MARR -v- SCOTT [2026] WASC 301
[2026] WASC 301
Page 1
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION : MARR -v- SCOTT [2026] WASC 301
CORAM : GETHING J
HEARD : 16 - 24 FEBRUARY 2026
17 - 19 JUNE 2026
DELIVERED : 5 AUGUST 2026
FILE NO/S : CIV 2022 of 2020
BETWEEN : DIANA MARION MARR
Plaintiff
AND
PHILLIP WARREN SCOTT
Defendant
Catchwords:
Property law - Property acquired as tenants in common in equal shares -
Distribution of proceeds of sale paid into court - Rights of co-owners to claim
initial contributions, expenses and mortgage payments - Distribution of rental
income received - Whether ouster from the property - Whether occupation rent
otherwise payable
Equity - Whether a fiduciary relationship arose between tenants in common in
equal shares - Common business enterprise to own and develop land for
commercial purposes - Whether fiduciary obligation breached by failure to
improve the property so it could be let commercially - Measure of equitable
compensation
Equity - Tenants in common in equal shares - Commercial relationship -
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[2026] WASC 301
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Whether there was common intention constructive trust adjusting beneficial
ownership - Whether there was a remedial joint endeavour constructive trust -
Whether there was a resulting trust based on unequal contributions to the
purchase price
Legislation:
Limitation Act 2005 (WA) s 13, s 26, s 27
Property Law Act 1960 (WA) s 126
Result:
Proceeds of sale of land in court distributed to co-owners
Category: B
Representation:
Counsel:
Plaintiff : In Person
Defendant : Ms P A Martino
Solicitors:
Plaintiff : In Person
Defendant : P A Martino Barrister & Solicitor
Case(s) referred to in decision(s):
Aikman v The Owners of Strata Plan 48817 - 16 Dolphin Drive Mandurah
[2016] WASC 380
Alistair McDougall Nominees Pty Ltd atf McDougall Holdings Trust v Rural
Bank (a division of Bendigo and Adelaide Bank Ltd (ACN 068 049 178)
[No 2] [2025] WASC 326
Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000)
22 WAR 101
Baumgartner v Baumgarnter (1987) 164 CLR 137
Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384
Biviano v Natoli (1998) 43 NSWLR 695
Bombara v Bombara [2010] WASC 314
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[2026] WASC 301
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Callow v Rupcev [2009] NSWCA 148
Calverley v Green (1984) 155 CLR 242
Chou v AWAPAGE SGT 26 Investment Ltd [No 3] [2018] WASC 383
City of Wanneroo v Tah Land Pty Ltd [2020] WASC 249
Commonwealth of Australia v Amann Aviation Pty Ltd [1994] HCA 54; (1991)
174 CLR 64
Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2006] HCA
55; (2006) 229 CLR 577
Coster v Coster [2024] NSWSC 1104
Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658
Dewar v Ollier [2020] WASCA 25
Doherty v Sampey (as Administrator of the Estate of Addison) [2023] WASC 10
Duckworth atf The Ocean Farm Trust v Water Corporation [2024] WASC 90
Effem Foods Pty Ltd v Lake Cumberline Pty Ltd [1999] HCA 15
Electricity Generation Corporation trading as Verve Energy v Woodside Energy
Ltd [2014] HCA 7; (2014) 251 CLR 640
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95
Fathers v Cook [2006] WASC 129
Forgeard v Shanahan (1994) 35 NSWLR 206
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Giacci v Giacci Holdings Pty Ltd [2010] WASC 349
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Helton v Allen [1940] HCA 20; (1940) 63 CLR 691
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64;
(1984) 156 CLR 41
Iain v Amit Laundry Pty Ltd [2019] NSWCA 20
In Meiners (by her next friends the Public Trustee) v Gunn [No 2] [2025]
WASC 529
In Re Ellis; Ellis v Ellis [2015] WASC 77
In Re Gorman (a Bankrupt) [1990] 1 WLR 616
John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
La Mela v Franklexis Pty Ltd [2020] WASCA 83
Lanskey Constructions Pty Ltd v Westrac Pty Ltd [2022] WASC 90
Lloyd v Tedesco [2002] WASCA 63
M Drainage & Constructions Pty Ltd atf DM Unit Trust t/a DM Civil v Lavan
[2023] WASC 451
Meagher as trustee in Bankruptcy of Stein v Stein [2025] WASC 235
Mercanti v Mercanti [2016] WASCA 206
Mirabela Nickel Ltd (in liquidation) (receivers and managers appointed) v
Mining Standards International Pty Ltd [2025] WASCA 82
Moleirinho v Talbot & Olivier Lawyers Pty Ltd [2014] WASCA 65
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[2026] WASC 301
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Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37;
(2015) 256 CLR 104
Muschinski v Dodds (1985) 160 CLR 583
Neil v Nott [1994] HCA 23; (1994) 68 ALJR 509; (1994) 121 ALR 148
Nobarani v Mariconte [2018] HCA 36
Nullagine Investments Pty Ltd v Western Australian Club Inc (1992) 177 CLR
635
Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003]
WASCA 11
Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd [1981] HCA 3;
(1981) 145 CLR 625
R v Adams [2016] NSWSC 1798
Sethi v Bhavsar [2020] WASCA 52
Silvester v Sands [2004] WASC 266
Smart v Prisoner Review Board (WA) [2012] WASC 48
Stevens v Wright [2021] WASC 36
Thorby v Goldberg (1964) 112 CLR 597
Trajkoski v State of Western Australia [2017] WASC 273
United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; (1985) 157
CLR 1
Ventia Utility Services Pty Ltd (ACN 010 725 247) (formerly known as Thiess
Services Limited) v Electricity Networks Corporation T/as Western
Power [No 3] [2024] WASC 179
Warman International Ltd v Dwyer (1995) 182 CLR 544; 128 ALR 201
Warren v Lawton [No 3] [2016] WASC 285
Watson v Foxman (1995) 49 NSWLR 315
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
West v Mead [2003] NSWSC 161
Willis v The State of Western Australia [No 3] [2010 WASC 56
Woodings as liquidator of Bell Groupage Ltd and Bell Groupage Finance Pty
Ltd v WA Glendinning and Associates Pty Ltd [2019] WASC 54
Woodley v Woodley [2018] WASCA 149
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 26] [2026]
WASC 101
Wright v Lemon [2024] WASCA 19
Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40
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TABLE OF CONTENTS
1. Introduction ................................................................................................................ 9
2. Trial ........................................................................................................................... 10
2.1 Pleadings ........................................................................................................... 10
2.2 Submissions ...................................................................................................... 10
2.3 Documents ........................................................................................................ 11
2.4 Schedules .......................................................................................................... 12
2.5 Witnesses .......................................................................................................... 12
2.6 Approach to the evidence generally ................................................................. 13
2.7 Ms Marr as a litigant in person ......................................................................... 14
3. Events leading up to the purchase of Links Road ................................................. 15
3.1 Ms Marr's background ...................................................................................... 15
3.2 Rancore Marr Sale Contract ............................................................................. 17
3.3 Mr Scott's background ...................................................................................... 18
3.4 Discussions leading up to the Initial Marr Scott Sale Contract ........................ 19
3.5 Initial Marr Scott Sale Contract ........................................................................ 24
3.6 Disspain conversation ....................................................................................... 28
3.7 Events after the Initial Marr Scott Sale Contract .............................................. 35
3.8 Final Marr Scott Sale Contract ......................................................................... 35
3.9 Initial applications for loans ............................................................................. 37
3.10 Vandalism ......................................................................................................... 41
3.11 Loans from the CBA ......................................................................................... 50
4. Settlement of Links Road ........................................................................................ 50
4.1 Facts from the documents ................................................................................. 50
4.2 Ms Mulcahy's evidence .................................................................................... 52
4.3 Ms Marr's evidence ........................................................................................... 55
4.4 Mr Scott's evidence ........................................................................................... 56
4.5 Factual findings ................................................................................................ 57
5. Evidence as to initial agreements ............................................................................ 59
5.1 Overview........................................................................................................... 59
5.2 Ms Marr's evidence ........................................................................................... 60
5.3 Mr Scott's evidence ........................................................................................... 66
6. Events following settlement ..................................................................................... 69
6.1 Banking arrangements ...................................................................................... 69
6.2 Vandalism repairs ............................................................................................. 70
6.3 Determination ................................................................................................... 72
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7. Events from 1999 to 2023 ........................................................................................ 74
7.1 Rezoning applications ....................................................................................... 74
7.2 Ms Marr's initial occupation ............................................................................. 75
7.3 Period of vacancy ............................................................................................. 76
7.4 Home Loan 2 .................................................................................................... 78
7.5 Mr Scott's relationship with Ms Caruana ......................................................... 84
7.6 Rent Transactions Schedule and Monthly Rent Spreadsheet ........................... 85
7.7 Byron Scott ....................................................................................................... 86
7.8 Richard Biesiekierski ........................................................................................ 87
7.9 Brian Rilston ..................................................................................................... 88
7.10 Tim Brown ........................................................................................................ 89
7.11 Streamline 2 ...................................................................................................... 92
7.12 Kevin Scott ....................................................................................................... 92
7.13 September 2011 meeting .................................................................................. 95
7.14 2011 Correspondence ..................................................................................... 102
7.15 Reece Scott and others .................................................................................... 107
7.16 Boatshed meeting............................................................................................ 108
7.17 2014 Application to the Magistrates Court. .................................................... 120
7.18 Occupation by Ms Marr and Mr Scott ............................................................ 122
7.19 Occupation by Mr Scott .................................................................................. 122
7.20 Tenancy agreement with Mr Pearce and Ms Butler ....................................... 123
7.21 Repayment of Home Loan 2 ........................................................................... 125
7.22 Commencement of the present action............................................................. 125
7.23 Application to the Magistrates Court .............................................................. 125
8. The sale of Links Road .......................................................................................... 126
9. What was the inpitial agreement or agreements between Ms Marr and
Mr Scott?................................................................................................................. 129
9.1 Legal principles .............................................................................................. 129
9.2 Ms Marr's position .......................................................................................... 134
9.3 Mr Scott's position .......................................................................................... 138
9.4 Approach to the determination of the issues................................................... 140
9.5 The Initial Marr Scott Sale Contract ............................................................... 141
9.6 The Final Marr Scott Sale Contract ................................................................ 142
9.7 Were there any other agreements? .................................................................. 142
9.8 Common intention constructive trust.............................................................. 150
9.9 Home Loan 2 .................................................................................................. 151
9.10 Pleaded agreements ........................................................................................ 152
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10. What are the legal principles relating to co-ownership of land? ....................... 153
10.1 The partition power......................................................................................... 153
10.2 Forgeard v Shanahan ...................................................................................... 154
10.3 Biviano v Natoli.............................................................................................. 161
10.4 Silvester v Sands ............................................................................................. 162
10.5 Fathers v Cook ................................................................................................ 167
10.6 Giacci v Giacci Holdings Pty Ltd ................................................................... 169
10.7 Trajkoski v State of Western Australia ........................................................... 172
10.8 Stevens v Wright............................................................................................. 173
10.9 Summary of applicable principles .................................................................. 175
10.10 Issues arising for determination ...................................................................... 178
11. Did Mr Scott oust Ms Marr? ................................................................................ 178
11.1 Ms Marr's position .......................................................................................... 178
11.2 Mr Scott's position .......................................................................................... 180
11.3 Did Mr Scott oust Ms Marr? ........................................................................... 180
11.4 What, if any, occupation fee is payable? ........................................................ 182
12. What rent did Mr Scott in fact receive? .............................................................. 183
12.1 Ms Marr's position .......................................................................................... 183
12.2 Mr Scott's position .......................................................................................... 183
12.3 Determination ................................................................................................. 186
13. Can Ms Marr claim any further occupation fee? ............................................... 187
13.1 Ms Marr's position .......................................................................................... 187
13.2 Mr Scott's position .......................................................................................... 187
13.3 Determination ................................................................................................. 187
14. What other contributions did the parties make? ................................................ 189
14. Mr Scott's position in evidence in chief.......................................................... 189
14.2 Ms Marr's position and evidence .................................................................... 193
14.3 Determination ................................................................................................. 195
15. How should the mortgages be accounted for? ..................................................... 196
15.1 Mr Scott's evidence in chief and final position............................................... 196
15.2 Cross-examination .......................................................................................... 198
15.3 Determination ................................................................................................. 199
16. What other expenses are claimed in relation to Links Road? ........................... 200
16.1 Ms Marr's position .......................................................................................... 200
16.2 Mr Scott's position and evidence .................................................................... 200
16.3 Expenses that are in issue ............................................................................... 203
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16.3 Determination ................................................................................................. 207
17. Does Mr Scott owe any fiduciary obligations to Ms Marr? ............................... 208
17.1 Ms Marr's position .......................................................................................... 208
17.2 Mr Scott's position .......................................................................................... 209
17.3 Relevant law ................................................................................................... 209
17.4 Did Mr Scott owe a fiduciary duty to Ms Marr? ............................................ 218
17.5 Is there a limitation issue? .............................................................................. 220
17.6 Did Mr Scott breach his fiduciary duty?......................................................... 221
17.7 What, if any, remedy is Ms Marr entitled to? ................................................. 227
17.8 What measure of equitable compensation is Ms Marr entitled to? ................ 229
18. Is Ms Marr entitled to a greater than 50% beneficial interest in Links Road? 236
18.1 Ms Marr's position .......................................................................................... 236
18.2 Mr Scott's position .......................................................................................... 237
18.3 Relevant law - Joint Endeavour Constructive Trust ....................................... 238
18.4 Was there a Joint Endeavour Constructive Trust? .......................................... 242
18.5 Was there a resulting trust?............................................................................. 243
19. How should the funds in court be apportioned? ................................................. 244
19.1 Approach......................................................................................................... 244
19.2 Actual inflows and outflows ........................................................................... 246
19.3 Adjustments to the Inflow Outflow Balance .................................................. 249
19.4 Distribution of the funds in court.................................................................... 252
20. What final orders are appropriate? ..................................................................... 252
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GETHING J:
1. Introduction
1 On 12 November 1998 the plaintiff, Diana Marr, and the
defendant, Phillip Scott, become registered proprietors as tenants in
common in equal shares of a property at 1 Links Road, Applecross
(Links Road). They remained so until 9 June 2023 when Links Road
was sold pursuant to an order of this court and the net sale proceeds
paid into court.
2 The primary issue in dispute is how the net proceeds are to be
distributed to the parties. Mr Scott says that the starting point is that
they are each entitled to an equal share in the proceeds. Ms Marr says
that as a result of an agreement between the parties, or a resulting or
constructive trust, she is entitled to a 62.4% share.
3 At various points over the 25 years in which they owned Links
Road, each occupied the property and each arranged for it to be let to
different tenants. Mr Scott says that he has accounted for all the rental
income he received. Ms Marr says he has not.
4 Ms Marr says that she was ousted from Links Road and makes a
claim for occupation rent, something which Mr Scott denies.
5 Mr Scott contends that he paid more of the expenses in relation to
Links Road than Ms Marr, and seeks 50% of the difference. Ms Marr
disputes whether many of these expenses relate to Links Road.
6 Ms Marr contends that the terms of the agreement between them
constituted fiduciary obligations mutually owed by the parties to each
other. She says that Mr Scott breached his fiduciary obligations by
failing to obtain rent for Links Road at fair market rates for a
commercial property. She seeks equitable compensation to restore her
to the position she would have been in had this breach not occurred.
7 For the reasons which follow:
(a) the starting point is that the net proceeds of sale are to be
equally allocated between Ms Marr and Mr Scott;
(b) before that occurs, the income and contributions made, and
expenses paid, need to be brought to account;
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(c) each party is entitled to 50% of the income from, and is
responsible for 50% of the costs of owning, Links Road;
(d) Ms Marr claims based on a constructive or resulting trust have
not been proven;
(e) Ms Marr succeeds in her claim for equitable compensation for
breach of fiduciary duty, but not at the level of damages
claimed; and
(f) the equitable compensation should be brought to account out of
the funds in court.
8 The net result is that the proceeds of the sale of Links Road
remaining in court should be distributed $315,885.43 to Ms Marr and
$392,818.12 to Mr Scott. This is subject to hearing from the parties on
one issue.
2. Trial
2.1 Pleadings
9 Mr Scott filed papers for the judge on 19 December 2025. The
final versions of the pleadings were:
(a) Substituted Statement of Claim, filed 5 February 2024 (Claim);
(b) Substituted Defence and Counterclaim, filed 24 July 2024
(Defence); and
(c) Reply to Substituted Defence and Counterclaim, filed
16 August 2024 (Reply).
10 The Claim was filed by lawyers acting for Ms Marr. By the time
the Reply was filed she was a litigant in person. The Reply is more in
the nature of submissions than pleadings. It is replete with emotive
language. It does not assist in defining the issues arising for dispute. It
does, however, foreshadow the evidence given by Ms Marr at trial.
2.2 Submissions
11 Ms Marr filed opening submissions dated 27 January 2026,
closing submissions dated 6 July 2026 and reply submissions dated 10
July 2026.
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12 Mr Scott filed opening submissions dated 6 February 2026 and
closing submissions dated 6 July 2026, but did not file reply
submissions.
2.3 Documents
13 Each of the parties went to considerable effort to collate and
present the documents spanning the 25 years in which they owned
Links Road in a logical and readily accessible form. As part of the case
management leading up to the trial, it was agreed, with my approval,
for the parties to collate the documents in bundles. All the documents
were scanned in PDF format. Each bundle was physically tendered by
the party tendering a USB containing the scanned documents. The
bundles were:
Party
tendering
Bundle name Exhibit Description
Plaintiff Trial Bundle A PTB A Commonwealth Bank of Australia
Account number 673401300 statements
from 11 November 1998 to 14 June 2023
(Home Loan 1).
Plaintiff Trial Bundle B PTB B Commonwealth Bank of Australia
Account number 679058101 statements
from 25 May 2002 to 1 September 2020
(Home Loan 2).
Plaintiff Trial Bundle C PTB C Commonwealth Bank of Australia
Account number 10138106 statements
from 13 November 1998 to 30 April
2011 (Streamline 1).
Plaintiff Trial Bundle D PTB D Commonwealth Bank of Australia
Account number 10495649) statements
from 9 June 2009 to 31 July 2023
(Streamline 2).
Plaintiff Trial Bundle E PTB E Various documents
Defendant Defendant's
Trial Bundle 1
DTB 1 Documents relating to settlement and
CBA loans
Defendant Defendant's
Trial Bundle 1
DTB 2 Visa card statement for the period from
March 1997 to Jule 2023
Defendant Defendant's
Trial Bundle 1
DTB 3 Documents relating to expenses,
receipts and leasing
Defendant Defendant's
Trial Bundle 1
DTB 4 Documents relating to tax returns
Defendant Defendant's
Supplementary
Bundle
DTB 5 Various documents
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14 The bundles were tendered by consent. The parties further agreed
that, unless objected to, or subject to cross-examination to the contrary,
the documents in the trial bundle are taken to be authentic and where a
document records transactions, the transactions in fact occurred.1
15 A number of other documents were tendered which were exhibited
in the usual way.
2.4 Schedules
16 Pursuant to orders I made on 19 March 2025, each party filed
detailed schedules providing particulars of amounts each says was paid
or received in relation to Links Road, cross-referenced to the document
said to record or evidence the amount.
17 When giving evidence, Mr Scott tendered updated schedules
cross-referenced to the trial bundles. He also tendered a number of
other schedules. Ms Marr did likewise. I will refer to these schedules
at the relevant points in this decision.
18 The schedules are not evidence. Rather, they summarise the
evidence contained in the primary documents.
2.5 Witnesses
19 Ms Marr gave evidence. She also called:
(a) Cheyne Pearce, who was a tenant at Links Road from 2020 until
it was sold in June 2023;
(b) Jacinta Caruana, Mr Scott's former de facto partner;
(c) Jeffery Matthews, a long term friend of Ms Marr;
(d) Jennifer Marr, Ms Marr's sister (who for clarity, and intending no
disrespect, I will refer to as Jennifer);
(e) Annie Mulcahy, the settlement agent for the Links Road
transactions (whom I allowed to be recalled);
(f) Christopher Disspain, who Ms Marr says drafted a deed for her
and Mr Scott; and
1 Transcript 16.2.25, pages 262 - 264.
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(g) Kevin Scott, Mr Scott's brother (who again for clarity, and
intending no disrespect, I will refer to as Kevin).
20 Mr Scott also gave evidence. In addition, he called Frank
Sanchez. Mr Sanchez is the principal of a real estate agency operating
mainly in the Applecross, Ardross and Mount Pleasant areas. He has
been doing so for over 25 years, dealing with both residential and
commercial properties. He holds the relevant licences. I am satisfied
that he is a suitably qualified witness to give expert evidence on the
issue of rental values for residential and commercial properties in the
Ardross area.
2.6 Approach to the evidence generally
21 The events covered in this judgment span 25 years. In my
assessment, each of Mr Pearce, Ms Caruana, Mr Matthews, Jennifer,
Ms Mulcahy, Mr Disspain and Kevin did their honest best to recall the
events in question. To the extent that they were able to do so, I
generally regard their recollections as being reliable.
22 Likewise, I accept that both Ms Marr and Mr Scott also did their
honest best to recall the events in question. However, as will become
apparent, each was in some respects an unreliable historian. I add to
this the experience of courts is that human memory is fallible and may
be shaped by self-interest to achieve the desired outcome in the trial.
As McLelland CJ in Eq explains in Watson v Foxman:2
… 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. All
this is a matter of ordinary human experience.
23 In the event of a conflict, I will generally prefer the evidence
which is supported by either a contemporaneous document or the
evidence of one of the other witnesses. More generally, in making
2 Watson v Foxman (1995) 49 NSWLR 315, 319 (McLelland CJ in Eq).
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factual findings, I place most weight on 'contemporary materials,
objectively established facts and the apparent logic of events'.3
24 The facts asserted by each party in this trial must be proven on the
balance of probabilities. They must be established to the reasonable
satisfaction of the court. The court must feel an actual persuasion of
their occurrence or existence. Reasonable satisfaction is not attained or
established independently of the nature and consequence of the facts to
be proved.4 In this judgment, when I refer to a fact being 'proven', it is
proven on the balance of probabilities on this basis.
25 On many occasions when Ms Marr was cross-examining Mr Scott,
she made statements about what she says occurred. The questions
Ms Marr asked, and the comments she made in response to an answer,
are not evidence.5
26 Where facts were not in issue at trial, I simply refer to the factual
findings I have made. Where the facts relating to particular event were
in issue, I set out the evidence before making specific factual findings.
2.7 Ms Marr as a litigant in person
27 In determining the action, I am mindful that Ms Marr is a litigant
in person. As a litigant in person, she is entitled to some leniency in
relation to compliance with the court rules.6 The court is required to
approach the documents in which she articulates her case with some
flexibility.7 The court needs to be astute to ensure that, in a poorly
expressed or unstructured document in which she sets out her case,
there is no viable case which, with appropriate amendment or
permissible assistance from the court, could be put into proper form.8
A 'frequent consequence of self-representation is that the court must
3 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 129 [31] (Gleeson CJ, Gummow and Kirby JJ) (Fox v
Percy). See also: Effem Foods Pty Ltd v Lake Cumberline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599
[16] (Gleeson CJ, Gaurdon, Kirby and Hayne JJ).
4 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, 361 (Dixon J); Helton v Allen [1940]
HCA 20; (1940) 63 CLR 691, 712 (Dixon, Evatt and McTiernan JJ); Robertson v Legal Services and
Complaints Committee [2025] WASCA 92 [14] (judgment of the court); Wright v Lemon (as executor of
the estate of Wright) [2024] WASCA 19 [934] (Buss P); Doherty v Sampey (as Administrator of the Estate
of Addison) [2023] WASC 10 [33] (Allanson J).
5 Coomer v The State of Western Australia [2024] WASCA 133 [157] (Vandongen JA, with whom Hall JA
agreed).
6 Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10] (judgment of the court).
7 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536 - 537 (Kirby P with whom Hope & Samuels JJA
agreed); Smart v Prisoner Review Board (WA) [2012] WASC 48 [10] (Pritchard J).
8 Sethi v Bhavsar [2020] WASCA 52 [27] (reasons of the court) (Sethi).
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assume the burden of endeavouring to ascertain the rights of parties
which are obfuscated by their own advocacy'.9
28 One 'abiding difficulty' faced by the court is 'the tension between
the duty of a … judge to ensure a fair and just trial and the requirement
that the court maintain a position of neutrality and impartiality as
between the parties'.10 The court also needs to ensure that any latitude
given to one party as a litigant in person does not deprive the other of
their right to procedural fairness and a fair hearing.11 The balance is
ordinarily struck by limiting the assistance given to a litigant in person
to that which is necessary to overcome, so far as is reasonably
practicable, the procedural disadvantages a litigant in person faces by
reason of not being legally trained.12 That is what I have sought to do.
3. Events leading up to the purchase of Links Road
3.1 Ms Marr's background
29 Ms Marr has a degree in architecture. As at September 1998 she
was running a building design business trading as Arteschi Designs. In
the past she had held a real estate agent's licence and had managed
properties professionally. By that time she had also undertaken a
number of residential property developments, describing herself as a
'serial property developer for profit'13 and a 'very sophisticated
purchaser'.14 She had extensive experience in subdivision and property
development. These developments were undertaken with other people,
including her ex-husband, Richard Biesiekierski and a friend by the
name of Graham Goodson. The developments involved purchasing a
property, subdividing it, then selling off the lots, either as a vacant lot
or with a house on it, and then dividing the proceeds.
30 As at September 1998, Ms Marr was the sole registered proprietor
of a property at 14 Madden Way Brentwood (Brentwood Property).15
At this time, it was her residence. She had purchased the Brentwood
Property for the purpose of subdividing it and selling the house at the
front and the vacant rear lot. By September 1998, she had nearly
9 Neil v Nott [1994] HCA 23 [5]; (1994) 68 ALJR 509, 510; (1994) 121 ALR 148, 150 (judgment of the
court); Sethi [27].
10 Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40 [74] (judgment of the court) (Zerjavic).
11 Nobarani v Mariconte [2018] HCA 36 [47] (Kiefel CJ, Gageler, Nettle, Gordon and Edelman JJ);
Woodley v Woodley [2018] WASCA 149 [76] (judgment of the court); Moleirinho v Talbot &
Olivier Lawyers Pty Ltd [2014] WASCA 65 [51] (judgment of the court).
12 Zerjavic [74] - [75].
13 Transcript 16.2.26, page 272 (Marr).
14 Transcript 16.2.26, page 283 (Marr).
15 DTB 1, pages 162 - 163.
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completed the works required before it could be subdivided. This
involved some alterations to the house and land to create a front lot
(Brentwood Lot 1), which was the house, and a rear lot (Brentwood
Lot 2), which was vacant land.
31 Ms Marr had originally borrowed money to purchase the
Brentwood Property from Advance Bank Australia Limited (Advance).
There was a mortgage over the Brentwood Property with Advance
securing the sum of $133,200.00 (Advance Mortgage).16 Advance
later became St George Bank (St George). By September 1998,
Ms Marr had paid down some of this mortgage.
32 The strata plan for the Brentwood Property was not registered until
11 August 1999.17 Ms Marr sold Brentwood Lot 1 to a Dianne Cullen
for $157,000. The transfer of title for Brentwood Lot 1 was registered
on 2 September 1999.18 She sold Brentwood Lot 2 for $117,500 to
another couple. The transfer of title for Brentwood Lot 2 was
registered on 3 September 1999.19
33 Ms Marr gave evidence that the sale contracts were entered into in
October 1998. At that time, there were delays with both Landgate and
the City of Melville in processing subdivision applications. This is why
settlement did not occur until September 1999. Ms Marr gave evidence
that Ms Mulchay acted for her on the settlements. There is no
documentary evidence to support Ms Marr's testimony. Ms Mulchay
brought to court a log book that she kept of all settlements. She was
not able to locate any transaction in which she acted for Ms Marr in the
sale of either lots of the Brentwood Property, either between December
1998 and January 1999 or in August 1999 to October 1999. The stamp
duty record on the transfer of land instrument for Brentwood Lot 2
refers to an instrument dated 25 February 1999, suggesting that this was
the date of the sale contract.20 Ms Marr rejected this suggestion.21 In
the end, it is sufficient for me to find that the two sale contracts were
entered into at some stage well prior to settlement in September 1999,
and were subject to new titles being issued.
34 Ms Marr leased Brentwood Lot 1 to Ms Cullen at Easter 1999, and
moved out to live at Links Road on 2 April 1999.
16 DTB 1, pages 172 - 183.
17 DTB 1, page 101.
18 DTB 1, pages 110 - 111.
19 DTB 1, pages 106 - 109.
20 DTB 1, page 107.
21 Transcript 18.2.26, pages 652 - 655 (Marr).
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3.2 Rancore Marr Sale Contract
35 With the development of the Brentwood Property nearing
completion, Ms Marr began to look for her next project. She was
interested in finding a property from which she could conduct her
business, somewhere more professional than her home. She was
attracted to Links Road for this purpose. It was also close to her then
existing clients and across the road from the City of Melville with
whom she had regular dealings. When she first came across Links
Road, it had been used for long term residential tenancies.
36 The house on Links Road was built in the 1950s. It was brick and
tile. It was on raised limestone footings and had jarrah floorboards.
There was a skillion at the rear which enclosed what was the open back
veranda and under which there was a laundry and toilet.
37 Links Road had been subdivided by its then owner, Rancore Pty
Ltd as Trustee for Rancore Superannuation (Rancore). It was on a
corner block with two street frontages. Only the front lot, on which the
original house was located, was being sold. When Ms Marr first came
across Links Road, the new certificates of title were yet to be issued.
38 On 7 September 1998 Ms Marr signed executed a Contract for
Sale of Land by Offer and Acceptance with Rancore to purchase Links
Road (Rancore Marr Sale Contract).22 It is evident on the face of the
Rancore Marr Sale Contract that there had been some modest
negotiation over price. The final terms relevant for present purposes
were:
(a) the property being purchased was the 'house on 468 sqm of land
only at 1 Links Road, Ardross';
(b) the purchase price was $170,000;
(c) a deposit of $2,500 was payable within two days of acceptance;
(d) the contract was subject to Ms Marr obtaining finance from the
'Commonwealth Bank' in the amount of $120,000 within
15 days from acceptance; and
(d) settlement was 10 days from the title becoming ready for
dealing but not before 35 days from acceptance.
22 DTB 1, pages 21 - 25.
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39 Ms Marr said that at the time the final price was agreed, she
intended to change the amount of finance required from $120,000 to
$130,000, but did not do so as a result of an oversight.
40 The last clause reflected the fact that, as mentioned, the land
purchased was part of a lot being subdivided. On 10 September 1998
Rancore's application for new title subdivision was approved and the
new title was created. The land being purchased became Lot 188 of
Diagram 96196, Certificate of Title volume 2140 folio 286. This is the
land which I refer to as Links Road.
41 At the date of the Rancore Marr Sale Contract, Links Road was
zoned residential under the relevant local planning scheme with the
City of Melville. The effect of this zoning was that Ms Marr required
approval from the City of Melville before she would conduct her
business from Links Road.
42 When she entered into the Rancore Marr Sale Contract, Ms Marr's
intention was to rent it in the short term to Mr Biesiekierski. This
followed a conversation which Ms Marr had with Anne King who was
the loans officer at the South Perth branch of the Commonwealth Bank
of Australia (CBA). By that time, Ms Marr was dissatisfied with the
service she had been provided with from St George and wanted to
change banks. Hence, the Rancore Marr Sale Contract referred to her
obtaining finance from CBA. Ms Marr was informed by Ms King that,
while she had sufficient capital, she needed more cashflow. Ms King
suggested she get a lease. In response, Ms Marr entered into a
residential tenancy with Mr Biesiekierski. This was on a standard form.
It was for 6 months, with an extension for a further six months. More
than 25 years later there is no copy of this tenancy agreement in
evidence. Ms Marr was challenged about whether she in fact entered
into this agreement, but remained firm in her evidence. This is a matter
purely within Ms Marr's knowledge. There is no evidence to the
contrary. I accept Ms Marr's evidence.
43 Ms Marr entered into the Rancore Marr Sale Contract before
having any conversations with Mr Scott about Links Road.
3.3 Mr Scott's background
44 Mr Scott is a professional consulting engineer, with experience
both in Australia and overseas. For the last 38 years, he has run his
own practice, Scott & Associates, employing varying numbers of
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people over that time. Scott & Associates is a business name, and not a
separate entity. It has never been the business name of a partnership.23
3.4 Discussions leading up to the Initial Marr Scott Sale Contract
45 Mr Scott and Ms Marr met though working on projects for mutual
clients, he as a consulting engineer and she as a building designer.
Ms Marr's evidence
46 Ms Marr gave evidence that at the time both she and Mr Scott
were doing some work for the same builder on the same property. At
the time, Ms Marr was excited about her recent purchase of Links
Road, and told Mr Scott of her plans to work from there. At the time of
this conversation, she was on her way to speak to a planner at the City
of Melville. Mr Scott's office was small, something he complained
about to Ms Marr. He was looking for bigger premises. The
conversation progressed to Mr Scott suggesting that he should rent
some space from Ms Marr. Then:24
I said, 'Well, come on down. I'm going there now. I've got the key.'
And he goes in there and he's just enamoured with it. He sees the same
vision that I saw. 'This is perfect. Oh my goodness. Can I have
naming rights?' 'Yes, of course you can. And how much space you
need?' 'I need double what I've got.' I went, 'Great. Well' - and I drew
the plans, and I did a pro rata split. Originally, I was going to keep the
south side and he was going to go for the north side.
But my business was much smaller and I only had one employee
whereas his business was much bigger and he had maybe three or four
or five - like a receptionist, and a really good… senior engineering
draughtsman, and a couple of juniors. They - 50 square metres that was
late wasn't enough for them. It was too small. So he - we look at this
and we talk excitedly.
47 Ms Marr gave evidence that she then went to the City of Melville
and received support from the planner she spoke to about her proposal.
48 At some point, Mr Marr did a sketch setting out how Links Road
would be developed to fit both her business, Arteschi Designs, and
Mr Scott's business, Scott & Associates.25 In relation to this sketch:26
23 Transcript 17.6.26, pages 1328 - 1329 (Scott).
24 Transcript 16.2.26, page 304 (Marr). See also: Transcript 18.2.26, page 680 ff (Marr).
25 PTB E, pages 35 - 36.
26 Transcript 16.2.26, page 307 (Marr).
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GETHING J: So as I understand what was - from this design. The
intention, at that stage at least, was that your office area would be 27.5
square metres?
MARR, MS: Yes.
GETHING J: Scott & Associates would be 46 square metres?
MARR, MS: Yes.
GETHING J: And then there's about 30 square metres of what I might
call common area?
MARR, MS: Yes. And then we would pro rata it.
49 Ms Marr gave evidence of a number of discussions about the basis
on which they would undertake what was proposed.
50 The conversation evolved to Mr Scott purchasing the property
with Ms Marr. Initially, she hoped that she could get Rancore to add
Mr Scott to her contract. In the end, they declined to do so. However,
Rancore did give Ms Marr some more time to obtain finance.
51 Ms Marr gave evidence that the facsimile of 22 September 1998
(quoted at [55]), which Mr Scott relies on, is a fabrication, though it
does contain some words that are genuine. There were other facsimiles
which now do not exist.27 However, in cross-examination she
conceded that it could be genuine, but doubted it because the dates of
the events in it are wrong.28
52 It was put to Ms Marr in cross-examination that she needed to
approach Mr Scott to join her in purchasing Links Road as the CBA
had rejected her loan application. She rejected this suggestion.29
53 I asked Ms Marr to tell me what she says the agreement was which
led to Mr Scott purchasing a half share in Links Road. Her response
was:30
MARR, MS: After he contemplated for a day or two, he said, 'I've
been really thinking about it and I would really like to get my name
back on a title.' And I said, 'Well, how much money have you got?'
And he said, 'Well, not enough.' And I said, 'Well, how are you going
to make up the difference?' And we came up with a vendor finance
27 Transcript 16.2.26, pages 311 - 313, 392 ff; Transcript 18.2.26, pages 675 - 676, 688 - 689 (Marr).
28 Transcript 18.2.26, page 689 (Marr).
29 Transcript 18.2.26, pages 677 - 678 (Marr).
30 Transcript 16.2.26, pages 315 - 316 (Marr).
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deal. So in order to buy any real property, you need 20 per cent cash
deposit, plus you need the associated settlement costs. And if it is a
property that you're going to develop, you've got to borrow a little bit of
extra money to do that …
It's talking about - so my books of account, it comes up - the property
purchase price is 170. Then, we borrowed an extra $6600 and we had
associated settlement costs on the first settlement because Rancore
wouldn't let him on to the first - on my deal of about 7000, including
white hand certificate, the bank start fees, the - Mr Despain doing the
deed of agreement, and so forth, and the stamp duty. And then, the
second settlement incurred some more. So there's my cost in, my cost
out, then his cost in, and his associated stamp duty. Join that all
together. And we agreed everything would be equalised. … -
GETHING J: So tell me - so just tell me a little bit more detail about
that.
MARR, MS: Okay. So my books of accounts say that my property
purchase plus the extras add up to about 185 grand. Half of 185 grand
is 92 and a half each….
Mr Scott's evidence
54 Mr Scott gave evidence that Ms Marr had mentioned to him in
passing that she was purchasing a property and was looking for a
partner to help her develop it. The property was Links Road. The
property was then a residential property, but there was a possibility of it
being zoned commercial at some time in the future. Ms Marr was
confident of obtaining the commercial zoning.
55 Mr Scott gave evidence that on 22 September 1998, Ms Marr sent
him a facsimile setting out the basis for the two of them purchasing
Links Road, and produced what he says is the original.31 Mr Scott
provided a transcription, which reads:32
To: Phil Scott fax no: 93648926
From: Diana Marr date: 22 Sept 98
Subject: Proposal for finance as discussed
Dear Phil
Hope this explains my approach in more detail and look forward to
further discussions soon.
31 Exhibit 2.
32 Exhibit 9.
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If you buy 50% of 1 Links Road as discussed, then we save the stamp
duty and costs of 2nd settlement due in or about Dec 98 or Jan 99. Until
then we can rent out the old house (it's no palace now but it sure is
convenient) for about $150 a week or $650 a month to help covering
holding costs of about $850 per month. Exact costs depend on how
much deposit we can each contribute for the settlement on or about
22nd October and these include the stamp duties, settlement agent, loan
app fees, rates & taxes, adjustments etc say $6 to 7k. Have already paid
$2,500 deposit, therefore we need about another $173,000 all up to do
the deal.
In addition to this, I reckon that another $10,000 will cover carparking
and stormwater if we contract that out, less if we don't. Then we need to
fix the roof & porch, paint outside & knock out the odd wall etc & put
in an alarm system, say a total of $20k total max. But most of that can
surely wait until we get the commercial zoning that we need. Therefore
costs are $170 + 7 + 20 = $197,000. Worst case therefore $100k each
with you borrowing a max $94k which will initially cost you about
$435 p/mth less 50% of any rental that a tenant (Dick?) might pay
whilst we are getting our shit together. Let's say that leaves you a
shortfall pending Commercial zoning of around $110 a month. Same
goes for me but of course we don't need to actually spend the last $20k
to do up the office until we have that part in the bag, so that's about
$390 a month each less $325 rent each = shortfall of only $60 a month
each.
Failing the zoning coming through, there is always the other option of
doing plans & specs for a yuppies paradise, then selling the whole damn
lot again ASAP off the plans, but doubt this will be necessary, given the
lobbying to council which is already well underway.
When we get the commercial zoning, our interest rates will rise to about
6.8%, which will immediately bump up your repayments on $94,000
(worst case) to $6,500 or so, which is of course a mere $550 a month
plus outgoings which simply would not be more than $500 a month
between the 2 of us, in other words far less than you are now paying for
half the space. But the bad news is that banks need more equity to cover
the risk & that comes out of my other properties so we are going to
need to work this out. See you soon.
Best regards
Diana
As noted, Ms Marr says that this document is a fabrication.
56 Mr Scott went on to say that Ms Marr had told him that she had
already negotiated a price with the vendor of $170,000. He was shown
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the Rancore Marr Sale Contract. There would be costs in the order of
$7,000 on top of that.
57 As to the actual arrangement, Mr Scott said:33
How was it - what was the actual arrangement, or what were you
actually discussing as to how you would obtain the property? What
would you pay and what would Ms Marr pay?---We were looking at
property as an overall proposition and what it would cost us to get in
and purchase the property. And there was a discussion as to whether or
not she could arrange for Rancore to accept me on the - the offer and
acceptance that had already been made. I'm not sure that's perhaps
rewriting the offer and acceptance to include my name on it. Later on,
that proved not to be possible. But basically, for her and I to go into the
property as equal partners and develop the property, equally sharing in
the costs and the work, and for us, the aim was to try and have a
commercial office where we were both able to reside there, because I
had been renting for some time at that point, and, you know, it was
appealing, and this is the area where I worked; I actually did work for
the council a fair bit across the road. It seemed like a good proposition,
but the proposition was to jointly do this together, and the proposition
was that there would be these - these costs to get in and do the deal,
costs to bring the house up, costs we expected too, in organising the -
you know, the application to change it to zoning, if it's possible. But
again, further down in that particular facsimile, it says what it says. If
we're not able to achieve commercial zoning on it, we can always do it
up and sell it, and the expression on the bottom of that fax was 'yuppy's
paradise'; we will sell it as a yuppy's paradise.
58 Mr Scott clarified that his reference to 'reside' was a wrong choice
of expression and that the intent was for the two of them to run their
businesses from the property.
59 He continued:34
MARTINO, MS: And you referred to a partnership. What actual
words - or can you recall the actual words that were used in your
discussion in September 1998?---I'm not sure I can recall the exact
words, but it - it was definitely just a discussion that we would be equal
in this arrangement, and that - and that Diana - Diana's other financial
issues were also present. She was working with another property at the
time, and coming out of that. The actual words were - if they weren't
exactly it, they were - they were very close to it, was we would do this
property together, and that we would sort out the costs as we went
along; we would be each responsible for half, we would sort out the
cost in the wash, and she gave me a pretty good idea of what it would
33 Transcript 23.2.26, page 1115 (Scott).
34 Transcript 23.2.26, page 1116 (Scott).
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cost to develop this property: the real estate costs, the stamp duty,
etcetera.
And what percentage of the property were you going to obtain?---I beg
your pardon?
What percentage of the property were you going to obtain?---I was
always going to obtain 50 per cent of the property.
60 After receiving the facsimile, they signed and offer and
acceptance:35
So what happened after you received this facsimile?---When I received
this facsimile, then I signed an offer in acceptance to Diana for the sum
of 88,500, which was exactly half of the 77 we estimated at that point,
although she had purchased the property at 170, we were looking at
approximately 177 in immediate costs. So for me just to come in on
that, that appeared reasonable, and - but it - and it was exactly
50 per cent of 170, plus 7000 estimated end costs that Diana was
suggesting she would be up for, up to this point. So that was what the
offer and acceptance was written up for. And the offer and acceptance
was written as a 50-50 arrangement.
Determination
61 Dealing with the facsimile of 22 September 1998, the original
which Mr Scott produced is clearly an original facsimile which has
aged and faded. It is compelling evidence that it was an authentic
document. Ms Marr did not refer to any independent evidence (aside
from her recollection) to suggest that it was fabricated. I regard the
assertion that it was fabricated as being implausible. Rather, I find that
it is more likely than not that it is an original.
62 I return the issue of what, if anything, was agreed at this point in
section 9.7.
3.5 Initial Marr Scott Sale Contract
63 The conversations progressed to the point that on 24 September
1998, Ms Marr and Mr Scott executed a Contract for Sale of Land by
Offer and Acceptance.36 I will refer to this as the Initial Marr Scott
Sale Contract as it was subsequently amended. The property was
described as 'a 50% (or half share) of house (#1) and land at 1 Links
Road, Ardross'. As originally executed, the land was described by
reference to the certificate for the undivided lot. The initial purchase
35 Transcript 23.2.26, page 1116 (Scott).
36 PTB E, page 15.
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price was $88,500, of which $100 was to be paid on acceptance and
$5,900 within 15 days of acceptance. The total figure of $88,500
comprised half the value of the property ($85,000), plus 50% of the
anticipated settlement costs for the first settlement step.37
64 Clause (iv) dealing with settlement read:
Settlement Date: within 30 days of settlement of prior DM/RPL
contract or the confirmation of rezoning.
So the contract was drafted on the basis that settlement of the Initial
Marr Scott Sale Contract would occur after settlement of the Rancore
Marr Sale Contract.38
65 The initial Marr Scott Sale Contract was conditional on the
rezoning occurring. If the rezoning did not occur, then the agreement
would fall away.39 Of this Ms Marr said:40
And we see that from a combination of the settlement date but also the
fact that clause 6 - that if the vendor is unable to (indistinct) the
proposed rezoning commercial status, or the purchaser is unable to meet
clause 1, doesn't pay the $6000, then effectively, the agreement falls
away, or you have to extend it?---Correct.
So if I have that - so that's your evidence as to what the agreement was
at that stage?---Yes.
Okay?---… it was very important to Mr Scott. I knew that I could put
commercial in there as long as it was an already compliant use. So in
my evidence-in-chief, I mentioned what those are: child care centres
and anything to do with medical.
So do I understand your evidence to be, then, that in the background
here was your discussion with Mr Scott that what would happen after
the - what was contemplated is that both you and Mr Scott would move
your businesses into Links Road and operate out of Links Road?---Yes.
And that that could only occur, as a result, because of zoning
limitations… once you had a change to commercial status?---Yes.
And… usually, it's 60-day turnaround when you put in…a development
application.
66 The contract was subject to the purchaser having finance
approved. The lender is identified as 'ANZ or other bank (the vendor's
37 Transcript 16.2.26, pages 317 - 318 (Marr).
38 Transcript 18.2.26, pages 684 - 686 (Marr).
39 Transcript 18.2.26, pages 690 - 691 (Marr).
40 Transcript 18.2.26, page 691 (Marr).
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bank)'. The last date for approval was 20 October 1998. In the
document which I refer to as the Initial Marr Scott Sale Agreement, no
amount is shown.41
67 Four special Conditions were handwritten into the in Initial Marr
Scott Sale Contract:42
4. The purchaser hereby authorises the vendor to use the $6000
deposit to meet any or all of the costs of settlement for the
previously mentioned 'prior DM/RPL contract' for the purchase
of Lot 188 (#1) Links Road Ardross, due to be settled on or
about the end October 1998.
5. The purchaser has a copy of the abovementioned prior DM/RPL
contract and agrees to and accepts all of the conditions therein.
6. The vendor will refund the $6,000 in full, with interest of 5% pa
commencing from the date of the prior DM/RPL contract
settlement and payable upon sale of this or any other property,
as separately agreed in the deed of agreement between Diana
Marr and Phillip Scott; if the vendor is unable to achieve the
proposed re-zoning of the property to Commercial status, or the
purchaser is unable to meet condition 1, the time for which may
be extended by agreement.
7. It is the intention of both the vendor and the purchaser to
continue to use their best efforts to expedite the proposed
re-zoning to Commercial usage of the property as agreed and
now in process of review by the Council (MCC).
68 In relation to clause 5, Mr Scott said that Ms Marr had asked that
the deposit be used to meet her costs for the prior purchase, including
stamp duty, rather than go into the trust account of the settlement agent.
Mr Scott accepted that as a condition.
69 In relation to clause 7, Mr Scott said that this was the intention of
the parties.
70 Ms Marr confirmed that the Initial Marr Scott Sale Contract
recorded that agreement between them at that time, 24 September 1998.
She said that it was 'very clearly articulating ... a joint endeavour'.43
More specifically:44
41 PTB E, page 15.
42 PTB E, page 15.
43 Transcript 16.2.26, page 321 (Marr).
44 Transcript 16.2.26, pages 321 - 322 (Marr).
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GETHING J: Now, is there - do you say that there is a wider joint
endeavour? Tell me more what you're meaning there because the -
we've got some clauses there. Are you saying that there's another wider
agreement between you and Mr Scott that this is a part or - what are you
meaning?
MARR, MS: Sure. Well, it's in two parts because it's really - it's an
agreement between me and Mr Scott as co-owners and co-partners in
this property development, but it's also between Mr Scott as the sole
owner of our first replacement tenant. It's always the intention that they
would have about two-thirds, nearly three-quarters of the gross of the
nett legible area, and we're going to pro rata… the tea room and the
toilets and - - -
…
GETHING J: Right. So am I right in understanding then that what
you're saying is that there's two contracts?
MARR, MS: Really, there are.
GETHING J: So - well, two. There's - the first contract is what you're
saying is what we see on the page?
MARR, MS: Yes.
GETHING J: Then there's a second contract arrangement, whatever?
MARR, MS: Yes.
GETHING J: By which Mr Scott is going to - and - through his
business, is going to rent a… part of… Links Road.
MARR, MS: Correct. And - - -
GETHING J: And the intention there, the arrangement that you have,
am I right in understanding that that's more or less the arrangement we
see on the other sketches that we've had a look at?
MARR, MS: Yes.
GETHING J: So he's going to rent a certain number of square metres,
you're going to rent a certain number of square metres… less than his.
There's some common area.
MARR, MS: Yes.
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3.6 Disspain conversation
Ms Marr's evidence
71 Ms Marr gave evidence that she spoke to a lawyer, Mr Disspain,
about getting a deed drafted for the transaction with Mr Scott. She
knew Mr Disspain as he was a friend of Jennifer. Ms Marr had used
Mr Disspain some years prior to draft a deed of agreement in relation to
a property development she undertook with Mr Goodson. She called
Mr Disspain, explained the transaction and asked him to draft a similar
deed.
72 Mr Disspain did so, and sent it by facsimile to her. Ms Marr
thought he might have also faxed the draft directly to Mr Scott.
Ms Marr has been unable to locate a copy of this draft deed.
73 As to what was recorded in the draft deed:45
That it was a joint venture, I think, he called it. Property development
to create commercial offices for Diana Marr, Arteschi Designs, and
Phillip Scott of Scott & Associates. And then, it sort of went into the
things like how much money I had put down, that we were — well, I
had imagined we were friends. I was mistaken, that there was no
presumption of advancement because I wasn't — he was in a de facto
relationship with someone else, and it's not — it's not just, suddenly, we
will just go and buy a property together. It's got a commercial basis,
which is evidenced by the reference to the deed of agreement in the
contract.
74 Ms Marr said that the deed covered the issue referred to in clause
6 of the Initial Marr Scott Sale Contract. She said that Mr Disspain
gave her the draft deed after this contact was first signed.
75 Ms Marr said that she went to Mr Scott's office in Ardross and
spoke to Mr Disspain using a speaker phone from Mr Scott's office.
Mr Disspain read out the terms. As to what he said:46
MARR, MS: Yes. And so Chris starts reading, and he says, 'This is
about a joint venture,' I believe he called it, and that there is no
presumption of advancement and these are the financial arrangements
and this is the capital that Ms Marr is providing and that all expenses
will be equalised and that until such time as that equalisation occurred
that Mr Scott would hold a portion of his 50 per cent on the title on
trust, or constructed trust, for me. Until he finished equalising, he had
not equally contributed.
45 Transcript 16.2.26, page 338 (Marr).
46 Transcript 16.2.26, pages 339 - 341 (Marr).
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…
GETHING J: So do I understand your evidence to be that the — okay.
When Mr Despain — did Mr Despain read out the entirety of the - - -
MARR, MS: Yes, he did. And - - -
GETHING J: He did. Okay. So just when he did that, was what he
read out in your — did that accurately capture from your perspective
what you thought the actual agreement was that you had with Mr Scott?
MARR, MS: Yes.
GETHING J: Okay. I understand.
MARR, MS: What we were going to do was, rather than force him to
put in the whole 40 plus that I put in, because he'd never catch up, that
we would add my contribution and his contribution, and then we'd add
that together and divide by two and there'd be a gap between what I put
in and what he put in was his personal loan. It was a personal loan…
from me to him because he couldn't afford to buy it without me.
…
GETHING J: So in terms of - so we've got the Despain agreement.
Now, tell me what - what happened with the agreement that
Mr Despain - - -
MARR, MS: Okay. Mr Despain read through it very carefully and
we're - we're sort of talking about each - but about four or five pages
double-spaced. And it was really quite elegant, and very succinct, and
it basically said he owed me a debt that had to be repaid. And until he
repaid it, I didn't have to pay anything because his payments were
covering my - I borrowed money out of Brentwood - - -
GETHING J: So I'm just trying to move you on in the chronology.
MARR, MS: Sure.
GETHING J: What then happened? How did that telephone call end?
MARR, MS: Okay. Mr Despain said, 'I advise you, Mr Scott, that I
act for Ms Marr. I am Ms Marr's solicitor and I urge you to get
independent legal advice. And he went 'No. I love it. I just understand
it so completely. You explained it so well, I don't need independent
legal advice.' And that's how it ended. And that is when he gave me
the balance of the - it's around about the time he gave me the balance of
the - once he was happy with that deed and I was happy with this deed.
