on the basis that the $150,000 was a loan and that it would come off Virginia's inheritance under Marie's will. 340 The relevance of these findings is considered further in relation to the remaining issues. Issue 3 - what is the effect of the distribution of Marie's estate - and are the plaintiffs estopped from denying that the distribution of Marie's estate constituted Virginia buying-back MBP's interest in the Property? 341 Virginia's counterclaim is that by the distribution of Marie's estate in 2010, Virginia 'bought-back' MBP's interest in the Property, and further that the plaintiffs are estopped from denying that the distribution constituted such a buy-back. This is denied by the plaintiffs. -- 79 of 97 -- [2026] WASC 276 SEAWARD J Page 80 Legal principles - proprietary estoppel Overview 342 Virginia's counterclaim is based on a claim of estoppel by encouragement, which is a type of proprietary estoppel. 343 The plaintiffs also advance their own estoppel claims, one being a claim of estoppel by encouragement, and the other being a claim of estoppel by acquiescence. 344 Estoppel by encouragement and estoppel by acquiescence are both forms of proprietary estoppel. It is therefore convenient to consider the elements of each type of proprietary estoppel together. 345 In Waltons Stores (Interstate) Ltd v Maher,235 Brennan J set out six requirements for an equitable estoppel which were formulated in a manner and at a level of generality sufficient to include both types of proprietary estoppel.236 In Kramer v Stone, the plurality went on to outline the individual elements from Brennan J's formulation applicable to each of estoppel by encouragement and estoppel by acquiescence. Estoppel by encouragement - elements 346 The elements of an estoppel by encouragement, based on a promise, are as follows:237 (a) a clear and unequivocal promise by A to B. The promise will generally concern some representation about future conduct; (b) a reasonable person in A's position must have expected or intended (or A actually did expect or intend) that B would rely upon the promise by some action, omission or course of conduct; (c) B has relied upon the promise by acting or omitting to act in the general manner that would have been expected; and (d) the consequence of B's reliance is that B will suffer detriment if the promise is not fulfilled, in the sense that B will be left in a worse position, as a consequence of reliance upon the promise, than if the promise had not been made. 235 Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 (Waltons Stores (Interstate) Ltd v Maher). 236 Kramer v Stone [2024] HCA 48; (2024) 281 CLR 484 [36] (Kramer v Stone). 237 Kramer v Stone [37] - [40]. -- 80 of 97 -- [2026] WASC 276 SEAWARD J Page 81 347 If the above elements are satisfied, the circumstances are described as being unconscionable, as opposed to unconscionability being an 'element' of the estoppel.238 348 As observed by Ball J in Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle,239 the elements of estoppel overlap to a significant extent, and cannot be treated as 'watertight compartments'. Rather, the various elements or aspects of the doctrine: are ultimately concerned with the overarching question whether it would be unconscionable in all the circumstances of the particular case to permit a departure from the encouraged expectation Representation/promise 349 The promise or representation relied upon by person B (being the claimant) to found an estoppel by encouragement must be sufficiently clear.240 350 In Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd, the plurality held that:241 This does not mean that the words used may not be open to different constructions, but rather that they must be able to be understood in a particular sense by the person to whom the words are addressed. The sense in which they may be understood provides the basis for the assumption or expectation upon which the person to whom they are addressed acts. The words must be capable of misleading a reasonable person in the way that the person relying on the estoppel claims he or she has been misled. (citations omitted) 351 There is no requirement that person A engage in conduct after the promise which further encourages the claimant in the course of conduct, action or omission which was adopted in reliance on the promise.242 238 Kramer v Stone [41]. 239 Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle [2015] NSWSC 1603 [62] cited in Browne v Browne [No 2] [2017] WASC 375 [85]. 240 Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1 [35], [149]. 241 Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1 [35]. See also [149] - [153] (Keane J). 242 Kramer v Stone [34], [44], [53]. -- 81 of 97 -- [2026] WASC 276 SEAWARD J Page 82 Knowledge 352 For estoppel by encouragement, the subjective state of mind of person A in making the promise or representation is not relevant. 