76 Ms Marr said that the deed was never signed.
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77 Ms Marr reiterated in cross-examination that the deed was to
provide for Mr Scott to hold part of his 50% interest on trust.47
78 In cross-examination, Ms Marr said that once Mr Scott had agreed
to the deed of agreement prepared by Mr Disspain, the decision was
made to settle simultaneously. As to its terms, she said:48
Well, I don't - what I'm - what I'm just - I'm trying to understand it is
your recollection?---My recollection is that Chris Despain - it was after
Chris Despain read through. It was only about five pages, this deed - - -
Yes?--- - - - and it - it set out the - our title, what we agreed to, and he
was holding a part of it on constructive trust for me because of my
massively greater contribution of over 40.
79 In cross-examination, Ms Marr rejected the suggestion that
Mr Scott had never met nor heard of Mr Disspain until the trial.
80 Counsel for Mr Scott drew Ms Marr's attention to the fact that the
deed of agreement which she says Mr Disspain drafted was not referred
to in the agenda for the Boatshed Meeting (see section 7.16).49
Mr Disspain's evidence
81 Mr Disspain practiced as a solicitor in Western Australia in the
1990s. He drafted a deed of agreement for Ms Marr in connection with
a property purchase between her and a Mr Goodson.
82 Mr Disspain gave evidence that in what he thought was 1998,
Ms Marr asked him to draft a similar deed of agreement for a property
at 1 Links Road, Ardross between her and Mr Scott. As to what it was
to contain:50
Okay. And what else can you remember about that?--- So…that deed
was very similar to the original, to the deed I did in…'93, and it was
based on the terms, obviously, that I was given - told to - to draft it to
by - by both parties. It was a… clear…a business deed, a business
arrangement. … I suppose the key terms were that…it was a vendor
finance arrangement where Diana Marr would sell a portion of the land
to Mr Scott. It required Mr Scott to repay…the financial shortfall… if
you will, because the intention was that their contributions would
eventually become equal, so the deed anticipated that payments would
be … made. It specified roles or, specifically, a role for Diana Marr,
47 Transcript 18.2.26, pages 686, 707, 735 - 737 (Marr).
48 Transcript 16.2.26, page 708 (Marr).
49 Transcript 19.2.26, page 825 (Marr).
50 Transcript 20.2.26, page 1060 (Disspain).
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that she had handled the design and the project management, and … she
would be paid a fee for that and Mr Scott was responsible for repaying
the … vendor finance. It was a clear business arrangement and
established that the commercial … arrangement where the initial
unequal contributions were not a gift or anything like that but rather…a
loan to be repaid. There was a provision, also, that both parties should
pay interest on their respective loans and I sent that to…again, my
recollection is in October … 1998, I sent both of the parties that deed
by facsimile. And I recall having a - a teleconference with both of them
and telling Mr Scott that he should get his own legal advice because I
was doing this for Diana Marr, not for him, and at the end of that call,
as far as I was concerned, the arrangement had been agreed and that's,
effectively, my recollection.
83 Mr Disspain could not recall any figures.
84 In cross-examination, Mr Disspain clarified that:
(a) the initial instructions came from Ms Marr;
(b) he did not know whether Mr Scott went and obtained his own
legal advice;
(c) he now has no record of the draft deed; and
(d) he did not know whether the deed was ever signed.
85 In cross-examination, Mr Disspain was also taken to the Initial
Marr-Scott Sale Contract. He could not recall seeing this contract at the
time. He was asked about clause 6: 51
There was a condition on that contract that Ms Marr would refund the
deposit of 6,000 in full with interest of five per cent per annum
commencing from the date of the prior Diana Marr-Rancore Pty Ltd
contract settlement, and payable upon sale of this or any other property
as separately agreed in the deed of agreement between Diana Marr and
Philip Scott. So this was a deed of agreement, a finance but finance of
the $6,000 at five per cent. Is it possible, given the length of time that
has transpired, that that may be the deed of agreement that you are
referring to?---No. I mean, I am very clear about what I did. I don't
know anything - anything other than that. I can't comment about what -
what is in - the in - the in the offer and acceptance and what that is
referring to. But that certainly does not form a part of what I drafted.
86 He also confirmed that the arrangement was a commercial one:52
51 Transcript 20.2.26, page 1065, see also pages 1067 - 1068 (Disspain).
52 Transcript 20.2.26, pages 1065 - 1066 (Disspain).
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As I have - as I have said, I can remember, it was, you know, clearly a
commercial arrangement. And I can remember that there were unequal
- unequal contributions, and they were - there was an intention that the
deed terms were that the contributions would be equalised.
And what do you mean just by 'the contributions would be' and what do
you mean just by 'the contributions would be equalised'?---Well, that -
that it was intended that it was - as I said, it was intended it was a
commercial arrangement. No - no gift was given, so therefore, the
parties would - the parties would end up in - in, you know, the position
of - of equality.
Right. So, eventually, if one party put in a bit more at the end of it, they
would have to be equal when they sold the property, say,
for - - -?---That's not - that - that's my - - -
Sorry. So if one - yes. Sorry. You go?---Sorry. Let me go - let me -
let me say - let me say it again so that we're clear. My recollection is
that - is that there was a clause that said that Diana Marr was going to
do the design and was going to be paid a project management fee, that
Mr Scott was going to repay his vendor finance, that it was a
commercial arrangement, and that even though the contributions were
unequal, the - the loan - it was a loan, effectively, which was to be
repaid. So in other words, the contribution from one party to the other
was a loan that was going to be repaid, and that both parties were going
to pay interest on any respective loans that they took out - each - each
took out, so that there was no, you know, agreement other than - other
than that. So that's - that's my recollection. I can't really string it
together any better than that because, you know, that's - that's really all I
can remember.
87 Mr Disspain did not accept the proposition put to him by counsel
for Mr Scott that Mr Scott had never met or heard of him in October
1998 and that there was never a teleconference.
88 Mr Disspain was also cross-examined on his interactions with
Jennifer, whom he confirmed he knew. Counsel for Mr Scott explored
whether these communications suggested to Mr Disspain the evidence
he may be expected to give. I am not persuaded that there was anything
in the communications between Jennifer and Mr Disspain, or Ms Marr
and Mr Disspain, which impacted either the honesty or reliability of his
evidence.
Jennifer's evidence
89 Jennifer primarily gave evidence in relation to a meeting on
16 September 2013 at the Boatshed Café in South Perth attended by
her, Ms Marr and Mr Scott (Boatshed Meeting). I deal with the
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Boatshed Meeting in section 7.16. However, Jennifer gave evidence
that at this meeting that Ms Marr was upset that the 'deed of agreement'
that would govern how they were going to conduct the property was
never signed.53
90 In cross-examination, Jennifer said she knew Mr Disspain and
reached out to him last year on behalf of Ms Marr. Counsel for
Mr Scott explored whether these communications suggested to
Mr Disspain the evidence he may be expected to give. I reiterate that I
am not persuaded that there was anything in the communications
between Jennifer and Mr Disspain which impacted either the honesty or
reliability of his evidence.
Mr Scott's evidence
91 In relation to clause 6 of the Initial Marr Scott Sale Contract,
Mr Scott gave evidence that there was no specific deed of agreement or
that, if there was, it only related to this $6,000 deposit.
92 Mr Scott gave evidence that there was never any deed of
agreement. He was never shown one, nor did he ever sign one. He has
never met Mr Disspain, and first heard of him recently in the context of
these proceedings. He does not believe he ever had a conversation with
Mr Disspain, certainly not one in his office over speakerphone.
93 In cross-examination, Mr Scott reiterated that he cannot recall ever
having had a conversation with Mr Disspain.54
Factual findings
94 I accept Mr Disspain's evidence as being honest and reliable, and
use that as the basis for my findings. This in turn means I regard
Ms Marr as having the (slightly) more reliable recollection.
Specifically, I find that:
(a) some years prior to 1998, Mr Disspain had drafted a deed for
Ms Marr in connection with the purchase of a property by her
and Mr Goodson;
(b) after having signed the Initial Marr Scott Sale Contract, Ms
Marr asked Mr Disspain to draft a deed for that transaction
based on the Initial Marr Scott Sale Contract;
53 Transcript 20.2.26, page 1011 (J Marr).
54 Transcript 17.06.26, page 1349 (Scott).
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(c) Mr Disspain did so, and sent a copy by facsimile to at least
Ms Marr;
(d) Ms Marr and Mr Scott had a telephone conference with
Mr Disspain from Mr Scott's office;
(e) Mr Disspain read out the terms of the draft deed;
(f) the draft deed made it clear that the transaction was a business
or commercial arrangement;
(g) Mr Scott's contribution was to be less than that of Ms Marr;
(h) Ms Marr was to provide vendor finance;
(i) the intention was that their contributions would eventually
become equal;
(j) Mr Scott would be responsible for repaying his vendor finance;
(k) both parties were going to pay interest on any respective loans
they took out;
(l) the unequal contribution was not to be construed as a gift, rather
a loan that had to be repaid;
(m) in addition, Ms Marr was to be paid a design and project
management fee;
(n) the draft deed did not address the issue in clause 6 of the Initial
Marr Scott Sale Contract;
(o) Mr Disspain told Mr Scott that he should obtain his own legal
advice; and
(p) the draft deed was never signed.
95 I don't accept Ms Marr's evidence that the draft deed also provided
that Mr Scott would hold a portion of his 50% share on constructive
trust for her until he finished equalising. This goes beyond what
Mr Disspain could recall. In this regard it is significant that Ms Marr
did not refer to Mr Scott holding his interest on any form of trust in the
agenda to the Boatshed Meeting in 2013 meeting (see section 7.16).
Rather, I find that Ms Marr's recollection has been influenced by
becoming aware of the concept of a constructive trust either through the
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legal studies she subsequently undertook or later conversations with her
lawyers.
96 Nor do I accept Ms Marr's evidence that Mr Scott 'loved' the draft
deed and was happy to sign it. If this really was the case, Mr Scott
would have in fact signed the draft deed. Or, if it was as significant as
Ms Marr now suggests, she would have insisted he sign it before
agreeing to vary the Initial Marr Scott Sale Contract (see section 3.8).
In these circumstances, Ms Marr's evidence is not plausible. It is more
likely than not that Mr Scott did not accept the terms of the draft deed.
Rather, it, and the conversation with Mr Disspain generally, became
another aspect of the ongoing discussion between the two of them as to
the basis on which they were going to own Links Road.
3.7 Events after the Initial Marr Scott Sale Contract
97 Mr Scott paid the $100 deposit on 24 September 199855 and the
remaining $5,900 on 14 October 1998.56
98 Ms Marr gave evidence that it was the intention from
24 September 1998 right up to the first week in October that it was
going to be a subsequent settlement. She said that to re-zone from
residential to commercial requires 30 days advertising, so the usual
time process is 60 to 90 days.57
99 The idea of a simultaneous settlement and a joint loan appears to
have come from a conversation which Ms Marr and Mr Scott had with
the CBA. It was suggested that it would be cheaper to get finance once
and settle once.58
3.8 Final Marr Scott Sale Contract
100 At some point after 24 September 1998 the Initial Marr Scott Sale
Contract was varied by the parties (Final Marr Scott Sale Contract).
The original is in evidence.59 It bears the imprint of having been
assessed for stamp duty.
101 It is common ground, and apparent on the face of the documents,
that two amendments were:
55 Exhibit 14; Transcript 24.2.26, page 1195.
56 Exhibit 15; Transcript 24.2.26, pages 1195 - 1196 (Scott).
57 Transcript 16.2.26, page 320 (Marr).
58 Transcript 16.2.26, pages 327 - 331 (Marr).
59 Exhibit 13, with a copy at DTB 5, pages 28 - 29.
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(a) in clause (iv), to reduce the purchase price by $3,500 to
$85,000; and
(b) in clause (vi), for the settlement date to be 'simultaneously with
the settlement of the prior DM/RPL contract'.
Next to each handwritten amendment is an initial. Both Ms Marr and
Mr Scott accept that they made these amendments.
102 There are then two further amendments to the finance clause:
(a) the latest date for finance is changed from 20 October 1998 to
30 October 1998 by changing the '2' in 20 to a '3'; and
(b) adding next to the printed text of 'Amount of Loan' the text:
'$120,000 Joint Loan with Diane Marr'.
103 Again, each amendment is initialled. To me, the initials look
similar to initials referred to in [101] (though I am no handwriting
expert).
104 On the second page, there was no change to the special conditions
I have quoted at [67], but at the bottom of this page the purchaser's
conveyancer was amended from 'to be advised' to 'Anne Mulchay'.
105 Mr Scott's evidence was that:
(a) he has no recollection of when the amendments were made,
though he thought they were made around the time of
settlement;
(b) he had no real recollection of the sequence in which the
amendments were made;
(c) one of the sets of initials is his (which he identified); and
(d) the handwriting in clause (vi) (settlement) was not his.
106 Ms Marr's evidence was that:60
(a) the correct certificate of title number must have been inserted
after 12 October 1998, which was when she got the numbers for
dealing, and she thought this was done at a meeting with
Ms Mulchay shortly before settlement;
60 Transcript 16.2.26, pages 374 - 376 ff; Transcript 18.2.26, pages 696 - 698 ff (Marr).
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(b) the adjustment to $85,000 was agreed about 9 November 1998
when it was agreed that they would do a simultaneous
settlement, which she thought was done in Ms Mulchay's office
shortly before settlement;
(c) the blue text 'Joint Loan with Diana Marr' is a fabrication; and
(d) the initials at the bottom of the page are not hers.
107 The stamped original of the Final Marr Scott Sale Contract is in
evidence. I do not accept Ms Marr's evidence that the Final Marr Scott
Sale Contract was either in different terms or was in terms that she did
not agree to. There is no contemporaneous materials or objectively
established facts to support her contention. In any event, the terms
which she contends that she did not agree to went to finance and are not
material to the determination of the issues in dispute in this trial.
108 I find that the Final Marr Scott Sale Contract is that contained in
exhibit 13.
3.9 Initial applications for loans
Mr Scott's evidence
109 Mr Scott gave evidence that at this time he was banking with ANZ
National Bank Limited (ANZ). This was why there was a reference to
ANZ in the Initial Marr Scott Sale Contract.
110 Mr Scott commenced preparing some documentation about his
then current financial position in order to obtain finance. This included
his tax returns up to the point they were available.
111 He recalled meeting with a couple of banks, including St George,
whom he knew that Ms Marr was then banking with.
112 Mr Scott gave evidence that Ms Marr had sent him a draft
facsimile to Bruce Mercer at St George Bank dated 28 October 1998.
He produced the original, it is faded, but legible.61 He made some
handwritten amendments. Leaving aside the header information, the
facsimile reads (with the amendments noted with additions in italics
and deletions struck through):
Please find following confirmation from Phil Scott that he has today
waived part of clause (iv) of his current offer dated 24th Sept 1998 to
61 Exhibit 3.
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purchase 50% of 1 Links Road Ardross. Clause (vi) of the contract of
sale to Scott refers to both the prior settlement of my contract to
purchase that property from Rancore Pty Ltd and confirmation of
re-zoning of the property from residential to commercial.
Thus the offer is now subject only to finance from either St George or
another Bank.
Settlement will now take place simultaneously with the proposed
settlement of my contract with Rancore as soon as possible after finance
approval from our joint financier.
Please assess a revised finance application on the following basis:
• an increase in my current mortgage to St George Bank, from
$135,000 to $185,000 (the additional $50,000 is intended for the
balance of the deposit for Links Rd)
• joint finance of $120,000 for myself & Phil Scott to secure
Links Rd. I intend to occupy the property until the re-zoning is
confirmed, at which time we will convert to a commercial loan.
I will also apply for a joint loan with Phil through my bank, the
Commonwealth or his, the ANZ, if you are unwilling to consider that
second loan. Phil's financial statements are available (which he
brought to our appointment on Friday 2nd Oct). These figures [can] will
be verified by his accountants Saugh Woodgate & Miller, within the
next 2 days.
Are you able to assist? Thankyou very much for your efforts on my
behalf to date.
113 Mr Scott said that he could have gone to an appointment with St
George, but had not clear recollection of doing so.
114 Attached to the facsimile is a copy of the first page of the Initial
Mar Scott Sale Contact, with four amendments:
(a) the purchase price changed to $85,000;
(b) the settlement clause amended to read: 'simultaneous settlement
of prior DM/PL contract';
(c) the notation 'N/A' adjacent to the reference to the lender being
'ANZ or other bank (vendor's bank)'; and
(d) next to the amount '$120,000 joint loan with Diana Marr'.
Each of these amendments is initialled.
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115 As to why there was an amendment to the price, Mr Scott stated:62
And what were the amendments?---The amendment was to change the
price from 88,500 to 85,000.
And why was that?---It was because that was our new agreement or
what I was prepared to accept as well, that I would be purchase it for
170. I would go in as a 50 per cent owner at 85,000, half of 170 and we
would all sort out all the end costs together afterwards.
What do you mean by end costs?---There's these costs were no longer
$7000. There were bits and pieces all over the place but I mean the
stamp duties paid to get in. I mean the - by her and by myself. I mean
the settlement agent's costs.
Right?---The postage and the sundries, whatever the settlement is to add
116 Mr Scott went on to give evidence that he believed that Ms Marr
did not find the finance negotiated with St George to be satisfactory.
She determined that the CBA was the best option. She asked Mr Scott
if he would consider CBA for his finance as well, so that they could
make a joint application. The amount they were going to borrow was
$136,000. This was, to his understanding, 80% of the value of Links
Road, being $170,000. The sale did not settle prior to 31 October 1998
as they did not receive bank finance in time.
117 In cross-examination, Mr Scott said that Scott & Associates never
signed a lease over Links Road.63
Ms Marr's evidence
118 Ms Marr gave evidence that she never sent any facsimile to
Mr Mercer. The first time she ever saw the document was when it was
discovered by Mr Scott in the court process. She disputes the
authenticity of the facsimile of 28 October 1998.64
119 Ms Marr gave evidence that, initially, she had approached CBA
for a loan to purchase Links Road. She had a line of credit with St
George, secured over the Brentwood Property, which she was going to
use for the balance of the purchase price. However, CBA offered her a
cheaper interest rate to both refinance the loan over the Brentwood
Property and finance the purchase of Links Road. This would involve
62 Transcript 23.2.26, page 1121 (Scott).
63 Transcript 17.6.26, page 1333 (Scott).
64 Transcript 18.2.26, pages 665 - 666, 668 - 669, 692 - 695 (Marr).
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using both properties to secure both loans. She was happy to consider
this approach as she was dissatisfied with St George.
120 Ms Marr gave evidence that CBA required Mr Scott to provide
financial information to verify his income. He was not able to do this
by 20 October 1998, causing settlement to be deferred.65 This gave her
a liability for penalty interest.66 Eventually, the income verification
was provided by Scott & Associates entering into a lease of Links
Road. Scott & Associates signed a lease for Links Road. It was a
commercial lease at $100 per square metre for about two thirds of the
gross lettable area. The lease was given to CBA to verify income. It is
not in evidence.67
121 She said that by 28 October 1998 she was really angry with
Mr Scott as, because of him, she was late in settling.68 She considered
settling on her own.69 She did not need Mr Scott financially, or in any
other way, until she lost her tenant because of the vandalism.70
122 Then the vandalism occurred (see section 3.10).
Determination
123 Beginning with the facsimile of 28 October 1998, the original
which Mr Scott produced is clearly an original facsimile which has
aged and faded. Again, Ms Marr did not refer to any independent
evidence (aside from her recollection) to suggest that it was fabricated.
I regard the assertion that it was fabricated as being implausible.
Rather, I find that it is more likely than not that it is an original.
124 However, there was no evidence that this facsimile was ever sent
to Mr Mercer. The evidential value of the 28 October 1998 facsimile is
that it is a document which I find to be authored by Ms Marr which
potentially contains admissions against her interest.
125 Ms Marr and Mr Scott ultimately applied to CBA for the joint
finance for Links Road. At the same time, Ms Marr applied to CBA for
a refinance for her existing borrowings to St George secured by the
Brentwood Property to assist her with settling the purchase of Links
Road under the Rancore Marr Sale Contract.
65 Transcript 16.2.26, page 328, pages 704 - 707 (Marr).
66 Transcript 18.2.26, page 713 (Marr).
67 Transcript 16.2.26, page 368 (Marr).
68 Transcript 16.2.26, pages 332 - 335 (Marr).
69 Transcript 16.2.26, pages 367 - 368 (Marr).
70 Transcript 16.2.26, pages 367 - 368 (Marr).
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126 I find that the reasons why settlement did not occur before 31
October 1998 was because of delays in Mr Scott providing his financial
information. To this extent, Ms Marr's explanation is inherently
plausible in light of the evidence as a whole. However, I accept
Mr Scott's evidence that Scott & Associates never provided a lease -
you cannot lease a property to yourself.
3.10 Vandalism
Facts which are not in dispute
127 On 31 October 1998, Links Road was vandalised (Vandalism).
128 The extent of the Vandalism is described by Ms Marr as follows:71
Every pane of glass in that house except the bathroom mirror was
broken. I think the glass in the stove door wasn't broken. Everything
else was just trashed. And the toilet had an incendiary device put into it
and it exploded. Apparently, you get newspaper, and you put some
metal on it, and you set fire to it, and it blew the China pan off the floor
and cracked the first part of the vitreous. It's the old terracotta pipes.
The electrical meter board was damaged. The wall lights and the
ceiling lights were ripped from the walls. There was inky pen and spray
paint - so oil based graffiti and it was disgusting. It was vulgar images
and vulgar words. The MFR word. Pictures of genitalia. The C word.
The F word. There was vomit all over the carpets in the two bedrooms.
There was every light fitting, every window treatment, every fly screen
- everything was just trashed. It was unfit for human habitation.
Mr Scott's evidence was to the same effect.72
129 Ms Marr and Mr Scott then agreed that it was the vendor's
responsibility and that they would be looking to the vendors to repair
the property.
130 Ms Marr took the lead in negotiating with the vendor's real estate
agent. She kept Mr Scott informed of the progress of these discussions.
131 It soon became apparent that the damage was not covered by
insurance as the house had been vacant for longer than allowed in the
insurance contract.
71 Transcript 16.2.26, page 342; Transcript 18.2.26 pages 720 - 721 (Marr).
72 Transcript 23.2.26, pages 1125 - 1126 (Scott).
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Mr Scott's evidence
132 It is instructive to begin with Mr Scott's evidence.
133 Mr Scott gave evidence that he received a copy of a facsimile
dated 3 November 1998 from Ms Marr to Mr Mansour.73 This
document, he says, was provided to him by Ms Marr at the time. The
document reads:
I hereby advise that late yesterday afternoon, following my
conversation with you, I visited 1 Links Road Ardross to inspect the
damage to the property caused by vandalism.
I was absolutely shocked and horrified by the extent of the damage
evident, and pass on my heart-felt condolences to both yourself and
most particularly to the vendors, who must be extremely distressed by
this latest turn of events. I understand that they are already under
extreme duress and must be devastated by this senseless and destructive
offence. I really do hope they catch the rotten @#%&!s who did this
terrible thing.
I am however, equally concerned for my own situation. The
Commonwealth Bank's Valuer is about to inspect the property to make
a market assessment, and am truly horrified at the thought of what he
will make of this absolute disaster area. Should I contact the Bank, or
would it be better if you did this on my behalf? I have already advised
my Settlement Agent, Anne Mulcahy of the current situation.
As a matter of urgency, please advise me via my mobile phone (no:
0419 916 846) of what steps the Vendors & their Insurance Company
intend to take to assess and rectify the damage; and a probable time-
frame for this process.
I am very alarmed by the fact that the settlement will now be deferred
even longer. As you know, I had every intention of immediately
moving into the property to set up a home office from which to operate
my business Arteschi Designs. I don't know what to do; please help!
134 Mr Scott then gave evidence that he received a draft of a facsimile
dated 4 November 1998 from Mr Marr to Mr Mansour. It was sent to
him by facsimile and he produced the original.74 He scribbled through
the first two paragraphs and some other words. He also tendered a
transcription, which is as follows:75
To: The Manager Ray White Applecross
73 DTB 1, page 31.
74 Exhibit 4.
75 Exhibit 10.
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Page 43
Attention: Nick Mansour
Fax no: 9316 1660
From: Diana Marr
Subject: Quotations for restitution of damage to 1 Links Road,
Ardross: 1 page total
Dear Nick
I hereby confirm today's verbal advice to you of the quotations received
to date for the repair of the damages to 1 Links Road. I also confirm
my intention to negotiate the fairest possible settlement with the vendor
to repair the damage to the property. Furthermore the mortgage papers
for me are ready to sign tomorrow pending settlement at the earliest
possible time next week.
(2 paragraphs with scribble)
I have arranged quotations from a number of reputable trades people
and suppliers and below is a summary of the advice received to date:
(line though)
Repair and repaint all affected walls, doors and
lounge room ceiling $2,810.00
Replace the broken glass kitchen cupboard and mirrors
(approx.. 30 panes of glass) $1,200.00
Replace carpet in lounge, dining, bed 1
(cheapest carpet on existing underlay) 2 quotes $970.00
Replace taps to the bathroom, clear blocked WC
(subject to confirmations 5.11.98) $250.00
Replace 4 broken or damaged light fittings to
lounge, dining, bed 1, 4 @ $50 each $200.00
Replace damaged flyscreen to dining, lounge and bed 1 $60.00
Electrician to fix new fixture to dining room
(live exposed wires to this room only) $50.00
Clean up broken glass, beer cans, general rubbish
3 hrs @ $18/hour $34.00
Repaint damaged balustrade to front verandah nil charge
Replace damaged window treatments to lounge,
dining, bed 1 and 2 nil charge
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(1 line unable to be read)
Price of all of the above mentioned iteMs without any builders or
managers margins
135 Mr Scott explained:76
… the [fax] is really just what we wanted to do, which was to quickly
lay out our estimate of the costs we had put together, mostly put
together and assembled by Diana, and - and give them a ballpark figure
of the work that we were - we were looking at to rectify the damage
and, at that point, we can see a way forward if we can negotiate a price
with them for the damage, and we don't have to go through a much
more torturous route which would be waiting and insisting that they
rectify the house.
…
The list came together by Diana and I discussing the work. But the
actual figures are what Diana's put in and sourced. However, both of us
have gone and sourced glass quotations and I - I recall we had two
different glass prices, but they were pretty similar. Now, I can't recall
exactly what they were. Presumably $1,200 was the - the lesser of the
two.
So that was the - all the broken glass in the property, because it says
about 30 panes of glass, is that right?---I understand that was - replace
all the broken glass in the property. There was a slight difference of
opinion Diana and I had a little later on, when we get to that, regarding
the coverage of that glass quotation.
…
[The] price of all the above-mentioned items are without (indistinct)
manager's margins. But in terms of (indistinct) it was really a
negotiating point. This is the ballpark value of the work. There had
been some other transmissions of discussion prior, and other estimates
prior to this one. This was one of them. But it was a comprehensive
list.
So do I understand that to be a comprehensive list of what and a
ballpark of how much?---Yes, your Honour.
136 Mr Scott then said that it was his understanding that the facsimile
was sent to Mr Mansour.
76 Transcript 23.2.26, pages 1130 - 1131 (Scott).
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Page 45
137 Mr Scott then gave evidence that he received a copy of a letter
dated 9 November 1998 from Ms Marr, which was a letter from her to
Mr Mansour. It reads:77
Dear Nick,
I reject both the unacceptably low verbal offers from the vendor,
conveyed by you to me, to settle on the property 'as is', in lieu of full &
proper restitution of the substantial damage to the house caused by
vandalism whilst the property was held at the vendor's risk pending
settlement.
The first verbal offer of $2,000 was made in your office during our
meeting at 5pm on Friday 6th Nov and was witnessed by Phillip Scott.
The second verbal offer of $3,000 was made during a telephone
conversation on Saturday 7th Nov and reported by you to remain open
only until 12pm today, Mon 9th Nov.
I have requested that you confirm the above offer in writing, because
the contract requires that all notices be made in writing and delivered in
the prescribed manner.
I refuse to act on any verbal offers given my understanding following
advice from you of the current threats to repudiate the contract and
other unspecified legal action by the vendor implied in your reporting to
both Phil Scott & myself of the vendor's attitude to the current contract.
I require confirmation of the offers because they demonstrate that the
vendor is aware that not only is the contract still valid but also that the
vendor is responsible for restoring the property to the state it was in
when I inspected it prior to making my first offer to purchase.
I hereby confirm the points raised during our telephone conversation of
yesterday (Sun 8th Nov), that you please arrange, as a matter of
urgency, (before 4pm Wed 11th) all of the following:
1. Written confirmation from yourself, on a Ray White Applecross
Letterhead, that the above-mentioned facts are an accurate
summation of the telephone conversation to which I refer. In
addition, please also confirm in writing your understanding as
verbally relayed to me by yourself (Sat7th Nov) that the offer of
$3,000 from Rancore is final and non-negotiable and that failing
my acceptance of this verbal offer before 12pm today, Mon 9th
Nov; that the vendor intends to commence unspecified legal
action against me or attempt to repudiate the now unconditional
contract. Please also confirm if, as you have claimed you have
been instructed by the vendor or the vendor's legal
representative not to confirm anything regarding the nature of
77 DTB 1, page 54.
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the verbal offers to accept the property 'as is' presented to me by
you.
2. A written and duly stamped (with their common seal)
confirmation from Rancore Pty Ltd stating their verbal offer as
relayed by you to me during one of our numerous recent
telephone conversations (Sat 7th Nov) that Rancore Pty Ltd is
prepared to offer me the sum of only $3,000 (three thousand
dollars) to accept a settlement of the current contract to purchase
the property at 1 Links Road Ardross in the condition that it is
now found and that any prescribed late penalties which may
apply in accordance with the contract shall also be waived.
3. As an alternative to the offer outlined above, a more fair &
reasonable monetary offer from the vendor or notification by the
vendor of any intention to carry out the repair work to my
satisfaction prior to settlement and the approximate time
required by them to complete same, should they choose this
option.
Please deliver confirmation of the above to either address: PO Box
1269, Booragoon WA 6154 within 3 (three) working days and have it
posted to arrive in my post box no later than the morning of Thursday
12th November 1998.
The letter then concludes with Ms Marr's name (though not signature)
and the date of 9 November 1998.
138 Mr Scott confirmed the accuracy of the first sentence of the
second paragraph of the 9 November letter as to the meeting on 6
November 1998.
139 As to what finally occurred, from Mr Scott's perspective:78
MARTINO, MS: Yes. Sorry. Yes. Sorry. Thank you. And do you
know how the vandalism, what was agreed ultimately?---The situation
of the vandalism, it was ultimately agreed that they and we would
proceed with the - the sale, but with an adjusted price that would reflect
the vandalism damage. What was contentious was the discussions that
went on in trying to determine the price of the value of the damage.
And they were initially offering much smaller amounts of two or three
thousand. There was some correspondence on that. And Diana and I
had entered the discussions, I think, starting somewhere around 12,000
as a reflection of costs and builder's margins included. And we thought
they were up against that price. They were threatening to terminate the
sale at that point. They didn't want to continue it unless it was a very
low price. And at the point where settlement approached, it was just
78 Transcript 23.2.26, pages 1131 - 1132 (Scott).
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before the weekend. The settlement was just after the weekend on a
Tuesday or something, the settlement that did occur, and I was not sure
whether it was going to go through, because I wasn't privy to the final
negotiations. I expect Diana was. And I understand they gave us some
money back, but I actually wasn't sure and wasn't told by Diana what
the final amount was that we would receive back for the damage.
140 Mr Scott gave evidence that at the time of settlement, he was not
aware of the final figure that had been settled upon by Ms Marr and
Rancore.79
Look, I was expecting a vandalism price in the - in the range that had
been negotiated, although I wasn't aware of the final figure that had
been settled upon by Diana or Rancore. And so I was expecting a final
price of 5000, 7000, thereabouts. That - that was within the expected
range. And then I wasn't sure in what form the discount had come in,
whether it was a settlement check that Diana had just failed to bank in
Streamline 1 when she received it, or whether it was an adjustment on
the price? I haven't been able to add it up and determine what I
consider that - how that figure was arrived at until later, now, with all
the documentation and everything in front of us, and the work we've
done on it in recent months.
And can you recall at the time of settlement any information being said
- sorry - anything being said about any separate cheques at settlement,
any cheques to Diana or from Rancore?---Not specifically, no.
And - - -?--- - - - Don't know. I don't believe that came about. I don't
believe I was informed. I was waiting to find out
141 For completeness sake, I note that there was a further letter
purporting to be from Ms Marr to Mr Mansour dated 5 November 1998.
It refers to a meeting and subsequent telephone conversation the
preceding day. However, it is marked 'without prejudice'. It is not the
case that both Ms Marr and Mr Mansour have consented to the tender
of this document.80 Accordingly, I declined to allow counsel for
Mr Scott to cross-examine Ms Marr about the document.81 Counsel for
Mr Scott sought some time to consider the issue, and ultimately did not
79 Transcript 23.2.26, pages 1140 - 1141 (Scott).
80 Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 [91] (McLure J,
with whom Murray J and Parker J agreed); M Drainage & Constructions Pty Ltd atf DM Unit Trust t/a DM
Civil v Lavan [2023] WASC 451 [24] - [26] (Howard J); Woodings as liquidator of Bell Groupage Ltd and
Bell Groupage Finance Pty Ltd v WA Glendinning and Associates Pty Ltd [2019] WASC 54 [121] (Smith
J).
81 Transcript 18.02.26 pages 714 - 715.
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press it.82 I have not taken this document into account in determining
the issues in dispute in this action.
Ms Marr's evidence
142 Ms Marr gave evidence that she spoke to Mr Mansour and told
him she would 'call in all [her] favours' to get the Vandalism repaired.
She said that she would supervise the repairs so there would be no
builder's margin. She said she would do a schedule of costs. She did
not have a copy of the schedule of costs she prepared.
143 Ms Marr described the facsimile of 3 November 1998 to
Mr Mansour as 'absolute fiction' and a 'fabrication'.83
144 She said the same of the facsimile of 4 November 1998 to
Mr Mansour, saying that the numbers were wrong.84 She said that it
was based on a real facsimile, but that it had been amended. She did
not have a copy of the real facsimile.
145 Likewise, the letter of 5 November 1998 to Mr Mansour was not a
document she wrote.85
146 Ms Marr said that there was no meeting sometime between 5 and
9 November 1998 at which Mr Scott and Ms Marr met with
Mr Mansour and representatives of Rancore.86
147 Ms Marr said that the letter dated 9 November 1998 was also not
genuine, though added that it was based on a real one, but rewritten.87
148 Ms Marr gave evidence in some detail about the efforts she went
to prepare her schedule of works. However, none of the work was done
until settlement had occurred and they obtained physical possession of
Links Road88 (see section 6.2).
149 Ms Marr said that she initially asked Mr Mansour for $12,800.
His clients would not agree. Ms Marr said that the final agreement with
Rancore was in two parts. The first was that there was a rebate off the
82 Transcript 19.02.26 page 796.
83 Transcript 16.2.26, pages 345 - 346; Transcript 18.2.26, pages 716 - 717 (Marr).
84 Transcript 16.2.26, pages 346 - 349; Transcript 18.2.26 pages 717 - 719 (Marr).
85 Transcript 18.2.26, page 666 - 667 (Marr).
86 Transcript 18.2.26, pages 725 - 728 (Marr).
87 Transcript 18.2.26, pages 723 - 725, 728 - 730 (Marr).
88 Transcript 16.2.26, page 356 (Marr).
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purchase price of $4,800.89 The second was a bank cheque to Ms Marr
in the amount of $4,800.90
Factual findings
150 In my view, the fact that Mr Scott was able to produce the original
facsimile of the 4 November 1998 letter is compelling evidence that
this facsimile is an authentic document. Accordingly, I prefer
Mr Scott's evidence and reject Ms Marr's evidence. I find that this
document was in fact prepared by Ms Marr and was sent by her to
Mr Scott on 3 November 1998 for him to review. However, there is no
evidence that this facsimile was ever sent by Ms Marr to Mr Mansour.
151 The fact that there are now three documents which Ms Marr
asserts are fabrications, which I have found are not, leads me to have
concerns more generally about the accuracy of her recollection. I
prefer the evidence of Mr Scott, and accept his evidence that Ms Marr
provided him with copies of her facsimile dated 3 November and letter
dated 9 November to Mr Mansour.
152 In each case, the contents of these documents, authored by
Ms Marr, are admissible as admissions against her interest.
153 However, the contents of these documents do not really add
anything to the analysis. It is common ground that Ms Marr was
primarily responsible for the negotiations with Mr Mansour.
154 As to the final agreement, Mr Scott was not privy to the final
negotiations. I accept the evidence of Ms Marr and find that, as part of
the adjustment, the purchase price for the Rancore Marr Sale Contract
was reduced by $4,800 to $165,200. This is reflected in the settlement
statement which I quote at [172]. Ms Marr's evidence is plausible
given that the responsibility to make good the Vandalism damage and
consequent delay in settlement rested for Rancore. For the same
reason, I also accept Ms Marr's evidence that she received a further
cheque of $4,800 from Rancore on account of the Vandalism. So I
accept Ms Marr's evidence as to the final agreement, being that at
settlement she received:
(a) a rebate off the purchase price of $4,800; and
(b) a bank cheque to her in the amount of $4,800.
89 Transcript 16.2.26, pages 357, 360, 361, 372 (Marr).
90 Transcript 16.2.26, pages 357, 360, 362 ff, 372; Transcript 18.2.26 pages 748 - 751 (Marr).
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3.11 Loans from the CBA
155 The facts relating to the loans ultimately obtained from the CBA
are not in dispute.
156 By letter dated 5 November 1998 to Ms Marr, the CBA advised
that it had approved a loan to Ms Marr and Mr Scott. I will refer to this
loan as Home Loan 1. The loan amount was $136,000. The interest
rate was the 'investment home loan standard variable rate'. The loan
was to be secured by a registered mortgage over Links Road.91
157 By letter dated 10 November 1998, CBA advised Ms Marr that it
had approved her application for a Commonwealth Bank Complete
Home Loan (CBA Brentwood Loan). The loan was for $167,500. The
security required was a registered mortgage over the Brentwood
Property, a registered mortgage over Links Road and a guarantee from
Mr Scott.92 Mr Scott signed a guarantee.93
158 On 10 November 1998, Ms Marr and Mr Scott signed a mortgage
agreement with CBA in relation to Home Loan 1. The mortgage was
secured over Links Road.94
159 The same day, Ms Marr signed a mortgage agreement with the
CBA in relation to the Brentwood CBA Loan.95
160 It is apparent from the face of the mortgage documents that each
mortgage was cross-secured over both Links Road and the Brentwood
Property.
161 Ms Marr confirmed that Home Loan 1 was a standard joint and
several mortgage with both parties being equally liable.96
4. Settlement of Links Road
4.1 Facts from the documents
162 From the documents in evidence, I find, that:
91 DTB 1, pages 42 - 50.
92 DTB 1, pages 52, 58, 59 to 66.
93 Transcript 23.2.26, page 1133 (Scott).
94 DTB 1, pages 71 - 74
95 DTB 1, pages 75 - 78.
96 Transcript 16.2.26, page 399 (Marr).
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(a) on 11 November 1998, settlement of the sale of the Rancore
Marr Sale Contract took place, with the effect that Ms Marr
became the registered proprietor of Links Road;97
(b) the stated consideration for the purchase in (a) was $170,000
and stamp duty of $4,720 was paid;98
(c) simultaneously with (a), settlement of the sale of the Final Marr
Scott Sale Contract took place, with the transfer document
recording Ms Marr as the transferor and Ms Marr and Mr Scott
as tenants in common as the transferee;99
(d) the stated consideration for the purchase in (c) was $85,000 and
stamp duty of $1,702.50 was paid;100
(e) the end result was that Ms Marr and Mr Scott became tenants in
common in equal shares of Links Road;101
(f) on 12 November 1998, the CBA registered a mortgage over the
title to Links Road (being Home Loan 1), though it was also
stamped on its face recording that it was additional security for
the loan over the Brentwood Property;102
(g) on 11 November 1998, Home Loan 1 was drawn down in the
amount of $136,000;103
(h) Ms Marr's mortgage with Advance Bank over the Brentwood
Property was also discharged on 13 November 1998;104
(i) the mortgage in (h) was replaced on the same date with a
mortgage to CBA again registered over the Brentwood Property
by way of primary security,105 though also stamped on its face
recording that it was also additional security for Home Loan
1;106 and
97 DTB 1, pages 164 - 167.
98 DTB 1, page 167.
99 DTB 1, pages 168 - 169.
100 DTB 1, page 169.
101 DTB 1, page 140.
102 DTB 1, page 140.
103 PTB A, page 3.
104 DTB 1, pages 170 - 171.
105 DTB 1, pages 99 - 100.
106 DTB 1, pages 160- 161.
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(j) the total amount of the loan in (i) was $167,500,107 with an
amount of $28,227 being provided for the settlement of the
purchase of Links Road.108
4.2 Ms Mulcahy's evidence
163 Ms Mulcahy gave evidence that she knew Ms Marr from doing
settlements for her. Aside from that, she could not really remember
anything about the transactions.
164 Ms Mulcahy was the settlement agent for the two transactions
involving Links Road. From her log book (which she produced), she
was able to locate the entries for both transactions, which were copied
and became exhibits.
165 In relation to the purchase of Links Road, from her log book
Ms Mulcahy was able to say that:109
(a) on 16 September 1998 she received instructions to act on behalf
of Ms Marr on the purchase of Links Road;
(b) the purchase price was $170,000;
(c) her settlement fees were $440;
(d) the total fees (including settlement fees) were $537; and
(e) settlement occurred on 11 November 2011.
166 In relation to the Rancore Marr Sale Contract, Ms Mulcahy said
that she did her own stamp duty returns. From her handwriting on the
face of this contract, she was able to identify that stamp duty of $4,720
was paid in relation to a gross consideration of $170,000.110
167 Ms Mulcahy was not able to recall anything between the signing
of the Rancore Marr Sale Contract and eventual settlement which might
have delayed settlement.
107 DTB 1, pages 59 to 66, 94.
108 PTB E, page 34.
109 Exhibit 7.
110 PTB E, page 8.
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168 In relation to the sale of a 50% interest in Links Road from
Ms Marr to Mr Scott, from her log book Ms Mulcahy was able to say
that:111
(a) on 4 November 1998 she received instructions to act on behalf
of Ms Marr on the sale of a 50% interest in Links Road;
(b) the purchase price was $85,000;
(c) her settlement fees were $499;
(d) the total fees (including settlement fees) were $499; and
(e) settlement occurred on 11 November 2011.
169 In relation to the Marr Scott Sale Contract, from her handwriting
on the face of this contract, she was able to identify that stamp duty of
$1,702.50 was paid in relation to a gross consideration of $85,000.112
170 There is in evidence a letter from Ann Mulcahy Settlements to
Mr Scott dated 11 November 1998. This letter attaches the settlement
statements for both transactions and the Marr Scott Sale Contract. At
the point in time when Ms Mulcahy gave evidence, the original of this
letter was not in evidence. Ms Mulcahy identified her signature on a
scanned copy of this letter (Mulcahy Letter Copy).113 Ms Mulcahy
gave evidence on a Friday. The original letter was tendered on the
following Tuesday, having been found by Mr Scott (Mulchay Letter
Original).114 Because of the significance placed on this letter by
Ms Marr, I allowed her to recall Ms Mulcahy when the trial resumed in
June. Ms Mulcahy identified her signature on the first page of the
Mulchay Letter Original.115 She identified the document attached to the
letter as being the original of the Marr Scott Sale Contract.116 She said
that the fees contained in each settlement statement were her usual fees
at the time.117
171 Ms Marr asked Ms Mulcahy about the two settlement statements
in evidence. Ms Marr asserts that these are fabrications. Ms Marr
questioned Ms Mulcahy about the letterhead on which the settlement
111 Exhibit 8.
112 DTB 1, page 86.
113 DTB 5, page 83; Transcript 17.6.26, page 1310 (Mulcahy).
114 Exhibit 13; Transcript 24.2.26, page 1194 (Scott).
115 Transcript 17.6.26, page 1310 (Mulcay).
116 Transcript 17.6.26, page 1310, 1315 (Mulcahy).
117 Transcript 17.6.26, page 1310 (Mulcahy).
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statements were printed. Both settlement statements were on the
preprinted letterhead of 'Ann Mulcahy Settlements'. The one for the
Marr Scott Sale Contract was in the original burgundy colour, but the
one for the Rancore Marr Sale Contract was a black and white copy.
Ms Marr also questioned Ms Mulchay about the contents of each
settlement statement. In the end, Ms Mulcahy was not able to recall
anything beyond what was recorded in the documents.118 She could not
give any evidence as to the authenticity or otherwise of the Mulchay
Letter Original.119 Given that the Mulchay Letter Original forwarded to
Mr Scott the original of the Marr Scott Sale Contract, I find that the
Mulchay Letter Original and its contents are authentic. The fact that
the settlement statement for the Rancore Marr Sale Contract was a
black and white copy could well be explained by original of this
document having been provided to Ms Marr in a similar letter advising
her that both settlements had occurred (though Ms Marr did not
discover such a letter).
172 The settlement statement for the Rancore Marr Sale Contract is in
the following terms:120
AM: 1920
10th November 1998
SETTLEMENT STATEMENT
DM MARR PURCHASE OF LOT 188 LINKS ROAD ARDROSS FROM
RANCORE PTY LTD
Dr Cr
Purchase price $165,200.00
MORTGAGE FUNDS FROM
COMMONWEALTH BANK OF AUSTRALIA
Less deposit paid 2,500.00
PAYMENT OF STAMP DUTY AND REGISTRATION
FEE PRIOR TO SETTLEMENT 4,814.00
COSTS AND DISBURSEMENTS:
Settlement fee 560.00
My fee to you 440.00
Stamp duty on Transfer 4,720.00
Registration fee Land Titles Office 94.00
Search Fee Land Titles Office 32.00
Land tax enquiry fee 20.00
Water Corporation enquiry fee 20.00
Postages Fax and sundries 15.00
118 DTB 5, page 83; Transcript 17.6.16, page 1310; pages 1314 - 1315 (Mulcahy).
119 Transcript 17.6.26, page 1314 - 1315 (Mulcahy).
120 Exhibit 13 (original); DTB 1, pages 83 to 87 (scanned copy).
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Monies held pending adjustment of
Rates/Taxes and FID 1,000.00
BALANCE REQUIRED TO
COMPLETE PURCHASE: 164,227.00
_______________________________
$171,541.00 $171,541.00
______________________________
173 Ms Mulcahy could not explain why the purchase price was
'$165,200' when the contract price was $170,000.121
174 The settlement statement for the Marr Scott Sale Contract is in the
following terms:
AM: 1920
10th November 1998
SETTLEMENT STATEMENT
DM MARR & PW SCOTT - PURCHASE OF LOT 188 LINKS ROAD ARDROSS
FROM RANCORE PTY LTD
Dr Cr
FUNDS RECEIVED AT SETTLEMENT: $1,527.00
Funds drawn and paid to vendor
($158,795.00
3,905.00) = $162,700.00
COSTS AND DISBURSEMENTS:
Settlement fee DM Marr (1st Purchase) 440.00
Settlement fee DM Marr (sale) 199.00
Settlement fee PW Scott (purchase) 300.00
Registration fee Transfer PW Scott 64.00
Search fees 32.00
Water enquiry fee 20.00
Land tax enquiry fee 20.00
Postages fax and sundries 25.00
Monies held pending adjustment of water
and shire rates - interim rates to issue 427.00
______________________________
$1,527.00 $1,527.00
______________________________
4.3 Ms Marr's evidence
175 Ms Marr gave evidence that the settlement statement I have quoted
at [172] was not authentic and has been fabricated.122 She confirmed
that the final purchase price was $165,200, being the $170,000 less the
$4,800 vandalism rebate.123 As mentioned at [154], she also received a
121 Transcript 17.6.28, page 1313.
122 Transcript 16.2.26, page 370; 18.2.26, pages 756 (Marr).
123 Transcript 16.2.26, pages 362, 371 (Marr).
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bank cheque in the amount of $4,800 in respect of the Vandalism
expenses.
176 Ms Marr's evidence in relation to the deficiencies in the settlement
statements at [172] and [174], as well as settlement generally, was
convoluted.124 Doing the best that I can to understand her evidence, it
appears that the deficiencies are:
(a) the purchase price should be $170,000 less $4,800 (which in
any event equals $165,200);
(b) there is no mention of the $4,800 rebate cheque;
(c) she does not know where the figure of $158,795 (funds drawn
and paid to vendor) comes from;
(d) the heading to the settlement statement at [174] is wrong - the
purchase from Rancore was by Ms Marr alone and not Ms Marr
and Mr Scott; and
(e) the balance she had to come up with to settle was $164,227,
saying the amount from CBA was only $162,700 (being
$165,200 less the $2,500 deposit).
177 Ms Marr accepts that the purchase price she actually paid to
Rancore was $165,200.125
178 Ms Marr says that the CBA letter advising that an amount of
$28,227 was transferred from the home loan for the Brentwood
Property126 should be disregarded.127 I disagree. There is no evidence
that it is a forgery and, in any event, this figure correlates with the
remainder of the evidence.
4.4 Mr Scott's evidence
179 Mr Scott was taken to the Mulchay Letter Copy.128 He gave
evidence that this was a scanned copy of the version of a letter which
he received from Ms Mulcahy.129
124 See for example: Transcript 16.2.26, pages 371 ff, 18.2.26 pages 747 - 759 (Marr).
125 Plaintiff’s Reply Submissions, par 12C.
126 PTB E, page 34. See also DTB 1, pages 88 - 89.
127 Plaintiff’s Closing Submissions, par 10.
128 DTB 1, page 83.
129 Transcript 23.2.26, pages 1139 - 1141 (Scott).
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180 As mentioned, the original hard copy letter was later tendered into
evidence, that is the Mulchay Letter Original.130 Mr Scott identified
that letter to be the original of the Mulchay Letter Copy.131
181 Mr Scott gave evidence that he paid the stamp duty to
Ms Mulcahy by drawing out cash in the amount of $1,708.50 on 10
November 1998.132 He said that the stamp duty was only $1,702.50, so
he may have misread or misheard the amount, and drawn out the wrong
amount. I find that he only paid the correct amount of $1,702.50 to
Ms Mulcahy.
4.5 Factual findings
182 Aside from identifying the expenses of settlement, the settlement
statements do not really assist in the determination of the issues in this
trial. These settlement expenses largely correlate with Ms Mulcahy's
log book and the other documents recording the stamp duty paid.
Ms Marr did not take issue with the expenses.
183 The settlement statements do confirm that the actual price paid by
Ms Marr for Links Road was $165,400.
184 I find that the settlement expenses for the Rancore Marr Sale
Contract were:
Item Amount
Stamp duty $4,720
Settlement fee $440
Registration Fee LTO $94
Search Fee LTO $32
Land tax inquiry fee $20
Water Corporation inquiry fee $20
Postage Fax and Sundries $15
Total $5,341
There was an amount of $1,000 withheld pending adjustment of rates
and taxes. However, there is no information as to how this was
ultimately apportioned, so I can make no further findings and have not
taken it into account further.
130 Exhibit 13.
131 Transcript 23.2.26, page 1193 (Scott).
132 Transcript 23.2.26, pages 1134, 1137 (Scott); exhibit 11.
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185 I find that the settlement expenses for the Marr Scott Sale Contract
were:
Item Amount
Stamp duty $1,702.50
Settlement fee Marr $199
Settlement fee Sott $300
Registration Fee LTO $64
Search Fee LTO $32
Land tax inquiry fee $20
Water Corporation inquiry fee $20
Postage Fax and Sundries $25
Total $2,362.50
186 Thus, the total settlement expenses were cost for the acquisition of
Links Road were $7,704 rounded to the nearest dollar):
Item Amount
Settlement expenses Rancore Marr Sale
Contract
$ 5,341
Settlement expenses Marr Scott Sale Contract $ 2,362.50
Total $ 7,703.50
187 From the settlement statements in [172] and [174], I find that:
(a) prior to settlement, Ms Marr paid $4,814 for stamp duty and
registration; and
(b) following settlement Mr Marr received an amount of $1,527,
essentially as a refund.
188 I also find that, prior to settlement, Mr Scott paid $1,702.50 for
stamp duty on the Marr Scott Sale Contract.
189 Ms Marr claims the following amounts as her initial contributions
prior to settlement:133
Item Particulars Amount
1 Deposit $ 2,500
2 Solo Loan application CBA $ 300
3 Reiwa Tenancy application from $ 5
4 White Ant Certificate $ 225
5 Lawyer Deed of Agreement $ 500
133 Exhibit 27 (my item numbers).
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6 Stamp Duty and registration fees $ 4,820
7 Rewa Tenancy application form $ 2.50
8 one quarter of CBA Brentwood
loan costs
$ 1,000
9 Other Associated Costs Settlement $ 1,527
10 Balance from Brentwood to bring
LVR above 80/20
$38,100
$48,979.50
190 In relation to the amounts claimed by Ms Marr, I accept item 1
(deposit of $2,500).
191 Ms Marr did not give evidence that she incurred the amounts in
item 2 (solo loan application), item 3 (REIWA) or item 4 (white ant
certificate). So she has not proven these amounts and I do not allow
them.
192 In relation to item 5 (deed of agreement), Ms Marr did not give
evidence that she incurred this amount. So she has not proven this
amount and I do not allow it.
193 In relation to items 6 and 9, at [184] I find the settlement expenses
for the Rancore Marr Sale Contract to be $5,341.
194 Ms Marr did not give evidence that she incurred the amounts in
item 7 (REIWA) or item 8 (CBA Brentwood loan costs). So she has
not proven these amounts and I do not allow them.
195 In relation to item 10, balance from Brentwood, I deal with this in
section 9.7.
5. Evidence as to initial agreements
5.1 Overview
196 In this Part I set out the further evidence from Ms Marr and
Mr Scott as to the initial agreements between them. I return in Part 9 to
make findings in relation to these agreements.
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5.2 Ms Marr's evidence
197 Ms Marr described the arrangement between herself and Mr Scott
as a 'commercial joint endeavour'.134 When I asked her what she meant
by a 'joint endeavour', she said 'in partnership'.135
198 I asked Ms Marr, when the dust settled on settlement, what she
says was the amount of the joint loan. Her evidence was:136
MARR, MS: Over $136,000 and some of that, most of that, went to
Rancore. 4,800 went back into my bank account, and another 6,600 to
bring us up to the 80 per cent in loan-to-valuation ratio, because I was
way in at 26 - 76 per cent loan-to-valuation. So we had that extra
amount, and it's referenced in other documents. 'We're going to do
work, we're going to put in the Cisco security, we're going to put in the
split system.'
GETHING J: Okay. So again, and I'm just, sort of, pointing you back
to the chronology. So when the dust settles on the settlement on 9th
of - - -
MARR, MS: 11th.
GETHING J: 11 November, we have a certificate of title.
MARR, MS: Yes.
GETHING J: Which gives - which puts you and Mr Scott there as
tenants in common and equal shares.
MARR, MS: Yes.
GETHING J: And we have a joint loan in the name for secured over
Links Road.
MARR, MS: Yes.
GETHING J: Cross-securitised over - cross-secured over Rancore
property.
MARR, MS: Yes.
GETHING J: - - - in the amount of $136,000.
MARR, MS: Yes, so we borrowed 68,000 each, and I've never heard
of the defendant's fabrication that he borrowed 79, and I borrowed 57.
134 Transcript 16.2.26, page 272 (Marr).
135 Transcript 16.2.26, page 273 (Marr).
136 Transcript 16.2.26, page 384 ff (Marr).
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GETHING J: Right.
MARR, MS: I've never heard of it before.
GETHING J: Okay.
MARR, MS: That's not what happened.
GETHING J: Okay. So, in relation to the loan, what, if any,
discussions did you have with Mr Scott about the basis - about how that
would - who would be responsible for it, how it would be repaid?
…
MARR, MS: As I said, I had to come up with something like $47,000,
$48,000 for me to settle it anyway. He came up with six. So we add 48
and six together, and you get 54. The difference - so he has to catch up
with me from $6,000 all the way up to half of 54 or 56,000. And of
course, the vandalism, which we didn't anticipate at the beginning, but
the vandalism added to the cost, and we couldn't know exactly what
was owed until the work was done. Because there are always
contingencies. There might be delays and so forth. So it was a personal
loan. Mr Scott borrowed $68,000 from the Commonwealth Bank, and
he borrowed the other 20-odd from me. And he had to repay me before
he did anything else.
GETHING J: Now, is there any - - -
MARR, MS: That is how you equalise.
GETHING J: Okay. Now, and he had to pay you how much?
MARR, MS: It should have been 905.
GETHING J: No. But how much in total do you say he had to repay
you?
MARR, MS: Well, we didn't know the bottom line until I finished the
vandalism.
GETHING J: Okay. So the difference between 68,000 and the
vandalism cost - - -
MARR, MS: Yes, and the extra money that we borrowed.
199 Ms Marr was not able to direct my attention to any document
which supported or evidenced her testimony that Mr Scott agreed to
loan the shortfall in his contribution as a personal loan.
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200 I inquired of Ms Marr whether there were any other conversations
which she had with Mr Scott in the lead up to settlement which she
recalled, but had not yet given evidence about:137
MARR, MS: Well, he - he remained remarkably quiet. He was happy
that I was doing the work. He was suggesting that I make the
vandalism, you know, like I was going to - basically, we - we had
planned anyway to repaint and strip and sand, so I actually took that out
of the first costs. I actually didn't allow for it. I - I wanted new window
treatments and chattels, and things like that, and we also needed extra
funds. So that's why we borrowed the extra $6600 and took it to the
maximum 80 per cent LVR. Mr Scott didn't really show up. Didn't
really - - -
GETHING J: But, I guess, what this is what I'm interested in, are
there particular conversations in particular contexts that you want me to
be aware of, or have you covered them all?
MARR, MS: Well, he was just happy and kept reassuring me that he
was so happy with the deal and, you know, he would really catch up.
And we were such good friends, and we could be multi-millionaires
together - well, we could have been.
201 In cross-examination, Ms Marr reiterated the position as regards
the settlement costs:138
GETHING J: So, can I … ask you this question, Ms Marr? Do you
accept that on the contract of sale, by which Mr Scott acquired a 50 per
cent interest in Links Road, he paid stamp duty of $1,702.50?---No, we
agreed to equalise everything so that we would be 50/50. So, all of the
first settlement costs get added to all of the second settlement costs, all
of the vandalism repairs, and then divided by two.
202 Ms Marr gave evidence that the settlement costs were to be
equalised:139
So the very first contribution, financial contribution, other than the
$6,000, plus the $300 that Mr Scott paid for the Commonwealth Bank
joint application that he was up to about that, and he also paid for the
stamp duty for the second settlement statement, which was always
agreed to be equalised, so we added my settlement and his settlement,
both together, and go 50/50. Because if you are 50/50, you pay half the
costs.
137 Transcript 16.2.26, pages 395 - 396 (Marr).
138 Transcript 19.2.26, page 840 (Marr).
139 Transcript 17.2.26, page 440 (Marr).
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203 Ms Marr said that the next contribution made by Mr Scott was an
amount of $853 on 11 January 1999.140
204 Ms Marr then said that next payment by Mr Scott was of $853 on
10 February 1993, adding:141
So he was - the way I worked it out, his monthly repayment to me for
the - because he was - he owed me for the money I loaned him as a
personal loan. He only got 68 from CBA. And the rest he got from me.
Now, my books closed, but the whole deal cost - we will round it to 185
for ease of [math]. Half of that is 92 and a half. Mr Scott's accounts
settle at exactly $170,000, no allowance whatsoever for any settlement
costs or the extra loan he denies- - -
GETHING J: So what is the 853 then?
MARR, MS: Sorry?
GETHING J: What is the 853 then?
MARR, MS: The 853, that is his second payment, still not - he is
actually going backwards because he needed to pay 905 to keep up.
GETHING J: With what?
MARR, MS: With - with his repayment, he had his half of the
mortgage to pay. Then, he had to also pay me. So by him paying it, he
is - hasn't kept up - - -
GETHING J: Okay.
MARR, MS: - - - but he is paying me back. And I am trying to get
him to - to agree to what he agreed to, to do what he agreed to and
signed on the deed of agreement. And he doesn't think it's fair.
GETHING J: Okay.
MARR, MS: And I am going, well, why didn't you put in 46, 47? I
go, why didn't you - because I didn't have it. And I said, so we have to
equalise.
GETHING J: And so when are these conversations taking place?
MARR, MS: These are taking place only after I had finished the work
and put in the joint application to council, which was rejected. So he
would never have settled but for the vandalism event.
140 PTB C, page 4; Transcript 17.2.26, pages 440 - 441 (Marr).
141 PTB C, page 4; Transcript 17.2.26, page 441 (Marr).
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205 After undertaking the repairs on Links Road, Ms Marr then turned
her attention to the rezoning application. She did the sketch that is in
evidence for the joint occupation.142 She then went to see Mr Scott to
get him to sign the application:143
MARR, MS: And - and - and my other clients have said, 'Sorry. I'm a
bit under the pump,' and then I did that freehand drawing. It was before
CAD computers. Anyway, I can't use computers. I've proven myself
computer illiterate. So I did that drawing and then take them around to
Mr Scott…to sign because we're doing a joint application.
GETHING J: Yes.
MARR, MS: And he has gone, 'I don't think I want to sign this deed of
agreement.' And I've been so focused on fixing the mess - - -
GETHING J: So let's go back half a step because what you said that
you took around for him to sign was the drawings?
MARR, MS: Yes.
GETHING J: And then you just dropped in the deed of agreement.
Where does that fit in?
MARR, MS: Well, he said, 'I don't want to sign the deed.' I said,
'You've got to sign the deed of agreement.' He said, 'No. I don't think
it's fair to me,' and I said, 'Well, why don't you come up with 46, 47
grand.' He said because he didn't have it, and I said, 'So, what, you
change the rules afterwards,' and he went, 'Yes. I don't - I just don't like
it,' and I went, 'Well, Phil, you can't do that. It's - it's a - it's breach of
contract,' but he kept - but he acquiesced. He kept paying the mortgage.
And now the story has changed: that it was - I was financially
delinquent, I only put 28 grand in.
206 As to the agreement between them, Ms Marr said:144
MARTINO, MS: And so the agreement was that you would be fifty-
fifty co-owners, and that you would then - Mr Scott would make up his
contributions by making payments into the - into the joint account,
which is Streamline One?---No. We each borrowed 68 grand, each of
us, and he borrowed all of the rest of his purchase price from me and
agreed to repay me.
And where do I find that - - -?---And then - and then after he has
induced me by his misrepresentations to put his name on the title, he
142 PTB E, pages 35 - 36.
143 Transcript 16.2.26, pages 403 - 404 (Marr).
144 Transcript 18.2.26, pages 764 - 767 (Marr).
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wants to change the deal. And he kept gaslighting and twisting. And,
Ms Martino, that's why we're here, so no.
So where do I find that agreement that he - because - because if you -
well, let me put it this way. Wait a second?---In the deed of agreement
that secretly got - it's gone.
Yes. But if you knew that at the point of settlement, why - - -?---I
didn't know - no. He didn't - he didn't raise it until after settlement, and
I was so busy fixing the vandalism damage.
But why didn't you then just vary the contract and say, 'Well, actually,
you haven't paid your shares, so I'm going to have a bit more than you.
You're not going to be a 50 per cent owner'?---What? That's not - - -
Well, why didn't you just make it - - -?---You've - you've got it the
wrong way around. I was more than 60 per cent because of how much
more I put in. He had to catch up. He's the one who breached the
contract, Ms Martino.
…
GETHING J: Okay. Could I ask this question. Was there any - after
the settlement, was there a conversation between you and Mr Scott
about who would be responsible for payment of the joint loan?---Yes.
What was that conversation?---It - it was the conversation before.
No, no, no. I am not talking about the conversation before?---Okay.
Basically - - -
Was there a - - -?--- - - - he needed $905 a month to repay his share of
the mortgage, pay his rent, and pay me back my loan - - -
Okay?--- - - - to him.
…
MARTINO, MS: So in the same vein as the settlement costs of $7,000
that you were going to equally be responsible for, you were going to be
equally responsible for the 136,000?---Yes.
And you and Mr Scott agreed?---And the way he paid - - -
And - - -?--- - - - me back the personal loan - - -
…
MARTINO, MS: Yes. So you were going to be - go equally, pay
equally, the joint loan of 136,000?---After he caught up, after he caught
up.
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5.3 Mr Scott's evidence
207 Mr Scott's evidence as to the agreement in relation to Home
Loan 1 was as follows:145
MARTINO, MS: And so just with the loan amount too, what was the -
what did you and Diana agree or discuss? What's your recollection
about how the loan proceeds of 136,000 would be used between
you?---Because it's going to be used to buy the house.
Yes, and how much would you use?---How much I?
Do you use, sorry?---Okay. Well basically, the simplified calculation
before it came in with damage and before we were settling on other
things such as differences in stamp duty and balancing up and things,
there's a loan - there's a purchase price of the house for 170,000 and we
are borrowing 136 from the bank. Basically 80 per cent of the loan.
We have that approval of that finance, so we have to find the other 34.
Now, I have 6 I don't have any more, so I provided 6 and Diana has
provided. So if you look at it, as to what at that point is my share of the
loan, my share is 85,000 less 6, 79 and Diana's share is 85,000 less 28.
And how did you and Ms Marr agree that was going to be dealt with
moving forward?---Can you tell me what - can you tell me what 85 less
28 is? 65, 8, 57.
Sorry, 28,000, did you say?---85,000 less than 28.
Yes, sorry, 57,000, yes?---57,000. So 57 and 79 up to the loan 136.
Yes, and how did - how was that going to be dealt with between the two
of you, the fact that you had more of the loan moving forward once the
property settled?---Okay, then, it was going to be recognised in future
settling up. There's no specific time we're going to settle up. We've
just both doing our best in there to put money in, secure the property
and work out what work has to be done and how we're going to do it.
However, it's acknowledged that I will pay more in due course on the
mortgage. I will catch up and we will at some point be even and then
presumably continue on as even, both making equal contributions.
So your understanding was you still retain the 50 per cent interest in the
property?---Yes, that's my understanding.
208 Mr Scott's evidence as to the arrangement or agreement between
him and Ms Marr following settlement was in the following terms:146
145 Transcript 23.2.26, pages 1138 - 1139 (Scott). See also: transcript 19.6.26, page 1724 (Scott).
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To my mind, the agreement that would finally arrive at settlement
included, to me, inconsequential changes to settlement finance from
120 to 130, which actually came in at 136. Dates of finance and
settlement that were, essentially, disrupted by the damage to the house
and the settlement anyway afterwards on the 11th. And the
arrangement we have between us is that we have purchased this house
together, 50 per cent each, and we are going to proceed through and
make various contributions to achieve our aim, perhaps if we can, of
turning it into commercial premises. But we each will own 50 per cent
and be responsible for 50 per cent of the costs. We may pay more here,
more here, there. One person organises something, pays it. Another
person organises something, pays it. Or money comes in, pays into the
account. But it will all be sorted out in the wash to be 50-50 in the end.
There was no, absolutely no inkling that anything else was expected
except that this was an equal even transition and that we would both
work to achieve what we're aiming with the property.
GETHING J: And you earlier gave some evidence about the
arrangement with the mortgage and the differential contributions. Did
that - did that, did your evidence in relation to - what - okay, so you
gave that at the point of time when, so just tell us what, in the final
analysis after settlement, what was your understanding of the
arrangement as a preparation for mortgage?---Immediately after
settlement, I have made a certain deposit, $6,000 to date, and I haven't
made any mortgage payments yet. And Diana has made her equity
transfer, her deposit of two and a half, and she's made no mortgage
transfers yet. So, immediately, they were starting off with an
imbalance, and I will be contributing more shortly and balancing up.
So am I right in understanding your evidence to be that there was no
change to the agreement which you gave evidence about before lunch,
which was, I think, that your, that you'd borrowed, I think your
evidence was 79,000. Ms Marr had borrowed, your response was
79,136, Ms Marr was (indistinct) for 57,000 of the 136, you would
make payments over time to catch up, and then you would be
equal?---Yes, except that got slightly modified, because the house was
purchased at a reduced amount, by $4800, which I believe is just simply
the damage revoked. So the vendors accepted 165,200 instead of 170,
which was noted in Anne Mulcahy's letter to us.
…
And in the process of that, I put in $6000, but Diana has taken out
$6000, out of the pot, and used that for her expenses, and then we've
both paid stamp duty expenses, mine smaller than hers. And also, the
settlement (indistinct) I believe, were simply added, and were part of
the equity transfer that came out of Commonwealth Bank, from the
146 Transcript 23.2.26, pages 1152 - 1154.
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Brentwood property, to cover Diana's side. So they had a balance, at
that point.
Right. And what's the basis of what you've just told me? Is that your
assumption, or is that a conversation you recall having with Ms Marr
after settlement?---No, this is me looking at all the documents in detail
now, and knowing the damage, and reading Anne Mulcahy's letter. I
was not fully conversant with what the figures were at that time, but I
knew that equity had been transferred. I knew that the money was
coming from the Brentwood property, which is why I was guaranteeing
the Brentwood property.
So am I right, then, in understanding your evidence to be that the intent
was that the expenses would be shared equally, in the wash-up?---Yes,
your Honour.
So that was the agreement at the time, that there's an unequal
contribution to the loan, which will be addressed over time, and the
expenses will be shared equally, and come out in the wash?---Yes, your
Honour.
So there was no more sophisticated agreement than that at the
time?---No, your Honour. No more sophisticated agreement than that.
…
MARTINO, MS: So you just said, then, that at the point of settlement,
you had a lesser contribution than Ms Marr?---Mmm.
And in terms of the interest in the property, what was your
percentage?---50 per cent.
209 In cross-examination, Mr Scott put the arrangement in pithy
terms:147
We had an arrangement where we decided we would do this project
together and we would seek the amount of money we needed from the
Commonwealth Bank and I had a $6000 deposit available and did so
and you contributed a larger deposit and then we borrowed the balance
from the Commonwealth Bank.
210 When cross-examined, Mr Scott also confirmed his evidence that:
(a) there was no deed of agreement;148
(b) there was no discussion about vendor finance;149
147 Transcript 17.6.26, page 1334 (Scott).
148 Transcript 17.6.26, page 1334, pages 1339 - 1340 (Scott).
149 Transcript 17.6.26, page 1348 (Scott).
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(c) there was no 'vendor finance document or anything like that';150
(d) he has no recollection of any conversation with Mr Disspain;151
and
(e) he was not privy to the final agreement Ms Marr made with
Rancore in relation to the reduction in purchase price due to the
Vandalism, though knew there was an agreement as settlement
was able to proceed;152
(f) his share of Home Loan 2 was $79,000 and he had to catch up
with Mr Marr to make the loan balances equal;153 and
(g) the costs of both settlements would need to be equalised.154
6. Events following settlement
6.1 Banking arrangements
211 On 13 November 1998, CBA Bank Account 10138106
(Streamline 1) is opened in the names of Ms Marr and Mr Scott.155
Streamline 1 is where the mortgage repayments for Home Loan 1 were
paid from. It was to be the account out of which the day to day
expenses were to be paid.
212 There is in evidence an almost complete set of bank statements for
Streamline 1.156
213 The first statement recorded a nil opening balance and the issue of
a cheque book.157 The second statement records the first deposit being
of $900 on 11 December 1998.158 Ms Marr gave evidence that she paid
this amount in so that there would be money in the account to meet the
impending mortgage payment.159 Mr Scott says that they paid it in
jointly.160
150 Transcript 17.6.26, page 1348 (Scott).
151 Transcript 17.6.26, page 1349 (Scott).
152 Transcript 17.6.26, pages 1336 - 1337 (Scott).
153 Transcript 17.6.26, pages 1398 - 1399 (Scott).
154 Transcript 17.6.26, page 1399 (Scott).
155 PTB C, page 3.
156 PTB C.
157 PTC C, page 3.
158 PTC C, page 4.
159 Transcript 17.2.26, page 438 (Marr).
160 Exhibit 25, page 2.
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214 There is no record of a cheque in the amount of $4,800 being
deposited into Streamline 1 over the period to 22 March 1999.
215 Ms Marr accepted that the amounts of $853 that were paid in
around this time were probably paid in my Mr Scott.161
6.2 Vandalism repairs
Mr Scott's evidence
216 Mr Scott gave evidence that once he and Ms Marr had access to
Links Road, they started right away to clean it up. They both
contributed to the cleanup. A priority was to stop people climbing in
through the windows. Ms Marr organised glazing of the windows.
Mr Scott believed that this cost around $1,600 and that Ms Marr paid
for this. He organised a telephone connection and a security system. In
this regard, Mr Scott identified an invoice in the amount of $1,099 for
the installation of the security system dated 29 January 1999.162 No
painting or floor sanding was done at that stage.163
Ms Marr's evidence
217 Ms Marr gave evidence that in the three weeks after settlement she
arranged for a number of contractors to come in and do work. She paid
them. Within a fortnight, sufficient work was done to make the house
secure. She disputed that Mr Scott did any work.164 Her evidence
was:165
I did all the repairs. I did the schedule of costs. I got all the quotes.
I supervised the work.
218 Mr Marr said that she paid for the SESCO security system, which
was installed in December 1998, but not paid for until later with the
invoice for the monitoring fee.166
219 In her statement of claim, Ms Marr set out the work she says was
done:167
Notwithstanding the Legal Interests, the plaintiff made financial and
non-financial contributions to the Property by incurring and paying for
161 Transcript 17.2.26, page 444 (Marr).
162 DTB 3, page 49.
163 Transcript 23.02.26, page 1155; Transcript 17.6.26, pages 1396 - 1397, 1406 - 1407 (Scott).
164 Transcript 16.2.26, pages 353 - 354, 400 ff; 17.2.26, pages 442, 732 - 734 ff; 760 (Marr).
165 Transcript 18.2.26, page 725 (Marr).
166 Transcript 17.2.26, page 442 (Marr).
167 Claim par 12A.
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the repair, maintenance and improvement of the Property, attendance to
engaging and supervising contractors to carry out repair works at the
Property, and otherwise carrying out cleaning/clearing work at the
Property which were to be undertaking shortly after the O&A.
Particulars
a) Between 1 and 4 November 2018 , the plaintiff undertook
various works at the Property on a full-time basis in order
(primarily to prepare a Schedule of Costs to repair and clean and
clear rubbish from the property) and otherwise liaised with
painters, glaziers, plumbers, electricians and other service
providers to obtain quotes and arrange for maintenance and
repair works to be carried out on the Property to make it fit for
human habitation (Works).
b) The estimated costs of the Works was approximately $12,800
and included:
(i) replacing all glazing at the Property;
(ii) replacement of window treatments that were destroyed
or vandalised with graffiti;
(iii) replacing lounge room and dining room floor coverings
or stripping and sanding all carpeted and timber floors
throughout the Property which were vandalised with
graffiti;
(iv) replacement of damaged and/or destroyed toilet pan,
cistern and sewer pipe;
(v) oil-based undercoat painting works to walls and
ceilings to seal graffiti;
(vi) subsequent top-coat painting of the walls and ceilings;
(vii) electrical repairs to non-functional and/or destroyed
wall and ceiling mounted light fittings; and
(viii) other sundry works such as the provision of a skip bin
and disposal of rubbish resulting from cleaning the
Property, disposal of rubbish and performance of the
above-mentioned works;
220 Ms Marr gave evidence that the work set out in paragraph (b)
above was the work she arranged to be carried out.168
168 Transcript 16.2.26, pages 355 - 358 (Marr).
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6.3 Determination
221 Given that Ms Marr was the one who was primarily liaising with
the representatives of Rancore about the Vandalism claim and received
the compensation to do so, I accept her evidence that she was
responsible for arranging the repairs. There is a caveat. I don't accept
that this was to the exclusion of Mr Scott as that is implausible. So I
find that he was also involved. So my finding is that Ms Marr was
largely responsible for arranging the repairs.
222 Ms Marr claims the following amounts in relation to Vandalism
repairs:169
Item Particulars Amount
1 Schedule of costs preparation DM $ 600
2 Supply blue fowlerware WC suite $ 345
3 Vision Glass replace glazing $ 2810
4 Electrician repair Meter box etc $ 500
5 KMM Plumbing new WC, pressure
test etc
$ 710
6 Connect phone for security system $ 250
7 Connect phone for security system $ 150
8 Total Bin Hire $ 230
9 Labour hire $ 54
10 Painting oil-based undercoat etc $ 1000
11 Project management & supervision
by DM
$3,000
$9,649
223 In relation to items 1 and 11, I accept Ms Marr's evidence that she
spent a considerable amount of her own time and effort in organising
the repairs and carrying out some of the work. I deal with the issue of
whether she can claim for her time in section 9.7 where I consider the
agreements which they made.
224 In relation to item 2 (toilet), Ms Marr said that she had a toilet pan
which she supplied. She had a quote to replace it at $385.170 Given that
she had to purchase the toilet pan in the first place, I allow this cost of
$345 as claimed.
225 In relation to item 3 (glazing), Ms Marr gave evidence that a
company called 'Vision' replaced all the glazing at a cost of $2,810.171
169 Exhibit 28, p 1 (my item numbers).
170 Transcript 16.2.26, pages 357 - 358 (Marr).
171 Transcript 16.2.26, page 357 (Marr).
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However, her quote was for $1,200 [134], (with the amount of $2,810
being for painting). Mr Scott accepted that the cost was $1,600.172 I
will allow the amount at $1,600.
226 In relation to item 4 (electrical), Ms Marr's evidence was that this
cost $500.173 As to what was done:174
So we had the metre box, but it was also, there were bare wires hanging
out of the wall that ripped the wall-mounted light fittings in the lounge
and dining. And there's two ceiling oysters, and they had just torn them
out and they were hanging.
227 Mr Scott did not recall ever involving an electrician in the
repairs.175 Again, there is no documentary evidence either way. Given
that Ms Marr was largely responsible for arranging the repairs, I accept
her evidence and allow this cost.
228 In relation to item 5, plumbing, Ms Marr said that this was for
installing the new toilet, repairing a crack on the sewer pipe underneath
and pressure testing it. She said this cost $500 to $600.176 Mr Scott
said that $255 was paid for toilet installation and that no pressure test
occurred.177 Mr Scott identified an invoice from KMM Plumbing for
work done on 24 November 1998 in the amount of $255.178 The work
was 'Unblock WC' and 'Repair Outside Water Pipe'. The invoice was to
Arteschi Designs. Mr Scott says his paid this invoice from Streamline 1
by cheque numbered 000001.179 Ms Marr says that there is no evidence
that this cheque was ever presented. However, the bank statement for
the period from 14 April 1999 to 18 August 1999 is missing.180 Given
that this invoice was to Ms Marr's business, and that she was largely
responsible for arranging the repairs, I accept that she paid it and that it
the cheque from Mr Scott was never presented. I allow this cost, though
only at $255 consistent with the invoice.
229 Mr Scott accepted item 6 (phone for security system), item 7
(power for security system) and item 8 (bin hire).181 I allow these costs.
172 Transcript 18.6.26, pages 1396 - 1397, 1618 (Scott).
173 Transcript 16.2.26, pages 357 - 358 (Marr).
174 Transcript 16.2.26, pages 357 - 358 (Marr).
175 Transcript 18.6.26, page 1629 (Scott).
176 Transcript 16.2.26, pages 357 - 358 (Marr).
177 Transcript 18.6.26, page 1630 (Scott).
178 DTB 3, page 34.
179 Transcript 19.6.26, pages 1719 - 1720 (Scott).
180 PTB C.
181 Transcript 18.6.26, page 1630 (Scott).
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230 In relation to item 9 (labour hire), Ms Marr gave evidence that she
'got a guy just out of the newspaper' for three to four hours at $18 per
hour.182 Mr Scott did not recall any labourer being involved.183 Given
that Ms Marr was largely responsible for arranging the repairs, I accept
her evidence and allow this cost of $54.
231 In relation item 11 (painting), Ms Marr gave evidence that: 184
The painting was only the oil-based paint to seal the inky pen and the
spray-on graffiti. And that was about $900 for the paint, but there was a
lot of things like paint roller trays and brushes and drop sheets.
She said that she sourced the paint though someone she knew at a cost
of around $1,200.185 Mr Scott said that he did not think that any
painting was done at that time.186 There is no documentary evidence
either way. Given that it is not in issue that the walls were heavily
graffitied, I find it plausible that Mr Marr would have at least made
some attempt to paint them. As mentioned elsewhere, this ended up
proving difficult as the ink leached through the paint (see [128] and
[247]). I allow this cost at the $1,000 claimed.
232 In summary, leaving aside items 1 and 11, I find that Ms Marr
expended $4,384 in November and December 1998 on repairing the
Vandalism damage. I deal with the attribution of these expenses in
section 9.7.
7. Events from 1999 to 2023
7.1 Rezoning applications
233 The facts in relation to the zoning applications were not in dispute.
This was handled by Ms Marr who generally had a better recollection
of the detail, so I find in accordance with her evidence.
234 As part of the rezoning application, various plans were prepared
which showed Arteschi Designs and Scott & Associates both having
space in the renovated building at Links Road.187 Having sufficient
parking spaces was a significant issue for the council.
182 Transcript 16.2.26, page 358 (Marr).
183 Transcript 18.6.26, page 1630 (Scott).
184 Transcript 16.2.26, page 358 (Marr).
185 Transcript 16.2.26, page 358 (Marr).
186 Transcript 18.6.26, page 1630 (Scott).
187 An example of which is at PTB E, pages 35 - 36.
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235 Around 1 December 1998, Ms Marr lodged the redevelopment
application to rezone Links Road from residential to commercial. The
initial zoning for Links Road did allow it to be used for certain
commercial purposes, for example, medical businesses.
236 The initial application was knocked back by the City of Melville at
the end of January or early February 1999.
237 Ms Marr then had some meetings with councillors from the City
of Melville in effect to lobby them to view the application favourably.
238 There was then a further application in mid-1999.
239 In August 1999, Mr Scott wrote to adjourning landowners seeking
their comments on the proposed rezoning application.188
240 The further application was again not successful.
241 In December 1999 an appeal was lodged with the Western
Australian Planning Commission.189 The appeal was not successful.
242 In 2001, Mr Scott applied for a zoning change to allow him to
occupy Links Road and operate this business from the premises. This
application was also refused.190
243 Towards 2008 the City of Melville was working on a new town
planning scheme for an area known as the 'city centre frame' essentially
wrapping around the then Garden City shopping centre. However,
work stopped on this due to work being done on nodes around the
Mandurah train line.191
244 Links Road was ultimately zoned commercial in April 2014.192
7.2 Ms Marr's initial occupation
245 Ms Marr moved into Links Road to live on 2 April 1999, having
moved from the Brentwood Property. She was paying what she
described as 'rent' at the rate of $100 per week, usually on a monthly
basis.193
188 DTB 1, page 20.
189 PTB E, page 38.
190 See generally: transcript 23.2.26, page 1177 ff (Scott); DTB 1, page 121.
191 See generally: transcript 17.2.26, page 507 ff (Marr).
192 See generally: transcript 17.2.26, pages 579 - 581 (Marr).
193 Transcript 16.2.26, page 407; transcript 17.2.26, page 445 (Marr).
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246 Ms Marr gave evidence that some boxes belonging to Scott &
Associates were also moved in the house around this time.194 In
cross-examination, Mr Scott said that he moved 6 boxes in around the
time Byron (Mr Scott's son) was using Links Road as a study venue,
that being 2003 (see section 7.7). He moved the boxes out at the
request of Mr Biesiekierski (see section 7.8).195 Mr Scott's evidence is
more specific, so I prefer it. However, whether the Scott & Associates
boxes were put there in April 1999 or 2003 is not material to the final
analysis.
247 At this point the graffiti damage was still evident. The graffiti had
been done in big xylon pens, large broad based markers. Attempts
were made to paint over the graffiti. However, the ink bled out of any
water based undercoat that was applied. This issue was only addressed
at a later stage when an oil based undercoat was used. There were no
curtains or window treatments there at that time.
248 Mr Scott's evidence was that Ms Marr was in occupation until
January 2001.196 Ms Marr's evidence was that she fully moved out on
10 January 2000. She moved out to move down to the south of the
State. She had been living between her residence down south and
Links Road in the preceding months.197 The analysis in Exhibit 12,
tendered by Mr Scott, (Summary of Contributions) shows a pattern of
regular deposits by Ms Marr of amounts between $400 and $1,000 over
the period from 12 April 1999 to 11 March 2001. After that date, the
deposits by Ms Marr are more sporadic. I regard this evidence as being
equivocal on the issue of when Ms Marr vacated. On balance, on this
issue I find that Ms Marr's recollection is more reliable. This is because
she was able to place the date of her move into the context of the other
events that were happening in her life at the time, going into some
detail. However, this issue is not material to the final analysis.
7.3 Period of vacancy
249 After Ms Marr moved out, Links Road was vacant for some time.
250 Ms Marr gave evidence that on two occasions, cheques deposited
into Streamline 1 in 2001 by Mr Scott were dishonoured.198
194 Transcript 16.2.26, pages 408, 444 (Marr).
195 Transcript 17.6.26, page 1392 (Scott).
196 Transcript 23.02.26, page 1161 (Scott).
197 Transcript 16.2.26, page 412; transcript 17.2.26 pages 436 - 437 ff; transcript 19.2.26, page 874 (Marr).
198 Transcript 17.2.26, pages 452 - 453 (Marr).
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251 Mr Scott agreed to finish the vandalism repairs.
252 Ms Marr gave evidence that during this period, Scott & Associates
were supposed to be paying rent.199 She put to Mr Scott that the tenant
during this period was Scott & Associates, which he denied.200
253 Mr Scott gave evidence that after Ms Marr moved out, he started
to do some further rectification work. He applied a turpentine based
undercoat which sealed in the graffiti ink, then a water based undercoat,
then a topcoat. Ms Marr chose the paint, but Mr Scott did most of the
work. The preparation and painting took some time. He paid for the
paint, referring to a credit card payment to Taubmans in Welshpool on
5 January 2001 in the amount of $567.71.201
254 Mr Scott then said that he sanded the floors over September 2001.
He referred to credit card payments to Workforce Equipment Hire in
Fremantle for hiring sanding equipment.202 Mr Scott added that these
expenses were not for Central Avenue (see section 7.5), as the sanding
work done on that property was done over three days immediately
following settlement on 20 July 2000.203 Ms Marr thought that the
sanding work was done in October 2002.204 However, the invoices in
evidence support Mr Scott's evidence that it was done in September
2001. There is also a letter from Mr Scott to Wesfarmers Federation
Insurance Ltd (WFI) dated 18 October 2001 attaching a cheque for
what I understand to be the insurance premium.205 Mr Scott goes on to
state:206
We have cleared the house and sanded the floors, we are currently
sealing the floors and will then re-paint all walls, ceilings and exterior
timber. The walls of the enclosed porch will be replaced. We expect to
be finished in two to three months.
255 Consistent with the documentary evidence, I find that while the
sanding was done in September 2001, the internal painting was not
done until October 2002 (see [278]).
199 Transcript 17.2.26, pages 579 - 580 (Marr).
200 Transcript 17.6.26, pages 1390 - 1391 (Scott); Transcript 18.6.26, page 1511 (Scott).
201 DTB 2, page 34.
202 DTB 2, pages 42 - 43.
203 Transcript 23.2.26, pages 1163 - 1164 (Scott).
204 Transcript 17.2.26, page 470 (Marr).
205 PTB E, page 43.
206 PTB E, page 43. See also: transcript 17.6.26, pages 1414 - 1416 (Scott).
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256 Some repairs to the brickwork were also done at some stage.207
7.4 Home Loan 2
Facts which are not in issue
257 It is not in issue, and I find, that:
(a) in around May 2002, Ms Marr and Mr Scott agreed to seek a
further loan from the CBA;
(b) by letter dated 13 May 2002, CBA advised that it had approved
a loan application for Mr Scott and Ms Marr;208
(c) the loan in (b) was for $36,000 and was to be secured by a
registered mortgage over Links Road (Home Loan 2);
(d) Home Loan 2 was drawn down on 27 May 2002 for $36,000;209
(e) Ms Marr used an amount of $17,900 from Home Loan 2 as an
advance to purchase a motor vehicle from Prestige Honda;210
and
(f) the balance of the Home Loan 2 funds in the sum of $18,100.00
was paid into Streamline 1 on 15 May 2002.211
Ms Marr's evidence
258 Ms Marr consistently referred to Home Loan 2 as the 'equalisation
loan'.212 For example:213
But it wasn't - the purpose of the loan was not a car loan. The purpose
of the loan was equalisation. What I spent my equalisation funds on
was my money. It wasn't a car loan. It has just been reinvented to be a
car loan.
259 As to how Home Loan 2 came about, Ms Marr gave evidence
that:214
207 Transcript 17.2.26, pages 459 - 460 (Marr).
208 DTB 1, pages 126 - 136.
209 PTB B, page 2.
210 DTB 1, pages 124 - 125; transcript 17.2.26, pages 464 - 465 (Marr).
211 PTB C, page 23; transcript 17.2.26, page 469 (Marr).
212 Transcript 16.2.26, pages 357, 402 (Marr); transcript 17.2.26, pages 463, 465, 476, 556 (Marr); transcript
18.2.26, pages 769, 771, 773 (Marr); transcript 19.2.26, page 814 (Marr).
213 Transcript 17.2.26, page 465 (Marr).
214 Transcript 17.2.26, page 463 (Marr).
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MARR, MS: He isn't repaying me the loan. He's not making any
progress on his repayments to me. It's just the bare minimum, just as if
the only payment he had to make was the mortgage payment, not the
rent, and not repay me the personal loan he borrowed. So I say, 'Look,
what - what is happening?'
And he goes, 'You know, ever since we bought the house, I'm really
stretched, and things have gone wrong, and I've got some bad debts',
and I went, 'Okay. What we will do is we will borrow some extra
money', and this is how the equalisation loan comes about. That's
called M2. Okay. So I say, 'Look, I - by my calculations, you owe me
at least nine - I'm over this, what we're going to do is exactly the same
as we did with the other one'.
You say, 'Okay. We will borrow 36 grand'. I want to take 18 out, and I
want to keep 9 in the joint account, and he kept 9 in the joint account.
The other 9, he repaid to me. However, this has been completely
recharacterised retrospectively. I had never heard anything other about
it until I got the first defence and counter-claim.
GETHING J: So that's - - -
MARR, MS: I had no idea it was a car loan.
260 Ms Marr accepted that both she and Mr Scott were jointly liable
for the whole amount of the loan.215 Then:216
MARR, MS: So we both borrowed 18, and - but I retained 27 of it.
GETHING J: But as far as the bank is concerned, you borrowed 36
together?
MARR, MS: Yes. Yes. Yes.
GETHING J: Okay.
MARR, MS: It wasn't between us and the bank, it was between us, to
get Mr Scott to equalise and to provide us with a float. And also that
we had an outstanding invoice because Ardross and Applecross were
the first Perth suburbs to go to the underground power, and we got a
quotation for the underground power for the property, of $6000. And I
said, 'Well, how are we going to pay this?'
And so we - we're going to need to borrow - we're going to need to
borrow money for the carpets, for the blinds, the floor stripping, the
sanding. We're going to stop using it as a study dive for the Scott
children. We are going to use this for the purpose it was intended for.
215 Transcript 17.2.26, page 464 (Marr).
216 Transcript 17.2.26, page 464 (Marr).
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261 In cross-examination, Ms Marr added:217
MARTINO, MS: Yes. And I think we then - we will be able to
conveniently then just do the 2002 home loan too. Thank you. So let's
talk about what occurred in 2002. So there's another home loan, isn't
there. There's home loan 2?---Yes, the equalisation loan.
Right?---Yes.
Okay. And - so 2002. You call this the equalisation loan?---Because
that's what it was.
Right. And what do you mean by that, though?---So that he could
finally catch up with me.
So he caught up. He caught up - - -?---He could finally - he could
finally catch up.
Yes?---With me.
Yes. Yes?---Because he - - -
So his - you contributed more at settlement, and he has to make sure, in
order - - -?---Yes, because I put in 42, and he put in six.
Yes?---Yes, that's right.
262 And:218
And so why take on more debt?---Because he hadn't paid me what he
owed me, and he caused the mortgage to go into default on numerous
occasions, because he wasn't pulling his weight. Because he was
financially overextended, because he purchased, with Miss Caruana, 4
Central Avenue. He was stretched, and he needed some working
capital, and the house needed renovations. And I had come back from
down south. I didn't need a new car. I wanted a new car.
Yes?---And because he still owed me money, because he still owed me
money - - -
So that - - -?---How I spend my money when he repays me doesn't
make it a car loan. It makes it an equalisation loan, that I just traded in
the Subaru Liberty on a Eunos.
263 Then in response to my question trying to clarify what Ms Marr
meant:219
217 Transcript 18.2.26, page 769 (Marr).
218 Transcript 18.2.26, page 771 (Marr).
219 Transcript 18.2.26, pages 772 - 773 (Marr).
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Am I right in understanding the position that after this loan, which you
call the equalisation loan, where you are able to take out of effectively
the … take out $18,000, that after that, in your mind, the contributions
have been equalised?---As long as I kept half of the remaining. There
was … 18,100.
Well, so in relation to the last 18,100 then - so it is half each - but as I
understand it, the $36,000 became money that had to be paid off as part
of what you have described as the joint endeavour?---Yes.
Okay. And that at the - but because you had taken out a certain amount
of that… the contribution to the joint endeavour had at that point in
time been… equalised?---Not - not quite, but… I just wanted to… cut a
deal.
Yes. Okay. You cut a deal. But to your - well, you cut a deal to
effectively equalise it?---Yes. I - I knew I was taking a - but he - he
was in a lot of financial difficulty, a lot of pain. He is still around in a
bashed-up old Ford Fairlane.
And then - - -?---And you know, he is - - -
Can I then understand your argument, your position - tell me if I am
wrong - is that from 2002 onwards, you were both equally responsible
for paying off all the loans?---Yes, as - as long as we got (indistinct) to -
I didn't know he would - because I was pushing back when he installed
his son. And - - -
Can I understand that in two parts? Okay. So the first part is that your
evidence is that from very early on, you were pushing Mr Scott to get
fair market rent?---Yes.
And that had two components. The first component was getting it up
to - - -?---Up to standard.
- - - fair market rent for a residential property?---Sure.
Your second component was commercial?---Correct.
Okay. So that is one part. Yes. Parallel to that, both of you have got a
debt which you have to pay off… for which you are both equally
responsible?---Yes.
Yes. Yes?---Yes.
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Mr Scott's evidence
264 As to how Home Loan 2 came about, Mr Scott gave evidence
that:220
In 2002, Diana came to me and said that she would like us to take out
an additional loan on the property for the purpose of her buying her car.
And Diana had already picked out a car and the price was 17,900. I
don't know if she had already paid the deposit on it or what. But this
car was 17,900, and the proposal to me was we buy — initially the
proposal was, 'Don't you want a car, too? We'll buy one each, 18,000
each.' I said I didn't need a car. She thought we might buy — borrow
two cars, extend the house line out, borrow two — buy two cars and
also have a bit of money left over for the house to do further
renovations. I didn't need a car. I didn't consider Diana's request
unreasonable because I was, you know, equity-wise, the initial larger
payment in the beginning by Diana for that. I didn't object to that. I let
her organise it and Diana went to the Commonwealth Bank and
negotiated. I thought it was an extension to our existing loan, but it
turned out to be a separate home loan altogether and that became home
loan 2. But the agreement at that point was — I didn't know what I
wanted to do with my 18,000, but Diana was going to take out the loan
and spend her share of it on the car loan. I suggested I would perhaps
leave mine in for the moment. We will leave mine in and do the
renovations with it, and that would be my — a further contribution.
Anyway, we proceed, she negotiates with the Commonwealth Bank,
and there is even at one point, some of the documentation we have
saved from that and Diana had negotiated and told the loans officer that
initially we were going to buy two cars and 18,000 plus 18,000 was
quoted in those initial loan application documents. We were granted
the loan, and we received the loan in May 2002 and that became home
loan 2. And the loan was delivered as a bank check for Diana for
17,900, a further 100 bringing it up to 18,000 for her and 18,000 for me.
So deposited in our account was 18,100 and walking away with the
check for 17,900 off to Prestige Honda was Diana to buy her car. So
we have the extra line on the car. Now up to that point I've actually
paid a little bit more mortgage than Diana, but I haven't caught up. But
at that point I believe, and the figures will show, that I have now put in
more equity into the deal, into the pot than Diana, including the deposits
earlier on and everything. With the car transaction of 18,000, we have
gone past equal, and I'm slightly ahead in my contributions.
GETHING J: So do I understand your evidence then to be that the
18,000, I understand what your evidence is saying, your 18,000, you
regard as a contribution to the property?---The 18,000, we've drawn
18,000 additional equity out of it. I've left mine back in the working
220 Transcript 23.2.26, pages 1164 - 1165 (Scott).
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accounts for the moment and Diana has taken her 18,000 away and
bought a car with it.
But you consider that to be a contribution?---So I consider, we've both
drawn out, and I've put back, effectively, 18,000.
265 And then in cross-examination Mr Scott said:221
Home loan 2 came about because you needed a car, and you even
approached Commonwealth Bank on the premise that we both needed a
car, and you opened discussions with Commonwealth Bank on that sort
of loan arrangement. I turned around and said, 'I do not need a car. I
do not know what I want to do with my half.' But I agreed that - to
facilitate your equity - sorry - your financial problem at the time - and
you needed a car, because you were driving up and down south, and the
old one had become unreliable. We would borrow 36,000 of which half
would be yours and half would be mine. It was never discussed at the
time as an equalisation loan, and I will show you by documentation that
I - although I started off a certain amount behind you, I was only 4000
or so behind you at the - at the point of that home loan.
MARR, MS: Okay?---And then the home loan came about, and I was
ahead of you at that point.
266 As to how the $4,000 was calculated, Mr Scott explained to
Ms Marr:222
At the start of the original purchase, home loan 1, right at that point
when we completed purchase I had made contributions of $7702, and
you had made contributions, including your Brentwood equity
drawdown of $29,541. On that basis, you were $21,838.50 ahead of me
at the point we had taken out home loan 1. Then we continued on with
contributions by both parties up to the point - I say a day before home
loan 2, 14 May 2002. Additional contributions being made by both
parties in that period, my contributions amounted to $32,476.19. They
were Scott & Associates check account direct payments stream one-one
contributions - 1500, sorry, 15 for the Scott * Associates direct
contributions. $23,039 for Streamline One contributions, $5220.50 for
visa account payments, and I had made two direct deposits into home
loan 1, which was $801.64 and $1900 on the dates of the 15th of the 5th
and 17th of the 9th. All up, my contributions were $32,476.19 in this
period. Your matching contributions were. Streamline One,
$13,063.10; some payments you made that I accept, which are
vandalism payments, glass, $1600; phone connection, $250; power
connection, $250; (indistinct) $230. Your contributions over this period
between home loan 1 and home loan 2 were $15,293.10…
221 Transcript 17.6.26, pages 1394 - 1395.
222 Transcript 17.6.26, pages 1396 - 1397.
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…
. At that point, you were still ahead of me with your initial contributions
and those intervening contributions by the sum of $4655. So you've
gone from being 21,800 something to 4600 something. Then we take
out on that day, 15 May 2002, we take out home loan 2. We reach
fifty-fifty share, 50 per cent each share on that $36,000 home loan 2
borrowing. My share is deposited in Streamline One account, $18,000.
Your share you use for a payment on a personal car, $17,900, and
depositing the $100 balance also in the Streamline One account. So at
that point in time, the figures add up from beginning to that day of
home loan 2. My contributions total $58,178.69. Your contributions
total $44,934.10. You are, at that point in time, $13,244.19 behind me.
267 I return to the issue of what, if anything, was agreed between the
parties in section 9.7.
7.5 Mr Scott's relationship with Ms Caruana
268 At this point in the narrative, it is necessary to refer to the
evidence relating to the relationship between Mr Scott and Ms Caruana.
This relationship started in about 1998 and finished in 2012. It was a
de facto relationship. Mr Scott did not own Links Road when the
relationship commenced. At some stage, Ms Caruana found out that
Mr Scott had purchased an interest in Links Road. She understood that
Mr Scott and Ms Marr had purchased the property together. She knew
that it was mortgaged. Mr Scott had told her from time to time that he
was paying this mortgage. The first time she visited Links Road there
was a 'whole lot of graffiti everywhere'.223 Mr Scott had told her that
there was a possibility that the zoning could be changed on the property
to commercial, and then they would have an office together. She was
also aware that there were arguments between Mr Scott and Ms Marr
about Links Road.
269 In 2000, Mr Scott and Ms Caruana purchased a property on
Central Avenue, Beaconsfield (Central Avenue). Central Avenue was
registered in Ms Caruana's name. They moved into Central Avenue to
live. Before they moved in, she and Mr Scott did some work sanding
the floorboards. Also, before they moved in the house was re-stumped.
At some stage between 2001 and 2003 they repainted the interior of the
house. Then in the mid 2000's they did some more major renovations
to the house, putting on another bedroom with an ensuite, another living
area, a laundry, kitchen and studio. No major plumbing work was done
before the renovations. After the renovations, they undertook
223 Transcript 20.2.26, page 972 (Caruana).
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landscaping to the front and back gardens, including the construction of
a pond and a limestone wall. This latter work was done by a friend,
Drago Dadich.
270 When the relationship ended, Mr Scott and Ms Caruana entered
into an agreement as to how the properties that had interests in would
be divided. Mr Scott retained his interest in Links Road in the
settlement.
271 Ms Marr asserted that some of the invoices which Mr Scott has
claimed for in this action were in reality for Central Avenue.224 I deal
with this issue in section 16.3.
7.6 Rent Transactions Schedule and Monthly Rent Spreadsheet
272 Mr Scott prepared two detailed documents setting out his evidence
in relation to rent received. The first was a document summarising all
the amounts received into Streamline 1 and Streamline 2 by way of
rent. The source documents used were the bank statements for each
account.225 The amounts received from each tenant are itemised along
with the date on which it was received. Where the bank statement
description for the transaction is 'cash', Mr Scott has allocated it to the
particular tenant based on the timing, frequency and amount of the
payment. He gave evidence that where he received the rent in cash, he
would deposit it into the bank account the next day or so. I will refer to
this document as the Rent Transactions Schedule.226 I have reviewed
the Rent Transactions Schedule and am satisfied that it accurately
correlates to the relevant bank accounts.
273 The second document is a summary of the data in the Rent
Transactions Schedule in an A3 spreadsheet, which I will refer to as the
Monthly Rent Spreadsheet.227 Mr Scott pointed out an error in the
Monthly Rent Spreadsheet being that he has shown that Ms Marr was
in occupation to January 2002, when his evidence was that she was in
possession only until January 2001. I make separate findings in
relation to the period of each tenancy. However, at a general level, I
accept Mr Scott's evidence that the data in Monthly Rent Spreadsheet is
224 Transcript 17.2.26, pages 458 - 459 (Marr).
225 Being Exhibits PTB C and PTB D.
226 Exhibit 17.
227 Exhibit 16.
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a summary presentation of the data in the Rent Transactions
Schedule.228
274 Counsel for Mr Scott took Ms Marr through the methodology used
to create the Rent Transactions Schedule and the Monthly Rent
Spreadsheet. It is fair to say that Ms Marr was generally sceptical
about the analysis undertaken by Mr Scott.229 However, she did not
make any point about the methodology undertaken generally which
leads me to have any concerns about its reliability. She accepted that
the amounts identified as being paid into Streamline 1 were in fact paid
in, but commented that it was missing a few.230
7.7 Byron Scott
275 The first tenant was Byron Scott, one of Mr Scott's sons (whom
for clarity of reference I will refer to as Byron). The Rent Transactions
Schedule and Monthly Rent Spreadsheet show that:231
(a) Byron was a tenant for 39 weeks between March 2003 and
December 2003;
(b) Rent for Byron was paid into Streamline 1 from 12 March 2003
to 1 December 2003;
(c) in total Byron paid $4,200 in rent; and
(d) his average rent was $108 per week.
276 Ms Marr asserted that there were other amounts which had not
been paid into Streamline 1. However, she was not able to give any
admissible evidence to back up her assertion, so I do not find it
proven.232
277 Ms Marr asserted that Byron was also a Scott & Associates
employee earning $100 per week.233 However, there is no evidence of
this and, in any event, it is not material to the final analysis. Ms Marr
also asserted that the rent paid was two thirds of the fair market rent.234
I return to this issue generally in section 11.4.
228 See generally: transcript 24.2.26, page 1205 ff (Scott).
229 Transcript 18.2.26, pages 776 - 787 (Marr).
230 Transcript 19.2.26, page 850 (Marr).
231 Exhibits 16 and 17.
232 Transcript 19.2.26, page 850 (Marr).
233 Transcript 17.2.26. page 473 (Marr).
234 Transcript 17.2.26. page 474 (Marr).
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278 It appears that Byron was in possession of Links Road prior to
March 2003. On 23 October 2002, Mr Scott wrote to WFI saying:235
As discussed with your staff we confirm that this house has not been
tenanted for the last six months. It has been and continues to be used by
one of my sons studying for his TEE exams. He is in attendance during
six or so day time hours five to six days each week but his regular
presence will cease on completion of the TEE exaMs late November.
In the last three weeks we have repaired and re-painted throughout.
Prior to tenancy which is expected in January or February next year we
still have extensive external painting, paving and landscaping to make
good. We will advise you when we re-tenant the house.
On the positive side we continue to have a "Back to Base" monitored
alarm system (with Sesco Security) with smoke and movement
detectors along with upgraded door locks.
We advise that we did have several incidents mid this year when three
high school students broke into the back Laundry area (not alarmed) to
'smoke' on a regular basis. Their access was denied by boarding up the
area. They responded by setting fire to the grass around the back of the
building but this was promptly extinguished by the Ranger, the Fire
Brigade and myself. No damage was done. They have not returned.
279 I find what Mr Scott told WFI to be the truth. However, I regard
Mr Scott as still being in sole occupation while his school age son was
living at Links Road. Consistent with the financial records, I find that
he did not become a tenant in his own right until March 2003. The letter
adds to the chronology as to when the internal painting was done.
7.8 Richard Biesiekierski
280 The second tenant was Mr Biesiekierski, whom I have mentioned
is Ms Marr's ex-husband. This was arranged by Ms Marr. There was a
written lease, which is not now able to be found and so is not in
evidence. The rent was $130, which had been discounted by $20 as
there were still Scott & Associates boxes on the back veranda.