353 That is, it is not necessary for a claimant to establish that person A knew that the claimant would rely on the promise or representation in the general detrimental manner in which it was relied upon. In Kramer v Stone, the plurality held that:243 it is sufficient for the estoppel to arise that either (i) a reasonable person in the position of the promisor would have expected, or (ii) the promisor actually expected, that the promise would be relied upon by the promisee in the general (detrimental) manner in which it was relied upon. Either (i) or (ii) is sufficient. Reliance 354 Reliance is a fact which must be proved by the claimant.244 As explained by the plurality in Sidhu v Van Dyke:245 it is not to be imputed on the basis of evidence which falls short of proof of the fact. It is actual reliance by the promisee, and the state of affairs so created, which answers the concern that equitable estoppel not be allowed to outflank Jorden v Money by dispensing with the need for consideration if a promise is to be enforceable as a contract. It is not the breach of promise, but the promisor's responsibility for the detrimental reliance by the promisee, which makes it unconscionable for the promisor to resile from his or her promise. (citations omitted) 355 Reliance may be established by direct evidence or inference.246 However, it is not necessary for a claimant to establish that the asserted assumption was the sole or predominant cause of his or her alleged act or omission by way of asserted reliance. What is required is that the claimant establish that the assumption was a contributing cause.247 The plurality in Sidhu v Van Dyke,248 referred with approval to the following passage of Robert Goff J in Amalgamated Investment & 243 Kramer v Stone [35]. 244 Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 [58], [61] (Sidhu v Van Dyke). 245 Sidhu v Van Dyke [58]; see also Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 [35]. 246 DM Drainage & Constructions Pty Ltd as Trustee for DM Unit Trust Trading as DM Civil v Karara Mining Ltd [No 6] [2021] WASC 410 [1729] (DM Drainage). 247 Sidhu v Van Dyke [73], [90] - [91], [93]. 248 Sidhu v Van Dyke [72]. -- 82 of 97 -- [2026] WASC 276 SEAWARD J Page 83 Property Co Ltd (in liq) v Texas Commerce International Bank Ltd in this regard:249 the question is rather whether his conduct was so influenced by the encouragement or representation … that it would be unconscionable for the representor thereafter to enforce his strict legal rights. (emphasis in original) 356 The plurality in Sidhu v Van Dyke,250 also referred with approval to the following passage of Neuberger LJ in Steria Ltd v Hutchison:251 it is sufficient for the representee to show that 'the representation was a significant factor which he took into account when deciding whether to [act as he did]'. Detriment 357 The concept of detriment was considered by the High Court in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd,252 and in The Commonwealth v Verwayen.253 In DM Drainage, Vaughan J (as his Honour then was) summarised the relevant principles as follows:254 Detriment is concerned with the consequences that would enure to the disadvantage of a claimant who has been induced to change his or her position if the state of affairs so brought about were to be altered by the reversal of the assumption or expectation on which the change of position occurred. The detriment must flow from reliance on the assumption tested at the time when the assumption is to be departed from. Detriment is not a narrow or technical concept; it must be substantial, but it need not involve the expenditure of money or be quantifiable in monetary terms. (citations omitted) 358 However, as observed by Vaughan J,255 there is no relevant detriment if: (a) the claimant would have been in the same position in 249 Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [1982] QB 84, 104 - 105. 250 Sidhu v Van Dyke [73]. 251 Steria Ltd v Hutchison [2007] ICR 445 [117]. 252 Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560. 253 The Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 (The Commonwealth v Verwayen). 254 DM Drainage [1731]. 255 DM Drainage [1732]. -- 83 of 97 -- [2026] WASC 276 SEAWARD J Page 84 any event;256 and/or (b) the detriment flows from person A's failure to fulfill its promise, but not from any act done or omission made by the claimant in reliance on that promise/assumption/expectation.257 359 Further, as explained by McHugh J in The Commonwealth v Verwayen:258 because the equitable doctrines create rights, they preclude the party estopped from denying the assumption of fact (or law) only as long as the equitable right exists. Once the detriment has ceased or been paid for, there is nothing unconscionable in a party insisting on reverting to his or her former relationship with the other party and enforcing his or her strict legal rights. Estoppel by acquiescence - elements 360 Estoppel by acquiescence prevents a person who has knowingly permitted another to act, through mistake, to his own detriment and to the advantage of the former, from profiting by the other's mistake.259 361 The elements of an estoppel by acquiescence are similar to estoppel by encouragement, but with some differences to accommodate the fact that the unconscionability arises from one party acquiescing to a known state of affairs (as opposed to making a promise) to the detriment of another. 362 In Kramer v Stone, the plurality outlined the elements of estoppel by acquiescence as follows:260 (a) B must be mistaken as to their legal rights; (b) B must expend money, or do some act, on the faith of their mistaken belief; (c) A must know of their own rights (which are contrary in some way to B's rights or B's mistaken belief about those rights); (d) A must also know of B's mistaken belief; and 256 Sidhu v Van Dyke [92]. 257 The Commonwealth v Verwayen (429). 258 The Commonwealth v Verwayen (501). 259 Discount & Finance Ltd v Gehrig's NSW Wines Ltd (1940) 40 SR (NSW) 598, 603, cited with approval in Kramer v Stone [54]. 260 Kramer v Stone [55]. -- 84 of 97 -- [2026] WASC 276 SEAWARD J Page 85 (e) A must encourage B in B's expenditure of money or the doing of some act, either directly or by abstaining from asserting their legal right. 363 Estoppel by acquiescence is different to estoppel by encouragement in that in the former, person A might not do anything to induce person B's action. That is, the 'encouragement' might involve no more than abstaining, with knowledge, from asserting person A's rights.261 364 This difference leads to the key different requirement when it comes to the question of person A's knowledge in a case of estoppel by acquiescence. Unlike estoppel by encouragement, person A is required to have knowledge of their own rights as well as the rights of B, and of B's mistake in relation to their rights:262 In assessing whether a person who is subject to an estoppel bears 'responsibility for the detrimental reliance' of the other party, there is a significant difference between a person whose promise causes another's detriment and a person who merely omits to act where action could spare the other party from detriment. Any responsibility in the latter case must require the omission to occur with knowledge of that person's rights and of the other's mistake so as to give rise to a duty to speak. By contrast, there is no justification for such a requirement in the former case. (citations omitted) Consideration of Virginia's estoppel claim Overview 365 The foundation of Virginia's estoppel claim is that the distribution of Marie's estate constituted a representation or promise by Karin that Virginia was 'buying-back' MBP's interest in the Property. 366 What is immediately apparent from the distribution of Marie's estate is that it does not conform with the terms of Marie's will. The total of Marie's estate, as contained in the statement of assets and liabilities, was $177,005.24. If it was distributed in accordance with the terms of the will, then Virginia would have received approximately $98,502 (being $20,000 plus 50% of the remainder) and 261 Waltons Stores (Interstate) Ltd v Maher, 429; Kramer v Stone [57]. 262 Kramer v Stone [59]. See also Waltons Stores (Interstate) Ltd v Maher (429). -- 85 of 97 -- [2026] WASC 276 SEAWARD J Page 86 Karin would have received approximately $78,502 (being 50% of the remainder). 367 However, Karin received $143,000, and the remainder (being approximately $34,000) was for Virginia, and was paid into the bank accounts of two of her children. 368 Virginia's estoppel case is as follows: (a) by Karin's conduct, in particular by the letter dated 31 December 2009, the email dated 22 January 2010, the bank disbursement form and the statement of assets and liabilities, Virginia was encouraged and induced to understand that MBP's interest in the Property was discharged upon the distribution of Marie's estate, and that the entirety of the Property was therefore, beneficially, Virginia's; (b) on the basis of that induced understanding, Virginia abstained from seeking legal advice as to her entitlements to Marie's estate, including the right to seek an order for adequate provision to be made out of Marie's estate for Virginia's proper support, maintenance and advancement in life under the provisions of the Family Provision Act 1972 (WA); (c) Virginia's abstention from seeking such legal advice constituted a material disadvantage which is substantial; and (d) the plaintiffs' conduct in seeking to force the transfer and sale of the Property in those circumstances is unconscionable. Representation 369 Virginia's evidence is that based on the correspondence from Karin, including the letter dated 31 December 2009, the email dated 22 January 2010, the bank disbursement