Ms Marr thought that Mr Biesiekierski, moved in in November 2023
and stayed for about 11 months.236
281 The Rent Transactions Schedule and Monthly Rent Spreadsheet
show that:237
235 PTB E, pages 50 - 51. See also: transcript 17.6.26, pages 1413 - 1414 (Scott).
236 Transcript 17.2.26, pages 475 - 478 (Marr).
237 Exhibits 16 and 17.
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(a) Mr Biesiekierski, was a tenant for 52 weeks between February
2004 and February 2005;
(b) rent for Mr Biesiekierski, was paid into Streamline 1 from
10 February 2004 to 27 January 2005;
(c) in total Mr Biesiekierski, paid $6,590 in rent; and
(d) his average rent was $124 per week.
282 In closing submissions, counsel for Mr Scott recorded the amount
of rent received from Mr Biesiekierski as being $6,449.238 The basis
for the discrepancy between this figure and that in [281] is not apparent.
The figure in [281] reflects the evidence which is summarised in the
Rent Transactions Schedule, so that is the basis of my finding.
283 The evidence in the Rent Transactions Schedule and Monthly Rent
Spreadsheet largely accords with that of Ms Marr, but is, in my view,
more accurate as it is based on the financial records. So I find in terms
of it. Otherwise, I accept the evidence of Ms Marr at [280].
7.9 Brian Rilston
284 The third tenant was Brian Rilston. Mr Rilston's tenancy was
arranged by Ms Marr. There was a written lease, which is again is not
in evidence. Mr Rilston and his partner moved in at the beginning of
January 2006 and moved out about April 2007. The rent was $150 per
week.239
285 At the commencement of the tenancy, there was an agreement
between Ms Marr and Mr Rilston that he would build a fence, with
materials supplied by Ms Marr and Mr Scott. In return, Mr Rilston
would get a discount on his rent for three weeks.240 This occurred, with
Ms Marr using the rent received in cash to pay for the materials at
Bunnings.241 In closing submissions, counsel for Mr Scott submits that
this amount ($600) should be brought to account in the final analysis.242
However, in the interests of simplicity, I will offset the expenses with
the income so that it is neutral to the analysis.
238 Defendants’ Closing Submissions, Annexure B, Part D.
239 Transcript 17.2.26, pages 474 - 482 (Marr).
240 Transcript 17.2.26, pages 482, 492 - 493 (Marr).
241 Transcript 19.2.26, page 856 (Marr).
242 Defendant’s Closing Submissions, Annexure A, page 2.
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286 Mr Scott only found out that Mr Rilston had left by going around
to the house to see if he could catch up on outstanding rent, only to find
the house empty. He said that Mr Rilston left with rent outstanding.243
287 Mr Scott said that he sent Mr Rilston a letter dated 30 June 2006
dealing with outstanding rent.244 Ms Marr says that this letter is
fabricated.245 I do not need to resolve this issue to determine the issues
in dispute.
288 Ms Marr asserted that Mr Scott obtained other payments from
Mr Rilston that he did not account for.246 Mr Scott denied this.247 As
Ms Marr did not adduce any evidence to back up her assertion, I accept
Mr Scott's evidence that he did not receive any payment over and above
those he accounted for in the Rent Transactions Schedule.
289 The Rent Transactions Schedule and Monthly Rent Spreadsheet
show that:248
(a) Mr Rilston was a tenant for 69 weeks between December 2005
and April 2007;
(b) rent for Mr Rilston was paid into Streamline 1 from 10 January
2006 to 5 April 2007;
(c) in total Mr Rilston paid $7,158 in rent; and
(d) his average rent was $104 per week.
290 The evidence in the Rent Transactions Schedule and Monthly Rent
Spreadsheet largely accords with that of Ms Marr, but is, in my view,
more accurate as it is based on the financial records. So I find in terms
of it. As the cash rent received at the outset was immediately offset
with the purchase of materials, it is neutral in the final analysis, so I
simply leave it out of figures in [289].
7.10 Tim Brown
291 The fourth tenant was Tim Brown. Mr Brown's tenancy was also
arranged by Ms Marr. There was a written lease (which is not in
evidence) in his name alone, but he had a partner. Ms Marr thought
243 Transcript 24.2.26, page 1207 (Scott).
244 DTB 3, page 4; transcript 24.2.6, page 1210 (Scott).
245 Transcript 17.2.26, pages 492 - 493 (Marr)
246 Transcript 19.2.26, pages 852 - 853 (Marr).
247 Transcript 24.2.6, pages 1210 - 1211; transcript 17.6.26, pages 1367, 1369 (Scott).
248 Exhibits 16 and 17.
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that the lease started at the end of May 2007 at $160 per week. She did
not know exactly when he vacated.249
292 There is in evidence some letters which Mr Scott says he sent or
gave to Mr Brown dealing with rent.250 Ms Marr asserts that they are
fabricated.251 Mr Scott identified one as a draft that was not sent.252 It
is not necessary for me to consider those letters in order to determine
the issues in dispute.
293 Mr Scott only found out that Mr Brown had left by going around
to the house to see if he could catch up on outstanding rent, only to find
the house empty. He said that Mr Brown left with rent outstanding.253
Mr Scott said he discussed rent increases and problems he was having
with Mr Brown with Ms Marr at the time.254
294 Ms Marr asserted that Mr Scott obtained other payments from
Mr Brown that he did not account for.255 Mr Scott denied this.256 As
Ms Marr did not adduce any evidence to back up her assertion, I accept
Mr Scott's evidence that he did not receive any payment over and above
those he accounted for in the Rent Transactions Schedule.
295 In closing submissions, counsel for Mr Scott submitted that
Ms Marr had received two weeks rent and a bond from Mr Brown
which she had not accounted for.257 However, there is no evidence to
this effect, so I do not allow the amount.
296 The Rent Transactions Schedule and Monthly Rent Spreadsheet
show that:258
(a) Mr Brown was a tenant for 61 weeks between May 2007 and
July 2008;
(b) rent for Mr Brown was paid into Streamline 1 from 28 May
2007 to 13 June 2008;
(c) in total Mr Brown paid $11,800 in rent; and
249 Transcript 17.2.26, pages 482 - 484 (Marr).
250 DTB 3, pages 6, 10.
251 Transcript 17.2.26, page 486 (Marr).
252 Transcript 17.6.26, pages 1356 - 1459 (Scott).
253 Transcript 24.2.26, page 1207 (Scott).
254 Transcript 17.6.26, page 1362 (Scott).
255 Transcript 19.2.26, pages 852 - 853 (Marr).
256 Transcript 24.2.6, pages 1210 - 121; transcript 17.6.26, pages 1367, 1369 (Scott).
257 Defendant’s Closing Submissions, Annexure A, page 2.
258 Exhibits 16 and 17.
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(d) his average rent was $193 per week.
297 Ms Marr had two issues with the Rent Transactions Schedule. The
first relates to an amount of $1,500 which was transferred into
Streamline 1 as a phone transfer on 21 May 2008. Ms Marr's evidence
was that she paid this in at the request of Mr Scott.259 In cross-
examination, Mr Scott did not dispute that this might be the case.260 So
I find in terms of Ms Marr's evidence. This amount is appropriately
characterised as a contribution by Ms Marr.
298 The second is the last payment of $500 which was paid into
Streamline 1 by phone transfer on 13 June 2008. Ms Marr put to
Mr Scott in cross-examination that this was an amount paid in by
Kevin. Mr Scott disagreed. 261 In section 7.12 I find that it is correctly
characterised as rent paid in by Mr Brown.
299 With the exception of the point in [297], the evidence in the Rent
Transactions Schedule and Monthly Rent Spreadsheet largely accords
with that of Ms Marr, but is, in my view, more accurate as it is based on
the financial records. So I find in terms of it. Taking into account the
point in [297], I find that:
(a) Mr Brown was a tenant for 61 weeks between May 2007 and
July 2008;
(b) rent for Mr Brown was paid into Streamline 1 from 28 May
2007 to 13 June 2008;
(c) in total Mr Brown paid $10,300 ($11,800 - $1,500) in rent; and
(d) his average rent was $169 per week.
300 In closing submissions, counsel for Mr Scott submitted that the
correct amount of rent for Mr Brown was $11,300.262 The reason for
this is not apparent, though it could be some confusion regarding the
figures at [297] and [298]. On my review of the evidence, the amount
at [299(c)] is the correct amount.
259 Transcript 19.02.26, page 864 (Marr).
260 Transcript 17.6.26, page 1370 (Scott).
261 Transcript 17.6.26, page 1371 (Scott).
262 Defendant’s Closing Submissions, Annexure B, Part D.
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7.11 Streamline 2
301 On 9 June 2009, Mr Scott open another account with the CBA,
this time in his name alone. This has been referred to as Streamline 2.
There is in evidence an almost complete set of the bank accounts for
Streamline 2.263
302 Mr Scott opened Streamline 2 so that when he made a deposit, it
would remain there until the bank withdrew it. He said that Ms Marr
had been removing money from Streamline 1 without his agreement.264
7.12 Kevin Scott
303 The fifth tenant was Kevin, Mr Scott's brother.
304 Ms Marr 'absolutely went ballistic' when Kevin moved in.265 She
was concerned that the rent being paid by Kevin was below market, a
concern she raised with Mr Scott a number of times.266
305 Later on, following a conversation with her accountant, Ms Marr
became concerned that the tenancy was not being conducted on an
arms-length basis, which may have tax implications for her.267
Ms Marr requested Mr Scott to provide her with information about the
rent and expenses for Links Road so she could prepare her tax returns.
She received some information, 'grudgingly and incomplete'.268
306 Kevin lived at Links Road between 2008 and 2011 with his son
and daughter. There was no written lease and he did not pay a bond.
The initial rent was in the ballpark of $200 per week. This suited Kevin
given that the property was very old and in disrepair. He said he was
not very stringent on paying the rent on a weekly basis and sometimes
paid it three weeks in arrears.
307 Kevin did not give evidence as to the precise date he commenced
his tenancy. In the Rent Transactions Schedule, Mr Scott says that
Kevin's tenancy was from 4 August 2008. The evidence of Kevin
generally accorded with that of Mr Scott and not that of Ms Marr. For
this reason, I prefer find Mr Scott's recollection on the specifics to that
of Ms Marr. I accept Mr Scott's evidence that that Kevin's tenancy was
263 PTB D.
264 Transcript 17.6.26, pages 1448, 1450 (Scott).
265 Transcript 17.2.26, pages 488, 508 (Marr).
266 Transcript 17.2.26, page 505 (Marr); PTB E, pages 153 - 154.
267 Transcript 17.2.26, pages 509 -511 (Marr).
268 Transcript 17.2.26, pages 511 - 512 (Marr).
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from 4 August 2008. This means the amount referred to in [298] is
properly rent for Mr Brown. However, whether the rent was for
Mr Brown or Kevin is not material to the final analysis: what is
material is that it is correctly characterised as rent.
308 The Rent Transactions Schedule and the Monthly Rent
Spreadsheet show, and I find, that:269
(a) Kevin was a tenant for 160 weeks between 4 August 2008 and
11 September 2011;
(b) between August 2008 and May 2009, payments were made into
Streamline 1, totalling $9,865;
(c) from June 2009 to September 2011, payments were made into
Streamline 2, totalling $19,050;
(d) in total Kevin paid $28,915 in rent; and
(e) his average rent was $181 per week.
309 There was an agreement between Kevin and Mr Scott to the effect
that he would pay less than market rent in return for doing work on the
property. Kevin explained that he was in the building industry. The
house needed a few things done. He was to carry out works to the
house to bring it up to a reasonable standard. Kevin was not charging
for his labour, but Mr Scott paid for any materials required. On one
occasion (24 February 2011), Kevin's rent was reduced from $800 to
$710 to offset the fact that Kevin had spent $90 on road base for the
hard stand car parking at the front of the house.270
310 In examination in chief, Ms Marr took Kevin to a list of works
which Mr Scott had itemised in an email to her dated 14 February
2011.271 The works were:
• Filled and levelled the front yard
● Retained the northern edge of the front yard
● Filled the backyard (neighbour's screen wall/retaining wall footings
were exposed piles)
269 Exhibits 16 and 17.
270 Transcript 24.6.26, pages 1209 - 1210 (Scott).
271 Exhibit 1.
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● Retained the rear screen wall with an additional raised limestone
garden bed (neighbour's screen wall was rotating onto our property
prior to this)
● Paved lower service area to side of house
● Built steps down to lower service area
● Twinside retaining wall to rear back corner
● Garden shed and pavers under to rear back corner
● Kitchen renovation - cupboards, benches, new sink etc,
● Fireplace re-cladding and replace kerosene heater with a gas heater
● Removed Sunroom walls (corrugated iron covered timber window
frames and totally busted and broken rear sliding door) and replaced
with modern sliding door frames - not yet complete as glass is yet to
be installed
● Hardstand to parking area
● Second hand stainless steel 900 mm stove/oven and range hood. The
old oven had one hinge door when Tim left
● Stud and gyprock infill to dining room arch to allow it to be used as a
third bedroom This he did off his own back)
311 Kevin confirmed that he did all this work, noting:
(a) in relation to dot point 3 (filling in the background), he built a
limestone retaining wall in front of it;
(b) in relation to dot point 7 (twinside retaining wall), this was
inside the fence line of Links Road, not on the adjoining lot;
(c) in relation to dot point 9 (kitchen renovation), he sourced a
kitchen that was being removed from another house that was
approximately the right dimensions, pulled it apart, modified it
and built it into Links Road;
(d) in relation to dot point 10 (gas heater), he could not recall
whether the gas heater was connected; and
(e) in relation to dot point 14 (infill to dining room), by blocking up
the archway with a stud wall and gyprock, he could use the
former dining room space as a bedroom for one of his children.
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312 Mr Scott gave evidence to the same effect.272 I find that Kevin did
all the work set out in [310] and [311].
313 Kevin did not consult Ms Marr in relation to any other work. He
was not aware of any future plans for the property.
314 Kevin could not recall having any problems with the gas and hot
water systems before he moved out.
315 Around 2011 Mr Scott had a conversation with Kevin about the
rent being increased. Kevin was not prepared to pay what was being
asked as he did not feel that the house was at that value. He found
another rental property in the area and moved into that.
316 For about seven years Kevin did work for Scott & Associates as a
subcontractor. This commenced about a year or two prior to when he
lived at Links Road. Specifically, he undertook compaction tests for
ground stabilisation. He was paid for that work by Scott & Associates.
The rent did not come out of what he was being paid by Scott &
Associates. There is no basis in the evidence for Ms Marr's assertion
that there was a 'contra' deal whereby the rent was reduced from $300
to $200 in return for Kevin undertaking work for Mr Scott.273
317 Kevin knew that Mr Scott and Ms Marr both had shares in Links
Road. He did not meet Ms Marr until he had moved into the property.
318 In terms of matters in dispute, when asked whether he had ever
attended any meeting with Ms Marr and Mr Matthews, Kevin gave
evidence that he did not know who Mr Matthews was. He recalled
meeting Ms Marr twice in the three years he was at the property, but
did not recall her being there with anyone else. He could not recall
Ms Marr ever having told him that she thought the rent was too low.
7.13 September 2011 meeting
319 It is not in issue that in September 2011 there was a meeting at
Links Road attended by at least Ms Marr, Mr Matthews and Mr Scott.
272 Transcript 23.2.26, pages 1175 - 1176 (Scott) ff.
273 Transcript 19.2.26, page 868 (Marr).
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Ms Marr's evidence
320 Ms Marr gave evidence that in addition to her, Mr Matthews and
Mr Scott, Mr Scott had brought along two of his friends, Eric and Sarah
Kingsmill. As to what was said:274
GETHING J: What did you say, and what did he say?
MARR, MS: I said, 'This ouster has got to stop.' 'No. I've moved in.'
I went, 'No. No, you haven't.' And - - -
GETHING J: Now, did you know that you said the word 'ouster'?
MARR, MS: Yes, I did.
GETHING J: Did you have any understanding as to the word 'ouster'
in 2011?
MARR, MS: Yes. Because I started reading law books. I started
reading about property - - -
GETHING J: So you used that word?
MARR, MS: Yes, I actually used that word. I definitely did.
GETHING J: Okay. So tell me about the conversation, what you said,
what Mr Scott said.
MARR, MS: Well, Mr Scott said, 'I had expired all my equity in the
property, and I'm taking control. I have paid - I have paid - I have paid
$100,000 in the last 10 years. I have paid everything off.'
…
… He said he had had a really painful breakup with Ms Caruana, and it - they
- that he had moved in.
321 Ms Marr described the conversation as 'really heated'. She
continued:275
MARR, MS: And it's - Phil says he has moved in.
GETHING J: Yes.
274 Transcript 17.2.26, pages 524 - 525 (Marr).
275 Transcript 17.2.26, pages 526 - 532 (Marr).
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MARR, MS: He hadn't moved in. He was pretending he had moved.
I said, 'I will take over. I will get this show back on the road. It is
going to go to commercial. It is not going to be used' - and all of this
time, I am writing to him, for the whole three years of the ouster with
Kevin. Kevin is a placeholder. Kevin is there to keep me out.
…
MARR, MS: He said, you haven't contributed
….
MARR, MS: I said, yes, I have contributed. I have contributed 50 per
cent of a fair market rent, arm's length rent, for the whole of the
duration. It has been leased 100 per cent of the time. I have
contributed that. Just because you shrank the rent, I don't care if Kevin
paid $200 a week. I want half the fair market rent, and that is 390.
Therefore, I will have 195, and you can keep the other five dollars.
That is how I contributed. And then, I said, you didn't pay the
mortgage. You stopped paying the mortgage unbeknown to me.
…
GETHING J: So what are you saying at the meeting, and what is he
saying?
MARR, MS: Okay. So what he is saying is, I have moved in. I am in
a really messy relationship breakdown with Jacinta. And he was in a
messy relationship breakdown with Jacinta.
…
MARR, MS: I said, 'Give me a price to buy you out,' and he said, 'You
have expired all your equity. You don't have any equity in this house.'
I said 'all right', and Geoff Matthews, my housemate, was coming into
his settlement, his property settlement, at about that time, and Geoff
said, 'Well, how much for me to buy it out?', and he said, 'I've got a
sworn valuation from Propell that says it's worth 660 grand or 590, but
I' - - -
GETHING J: So who said that?
MARR, MS: Mr Scott.
GETHING J: Mr Scott, yes.
MARR, MS: He says he's got a sworn valuation, but he's so far in
front of me that he will sell half to Mr Matthews for 330. Well, that
valuation says 590, that particular one. We did find that one. So he's
telling me I've got no equity; I've got no right; it's morally wrong for
me to be in the property that I've funded and financed; that he's
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completely in control; he's the property manager, and, 'It's my way or
the highway. Suck it up, Buttercup,' pretty much. And I'm going, 'This
is completely outrageous. If I go' - - -
GETHING J: So how did the meeting end?
MARR, MS: Geoff went outside to the back, and he just went, 'I can't
believe this; you've all been to university, and I'm just a truck driver.'
..
MARR, MS: He - then Phil follows him out, and Mr Matthews will
tell you the offer Mr Scott made to him. He will tell you when he's in
the box
GETHING J: Yes.
MARR, MS: And then I just go, 'I'm getting out of here, and it's a
kangaroo court. This is an outrage. This is a travesty. You're only
doing this to keep me out,' and he says, 'Well, I'm living here,' and of
course, he wasn't living there. I would have moved in that day and
taken control, and it would have been a done deal…..
Mr Matthew's evidence
322 Mr Matthew's gave evidence that he has been friends with
Ms Marr for more than 45 years. Around 2011, he was sharing a rental
property with Ms Marr in Rossmoyne.
323 Mr Matthews gave evidence of on a number of occasions being in
a room with Ms Marr when she was having a conversation with
Mr Scott on speakerphone. As to what he heard:276
Okay. Could you - could you tell us the one that stands out most in
your mind, and try and place it in terms of timing?---Well, the whole -
not one that stands out in my mind, they all did. It was just - it was the
same thing. Diana wanted half a fair market rent, and Phil was saying, I
decide what the rent is going to be. And it just went backwards and
forwards, the same thing, you know.
So do I understand your evidence to be that this occurred over a number
of conversations that you heard?---Quite a lot, quite a lot.
So you're hearing, essentially, the same thing from Ms Marr, the same
thing from Mr Scott?---Yes, yes, yes, yes, yes.
…
276 Transcript 20.02.26, pages 987 - 988 (Matthews).
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MARR, MS: Okay - - -?---And it was - I was - that's when I said to
Diana, you've got to sort this out, you've got to get a meeting with
Mr Scott and sort this out.
324 The first time he met Mr Scott was when he went around to Links
Road with Ms Marr for a meeting. This occurred in September 2011.
The purpose of the meeting was to 'try and sort out what was going on
with the house, with the rental'.277
325 Mr Matthew's gave evidence that Ms Marr had told him that she
had an interest in Links Road:278
Okay, and what did she tell you about her - what interest did she tell
you that she had?---That she had bought this property, and Phil had
bought into it, and it was going to be turned into a commercial venture
as soon as they could.
326 Mr Matthews said that in addition to Ms Marr and Mr Scott, there
were two other people present. They were friends of Mr Scott, a
husband and wife. He recalled that the wife's name was Sarah, but
could not recall the husband's name. The house was empty. They sat
on four fold-up chairs in the lounge room, with Mr Scott sitting on a
paint tin.
327 As to what occurred:279
Can you remember what Ms Marr was saying, what you were saying,
what Mr Scott was saying?---Yes, I've got to be - I don't think I said a
word. It was just - it was just - it wasn't a meeting; it was an ambush,
where Phil and the other two, especially the lady - Sarah, I think her
name was - just - it was just a screaming match.
…
I'm interested in what you heard people say and what you
said?---'Diana's used up all her equity. She hasn't contributed into the
house.' And when Diana - yes, but you know, like, the rental income -
she's entitled to half of the rental income, but that didn't matter
according to them. That wasn't a contribution, you know, and Phil was
saying that, 'You only get rent for a two-bedroom house, and it's
whatever I decide what the rental property - whatever the rent is going
to be.' And I went, yes, okay, you can't say that, but I thought, well,
that was part of it.
277 Transcript 20.2.26, page 981 (Matthews).
278 Transcript 20.2.26, page 982 (Matthews).
279 Transcript 20.2.26, pages 982 - 983 (Matthews).
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And what else can you recall - so what I just want to do is try and
exhaust your memory. Is there anything else you can call either Sarah
saying or Phil saying?---It was just - - -
MARR, MS: Who was living there?--- - - - 'You've used up all your
equity.'
GETHING J: Just hold it?---You know, that just stood out: 'You've
used up all your equity.'
Okay, you've got a strong recollection of that?---Yes. Yes, your
Honour, sorry.
Can you remember anything else that Ms Marr said?---I can remember
Diana trying to say things and just got shouted down every time. She
couldn't get a point across. It just got shouted down, and it was Phil
saying it's whatever he reckoned would happen with the house. Diana
had no say in it. And then he started on about the tenants that Diana
had in the house, and I got upset with that. I didn't say anything…
328 And:280
Okay. So just thinking back, just take a moment, anything else you can
recall about that meeting that - thinking about things you said, Diana
said, Phil said, Sarah said, or do you think you've exhausted your
memory?---Diana, I can remember her saying that she - she was entitled
to half the rent, and it was half of a fair market rent.
Yes?---And Phil was saying he can charge whatever he wants, and it
really didn't matter what Diana thought. But she was always on about
it, you know, you can subsidise your family, but it comes out of your
side of the - the ledger, so to speak.
329 Mr Matthews ended up leaving the room to go to the toilet.
Mr Scott then appeared and said to him: 'Give me 330, and I will walk
away'. Mr Matthews said no.281
330 In cross-examination, it was put to Mr Matthews that Mr Scott did
not say that he would decide what the rent would be. Mr Matthews did
not accept this. It was also put that Mr Scott did not say that Ms Marr
had used up all the equity. Again he disagreed. Rather, Mr Mathews'
evidence was that they said that she never paid her share of the
mortgage. In response, Ms Marr tried to explain that half a fair market
rent is more than her part of the mortgage.
280 Transcript 20.2.26, page 984 (Matthews).
281 Transcript 20.2.26, page 984 (Matthews).
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Mr Scott's evidence
331 Mr Scott described the meeting as being very informal, more that
Mr Matthews accompanied Ms Marr to the premises. It was not a
scheduled meeting. Kevin had just left the premises. Mr Scott had
some sleeping gear there and some furniture.
332 As to what was said:282
And was there anything said about the mortgage at that time?---On that
occasion, Ms Marr was making the comment that she still considered
herself the majority owner of the property and believed she had made
larger contributions than I, and was discussing - discussing that in a
heated arrangement. So, that discussion was about the mortgage and
who paid a - a portion of the mortgage, and - and whether they - we had
matching portions of the mortgage. Or one party had paid more than
another. And it was my opinion that I had paid more of the mortgage
and made more of the contributions up to that date. And the books very
definitely show that. And it was Ms Marr's opinion that she was ahead
of me on the mortgage payments, and that was her opinion on the
mortgage and our contributions to date, that she was way ahead.
And can you recall any discussions, just about the rent?---The - the rent,
at this point - we've already had a rent discussion some months earlier
for Kevin Scott being present. He has just moved out at the time of this
meeting. I did increase the - the rent in Kevin's days, and then Kevin
decided in his - his - what turned out to be his last days, and Kevin
decided that he would probably like to move on, and he did so. So, the
rent. The rent was an issue with Diana and myself. A point of conflict.
…
Part of the discussion was Ms Marr believed the house, also, was now
rated as a three bedroom house, not a two-bedroom house, because a
dining room has now been used as a bedroom. That was - that was an
issue she raised when Kevin was there and wanted Kevin to pay more
rent because he had improved them, the situation, and put in a small
wall and an archway, within an archway a lightweight stud wall, and
lined it, and that became - the access point was no longer between the
dining room and the living room, and it would be closed off. We had a
difference of opinion on the two-bedroom, three-bedroom issue, and
particularly as Kevin had undertaken this work, why should he have
suffered and had his rent increased. The house was no larger, it was
just the using of a dining room as a bedroom, which any tenant is
entitled to do.
282 Transcript 24.2.26, pages 1196 - 1197 (Scott).
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Findings
333 I generally consider Mr Matthews to have the most reliable
recollection of this meeting. It was a standalone occasion for him for
which he expressed having a strong recollection. This is in contrast to
Ms Marr and Mr Scott for whom this meeting was one in a long series
of interactions in which each raised similar concerns. However, the
evidence of Ms Marr and Mr Scott does provide some context as to
what Mr Matthews recalls being said, which I have added to my
findings. On that basis I find the following facts:
(a) the meeting on 11 September 2011 was attended by Ms Marr,
Mr Matthews, Mr Scott and two friends of Mr Scott, a married
couple;
(b) the purpose of the meeting was to try and sort out what was
going on with Links Road, in particular as regards rent;
(c) the conversation was heated;
(d) at one point Mr Scott said words to the effect that Ms Marr had
used up all her equity as she had not contributed to the house;
(e) in response Ms Marr said that she was entitled to half the fair
market rent, which was more than her part of the mortgage;
(f) Mr Scott said that he could set the rent at whatever he decided;
(g) Ms Marr said that if Mr Scott wanted to subsidise his family,
that would come out of his side of the ledger;
(h) Mr Scott said that he had a valuation of Links Road for
$660,000; and
(i) Mr Scott made an offer to Ms Marr, through Mr Matthews, to
sell his interest in Links Road to her for $330,000.
7.14 2011 Correspondence
334 Ms Marr's position at the time is set out in a letter which she sent
to Mr Scott in 2010 or 2011 (her evidence was that if the version in
evidence was a draft, the final was very similar):283
283 PTB E, page 152; Transcript 17.2.26, pages 533 - 534 (Marr).
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Dear Phil
I have had further legal advice and confirm that you are not legally
entitled to exclude me from my property. As a tenant in common i am
entitled to reside at my property and you can share it with me if you like
but you may not exclude me from it.
You are not a sole proprietor and Links Road is not a charity in favour
of your family. I reiterate that your non-arms-length transactions with
your family will not be subsidised by me and that the entire discount
you see fit to provide to them is to be; since your receipt of written
notice in 2008 and again in 2009; debited from your half share of a fair
market rental. During the last 5 years you have given away or foregone
from your share of the fair market rental about $25,000. The situation is
intolerable and it will not persist.
You have been in receipt of written notice from me that During our
telephone conversation on Wed 17 April, you said that you were
currently going through a "messy separation" with your ex-partner.
Because she is entitled to a share of any property you acquired during
your relationship, this will include any entitlement your ex-partner may
have to your 50% share in the Links Rd property. Because I own 50%
of the property; and there is now a third party with arguably a 50%
claim over your 50% of the property; it is critically important that all
financial matters be sorted out as soon as possible. After all we wouldn't
want your ex to miss out on her fair share of your half of the property
would we?
You may soon be in a position to buy out my half share depending upon
how you split the Central Ave property with your ex-partner. Right now
is therefore the ideal time for us to come to an agreement re the Links
Road property settlement.
You advised that you wish to keep the Links Road property inter alia so
that you can continue to subsidise your family members by providing a
discounted rental in respect of your half of the property. Naturally your
ex-partner's share of Links Rd is affected by your past largesse firstly to
Kevin and more recently to your sons. Because I was not responsible
for your retention of I reiterate that any rental discount you have agreed
to provide is to be offset against your 50% share and not mine as has
been repeatedly advised to you in writing. I estimate that over the last 5
years you have unilaterally provided your family with at least $20,000
in rental subsidies. You were unable or unwilling to tell me how much
rent is being paid. This is an unacceptable state of affairs. The rent is
way too low and you know this fact.
There are several nearby properties for lease advertised on the net and
which form a good comparison as to a fair market rental for Links
Road. They include:-
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130a Risely St 2x1 duplex with carport $380/week
3a Torridon St 2x1 duplex with carport $450/week
80 Reynolds Rd 2x1 house no carport $410/week
It appears that there may well have been another page to this letter, but
it is not in evidence.
335 Mr Scott's position is also set out in a letter from around this time,
dated 14 September 2011. Ms Marr recalls receiving this letter.284 The
letter reads:285
Dear Diana
1 LINKS ROAD, ARDROSS - MAINTENANCE
REQUIREMENTS
I confirm my advice to you, I have moved into 1 Links Road, Ardross. I
will be occupying it and using if for for my own purposes for some
period of time. This should be acceptable to you given you moved in
and took sole occupancy yourself for a similar period shortly after
settlement was made on the property. You paid no rent during that
period.
The property needs urgent repairs as follows: -
1. The brickwork mortar joints are fretting very badly on several
areas of the two front piers and also on a number of external
face brick areas around the house. This is a safety issue with
respect to the two front piers; it must be done without further
delay. One of the worst wall areas is exhibiting brick
dislodgement due to fretting. If we do not correct this now we
will be facing much greater repair costs.
2. The bottom of the bathroom door has rotted away; the whole
door requires replacing.
3. The electric HWS is shutting off every couple of minutes when
running; this requires checking by a plumber and either be
repaired or be replaced. It is now approximately 8 years since it
I originally replaced it.
These repairs are required to halt further deterioration and for the
residence to be in usable, safe and leasable condition.
Other general maintenance is required in the following areas: -
284 Transcript 17.2.26, pages 535 - 537 (Marr).
285 PTB E, pages 156 - 158.
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1. The kitchen floor vinyl tiles delaminated (two layers). This was
removed by the last tenant. He has subsequently installed
modern kitchen benches and sink after removing the adhesive
and sanding the floor. This floor has not been sealed. I will
arrange for it to be sealed before it becomes damaged with use
and for cleanliness issues.
2. Half-way through the second last tenancy (T Brown) the
freestanding stove had got to the point where the oven door was
only connected with one hinge (the other fractured through) it
would only remain closed with a permanent timber strut off the
floor. In addition, two of the stove elements had failed. This has
since been replaced with a purchased second-hand electric built-
in oven, gas cooktop and S/S replaced with their modern
equivalent as part of the renovation works provided by the last
tenant. The gas cooktop stove requires gas connection though,
so I will arrange this. We do require a working cooktop for a
leasable residence.
3. The two shower cocks have reached the point where they are not
completely shutting down. Their both require a plumber to
replace their washers because they have seized components
inside.
4. The basin hot water tap has a badly corroded body and could do
with replacement with a similar tap.
5. The bathroom ceiling and walls have very bad peeling paint.
These need scraping and repainting before the house can be
leased again. The fan is no longer running and needs replacing.
6. An area of the kitchen ceiling was water damaged years ago and
has peeling paint. The water leak occurred when the flue
through the roof was dislodged during a storm, not as you have
claimed due to a hole in the roof left by a previous contractor.
The water leak was fixed long ago but the ceiling in this area
requires scraping and repainting.
7. The rear Sunroom area has been stripped of the old and rusted
glassless Louvre frames, jarrah stud exposed framing and
asbestos cement cladding. The corrugated iron old roof sheeting
that had been temporarily fixed over the window openings for
six years was also removed. Some second-hand aluminium
glazing and a sliding door have been installed. This work was
undertaken by the last tenant, Kevin Scott. It requires the filling
in of gaps over and alongside with new stud framed walls and to
have glass cut and installed in the window framing. The last
tenant did a considerable amount of work fitting the framing;
however this area too requires finishing to bring it up to a
leasable standard.
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8. General touch-up painting is required to repair damaged wall
paint areas from wear and tear from the five tenancies.
We originally had an agreement to repair the damaged house and
develop it for either 'home office occupancy' or 'full commercial' or
'medical usage'. You have only recently voiced (but not yet put in
writing) that you no longer wish to do this as it will be 'bulldozed when
rezoning comes through'. I am not sure if I agree with that but I am
certain that rezoning is actually going to take a significant amount of
time before it actually occurs (1-2 years?) In the meantime we still need
to be able to let the property out at a reasonable rental that covers
mortgage repayments and all running costs. I suggest we both do what
we can to achieve this. Of the above list are there any items you are able
to take responsibility for?
Notwithstanding the above, I am certainly open to negotiation on either
one of us buying the other out, or us jointly putting the property on the
market.
Yours faithfully
336 Ms Marr responded by letter dated 16 September 2011 in the
following terms:286
Phil
re: your bullsh!t claims about my property
Again I confirm that you have no right at law to do what you have done
re my property. You do not own more of it that me. You agreed to buy
half and as yet you have significantly failed to account as required by
law.
You have no right whatsoever to exclude me from my property (which
is ouster by force). Again I reiterate I do not accept my expenditure by
you to 'improve' the property. No equity whatsoever resides in the
building as you should know; if you were intelligently informed but it
seems sadly are not. Again I repeat I am not liable for the allegedly
stupid debts you may choose to continue to run up. I did not choose the
stupid new granite and stainless steel kitchen; I did not choose to pay
for a fake log fire gas heater for your brother or any of the rest of it. I
did not chose the stupid earthworks and ill-conceived pathetic retaining
and atrocious 'paving' which I say has seriously devalued my property.
Stop defaming me and wake up to what it is you actually agreed to.
Forget saying your belated payment over many years goes anywhere
near my hugely greater initial contribution. A measly $100k over 13
286 PTB E, page 159; Transcript 17.2.26, pages 538 - 539 (Marr).
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years does not begin to match my initial investment. Stop trying to sazy
to all and sundry that it does.
I demand immediate sale and settlement. You will make the property
available to whomever I desire or else I will see you in court. I have
begged you to mediate, I have written long and loud but you still
foolishly think you know best. Think again!
Fix this mess now or elect by your ongoing refusal to face facts to pay
to fix it by the hideous legal route. Trust me it wont be cheap if you
choose that stupid route. Get real, face facts, get legal advice or I will
sue you very soon.
Goodbye, till you see reason - perhaps if you wish that will be forever.
You choice!
Your ex friend and partner
337 Ms Marr then gave evidence that Mr Scott responded with a phone
call saying that he had moved Reece, another of his sons, into the
property. He was occupying the house with other students. The
arrangement was that of a 'uni students' share home'. Ms Marr
continued to voice her concerns to Mr Scott that Reece was not paying
a market rent.287
338 I add that around this time, Ms Marr was receiving
communications from the CBA to the effect that the mortgages over
Links Road were not being paid (see section 15.2).288
7.15 Reece Scott and others
339 The sixth tenant was Reece Scott (another of Mr Scott's sons)
together with a number of other people. These people rented rooms
from time to time. This arrangement was in place between November
2011 and June 2014, for some 134 weeks.
340 The Rent Transactions Schedule and the Monthly Rent
Spreadsheet show that:289
(a) over the period from 7 November 2011 to 26 June 2014, rent
was deposited into Streamline 2 for nine people:
287 Transcript 17.2.26, pages 539 - 543 (Marr).
288 Transcript 18.2.26, pages 626 - 627 (Marr).
289 Exhibits 16 and 17.
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Person Amount
Reece Scott $13,790.00
Sean Scott $7,885.00
William Reni $4,950.00
Sara C $720.00
Cesar A $4,200.00
Catherine S $960.00
Jamie B $5,800.00
Crystal Y $1,170.00
Kirsten T $500.00
Total $39,975.00
(b) the average rent paid over the 134 weeks was $298.32 per week.
341 Ms Marr asserted that Reece and Sean had a 'contra' deal whereby
the rent was reduced in return for them working for Scott &
Associates.290 There is no basis for this assertion in the evidence, so I
reject it. Ms Marr generally did not accept that Mr Scott's analysis of
the amount paid in by the other tenants was accurate.291 However, she
did not draw my attention to any evidence to the contrary.
342 The analysis in the Rent Transactions Schedule and the Monthly
Rent Spreadsheet in [340] reflects the source documents, and I find in
terms of it.
7.16 Boatshed meeting
Common ground
343 It is not in issue that on 16 September 2013 there was a meeting at
the Boatshed Café in South Perth attended by Ms Marr, Jennifer and
Mr Scott.
344 Nor it is in issue that, prior to the meeting, Ms Marr prepared a
document which she titled 'Proposed Agenda - topics to be addressed &
documented today' (Agenda).292 It reads:
Meeting: Phil Scott & Diana Marr re 1 Links Road Mon 16th Sept
2013
Proposed Agenda - topics to be addressed & documented today
290 Transcript 19.2.26, pages 870 - 871 (Marr).
291 Transcript 19.2.26, page 871 (Marr).
292 PTB E, page 166.
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1. That the 2 x 50% tenants in common owners 'agree to agree' and
to forthwith sort out and to record any agreements between us in
writing and as a matter of urgency.
2. Current mortgage balances and current required repayment
amounts - as per the Commonwealth Bank notices rec'd this
morning (Monday 16th September 20130:
a. Loan # 67340 1300 currently $92,769.48 (5.40%) -
repayment due = $765/month
b. Loan # 67905 8101 currently $23,602.56 (5.44%) -
repayment due = $221/month
c. Both mortgages total about $116,372 and are repayable
at only $986/month and NOT $1415 per month as is
being paid against instructions by 50% owner Diana.
d. Commonwealth Bank forMs to be completed today and
excess monies from rent are to be diverted to the
underground power debt accruing interest at 11% per
annum. Non-negotiable and this must be addressed
immediately.
3. Who really paid for what and when? And how are we going to
sort it now NOW? Has Phil (as he has claimed) 'paid over $100
grand' or was there something else going on?
4. Initial inputs into the purchase (Diana $42,000 plus all stamp
duties vs Phil $6,500) and how did this actually alter over time?
Eg for Phil to 'catch up' he would have had to pay down the head
mortgage by $35,000 which never happened because the rent or
fair market rent that should have been paid to both owners made
or should have made the property cash-flow positive since about
2008 when Phil's family moved in.
5. The justification throughout 2008 and 2009 for the substantially
subsidised rental for past tenant Kevin Scott was that he was to
'improve the property to increase its rental value'. Written
notice was given in late 2009 that the rent was to be no less than
$300 per week. How to address the shortfall (Diana's 50% of
the fair rent being $150 per week and NOT $100/week which
Diana has NEVER accepted as is recorded).
6. Calculation of the extent of the subsidy provided by Phil Scott to
his family by way of his unilateral decision to charge a sub-par
rental to those (his) unauthorised tenants despite repeated
written & verbal notices from the other 50% property owner
(DM).
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7. Legal principles re Tenants in Common - right of occupancy of
any co-owner, other owner MUST NOT exclude a registered
proprietor from (her) own property despite his personal opinion.
Need assurance that the current and legally unauthorised tenants
will vacate - and the consequences of any failure by them to
vacate the property by 23 October 2013 as required by 50%
owner Diana - legal redress to her.
8. Arm's length transactions - any rent charged MUST be based on
fair market rent; an arbitrary amount of less than 2 thirds of fair
rent for a 3 bedroom house in not at all acceptable and ATO
penalties may apply.
9. ATO notice to Diana - requirement to lodge tax returns, issues
re joint tax problems.
345 Ms Marr gave a copy of this document to Jennifer prior to the
meeting and to Mr Scott either before or at the meeting.
Ms Marr's evidence
346 Ms Marr gave evidence that at the time this meeting took place she
was homeless. She had to leave her prior rental accommodation as the
property was being sold. By then she had been corresponding with
Mr Scott for some time trying unsuccessfully to get the information she
needed to complete her tax return. Following a meeting with her tax
accountant, she became concerned about the tax position Mr Scott was
taking in relation to Links Road. She had received what she described
as a 'red letter' (what I understand was a 'please explain' letter) from the
ATO. She called the meeting to try and sort out these issues.293
347 As to what was said:294
MARR, MS: So I am telling him how I feel … and thinking that he
would have … empathy and understand.
…
But I was mistaken. And it actually gave him more power. So the - and
he likes to see me upset and get emotional.
GETHING J: Okay. So again, I - all I - - -
MARR, MS: And we discussed that as well.
GETHING J: Sorry. Yes.
293 Transcript 16.2.26, page 391; Transcript 17.2.26, pages 551 - 555 (Marr).
294 Transcript 16.2.26, page 391; Transcript 17.2.26, pages 555 - 561 (Marr).
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MARR, MS: We discussed that at the meeting.
GETHING J: Yes. Okay.
MARR, MS: And I said, this is bullying, this is coercive, you have got
to stop.
GETHING J: Yes.
MARR, MS: And he sort of smiles and everything. So we go -
Jennifer says, look, let's bring this to - or, who put in what? And then,
we start, Phil items, all his withdrawals from the joint accounts. He
reckons that I did all the withdrawals, but I didn't. Then, he goes, car.
And I go, yes, with the money from the equalisation loan, I bought a
car.
It is not a car loan. It's an equalisation loan. We are discussing this,
and he is trying to put the spin that it is a car loan. Because if it's a car
loan, that is not an equalisation loan, and we have got to change - we -
and I am saying, I don't want you to rewrite history, and he is getting
quite agitated.
And we are talking about, we need the in costs for Diana and for Phil,
and then, the settlement statement, and the vandalism of the house. So
Phil says it was a rebate of $7,000. And I go, no it wasn't. It was
4,800. This is what Phil is saying, that the original purchase price was
170,000. Yes, it was. Because I took 170,000 to settlement. Phil got
50 per cent on that late change. He agreed then that we did the change
in the - when we went to Anne Mulcahy's office…. in November.
…
That is when that contract was changed… and not before. He agreed.
…
MARR, MS: He agreed that we were splitting the - all - both the costs
of both the settlements. The first one cost 6,600 according to Mr Scott.
And he said that he had put in 6,500 plus 300. He says there are two
stamp duties. And that is only one of the two pages. Then, we move
on. And I am really upset about the underground power. This was
done years earlier. And we have still got this invoice running. And I
said, well, pay it. We need to pay it off.
And then, we are talking about when, he says, that in 1998 it was
vacant. It wasn't vacant. It had a tenant. And the tenant was Scott &
Associates. And the archive boxes remained there until 2005. Then,
Diana - he agrees, Diana - so I moved in, in Easter 99. And I stayed
there for 10 months, about 40 weeks. And then, Byron, Byron is the
next tenant.
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So there is this lacuna. There is this gap in between Diana moving out
in January 2000. So nothing happens, but I am the tenant even though I
was staying in Bornholm. Then, he rents it out to Byron, but Byron is
really already off home house because he is in a high school just a few
hundred metres down the road. And he would come there and study.
…
And then, who was the next tenant? So he says, Dick and the boys and
what rent they were paying. So that is my husband, and the boys …
are my kids.
And he says it was 2003. And he is referencing median rent and
REIWA. And I said, yes, the median rent is about 150. 150 would be
reasonable. But the back verandah is full of your archive boxes. I am
not charging my ex-hubby to store your archive boxes. You are paying.
And you know, then, there is Brian Rilston. And he says he was in
arrears. And I was - I didn't believe that that was true. It wasn't true.
They were - they were great tenants…
Then, he is talking about Tim Brown, and Tim Brown did a runner. He
was terrible, but the bank statements - anyway, I didn't have them then.
And then, he says, Kevin Scott moved in, in August 2008. But we can
actually see rent in June or July. And he was there until 2010. No, he
wasn't. He was there until 2011.
Then, there is Reece and the tenants. So there are three tenants in the
three-bedroom house. He says that they are Reece, Sean and Caesar
and that the total rent is $350 per week….
…
GETHING J: So he - at the meeting, he is saying that there are three
tenants, his son and one other man. And they are charging $350. That
is what he said at the meeting.
MARR, MS: Yes. He says it is 350. And I said, well, that is too low.
You got a letter from Joseph Mansour. We - I had been to see a few
real estate agents, but I couldn't get access. They wouldn't let me access
into the house because of the ouster. And then, he confirms that the
third bedroom, the wall was done in 2008, and that Kevin had done that
off his own bat because he has a boy and a girl, and there is only - there
were only two bedrooms in the - yes. And so he has explained that, and
that a new kitchen went in.
And I said, why would you put in a new kitchen into a commercial
property? I didn't give you my permission. You didn't consult me. I
am not interested in that. I am interested in developing it to the plan we
agreed on. And then, he said he got a second-hand 130-litre Rheem gas
storage hot water system. And I said why would you put - I am
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questioning it. I am going, you would put an electric instantaneous or a
gas instantaneous into a commercial premises. You don't need hot
water for a family, and you know - I said these are - these are
inappropriate.
And then, he says - he raised a whole bunch of other things, like this
burning log, a Rinnai faux log gas heater that sort of glows. And I am
going, why would you - that is inconsistent with commercial. And,
well, it is not going to be commercial now. The city centre frame is
going to be published in 2013. Then, it will go to council, and we won't
get the approval until 2014. So we already had the city centre frame.
We already knew it was R100. And I am desperately keen to get back
into the property before that gets gazetted. I need control of it because
otherwise, there is a capital gains tax issue. And I also want to fix up
the mess…
…
… I am saying… my training and my natural… inclination… as a
building design professional, an award-winning one, is, I want to put a
property to its highest and best use. I want to return - maximise return
on investment. I am explaining all of this - - -
…
MARR, MS: And he is just not interested in that.
…
MARR, MS: Because it is not about just the money and I got very
upset and went outside and had a bit of a cry. And Jen was in there
with him, and then I calmed down and came back inside, and we made
arrangements. There's a lot more to get through, we haven't even — it's
just the tip of the iceberg. So we made an agreement to meet again on
the evening of Thursday, following Thursday, so the 19th. And - - -
GETHING J: So was there any, aside from the agreement to meet
again… was there any other agreement reached then?
MARR, MS: Yes, the agreement was that I put in over 42, that we
were always going to split the settlement costs. Of course, it was a job.
It, basically, it was a — the whole thing was to get it to commercial.
Because you get such a better level of — I'm very keen to maximise a
building's power and potential, like to benefit its owners. And that's —
okay, I was unable to understand what I was dealing with. I didn't
understand that it was about something other than profit and money, it's
about power and control.
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348 Mr Scott's version of what occurred was put to Ms Marr in cross-
examination, which she denied.295
Jennifer's evidence
349 Jennifer gave evidence that she went to the meeting to support
Ms Marr in her attempts to get back into Links Road. She said that
Ms Marr and Mr Scott were at a deadlock. She described herself as the
'moderator'.296 She took notes, which I will come back to at [353] -
[354].297
350 Jennifer recalled:298
Well, as per - we were following the items on the agenda. Diana was
technically homeless, and looking to get back into the property. I asked
Phil directly if he had a lease on the property, and asked to see that
lease, and then he said - well, apparently, he said he had a fixed-term
lease. When I asked to see the lease, he said it was a verbal lease, and I
questioned that, because I thought it was very interesting that you could
have a fixed-term lease that was verbal. So I asked him to please
provide that next time we met.
Okay?---We went through the figures of the property, Diana's initial
purchase, her initial deposit of $42,000. We went through Phil's
contributions of 6000, and the fact that there was a deed of agreement,
because Phil needed to make up the difference because Diana had put in
a significantly larger amount of capital. We went through - we broke
down the purchase price, 85,000 on Phil's side on a $170,000 property
deal that Diana did, the second deal with Phil. We specifically
discussed Phil having his sons stay at the property at a very low rent,
and I asked Phil when Diana would be able to move in, and his
response was, well, Diana could move in towards the end of November
or early December of that year, because Sean would have finished his
exams, his medical exams.
…
Okay. So you're saying - so you've told us what Mr Scott said. What
else can you recall?---Diana did get a little bit upset, so she left. She
went off to have a cigarette, and so I stayed with Phil, and just covered
off on the situation. We were sitting there discussing things. We were
at a round table, so we were very close proximity. I was taking notes,
because we were going through the agenda items, and I confirmed as I
wrote things down that this is what Phil agreed to.
295 Transcript 19.2.26, pages 824 - 832 (Marr).
296 Transcript 20.2.26, page 1002 (J Marr).
297 Exhibit 6; PTB E, page 167.
298Transcript 20.2.26, pages 1002 - 1004 (J Marr).
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Do you remember anything else about the meeting?---Apart from it
getting heated, Diana came back. We were looking to get towards
resolution. And it was a - it was the sets of figures we covered off on
the vandalism issue. We covered off on the two sets of stamp duty,
payable. We covered off on the fact that, as I said, Phil was charging
under-market rent for his sons, so - which didn't seem fair, and the fact
that Diana had an agreed lease in place to take over the property with
her friend Kerry Donovan.
They were going to take possession because Phil agreed to vacate the
property in late November, early December. And we just covered - I
suppose we just covered off on the items on the agenda. They are the
ones - they are the key things that I remember. Phil - I remember that
Phil was quite amenable at the meeting, and I was quite surprised he
had agreed to things. He agreed to what Diana had laid out and was
very calm, and happily agreed that his sons would move out.
And how did the meeting end?---We were going to have a follow-up
meeting, I believe, that week, just to - to, you know, tidy things up.
And that was cancelled at short notice on the day by Phil, and we were
to meet again. And unfortunately, after that point, Phil was
uncontactable.
351 Jennifer also recalled that there was an agreement for Mr Scott to
'catch up by contributing cashflow'.299 And:300
GETHING J: So is there anything else - so really, we are around that.
Is there any other, anything else, you can recall about that?---Me?
About - yes, Jennifer, about the - so in terms of anything you can recall
about the arrangements made for Phil to catch up?---Yes. It was a
professional - it was a professional arrangement. Diana and - and Phil
met each other, professionally. And there was a deed of agreement that
was to be signed to - to govern this particular arrangement because of
the - you know, the nature of this agreement.
…
GETHING J: Okay. Well, okay. Maybe I will ask this open-ended
question. Was there any discussion of the deed of agreement at the
Boatshed meeting?---That's a very good question.
I think so?---Yes. Yes. There was a - there was the discussion because
it's the - by Phil agreeing that Diana had definitely put in the lion's share
of the finance, that the deed of agreement would govern the nature of
the - how they were going to conduct this property. Because it was a
business purchase. They - it was, you know - - -
299 Transcript 20.2.26, page 1010 (J Marr).
300 Transcript 20.2.26, pages 1011 - 1012 (J Marr).
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So can you recall - so that is, I guess, the - do you recall what Diana
said about the deed of agreement and what, if anything, Phil said about
the deed of agreement?---Well, Diana was very upset because the deed
of agreement wasn't signed by Phil, even though it was agreed to. So
Diana said that the deed of agreement was there to protect the conduct
of how this arrangement would go. I don't recall Phil saying much
about the deed of agreement. The deed of agreement, Diana is - Diana
was a property developer at the time, and she had done countless - she
had done numbers of deals.
Well, I don't - and again, I am not - I am sort of just constraining you to
this particular meeting in terms of - - -?---All right. Yes. Yes.
So… do I understand what you are saying, that Diana is talking about
the deed of agreement?---Yes.
And - okay. Yes?---Yes. Because Phil has - Phil has agreed that Diana
has already put in the lion's share, so how else was he to make up the
difference?
352 Jennifer also recalled that Ms Marr and Mr Scott had different
recollections as to what happened in relation to the vandalism claim.
She thought that this might have been the point in time at which
Ms Marr left the table.
353 Referring to her notes, Jennifer added that Mr Scott accepted:301
(a) that the original purchase price was $170,000, and that each had
a 50% share worth $85,000;
(b) that Ms Marr put in a $42,000 deposit;
(c) stamp duty was $6,600, being for the two sales;
(d) he was liable for an amount of $6,500 and another amount of
$300; and
(e) there was a rebate of $7,000 for the vandalism (though, looking
back, Jennifer was not now sure how this was to be brought to
account).
354 Jennifer recorded that there was discussion about:302
(a) a request by the council in relation to underground power;
301 Transcript 20.2.26, pages 1007 - 1008 (J Marr).
302 Transcript 20.2.26, pages 1008 - 1010 (J Marr).
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(b) withdrawals from the joint account;
(c) a 'car';
(d) the various tenancies and amounts said to be outstanding; and
(e) some renovations to Links Road, in particular a third bedroom
wall and a new kitchen.