form and the statement of assets and liabilities, she understood that the $120,000 paid by MBP to acquire its interest in the Property had been repaid with interest and costs by the distribution of Marie's estate.263 370 I do not accept that the communications at the time of the distribution of Marie's estate constitute a clear and unequivocal promise by Karin to Virginia that the $143,000 constituted Virginia 'buying back' MBP's interest in the Property. I also do not accept that a 263 Exhibit 92 [74]; Exhibit 93 [13]. -- 86 of 97 -- [2026] WASC 276 SEAWARD J Page 87 reasonable person in Karin's position must have expected or intended (or that Karin actually did expect or intend) that Virginia would rely upon the promise by some action, omission or course of conduct. 371 I have reached this conclusion for two interrelated reasons. First, on the basis of the content of the various documents and communications, and secondly, when regard is had to the background to the distribution of Marie's estate. Documents and communications 372 Virginia relies on the communications from Karin dated 31 December 2009 and 22 January 2010. Those conversations are detailed earlier in these reasons. 373 Virginia relies on Karin's references to getting back the money she used to pay out Bill; wanting to try to recoup the interest on the NAB loan she took out to pay out Bill; and wanting to recoup the legal transaction costs at the time of the transfer as being an indication that the $143,000 constituted Virginia buying back MBP's interest in the Property. 374 I accept that from these two communications Virginia may, at least initially, have been confused or had the impression that Karin may have been suggesting that the proposed distribution would be Virginia buying out MBP's interest in the Property. 375 However, there is nothing in the letter of 31 December 2009 or the email of 22 January 2010 which expressly states that the proposed distribution constitutes Virginia buying back MBP's interest in the Property. 376 Further, in the subsequent communications, Virginia expressly raised the proposition that the distribution would constitute her buying back MBP's interest in the Property, and Karin expressly refuted this. 377 This occurred first in Virginia's email sent on 27 January 2010 at 11.57am, where Virginia stated: as to the money I owe you for paying bill I don't have any probs with that as long as you then take your name off my mortgage as agreed originally that that would be done once debt paid. 378 I have found that Virginia's reference to the mortgage in this email was intended to be a reference to the title deeds. -- 87 of 97 -- [2026] WASC 276 SEAWARD J Page 88 379 Karin responded in her email sent at 3.15 pm that day refuting this as follows: The only thing with the $120K is that you aren't repaying me. I am getting the money as part of my share of mum's estate. 380 Virginia responded in her email sent on 28 January 2010. Whilst she first says, 'what difference does that make', she then goes on to indicate her acceptance by saying, 'Any way if that's the way you want to be that's fine by me'. 381 The topic is again raised in the telephone conversation which I have found took place between Karin and Virginia on 28 January 2010. In that telephone conversation, Karin explains that there was no loan from Karin and Peter to Virginia, and therefore no debt for Virginia to repay. Rather, Karin and Peter acquired a 23% interest in the Property. 382 Karin goes on to explain that she wants her share 'or at least part of' her share of Marie's estate so that she and Peter can pay back the $120,000 NAB loan they took out in 2007 as they did not have the money in the bank (and that they told Virginia this at the time). 383 At the conclusion of this conversation, Virginia indicates her acceptance of this approach, by saying, 'Okay if that's the way you want it to be'.264 Background 384 The letter, emails and conversation between Virginia and Karin must also be understood against the background to the distribution of Marie's estate. In particular, the representation by Virginia in 2007 that Marie was going to loan Virginia the $150,000 necessary to pay out the mortgage on the Property and, significantly, that this loan would come off Virginia's entitlements under Marie's estate. 385 Virginia relies on the fact of the $150,000 being a gift from Marie in support of her construction and understanding of the email communications from Karin. However, whilst I have found that Marie decided on 12 June 2007 to gift Virginia the $150,000, I have also found that Virginia did not tell Karin that the money had become a gift prior to, or during, the distribution of Marie's estate. I have also found that Virginia did not tell Karin that the $150,000 would no longer come off Virginia's inheritance under Marie's will. 264 Exhibit 82 [101]. -- 88 of 97 -- [2026] WASC 276 SEAWARD J Page 89 386 If the distribution of Marie's estate is considered through the lens of Karin's understanding (not disabused by Virginia) that Virginia owed the estate $150,000, then the distribution proposed by Karin results in Virginia receiving more than she was entitled to receive under the terms of the will. If the $150,000 loan is factored into the distribution, then Virginia should not have received any money from the estate, and Karin should have received all of the money. 387 This background fact especially explains Karin's emails of 31 December 2009 and 22 January 2010 where she, instead, suggests that she only take as much of Marie's estate as she actually needs to pay off the loan and associated costs and interest (ultimately being $143,000) and that they split the remainder of the estate. This was, in effect, Karin choosing to forgo some of her entitlement. This explains the use of the phrase 'I would like to suggest that we split this 50/50' in the letter of 31 December 2009. 388 This also explains Karin's reference in the conversation on 28 January 2010, to Karin wanting, 'my share or at least part of my share of mum’s estate so that Peter and I can repay NAB bank debt'. 389 Further, in the telephone conversation on 28 January 2010, Karin expressly refers to Marie loaning Virginia $150,000. When Virginia indicated that she was not happy, Karin said that Virginia:265 already had the benefit of $150,000 of mum's money when she made you a loan in 2007 to pay out your house mortgage. We discussed all of this at the time and I sent you an Acknowledgement of Debt in relation to mum's loan. 390 When Virginia protested that she had not signed the acknowledgement of debt form, Karin explained that not signing the form did not change anything, and that Virginia was not saying the money wasn't a loan, only that she didn't sign the form. Virginia did not refute this. 391 A further relevant background fact which must be considered when construing the relevant communications is that Karin and Peter did not loan Virginia any money. Rather, they purchased an interest in the Property. The only loan taken out was by Peter and Karin from the NAB to fund the purchase. 265 Exhibit 82 [101]. -- 89 of 97 -- [2026] WASC 276 SEAWARD J Page 90 392 The references in Karin's communications, and the bank disbursement form, to a loan and associated costs are therefore references to the money Karin and Peter required to pay off the NAB loan and associated costs. This reference to a loan is distinct from and different to the concept of Virginia 'buying back' MBP's interest in the Property. Conclusion 393 When all the communications are considered in full and are understood against the above background, I do not consider the communications from Karin concerning the distribution of Marie's estate to be a clear and unequivocal promise by Karin to Virginia that the distribution of Marie's estate amounted to Virginia buying back MBP's interest in the Property. 394 Further, I do not consider that a reasonable person in Karin's position must have expected or intended (or that Karin did expect or intend) that Virginia would rely upon the communications in the manner she submits. I consider a reasonable person in Karin's position would have expected, or intended, that Virginia understand that the distribution of Marie's estate was proceeding on the basis that the $150,000 received by Virginia from Marie in 2007 was a loan that was to come off her entitlements under Marie's estate as Virginia had represented in 2007. I also conclude that this is what Karin expected or intended. 395 Virginia says that it is difficult to understand why Karin would frame her communications in this manner, if she was not trying to give the impression that the $120,000 investment was being repaid and that therefore she was paying out MBP's interest in the Property. 396 However, properly understood, the communications were framed in this manner as: (a) Karin was proceeding on the previously represented basis that Marie had loaned Virginia the $150,000 which would come out of Virginia's inheritance under Marie's will; and (b) given the size of the estate, Virginia was therefore not entitled to any distribution. Notwithstanding this, Karin was proposing to only take as much of her interest under Marie's will as she needed to pay off the NAB loan and associated interest and costs, and to instead split the remainder with Virginia. 