355 Jennifer gave evidence that Mr Scott agreed that he and his sons
would vacate Links Road by December 2013 so that Ms Marr and her
friend, Kerry Donovan, could move into the property. I observe that
this agreement is not recorded in Jennifer's notes. In cross-
examination, Jennifer added that a second meeting was planned to
complete the items which had not been discussed and for Mr Scott to
sign an agreement to vacate.303
356 In cross-examination, Jennifer accepted that there was no
reference to a deed of agreement in her notes. It was put to her that
Mr Scott in fact said that Ms Marr did not put in $42,000. Jennifer
disagreed. It was put to her that Mr Scott never said that his boys or his
sons were going to vacate the property. Again, Jennifer disagreed.304
Mr Scott's evidence
357 Mr Scott's recollection was:305
At the Boatshed meeting I went to meet with Diana, and she was
accompanied by her sister Jennifer, and the agreement was that we
would meet, and we would try and talk out and resolve these issues, and
perhaps negotiate if there was room there for going forward with one of
us buying each other out, or something like that. So we went and met at
the Boatshed, and there was only myself and Jennifer, Diana, and they
had a well- written agenda, and you saw that presented to the court
earlier.
358 Mr Scott recalled receiving a copy of the Agenda, but could not
recall whether he received it at or after the meeting.
359 And:306
And can you recall Jennifer Marr taking notes?---I recall Jennifer Marr
taking notes. With respect to the meeting, I found that it was very much
303 Transcript 20.2.26, pages 1018 - 1019 (J Marr).
304 Transcript 20.2.26, page 1019 (J Marr).
305 Transcript 24.2.26, pages 1197 - 1198 (Scott).
306 Transcript 24.2.26, pages 1198 - 1199 (Scott).
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a one-sided meeting, where I was getting told stuff rather than there
being a quiet discussion and an attempt to be a meeting of minds. I
would characterise the meeting as it was an attempt to railroad me and
get me to agree to these items that are presented in the meeting, such as
- there it is. Item 4, Diana's 42,000 plus stamp duty and 6500. The date
of this meeting, 13 December - - -
Well, at the top it says 16 September 2013?... ---16 December - sorry,
16 September 2013. Now, that's during the period when actually Reece
and the boys are present - sorry, not - and Kevin has left. So at this
point, I'm trying to explain to them that this is the highest level of rent
we've achieved, and we're actually getting a very good rental income
out of the presence of Bruce Scott and the others. And it is a continual
occupation of the house, and they're all paying the rent without failure.
And it's adding up to a significant contribution. It's of the order of $300
a week, as it turned out over the entire rental period. $300 a week
average, and that was 50 per cent more than Tim Brown and Kevin
Scott, and definitely 300 per cent more than Brian Rilston, basically,
and Dick Biesiekierski. I was attempting to explain to Diana that Kevin
was a good tenant and had done maintenance repair work, which was
beneficial to us. The house had cleaned up a fair bit. And that recent -
the students were paying a good rent. We're talking about a house with
no glass in the back sunroom wall. I'm not sure Kevin actually said that
yesterday, but the glass was never in the sunroom. The framing on the
entire western face had been installed by Kevin, just framing and no
glass. And the panes of glass that were eventually provided and
installed there were done by myself and Mr Dadich in early 2020. So
this - and I draw that point, we had a house, although Kevin has cleaned
it up - well, in the landscaping department and the installation of new
kitchen benchtops and recycled cupboards and laundry, similar. We
still have a substandard house. This is not an average house or a
median house in the Ardross area. This is a lower quartile house. And
the rent that we are getting is the appropriate level of rent for it.
…
That is my - there's rental discussion there, yes. And a calculation
again, Diana, since - has said from the early days that she contributed
an initial deposit of 42,000, but that did not happen. I contest that that
happened and it's a much lower figure.
360 Mr Scott added that he thought Ms Marr may have raised the issue
of her having some tax returns to lodge. He said that at that time he
was a little behind in his tax returns. He said that he gave Ms Marr the
information she was seeking not long afterwards.
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361 As to how the meeting ended:307
The meeting ended up with these items discussed. Basically, the
history of the house and the rental history and whatever other items we
can see there pretty well got covered. On occasions, Diana became
agitated and left to go and have a break or a - a cigarette and - and
Jennifer continued those discussions with me on those occasions. One
of the things was that Diana had said that she wanted to move into the
house at that stage, and I explained we already had tenants and they
were paying a good rent there. And Diana - I did explain that she hadn't
been making much in the way of contributions and where was the
mortgage going to come from if she moved in. There was no answer to
that; that wasn't recorded in the agenda, in the handwritten notes.
However, also not recorded in the agenda was a later claim that I had
agreed that the boys would move out by the end of the year, the
academic year. Now, it's straight up, I did not agree to that. Diana and
Jennifer wanted me to agree to that. And Diana - sometimes she
believes that if she says it enough it gets real.
GETHING J: Well, again, I'm not concerned about your opinion. I'm
just concerned about what was said and what wasn't?---Okay. So I was
- this was more a meeting of being told, 'Move out by the end of the
academic year,' and I did not agree to that…
...
MARTINO, MS: So what you can recollect about that point, and
you've said that you didn't agree for the boys to move out?---That's
correct.
And was any agreement reached at that meeting?---No, not really, but it
was good to discuss it all.
362 Mr Scott maintained this position under cross-examination.308
Findings
363 The agenda prepared by Ms Marr is significant as it records
Ms Marr's recollection of the original agreements between her and
Mr Scott. What is significant is what it does not record. Ms Marr was
not in 2013 asserting that Mr Scott agreed that she would have an
equitable interest in Links Road in excess of her 50% legal interest.
Nor does it record that Mr Scott entered into a personal loan with her,
307 Transcript 24.2.26, page 1200 (Scott).
308 Transcript 18.6.26, pages 1608 - 1610 (Scott).
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parallel to Home Loan 1, by which he would pay for the difference in
the initial inputs.
364 There is a large measure of consensus as to the topics discussed at
the Boatshed meeting (being the matters I have noted at [353] - [354]).
The differences mostly turn on whether Jennifer's note recorded what
Ms Marr said or what Mr Scott agreed to. On this issue, I consider that
Mr Scott has the more reliable recollection. It is inherently improbable
that in this meeting Mr Scott would have agreed to matters (such as the
amount of Ms Marr's initial contribution) which have otherwise been in
dispute for the whole of the 25 plus years since Links Road was
purchased. I find that the matters Jennifer made a note of were matters
that were discussed, but not matters that were agreed to by Mr Scott.
Rather, each of Ms Marr and Mr Scott was reiterating long held
positions on the issues going to their initial contributions.
365 In particular, I do not consider that it is more likely that not that
Mr Scott agreed that he would move out at the end of the year. If he
had made such an agreement, Jennifer would most certainly have
written it down in her notes. The fact that she did not makes it
inherently improbable that it was agreed. However, I do find that this is
what Ms Marr wanted to happen and expressed this to Mr Scott in firm
terms.
366 For completeness sake, I add that no meeting took place the
following Thursday.
7.17 2014 Application to the Magistrates Court.
367 Thinking that she would finally be getting exclusive possession,
Ms Marr had intended to lease Links Road to a friend, Mr Donovan,
and then live in the house with him. Mr Donovan had signed a lease.
She had planned to renovate the house to allow it at least be used for a
permissible commercial purpose. However, at the end of 2013,
Mr Scott told her that he was staying in possession. That was the
catalyst for her to commence proceedings in the Magistrates Court
seeking exclusive possession of Links Road.309
368 The proceedings in the Magistrates Court were commenced by
Ms Marr in early 2014. The defendants were the then tenants.
Mr Scott was later added as an interested party. The application was
heard on 21 and 22 May 2014 by Magistrate Atkins. The Magistrate
309 Transcript 17.2.26, pages 567 - 570 (Marr).
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gave reasons for decision on 6 June 2014, the transcript of which is in
evidence, finding that:310
(a) Ms Marr had standing, as a one of two tenants in common, was
a lessor for the purposes of the Residential Tenancy Act 1987
(WA) (RTA) and had standing to bring the application;
(b) the arrangement between Mr Scott, Reece, Sean and others
amounted to a residential tenancy agreement, regulated by the
RTA;
(c) the tenancy was a periodic one not a fixed term one;
(d) the claim by Ms Marr of an illegal purpose (based on tax issues,
failure to disclose documentation by Mr Scott and a failure to
obtain a full market rental) was not made out;
(e) the claim by Ms Marr that the tenants had intentionally or
recklessly injured her was not established and was dismissed;
(f) the claim by Ms Marr for restitution from the tenants for the
costs of alternative accommodation and for storage of
household items during what she asserts to be an unlawful
exclusion was dismissed;
(g) the notice of termination which Ms Marr served was valid;
(h) Ms Marr filed her application for repossession a day earlier than
permitted, so it fails;
(i) however, in the circumstances, she was entitled to have the
lease terminated on the ground of undue hardship;
(j) the appropriate date for termination would be 14 days from the
date of the decision; and
(k) the orders made did not purport to have any impact upon the
tenancy in common of Ms Marr and Mr Scott.
369 There is no suggestion in the reasons for decision that Mr Scott
was denying that Ms Marr was a tenant in common.
310 PTB E, pages 185 - 196.
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7.18 Occupation by Ms Marr and Mr Scott
370 It is not in issue that on 20 June 2014, Ms Marr moved back into
Links Road, however, so did Mr Scott and Reece. It is sufficient for me
to find that this living arrangement was very difficult for Ms Marr.
371 At some point, Mr Matthews came to Links Road to drop off a
small television for Ms Marr. Mr Scott was at the house, but not his
son. Mr Matthews and Ms Marr tried to get the television working, but
couldn't. So he left. He said that there was no drama with Mr Scott on
that occasion. He described the state of the house as being 'a bit messy',
and that it has a 'really well … lived in look'.311
372 Jennifer also visited Ms Marr at Links Road when she was living
there with Mr Scott. She described it as being 'in a very unkempt state'
and that the toilet 'was like something out of a public latrine'.312
373 Ms Marr went back to the Magistrates Court seeking exclusive
possession of Links Road. Ms Marr recalled this as an application for a
misconduct restraining order.313 Mr Scott could not recall the precise
nature of the application but said that Magistrate Atkins 'wasn't
prepared to hand exclusive access or possession to Diana Marr' and said
words to the effect of 'I have already dealt with this.'314
374 This application was heard on 5 September 2014 and was
dismissed. The same day, Ms Marr moved out of Links Road, leaving
in what Mr Scott described as an agitated state. I accept Mr Scott's
evidence that he treated Ms Marr with appropriate courtesy during this
period.315 However, I also accept that, from Ms Marr's perspective, her
experience was different and that the events leading up to Ms Marr
leaving Links Road had a significant impact on her mental health.316
7.19 Occupation by Mr Scott
375 It is not in issue that after 5 September 2014, Mr Scott occupied
Links Road.
376 Ms Marr said she was telling Mr Scott that he should be paying
50% of a fair market rent. She gave evidence of being ignored by him.
311 Transcript 20.2.26, page 990 (Matthews).
312 Transcript 20.2.26, page 1014 (J Marr).
313 Transcript 19.2.26, page 833 (Marr).
314 Transcript 24.2.26, page 1201 (Scott).
315 Transcript 19,6.26, pages 1729 - 1739 (Scott).
316 See for example: Transcript 17.2.26, pages 581 - 582 (Marr).
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377 Ms Marr had stored a significant quantity of her possessions in the
bedroom she was occupying. She removed these possessions in
November 2015.
378 During 2017 to 2019, Ms Marr and Mr Matthews were sharing a
rental property in Lesmurdie. Mr Matthews was very sick. Ms Marr
became his carer for two to three years, which became the primary
focus of her attention.
7.20 Tenancy agreement with Mr Pearce and Ms Butler
379 The last tenants in Links Road were Cheyne Pearce and Susan
Butler, who resided there with their then infant son. Their tenancy
went from 22 February 2020 to 3 June 2023. They became aware that
Links Road might be available to rent as Ms Butler worked with
Mr Scott's partner. Mr Pearce and Ms Butler signed a written tenancy
agreement. Initially it was two year tenancy, which was extended on a
month to month basis. At that time, the State was still in a COVID
emergency, and they wanted to remain in the house. They vacated the
property when they purchased a house.
380 When Mr Pearce and Ms Butler commenced their tenancy, the
house was, in Mr Pearce's view, clean, but old:317
MARTINO, MS: Just in terms of the state of the house, Mr Pearce,
when you entered the tenancy, what was - what was the general state of
the house?---It was clean. It was old. There was some nice things, like
it was high - ceilinged, wooden floorboards, big rooms. There was also
termite bait in the lounge room for six months because there was
termites. It was hot. I didn't think there was any insulation. There was
only - there was an aircon that fed the spare room and study and
kitchen, so it didn't really do anything for the rest of the house. It was
cold in winter because it sat over a decent crawl space. The gardens
were pretty overgrown. There was a fence in the backyard that was,
like, just shade cloth, so people would walk past and look in, and they
could look in. The hot water system had to be replaced once. The paint
was bubbling. It was coming off in my son's room because of the
leaking bathroom. The oven didn't really work properly. That was
eventually replaced. There was an outside toilet that was sort of
enclosed in this sun-room. It was rat-infested, periodically, in the walls,
in the ceiling, in the backyard, in the shed, but it was - we also made it
our home. We painted a wall in the kitchen into a chalkboard and yes,
it was - it was a bigger place than where we were in, but it was - it was,
it came with the fact that it was a - not a new home. Yes.
317 Transcript 20.2.26, pages 946 - 947 (Pearce).
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381 At the start, the rent was $325 per week, and there was a $650
bond. At some point, the rent increased to $400 per week.
382 Mr Pearce made it clear that there was never any deal for him to
do work at Links Road for reduced rent. He voluntarily did some work
in the garden and inside the house. I would describe the work done as
the usual sort of work a tenant would do in a rental property.
383 At some point, Ms Marr became aware that there was a new tenant
at Links Road and Mr Pearce became aware that Ms Marr was a
co-owner of Links Road. Mr Pearce first met Ms Marr when she came
and knocked on his front door. He described feeling intimidated by the
interaction, in particular the language used. Ms Marr came to the house
on around eight other occasions after that, including to take photos and
drop off paperwork. At some point, Mr Pearce also became aware that
Ms Marr had lodged a caveat over Links Road. I got the sense from
Mr Pearce's evidence that he and Ms Butler were trying to stay out of
the evident dispute between Ms Marr and Mr Scott. However, he was
required to give evidence at two court hearings relating to their dispute
during his tenancy.
384 The Rent Transactions Schedule and the Monthly Rent
Spreadsheet show that:318
(a) Mr Pearce and Ms Butler were tenants for 168 weeks between
February 2020 and May 2023;
(b) between 21 February 2020 and 26 May 2023, payments were
made into Streamline 1, totalling $60,658; and
(c) their average rent was $361 per week.
385 This amount received was gross, that is, without any deduction of
real estate's commission and fees.
386 Ms Marr again asserted that there may be a 'contra deal' with Scott
& Associates which she did not know about.319 However, there is no
evidence of this.
387 Ms Marr cross-examined Mr Scott to the effect that some of the
rent which he received from Ms Butler and Mr Pearce was in cash
318 Exhibits 16 and 17.
319 Transcript 19.2.26, page 872 (Marr).
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which he did not account for. He denied this.320 As Ms Marr did not
adduce any evidence that what she alleged in fact occurred, I accept
Mr Scott's evidence.
388 The analysis in the Rent Transactions Schedule and the Monthly
Rent Spreadsheet in [384] reflects the source documents, and I find in
terms of it.
7.21 Repayment of Home Loan 2
389 On 10 August 2020, Ms Marr paid an amount of $12,100 into
Home Loan 2 which almost reduced the loan balance to zero.
390 In cross-examination, Ms Marr suggested to Mr Scott that they
had agreed that the amount would be paid off Home Loan 2 on
condition that Links Road would be immediately put to its highest and
best use. Mr Scott disagreed, saying that there were no conditions
attached.321 Ms Marr did not give evidence in terms of her question.
So the only evidence on this issue is Mr Scott's denial. I find in terms
of his evidence.
7.22 Commencement of the present action
391 The present action was commenced by Ms Marr on 9 October
2020. The catalyst for doing so was Ms Marr getting another 'red letter'
from the tax department requiring her to provide tax returns relating to
Links Road. She had for some time being lodging tax returns which
left out the matters relating to Links Road, with an explanation that
these matters would be determined later. This culminated in a telephone
call from someone in the ATO fraud investigation team, asking
questions about Links Road. Also, around this time, she had received
calls and emails from the CBA hardship line to the effect that a request
had been made by the other owner of Links Road to stop paying the
mortgage and capitalise the interest. Ms Marr was not able to contact
Mr Scott to speak about this.
392 I deal with the sale of Links Road pursuant to an order of the court
in Part 8.
7.23 Application to the Magistrates Court
393 Around 2022, Mr Matthews entered into a tenancy agreement with
Ms Marr. The intent was that when the fixed term tenancy with
320 Transcript 18.6.26, page 1489 (Scott).
321 Transcript 18.6.26, pages 1594 - 1595 (Scott).
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Mr Pearce and Ms Butler was finished, he was going to rent Links
Road from Ms Marr. The rent was $450 per week. They had planned
to do some work together to get the property up to a commercial
standard. This included putting a ramp in at the front and wheelchair
access to the toilet at the rear. However, as Mr Pearce and Ms Butler
did not move out, and Ms Marr was not able to obtain sole possession
from the Magistrates Court, his tenancy did not go ahead. This was the
only tenancy agreement he recalled entering into with Ms Marr.322 I
accept his evidence.
394 On 22 February 2022, Ms Marr applied to the Magistrates Court
for orders under the RTA seeking to recover possession of Links Road.
The defendants were Mr Pearce and Ms Butler, with Mr Scott added as
a third party. On 1 July 2022 Magistrate Darge dismissed the
application on the basis that:323
(a) it was an abuse of the court's process to bring further actions to
seek orders already the substance of existing litigation (being
the present Supreme Court action); and
(b) the Magistrate lacked jurisdiction to make residential tenancy
orders or restraining orders in a possession of land action.
The Magistrate concluded that '[t]hese proceedings are an attempt to
effectively short cut the existing Supreme Court action.' The
Magistrate noted that there had been a similar application in 2021324
and that earlier in 2022 Ms Marr had unsuccessfully applied for a
restraining order against Mr Scott.325
395 There is no suggestion from the materials in evidence from this
application in the Magistrates Court that Mr Scott was denying that
Ms Marr was a tenant in common.
8. The sale of Links Road
396 At the time Ms Marr commenced the action on 9 October 2020,
Ms Butler and Mr Pearce were in in occupation of the Property.
397 In his counterclaim filed 6 August 2021, Mr Scott sought an order
pursuant to Property Law Act 1969 (WA) (PLA) s 126(1) that the
Property be sold. PLA s 126(1) provides:
322 ts 988 (Matthews).
323 PTB E, pages 264 - 288.
324 Discussed at PTB E, pages 270 - 271.
325 Discussed at PTB E, page 271.
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Where in an action for partition the party or parties interested,
individually or collectively, to the extent of a half share or upwards in
the land to which the action relates request the Court to direct a sale of
the land and a distribution of the proceeds, instead of a division of the
land between or among the parties interested, the Court shall, unless it
sees good reason to the contrary, direct a sale accordingly.
398 On 16 August 2022, Mr Scott made an application for summary
judgment on this part of his counterclaim. Master Sanderson granted
the order on 8 November 2022. The orders provided for Mr Scott to
have the conduct of the sale of Links Road. The net proceeds of the
sale were to be paid into court.
399 Links Road was sold and settlement of the sale was completed on
9 June 2023. An amount of $865,639.86 was paid into court. In an
affidavit filed on 30 June 2023, Mr Scott certified the following
amounts in relation to the sale:
SALE PRICE $930,000.00
LESS COMMONWEALTH BANK OF
AUSTRALIA LOAN PAYMENT
$38,179.98
LESS WBP GROUP (VALUER) FEE $1,100.00
LESS ROSS & GALLOWAY (AGENT)
COMMISSION
$20,640.00
LESS LEGAL FEES (PA MARTINO) FOR
SETTLEMENT
$3,442.47
LESS PEXA TRANSFER FEE $123.97
LESS PEXA WITHDRAWAL OF CAVEAT FEE $33.55
LESS LANDGATE DISCHARGE OF
MORTGAGE FEE
$187.60
LESS LANDGATE WITHDRAWAL OF
CAVEAT FEE
$187.60
LESS WATER AND SHIRE RATES
ADJUSTMENTS
$464.97
NET SALE PROCEEDS $865,639.86
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400 When giving evidence, Ms Marr expressed concern at the
purchase price accepted by Mr Scott. Her evidence was to the effect
that with modest renovations Links Road could have been made
suitable to have been let commercially. This would have significantly
increased the rental value and thus the sale price.326 However, as Links
Road was sold pursuant to a process sanctioned by the court, there is no
basis for Ms Marr to challenge the adequacy of the sale price ultimately
received by this process.
401 Pursuant to the order of Justice Forrester made 24 October 2023, a
sum of $70,000.00 was released to each of Ms Marr and Mr Scott,
leaving a balance of $725,639.86 ($865,639.86 - $140,000.00).
402 On 1 August 2025 I made orders to the effect that the parties could
each engage a legal services provider to prepare trial bundles on the
basis that, once invoices were provided, I would order an amount of
money sufficient to pay each invoice would be paid out of the money in
court. I granted liberty to the parties to apply as to the final attribution
of this cost. Pursuant to this arrangement, on 16 September 2025 I
ordered that the sum of $1,531.75 be paid out to Mr Scott in respect of
his trial bundles.
403 On 18 February 2026 I ordered that the sum of $809.34 be paid
out to Ms Marr in respect of her trial bundles. I also ordered that the
sum of $1894.36 be paid out to Mr Scott in respect of his trial bundles.
404 On 18 February 2026 I made similar orders in relation to the costs
of transcripts for the trial. I ordered that a sum of $2,760.50 be paid to
Ms Marr on account of anticipated transcript expenses. I ordered that a
sum of $2,760.50 be paid out to Mr Scott for transcript expenses
already incurred.
405 On 5 March 2026 I ordered that a further sum of $1,271.80 be paid
out to Ms Marr and that a further sum of $10,749.70 be paid out to
Mr Scott.
406 The entitlements of the parties pursuant to orders made by myself
for payment out of court on account of what I will refer to as Trial
Expenses from September 2025 to March 2026 inclusive are as
follows:
326 Transcript 18.2.26, pages 638 - 641 (Marr).
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Order Made For Payment Out of Court Marr Scott
16 September 2025 (order 1) $1,531.75
18 February 2026 (order 1) $809.34
18 February 2026 (order 2) $2,760.50
18 February 2026 (order 3) $1,894.36
18 February 2026 (order 4) $2,760.50
5 March 2026 (order 1) $1,271.80
5 March 2026 (order 2) $10,749.70
Total Ordered to be Paid Out $4,841.64 $16,936.31
407 All of the amounts allocated to Mr Scott have been paid out.
However, none of the amounts allocated to Mr Marr have been paid
out. I will deal with the issue of how these expenses should be brought
to account in section 19.4.
408 As at the date of judgment, the balance remaining in the Supreme
Court is $708,703.55.
9. What was the initial agreement or agreements between Ms Marr
and Mr Scott?
9.1 Legal principles
409 There are two written contracts between the parties, being the
Initial Marr Scott Sale Contact and the Final Marr Scott Sale Contract.
It is not in issue that each were legally enforceable contracts between
the parties.
410 The principles by which a court construes a contract were recently
summarised by the Court of Appeal in Mirabela Nickel Ltd (in
liquidation) (receivers and managers appointed) v Mining Standards
International Pty Ltd:327
There was no issue between the parties concerning the applicable
principles of contractual construction. There have been many recent
decisions in this court outlining the general principles for the
construction of commercial instruments … often by reference to
Electricity Generation Corporation v Woodside Energy Ltd… and
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd….
Nothing useful would be gained by yet another exposition of those
327 Mirabela Nickel Ltd (in liquidation) (receivers and managers appointed) v Mining Standards
International Pty Ltd [2025] WASCA 82 at [114] - [116] (judgment of the court) (Mirabela). Referring to:
Electricity Generation Corporation trading as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014)
251 CLR 640 [35] (French CJ, Hayne, Crennan and Kiefel JJ); Mount Bruce Mining Pty Ltd v Wright
Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] - [52] (French CJ, Nettle and Gordan JJ).
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principles. It suffices to adopt what has been stated in those recent
decisions.
In summary:
1. The construction of a contractual clause involves an objective
determination of the meaning of the words of the contract by
reference to text, context (the entire text of the contract) and
purpose.
2. The starting point for the proper construction of a contractual
clause is the language used in the clause - one must identify the
possible meanings that the words chosen by the parties can bear.
3. In determining the meaning of the terms of a commercial
contract it is necessary to ask what a reasonable business person
would have understood the terms to mean. That inquiry will
require consideration of the language used by the parties in the
contract, the circumstances addressed by the contract and the
commercial purpose or objects to be secured by the contract.
The instrument must be read as a whole.
4. Absent a contrary intention in the contract, the court approaches
the task of giving a commercial contract an interpretation on the
assumption that the parties intended to produce a commercial
result - one that makes commercial sense. This requires that the
construction be consistent with the commercial object of the
agreement. Similarly, a commercial contract should be
construed so as to avoid it making commercial nonsense or
working commercial inconvenience. However, it must be
recognised that business common sense is a topic on which
reasonable minds may differ.
5. If the words used are unambiguous the court must give effect to
them. The court has no power to remake or amend a contract
for the purpose of avoiding a result that is considered to be
inconvenient or unjust.
Finally, a contract should be construed practically so as to give better
effect to its commercial purpose. The law seeks to uphold commercial
contractual obligations and the expectations that derive from them. The
court should not adopt a narrow or pedantic approach to construction,
particularly in the case of commercial arrangements…
411 What is in issue is whether there were any further legally
enforceable contracts. These contracts are alleged to be wholly oral.
The specific issue is whether, in the conversations in which the contract
is said to arise, Ms Marr and Mr Scott in fact reached a bilateral
agreement and had the necessary intention to immediately create a
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legally binding contractual relationship.328 The court's task is to
ascertain from the parties' actions and dealings whether they intended to
make a concluded bargain.329 This must be determined objectively
having regard to all relevant circumstances.330 'Intention' is used to
describe 'what it is that would objectively be conveyed by what was
said or done, having regard to the circumstances in which those
statements and actions happened'.331 That intention is tested objectively
by reference to what a reasonable observer would have
concluded.332 It is 'not a search for the uncommunicated subjective
motives or intentions of the parties'.333 Rather, the subjective intentions
and beliefs of the parties are irrelevant.334 Likewise, direct expressions
of intent by a party, made after the contract was arrived at, are not
admissible.335
412 The relevant circumstances may include prior negotiations,
surrounding circumstances and post contractual conduct.336 There is a
difference in approach difference between where a contract is wholly in
writing and where it is not. This was explained by Campbell JA said
in Lym International Pty Ltd v Marcolongo:337
The admissibility of evidence for interpreting a wholly written contract
is decided by reference to whether it is able to assist in ascertaining the
meaning that the bystander who knows all the relevant surrounding
circumstances would understand from the parties using those words.
Save in the case of post-contractual events providing retrospectant
evidence of a surrounding circumstance that was known to the parties at
the time of contracting, the view favoured in this court is that
post-contractual conduct cannot assist in that task, and thus is not
admissible, or if admitted cannot legitimately be used in that task …
By contrast, the task in ascertaining what are the terms of a contract that
is not wholly in writing is quite different - the task is finding as a fact
328 Mirabela [114] - [116]; La Mela v Franklexis Pty Ltd [2020] WASCA 83 [83] (judgment of the court)
(La Mela).
329 Mirabela [192], [194]; La Mela [84].
330 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, 105 - 106 (Gaudron,
McHugh, Hayne & Callinan JJ) (Ermogenous); La Mela [84].
331 Ermogenous 105 - 106; La Mela [83]; Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000]
WASCA 27; (2000) 22 WAR 101 [25] - [26] (Ipages J with whom Pidgeon J agreed) (Anaconda).
332 Mirabela [194]; La Mela [84].
333 Ermogenous 105 - 106; La Mela [83]; Anaconda [25] - [26].
334 Mirabella [192].
335 Anaconda [25] - [26].
336 Doherty v Sampey (as Administrator of the Estate of Addison) [2023] WASC 10 [262] (Allanson J)
(Doherty); Chou v AWAPAGE SGT 26 Investment Ltd [No 3] [2018] WASC 383 [133] - [135] (Allanson
J) (Chou).
337 Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 [142] - [143] (Campbell JA, with whom
Basten JA agreed at [1] and Sackar J agreed at [272]).
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what the parties have agreed. A range of post-contractual conduct
could be relevant to ascertaining what the parties have agreed. For
example, their conduct in carrying out the contract could itself be
objective evidence of what they had agreed, an admission of one of the
parties could assist in ascertaining what they have agreed, and business
records created to record or report on the contract rather than carry it
out could also assist in that task.
These observations were quoted with approval by Allanson J in
Doherty.338
413 Where the agreement is said to have been made entirely orally, the
following observations of Hammerschlag J in John Holland Pty Ltd v
Kellogg Brown & Root Pty Ltd instructively summarise the
principles:339
Where a party seeks to rely upon spoken words as a foundation for
a cause of action, including a cause of action based on a contract,
the conversation must be proved to the reasonable satisfaction of the
court which means that the court must feel an actual persuasion of its
occurrence or its existence. Moreover, in the case of contract, the court
must be persuaded that any consensus reached was capable of forming
a binding contract and was intended by the parties to be legally
binding. In the absence of some reliable contemporaneous record or
other satisfactory corroboration, a party may face serious difficulties of
proof. Such reasonable satisfaction is not a state of mind that is
obtained or established independently of the nature and consequences
of the fact or facts to be proved. …
414 This quote was adopted by Allanson J in Chou.340 His Honour also
observed that the party who alleges that the oral agreement was made
'bears the onus of proving, and the court must be satisfied that there is
sufficient evidence to support a positive finding that the agreement it
alleges was made'.341 And that it 'is trite law that for the court to find
the agreement was made, the court "must feel an actual persuasion of
its occurrence or existence''.'342
415 Relevant to the present action, Allanson J also observed that:343
338 Doherty [262].
339 John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 [94] (Hammerschlag J)
(John Holland); MBPAGE Properties Pty Ltd (AC N 073 623 640) v Barnes [2026] WASC 276 [278]
(Seaward J).
340 Chou [133].
341 Chou [132]. See also: Nguyen v Nguyen Huynh (WA) Pty Ltd [2022] WASC 218 [384] (Hill J).
342 Chou [132], citing Briginshaw (361); Helton v Allen [1940] HCA 20; (1940) 63 CLR 691, 712 (Dixon,
Evatt & McTiernan JJ).
343 Chou [134] - [135], [138] citing R v Adams [2016] NSWSC 1798 [65] - [66] (other references omitted).
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The court can have regard to the commercial context, and to both
pre-contractual … and post-contractual conduct … as relevant to
determining whether an agreement has come into existence between the
parties. Subsequent conduct may also be admissible as evidence where
the terms of an oral contract are in issue. As Sakar J said in King v
Adams:
'Ascertaining the existence and terms of an oral contract is a
question of fact … Consideration of surrounding circumstances
and post contractual conduct is permissible when the existence
or terms of an oral contract are in issue …'
In having regard to conduct after the date of the alleged agreement, the
court must of course consider the possibility that a party may regret and
seek to walk away from its earlier agreement.
…
To enable an objective determination of whether there was a mutual
intention to contract the terms [as] alleged …, it is necessary to consider
the evidence of pre and post contract conduct.
416 The passage quoted from the decision of Hammerschlag J in John
Holland was also adopted by Hill J in Lanskey Constructions Pty Ltd v
Westrac Pty Ltd.344 Her Honour also observed that:345
….in determining the terms of an oral agreement in the absence of a
contemporaneous record or other corroboration, the court must be alive
to the reality that words that are spoken are capable of bearing different
and potentially opposed meanings depending on the nuance and
emphasis that is given to particular words. A person's appreciation of
the significance of these matters must necessarily be considerably
diminished if there is a significant delay between the date when the
conversation took place and when evidence of the conversation is
given…
Her Honour's observations as to the impact of delay are of particular
relevance to the present case where more than 25 years has elapsed
between when the conversations are said to have occurred and when
each of Ms Marr and Mr Scott gave evidence.
417 Once the court has determined that the requisite intention is
present, it is then necessary to go on to consider whether the terms of
the bargain, or at least its essential and critical terms, have been agreed
344 Lanskey Constructions Pty Ltd v Westrac Pty Ltd [2022] WASC 90 [49] (Hill J) (Lanskey).
345 Lanskey [49].
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upon or whether the intended contract is so incomplete or uncertain as
to be void.346
9.2 Ms Marr's position
418 In the Claim, Ms Marr refers to the terms of what I have defined
as the Initial Marr Scott Sale Contract, which I have set out in section
3.5, including the Conditions.
419 Ms Marr then pleads that as a result of various discussions
between her and Mr Scott between about 17 and 24 September 1998
and by virtue of entry into the Initial Marr Scott Sale Contract on the
conditions it contained, the parties agreed to enter into a joint
relationship or endeavour (Joint Endeavour). The Joint Endeavour
was to ('Property' referring to Links Road):347
(i) Jointly acquire the Property on the basis that:
a. The plaintiff would acquire the Property solely;
b. The plaintiff would then sell half of her interest in the
Property to the defendant for $88,500;
c. The defendant would contribute an aggregate $6,000
toward the $88,500 that would be payable to the
plaintiff;
d. In order to obtain funding for remainder of the $88,500
amount payable to the plaintiff, the plaintiff would
obtain funding from CBA by way of a $136,000 loan to
be secured by mortgage over the Property;
e. The defendant would assume liability on the above-
mentioned loan in proportion with the value of the
purchase price owed to the plaintiff, plus any settlement
or other costs, disbursements and/or charges that would
be incurred in connection with the O&A and more
broadly with the joint acquisition of the Property (as
opposed to a sole purchase by the plaintiff only);
(ii) Following joint acquisition of the Property, to:
a. Re-zone it for exclusive commercial use;
346 Ermogenous 105; Alistair McDougall Nominees Pty Ltd atf McDougall Holdings Trust v Rural Bank
(a division of Bendigo and Adelaide Bank Ltd (ACN 068 049 178) [No 2] [2025] WASC 326 [96]
(Seaward J); Perpetual Trustee Co Ltd v Nikoloff [2020] WASC 389 [49] (Strk AM); City of Wanneroo v
Tah Land Pty Ltd [2020] WASC 249 [291] (Smith J); Anaconda [28]; Thorby v Goldberg (1964) 112 CLR
597, 607 (Menzies J).
347 Claim par 5 (i) - (ii).
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b. Lease it to commercial tenants (following re-zoning) at
fair market rental;
c. Further or alternatively, redevelop it; and
d. In the meantime, rent it out to 3rd party residential
tenants at fair market rental.
420 The particulars for discussions in which the Joint Endeavour was
agreed were:348
The various discussions between the plaintiff and the defendant
occurred between around 17 to around early-October 1998 and in
person at Scott & Associates' then-office location (situated at Suite 1,
16 Kearns Crescent, Ardross - S&A's Office), at the Property and/or at
a café within the vicinity of the Applecross area; or via telephone
discussions between the plaintiff and the defendant.
421 Ms Marr pleads that on or around 14 September 1998, she entered
into a residential tenancy agreement with Mr Biesiekierski
(Biesiekierski Tenancy Agreement). She says that she relied on this
agreement to procure finance approval from CBA in respect of the
Rancore Marr Sale Contract. She says that the Biesiekierski Tenancy
Agreement was in writing and for a period of between 6 and 12 months
at a rental rate of $120 per week.349
422 Ms Marr then pleads some matters in relation to the Vandalism,
which I have referred to at [219]. Ms Marr pleads that, as a result of
the Vandalism, she lost the opportunity of the Biesiekierski Tenancy
Agreement.350
423 Ms Marr further pleads that the parties entered into a verbal
agreement which she defines as the October Agreement (which
definition I will adopt):351
The parties had verbal discussions around 31 October 1998 in respect of
the Vandalism. By 11 November 1998, the parties verbally agreed:
(i) That the plaintiff would discount the agreed purchase price in
the O&A to $85,000 in exchange of the defendant indemnifying
the plaintiff for 50% of the costs necessary to repair the
Vandalism; and
348 Claim, par 5 (a).
349 Claim, par 2.
350 Claim, par 6.
351 Claim, par 7.
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(ii) The entry into a lease agreement between themselves and the
defendant's sole proprietor business known as Scott &
Associates (S&A);
(October Agreement)
Particulars
a) The October Agreement was partly verbal and partly
written.
b) To the extent that it is was writing, the October
Agreement is referred to in the O&A (as amended by
the parties around 10 November 1998).
c) To the extent that it was verbal, the October Agreement
occurred by way of discussions between the parties at
the Property, S&A's Office or via telephone.
424 Ms Marr then pleads that she undertook certain works shortly after
settlement of the acquisition of Links Road, which I have quoted at
[219], which she defined as 'Works' (which definition I will adopt).
425 Ms Marr then says that the Works and her organisation and
supervision of the Works were commonly intended to be part of the
Joint Endeavour.352
426 Ms Marr then pleads that around 5 to 11 November 1998, she and
Mr Scott made a further agreement which she defines as the
Indemnity:353
Notwithstanding the Legal Interests, the parties verbally agreed around
5 to 11 November 1998 that the defendant would indemnify the
plaintiff for a 12.4% proportion of the debt that was otherwise jointly
owed by the parties to CBA at the time (Indemnity).
Particulars
a) On or around November 1998, the parties verbally discussed
and agreed to reassess and/or revise the Joint Endeavour
following contributions toward their acquisition and ownership
of the Property, the physical condition of the Property and the
discount with which Rancore had provided the plaintiff with.
b) The said discussions occurred at the Property, S&A's Office and
via telephone.
352 Claim, par 13.
353 Claim, pars 14 and 15.
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c) The revised agreement with the plaintiff was to the effect that
the parties would:
(i) Equally share part of the losses occasioned by the
Vandalism, in recognition that the Rancore-Marr Sale
Contract would have settled before the said Vandalism,
had the defendant supplied documentation to CBA (to
be approved as a co-borrower with the plaintiff) in a
timely manner;
(ii) Recognise a discount of $9,600.00 that Rancore stated
around 5 November 1998 that it would give the
plaintiff at settlement of the Marr-Rancore Sale
Contract (Rancore Discount);
Accordingly, the defendant provided the Indemnity in
recognition of:
(i) the plaintiff's financial contribution to the defendant's
acquisition of his legal interest in the Property (through
provision of vendor finance);
(ii) the plaintiff's financial and non-financial contributions
in funding and performing the Works;
(iii) The Rancore Discount; and
(iv) Financial and non-financial contributions that the
Plaintiff made by 12 November 1998 and in relation to
re-zoning of the Property (such as planning
applications, planned building works and payment of
document fees).
427 There is then a plea that by virtue of the matters which I have
referred to in [419] to [426] and 'as a matter of law', the plaintiff
acquired an aggregate 62.4% beneficial interest in the Property by
about 11 November 1998. I deal with this claim in section 9.8 and Part
18.
428 In summary, Ms Marr says that there were three agreements
between the parties:
(a) the Joint Endeavour;
(b) the October Agreement; and
(c) the Indemnity.
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9.3 Mr Scott's position
429 Mr Scott pleads that the parties entered into the Initial Marr Scott
Sale Agreement. In relation to the this, Mr Scott pleads that despite
special condition 6 referring to an agreement, there was no signed
agreement between the parties.354
430 Mr Scott further pleads that it was an implied term of the Initial
Marr Scott Sale Contract that any proposed rezoning would be achieved
within a reasonable period following settlement of the Marr-Scott Sale
Contract.355
431 Mr Scott denies that the parties entered into what Ms Marr
describes as the Joint Endeavour. Rather, he says that at all material
times, he and Ms Marr have been co-owners of Links Road.356
432 Mr Scott then pleads that there was a verbal agreement in or about
October or November 1998 that:357
(a) Home Loan 1 (to use my definition) would be used:
(i) in part by Mr Scott for completing the Marr-Scott Sale
Contract; and
(ii) in part by Ms Marr for completing the Rancore Marr
Sale Contract;
and
(b) each would be responsible for the Joint CBA Loan to the extent
of:
(i) $79,000 by Mr Scott to Ms Marr in completion of the
Marr-Scott Sale Contract; and
(ii) $59,000 by Ms Marr towards completion of the
Rancore-Marr Sale Contract and payment of her
settlement fees and disbursements.
I will refer to this agreement as the Scott Loan Agreement.
354 Defence, par 3.6.
355 Defence, par 3.7.
356 Defence, par 4.
357 Defence, pars 7.2, 7.4(d).
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433 Mr Scott denies that Ms Marr incurred the expenses in relation to
the Vandalism she pleads or that, if incurred, any money paid was
intended to be part of the Joint Endeavour (which he denies exists).358
434 Mr Scott denies that he and Ms Marr entered into the Indemnity
and says even if there is an Indemnity, which is denied, the claim is a
contract claim and is statute barred pursuant to Limitation Act 2005
(WA) (LA) sections 13, 26 and 27. He further says that:359
(a) at all material times, he and Ms Marr have been co-owners of
Links Road;
(b) at no time did he agree to indemnify Ms Marr; and
(c) the two of them did not obtain the City of Melville's approval to
the rezoning of Links Road to 'commercial' within a reasonable
time following settlement on 12 November 1998 or at any time
the two of them held Links Road as co-owners.
435 Mr Scott accepts that the Vandalism occurred. He says that the
cost to repair the damage caused to the house by the Vandalism was in
the vicinity of $6,000. He goes on to say that as at 31 October 1998,
Ms Marr was in default of the Rancore Marr Sale Contract for delay in
completing settlement and penalty interest was applicable. Sometime
between 5 November 1998 and 11 November 1998, Rancore and
Ms Marr agreed to settle their respective claims or the Vandalism and
penalty interest on terms that resulted in Rancore allowing to Ms Marr
a discount on the purchase price under the Rancore-Marr Sale Contract
of about $4,800 (Rancore Discount (Scott)).360
436 Mr Scott then says that was the common understanding and
assumption of he and Ms Marr that the savings to Ms Marr under the
Rancore Marr Sale Contract by the Rancore Discount (Scott) was joint
money of the two of them and would be used towards the repair of the
house at Links Road. Alternatively, he believed and assumed that the
savings to Ms Marr by the Rancore Discount (Scott) was joint money
of the two of them and would be used towards the repair and
improvement of the house at Links Road. These assumptions are said to
have been caused or induced by the conduct of Ms Marr in:361
358 Defence, par 8.
359 Defence, par 9.
360 Defence, pars 5.1 - 5.4.
361 Defence, pars 5.5 - 5.7.
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(a) keeping Mr Scott informed of her negotiations with Rancore in
relation to the Vandalism;
(b) representing to Mr Scott that the savings from the Rancore
Discount was joint money of the two of them and would be
used towards repairing the house, a representation that was
made verbally during discussions between the two of them in or
about November 1998; and
(c) at the settlement of the Marr Scott Sale Contract, not passing to
Mr Scott any part or benefit of the Rancore Discount (Scott).
437 Mr Scott denies the October Agreement and reiterates that what is
set out at [432].362
438 In summary, Mr Scott's position is that there were two agreements:
(a) the Marr Scott Sale Contract, without distinguishing between
the versions over time; and
(b) the Scott Loan Agreement.
Otherwise, the rights and obligations of each party were those which
flowed from their ownership of Links Road as tenants in common in
equal shares.363
9.4 Approach to the determination of the issues
439 The evidence given at trial by Ms Marr presents a different factual
narrative from that in the pleadings. Mr Scott's evidence was largely
consistent with his pleaded case. In order to determine the issues which
arise on the pleadings, I begin with an analysis of the facts which can
be drawn from the evidence and the legal consequences of those
findings. I then return to consider whether either party has proven their
pleaded case.
440 In their pleadings, neither party really engaged with the issue that
the Marr Scott Sale Contract was varied. For the purposes of
determining the legally enforceable agreements between the parties, it
is necessary for me to do so. Hence, I consider the Initial Marr Scott
Sale Contract and the Final Marr Scott Sale Contract separately.
362 Defence, par 6.
363 See generally: Defendant’s Opening Submissions, pars 41 - 50.
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9.5 The Initial Marr Scott Sale Contract
441 I have set out the salient terms of the Initial Marr-Scott Sale
Contract in section 3.5. On its face, the Initial Marr-Scott Sale Contract
created a legally binding contractual relationship on its terms, and I so
find. The core terms were:
(a) Mr Scott would purchase a 50% interest in Links Road for
$88,500, with a $6,000 deposit;
(b) settlement was to occur, in practical terms, on confirmation that
Links Road had been rezoned to commercial;
(c) the parties were to use their best endeavours to expediate the
proposed rezoning;
(d) Ms Marr could use the $6,000 towards the costs of settlement
for the Rancore Marr Sale Contract; and
(e) if the parties were unable to achieve rezoning to commercial,
the agreement would come to an end and the deposit would be
refunded with interest.
So there was a legally enforceable contract between Ms Marr and
Mr Scott as at 24 September 1998 to this effect.
442 As to whether there was any wider agreement at this time, there is
consensus between the evidence of Ms Marr (see for example [48]) and
Mr Scott (see for example [57]) that the initial plan was for each of
them to take some space in Links Road from which to operate their
respective businesses. Hence the need for the rezoning to commercial.
443 The parties were prepared to enter into the Initial Marr Scott Sale
Contract on the basis of the plan in [442]. However, the plan was at
that stage still too vague for me to find that a reasonable observer
would have concluded that the parties intended to create an
immediately binding legal relationship.
444 There is also a measure of consensus in the evidence of Ms Marr
(see for example [53], [204]) and Mr Scott (see for example [57], [59],
[208]) that the plan was for the two of them to equally share the costs of
acquiring, holding and developing Links Road.
445 From the terms of the Initial Marr Scott Sale Contract, I find that
the parties intended to enter into a separate deed of agreement. The
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proposed deed of agreement was to cover at least the refund of the
deposit. Common sense would also suggest that the deed of agreement
would also formalise the arrangements at [442] and [444]. However, it
is common ground that no such deed was ever entered into.
9.6 The Final Marr Scott Sale Contract
446 The Final Marr Scott Sale Contract created a legally binding
contractual relationship on its terms, supplanting the Initial Marr Scott
Sale Contract. I do not need to make any findings as to the sequence of
the various amendments. It is sufficient to find that the Final Marr
Scott Sale Contract was in terms of the original which is part of Exhibit
13. The core terms were:
(a) Mr Scott was to purchase a 50% interest in Links Road for
$85,000;
(b) settlement was to occur simultaneously with the Rancore Marr
Contract; and
(c) the parties were to use their best endeavours to expediate the
proposed re-zoning to commercial.
So there was a legally enforceable contract between Ms Marr and
Mr Scott to this effect.
447 The fact that settlement of the Final Marr Scott Sale Contract to
occur simultaneously with the settlement of the Rancore Marr Sale
Contract impacts on clause 6 (dealing with the refund and quoted at
[67]). In assessment, a reasonable business person looking at the Final
Marr Scott Sale Contract would view the amendment of cl (iv) relating
to settlement, to also constitute a waiver of clause 6: clause 6 must fall
away if there is simultaneous settlement, regardless of whether Links
Road has been rezoned to commercial. I am fortified in this view by the
fact that this is what occurred. Both contracts were settled
simultaneously at a time when zoning to commercial had not then been
obtained.
9.7 Were there any other agreements?
448 The question then becomes whether there was a wider agreement
or agreements.
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Home Loan 1
449 I begin with Home Loan 1. It is not in issue that Home Loan 1
was a standard joint and several loan with both parties being equally
liable.
450 In the passages of his evidence which I have quoted at [208] and
[209], Mr Scott explains how he arrives at the figures of $79,000 and
$59,000 (as pleaded [432]), as follows:
(a) the cost of Links Road was $170,000;
(b) Home Loan 1 was for $136,000, so the parties had to find
another $34,000;
(c) he put in the deposit of $6,000;
(d) Ms Marr put in the balance of $28,000;
(e) his share of the loan is half of the purchase price ($85,000) less
his deposit ($6,000), being $79,000; and
(f) Ms Marr's share of the loan is half of the purchase price
($85,000) less her contribution ($28,000), being $57,000.
In other words, Mr Scott had to pay an additional $11,000 over and
above half of Home Loan 1 ($68,000) to reflect his unequal
contribution.
451 It is thus apparent that the pleaded position of both parties in
relation to Home Loan 1 is substantively the same. Ms Marr pleads
that it was agreed that Mr Scott would assume liability on Home Loan 1
'in proportion with the value of the purchase price owed to the plaintiff,
plus any settlement or other costs, disbursements and/or charges that
would be incurred in connection with the O&A and more broadly with
the joint acquisition of the Property (as opposed to a sole purchase by
the plaintiff only)' (quoted at [419]). Mr Scott now quantifies the
proportionate liability he would assume as an additional $21,775 over
and above the otherwise $68,000 equal contribution (see [469]) (though
I find that this amount is overstated).
452 However, Ms Marr did not give evidence in terms of her pleaded
position. Rather, her evidence (set out at [75])) is that Mr Scott entered
into a personal loan with her by which he was to repay the difference
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between what he contributed to the purchase price and what Ms Marr
contributed to the purchase price. This personal loan is not pleaded.
453 So while it is common ground between the parties that Mr Scott
was to address the imbalance in the initial contributions with the effect
that, over time, they were going to be equally responsible for the
mortgage payments on Home Loan 1, there is a difference in how the
imbalance was to be addressed:
(a) Ms Marr now says that the additional contributions were to be
addressed by Mr Scott repaying the amount as a personal loan
to her; whereas
(b) Mr Scott says it was to be addressed by him over time by
contributing more to the loan repayments.
454 Looking at the conduct of the parties subsequent to settlement,
there is no evidence of Mr Scott making any payment directly to
Ms Marr at all, certainly nothing is described as a loan repayment.
Rather, Mr Scott was making regular payments into Streamline 1 (as
was Ms Marr) which were used to make the mortgage repayments on
Home Loan 1.
455 As to expenses, both Ms Marr (for example [53]) and Mr Scott
(for example [59]) gave evidence that all expenses, including settlement
expenses, were to be shared equally. I accept Mr Scott's evidence that
(quoted in context at [208]):364
And the arrangement we have between us is that we have purchased this
house together, 50 per cent each, and we are going to proceed through
and make various contributions to achieve our aim, perhaps if we can,
of turning it into commercial premises. But we each will own 50 per
cent and be responsible for 50 per cent of the costs. We may pay more
here, more here, there. One person organises something, pays it.
Another person organises something, pays it. Or money comes in, pays
into the account. But it will all be sorted out in the wash to be 50-50 in
the end. …
So am I right, then, in understanding your evidence to be that the intent
was that the expenses would be shared equally, in the wash-up?---Yes,
your Honour.
So that was the agreement at the time, that there's an unequal
contribution to the loan, which will be addressed over time, and the
364 Transcript 23.2.2026, pages 1152 - 1153 (Scott).
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expenses will be shared equally, and come out in the wash?---Yes, your
Honour.
So there was no more sophisticated agreement than that at the
time?---No, your Honour. No more sophisticated agreement than that.
456 In summary, I find that the initial agreement between Ms Marr and
Mr Scott was:
(a) the unequal contributions to the loan were to be addressed over
time by Mr Scott by contributing more to the loan repayments;
(b) once addressed, the parties would be equally responsible for
loan repayments;
(c) otherwise, all expenses would be shared equally, with the
parties each paying for particular expenses from time to time;
and
(d) there would be a final accounting of expenses at some point,
with the intent that they be equalised.
457 As to what would occur if they received income from the renting
Links Road from time to time, it is not in issue that the income in fact
received is to be divided equally. This is the ordinary application of
co-ownership principles (see [541]). Neither party gave evidence that
this issue was discussed in their initial conversations. It is sufficient for
me to find that there was no agreement to depart from or adjust that the
ordinary application of co-ownership principles as regards income.
458 I come to the same conclusion about how the profit on sale would
be shared. There was no agreement to depart from, or adjust, the
ordinary application of co-ownership principles which would see the
net profit being shared in accordance the proportion of ownership.
459 I consider that the agreement in [456] is the one which I can
determine objectively having regard to all relevant circumstances. It is
what a reasonable observer would have concluded. There is ample
evidence to support a positive finding that an agreement in these terms
was made. Moreover, the agreement in [456] reflects the conduct of the
parties over the following 25 years. On the other hand, there is
insufficient evidence for me to 'feel an actual persuasion' for the
existence of any different or more sophisticated agreement.
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460 Rather, I find that there was a plan, but not a legally enforceable
contract:
(a) to rezone Links Road to for commercial use;
(b) to undertake renovation works to Links Road to enable it to be
used for commercial purposes; and
(c) for both Ms Marr and Mr Scott to conduct their businesses from
Links Road.
The last point is evident from the fact the plans used to support the
rezoning application contemplated Ms Marr and Mr Scott conducting
their businesses from Links Road. However, the plan was still too
vague for me to find that a reasonable observer would have concluded
that the parties intended to create an immediately binding legal
relationship in terms of the plan.