397 The fact that the statement of assets and liabilities does not record the $150,000 loan to Virginia does not alter my above conclusion. -- 90 of 97 -- [2026] WASC 276 SEAWARD J Page 91 Whilst the loan is not included, the telephone conversation on 28 January 2010 makes it clear that Karin was proceeding on the basis that Marie loaned Virginia the $150,000. This was not refuted by Virginia. Further, Karin's letter and emails are consistent with this assumption, and Virginia has accepted that she never told Karin that Marie gifted her the money. I have also found that Virginia did not tell Karin that the $150,000 would no longer come off Virginia's inheritance under Marie's will. 398 Finally, the bank disbursement form does not alter my above conclusion. Whilst the bank disbursement form records that the $143,000 is comprised of sums of money for 'repayment of loan', 'interest charged on loan' and 'legal fees applied to loan', there is nothing in the form that indicates that the loan was a loan from Karin to Virginia, or that Virginia was buying back MBP's interest in the Property. The references are instead consistent with Karin and Peter's loan from the NAB and associated interest and costs. Reliance 399 Virginia's case is that she relied on the representation that the distribution of $143,000 to Karin was a repayment to MBP for its interest in the Property, and therefore did not seek legal advice as to the distribution of Marie's estate. 400 However, in the circumstances where I have found that Karin did not make the representation regarding the distribution of Marie's estate as alleged, there can be no reliance on any such representation by Virginia, and I find accordingly. 401 In any event, I observe that Virginia's case as to reliance suffers from a number of difficulties. 402 Virginia's evidence is that at the time of the distribution of Marie's estate, she was not aware of the provisions of the Family Provision Act 1972 (WA) or of her right to challenge Marie's will on the basis that Marie had not made adequate provision for her support, maintenance, education and advancement in life.266 403 Further, I have found that whilst Virginia knew that the $150,000 had become a gift, she made a deliberate decision not to tell Karin, and that Virginia did not tell Karin that the $150,000 would no longer come off Virginia's inheritance under Marie's will. 266 Exhibit 93 [14]. -- 91 of 97 -- [2026] WASC 276 SEAWARD J Page 92 404 Finally, in her email sent on 28 January 2010, and in the subsequent telephone conversation on 28 January 2010, Virginia agreed to proceed in the manner outlined by Karin. That agreement came after Karin had explained that the $143,000 did not amount to Virginia buying back MBP's interest. 405 In these circumstances, it is unclear why Virginia would have thought to seek legal advice as to her entitlements under Marie's estate but declined to do so on account of Karin's communications. Detriment 406 Virginia's case is that her abstention from seeking legal advice in respect of her entitlements under the will constitutes a material disadvantage which is substantial because had she sought that advice, it was inevitable that Virginia would have a very strong claim under the Family Provision Act 1972 (WA), when her circumstances as at 2009, in contrast to Karin's circumstances, were taken into account. 407 In the circumstances where I have found that Karin did not make the representation regarding the distribution of Marie's estate as alleged, and there was no reliance on any such representation by Virginia, I also find that any detriment suffered by Virginia was not as a result of her reliance on any representation made by Karin. 408 For completeness, I observe that Virginia's claimed detriment is in the form of a loss of a chance to bring a successful family provision claim. I accept that this type of detriment may constitute detriment of a type which can found an estoppel. 409 In the course of submissions, counsel for Virginia submitted that she had a very strong claim for a successful family provision claim, and it would have been open to a court considering such a claim to order that Virginia receive the entirety of Marie's estate. 410 I have some doubts as to the correctness of this proposition, given Marie had already made extensive financial provision for Virginia in the form of gifts of money (totalling $160,000), the purchase of a car ($21,500), and bequeathing Virginia a greater share of her estate. In these circumstances, a court may have concluded that Marie had made adequate provision for Virginia's proper maintenance, support, education or advancement in life, or that any increased provision should be more modest. In these circumstances, it may be that any detriment suffered by Virginia could not be described as being sufficiently -- 92 of 97 -- [2026] WASC 276 SEAWARD J Page 93 'substantial'. However, it is not necessary for me to finally decide this matter. Conclusion as to Virginia's estoppel claim 411 Accordingly, for the reasons outlined above, I am not satisfied that Virginia has established her claim for an estoppel by encouragement, and I do not find that the plaintiffs' hold MBP's interest in the Property on trust for Virginia. Issue 4 - is Virginia estopped from denying that the $150,000 was a loan? 412 The plaintiffs also make two estoppel claims, both being that Virginia is estopped from denying that the $150,000 was provided by way of a loan from Marie, albeit each is directed to a different property interest. 413 However, these estoppel claims are only pleaded or advanced in response to Virginia's contention that the $150,000 was a gift from Marie, and in response to Virginia's estoppel claim.267 414 Whilst I have found that on 12 June 2007, Marie gifted Virginia the $150,000, I have also concluded that, notwithstanding this fact, Virginia has not established her estoppel claim. 415 This is because I have found that whilst the $150,000 was a gift from Marie, I have also found that there was no representation by Karin that the distribution of Marie's estate constituted Virginia 'buying-out' MBP's interest in the Property, and accordingly, there could be no detrimental reliance by Virginia. 416 My findings in relation to Virginia's estoppel claim mean that it is not necessary to resolve the plaintiffs' estoppel claims. Counsel for the plaintiffs accepted that their estoppel claims would fall away if I were to dismiss Virginia's estoppel claim.268 417 I also observe that it is not possible to do so as my findings remove a fundamental factual element on which the plaintiffs' estoppel claims are premised - being that the plaintiffs have suffered detriment as a result of relying on representations made by Virginia, or because of Virginia's acquiescence, concerning the $150,000. 267 Reply [16A]; ts 48. 268 ts 276. -- 93 of 97 -- [2026] WASC 276 SEAWARD J Page 94 Issue 5 - if the $150,000 was a gift, should it be set aside on the basis that it was procured via a breach of fiduciary duty? 418 The plaintiffs also claim that in the event that the $150,000 is a gift, that gift ought be set aside on the basis that it was procured by way of a breach of Virginia's fiduciary duties. 419 As with issue 4, in light of my conclusions regarding Virginia's estoppel claim, it is not necessary to consider the plaintiffs' breach of fiduciary duty claim. This is because I have found that whilst the $150,000 was a gift from Marie, I have not accepted Virginia's estoppel claim. 420 However, even if I had not reached this view, I would not uphold the plaintiffs' breach of fiduciary duty claim for the following two reasons. 421 First, there is no evidence that the gift of the $150,000 was made by Virginia to herself, acting pursuant to the power of attorney. 422 In this regard, Virginia's evidence is that whilst she took Marie to the bank, the actual transfer of the $150,000 was made by the bank teller on Marie's instructions.269 Virginia was not cross-examined on this aspect of the transfer, and Karin has not led any evidence to the contrary. There was no evidence before the court that Marie was not capable of giving those instructions. 423 Further, Virginia's evidence is that it was Marie who, on 12 June 2007, told Virginia that she was going to gift her the money, that it was not a loan, and that Virginia should not sign the acknowledgement of debt form. For the reasons outlined above, I have accepted Virginia's evidence in this regard. 424 Finally, the power of attorney appointed Virginia and Karin as joint attorneys. There is no evidence that Karin also exercised any power under the power of attorney in relation to the $150,000. 425 Secondly, and in any event, the plaintiffs do not identify how, in accepting the $150,000 as a gift, Virginia was acting contrary to Marie's interests, or Virginia was putting herself in a position of conflict with Marie. 269 Exhibit 92 [46] (albeit I have found that the date at which this occurred was in early July and not mid-June 2007). -- 94 of 97 -- [2026] WASC 276 SEAWARD J Page 95 426 The plaintiffs' oral closing submissions on this issue are substantively directed towards how Virginia was acting contrary to Karin's interests, or was acting contrary to the previous agreement between Karin and Virginia.270 427 However, in circumstances where the $150,000 was previously a loan repayable against Virginia's inheritance under Marie's will, and therefore the money would not be available to Marie in her lifetime, it is unclear how the change to a gift would be against Marie's interests or would place Virginia in a position of conflict with Marie. Issue 6 - should this court order a sale of the Property? 428 Having addressed the other relevant issues, it is left to consider the exercise of the power under s 126(2) of the Property Law Act. 429 As outlined earlier in these reasons, the power in s 126(2) can only be exercised if the court is satisfied that a sale of the land would be 'for the benefit of the parties interested'. The reference to a sale being for the benefit of the parties interested, is made by reference to the alternative relief of partition of the land, and not to maintaining the status quo. 430 In the present circumstances, I am satisfied that it would be for the benefit of the parties interested to order a sale of the Property, as opposed to partition of the Property. The Property is a residential dwelling in Lesmurdie, and the parties accept that the Property is not suitable for partition. 