Settlement Expenses
461 As to the settlement expenses, both Ms Marr ([53]) and Mr Scott
([59], [115]) gave evidence that these were to be shared equally. As set
out at [186], the total settlement expenses for both properties were
$7,703.50 ($7,704 rounded), so $3,852 each ($7,704 x 50%).
Vandalism expenses
462 In section 6.2 I found that Ms Marr expended $4,384 in November
and December 1998 on repairing the Vandalism damage.
463 Also set out section 6.2, Ms Marr claims a total of $3,000 for her
supervision of the repair works, and $600 of her time spent preparing
the schedule of costs. As mentioned, I accept Ms Marr's evidence that
she spent a considerable amount of her own time and effort in
organising the repairs and carrying out some of the work. However, I
am not satisfied that there is a legal basis for her to claim an amount in
respect of this work. There is no principle allowing a co-owner to make
a claim to be compensated for personal exertion in relation to repairs to
a co-owned property. Nor am I persuaded that there was a legally
enforceable agreement between Ms Marr and Mr Scott pursuant to
which he agreed to recompense her for this amount. Rather, the scope
of the legally enforceable agreement is as I have set out at [456].
Ms Marr has not proven an entitlement to the $3,600 claimed.
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464 I have accepted Ms Marr's evidence that by way of compensation
for the Vandalism damage, at settlement of the Rancore Marr Sale
Contract she received $9,600 comprising:
(a) a rebate off the purchase price of $4,800; and
(b) a bank cheque to her in the amount of $4,800.
However, she did not account for either amount to Mr Scott. As to the
former, his sale price was still $85,000, being half of $170,000,
whereas she only paid $165,200 at settlement. As to the latter, there is
no record of the $4,800 cheque being deposited into Streamline 1.
465 I add here that Mr Scott has claimed expenses in relation to
Vandalism repairs as part of his claim for co-ownership expenses, being
for the security system. I will deal with these expenses in Part 16.
466 The net result is that Ms Marr received $9,600 in respect of repairs
arising from the Vandalism, has proven that she spent $4,384 and is not
entitled to be compensated for her personal exertion. The appropriate
way to bring to account the Vandalism expenses is to offset them
against the $4,800 received by Ms Marr. The discount on the purchase
price needs to be brought to account separately (see [473]).
The amount of Mr Scott's initial unequal contribution
467 I turn then to assessing the amount of Mr Scott's unequal
contribution.
468 As set out at [189], Ms Marr claims that her initial contribution
was $48,979.50. In section 4.5, I have not allowed any expense over
and above the costs of settlement (which I have deal with at [461]).
The issue I did not deal with in section 4.5 was Ms Marr's claim for
$38,100 being 'Loan balance from Brentwood to bring LVR about
80/20'.365 As to this, from the settlement statement in [172], the balance
required to complete the Rancore Marr Sale Contract was $164,227.
This accords with the bank records.366 Home Loan 1 was $136,000,
leaving a balance of $28,227. According to the bank records, this was
in fact the amount paid. So this is the amount of equity which I find
that Ms Marr in fact contributed from the Brentwood Property.
365 Exhibit 27.
366 PTB E, page 34.
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469 In the Defence Closing Submissions, Mr Scott accepts that the
amount which Ms Marr contributed from the Brentwood Property needs
to be brought to account. He also brings to account the reduction in the
purchase price as a result of the Vandalism. His analysis was:367
The difference is an amount of $21,775 ($29,541 - $7,766).
470 However, Mr Scott's analysis conflates two issues. The first is the
measure of Mr Scott's initial unequal contribution. The second is the
entitlement of each party to claim their initial cash contributions from
the proceeds of the sale.
471 Analytically, the first question is answered by asking how
Mr Scott paid the $85,000 due to Ms Marr under the Final Marr Scott
Sale Contract. This is in essence Mr Scott's pleaded case (see [432]).
This had been reduced from $88,500 to take out the costs of settlement.
367 Defence Closing Submissions, Annexure A, page 1.
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They agreed to each pay 50% of settlement costs of $3,852 ([461]).
This amount should be added by way of a contribution to the costs of
settlement. The purchase price is $85,000 as there was no agreement to
reduce this amount to reflect any Vandalism discount (though this is
still brought to account - see [473]). This can be seen to leave a
difference of $13,650:
Item Amount
Purchase price $85,000
Settlement costs $3,852
Sub total $88,852
Less deposit $6,000
Less 50% of Home Loan 1 $68,000
Less stamp duty paid $1,702
Balance $13,150
472 Thus, I find that the measure of Mr Scott's unequal contribution
was $13,150.
473 As to the second question, each party is entitled to claim out of the
sale price their initial cash contributions. Ms Marr's contribution was
$28,227. Based on the settlement statement in [172], it is apparent that
this amount reflects the reduced purchase price of $165,200. Put
differently, but to the same effect, had the purchase price not been
reduced, Ms Marr would have been required to contribute $33,027
($28,227 + $4,800) in order for a settlement to occur for a purchase
price of $170,000. However, what does need to be deducted is the
$1,527 paid to Ms Marr by way of refund ([187]). This leaves $34,014:
Item Amount
Equity from the Brentwood Property $28,227
Deposit Rancore Marr Sale Contract $2,500
Stamp duty and registration fee $4,814
Sub total $35,541
Less refund $ 1,527
Balance $34,014
474 Mr Scott's initial cash contribution was $7,702.50:
Item Amount
Deposit Marr Scott Sale Contract $6,000
Stamp duty $1,702
Balance $7,702
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9.8 Common intention constructive trust
475 As mentioned [427], Ms Marr claims that by virtue of the factual
matters she identifies and 'as a matter of law', she acquired an aggregate
62.4% beneficial interest in the Property by about 11 November 1998.
The factual matters identified are:368
(a) the Marr-Scott Sale Agreement;
(b) the Joint Endeavour;
(c) her initial contributions;
(d) the Indemnity; and
(e) the Rancore Discount.
476 There are two potential bases for this claim. The first is that, as at
September to November 1998, a constructive trust arose by virtue of
the common intention of the parties. The second basis is that there is a
remedial resulting or constructive trust. The former creates substantive
rights from when it is made; the latter is an equitable remedy which
comes into existence when a court makes a declaration to that effect.369
I deal the first basis at this point, and return to the second in Part 18.
477 To establish a common intention constructive trust, two matters
must be established: first, the existence of a common intention that the
relevant parties should have a beneficial interest; and second, that the
claimant acted to his or her detriment on the basis of that common
intention. The common intention must be actual, and cannot be
imputed by operation of law.370 The law does not impute a presumed
intention to the parties based upon what the court considers fair and
reasonable persons in the position of the parties would have intended
had they turned their minds to the issue.371
478 On the evidence which I have set out in Parts 3 to 5, I am not
satisfied that Ms Marr and Mr Scott in fact agreed that Ms Marr would
have a beneficial interest in excess of her 50% interest as an owner
common in equal shares. Ms Marr's evidence that there was an
agreement in these terms was in the context of the draft deed which she
said Mr Dispain drafted and provided to the parties. However, this
368 Claim, par 16.
369 Trajkoski v State of Western Australia [2017] WASC 273 [28] (Le Miere J) (Trajkoski).
370 Coster v Coster [2024] NSWSC 1104 [156] (Hmelnitsky J).
371 Trajkoski [27]; Astill v State of Western Australia [2020] WASC 119 [40] (Hill J).
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deed was never signed. Nor is there any other evidence that Mr Scott
agreed to its terms. And Mr Dispain did not give evidence to this effect
(see also [95]). Nor did Ms Marr mention this in her agenda for the
Boatshed meeting ([363]) or in her letter of 2010 or 2011 ([334]).
Ms Marr has not established the existence of a constructive trust on this
basis.
9.9 Home Loan 2
479 What occurred when Home Loan 2 was entered into is not in issue
([257]).
480 Ms Marr characterised Home Loan 2 as the 'equalisation loan'. Its
purpose was 'equalisation' ([258]). She wanted to 'cut a deal' to
equalise contribution to the joint endeavour ([263]).
481 Mr Scott's evidence was that with the car transaction of $17,900
'we have gone past equal' ([264]).
482 It is common ground that the $36,000 had to be paid off by the
parties jointly. In this way, Mr Scott is paying off money part of which
went to Ms Marr personally (and for which she does not need to
account in the final analysis). The proper characterisation of what
occurred is that the balance of the $18,100 paid into Streamline 1 is that
it was a further joint contribution to Links Road.
483 I find that effect of what occurred in relation to Home Loan 2 was
that the initial agreement that the unequal contributions to the loan were
to be addressed over time by Mr Scott had been met. I find that this
was what the parties agreed; in Ms Marr's words, a deal was cut and
Mr Scott equalised. Ms Marr received $17,900 out of the funds of the
joint endeavour and, in effect, agreed not to pursue Mr Scott further for
the initial unequal contribution. This means that, in the final
accounting, Mr Scott's unequal contribution of $13,150 does not have
to be dealt with.
484 It follows that I don't accept the argument made by Ms Marr in
closing submissions that Mr Scott has not caught up on the shortfall of
$11,000 from his initial contribution to the purchase price.372 However,
in the same submissions Ms Marr goes on to say that Home Loan 2
'was structured to equalise the parties' contributions'. This is what I
have found.
372 Plaintiff’s Closing Submissions, Schedule.
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485 I add that, if the initial agreement had been that Mr Scott would
repay the unequal contribution to Ms Marr by way of a personal loan,
the effect of the Home Loan 2 transaction would have been to have
discharged this liability.
486 The effect on the mortgage payments in the final analysis is that
the expenses comprising payments of interest and capital are to be
shared equally in accordance with the agreement in [456].
487 Ms Marr claims an amount of $4,549.60, being 62.4% of the
$12,100 balance of Home Loan 2 paid into Streamline 1.373 The basis
of this claim is not apparent. In my assessment, this amount was a joint
contribution to what I later describe as the common business enterprise.
Ms Marr accepts this in her closing submissions, describing it as a 'joint
float'.
9.10 Pleaded agreements
488 Based on my conclusions in this Part, the agreement which I have
found proven is substantially in accordance with the pleaded Joint
Endeavour ([419]), though I have found that the matters post settlement
were a plan rather that a contract (and, as I will explain in Part 17, a
plan that gave rise to a fiduciary relationship). I accept that the
relationship between the parties was purely commercial. Ms Marr has
not persuaded me that there was a contract in terms of the October
Agreement.
489 As to the Indemnity, Ms Marr did not give evidence in terms of
what is pleaded as at [426]. So she has not proven it on the balance of
probabilities. More specifically, she has not proven that there was an
agreement to the effect that she was entitled to an aggregate 62.4%
beneficial interest in Links Road.
490 On the other hand, Mr Scott has proven the Scott Loan Agreement
on the balance of probabilities, though at figures reflecting the evidence
at trial. The agreement set out at [456] is consistent with his position
that the rights and obligations of the parties were those which flowed
from their ownership of Links Road as tenants in common in equal
shares.
491 The net effect is that there is no agreement which modifies the
usual principles which apply to an accounting of initial contributions,
373 Plaintiff’s Closing Submissions, Schedule.
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income, expenditure and distribution of sale proceed between co-
owners of a property.
10. What are the legal principles relating to co-ownership of land?
10.1 The partition power
492 I have quoted PLA s 126(1) at [397].
493 The power to distribute the proceeds of sale in PLA s 126(1) is a
statutory discretion.374 That statutory discretion is to be exercised on
the same basis as the statutory discretion relating to the power to sell,
that is, it must be exercised judicially. It must be exercised having
regard to the objects of the PLA, specifically those evident in PLA s
126. It must not be exercised arbitrarily, capriciously or so as to
frustrate the legislative intent.375
494 The common law and equitable principles relating to common
ownership of land provide an appropriate basis to exercise a statutory
power of sale and distribution of proceeds.376 It is to those principles I
now turn.
495 Before doing so, it is instructive to set out the nature of the interest
of co-owners. This is summarised in the judgment of Brennan J in
Nullagine Investments Pty Ltd v Western Australian Club Inc:377
The share or interest which a tenant in common has in land is an
'undivided' share, that is to say, 'a distinct share in property which has
not yet been divided among the co-tenants'… A division of the property
is repugnant to the nature of a tenancy in common… for it is an
essential characteristic of a tenancy in common that each of the tenants
has the right to occupy the whole of the property in common with the
others. Like joint tenants, tenants in common have a unity of
possession; unlike joint tenants, they need not have a unity of interest,
nor a unity of title, nor need there be a unity in the time when the
interests of the co-owners vest. Each tenant in common has a separate
and individual title to the property, limited according to the estate or
term granted to or acquired by the tenant…Thus one tenant in common
may be seised of an estate in fee simple, another seised of an estate for
life, while a third may be a tenant for a term of years, each of their
374 MBPAGE Properties [269] (Seaward J); Warren v Lawton [No 3] [2016] WASC 285 [213] - [214] (Le
Miere J); Forgeard v Shanahan (1994) 35 NSWLR 206, 219 (Mahoney JA agreed) (Forgeard).
375 See generally: Meagher as trustee in Bankruptcy of Stein v Stein [2025] WASC 235 [38] (Forrester J);
Gray v Gray [2023] WASC 70 [37] - [38] (Strk J); Bombara v Bombara [2010] WASC 314 [79] - [81]
(Allanson J).
376 Forgeard 219 - 220 (Mahoney JA).
377 Nullagine Investments Pty Ltd v Western Australian Club Inc (1992) 177 CLR 635, 643 - 645
(Brennan J) (references omitted).
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interests being separately acquired at different times. There is no right
of survivorship among tenants in common… And thus, at common law,
a tenant in common who wished to sell his interest in land was
constrained to sell subject to the right of any co-tenant to remain in
possession of the whole of the land…
The shares of tenants in common are not carved out of, or engrafted
onto, some notional tenure of an estate in fee simple in the land
amenable to sale by, or on the application of, one tenant. Nor are
tenants in common equitable owners of land capable of compelling a
sale of the legal title by a bare legal owner. The rights of ownership are
exhausted by the shares of two tenants in common, each seised of and
holding on his own behalf an estate in fee simple in a one half share in a
parcel of land… If tenants in common concur in a sale of a parcel of
land to a third party, each must convey his own share to the purchaser
who takes a single estate in fee simple in the whole of the land… Or
one tenant in common may take a conveyance of the shares of the other
co-tenants and acquire sole ownership of the land. But, if tenants in
common do not concur in one or other of these courses, the only way in
which one of them can secure a sale of the land is by applying for an
order for sale under statute — in Western Australia under [Property
Law Act 1969 (WA)]… s 126(1)..
10.2 Forgeard v Shanahan
496 The law in relation to the rights of co-owners was
comprehensively summarised by Meagher JA (with whom Mahoney JA
agreed) in Forgeard:378
1. Since both joint tenants and tenants in common have joint
possession of the land in which they have the estate, it was a
settled rule of law that the possession of any one of them was
the possession of the other of them, so as (for example) to
prevent the statutes of limitation from affecting them; nor did
the bare receipt of all the rents and profits by one operate as an
ouster of the other…
2. It follows that, where one co-owner is in occupation and the
other not, but there has been no actual ouster or exclusion by the
former of the latter, the law treats the latter simply as someone
who has chosen not to exercise his legal right to occupy the
land.
3. It also follows that a co-owner not in occupation was normally
virtually without remedy. He could not sue in trespass unless
there was an ouster… In the case of personalty, he could not
bring trover, absent ouster…, and even the secret removal of
chattels by one co-owner for the purpose of selling them and
378 Forgeard 221 - 222 (Meagher JA with whom Mahoney JA relevantly agreed).
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applying them to his own use, did not amount to a conversion or
confer any right on a co-tenant to sue in trover… A co-owner
out of occupation could not even recover his share of rents and
profits if the co-owner in occupation appropriated them to
himself: no action of account lay either at law or in equity…
4. Apart from statute, a co-owner out of occupation had remedies
at law in two situations, and no more. If he had been ousted, he
could bring ejectment and mesne profits… If, on the other hand,
his co-owner were in occupation by agreement that co-owner
became an agent or bailiff and rendered himself liable in a
common law action of account. In either case (that is, of ouster
or occupation by agreement) he would be liable for rents
actually received and possibly also for an occupation fee.
5. Apart from statute, in equity the plight of a co-owner not in
occupation was little better. There did not seem to be any action
which would render a co-owner in occupation liable to refund
any rents received, much less liable for an occupation fee…
6. In 1705 things improved a bit with a Statute of Anne. That
statute is properly cited as 4 & 5 Anne c 3 s 27, although —
curiously — often referred to as 4 Anne c 16 s 27. In so far as it
is here relevant it provides:
And… from and after the said first day of Trinity term,
… shall and may be brought…by one joynt tenant, and
tenant in common, his executors and administrators,
against the other, as bailiff for receiving more than
comes to his just share or proportion, and against the
executor and administrator of such joynt tenant, or
tenant in common (sic)…'
Thereafter, as far as rents actually received were
concerned, a non-occupying co-owner had a statutory
right of action both at law and in equity, which caused
the courts no problem subject to occasional disputation
about what constituted an accountable 'rent'…:
7. In New South Wales the Statute of Anne although formerly
available, as repealed by the Imperial Acts Application Act 1969,
a piece of legislation recommended by a Law Reform
Commission. It is a neat illustration of the havoc which can be
wrought by high-minded but ignorant people, putting litigants in
New South Wales back into the position they would have been
in before 1705 in England.
8. So much for rents actually received. Turning to the liability of a
co-owner in occupation to pay an occupation fee, the position at
law is fairly clear. He was not liable unless he excluded his co-
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owner, in which case he rendered himself liable in ejectment and
for mesne profits, or if he constituted himself a bailiff, in which
event he would be liable in an action of account, like any other
bailiff… Indeed, the whole bias of the law against making a co-
owner in occupation liable to account is precisely based on the
rationale that if such a liability were to exist a co-owner could,
by abstaining from entering into occupation, turn his co-owner
into an involuntary bailiff. As far as equity is concerned, an
occupation fee will be exacted in at least two circumstances:
first, in a partition suit (or related litigation): if there has been an
exclusion, the tenant in occupation will be charged with an
occupation fee…; this is an example of equity following the
law; and secondly, if the owner in occupation claims an
allowance in respect of improvements effected by him, equity
will permit such an allowance only on terms that he is
accountable for an occupation fee — this is an example of he
who comes to equity having to do equity…
9. In Halsbury's Laws of England, 1st ed, vol 21, par 1594, it is
stated: 'Where one party has been in exclusive occupation, the
court, if desired, will order that he shall be charged an
occupation rent'. Three cases are cited as authority for the
proposition, but none of them really supports a proposition so
wide. There is, of course, ample authority that an occupying
party may be charged with an occupation rent if he has ousted
the other party or if he is seeking an allowance for
improvements; but there is no authority which goes beyond that.
On the other hand, there is much authority against the
proposition… Indeed, if the law were as Halsbury stated, the
rule of public policy referred to in par 8 above would be
infringed.
10. If a co-owner in occupation effects improvements on the co-
owned property he may claim an allowance for any
improvements in value effected by him. Such an allowance may
be claimed in an action for partition. The allowance is not a
reimbursement of the amount expended, but an allowance in
respect of the amount by which the value of the property has
been increased, not exceeding the amount expended, the 'value'
to be ascertained at the commencement of the action… Thus, in
summary, a tenant who effects repairs, is entitled to an
allowance for the lesser of the value of the enhancement of the
property and the cost of effecting the repairs.
11. There is authority that no allowance for improvements will be
allowed in favour of the occupying owner unless the non-
occupying owner seeks to charge him with an occupation fee, so
that the two rights are truly mutual: one cannot claim one
without suffering the other…; but it is not difficult to point to
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cases where improvements have been allowed although no
occupation fee was charged….
12. A variation on these themes is supplied by the Federal Court of
Australia's decision in Squire v Rogers. This case decides that
where the co-owner in occupation has been in receipt of rents
and profits from the property and used them to finance
improvements, if his other co-owner seeks an allowance equal to
a proportion of the rent and profits he must make the occupying
co-owner an allowance in respect of all moneys spent, not
simply so much of them as results in an advancement of the
value of the land.
13. What is meant by [improvements] is something more than mere
repairs and maintenance, for which no allowance can be made…
14. If the non-occupying co-owner seeks an allowance for rents and
profits not accounted for, or semble for an occupation fee, there
is authority for the proposition that such an allowance is limited
by the extent of the occupying co-owner's claim for
improvements… Mr Harris, for the appellant, is, I think, correct
in saying that there is nothing in authority to justify this
limitation. It is not justified by the only authority Griffith CJ
cites for it, Teasdale v Sanderson. It is not part of the ratio of
Brickwood v Young.
15. All the above principles are applied in partition actions, and
cannot be relied on elsewhere…except in administration
actions… and in other cases where there is a fund in court, for
example, because of a resumption: Brickwood v Young. They
should also be applied, as Mr Harris argued, in cases where the
Court decrees sale under s 66G of the Conveyancing Act 1919.
Sale and partition are true alternatives, and should, mutatis
mutandis, be governed by the same principles.
16. Apart from questions of improvements and occupation fees,
which arise from the relationship of co-owners, it will also often
happen that co-owners are joint debtors (for example, on a
mortgage, or because rates are levied on the property). If one co-
owner pays such a debt in full he is entitled to require the other
co-owner to contribute a rateable amount; at least that is the
prima facie position. In this regard the parties' rights arise from
the equitable doctrine of contribution, not from the law of
property… that is, they would apply in the case of all joint debts
even if the debtors owned no property.
497 The facts of Forgeard illustrate the application of these principles.
The appellant, Mr Forgeard, and the respondent, Ms Shanahan, became
registered proprietors as joint tenants of a property in suburban Sydney.
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The property was financed $6,100 from the parties' joint savings and
$30,000 by way of loan secured by mortgage over the property. The
relationship broke down and Mr Forgeard left in October 1981, leaving
Ms Shanahan in occupation of the property. The trial judge could not
find that Mr Forgeard was relevantly excluded from the property. The
plaintiff sought an order for the sale of the property under
Conveyancing Act 1919 (NSW) s 66G (the NSW equivalent to PLA
s 126(1)).
498 The real issue in dispute in the appeal was how the proceeds of the
sale of the property should be divided between the parties. It had been
agreed that:
(a) between October 1981 and November 1990 Ms Shanahan made
payments totalling $45,906 in respect of mortgage repayments
($36,100), water rates ($3,440), council rates ($4,300),
insurance ($1,542) and pest control ($524);
(b) if the property had been leased between those dates the rent
which could have been derived would have been $68,290;
(c) in October 1981 the market value of the property was $187,500;
and
(d) in October 1981, the amount required to discharge the mortgage
was $12,338.
Further, the trial judge found that Mr Forgeard had paid off the
mortgage to the extent of $3,159.
499 In the application for sale, Mr Forgeard sought to make
Ms Shanahan accountable for an occupation fee and Ms Shanahan
sought an allowance in her favour for the expenditure incurred by her.
Meagher JA agreed with the trial judge's assessment in relation to
expenses:379
His Honour, in effect, allowed the defendant a sum representing one-
half of the first three amounts. I do not see how there can be any quarrel
with that. They were payments made by one of two debtors of a debt
jointly owed by them both. He also made a deduction, as he should, of
one-half of the mortgage payments of $3,159 made by the plaintiff. He
made no direct allowance for either the insurance or the pest control;
and, again, I do not see why he should. They cannot be classified either
as payments for improvements or payments of debts jointly owing. At
379 Forgeard 225.
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most they are payments towards the maintenance of the property, and as
such no allowance should be made in respect of them.
500 In relation to the claim for occupation fees, pursuant to points 8
and 9, Meagher J held that no such allowance should be made except in
reply to the other party's claim for improvements.380 The trial judge,
Rolfe J, viewed the claim for mortgage payments as, in effect, a claim
for improvements, and required Ms Shanahan to account for rents and
profits. Meagher JA disagreed. Specifically:381
In the case where one party is claiming an allowance for improvements
and the other is seeking to charge an occupation fee, both claims can
arise in partition actions (and related actions), and only in such actions.
Each claim is a potential incident of a partition action. In this context,
'no rent if no improvements' makes good sense. The discharging of joint
debts stands in a different position. An adjustment occasioned by such a
discharge is not necessarily made in a partition action: it could be made
in an action for contribution, which could be brought quite
independently of a partition action (or its equivalent). In the present
case, for example, the defendant could have brought an action for
contribution before or after the s 66G case. In these circumstances to
equate a claim for contribution with a claim for an allowance for
improvements does not seem to me to carry much conviction.
This finding was at odds with the decision of the trial judge, but as
there was no cross-appeal, the first instance decision stood.
Meagher JA also reiterated the proposition that no claim for an
occupation fee should be allowed in excess of the value of the
improvements.382
501 Mahoney JA agreed with the application for the law by Meagher
JA. His Honour was of the view that the common law and equitable
principles relating to common ownership of land provide an appropriate
basis to exercise a statutory power of sale and distribution of
proceeds:383
The real issue in this proceeding has been how the proceeds of the sale
of the property should be divided between them. Rolfe J examined the
principles which had been involved in partition cases when the power to
order partition and the like derived essentially from the equitable
jurisdiction of the Court. It is those principles which have been the
subject of examination in this appeal.
380 Forgeard 225.
381 Forgeard 225.
382 Forgeard 226.
383 Forgeard 219 - 220 (Mahoney JA).
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Those principles do not, as such, apply in the exercise of the power to
order statutory sale under s 66G. In this the Court exercises a statutory
power and, considered formally, the way in which the statutory
discretion is to be exercised must be derived, in the ordinary process of
statutory interpretation, from the terms of the statute.
However, it is proper that, in formulating the principles to be applied in
the exercise of the statutory power, the court should have regard to what
has been decided in the analogous partition and similar cases. This is
what ordinarily courts do. It is proper that it be done. Each new area of
the law must be dealt with in its own way and, no doubt, each judge
must, as counsel's argument inferred, form his own conclusions. But the
law has developed by, inter alia, the use of analogies. The judicial
process has, as Holmes, Cardozo and others have observed, seen this as
a legitimate technique for dealing with new problems. It is a technique
which contributes to the certainty of the law: lawyers may expect that
the principles developed in one case will be applied to solve the
problem posed by an analogous case. It is proper that, with proper
exceptions, that be done in this case.
The principles which have been evolved in this area of the law derive,
in the first instance, from the incidents which the law long ago attached
to common ownership of land. I see no reason to depart from them. To
do so would be merely to substitute one set of judgments as to what is
just for another, without there being a compelling reason for the one or
the other. The principles, for example, to be applied to or to be derived
from the right to occupy commonly owned land are, I think, of this
nature.
502 As to those principles:384
As with many principles, minds may differ as to the result of the
application of them to particular fact situations. But, in my opinion,
there is in most of the decisions a commonsense accommodation of
competing claims. Thus, one common owner occupying the land may
have an interest in effecting improvements which will make his
occupation more comfortable; in a sense, it may be unjust if, having
effected them, he receives no compensation for the increase in the land
value resulting from them. On the other hand, the non-occupying owner
may legitimately wish not being required to pay for, or for a share of,
improvements which he does not desire to have effected. But if the
benefit of the improvements be realised by sale of the land, there is
justice in affording to the co-owner who has effected the improvements
some benefit from them when the proceeds of disposal are divided.
And, on one view, there is justice in setting off against such an
allowance for improvements a notional occupation fee payable by the
one who during his occupation of the land has effected them.
384 Forgeard 220.
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503 For present purposes, it is not necessary to consider the dissenting
judgment of Kirby J.
10.3 Biviano v Natoli
504 The principles set out by Meagher JA in Forgeard in relation to
occupation fees were quoted with approval by Beazley JA (with whom
Powell and Stein JJA agreed) in Biviano v Natoli.385 Her Honour
stated the general principle in the following terms:386
A tenant in common is entitled to exercise acts of ownership over the
whole of the common property without liability to be called upon to
account in respect thereof: Luke v Luke (1936) 36 SR (NSW) 310; 53
WN (NSW) 101. This general rule will be displaced, however, where a
tenant in common has wrongfully excluded a co-tenant from exercising
the right to occupation. At common law a co-tenant so excluded could
sue for ejectment and for mesne profits: Goodtitle v Tombs (1770) 3
Wils KB 118; 95 ER 965, and could also bring a partition suit to charge
the occupying co-tenant with an occupation rent: Pascoe v Swan (1859)
27 Beav 508; 54 ER 201. Long Innes CJ in Equity in Luke v Luke said
(at 314; 102): '… by excluding [a] co-owner from the exercise of his
legal rights the tenant in common who so excluded his co-owner had
committed a legal wrong.'
505 As to what constitutes an ouster:387
The true nature of ouster is that it constitutes a trespass by one co-tenant
of another co-tenant's rights in respect of the property. 'An express
denial of the title and right to possession of fellow tenants, brought
home to the latter openly and unequivocally' would clearly amount to
an ouster: see 20 Am Jur 2d, Cotenancy and Joint Ownership, par 51,
citing Williams v Sinclair Refining Co Inc 39 NM 388; 47 P 2d 910
(1935) and Howell v Bradford 570 So 2d 643 (1990): see also Doe v
Bird (1809) 11 East 49; 103 ER 922. On the other hand, a temporary
disturbance to an access way to the property would not: see, eg,
Ferguson v Miller [1978] 1 NZLR 819.
506 On the facts, Beazley JA held that the removal of a person
otherwise entitled to occupy property, or the continuance of that
removal, pursuant to an apprehended violence order under Pt 15A of
the Crimes Act 1900 (NSW) did not itself constitute a legal wrong, and
the actions in obtaining the order do not constitute an ouster.388
However, the appellant did deny the respondent's interest in the
385 Biviano v Natoli (1998) 43 NSWLR 695, 700 (Beazley JA, with whom Powell and Stein JJA agreed)
(Biviano).
386 Biviano 700.
387 Biviano 700 - 701.
388 Biviano 703.
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property during the proceedings. Her Honour held that this amounted
to an express denial of his rights as co-tenant and constituted an ouster.
The appellant was thus liable to pay an occupation fee from the date of
the filing of the defence.389 As to the way in which the occupation fee
was to be calculated, her Honour stated:390
In my opinion, the starting point for the determination of the question is
first, the principle that a co-tenant is entitled to the use and occupation
of the whole of the premises and secondly, that the entitlement of the
ousted tenant is to an occupation fee. The occupation fee is in fact
mesne profits arising from the occupying co-tenant's wrongful ouster.
Mesne profits are not rent: see Progressive Mailing House Pty Ltd v
Tabali Pty Ltd (1985) 157 CLR 17 at 39. They are calculated on the
open market value of the premises: see Rock Bottom B Fashion Market
Pty Ltd (In Liq) v HR & CE Griffiths Pty Ltd (Court of Appeal,
Queensland, 6 March 1998, unreported) at 10-12, per Dowsett J. 'The
measure … is a reasonable sum in the nature of rent': see Strand
Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952]
2 QB 246 at 252, per Somervell LJ. This is often proved in fact by
relying on the amount of rental payable under an existing lease: see
Atkin's Encyclopaedia of Court Forms in Civil Proceedings, 2nd ed, vol
24, par 22; Halsbury's Laws of England, 4th ed, vol 27, par 255; Rock
Bottom Fashion Market Pty Ltd (In Liq) v HR & CE Griffiths Pty Ltd.
Notwithstanding that a co-tenant has a right to occupy the whole
property, I do not consider that it is appropriate to merely take the rental
value for the whole of the property. It would be inequitable to do so
because an actual letting of the property where there is already a co-
tenant in occupation would not attract a market rental based on full
occupation. It may not even attract 50 per cent of the market rental.
The onus of establishing the quantum of the occupation fee falls upon
the party claiming it — namely, the ousted co-tenant. The respondent
proved the rental value of the property based on there being no other
person already in occupation. He did not prove the rental value on the
basis that the appellant and her daughter also occupied the property, as
they were entitled to do. Notwithstanding that, I am of the opinion that
as the appellant did not seek to assert any lesser figure than 50 per cent,
that is the appropriate percentage to apply.
10.4 Silvester v Sands
507 The principles identified by Meagher JA in Forgeard have been
applied in five first instance decisions in this court. It is instructive to
review each of these decisions in detail in order to determine the
application of the principles to the facts presently in dispute.
389 Biviano 703.
390 Biviano 704.
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508 The first decision was that of E M Heenan J in Silvester v
Sands.391 In that case the defendant, Ms Sands, was the sole registered
proprietor of a property in Wembley, and became so registered on 3
December 1986. The plaintiff, Mr Silvester, alleged that he and
Ms Sands were in a de facto relationship from about 1982 to 1993. It
was not in issue that Ms Sands contributed about half the purchase
price and that the balance was financed by a loan in the names of both
parties and Ms Sands' mother. Mr Silvester further alleged that there
was a verbal agreement that the property should be registered in
Ms Sands' name, but that he would acquire an equal interest in the
property. His case was that from the date of purchase until 1993 he and
Ms Sands lived together at the house and equally shared the mortgage
loan repayments and all ancillary expenses. He said that in 1998 he
paid some $30,000 off the mortgage after having received a gift from
his parents. He claimed that he was beneficially entitled to a half share
in the house due to either the express agreement or resulting trust based
on his contributions. On the basis of that interest, he sought an order
for the sale of the property pursuant to PLA s 126 as well as orders in
relation to the distribution of the proceeds of sale. Ms Sands denied
that there was a de facto relationship or an agreement in relation to the
property or that Mr Silvester had any beneficial interest in the property.
509 For present purposes, it is not necessary to consider the reasoning
of E M Heenan J as to the beneficial ownership of the property. This
was a detailed analysis of the multitude of payments and financial
transactions over a period of many years. Rather, it is sufficient to note
that his Honour found that the net proceeds of the sale of the property,
after a notional amount to discharge the outstanding balance of the joint
loan, should be allocated between the parties on the basis that the
beneficial interests held by the parties were in the order of: Mr Silvester
46%, Ms Sands 49% and Ms Sands' mother 5%.392
510 The relevant issue for present purposes was that there then needed
to be an accounting between the parties for what occurred after their
final separation in May 1995. Ms Sands continued to reside at the
property for some time but later moved to other premises occasionally
returning to the property for periods which were never precisely
established. E M Heenan J found that since June 1994 Ms Sands had
met all the mortgage repayments and other recurrent expenditure for
rates, water use, electricity and so on in respect of the premises. The
391 Silvester v Sands [2004] WASC 266 [141] (E M Heenan J) (Silvester).
392 Silvester [128] (E M Heenan J). His Honour calculated the shares based the notional contributions to the
purchase price, but for ease of reference for the present case, I have converted these to percentages.
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property was never leased or rented. She derived no income in any
other way arising from the use of the property over that time. She had
the benefit of the sole occupation of the home for those periods during
which she lived there and she had and retained the option of living there
during periods when the property was vacant. His Honour observed
that that on an accounting between the co-owners of the beneficial
interests there may be an adjustment necessary to recognise that
Ms Sands (and her mother) paid greater shares of the home loan
repayments and other expenses associated with the maintenance and
use of the property than their proportions of the beneficial interests in
the property.393 The onus was on Ms Sands to establish that she paid a
disproportionate share of the expenses.394
511 E M Heenan J stated the principles in the following terms:395
In an instance where the beneficial ownership of a property is shared
between two people, either husband or wife, co-habitees or others, and
one leaves, with the remaining co-owner continuing or taking over
mortgage repayments and the responsibility for repairs and
improvements, there can be an account taken in equity between those
parties. For the paying party to recover an allowance for any
appreciation in the value of the capital asset because of these outgoings
it is necessary to prove that the expenditure has, in fact, produced an
ascertainable increase in the capital value as, for example, in the case of
a renovation which has enhanced the market value of a house or, in
relation to the repayments of a mortgage where the repayments have
effected an ascertainable reduction in the principal previously owing
under the mortgage. In the absence of proof of an increase in capital
value so caused, no recovery because of unrelated appreciation in value
will be possible and the parties are left to hold the property, or share the
proceeds of any sale, on the basis of their established beneficial
interests, usually, but not always, arising from the extent of their
contributions towards the costs of its acquisition. Such a claim, where
it exists, will only be available in certain designated proceedings which,
include a partition suit or a claim for a compulsory sale or in other
proceedings which involve a termination of the proprietary interests of
the co-owners whether those interests be legal or beneficial.
Then there is the category of payments which do not directly enhance
the capital value of the asset such as for the interest component under a
mortgage or other outgoings necessary for the preservation of the
property such as repairs, minor improvements and the payments of
rates, taxes and other expenses deriving directly from ownership. Often
there will be a situation where one of the co-beneficial owners vacates
393 Silvester [134].
394 Silvester [137].
395 Silvester [140] - [141].
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the premises and leaves the other in occupation who, staying on,
through choice or necessity continues to meet the mortgage repayments,
rates, taxes and other like expenditure. In that situation a remaining
co-owner or co-beneficial owner may be entitled to recover a
contribution, proportionate to the departed co-owner's beneficial
interest in the property, to the mortgage repayments, rates, taxes and
like expenditure but, in such cases, the person claiming a contribution
or an account will be chargeable with an occupation rent in respect of
the period in which he or she continued to enjoy sole possession of the
premises - In Re Pavlou (a Bankrupt) [[1993] 1 WLR 10460] at
1049 - 1050. In some cases a court may simply set-off the payment of
expenditure by the continuing occupant against the occupation rent as a
matter of convenience but a strict accounting can be demanded by the
parties - In Re Gorman (a Bankrupt) [1990] 1 WLR 616 at 626. In
this regard, Hodgson JA said in Ryan v Dries [[2003] ANZ Con R 47]
at [61]:
"There seems little question about the broad principle applicable
in this situation: a co-owner of property who has exercised the
right to occupy the property is not liable to be charged with an
occupation rent unless he or she (1) has excluded the other
co-owner from occupation or (2) is claiming an allowance for
expenditure in respect of the property: see Luke v Luke (1936)
36 SR(NSW) 310. If an allowance for expenditure is claimed,
then, by reason of the maxim requiring the seeker of equity to do
equity, the claimant can be charged with an occupation rent up
to a limit of the amount allowed for the claim for expenditure:
see Teasdale v Sanderson (1864) 33 Beav 534; 55 ER 476;
Brickwood v Young (1905) 2 CLR 387."
512 In relation to the first class, E M Heenan J found that the
subsequent mortgage payments made by Ms Sands were applied very
largely in reduction of advances obtained by and used solely for her
benefit. She could only show a prima facie claim for an allowance for
a reduction in the principal of the home loan between June 1994 and
October 1995 in the order of just over $1,000. Ms Sands claimed
certain other maintenance expenses claimed, but offered no proof, so
his Honour rejected them. Nor was there any evidence adduced or any
submission to the effect that those items of expenditure effected any, or
any ascertainable, appreciation in the capital value of the property.396
513 In relation to the second class, his Honour found that Ms Sands
had an arguable claim for a contribution from Mr Silvester,
396 Silvester [142] - [146].
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proportional to his beneficial interest, for council rates and water rates
incurred after June 1994.397
514 Then:398
Against this, however, the defendant remained in possession of Essex
Street from June 1994 (during the separation), and then again after May
1995 for several years. She left the premises vacant for subsequent
periods since then but has been in occupation at other times. For the
whole of the period from May 1995 to the present she has been entitled
to the possession of the premises. Because she seeks a contribution
from the plaintiff to the expenses which I have identified in the
preceding paragraph, I consider that she should be obliged to pay an
occupation rent for some or all of that period after May 1995.
515 His Honour concluded that any claim for any balance due on an
account would be extinguished by a charge against Ms Sands for an
occupation rent:399
No claim in this respect was advanced by the plaintiff and there is no
evidence upon which any acceptable estimate of a market rent for the
premises could be based or upon which an assessment of mesne profits
could be justified. However, the exclusive possession of the premises
by the defendant has lasted for over nine years and any assessment of
an occupation rent or mesne profits over that period, even at extremely
modest rates, would very probably exceed the maximum which the
defendant could advance as the balance due to her after an account for
home loan repayments since June 1994 and for rates, taxes and
insurance premiums paid on the premises. Therefore, in these particular
circumstances, because of the absence of any formal claim, the
extremely scant evidence available on the issues, and the high
probability that a claim for any balance due on an account would be
extinguished by a charge against the defendant for an occupation rent, I
consider that I should follow the precedent of simply setting the
defendant's payments in this regard off against an occupational rent and
leave it at that which is what I have decided to do. There does not
appear to me to be any significant prejudice to either party in adopting
this course and there is much to be said for bringing this litigation to an
end and avoiding the effort and expense of further proceedings or
investigations which are most unlikely to lead to any significant
measure of relief in favour of the defendant against the plaintiff or vice
versa.
516 In the end, E M Heenan J took the view that unless Mr Silvester's
claim could be satisfied by a money payment by Ms Sands, or
397 Silvester [145] - [146].
398 Silvester [147]
399 Silvester [148].
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vice versa, the property will have to be sold and the proceeds of sale
distributed in accordance with the declarations made about the extent of
the equitable interests and the liability of the parties to discharge the
loan secured by the mortgage.400
10.5 Fathers v Cook
517 The second decision as that of Simmonds J in Fathers v Cook.401
The parties were in a de facto relationship for a number of years. They
purchased a property, referred to by the trial judge as the 'Koonawarra
Close' property, as tenants in common in equal shares. The plaintiff,
Ms Fathers, contributed more than 50% of the purchase price. There
was a mortgage over the property in joint names. The trial judge found
that there was a contractual agreement at the time the financing
arrangements for Koonawarra Close were finalised that:402
(a) the defendant, Mr Cook, would pay Ms Fathers an equalising
payment, with the effect that each would have contributed 50%
of the purchase price; and
(b) Mr Cook undertook responsibility to pay for the mortgage.
Ms Fathers was entitled to relief to the effect that Mr Cook was liable
from his share of the proceeds to discharge the mortgage on the
Koonawarra Close property and to pay her an amount so as to equalise
their contributions to the acquisition of the Koonwarra Close
property.403
518 Ms Fathers moved out of the Koonawarra Close property on 9
June 2002. Mr Cook moved back into the property at the end of July
2002 where it appears he remained at the time of trial. Ms Fathers
claimed occupation rent for this period. This was on the basis that,
prior to moving back into the property, Mr Cook obtained a Misconduct
Restraining Order (MRO) against Ms Fathers. The terms of the order
referred only to where Mr Cook lived, and did not specify the address
of the Koonawarra Close property. At this point in the analysis,
Simmonds J referred to and followed the decision in Biviano. His
Honour held that the conduct of Mr Cook in obtaining the MRO did not
constitute an ouster. His Honour observed that it did not appear to have
been suggested that Mr Cook continued to keep Ms Fathers out of, or
400 Silvester [150].
401 Fathers v Cook [2006] WASC 129 [149], [156] (Simmonds J) (Fathers)
402 Fathers [140].
403 Fathers [164].
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otherwise denied her the right to occupy, the property once the MRO
and any extension or replacement of it had expired.404
519 Simmonds J considered a second basis for Ms Fathers' claim for
occupation rent, again based on the principles stated by Meagher JA in
Forgeard. This arose of out Mr Cook's claim for improvements to the
Koonawarra Close property. His Honour stated that it 'is well
established than a co-owner in occupation is accountable in equity for
such a fee, up to the value of the improvements' citing Forgeard.405
Specifically:406
As to the net proceeds of the Koonwarra Close property, after
allowance for the respondent's equalisation obligations as I have
referred to them, which appear to me to be appropriately so allowed for,
it also seems to me that [Mr Cook] has sufficiently called for the
application of the equitable principles which provide for the possibility
of an allowance to be made out of the proceeds of the sale under s 126
in respect of improvements and repairs which are capable of enhancing
the value of the property. There is also the possibility under those
principles, in this case, of an allowance proportionate to the other
co-owner's (the plaintiff's) beneficial interest in the property for
outgoings for the preservation of the property, such as payments of
rates, taxes, insurance premiums, and other items, such as grounds and
maintenance expenditures.
520 The amount for improvement could include an allowance for the
labour of Mr Cook.407
521 Then:408
… in respect of allowances both for increases in the value of the
property and the other expenditures I referred to, the person claiming
the allowance is chargeable with an occupation rent in respect of the
period in which the claimant enjoyed sole possession of the premises:
Silvester (supra) at [141]. That period in this case runs from 31 July
2002 (the date at which I found the respondent entered possession of the
property) to the date on which the assessment is to be made or the date
possession ceased, whichever is the earlier.
522 His Honour observed that it seemed unlikely that the total of the
renovations and other expenditure amounts, plus labour costs (some of
which were disputed by Ms Fathers) would exceed the market rent for
404 Fathers [149].
405 Fathers [156].
406 Fathers [171].
407 Fathers [175].
408 Fathers [173].
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the period in which Mr Cook was in sole occupation of the property.
Nonetheless, his Honour accepted the position of Mr Cook that there
should be an enquiry and account.409
523 His Honour accepted that the Koonawarra Close property should
be sold pursuant to PLA s 126 with each party having an initial
entitlement to half the proceeds (after deducting sale costs). From
Mr Cook's entitlement, Ms Fathers would receive the equalising
amount. Mr Cook's share of the proceeds would also have to bear the
costs of the discharge of the mortgage. The results of the enquiry and
account would also need to reflected in the final orders made.410
10.6 Giacci v Giacci Holdings Pty Ltd
524 The third decision was another of E M Heenan J, this time in
Giacci v Giacci Holdings Pty Ltd.411 The case was a claim for sale in
lieu of partition. The plaintiff and the two defendants were tenants in
common in equal shares of an estate in fee simple of about 39 hectares
of partly-improved rural land south-east of Bunbury. The plaintiff and
one of the defendants were brothers, with the corporate defendant being
controlled by the defendant brother and another brother. The
relationship between the plaintiff and his brothers had broken down.
525 It was not in issue that the ownership of the property must change.
Nor was it in issue that the plaintiff should be able to realise and obtain
one-third of the current market value of the land. The issue was how
this should occur.412 The defendants sought an order compelling the
plaintiff to sell his interest to them at a figure to be determined by the
court on the basis of contested valuation evidence about the current
market value of the entire property.413 E M Heenan J held that PLA
s 126 does not a empower the court to make an order of this kind.
Rather, plaintiff was entitled to insist that the sale be of the entire land,
not merely of his undivided one-third share, and that it be at a sale
which ensures the achievement of current market value.414
526 The plaintiff alleged that he had been unlawfully excluded from
the property. He made a claim for a share of the rents and profits,
409 Fathers [178] - [179].
410 Fathers [169].
411 Giacci v Giacci Holdings Pty Ltd [2010] WASC 349 (Giacci).
412 Giacci [16].
413 Giacci [17], [41].
414 Giacci [42] - [44].
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allowances and/or mesne profits from the land. As to the plaintiff's
claims, E M Heenan J observed:415
The poor relationship between the brothers, over recent years and at
present, is such that the plaintiff claims he has been excluded from this
land and that rents and other moneys paid by third persons for the first
house, for the cottage, the stables and horse training facilities, as well as
for occasional agistment of horses, has been received by one, or other,
or both of the defendants without any accounting to him and without
any share of those rents or profits being paid to him.
527 The defendants did not seek to make a claim for necessary
expenditure which they incurred on the land. Rather, the issue was
limited to whether there should be an inquiry and an account in relation
to all rents, profits or other revenues derived by the defendants from the
land over the period from April 1996 until date, and, if so, whether
there should be an order that one-third of those receipts, profits or other
revenues should be paid to the plaintiff.416
528 In terms of the issues arising at trial, E M Heenan J observed:417
By the commencement of the trial, however, the parties by their counsel
had reached some degree of common ground about these claims. By
then the plaintiff accepted that limitation issues would prevent him from
seeking an account or recovering any moneys in respect of the sale to
the first defendant of the first house or in respect of other
improvements. The plaintiff also accepted that other limitation issues
would prevent any claim for rents or profits or accounts in respect of
them for more than 12 years prior to the issue of the writ, but that
claims to a third of all such revenues for the period commencing
12 years before the issue of the writ to date could be pursued and were
being pursued.
The defendants' position, at the commencement of the trial, was to deny
that there had been any rents or profits derived by either of them in
respect of the land which had not been fully and appropriately shared
with the plaintiff but if, despite that denial, it were proved that there
were any such payments, then the defendants accepted that one-third of
those gross payments would be payable to the plaintiff.
529 On the evidence at trial, E M Heenan J found that the plaintiff had
not been excluded from his right to possession of the subject land but,
415 Giacci [12].
416 Giacci [14].
417 Giacci [58] - [59]. See also Giacci [13].
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rather, declined to exercise that while still maintaining his title to his
one-third undivided share.418
530 His Honour adopted the analysis by Meagher JA with one
adjustment for the Western Australian context. In paragraphs 6 and 7
quoted at [496], Meagher JA referred to the Statute of Anne (4&5 Anne
c 3) which had the effect of giving a non-occupying co-owner a
statutory right of action to recover their share of rents actually received.
The Statute of Anne had been repealed in New South Wales.
E M Heenan J held that the Statute of Anne continued to apply in
Western Australia.419 I respectfully agree with his Honour's analysis,
observing that there has been no change in the legislative regime in the
intervening 15 years since Giacci was decided. For ease of reference I
repeat that the relevant provision of the Statute of Anne, s 27 provides:
And from and after the said first day of Trinity term, shall and
may be brought by one joynt tenant, and tenant in common, his
executors and administrators, against the other, as bailiff for receiving
more than comes to his just share or proportion, and against the
executor and administrator of such joynt tenant, or tenant in common …
531 E M Heenan J concluded:420
I have already concluded that the evidence does not support any finding
that the defendants ousted the plaintiff from possession of this land but,
rather, the position is that they exercised their rights of possession over
the whole and discouraged the plaintiff from exercising his right of
possession, a situation in which he acquiesced. From this position, they
went on to receive rents, profits and other revenues derived from the
use of the land and did not share those with the plaintiff or account to
him for them. The result is that under the common law doctrines
the defendants made themselves liable as bailiffs to account to the
plaintiff for his share of those rents and profits. Also, they are liable to
him under the Statute of Anne to the extent that their share in those
rents and profits was disproportionate to their entitlement. Not having
excluded the plaintiff from possession, neither defendant is liable for
mesne profits.
The liability to account is only for rents and profits actually received
and not for what might have been received had the defendants better
managed or exploited the subject land …
532 His Honour went on to consider whether or not, in addition to his
right to an account of the rents and profits of the land and under the
418 Giacci [77].
419 Giacci [86].
420 Giacci [89] - [90] (reference omitted).
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Statute of Anne, the plaintiff also has a right to an occupation fee.
However, this claim was not pursued in the conduct of the trial so his
Honour did not have to consider it further. However:421
If there had been a live claim for an occupation fee, it might have been
necessary to consider any offsetting claims for enhancement in the
value of the land effected by improvements made by either defendant or
to bring to account payments such as rates, if any, met by
the defendants. It seems, however, that the state of record-keeping by
the parties, in particular by the defendants, is so poor that there is no
vitality in any such possible effects, and it also seems that, in the way
the action has developed and the trial unfolded, the plaintiff is content
with his claim for an account at law, equity and under the Statute of
Anne.
533 The final orders provided for the property to be sold, with the
plaintiff having conduct of the sale. A suite of orders were made to
facilitate the sale and the resolution of any disputes in the sale process.
The plaintiff was then entitled to 'an inquiry and an account directed to
the ascertainment of what rents, profits or other payments have been
derived by the defendants arising from the letting of the first house, the
cottage, the horse stables and associated horse training facilities and,
upon ascertaining the extent of such receipts, an order that
the defendants jointly and severally pay to the plaintiff one-third of the
receipts so received plus interest'.422 The account was to be undertaken
by a Registrar of the court.
10.7 Trajkoski v State of Western Australia
534 The fourth decision is the decision of Le Miere J in Trajkoski.
That case concerned an objection to the confiscation of property
pursuant to Criminal Property Confiscation Act 2000 (WA). The State
sought a declaration that the interest of the plaintiff, Mr Trajkoski, as
joint tenant in a property in Mirrabooka (Mirrabooka Property) had
been confiscated to the State. This followed Mr Trajkoski being
declared a drug trafficker following a drug conviction. The second
plaintiff, Ms Janczak, was Mr Trajkoski's former wife, and the other
joint tenant on the title to the Mirrabooka Property. She contended that
the majority of the interest of Mr Trajkoski that the State claims was
held on a constructive trust for her. Le Miere J was not persuaded that
there was a constructive trust.