431 Whilst I am satisfied that it would be for the benefit of the parties interested to order a sale of the Property, ultimately, the court retains a discretion as to whether to order a sale. Having considered all the circumstances surrounding the Property and the parties, I am satisfied that I should exercise the court's discretion to order a sale of the Property for the following reasons. 432 First, MBP owns a 23/100th interest in the Property as a tenant in common with Virginia, who owns the remaining 77/100th interest. In the course of considering issue 3, I have concluded that MBP does not hold its interest on trust for Virginia. 433 Secondly, MBP has owned its interest since 2007, and Karin and Peter, who are the directors of MBP wish to realise this interest. To 270 ts 272 - 275. -- 95 of 97 -- [2026] WASC 276 SEAWARD J Page 96 that end, on 21 January 2020, Karin and Peter signed a transfer of land form transferring MBP's interest in the Property to themselves as joint tenants, for consideration of $115,000. Further, Karin and Peter have requested that Virginia provide them with the duplicate certificate of title for the Property so that they might register this transfer (and any further transfers). Virginia has declined this request. 434 Thirdly, there is nothing in the terms of the oral agreement between Karin and Virginia made in 2007 regarding MBP's purchase of its interest in the Property which would prevent or restrict an order for sale under s 126(2) of the Property Law Act. In the context of considering issue 1, I have concluded that it is not an express or inferred term of the oral agreement that MBP could not sell its interest in the Property; or ask Virginia to buy-out MBP's interest in the Property; or make an application under s 126 of the Property Law Act; or otherwise deal with its interest whilst Virginia was living at the Property. 435 Fourthly, Karin and Peter have engaged in communications with Virginia in 2015, and then again from 2019 onwards, in which they have explained their wish to sell MBP's interest in the Property, and have requested Virginia purchase that interest from MBP. It was agreed between Karin and Virginia in 2007 when MBP purchased its interest in the Property, that if Virginia wished to own the entirety of the Property again, then she would need to buy-out MBP's interest in the Property. Karin and Peter have provided Virginia with the opportunity to purchase MBP's interest in the Property. These offers were not accepted. 436 Fifthly, I acknowledge that the Property is Virginia's residential home, and a 'passive' investment for MBP, Karin and Peter. However, no evidence has been put before me that an order for the sale of the Property would cause any particular hardship (financial or otherwise) to any of the parties, including Virginia. Virginia's three children are now all adults, and none are living in the Property with her. 437 Sixthly, Virginia submits that MBP came to purchase its interest in the Property in the context of Karin and Peter assisting Virginia at the time of her separation from Bill, and the purpose of that assistance was to ensure that Virginia could pay-out Bill's interest in the Property, and remain in the Property with her three children. Virginia submits that a sale of the Property, whilst she is still living there and against her wishes, would undermine that purpose and intent. -- 96 of 97 -- [2026] WASC 276 SEAWARD J Page 97 438 Even accepting the background to the reason why Karin and Peter agreed to buy-out Bill's interest in the Property, I am not satisfied that this matter outweighs the other matters I have referred to above. In particular, I do not consider it can outweigh the lack of any express or inferred terms of the type referred to above. 439 Further, I observe that MBP purchased its interest almost 20 years ago in 2007, and Virginia has had the benefit of being able to live, mortgage free, in the Property since that date and has been able to raise her children in the Property until they left home. 440 In those circumstances, I consider the proper exercise of the court's discretion under s 126(2) of the Property Law Act is to order a sale of the Property. Conclusion 441 For the above reasons, I will make orders for the sale of the Property under s 126(2) of the Property Law Act. I will also dismiss Virginia's counterclaim. 442 I will hear further from the parties as to the appropriate orders, including orders necessary to give effect to the order for the sale of the Property and as to costs. I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. MA Associate to the Hon Justice Seaward 16 JULY 2026 -- 97 of 97 --