421 Giacci [92].
422 Giacci [93].
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535 Almost as an aside, Le Miere J considered the issued of
occupation rent:423
Finally, if I am mistaken, and the second plaintiff's alleged
contributions did in fact create a constructive trust in her favour, giving
her a beneficial interest in the Mirrabooka Property in excess of 50%,
that interest would be set-off in equity against what she owes to the first
plaintiff in occupation rent. There are two possible bases for the
conclusion that the second plaintiff owes the first plaintiff occupation
rent. The first is the breakdown of the plaintiffs' relationship. The
breakdown of a domestic relationship has been recognised as a reason
of the same nature as an ouster, and one that operates 'as an independent
ground for charging the co-owner who remains with an occupation
rent': Callow v Rupchev [2009] NSWCA 148 [46] (per curiam); see
also McKay v McKay [2008] NSWSC 177 [51] (Brereton J). The
parties separated in 'late 2007' and the second plaintiff remained at the
Mirrabooka property living rent free until 'the middle of 2008'. The
second plaintiff would be liable to pay occupation rent during this
period. The second basis for finding that the second plaintiff owes the
first plaintiff occupation rent is as follows: where a co-owner makes a
claim in relation to mortgage or improvement expenses, they will be
liable to their co-owner for occupation rent: Draper v Official Trustee
in Bankruptcy (2006) 156 FCAFC 553 [163] (Besanko J; see also
[102], [104], [114] (Rares J)). In this instance, occupation rent would
be owed from August 2007, when the first plaintiff was incarcerated,
and 'the middle of 2008', when the second plaintiff left the Mirrabooka
Property. This is an application of the principle that a party 'who seeks
equity must do equity': Ryan v Dries [2002] NSWCA 3 [71], [75]
(Hodgson JA); Foregeard v Shanahan (1994) 35 NSWLR 206, 223
(Meagher JA). Therefore either because of the plaintiff's separation, or
because of the second plaintiff's claim for mortgage expenses during the
period of the first plaintiff's imprisonment, any mortgage repayments,
rates, taxes, proven property improvements and like expenditure would
be set off in equity against occupation rent in respect of the period that
the second plaintiff had exclusive possession of the Mirrabooka
Property: see eg Draper v Official Trustee in Bankruptcy [114] (Rares
J); [163] (Besanko J); Callow v Rupchev [30], [59] - [60], [74] (per
curiam); Calverley (253) (Gibbs CJ).
10.8 Stevens v Wright
536 The fifth and most recent decision if that of Acting Master Strk (as
her Honour then was) in Stevens v Wright.424 As her Honour did, I will
refer to the parties by their first names. The plaintiff, Simon, was the
son of the late Margaret Helen Wright. Margaret died on 15 August
2012 and Simon was the executor of her estate. The defendant,
423 Trajkoski [38] (Le Meire J).
424 Stevens v Wright [2021] WASC 36 [82] - [83] (Stevens).
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Raymond, was Margaret's second husband and together they resided at
an address in Singleton (Property). Margaret and Raymond were the
registered proprietors of the Property as tenants in common in equal
shares. Raymond survived Margaret. Margaret's will provided that the
residue of her estate was left to Simon and his brother, Margaret's other
son, Grant. In earlier proceedings, Simon sought orders to compel the
sale of the Property. Raymond was the defendant. By a deed of family
arrangement dated 13 November 2014 (Deed), the proceeding was
settled. It was not in issue that, by the Deed, Raymond was entitled to
occupy the Property until the earlier of his death or 9 May 2019. The
Deed provided for how the sale proceeds were to be dealt with. Around
May 2019, Simon sought to engage with Raymond to sell the Property.
The dispute was not able to be resolved so Simon commenced the
second action.
537 In the second action, Simon sought orders that: the Property be
sold free of encumbrances; that he be given conduct of the sale and for
orders which would facilitate the same; that Raymond pay occupational
rent for the Property from 10 May 2019 to date; and that Raymond be
ejected from the Property. Strk Acting Master granted summary
judgment based on admissions made by Raymond entitling Simon to
sell the property free from encumbrances, with ancillary orders to
facilitate the sale process. Her Honour declined to award summary
judgment in relation to the plea of ouster and the claim for ejectment,
observing that there remained real uncertainty as to Simon's right to
judgment without further investigation of the facts.
538 Her Honour set out the principles relating to ouster in the
following terms:425
In the context of co-ownership, ouster refers to a wrongful act of
exclusion of one co-owner by another.
An essential characteristic of a tenancy in common, where each party
owns an undivided interest in the whole, is that each of the tenants has
the right to occupy the whole of the property in common with the
others…It has been long recognised that as all are equally entitled to
occupation, one cannot claim rent from the other - compensation is not
provided to co-owners who do not remain in possession of jointly
owned property… However, ouster is one of the limited occasions
where a court may allow compensation for sole occupation of co-owned
property, as compensation for the interference with a proprietary right.
425 Stevens [79] - [83] (some references omitted and emphasis added).
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Exclusive possession will not by itself establish ouster. There must be a
wrongful act. A wrongful act may include the exclusion of a co-owner,
or a refusal to allow the co-owner to exercise their right to possession.
Ouster tends to arise in support of a claim for occupation rent, and the
cases tend to concern the breakdown of the relationship as between
co-owners…
The plaintiff refers to the decision of Forgeard v Shanahan as
authority which supports his entitlement to an order for ejectment. In
the context of an application for sale, the decision of Forgeard v
Shanahan concerns a plaintiff who sought to make a defendant
accountable for an occupation fee and that defendant who sought an
allowance in her favour for the expenditure incurred by her.
Meagher JA at 221 observed that this raised the question of the rights
one co-owner has against another, particularly when one has been in
occupation and the other has not. The position is summarised by
Meagher JA in sixteen points at 221 - 224 of his Honour's decision.
Counsel for the plaintiff refers specifically to the observation made at
point 8 on 223, as follows:
… Turning to the liability of a co-owner in occupation to pay an
occupation fee, the position at law is fairly clear. He is not
liable unless he excluded his co-owner, in which case he
rendered himself liable to ejectment and for mesne profits, or
if he constituted himself a bailiff, in which event he would be
liable in an action of account, like any other bailiff.
10.9 Summary of applicable principles
539 From this review of the authorities, it is apparent that there are
some divergences in the way in which the principles are expressed and
applied. However, looking at the case law as a whole, the authorities
support nine principles which are relevant to the determination of the
issues in dispute in this case.
540 First, the starting point is that the proceeds of the sale of the
Property are to be divided between the co-owners in proportion to their
interests in the property.
541 Second, (at least in Western Australia) a co-owner not in
occupation has a statutory right pursuant to the Statute of Anne to
receive a proportion of any rent actually received by the co-owner in
occupation. The liability to account is only for rents and profits
actually received and not for what might have been received had the co-
owner in occupation better managed or exploited the property. In
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Giacci, interest was payable from the date on which the funds were
received by the co-owners in occupation.426
542 Third, where only one co-owner is in occupation, a key issue is
whether that co-owner ousted the other co-owner or whether the other
co-owner should be taken to have chosen not to exercise their legal
right to occupy the land. Exclusive possession will not by itself
establish ouster. Nor will the bare receipt of rent from the property.
There must be a wrongful act. A wrongful act may include the
exclusion of a co-owner, or a refusal to allow the co-owner to exercise
their right to possession. Ordinarily it requires an express denial of the
title and right to possession of the other co-owner, communicated to the
other co-owner openly and unequivocally. For example, in Biviano,
ouster was not established by the grant of the apprehended violence
order but was established by an express denial of the respondent's
interests in the property in the pleadings.
543 Fourth, where one co-owner has ousted the other, the co-owner in
occupation is liable to pay an occupation fee to the other co-owner.
The occupation fee is in the nature of mesne profits, that is damages for
trespass, arising from the occupying co-owner's wrongful ouster. An
occupation fee is assessed on the basis of the open market rental value
of the property. The measure is a reasonable sum in the nature of rent.
Where the other co-owner is in occupation, the value of the occupation
fee may be reduced to reflect the fact that there is already a co-owner in
occupation. The onus of establishing the quantum of the occupation fee
is on the party claiming it.
544 Fifth, one co-owner may claim from another co-owner an
allowance proportionate to the latter's interest in the property for
improvements and repairs which enhanced the value of the property
(Improvement Allowance). The enhanced value will usually arise
from renovations. The Improvement Allowance is not a reimbursement
for the amount expended. The onus is on the claiming co-owner to
establish that the expenses paid produced an ascertainable increase in
the capital value of the property.
545 Sixth, one co-owner may claim from another co-owner an
allowance proportionate to the latter's interest in the property for
outgoings for the preservation of the property (Preservation
Expenses). This class of expenses includes council rates, water rates
and insurance (each of which were allowed in Forgeard), Meagher JA
426 Giacci [93], [105].
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said that no allowance could be made for 'mere repairs and
maintenance'. However, his Honour accepted a claim for pest control.
In Trajkoski, Le Miere J referred to 'mortgage payments, rates, taxes,
proven property improvements and like expenses'.427 E M Heenan J in
Silvester uses the same language of 'mortgage repayments, rates, taxes
and other like expenditure'.428 In my view, the dividing line is between
expenses that would ordinarily be paid by an owner of property (which
can be claimed as preservation expenses) and expenses that would
ordinarily be paid by a tenant (which cannot). So expenses paid by a
co-tenant in occupation that would ordinarily be paid by a tenant cannot
be claimed against the other co-tenant. An example of an expense
ordinarily paid by a tenant would be power expenses. The onus is on
the claiming co-owner to establish that they paid a disproportionate
share of the Preservation Expenses.
546 Seventh, where a co-owner makes a claim for either an
Improvement Allowance or Preservation Expenses, the co-owner
becomes liable to pay an occupation fee in respect of the period in
which that co-owner was in sole occupation. A co-owner seeking equity
must do equity. At least in this circumstance, the occupation fee is
limited to the value of the Improvement Allowance and Preservation
Expenses. The corollary also applies. Where a co-owner claims an
occupation fee (which could only be as a result of an ouster) the claim
is subject to payment of any Improvement Allowance and Preservation
Expenses.
547 Eighth, money paid under a joint mortgage can be brought to
account in the distribution process. Although in Forgeard Meagher JA
opined that mortgage payments could not be brought to account (on his
analysis as part of what I have termed the Improvement Allowance),
the balance of authority is that they can. The statement of principles by
E M Heenan J in Silvester at [511] refers to mortgage repayments when
considering both the Improvement Allowance and Preservation
Expenses. Le Meire J in Trajkoski makes no distinction, opining that
any mortgage repayments could be set off in equity against a claim for
occupation rent ([535]).
548 Ninth, the position of the parties in points one to eight may be
varied by agreement between them. As was the case in Fathers, the
contractual position can be brought to account in the orders made for
the distribution of the proceeds of the sale of the property pursuant to
427 Trojkoski [38].
428 Silvester [141].
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PLA s 126. However, as I have found in Part 9, in the present case, the
only aspect in which the ordinary application of co-ownership
principles was varied by agreement was that Mr Scott was to be
responsible for the imbalance in initial contributions by contributing
more to loan repayments. However, that imbalance was ultimately met
with the arrangements around Home Loan 2 (section 9.9).
10.10 Issues arising for determination
549 Applying the principles set out in the preceding section, and
adding in the other claims raised by Ms Marr, ten further issues arise
for determination:
• Did Mr Scott oust Ms Marr (Part 11)?
• What rent did Mr Scott in fact receive (Part 12)?
• Can Ms Marr claim any further occupation fee (Part 13)?
• What other contributions did the parties make (Part 14)?
• How should the mortgage payments be accounted for (Part 15)?
• What other expenses are claimed in relation to Links Road
(Part 16)?
• Does Mr Scott owe any fiduciary obligations to Ms Marr
(Part 17)?
• Is Ms Marr entitled to a greater than 50% beneficial interest in
Links Road (Part 18)?
• How should the proceeds of the sale of Links Road held in court
be distributed (Part 19)?
• What final orders are appropriate (Part 20)?
11. Did Mr Scott oust Ms Marr?
11.1 Ms Marr's position
550 Ms Marr pleads that between about January 2000 and about June
2003, Mr Scott excluded her from occupying the Property by personally
occupying it to benefit his firm, Scott & Associates. This is said to
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entitle her to occupation rent equal to her proportional beneficial
interest in Links Road during this period.429
551 Ms Marr then pleads that between about August 2008 and 9 June
2023, Mr Scott again excluded her from occupation of the Property.
Three series of facts are identified in the particulars:430
a) Around August 2008, the defendant verbally informed the
plaintiff that his brother Mr Kevin Scott had moved in to the
Property and paid rent at $200 per week. Despite the plaintiff
stating to the defendant that she was unhappy with that
arrangement and words to the effect that the rate of rent charged
by the defendant was significantly below market, the defendant
continued with his arrangement with Mr Kevin Scott and either
failed or refused to obtain the plaintiff's consent to that
arrangement, or alternatively obtain rent from Mr Kevin Scott at
an amount reflective of the current market rate for his period of
occupation of the Property.
b) On or around September 2011, the plaintiff, the defendant,
Mr Jeff Matthews, Mr Eric Kingsmill and Ms Sarah Kingsmill
met outside the Property. During that meeting, the defendant
stated to the plaintiff that he had moved into the Property and
words to the effect that the defendant 'expired all her equity by
not contributing'.
c) Between around early-2011 and late-2014, and again between
early-2020 and early-2022, the defendant rented the Property out
to various 3rd party tenants without informing the plaintiff or
seeking her consent in respect of any proposed or actual
arrangements in that regard. Namely, the defendant rented the
Property to:
(i) Mr Reece Scott;
(ii) Ms Sara Chirichilli;
(iii) Ms Catherine Skinner;
(iv) Mr William Rennie;
(v) Ms Kirsten Tyson;
(vi) A Ms 'Crystal';
(vii) Mr Jamie Botting;
429 Claim, pars 18 and 19.
430 Claim, par 20.
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(viii) Mr Sean Scott;
(ix) Mr Cesar Alvarez;
(x) Ms Susan Butler; and
(xi) Mr Cheyne Pearce.
552 Ms Marr then plead that by reason of the matters I have referred to
at [550] and [551], Mr Scott 'constructively ousted' her from her joint
right of possession of Links Road between about January 2000 and
about November 2003, and further or alternatively between about July
2008 and 9 June 2023.431
11.2 Mr Scott's position
553 Mr Scott denies the claims made by Ms Marr said to constitute a
constructive ouster. He reiterates that he seeks an account as to the
contributions of the parties as co-owners. Specifically, Mr Scott says
that:432
(a) at all material times, his occupation of Links Road was in
exercise of his right of possession of the land as a co-owner and
not pursuant to an agreement with Ms Marr;
(b) all material times, the receipt by him of the rents did not operate
as an ouster;
(c) at no time did he agree to pay Ms Marr occupation rent;
(d) Ms Marr occupied Links Road from on or about 12 November
1998 to mid-2002 and 20 June 2014 to sometime in or about
September 2014;
(e) from time to time during the period alleged, he leased his
interest in Links Road to third parties in exercise of his right as
a co-owner; and
(f) he has accounted to her for all rent that he received.
11.3 Did Mr Scott oust Ms Marr?
554 I have summarised the principles relating to ouster at [542]. In
summary, ouster requires an express denial of the title and right to
431 Claim, par 21.
432 Defence , par 11.
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possession of the other co-owner, communicated to the other co-owner
openly and unequivocally.
555 Following the approach of E M Heenan J in Giacci (in the passage
I have quoted at [531]), in this case, for an ouster to occur, something
more is required than Mr Scott, as the owner in possession, exercising
his right of possession over the whole and discouraging Ms Marr, the
other owner, from exercising her rights, a situation in which she
acquiesced. In my assessment, this characterises the period of
Mr Scott's occupation from when Ms Marr moved out (January 2001)
to when Mr Biesiekierski moved in (February 2004). There was no
ouster.
556 I would make the same characterisation of the period in which
Kevin occupied Links Road. Ms Marr's concerns focussed on ensuring
that Kevin paid a fair market rent.
557 In cross-examination, Mr Scott accepted that he did not consult
Ms Marr before letting Links Road to Kevin or Reece, only telling her
afterwards. However, he added that, likewise, Ms Marr had not
consulted with him prior to letting Links Road to the tenants she
arranged, only letting him know afterwards.433 I do not consider
Mr Scott's lack of consultation to be indicative of an ouster.
558 However, from the September 2011 meeting (section 7.13),
Ms Marr can no longer be characterised as acquiescing to Mr Scott, or
tenants arranged by him, having possession of the whole of Links Road.
This conclusion is reinforced by the 2011 correspondence
(section 7.14) where Ms Marr asserts her right to reside at Links Road
in no uncertain terms. From this point on, Mr Scott ousted Ms Marr,
essentially for the term of the lease to Reece Scott and others
(November 2011 to June 2014).
559 It required an application to the Magistrates Court for Ms Marr to
be able to occupy Links Road (section 7.17). The outcome was that, in
June 2014, Ms Marr was able to reassert her right to occupy Links
Road, so the ouster came to an end.
560 However, she moved out in September 2014. The position then
reverted to Mr Scott exercising his right of possession over the whole
and discouraging Ms Marr from exercising her rights, a situation in
which she acquiesced. So there was no ouster.
433 Transcript 18.6.26, pages 1524 - 1527 (Scott).
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561 This position continued until Ms Marr commenced this present
action in October 2020. At this point it could no longer be said that she
was acquiescing to Mr Scott being in sole possession. From that point
on, there was a second ouster.
11.4 What, if any, occupation fee is payable?
562 As set out at [543], having found there to be an ouster, Mr Scott is
liable to pay an occupation fee to Ms Marr. The onus of establishing
the quantum of the occupation fee is on the party claiming it.434
563 The occupation fee is to be based on the market rental value of
Links Road.
564 In each of the two time periods in which I have found an ouster,
Links Road was occupied by a rent paying tenant. Mr Scott accepts
that Ms Marr is entitled to 50% of the rent actually received. An
occupation fee is based on fair market rent. So the amount of the
occupancy fee would be 50% of the difference between fair market rent
and actual rent (following the reasoning in Biviano quoted at [506]).
565 Mr Sanchez gave evidence that in 2016 the gross fair market rent
for Links Road would have been around $300 per week.435 If let
through an agent, around 10% would be deducted for the usual agents'
commission and fees.436 So the fair market rent actually received by
the owner would have been in the order of $270. The average rent paid
by Reece and others was $298.32 per week ([340]). On this basis,
Ms Marr has not established any entitlement to occupation rent over the
above her proportion of the actual rent received.
566 As to Ms Butler and Mr Pearce, they paid an average of $361 per
week across their tenancy. This was received gross, that is, without any
deduction of real estate's commission and fees ([385]). Mr Sanchez
gave evidence that in 2020 the gross fair market rent for Links Road
would have been in the range of $300 to $500 per week.437 After
deducting for the usual agents' commission and fees, this becomes $270
to $450.438 The rent initially paid by Ms Butler and Mr Peace was $325
per week rising to $400 per week in 2022. When asked by Mr Marr
whether in February 2020 $325 per week was a fair market rent,
434 Biviano 704 quoted at [506].
435 Transcript 19.6.26, pages 1660 and 1673 - 1676 (Sanchez).
436 Transcript 19.6.26, pages 1667 - 1668 (Sanchez).
437 Transcript 19.6.26, pages 1662 - 1663 (Sanchez).
438 Transcript 19.6.26, page 1668 (Sanchez).
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Mr Sanchez said that average rents were between $300 to $600, with
$600 being for the properties in better condition.439 When Ms Marr
asked Mr Sanchez directly whether he considered $325 per week to be
fair market rent, his answer was equivocal.440 The end result is that
there is no evidence that the rent paid received from Ms Butler and
Mr Pearce was not fair market rent.
567 In summary, while Ms Marr has proven that she was ousted for
two periods, she has not proven an entitlement to any occupation fee
over and above the 50% of actual rent received to which she was
already entitled.
12. What rent did Mr Scott in fact receive?
12.1 Ms Marr's position
568 Ms Marr pleads that between about November 2003 and early-
2022, Mr Scott rented Links Road to one or more third parties and
received rental income from those parties.441 She claims that Mr Scott
has not properly accounted to her for this income.
569 In the end, Ms Marr only had two issues with the accuracy of the
record of rent receipts in the Rent Transactions Schedule. Each relates
to the rents said to have been received from Tim Brown, which I have
dealt with the sections 7.10 and 7.12. The consequence of the finding
at [297] is that the amount of $1,500 should be deducted from the total
in the Rent Transactions Schedule.
570 Ms Marr also asserted that Mr Scott received some payments from
Mr Rilston and Mr Brown which he did not account for. I have found
that this was not the case ([288] and [294]).
12.2 Mr Scott's position
571 Mr Scott accepts that from time to time while the parties co-owned
Links Road, he leased his interest to third parties in exercise of his right
as a co-owner. However, he has accounted to Ms Marr for all rent that
he received.442
572 Mr Scott accepts that as he and Ms Marr as are co-owners of Links
Road, he is liable to account for the monies he actually received either
439 Transcript 19.6.26, page 1683 - 1684 (Sanchez).
440 Transcript 19.6.26, pages 1684 - 1685 (Sanchez).
441 Claim, par 22.
442 Defence, par 11.5.
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as a bailiff for Ms Marr or under the Statute of Anne based on
Ms Marr's 50% entitlement.443 However, he says that he has accounted
to Ms Marr for all rent that he received.444
573 I have made findings in Part 7 as to who occupied Links Road,
when and on what basis.
574 Mr Scott says that rent was received and paid into Streamline 1
and Streamline 2 and the total sum of rent received was $159,296.00:
(a) Streamline 1 - $39,613
(b) Streamline 2 - $119,683
In most instances rental payments were referenced by the tenant's
name.445
575 This rent included the payments made by the tenants arranged by
Ms Marr, being Mr Biesiekierski, Mr Rilston and Mr Brown. As set
out at [569], the rent allocated to Mr Brown needs to be reduced by
$1,500. By tenant, the breakdown was (rounded to the nearest dollar):
Tenant Amount Para
Byron Scott $4,200 [275]
Dick Biesiekierski $6,590 [281]
Brian Rilston $7,158 [289]
Tim Brown $10,300 [299]
Kevin Scott $28,915 [308]
Reece Scott $13,790 [340]
Sean Scott $7,885 [340]
Willian Reni $4,950 [340]
Sara C $720 [340]
Cesar A $4,200 [340]
Catherine S $960 [340]
Jamie B $5,800 [340]
Crystal Y $1,170 [340]
Kirsten T $500 [340]
Cheyne Pearce and Susan Butler $60,658 [384]
Total $157,796
576 Mr Scott's income tax returns are in evidence.446 He said he would
claim 50% of the rental income and 50% of expenses. He gave
443 Defence, par 14.3.
444 Defence, par 11.6.
445 Defendant’s Opening Submissions, pars 25, 52.
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evidence that the income claimed did not always match the rent he has
calculated for the trial. This was because for trial purposes he
identified additional rent which was either a net bank transfer or a cash
deposit. He said that he never prepared a partnership or joint venture
tax return with Ms Marr. Rather, on his accountant's advice, he
claimed 50% as that was his ownership entitlement.
577 It is instructive for the analysis I am required to undertake to
summarise what Mr Scott has claimed in relation to Links Road (the
figures in italics were barely legible, so may be incorrect).
Year Gross rent Interest
deduction
Other
deductions
2009/2010447 $3,800 $4,316 $3,086
2010/2011448 $3,855 $6,862 $1,004
2011/2012449 $11,007 $4,669 $4,072
2012/2013450 $7,910 $3,758 $1,284
2013/2014451 $7,010 $2,831 $1144
2014/2015452 $0.00 $0.00 $0.00
2015/2016453 $0.00 N/A $0.00
2016/2017454 $0.00 N/A $0.00
2017/2018455 N/A N/A N/A
2018/2019456 N/A N/A N/A
2019/2020457 $3,250 $499 $1,170
2020/2021458 $0.00 N/A $0.00
2021/2022459 $0.00 N/A $0.00
2022/2023460 N/A N/A N/A
578 There is some earlier taxation information in evidence,461 however
it does not advance the analysis to review them in detail.
446 DTB 4. See generally, Transcript 24.2.26, pages 1238 ff.
447 DTB 4, page 100.
448 DTB 4, page 104.
449 DTB 4, page 107.
450 DTB 4, page 114.
451 DTB 4, page 118.
452 DTB 4, page 126.
453 DTB 4, pages 129 - 130.
454 DTB 4, pages 132 - 133.
455 DTB 4, pages 137 - 139.
456 DTB 4, pages 140 - 142.
457 DTB 4, page 144.
458 DTB 4, page 147.
459 DTB 4, page 150.
460 DTB 4, pages 152 - 153.
461 DTB 4, pages 2 - 98.
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579 Ms Marr is critical of Mr Scott for the discrepancies between his
evidence and what he put in his tax returns.462
580 It is apparent that Mr Scott now identifies more rental income than
he claimed in his tax returns. Ms Marr submits that this undermines the
credibility of his evidence.463 However, rather than undermining his
evidence, this supports its reliability: having accounted for it in these
proceedings, he will now need to go back and amend his tax returns.
Mr Scott explained that when he was declaring his income he had
looked through the books and added up the rent but hadn't included the
net bank transfers and bank deposits and perhaps the phone transfers.464
Moreover, of every additional dollar of rent he identifies, he accepts
that 50% should go to Ms Marr.
12.3 Determination
581 There is an issue as to whether Scott & Associates were ever a
tenant (see section 7.3). However, as Scott & Associates is no more
than a business name for Mr Scott's business ([44]), it is not a separate
legal entity capable of leasing Links Road from Mr Scott and Ms Marr.
Rather, if there was occupancy by 'Scott & Associates', this is properly
characterised as occupancy by Mr Scott personally. So the issue of
whether Links Road was occupied by 'Scott & Associates' or Mr Scott
personally is neutral to the final analysis.
582 Ms Marr has not been able to identify any rent payment that
Mr Scott did not pay into either the Streamline 1 or Streamline 2
account. Accordingly, I am satisfied that Mr Scott accounted for all the
rental income he received.
583 I am satisfied as to the accuracy of Mr Scott's analysis, save for
the $1,500 which was allocated to Mr Brown as rent but which should
be a contribution by Ms Marr.
584 I find that the total rent in fact received was $157,796, of which
each of Ms Marr and Mr Scott is entitled to 50%, being $78,898.
462 Plaintiff’s Closing Submissions, par 87.
463 See for example: Transcript 18.6.26, page 1482.
464 Transcript 24.2.25, page 1240 (Scott).
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13. Can Ms Marr claim any further occupation fee?
13.1 Ms Marr's position
585 Ms Marr makes a claim for what she describes as 'Occupation
Rent',465 but what is properly characterised as an 'Occupation Fee'
([543]).
586 Ms Marr further pleads that between about 2006 and 2014, and
again between 2020 and early-2022, Mr Scott rented Links Road to
third parties at weekly rental rates which he knew or ought to have
known were substantially less than the market value for the weekly
rental rates receivable with respect to the property.
587 Ms Marr asserts that the tenancies arranged by Mr Scott (Bryon,
Reece and others, Butler and Pearce) were not at market rent. She
seeks the difference between the actual rent received and the market
rent.
588 Ms Marr also asserts that Mr Scott was under an obligation to
always seek the 'highest, best use' of Links Road. This obligation at
least required him to do what was necessary for the premises to be
leased for a complying commercial purpose within the initial zoning for
example, a medical suite.
589 In Closing Submissions466 Ms Marr submits that Mr Scott is liable
for the difference between actual rent received and market rent from
2009 to 2014 on the basis Links Road was a residential tenancy and
2014 to 2023 on the basis that it was a commercial tenancy. The
shortfall is said to be $326,615.50, of which Ms Marr is entitled to
62.4% given her beneficial interest, giving $203.808.07.
13.2 Mr Scott's position
590 Mr Scott denies that the rent for Links Road was at any time less
than the market rent.
13.3 Determination
591 As set out in section 10.9, there are two bases on which one co-
owner may seek an occupation fee from another co-owner. The first is
where there has been an ouster. As set out in Part 11, while Ms Marr
was ousted from Links Road for two periods, she is not entitled to an
465 See also Claim, par 24.
466 Plaintiff’s Closing Submissions, Schedule.
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occupation fee over and above her proportionate share of the rent
actually received.
592 The second basis is where the co-owner in occupation makes a
claim for what I have defined as an Improvement Allowance or
Preservation Expenses.467 As Mr Scott has made a claim for
Preservation Expenses, there must be set off against this claim a
notional occupation fee at least for the period in which he was in sole
occupation of Links Road. The rationale for this approach is set out in
the passage from the decision of Mahoney JA in Forgeard which I
have quoted at [502].
593 I reiterate that the onus of establishing the quantum of the
occupation fee is on the party claiming it.468
594 The first period in which Mr Scott was in sole occupation was
between when Ms Marr left in January 2000 to March 2023 when
Byron was a tenant (see sections 7.2 to 7.7). As to this period, Ms Marr
has not persuaded me that Links Road was in a fit state to be let on the
open market. I have described in the work undertaken up to the point at
which Kevin left Links Road (see [309] to [312]). It is significant.
Even once Kevin left, there was still a great deal of work to be done.469
I find that in the first period of Mr Scott's sole occupancy Links Road
had no fair market rent.
595 The second period is from 6 September 2014 (the day after
Ms Marr left) to 21 February 2020 (being the day before the
commencement of the tenancy with Ms Butler and Mr Pearce) (section
7.19).
596 Using the same approach as Beazley JA in Biviano,470 I assess the
occupation fee at 50% of market rental.
597 Mr Sanchez gave evidence that the fair market rental in 2016 was
$300 per week.471 After deducting for the usual agents' commission
and fees, this becomes $270.472 He opined that by 2021 the gross fair
market rent for Links Road would have been in the range of $300 to
$500 per week.473 After deducting for the usual agents' commission
467Silvester [140] - [141]; Fathers [173]; Giacci [9]; Trajkoski [38].
468 Biviano 704 quoted at [506].
469 As described by Mr Scott in the letter I have quoted at [335].
470 Biviano 506.
471 Transcript 19.6.26, page 1660 (Sanchez).
472 Transcript 19.6.26, page 1667 (Sanchez).
473 Transcript 19.6.26, pages 1662 - 1663 (Sanchez).
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and fees,474 this becomes $270 to $450. The median rental data
contained in Mr Sanchez's report suggested that rents over this time
went both up and down, and, in effect, stayed static.475 I find the fair
market rent over the period from September 2014 to January 2020 to be
$270 per week. Mr Scott was in sole occupation from 6 September
2014 to 21 February 2020. For reasons which become apparent in Part
17, I divide this into two periods.
598 The first is 6 September 2014 to 31 December 2017, being 172
weeks. The occupation fee becomes $46,440 (172 weeks x $270).
Ms Marr is entitled to half, being $23,220.
599 The second is from 1 January 2018 to 21 February 2020, being
111 weeks. The occupation fee becomes $29,970 (111 weeks x $270).
Ms Marr is entitled to half, being $14,985.
600 Ms Marr claims that after 2014 the market rent should be assessed
on a commercial basis, not a residential basis. However, the law is as
set out by E M Heenan J in Giacci:476
The liability to account is only for rents and profits actually received
and not for what might have been received had the defendants better
managed or exploited the subject land…
So this aspect of Ms Marr's claim fails. I add that this principle makes
it clear that the accounting that occurs under co-ownership principles is
an account on a common basis, and not on a wilful basis (see [732] and
[734]). I come back to Ms Marr's claim for rent on the basis of a
commercial tenancy when considering the breach of fiduciary duty
argument (section 17.7).
601 In summary, Ms Marr is entitled to an occupation fee of $38,205
($23,220 + $14,985).
14. What other contributions did the parties make?
14. Mr Scott's position in evidence in chief
602 Given that Mr Scott has provided the more detailed information
relating other contributions, it is instructive to consider his position and
evidence first.
474 Transcript 19.6.26, page 1667 (Sanchez).
475 Exhibit 29.
476 Giacci [89] - [90] (reference omitted).
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603 In the Defendant's Opening Submissions, Mr Scott says that he
and Ms Marr made further contributions to Links Road during the
ownership period. This was by payments predominantly to Streamline
1 and Streamline 2 and on one or two occasions direct to Home Loan 1
and Home Loan 2.
604 Mr Scott gave evidence as to how he used the CBA Visa Card
ending in 6875 (CBA Visa):477
That is a Visa card I opened with the Commonwealth Bank, and it's
what I use to pay for day-to-day expenses as well on Links Road. But
I've also used that, I've had it established already, that wasn't the first
statement for that account. And I collected and made note of the
smaller payments and what-have-you that I did for Link Road. You
know, if I was in Bunnings and I bought something for Links Road, it
would usually be with my Commonwealth Visa card. But I've also used
the Commonwealth Visa card — it's a personal account, essentially a
personal account before and afterwards. I used it sometimes for balance
transfers. I used it when I didn't have enough money to pay for the up-
and-coming mortgage and I needed to move some money across. So I
used that to transfer from into the Streamline to make sure there was
enough money to pay for the mortgage on some months when there
wasn't enough money in there. So I really consider this a personal
account outside the two Diana Marr - Phil Scott accounts, Streamline 1
and Home loan 1/2, and my own account Streamline 2 that I established
later on. Those are the four accounts used solely dedicated to Links
Road. But this one here is my own personal Visa card that I had prior
and continue to have now. And I used it for quick funding from time to
time and I used it to pay for the small items as convenient. I didn't
write a check in Bunnings for something small.
605 Mr Scott prepared and tendered an analysis of Streamline 1
(Streamline 1 Analysis).478 This was based on the bank statements for
Streamline 1.479 Each transaction is itemised by date and amount. For
the months where there was no statement, he interpolated the data from
other sources. In summary, his analysis was:
Withdrawals for expenses $ 18,496.98
Bank fees, charges or
interest
$ 2251.58
House insurance $ 1,252.50
Water Corp $ 862.10
Land tax $ 0.00
City of Melville $ 2,033
477 Transcript 23.2.26, pages 1171 - 1172 (Scott).
478 Exhibit 24. See generally: Transcript 24.2.26, pages 1231 ff (Scott).
479 PTB C.
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Work maintenance repairs $ 12,097.80
Mortgage payments $128,318.74
Home loan 1 $110,846.38
Home loan 2 $ 22,133
Payments to Visa Card $ 10,330.07
Sub-total $157,145.79
Less Deposits $157,145.79
Rent $ 39,472.00
Net contribution - D Marr $ 16,688.05
Net contribution - P Scott $100,985.74
Balance $0.00
606 In a similar way, Mr Scott prepared and tendered an analysis of
Streamline 2 (Streamline 2 Analysis).480 This was based on the bank
statements for Streamline 2.481 Again, transaction is itemised by date
and amount. In summary, his analysis was:
Withdrawals for expenses $29,857.44
Bank fees, charges or interest $302.76
House insurance $1,188.00
Water Corp $8,227.78
Land tax $3,9212.30
City of Melville $ 6,252.00
Work maintenance repairs $9, 915.80
Mortgage payments $164,093.00
Home loan 1 $130,943.00
Home loan 2 $33,150.00
Payments to Visa Card $38,847.17
Sub-total $232,797.61
Less Deposits $232,797.61
Rent $119,683.00
Net contribution - D Marr $0.00
Net contributions - P Scott $113,114.61
480 Exhibit 25. See generally: Transcript 24.2.26, pages 1234 ff (Scott).
481 PTB D.
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Balance $0.00
607 Mr Scott prepared and tendered a schedule entitled 'Summary of
Contributions'.482 He gave evidence that he prepared this document by
going through three sources to identify all the amounts which he says
are contributions and withdraws in relation to Links Road, being:483
(a) Streamline 1;
(b) Streamline 2; and
(c) the CBA Visa.
As mentioned, there is an almost complete set of the bank statements
for Streamline 1484 and a complete set for Streamline 2.485 There is also
an almost complete set of the accounts for the CBA Visa.486
608 Mr Scott summarises the contributions as follows:487
CONTRIBUTIONS DURING OWNERSHIP OF THE PROPERTY
C1 Streamline 1 - Owner Contributions DM PS
Deposits
Withdrawals
Add withdrawals (PS to reimburse Visa)
$27,510.00
-10,321.96
$103,621.95
-2,636.05
-10,330.07
Net Deposits over Withdrawals $17,188.05 $90,655.83
C2 Streamline 2 - Owner Contributions DM PS
Deposits
Withdrawals
Add withdrawals (PS to reimburse Visa)
$153,355.35
-40,240.74
-38847.17
Net Deposits over Withdrawals - $74,267.44
C3 Commonwealth Visa Card - Owner
Payments/Contributions
DM PS
Insurance
Watercorp
Land Tax
$7,168.00
13,749.65
1,014.10
482 Exhibit 12.
483 See generally: Transcript 23.2.26, pages 1169 ff; 24.2.26, pages 1232 ff (Scott).
484 PTB C.
485 PTB D.
486 DTB 2.
487 Defence Closing Submissions, Annexure A, page 3.
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Page 193
City of Melville
Work, maintenance, repairs
23,452.81
8,957.87
Contribution by direct payment from personal Visa Card $54,342.43
609 Mr Scott took out reimbursements to the CBA Visa as these
amounts reflect amounts he claims as expenses (see Part 16). The net
result ensures that he does not get the benefit of these payments
twice.488
610 He then claims the amounts paid from his CBA Visa as expenses
as contributions. In substance, he paid these expenses from his own
funds.
611 In the Defence Closing Submissions, Annexure A, Part C,
Mr Scott sets out the contributions he says each party made to Home
Loan 1 and Home Loan 2. I deal with this in Part 15.
612 In the Defence Closing Submissions, Annexure B, Part C,
Mr Scott sets out some other direct payments he says were made by
each party. I deal with the Vandalism expenses paid by Ms Marr in
section 9.7. Mr Scott is entitled to claim the early payments made from
the Scott & Associates cheque account, as he paid these amounts from
his own funds. An amount of $1,515.05 needs to be added to his
contribution ($1,515 rounded to the nearest dollar) (see [650] to [651]).
14.2 Ms Marr's position and evidence
613 Ms Marr gave the following general evidence in relation to
banking arrangements:
(a) where there is a reference to a quick deposit or transfer or phone
transfer that is not labelled, it is hers;489
(b) she would ordinarily round up deposits over the minimum
required to cover fees;490 and
(c) over the period to 2008, Ms Marr was paying money, in
particular, off Home Loan 2.491
488 Transcript 24.2.26, pages 1232 - 1233 (Scott).
489 Transcript 17.2.26, page 439 (Marr).
490 Transcript 17.2.26, page 439 (Marr).
491 Transcript 17.2.26, page 487 (Marr).
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Page 194
614 As part of the pre-trial processes, Ms Marr filed a document in
which she set out which amounts which she attributed to her and which
she attributed to Mr Scott (Marr Transaction Analysis).492
615 In cross-examination, Ms Marr was taken through a number of
transactions in the Streamline 1 Analysis which differed from the Marr
Transaction Analysis. She disputed a number of transactions:493
(a) on 11 December 1998, there was a deposit of $900, which
Mr Scott says was $450 each, but Ms Marr says was entirely
from her;
(b) on 10 September 1999, there was a deposit of $800, which
Mr Scott said was $400 each, but Ms Marr says was entirely
from her;
(c) on 11 October 1999, there was a deposit of $800, which
Mr Scott was $400 each, but Ms Marr said was entirely from
her;
(d) on 11 November 1999, there was a deposit of $800, which
Mr Scott says included $200 from him, by Ms Marr said was
entirely from her;
(e) on 14 December 1999, there was a deposit of $860, which
Mr Scott said included $430 from him, but Ms Marr said was
entirely hers;
(f) on 13 March 2000, there was a deposit of $900, which Ms Marr
notes as being 'probably by Phil', but which Mr Scott says was
$450 each;
(g) on 22 January 2001, there was a deposit of $1,900 which
Ms Marr says is all hers, but which Mr Scott says was him
(though Mr Scott was not able to identify an entry from his
bank records to support the transaction);494
(h) on 31 January 2001, there was a deposit of $450, which
Ms Marr says is hers, but which Mr Scott says was him; and
(i) on July 2001, there was a deposit of $1,100, which Ms Marr
claimed, but agreed it could be from Mr Scott.
492 Exhibit 5.
493 Transcript 19.2.26, pages 799 - 809 (Marr).
494 Transcript 24.02.26, pages 1237 - 1241 (Scott).
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Page 195
616 In Closing Submissions, Ms Marr was critical of Mr Scott
accounting in relation to the use of his CBA Visa to pay both personal
expenses and expenses relating to Links Road.495
14.3 Determination
617 In my assessment, Mr Scott's analysis is comprehensive and
accurately summarises and brings to account the source documents. It
is more likely than not that the contributions made by each party were
as summarised by Mr Scott. For all but one of the disputed
transactions, Mr Scott was able to identify a source document in his
own bank accounts which supported the conclusion reached. Ms Marr
was not able to do so. For this reason, I prefer Mr Scott's evidence in
relation to the disputed transactions and find in his favour.
618 One matter did arise in the course of Mr Scott's cross-examination.
As set out at [297] an amount of $1,500 was characterised as rent from
Mr Brown whereas it should have been a contribution from Ms Marr.
This amount needs to be added to the amount for Streamline 1
identified by Mr Scott to give $18,688.05 ($17,188.05 + $1,500).
619 Mr Marr was critical of Mr Scott's practice of taking money out of
Streamline 1 and Streamline 2 for personal purposes.496 I observe that
Ms Marr did the same on occasion. Whilst the intermixing of personal
funds and funds relation to the common business venture is not
desirable, I accept that this was done because of Mr Scott's strained
financial position at times. The important point is that in the analysis
which Mr Scott has presented to this court, he has (and in my view
accurately) accounted for the funds he withdrew from Streamline 1 and
Streamline 2 for personal purposes. I also accept the accuracy of
Mr Scott's accounting for his use of his CBA Visa, and that the amounts
claimed relate only to Links Road.
620 In summary, I find that (rounded to the nearest dollar):
(a) Ms Marr made net contributions through Streamline 1 of
$18,688;
(b) Mr Scott made net contributions through to Streamline 1 of
$90,656;
(c) Ms Marr made no net contributions through Streamline 2;
495 See generally: Closing Submissions, Schedule.
496 See generally: Closing Submissions, Schedule.
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Page 196
(d) Mr Scott made net contributions through Streamline 2 of
$74,267;
(e) Mr Scott made net contributions through his visa account of
$54,342; and
(f) Mr Scott made a further contribution of $1,515 by reason of the
money paid out of the Scott & Associates cheque account.
15. How should the mortgages be accounted for?
15.1 Mr Scott's evidence in chief and final position
621 Most of the statements for Home Loan 1 for the period from
11 November 1998 to 14 June 2023 are in evidence.497 The opening
balance was $136,000. The amount paid out to close this account as
part of the sale of Links Road on 9 June 2023 was $38,179.98.
622 Mr Scott prepared a very detailed analysis for the statements for
Home Loan 1.498 For three months where there was no statement, he
interpolated the figures based on patterns in the months before and after
and information from the other accounts. Every payment and receipt is
itemised, along with the statement in which it appears and the date.
623 Mr Scott also prepared and tendered an analysis of the payments
from Streamline 1 into Home Loan 1 and Home Loan 2499 and an
analysis of the payments from Streamline 2 into Home Loan 1 and
Home Loan 2.500 In both documents, each transaction is itemised by
date and amount.
624 In summary, his analysis for Home Loan 1 was:
Initial drawdown $136,000.00
Add Withdrawals $155,235.32
Interest $153,001.95
Bank fees $2,224.26
Federal Institution Duty $9.11
Sub total $291,235.32
Less Deposits $253,055.43
497 See generally PTB A.
498 Exhibit 20. See generally, Transcript 24.2.26, pages 1219 ff (Scott).
499 Exhibit 22. See generally, Transcript 24.2.26, pages 1224 ff (Scott).
500 Exhibit 23. See generally, Transcript 24.2.26, pages 1225 ff (Scott).
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Page 197
Mortgage payment -
Streamline 1
$106,472.74
Mortgage payment -
Streamline 2
$135,891
Additional deposit - D Marr $7,963.96
Additional deposit - P Scott $2,727.64
Settlement payout $38,179.98
Balance $(0.09)
625 The fact that Mr Scott was able to reconcile 25 years' worth of
bank statements to within 9 cents gives me a high measure of
confidence as to its accuracy, especially with some missing statements.
626 In the Defence Closing Submissions, Mr Scott adjusts these
figures to reflect the evidence at trial:501
C4) Home Loan 1 - Direct payment Contributions by Owners
Contribution by direct payment into Home Loan 1 DM PS
11 Oct 10 PS Repayment/payment Netbank $4,500.00
15 May 01 PS direct payment of arrears (cheque)
deposit slip/letter on file
801.64
7 Sep 01 PS direct payment of arrears (cheque)
letter on file
1,900.00
27 Aug 21 PS Repayment/Payment Cheque
(insurance refund) 50%
26.00
12 Oct 10 DM Repayment/Payment Netbank $3,000.00
10 Aug 20 Direct deposit by DM 321.00
15 Aug 20 Direct deposit by DM 116.96
27 Aug 21 Repayment/Payment Cheque (insurance
refund)
26.00
$3,463.96 $7,227.64
627 In both the table above and the table in [624], the aggregate direct
contributions of the parties is $10,961.60; all that has changed is the
allocation of payments.
501 Defence Closing Submissions, Annexure B, Part C, item C4.
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Page 198
628 There is in evidence a complete set of the statements for Home
Loan 2 for the period from 27 May 2002 to 1 September 2020 when it
was paid out.502
629 Mr Scott also prepared a detailed analysis of the statements for
Home Loan 2.503 Again, every payment and receipt is itemised, along
with the statement in which it appears and the date.
630 In summary, his analysis for Home Loan 2 was:
Initial drawdown $36,000.00
Add Withdrawals $31,909.04
Interest $30,157.04
Bank fees $1,752.00
Sub total $67,909.04
Less Deposits $67,909.04
Mortgage payment - Streamline 1 $21,828.00
Mortgage payment - Streamline 2 $33,921.04
Additional deposit - D Marr $12,160.00
Additional deposit - P Scott $0.00
Balance $0.00
631 Again, the fact that Mr Scott was able to reconcile 18 years' worth
of bank statements to zero out gives me a high measure of confidence
as to its accuracy.
632 The analysis in [630] was confirmed in the Defence Closing
Submissions.504
15.2 Cross-examination
633 Aside from the circumstances in which Home Loan 2 was entered
into (which I have dealt with in section 7.4), the only other issue in
relation to the mortgages was an event which occurred in mid-2010.
The following entries appear in the bank statement for Home Loan 1 on
29 June 2010:505
502 PTB B.
503 Exhibit 21. See generally: Transcript 24.2.26, pages 1222 ff.
504 Defence Closing Submissions, Annexure B, Part C, item C5.
505 PTB A, page 75.
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Page 199
29
Jun
We confirm the following changed to your repayment
arrangements: Your direct debit has been cancelled. Please
ensure you meet your repayment obligations by the monthly
due date.
29
Jun
We confirm the following changed to your repayment
arrangements: Your elected Direct Debit Repayment
Amount: $1110.00 per month commencing 11/07/2010.
29
Jun
We confirm the following changed to your repayment
arrangements: Your elected Direct Debit Repayment
Amount: $1110.00 per month commencing 11/07/2010 will
be debited from your account number XXXX XXXX.
29
Jun
We confirm the following changed to your repayment
arrangements: Your direct debit has been cancelled. Please
ensure you meet your repayment obligations by the monthly
due date.
634 Mr Scott said he had no idea what these entries were about.506 The
effect of what was done was that no amount was paid off Home Loan 1
from this date to mid-October 2010.507 Mr Scott said that he received
no notification from the bank that there was a problem.508
635 On 11 October 2010 $4,500 was paid in and on 12 October 2010
$3,000 was paid in.509 Mr Scott allocated both to Ms Marr.510 Ms Marr
put to Mr Scott in cross-examination that he in fact paid the $4,500 and
she paid the $3,000, which he accepted. Mr Scott made this adjustment
in his final figures.
15.3 Determination
636 Nothing in the cross-examination of Mr Scott causes me to have
any doubts as to the accuracy of the analysis which he undertook and
which I have set out in section 15.1.
637 At [547], I concluded that money paid under a joint mortgage can
be brought to account in the distribution process. Where the parties are
jointly and severally liable, the appropriate basis is that they each
contribute equally to the repayment of joint debt. This would be the
position if, independently of the partition claim, one had sued the other
relying on the doctrine of equitable contribution.511 The doctrine of
506 Transcript 17.6.25, pages 1436 - 1443 (Scott).
507 See Exhibit 20, page 11.
508 Transcript 17.6.25, page 1445 (Scott).
509 See Exhibit 20, page 11.
510 Exhibit 20, page 21; Transcript 24.2.26, pages 1221 - 1222.
511 Ventia Utility Services Pty Ltd (ACN 010 725 247) (formerly known as Thiess Services Limited) v
Electricity Networks Corporation T/as Western Power [No 3] [2024] WASC 179 [39], [182] (Archer J).
-- 199 of 253 --
[2026] WASC 301
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Page 200
equitable contribution is an equally appropriate analogical basis to
exercise the power to distribute in PLA s 126(1). I add that my finding
in section 9.7 means that there is no contractual basis to depart from an
approach in which each party is required to contribute equally to the
joint debt.
638 The result is that (rounded to the nearest dollar):
(a) the total mortgage repayments made on Home Loan 1 was
$242,364 ($106,472.74 + $135,891);
(b) the total mortgage repayments made on Home Loan 2 were
$55,749 ($21,828.00 + $33,921.04);
(c) each of Ms Marr and Mr Scott is liable for half of the total
amounts paid;
(d) Ms Marr made direct contributions to Home Loan 1 of $3,464;
(e) Ms Marr made direct contributions to Home 2 of $12,160;
(f) Mr Scott made direct contributions to Home Loan 1 of $7,228;
and
(g) Mr Scott made no direct contributions to Home Loan 2.
16. What other expenses are claimed in relation to Links Road?
16.1 Ms Marr's position
639 The only expenses which Ms Marr incurred which she claims
should be brought to account from the proceeds of the sale of Links
Road are the expenses in relation to the Vandalism. I have dealt with
these in sections 6.2 and 9.7.
16.2 Mr Scott's position and evidence
640 Mr Scott denies that Ms Marr made any later contributions
towards the parties' ownership of Links Road. Specifically, he says that
Ms Marr:512
512 Defence, par 10.
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Page 201
(a) made no payments to repay the mortgage since settlement on
12 November 1998, other than payments made by deposit of
rent from tenants which were paid to the mortgage; and
(b) made no payments to pay land tax, shire rates, water rates and
building insurance since settlement 12 November 1998.
641 Mr Scott says that he has paid his contribution and Ms Marr's
contribution either in full or to the extent the rent payments did not
cover payments to the mortgage, land tax, shire rates, water rates and
building insurance since settlement on 12 November 1998.513
642 Mr Scott reiterates that the parties held Links Road as tenants in
common in equal shares, and calls for an accounting of the amounts
paid and received in relation to the property.514
643 In the counterclaim, Mr Scott reiterates that he and Ms Marr are
tenants in common in equal shares. Mr Scott pleads that he has
contributed a greater amount to the retention and preservation of Links
Road than Ms Marr. He says that he has paid his contribution and
Ms Marr's contribution either in full or to the extent the rent payments
did not cover payments to the mortgage, land tax, shire rates, water
rates and building insurance since the settlement on 12 November
1998.515
644 Mr Scott seeks an account on a common basis.516 He then seeks
an order that Ms Marr pay to him a sum equivalent to one-half of the
sum of the greater expenditure outlaid as determined by the account,
together with interest as and from the dates such account determines the
greater expenditure was outlaid by him.
645 Mr Scott tendered a document headed 'Summary of
Expenditures'.517 He gave evidence that he went through four sources
to identify all the amounts which he says he paid for expenses relating
to Links Road, being:518
(a) Streamline 1;
(b) Streamline 2;
513 Defence, par 10.3
514 Defence, pars 10.5, 16 - 20.
515 Defence, pars 17 - 20.
516 Defence, par 21.
517 Exhibit 18.
518 See generally: Transcript 23.2.26, pages 1167 ff, pages 1213 ff.
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Page 202
(c) his CBA Visa; and
(d) in some instances, the Scott & Associates cheque account.
As mentioned, there is an almost complete set of the bank accounts for
Streamline 1519 and Streamline 2.520 There is also an almost complete
set of the accounts for the CBA Visa.521 Each of the individual
payments is set out in the Summary of Expenditures, along with its
source. He also tendered the source invoices where available.522
646 Mr Scott also gave evidence that each of the expenses in the
Summary of Expenditures was actually incurred and was incurred in
relation to Links Road and not any other property.523 He went through
a sample of the invoices and primary material used to prepare the
Summary of Expenditures.524
647 Mr Scott then categorised the payments as follows:
Category Amount
House insurance $ 9,832.50
Water Corporation $23,363.51
Land tax $ 4,935.40
Melville City Council $30,989.90
Repairs and general charges $32,265.90
Total $101,387.24
648 Within each expense type, the individual amount and date is
itemised, along with the where the payment was made from.
649 Counsel for Mr Scott confirmed these amounts in closing
submissions.525
650 Mr Scott gave evidence that he paid some of the initial expenses
from the Scott & Associates cheque account. These are set out in the
Summary of Expenditures as follows:526
Date Item Amount
12 Nov 99 Sesco Security - 1 Links Road $440.35
519 PTB C.
520 PTB D.
521 DTB 2.
522 DTB 3; exhibit 19.
523 Transcript 24.2.26, page 1215.
524 Transcript 24.2.26, pages 1216 ff.
525 Defendant’s Closing Submissions, Annexure B.
526 Exhibit 18 pages 2 and 8.
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Page 203
28 Mar 01 MCC - Home occupation application -
1 Links Road
$150.00
30 May 01 Sesco Security - Oct - Dec 2000, Jan -
Mar 2001 - Links Road, Ardross
$200.20
30 Jun 01 Sesco Monitoring - 1/4/01 - 30/6/01
Invoice 380060 1 links Rd, Ardross
$100.10
20 Sep 01 Sesco Monitoring - 1/4/01 - 30/6/01
Invoice 380060 1 links Rd, Ardross
$100.10
18 Oct 01 Wesfarmers Federation Insurance - 1
Links Rd
$224.00
27 Nov 01 Sesco Monitoring - 1/107/01 -
31/12/01 Invoice 42553 1 Links Road,
Ardross
$100.10
8 Feb 02 Sesco Security Monitoring - 1 Links
Road (1/1/02 - 31/3/02) Inv.
1461/44484
$100.10
7 May 02 Sesco Security - 1 Links Rd - 1/4/02 -
30/6/02. Invoice No.46596
$100.10
651 These amounts total $1,515.05. They are characterised as 'Repairs
and General Charges'. However, they are not included in the amount
set out for this category in [647]. Rather, they are brought to account as
a contribution ([612]).
652 I have reviewed the Summary of Expenditures and am satisfied
that it accurately correlates to, and summarises, the relevant source
material. As a general finding, I find that Mr Scott incurred each of the
expenses set out in the Summary of Expenditure on the dates and in the
amounts particularised. However, there were some individual expenses
or categories of expense which Ms Marr challenged which I need to
consider in detail.
16.3 Expenses that are in issue
653 Ms Marr challenges a number of the expenses incurred on three
bases:
(a) the expense did not relate to Links Road;
(b) the expense is not one properly able to be claimed by a co-
owner as an ownership expense; or
(c) the expense is one which would not have been incurred had
Links Road been let commercially.
It is convenient to deal with the challenges under these headings.
-- 203 of 253 --
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Expenses that did not relate to Links Road
654 Ms Marr challenged an invoice from Drago Dadich for $345 for
'Stitching and Repointing Brickwork'.527 The invoice on its face is
expressed to be for work done at '1 Links Road Booragoon'. The date
is the issue. It is written '3rd October 2001' with the second zero having
a line through it, making the date '3rd October 2011'. Mr Scott claims in
this amount in the Schedule of Expenses, but does not record the
date.528 Mr Scott said he did not change the date from a '0' to a '1'.
Ms Marr suggested that the invoice was for work done in October 2001.
Mr Scott thought that might have been the case. He denied that the
invoice was for work done at the Beaconsfield Property (that is, Central
Avenue).529 However, the issue of dates does not matter as I am
satisfied that the work was done at Links Road and that it has only been
claimed once.
655 Ms Marr challenged a series of invoices which Mr Scott claimed
over October and November 2002 by Mr Dadich, his sons Adrian and
Reece and his nephew Joshua Harris. These are set out in the Summary
of Expenditures as follows:530
Date Item Amount
14-Oct-02 000011 - Drago Dadich 30.5 Hours
1/10 - 4/10
$605.07
09-Oct-02 000012 - Reece Scott 14 Hours 1/10 -
4/10
$105.00
14-Oct-02 000013 - Adrian Scott 20.5 Hours 1/10
- 4/10
$153.75
14-Oct-02 000014 - Adrian Scott 26.5 Hours 7/10
- 13/10
$198.75
15-Oct-02 000015 - Reece Scott 32.5 Hours 7/10
- 13/10
$243.75
16-Oct-02 000016 - Drago Dadich 53 Hours 7/10
- 13/10
$954.00
21-Oct-02 000018 - Joshua Harris 16 Hours 15/10
- 21/10
$120.00
29-Oct-02 000019 - Joshua Harris 16 Hours 22/10 $120.00
29-Oct-02 000020 - Joshua Harris 16 Hours 28/10 $120.00
29-Oct-02 000021 - Drago Dadich 41 Hours
14/10 - 3/11
$738.00
527 DTB3, page 236.
528 Exhibit 18, page 9.
529 Transcript 17.6.26, pages 1373 - 1389 (Scott).
530 Exhibit 18, page 8.
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Page 205
7-Nov-02 0000230 - Drago Dadich 13 Hours
4/11 - 5/11
$234.00
These amounts are included in the category of 'Repairs and general
charges'.
656 Ms Marr suggested that only 30 hours of work was done at Links
Road and the rest was done at Central Avenue. Mr Scott disagreed,
saying:531
That entire time there, basically, Drago Dadich and the labourers I was
able to obtain from him to work with him on their school holidays, if
you like, sanded back all the doors and painted them, all the internal
woodwork, and sanded and filled and painted the external woodwork.
Mr Scott said that Ms Marr was not present when this work was
done.532
657 Ms Marr did not adduce any evidence to the effect that the work
being claimed was done at Central Avenue. Mr Scott's evidence that
work was being done at Links Road is supported by his letter dated
23 October 2022 to WFI which I have quoted at [278]. I accept
Mr Scott's evidence and find that the work claimed was done at Links
Road.
658 Ms Marr challenged an amount of $440 incurred on 21 June 2002
with the description: 'G.Balt - Bobcat Man'.533 Mr Scott said that was
for clearing out the backyard at Links Road. He denied the suggestion
that it was done at Central Avenue.534 Ms Marr did not adduce any
evidence to the effect that the work being claimed for was done at
Central Avenue. I accept Mr Scott's evidence and find that the work
claimed was done at Links Road.
659 Ms Marr challenged two payments to the Water Corporation on
24 October 2002, one for $340.80 and one for $548.95. Mr Scott
referred to the due dates on the invoices which showed that one was
due on 4 November 2003 and other on 31 July 2003.535 They were both
531 Transcript 17.6.26, page 1403; also pages 1404 - 1410 (Scott).
532 Transcript 17.6.26, page 1405 (Scott).
533 Exhibit 18, page 8.
534 Transcript 17.6.26, pages 1410 - 1411 (Scott).
535 DTB 3, page 698, 702.
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Page 206
for Links Road. He paid them both at the same time.536 I accept this
explanation.
Expenses not able to be claimed by a co-owner as an ownership expense
660 As set out at [650], Mr Scott claimed for a security system at
Links Roads then for monitoring over several years. Mr Scott gave
evidence that after the Vandalism, kids were still trying to break into
the house, so there was a need to install and maintain a security
system.537 Ms Marr contended that they were a tenant cost. Given that
Ms Marr was occupying Links Road for much of this initial period and
the impact on them both of the Vandalism, I regard the security
expenses as an ownership expense for the period in which it is being
claimed.
661 Mr Scott claimed the following amounts in 2002 for Western
Power:
9 October 2002 Western Power $26.70
17 December 2002 Western Power $31.00
Total $57.70
Ms Marr contended that these were occupation expenses not ownership
expenses. Mr Scott accepted this.538
662 Mr Scott claims for amounts paid to the Water Corporation.
Ms Marr accepts that amounts paid for water rates are ownership
expenses, but says that amounts paid for water usage are not. She says
that, even in a residential tenancy, water usages charges are ordinarily
the responsibility of the tenant.
663 Mr Scott's evidence is that none of the tenants which either
Ms Marr or he arranged were required to pay for their water usage.539 I
accept this evidence. Both of them appeared to have proceeded on the
basis that water usage was to be paid as an ownership expense. These
expenses are properly able to be brought to account by Mr Scott. This
is subject to the next section.
536 Transcript 17.6.26, pages 1453 - 1455 (Scott).
537 Transcript 17.6.26 pages 1390 - 1391 (Scott).
538 Transcript 19.6.26, pages 1538, 1730 (Scott).
539 Transcript 17.6.26, page 1457 (Scott).
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Page 207
Expenses which would not have been incurred had Links Road been let
commercially
664 Ms Marr's position is that Mr Scott was required to lease Links
Road to a commercial tenant. Had he done so, the commercial tenant
would have been responsible for water rates and charges, insurance,
council rates and land tax.
665 In Part 18, I find that Mr Scott owed fiduciary duties to Ms Marr
which, in the circumstances of this case, required him to lease Links
Road commercially, though only from 9 October 2014. I deal return to
the issue of these outgoings in this context in section 18.7.
16.3 Determination
666 I find that Mr Scott paid the following expenses in relation to
Links Road, categorised as follows:
Category Amount
claimed
Amount
disallowed
Amount able to
be claimed
House insurance $9,832.50 $0 $9,832.50
Water Corporation $23,363.51 $0 $23,363.51
Land tax $4,935.40 $0 $ 4,935.40
Melville City
Council
$30,989.90 $0 $30,989.90
Repairs and general
charges
$32,265.90 $57.70 $32,208.20
667 Each category of expense is an expense that may properly be
claimed by a co-owner as a Preservation Expense. As I have mentioned
at several points ([309] - [312], [335]), Links Road required a
significant amount of work to both rectify the Vandalism and bring it
up to a standard that meant it could be let on the open market. Hence, I
view the repairs and maintenance undertaken by Mr Scott to be in the
nature of what I have termed Preservation Expenses properly paid by
the owners as opposed to the sort of repair costs ordinarily incurred by
a tenant. Further, given the dilapidated state of Links Road for most of
the time it was owned by the Parties, many of the maintenance and
repair expenses claimed by Mr Scott could also readily be characterised
as Improvement Expenses. He is entitled to claim these expenses at
cost. I note that he does not make any claim for a greater than 50%
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beneficial interest in Links Road as a result of the work he undertook or
arranged for Kevin to undertake.540
17. Does Mr Scott owe any fiduciary obligations to Ms Marr?
17.1 Ms Marr's position
668 Ms Marr makes a further, or alternate, claim that the terms of the
Joint Endeavour constituted fiduciary obligations mutually owed by the
parties to each other.541 By the failure or refusal of Mr Scott to obtain
rent from tenants of Links Road at fair market rates, he is said to have
breached the fiduciary obligations he owed to her.542 This has two
components. The first is the difference between the rent actually
received and the fair market rent for a residential property. The second
is 'the loss or reduction of value of the Property because it was not
rezoned and rented out as a commercial property'.543
669 Ms Marr then goes on to plead that the breach entitles her to
equitable compensation to restore her position to that which would have
accrued if Mr Scott had not breached his fiduciary obligations. The
measure claimed is:544
(i) The payment of monies sufficient to compensate the
plaintiff's loss resulting from the said breaches of fiduciary
duty; or
(ii) Alternatively, ordering the recoupment of rent that was
retained by the defendant in excess of his proportionate
liability to distribute to the plaintiff as a joint owner of the
Property, with compound interest to compensate for the
ongoing loss of use of the said monies (that would otherwise
have been productive of alternative financial benefit to her).
670 In the Claim, Ms Marr then seeks an order for an account in
relation to the claims she has made. She also raises issues about the
inadequacy of the documents provided by Mr Marr. She seeks an
account on a 'wilful default' basis.545
540 Defence Closing Submissions [79].
541 Claim, par 45.
542 Claim, par 45.
543 Claim, par 32.
544 Claim, pars 44 to 46.
545 Claim, pars 32 to 43.
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17.2 Mr Scott's position
671 Mr Scott denies that he owes any fiduciary duty. He says that as
he and Ms Marr as are co-owners of Links Road, he is only liable to
account for the monies he actually received either as a bailiff for
Ms Marr or under the Statute of Anne for Ms Marr's 50% entitlement.546
I have dealt with this issue in Part 12.
672 Mr Scott denies that Ms Marr is entitled to equitable compensation
and reiterates that they are co-owners.547
673 Mr Scott further pleads that even if there are fiduciary duties
and/or equitable Ms Marr is entitled to compensation, the claims are
equitable claims and are statute barred pursuant to Limitation Act 2005
(WA) s 13, s 26 and s 27.548
17.3 Relevant law
674 There are a number of types of relationship which are accepted to
be fiduciary relationships without further inquiry as to the specific
circumstances of the case. The classic description of this class is by
Mason J Hospital Products Ltd v United States Surgical
Corporation:549
The accepted fiduciary relationships are sometimes referred to as
relationships of trust and confidence or confidential relations…trustee
and beneficiary, agent and principal, solicitor and client, employee and
employer, director and company, and partners. The critical feature of
these relationships is that the fiduciary undertakes or agrees to act for or
on behalf of or in the interests of another person in the exercise of a
power or discretion which will affect the interests of that other person in
a position. The expressions "for", "on behalf of', and "in the interests of'
signify that the fiduciary acts in a "representative" character in the
exercise of his responsibility….
It is partly because the fiduciary's exercise of the power or discretion
can adversely affect the interests of the person to whom the duty is
owed and because the latter is at the mercy of the former that the
fiduciary comes under a duty to exercise his power or discretion in the
interests of the person to whom it is owed… Thus a mere sub contractor
is not a fiduciary. Although his work may be described loosely as work
which is to be carried out in the interests of the head contractor, the sub-
546 Defence, par 14.3.
547 Defence, par 14.4.
548 Defence, par 14.5.
549 Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41,
96 - 97 (Mason J) (references omitted) (Hospital Products).
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contractor cannot in any meaningful sense be said to exercise a power
or discretion which places the head contractor in a position of
vulnerability.
675 And:550
The classical illustrations of the fiduciary relationship are those in
which the fiduciary is under a duty to act not in his own interests or
solely in his own interests but in the interests of another or jointly in the
interests of another and himself, e.g., a trustee and a partner.
676 However, as Mason J points out, the categories of fiduciary
relationship are not closed.551 Whether a relationship not falling within
an established category is characterised as a fiduciary relationship is a
question of fact in the particular circumstances of the case.552
677 A contractual relationship may also be a fiduciary one. Again, in
the words of Mason J in Hospital Products:553
That contractual and fiduciary relationships may co-exist between the
same parties has never been doubted. Indeed, the existence of a basic
contractual relationship has in many situations provided a foundation
for the erection of a fiduciary relationship. In these situations it is the
contractual foundation which is all important because it is the contract
that regulates the basic rights and liabilities of the parties. The fiduciary
relationship, if it is to exist at all, must accommodate itself to the terms
of the contract so that it is consistent with, and conforms to, them. The
fiduciary relationship cannot be superimposed upon the contract in such
a way as to alter the operation which the contract was intended to have
according to its true construction.
678 A commercial relationship may also be a fiduciary relationship:554
But it is altogether too simplistic, if not superficial, to suggest that
commercial transactions stand outside the fiduciary regime as though in
some way commercial transactions do not lend themselves to the
creation of a relationship in which one person comes under an
obligation to act in the interests of another. The fact that in the great
majority of commercial transactions the parties stand at arm's length
550 Hospital Products 99.
551 Hospital Products 96.
552 Hospital Products 100.
553 Hospital Products 97. See also: John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010)
241 CLR 1 [91] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ) (John Alexander); Dalecoast Pty Ltd
v Guardian International Pty Ltd [2003] WASCA 142 [71] (Murray J, with whom Wallwork J and
Anderson JJ agreed); Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 26] [2026] WASC
101 [1557] (Smith J) (Wright Prospecting); Duckworth atf The Ocean Farm Trust v Water Corporation
[2024] WASC 90 [56] (Howard J); Lamers as trustee for Ben and Debra Lamers Family Trust v Arvind Pty
Ltd [No 3] [2023] WASC 30 [722] (Hill J).
554 Hospital Products 100.
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does not enable us to make a generalization that is universally true in
relation to every commercial transaction. In truth, every such
transaction must be examined on its merits with a view to ascertaining
whether it manifests the characteristics of a fiduciary relationship.
679 And it may not. As the High Court observed in John
Alexander:555
[T]he reason why commercial transactions falling outside the accepted
traditional categories of fiduciary relationship often do not give rise to
fiduciary duties is not that they are 'commercial' in nature, but that they
do not meet the criteria for characterisation as fiduciary in nature.
680 As to when a relationship may be characterised as fiduciary,
Mason J stated that an obligation to act in the interests of another is the
'foundation of the fiduciary relationship'. Specifically:556
But entitlement to act in one's own interests is not an answer to the
existence of a fiduciary relationship, if there be an obligation to act in
the interests of another. It is that obligation which is the foundation of
the fiduciary relationship, even if it be subject to qualifications
including the qualification that in some respects the fiduciary is entitled
to act by reference to his own interests. The fiduciary duty must then
accommodate itself to the relationship between the parties created by
their contractual arrangements. And entitlement under the contract to
act in a relevant matter solely by reference to one's own interests will
constitute an answer to an alleged breach of the fiduciary duty. The
difficulty of deciding under the contract when the fiduciary is entitled to
act in his own interests is not in itself a reason for rejecting the
existence of a fiduciary relationship, though it may be an element in
arriving at the conclusion that the person asserting the relationship has
not established that there is any obligation to act in the interests of
another.
681 The position is summarised by Pritchard J in Aikman v The
Owners of Strata Plan 48817 - 16 Dolphin Drive Mandurah in the
following terms:557
A fiduciary relationship between two parties is usually identified as one
which is characterised by a duty, and corresponding expectation, of
loyalty from one party (the fiduciary) towards the other (the
beneficiary). Fiduciary obligations have been held to arise in the
context of certain relationships, such as between partners, solicitor and
555 John Alexander [90]; Duckworth [55].
556 Hospital Products 99.
557 Aikman v The Owners of Strata Plan 48817 - 16 Dolphin Drive Mandurah [2016] WASC 380
[100] - [101] (Pritchard J) (citations omitted); Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd
[No 26] [2026] WASC 101 [1557] (Smith J) (Wright Prospecting).
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client, principal and agent, director and company, and employer and
employee.
Outside those well-established categories, determining whether
fiduciary obligations arise will depend on the identification of criteria
indicative of the existence of a fiduciary relationship. The law on
fiduciary duties in Australia is not yet settled and there is not a precise
or comprehensive set of circumstances or criteria by reference to which
fiduciary obligations will be imposed. The circumstances which may
point towards a fiduciary relationship include the existence of a
relationship of confidence, inequality of bargaining power, the scope
for one party unilaterally to exercise a discretion or power which may
affect the rights or interests of the other, and a dependence or
vulnerability on the part of one party that causes that party to rely on
another. None of these circumstances or criteria is individually
determinative of the existence of a fiduciary duty. However, one critical
feature which must be present is that the fiduciary undertakes or agrees
to act for, or on behalf of, another person, in the interests of that other
person, in the exercise of a power or discretion which will affect the
interests of that other person in a legal or practical sense, and to the
exclusion of the fiduciary's own interest.
682 This passage was quoted with approval by Smith J in Wright
Prospecting.558 Relevantly for present purposes, her Honour went on to
observe that:559
A fiduciary duty may also arise where parties join in a common
business enterprise where the relationship between them is one of
mutual trust and confidence; in that event, all parties must seek to
realise for the advantage of each participant all the assets committed to
the joint venture.
683 Her Honour cited the decisions of Gummow ACJ, Hayne and
Callinan JJ in Concrete Pty Ltd v Parramatta Design and
Developments Pty Ltd.560 Each of their Honours in turn referred to the
decision of Mason, Brennan and Dawson JJ in United Dominions
Corporation Ltd v Brian Pty Ltd,561 so it is convenient to begin with
that decision.
684 In United Dominions the parties to a joint venture agreement to
develop land were held to be in a fiduciary relationship. The parties
558 Wright Prospecting [1557].
559 Wright Prospecting [1562].
560 Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577
[15] (Gummow ACJ): [124] (Hayne J); [156] (Callinan J) (Concrete HCA).
561 United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; (1985) 157 CLR 1, 10 - 12
(Mason, Brennan and Dawson JJ, with whom Gibbs CJ and Dawson J agreed generally) (United
Dominions).
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were at arms-length and the endeavour purely commercial. The
plurality made some observations as to when a fiduciary relationship
will exist in a joint venture situation (my emphasis):562
The term "joint venture" is not a technical one with a settled common
law meaning. As a matter of ordinary language, it connotes an
association of persons for the purposes of a particular trading,
commercial, mining or other financial undertaking or endeavour with a
view to mutual profit, with each participant usually (but not necessarily)
contributing money, property or skill. Such a joint venture (or, under
Scots' law, "adventure") will often be a partnership. The term is,
however, apposite to refer to a joint undertaking or activity carried out
through a medium other than a partnership: such as a company, a trust,
an agency or joint ownership. The borderline between what can
properly be described as a "joint venture" and what should more
properly be seen as no more than a simple contractual relationship may
on occasion be blurred. Thus, where one party contributes only money
or other property, it may sometimes be difficult to determine whether a
relationship is a joint venture in which both parties are entitled to a
share of profits or a simple contract of loan or a lease under which the
interest or rent payable to the party providing the money or property is
determined by reference to the profits made by the other. One would
need a more confined and precise notion of what constitutes a "joint
venture" than that which the term bears as a matter of ordinary language
before it could be said by way of general proposition that the
relationship between joint venturers is necessarily a fiduciary one…
The most that can be said is that whether or not the relationship
between joint venturers is fiduciary will depend upon the form which
the particular joint venture takes and upon the content of the obligations
which the parties to it have undertaken. If the joint venture takes the
form of a partnership, the fact that it is confined to one joint
undertaking as distinct from being a continuing relationship will not
prevent the relationship between the joint venturers from being a
fiduciary one. In such a case, the joint venturers will be under fiduciary
duties to one another, including fiduciary duties in relation to property
the subject of the joint venture, which are the ordinary incidents of the
partnership relationship, though those fiduciary duties will be moulded
to the character of the particular relationship …
In the present case, it is apparent that the relationship between the
participants in the shopping centre venture was a fiduciary one at least
from the time when the formal agreement was executed. Under the
agreement, the participants were joint venturers in a commercial
enterprise with a view to profit. Profits were to be shared. The joint
venture property was held upon trust …
562 United Dominions 10 - 11.
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685 Their Honours went on to hold that the relationship between the
participants under the agreement exhibited all the indicia of, and plainly
was, a partnership. The appellant asserted that the no fiduciary
relationship existed, and no fiduciary duties arose, until the joint
venture agreement was executed. Their Honours disagreed:563
To the extent that that submission involves a general legal proposition
that the relationship between prospective partners or joint venturers
cannot be a fiduciary one until a formal agreement is executed, it is
clearly wrong. A fiduciary relationship can arise and fiduciary duties
can exist between parties who have not reached, and who may never
reach, agreement upon the consensual terms which are to govern the
arrangement between them. In particular, a fiduciary relationship with
attendant fiduciary obligations may, and ordinarily will, exist between
prospective partners who have embarked upon the conduct of the
partnership business or venture before the precise terms of any
partnership agreement have been settled. Indeed, in such circumstances,
the mutual confidence and trust which underlie most consensual
fiduciary relationships are likely to be more readily apparent than in the
case where mutual rights and obligations have been expressly defined in
some formal agreement. Likewise, the relationship between prospective
partners or participants in a proposed partnership to carry out a single
joint undertaking or endeavour will ordinarily be fiduciary if the
prospective partners have reached an informal arrangement to assume
such a relationship and have proceeded to take steps involved in its
establishment or implementation.
686 In Concrete HCA, two companies, Landmark Building
Developments Pty Ltd (Landmark) and Toyama Pty Ltd (Toyama),
formed a joint venture to purchase and develop land, together with a
third company, Parramatta Design & Developments Pty Ltd
(Parramatta), which provided architectural services. The principal of
Parramatta, a Mr Fares, was also a principal of Landmark. Units were
to be constructed and sold for profit. There was no written agreement
recording the terms of the joint venture. There was no express
agreement about what would happen if the object of the joint venture
was not achieved. It was agreed that Mr Fares and/or Parramatta would
provide architectural services for the joint venture by preparing plans
and drawings for the units. Parramatta was paid for one set of plans.
The joint venturers agreed that Mr Fares and/or Parramatta would
prepare a further set of plans without charge. The second set was
prepared and made available to the other joint venturers for the
purpose, amongst others, of obtaining development consent. Consent
was granted by the relevant council. Parramatta did not convey title to
563 United Dominions 11 - 12.
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its copyright in the plans to any of the others. The joint venturers fell
out, the development did not proceed and court-ordered trustees sold
the land to another company, Concrete Pty Ltd (Concrete). Concrete
wished to construct a unit development on the land in accordance with
the development consent and to reproduce the plans. Parramatta and
Mr Fares refused permission for Concrete to use the plans. Concrete
commenced proceedings under Copyright Act 1968 (Cth) (CA) s 202
alleging that Parramatta and Mr Fares had threatened copyright
infringement proceedings against it without justification. Parramatta
cross claimed alleging infringement against Concrete, essentially
because no payment had been made for the preparation of the drawings.
Parramatta and Mr Fares did not allege that there was an implied
licence in favour of the joint venturers, which they had revoked on the
basis of non-payment of any fee. They contended that there had never
been such an implied licence because their provision of the plans
without fee was conditional on Parramatta's building the units on a
cost-plus basis.
687 The High Court held that in the circumstances of the case
Paramatta and Mr Fares had impliedly consented to the use of the plans
for the purposes of the joint venture. The plans were to be used by the
landowners to develop the site from the stage of obtaining development
consent through to achieving profits by the sale of units built in
accordance with the consent. The purposes of the joint venture must
include the sale of the land with the benefit of the consent before
completion of the development. The landowners who sold the land to
Concrete with the benefit of the development consent passed the benefit
of Paramatta and Mr Fare's implied consent to the use of the plans to
Concrete, as it was within the ambit of the implied consent which the
landowners had received from them. Paramatta and Mr Fares were not
entitled to deny consent to the use of the plans by Concrete to pursue
interests in conflict with the purposes of the joint venture. Accordingly,
Paramatta and Mr Fare's threats of copyright infringement were
unjustified and Paramatta's infringement claim against Concrete failed,
because they had impliedly licensed Concrete, within the meaning of
CA s 15, to reproduce the plans.
688 For present purposes, what is of significance is that the findings by
the various member of the court that the joint venture had fiduciary
characteristics of the kind identified in United Developments.
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689 Gummow AJC, in the context of considering whether there was an
implied licence, observed:564
It is here that the nature and scope of the joint venture in which
Parramatta, Landmark and Toyama participated becomes critical. No
written agreement was made recording the terms of the joint venture.
Title to the development site was registered for a tenancy in common as
to two-thirds for Landmark and one-third for Toyama. The land
subsequently was sold in the circumstances explained in the other
reasons for judgment. Title to the copyright of Parramatta was not
conveyed by Parramatta to Landmark and the other members of the
joint venture. However, the plans were made available for the purposes
development application, an essential step to achieve the development
of the site. Landmark had a substantial financial interest in that
development and its proceeds, and Mr Fares, sole director and
shareholder in Parramatta, was a principal of Landmark.
Contrary to the case asserted by Parramatta, the purposes of the joint
venture extended, upon breakdown of relations between the parties, to
such use of the plans and drawings as was necessary and convenient to
turn to account the development site and the current development
approval. As a matter of contract, Parramatta and Landmark were
obliged to cooperate in the doing of acts necessary for the performance
by the joint venturers of their mutual and fundamental obligations under
their arrangements…
Further, given the nature and scope of the joint venture arrangements,
the joint venture possessed fiduciary characteristics of the kind
identified in United Dominions Corporation Ltd v Brian Pty Ltd … For
Parramatta to deny consent to the use by Concrete of the plans and
drawings as consequent upon the acquisition of the development site
would be to pursue its interests in conflict with the purposes of the joint
venture as earlier identified.
For these reasons, and as an implication drawn from the circumstances
of the case, Concrete enjoys the authority of a licence binding upon
Parramatta within the meaning of s 15 of the Act.
690 Hayne J observed:565
Once it is recognised that all three companies- Parramatta, Landmark
and Toyama- joined in a common business enterprise, it must also be
recognised that the relationship between those participants was one of
mutual trust and confidence. It matters not whether the participants
564 Concrete HCA [12] - [16] (Gummow ACJ) (references omitted).
565 Concrete HCA [124] (Hayne J). (134) was a reference to United Dominions(10 - 11; (135) was a
reference to Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384, 407 - 408
(Dixon J) (Birtchnell) and McPherson, “Joint Ventures”, in Finn (ed), Equity and Commercial Relationships
(1987) 19, at pages 26 - 30.
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could properly be described as partners, or whether it is only the
necessarily less precise expression 'joint venture' (134) that can be
applied to their relationship. The critical consideration is that the
relationship was one of mutual trust and confidence (135). The
obligations of each of the participants, when the relations between them
broke down, extended not only to realising, to the advantage of each of
the participants, all of the assets that had been committed to the venture,
but also to not impeding that realisation whether by pursuing the
individual interests of one participant in conflict with the interests of
others, or in some other way. As Gummow A-CJ points out, for
Parramatta to deny consent to the use by Concrete of the plans and
drawings would be to pursue its interests in conflict with the interests of
other participants. Section 15 of the Copyright Act was thus engaged.
691 And Callinan J:566
It is a well settled rule of construction of contracts that each party owes
to the other a duty to cooperate in the doing of acts which are necessary
to the performance by the parties, or any of them, of the contract…
A corollary of that rule is that a party will not obstruct the performance
of the contract. Not only should such a term be implied in the
agreement for the joint venture here, but also regard should be had to
the fiduciary relationship existing between joint venturers, giving rise to
mutual rights and obligations (169). Those matters do not mean that the
respondents should, on account of them alone, necessarily forgo any
entitlement to, or intellectual property that they might possess in, the
plans. But, as will appear, they are of considerable relevance to the
resolution of the case.
There is another term which is discernible from the nature of the
primary agreement, the agreement for the joint venture itself. It is that
the purpose of the agreement was to maximise the financial return of all
parties to it. Again, that does not of itself exclude any entitlement that
the respondents might have to charge for, and recover, professional fees
properly payable. But it does throw light upon the intentions to be
imputed to the parties, in the event, apparently unforeseen at the time of
the making of the joint venture agreement, of its breakdown. At that
point, both terms, of cooperation and non-obstruction, and of the
application of joint and several effort to maximise the financial return,
and the underlying fiduciary obligations came into play, subject of
course to any other agreement in favour of one or more of the parties.
692 The remaining members of the court, Kirby and Crennan JJ, did
not consider the fiduciary relationship issue.
693 As noted, Hayne J cited the decision of Dixon J in Birtchnell. The
passage cited in part reads:567
566 Concrete HCA [156] - [157] (Callinan J). (169) was a reference to United Dominions 10 - 11.
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The relation between partners is, of course, fiduciary. Indeed, it has
been said that a stronger case of fiduciary relationship cannot be
conceived than that which exists between partners. "Their mutual
confidence is the life-blood of the concern. It is because they trust one
another that they are partners in the first instance; it is because they
continue to trust one another that the business goes on"… The relation
is based, in some degree, upon a mutual confidence that the partners
will engage in some particular kind of activity or transaction for the
joint advantage only.
694 What may be referred to as a 'common business enterprise'568
fiduciary relationship is thus of a slightly different character than what
may be referred to as an 'exclusive' fiduciary relationship. In the
former, as Dixon J observes, each party must act for their joint
advantage. In the latter, the fiduciary must exclusively serve the
interest of the other.569 The trustee is the archetype of this kind of
fiduciary relationship,570 as the partnership is of the former.571 What is
common is that, in each case, 'the fiduciary is not free to pursue his or
her separate interests'.572
17.4 Did Mr Scott owe a fiduciary duty to Ms Marr?
695 The factual findings I have made so far include that:
(a) the relationship between Ms Marr and Mr Scott was purely
commercial ([488]);
(b) Links Road was owned by Ms Marr and Mr Scott as tenants in
common equally ([162]);
(c) the Final Marr Scott Sale Agreement included a term that both
parties would use their best endeavours to expediate the
proposed re-zoning to commercial ([446]);
(d) there was a plan, but not a legally enforceable contract, to
rezone Links Road to for commercial use, undertake renovation
works to the property to enable it to be used for commercial
purposes and for both Ms Marr and Mr Scott to conduct their
businesses from the property ([460]);
567 Birtchnell 10 - 11 (Dixon J).
568 To use the language of Smith J in Wright Prospecting [1562].
569 Mercanti v Mercanti [2016] WASCA 206 [226] (Buss P) (Mercanti).
570 Mercanti [227].
571 Birtchnell 10.
572 Hospital Products 99; Mercanti [226].
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(e) once the unequal contributions to the initial loan were
addressed, all expenses would be shared equally, with the
parties each paying for particular expenses from time to time,
with there being a final accounting of expenses at some point so
that the expenses could be equalised ([456]); and
(f) income and the ultimate profit on sale would be shared in
accordance with their rights as co-owners ([457]).
These findings lead me to find that Mr Marr and Mr Scott engaged in a
common business enterprise to own and develop Links Road.
696 It is not necessary for me to characterise the common business
enterprise as a 'joint venture' or a 'partnership'.573 Rather, the focus is
on the form which common business enterprise takes and the content of
the obligations which the parties undertook. The plurality in United
Dominions said that the joint undertaking, or in my language common
business enterprise, could be carried out through the medium of joint
ownership ([684]). The common business enterprise in [695] was, in
the language of the plurality in United Dominions, 'an association of
persons for the purpose of a particular … financial undertaking or
endeavour with a view to mutual profit, with each participant
contributing money [and] skill', the property being contributed jointly.
That is exactly what has occurred in the present case.
697 As was the case in United Dominions, the fact that there was no
formal agreement does not preclude a fiduciary relationship arising. To
reiterate what I have quoted at [685], a 'fiduciary relationship can arise
and fiduciary duties can exist between parties who have not reached,
and who may never reach, agreement upon the consensual terms which
are to govern the arrangement between them'.574 And, 'the relationship
between prospective partners or participants in a proposed partnership
to carry out a single joint undertaking or endeavour will ordinarily be
fiduciary if the prospective partners have reached an informal
arrangement to assume such a relationship and have proceeded to take
steps involved in its establishment or implementation'.575 Again, that is
exactly what has occurred in the present case.
698 Further, I also find that the relationship was one of mutual trust
and confidence.576 The fact that Ms Marr and Mr Scott did not take the
573 Concrete HCA [124].
574 United Dominions 12.
575 United Dominions 12.
576 Concrete HCA [124].
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effort to formally document the terms of their common business
enterprise at the outset is strongly indicative of the mutual trust and
confidence that then existed between them. In the words of Dixon J,
their common business enterprise was based 'upon a mutual confidence
that the partners will engage in some particular kind of activity or
transaction for the joint advantage only'.577
699 For these reasons, Ms Marr has proven that the relationship
between her and Mr Scott to own and develop Links Road was
fiduciary in nature.
17.5 Is there a limitation issue?
700 At this point in the analysis, it is necessary to consider the
limitation defence raised by Mr Scott. As mentioned, Mr Scott further
pleads that even if there is a fiduciary duty and/or equitable
compensation claim they are equitable claims and are statute barred
pursuant to LA sections 13, 26 and 27.
701 LA s 13 sets a general limitation period of 6 years:
13. General limitation period — 6 years
(1) An action on any cause of action cannot be commenced
if 6 years have elapsed since the cause of action
accrued.
(2) Subsection (1) does not apply to an action if Division 3
provides for a different limitation period for that action.
702 LA s 26 provides that an 'action for an account cannot be
commenced if the limitation period for the cause of action that is the
basis of the duty to account has expired'.
703 LA s 27 deals with equitable actions:
27. Equitable actions (not analogous to other actions)
(1) An equitable action cannot be commenced after the
only or later of such of the following events as are
applicable —
(a) the elapse of 6 years since the cause of action
accrued; or
577 Birtchnell 10 - 11 (Dixon J).
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(b) the elapse of 3 years since time started
running, on equitable principles, for the
commencement of the action.
(2) In this section —
equitable action means an action —
(a) in which the relief sought is in equity; and
(b) for which (had a limitation period not been
provided for under subsection (1) or section
13) the limitation period would not be
determined in equity by analogy to the
limitation period for any other kind of action.
704 The application of these provisions was the subject of detailed
consideration by the Court of Appeal in Wright v Lemon.578 I adopt
this analysis and do not need to repeat it.
705 The fiduciary duty which I have found arises out of the initial
agreements in 1999. In these circumstances, equity applies the ordinary
six year limitation period that applies to breach of contract claims by
analogy.579
706 The action was commenced on 9 October 2020. The limitation
period limits the claim which Ms Marr could bring to six years prior to
this date, being 9 October 2014. So I only need to consider whether
there was a breach of the fiduciary duty after 9 October 2014.
17.6 Did Mr Scott breach his fiduciary duty?
707 Ms Marr claims damages on two bases.
708 The first is the first is the difference between the rent actually
received and the fair market rent for a residential property. I have deal
with this issue in Parts 12 and 13, and have taken the resulting position
into account in the analysis in Part 19. The characterisation of the
relationship a fiduciary does not change the outcome of this analysis.
709 The second is the loss and reduction of value of the Links Road
because it was not rezoned and rented out as a commercial property.
This in turn has two components:
578 Wright v Lemon [2024] WASCA 19 [1096] - [1112] (Buss P, with whom Vaughan and Hall JJ agreed)
(Wright).
579 Wright [1096] - [1112]; Dewar v Ollier [2020] WASCA 25 [167] - [169] (judgment of the court);
Duckworth atf The Ocean Farm Trust v Water Corporation [2024] WASC 90 [63] - [64] (Howard J).
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(a) a claim for the difference between the actual rent received and
the fair market rent if let commercially; and
(b) a claim for the difference between the purchase price that would
have been received had the property been zoned commercial
and the purchase price in fact received.
710 Each component is based on the premise that Mr Scott had an
obligation to develop Links Road so that it could be let commercially.
As mentioned at [600], the liability of a co-owner to account is only for
rents and profits actually received, and not for what might have been
received had he better managed or exploited the subject land. If the
co-owner is a fiduciary in the context of a common business enterprise,
the position changes. Again, as Smith J puts it, 'all parties must seek to
realise for the advantage of each participant all the assets committed to
the joint venture'.580
711 The common business enterprise did not contemplate a wholesale
redevelopment. But it did contemplate that Links Road would be
improved so as to be able to be let commercially. Initially, this was to
be to the businesses then being operated by Ms Marr and Mr Scott.
712 I find that the fiduciary obligation on Mr Scott included to use
reasonable endeavours to get Links Road re-zoned to commercial. This
is reflected in clause 7 of the Marr Scott Sale Contract (quoted at [67]),
but expressed in more general terms as that clause referred to the
application then in process. As set out in section 7.1, Ms Marr handled
the rezoning application. Links Road was not rezoned to commercial
until April 2014. I am not satisfied that Mr Scott breached his fiduciary
obligation by failing to use reasonable endeavours to get Links Road
re-zoned to commercial before this date. There is no evidence to this
effect. In any event, this breach is not pleaded.
713 The breach reflected in both the Claim and the way in which the
trial was fought581 was that Mr Scott had, and breached, a fiduciary
obligation to improve Links Road and let it out commercially. More
specifically, I find that the fiduciary obligation on Mr Scott required
him to do one of three things:
(a) work with Ms Marr to together improve Links Road so that it
could be let commercially; or
580 Wright Prospecting [1562].
581 Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658, 664 (Murphy, Wilson, Brennan, Deane and
Dawson JJ) (Dare). See for example: Transcript 19.6.26, pages 1708 - 1709.
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(b) himself improve Links Road so that it could be let
commercially; or
(c) vacate occupancy and allow Ms Marr to improve Links Road so
that it could be let commercially.
714 There were two potential ways in which Links Road could be let
commercially:
(a) a complying commercial use within the initial zoning
parameters;582 or
(b) letting following a rezoning to commercial in April 2014.
715 I do not need to consider the former as, given the limitation point,
the issue of whether there has been a breach can only arise in the period
after Links Road had been rezoned to commercial.
716 It is common ground that a number of improvements had to be
made to Links Road in order for it to be let commercially.
717 Ms Marr gave evidence that in 2014 (section 7.17) and 2022
(section 7.23) she had entered into leases over Links Road with a friend
with the intent that she would live there with her friend and together
they would undertake the work required to get the property up to a
commercial standard. In this regard, she said that the friend in 2014
was a licensed electrician who was going to do some electrical work for
her as 'part of the deal'.583
718 Her evidence as to the work required was:584
So, even though you could zone the property - the property now was
zoned commercial, you were advocating residential tenancies and the
use of residence? Short term, in order to effect the works necessary to
put in the ramp. A pedestrian access ramp is necessary. So I was going
to get some limestone blocks and do some sand fill, and brick pave it,
and compact it. Cutting the toilet door at 90 degrees to where it is, for
wheelchair accessibility. Disabled people have difficulty..
719 And:585
582 As to which, see for example: Transcript 19.02.26 page 822 (Marr).
583 Transcript 19.02.2026, pages 834 - 835 (Marr).
584 Transcript 19.02.2026, pages 834 - 835 (Marr). Also, Transcript 17.02.26 page 598 (Marr).
585 Transcript 17.02.26 pages 607, 639 (Marr).
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And the only other - there were other tiny modifications, and that is to
do with ACROD accessibility to toilets in commercial buildings, that
we would have to chop the door in the toilet in from the side, not going
into the laundry and around the corner. That's too hard for people in
wheelchairs.
That it would come off the 1.1 metre passageway, where the toilet
abutted back. And there is a copy of the plan of the house in here
somewhere, and also in the online marketing that Ross & Galloway
caused to be published. The very last slide, there's a plan, and I can
explain that. So it was really minor modifications.
…
The exterior - the place was a mess. I would have had a painter in there
instantly. And we don't need - you don't need a building licence to
build the external ramp for wheelchair or disabled access. And the only
other thing I had to do was cut a new door into the side of the toilet for
mobility access so that you could get into the toilet; instead of going
around to 180 degrees, you come in at 90 degrees.
That's it. And then it's commercial. And it could be a tax accountant.
It didn't need to be a medical facility. It could be anything that anybody
wanted. Perfect location, high visibility corner, because that's where
Almondbury Road kinks and Links Road is a major street because of
the high school. And there's a - it's a big, high-profile corner. All you
need is signage and someone pays for that, naming rights. It has got
value.
720 Mr Scott gave evidence to the effect that the work would have
been extensive:586
And in terms of what was required to be done, if anything, to the
commercial property, to make - sorry, to make the property be used as
commercial, what would you say would need to have been done?---At
that point, the property would have been entirely unacceptable. There
was a lot more work to be done. It was - it had some stud framing and a
sliding door on the rear sunroom south wall. It wasn't infilled around
the sliding door at that time, just a triangle up above. It was open there.
And then on the entire west face of the sun-room, there was a couple of
steel members and some aluminium framing but no glass in any of the
four hole points, 2014, Reece. Yes. Kevin has left. It was pretty
grungy all the way through. The tiles were all lifting in the bathroom
and the - the laundry. The back areas, the paving had not been
completed around the edges. It had only been completed in the body of
it. There was settlement in the middle of it. The front porch was
sagging.
586 Transcript 19.6.26 pages 1717 - 1718 (Scott)
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So what specific things would you need to attend to, to make it
commercial? That was a residential property?---Look, I - I'm pretty
sure it wasn't just - to put in it - you couldn't put in a ramp and go,
'Okay. It's commercial now.' The whole lot really needed bringing up
to a smart reasonable standard, and, you know, a single dunny that you
walk out to, and you walk through the open air at the back, is not
something you would present to a commercial tenant. The lifting floors
is not something you can present to a commercial tenant. I'm just
thinking of the work we did after these tenants, after we took possession
of it and lived there for a while, and the work we did before we put
Suzie and Shane in entailed a lot of these things and cleaning up, and I
would not say, even when we did a lot of this work and got Suzie and
Shane in, that it was presentable as a commercial tenancy at all. There
was still a lot to be done, but at least we had the glass in the back then.
And, really, there - sorry?---The porch, all worn. A lot of areas of the
front facade of the building were not good. It always had a problem
with cracking mortar, and that was an issue that had to be resolved. The
gardens were not at all presentable.
And what about the parking?---And the parking.
What would be required for - - -?---That's - that's a good point. The
parking, you would have to put down a complete asphalt surface. There
was no driveway crossover onto the property, so that had to occur.
People were bumping over a six-inch kerb the entire time to get in and
out. There was no - it was from - Kevin did a reasonable job of putting
down a - levelling it and putting down a rock a crushed rock surface,
but it was still a loose crushed rock surface, and I don't think that would
have been acceptable to any commercial client. It - sort of, you can get
away with some of these things and have a daggy house for a residential
client, but you can't do this for commercial clients.
What about - - -?---Look, I'm sure that if you wanted to turn it into a
commercial and - keep the building structure there and turn it into
commercial property, at that time, we would have spent $40,000.
And what about the requirements for disabled clients?---We would have
had to have had proper asphalt pot mix paving and marking out of bays
for it to be a commercial. I'm sure that will be a minimum requirement
of council. And the drive over crossover alone would have - would
have cost another $2000 to $4000. Council had already indicated that
they were not prepared to give a property - a crossover to this property
off their own account, which is what they normally do for new houses,
because there's an old house, and they surmised that it did actually have
a crossover at some point to the rear before it got subdivided, before we
bought it, so they weren't paying for the second one. We had to pay for
that.
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And would you have had to change the toilets in order — and the doors
for disabled clients?---You would have had to — I doubt that the toilet
at the size that it was would have allowed for disabled clients at all. It's
just not wide enough and, certainly, the door had to be reworked. But
the approach into the door as well. And there's no ramps internally or
externally but lots of steps everywhere that would have had to have
been ramped. And disabled access would have been a big hurdle.
And you would have had to complete parking and disabled access for a
commercial premises?---I believe so, yes.
And, roughly, sorry, how much do you think that would have
been?---I'm sure we're looking at 40,000 and upwards.
721 I have no expert evidence as to what work would have been
required to have brought Links Road up to the level at which it could
have been rented commercially, nor the cost of doing so.
722 Mr Sanchez gave evidence that Links Road is currently being used
for a chiropractic practice.587 So I can readily infer that it was entirely
possible for Links Road to be improved so as to be let commercially at
least for a medical or allied health practice.
723 In relation to the three options at [713], it is readily apparent from
all the evidence that by 2014 there had been a total breakdown in the
relationship between Ms Marr and Mr Scott. This is seen most starkly
in the fact that Ms Marr had to commence proceedings in the
Magistrates Court in order to exercise her right to possession of Links
Road (see section 7.17). The first option was not feasible.
724 As to the second option, Mr Scott gave evidence that in the period
from 2014 to recent times he was in a difficult financial position. His
net equity was modest. Among other things, from 2014 he had an
instalment plan with the Australian Taxation Office to pay off his
outstanding tax liabilities. He was only able to clear this debt in 2025
when he received an inheritance from his father.588 He gave evidence
that he would not have had the financial capacity to undertake the
necessary works to bring Links Road up to the standard of being able to
be let commercially.589 I accept his evidence and find in terms of it.
However, I would allow him some time to have considered the first two
options.
587 Transcript 19.6.26, page 1675 (Sanchez).
588 Transcript 19.6.26, pages 1713 - 1717 (Scott).
589 Transcript 19.6.26, pages 1718 (Scott).
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725 That leaves the third option. I accept Ms Marr's evidence which is
to the effect that, if given the opportunity, she could and would have
undertaken the improvements necessary to bring Links Road up to the
standard of being able to be let commercially. This, however, would
have taken some time.
726 Drawing this analysis together, I find that:
(a) Mr Scott was under a fiduciary duty 'to realise for the advantage
of each participant all the assets committed to the joint
venture';590
(b) at least after Links Road had been rezoned in April 2014, this
required Mr Scott to take one of the three options outlined at
[713];
(c) by no later than 31 December 2016, it should have been readily
apparent to him that it would not be possible for him to either
work with Ms Marr to together improve Links Road so that it
could be let commercially or for him, alone, to improve Links
Road so that it could be let commercially;
(d) consequently, by 31 December 2016, Mr Scott should have
vacated occupancy of Links Road so as to allow Ms Marr to
improve Links Road so that it could be let commercially; and
(e) he failed to do so.
727 On this basis, I find that Mr Scott breached the fiduciary duty he
owed to Ms Marr from 31 December 2016 by not vacating occupancy
of Links Road so as to allow Ms Marr to improve Links Road so that it
could be let commercially.
17.7 What, if any, remedy is Ms Marr entitled to?
728 'In choosing between available remedies for breach of fiduciary
duties, the court must fashion the most appropriate remedy or remedies
to fit the nature of the case and particular facts'.591 There are three
primary remedies: constructive trust, account of profit or equitable
compensation.592
590 Wright Prospecting [1562].
591 Wright Prospecting [1902].
592 Warman International Ltd v Dwyer (1995) 182 CLR 544; 128 ALR 201, 208 - 12 (reasons of the court).
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729 A constructive trust would typically be imposed where the
fiduciary acquired the property over which the constructive trust is
sought to be imposed.593 That is not what has occurred in the present
case. There are other grounds on which a constructive trust may be
imposed, which do not depend on a breach of fiduciary duty by
Mr Scott. I address these in Part 19.
730 As to the second form of remedy:594
An account of profits is applied where it is appropriate that the fiduciary
disgorge realised and unrealised profits of a business… A person who is
under a fiduciary obligation must account to the person to whom that
obligation is owed for any benefit or gain obtained in breach of the
profit or conflict rules…
731 In the present case, Ms Marr does not assert that Mr Scott made a
profit by reason of his breach of fiduciary duty. Rather, the allegation
is in substance that he failed to 'to realise for the advantage of each
participant all the assets committed to the joint venture'.595
732 Ms Marr has sought an account on a 'wilful default' basis. The
difference between an account on a common basis and an account on
wilful default basis was explained by E M Heenan J in In Re Ellis;
Ellis v Ellis.596 As to the former:597
The first which is usually made against the executor or administrator is
an order for 'a common account'. In such an instance, the accounting
party, the personal representative, must disclose all of the assets of the
estate which he has received or realised and all of the expenses or
distributions which he has made by payments from the estate. The
process of account will examine whether all estate assets have been
properly accounted for and at full value and whether all the claimed
expenditure is justified both in relation to its nature and quantum. It
will be necessary for the accounting party to produce vouchers to show
the realisation of estate assets, for example, proceeds of bank or other
deposit accounts, the sale of realty or personality (not specifically
distributable under the will), rents and profits received and interest,
dividend or other estate income. Similarly, the personal representative
will list all expenditure and produce vouchers or other evidence as to
payment and justify the incurring of such expenditure both as to its
nature and quantum. Obviously, administration expenses, accounting
593 See generally: Wright Prospecting [1904] - [1910].
594 Wright Prospecting [1914] (references omitted).
595 Wright Prospecting [1562].
596 In Re Ellis; Ellis v Ellis [2015] WASC 77 (E M Heenan J) (Ellis).
597 Ellis [124] - [125].
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and taxation costs, commissions on sale, expenses for the maintenance
or preservation of estate property and the like are all included.
Such an account will not extend to a loss to the estate due to a breach of
duty by omission such as failing to invest trust property in order to
obtain a suitable return or, where there is power to do so, to lease or
relet estate property which is intended to be retained in the long term.
733 The analysis in Parts 12 to 17 is in substance an account on a
common basis.
734 As to an account on a wilful default basis:598
However, if it is proved that there has been any wilful breach of trust…
it is open for the court to order that the account be conducted on the
basis of wilful default. This need not be conscious wrongdoing by the
executor or administrator as it is sufficient for the account to be based
on a wilful default footing if there is any breach of trust by omission
proved which has caused loss to the estate. In such a case, the
accounting party will be made liable not merely for any receipts or
payments actually received or made but in respect of the value of
property or income which should have been derived by the estate but
for the wilful breach and to make reparation, often with interest, for
opportunities so incurred.
735 As to the third form of relief:599
Equitable compensation is an alternative to an account for breach of
fiduciary duty. Equitable compensation aims to put the plaintiff in the
position he or she would have occupied had the duty not been
breached… This remedy is assessed at the time of trial, not at the time
of breach…
736 On the facts of this case, there is no conceptual difference between
the inquiry to be undertaken for a wilful default inquiry and inquiry to
be undertaken for equitable compensation inquiry. However, given the
vagueness of the evidence relied on, the latter is the preferable
approach.
17.8 What measure of equitable compensation is Ms Marr entitled to?
737 I thus need to assess the measure of compensation necessary to put
Ms Marr in the position she would have occupied had the duty not been
breached. The rule is well established that where the court is called on
to assess damages on the basis of incomplete or vague information, the
598 Ellis [126].
599 Wright Prospecting [1916] (references omitted).
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court can adopt a broad brush approach and do its best. In
Commonwealth of Australia v Amann Aviation Pty Ltd Mason CJ and
Dawson J said:600
The settled rule, both here and in England, is that mere difficulty in
estimating damages does not relieve a court from the responsibility of
estimating them as best it can. Indeed…. the 'assessment of damages …
does sometimes, of necessity involve what is guess work rather than
estimation'. Where precise evidence is not available the court must do
the best it can. And uncertainty as to the profits to be derived from a
business by reason of contingencies is not a reason for a court refusing
to assess damages.
Further, in Pennant Hills Restaurants Pty Ltd v Barrell Insurances
Pty Ltd Barwick CJ observed that:601
It is perhaps not a very satisfying answer to say that damages are not in
every case a perfect compensation but in many cases no more than an
approximation lacking in mathematical or economic accuracy or
sufficiency. But, however unsatisfying, that answer, in my opinion,
must be accepted.
738 The starting point is then to identify the position that Ms Marr
would have been in had Mr Scott vacated occupancy of Links Road by
31 December 2016 so as to allow her to have improved Links Road so
that it could be let commercially. I find that Ms Marr could have done
this work. Her professional background was in building design and she
had experience in managing at least her own redevelopment projects.
She had done a sketch of Links Road as commercial premises back in
1999.602 From her evidence, I accept that she may well have done a lot
of the work herself or with friends (see [367] and [343] above).
However, I also find that it would have taken Ms Marr a further 12
months to have undertaken the necessary work.
739 So the counterfactual on which damages are to be assessed are that
by 1 January 2018 Links Road would have been let commercially. I
accept that it may have taken some time to have found a tenant, but I
have also factored that time delay into the 12 months in [738].
Damages are thus to be assessed to put Ms Marr in the position that in
the period from 1 January 2018, it was let commercially. The end date
600 Commonwealth of Australia v Amann Aviation Pty Ltd [1994] HCA 54; (1991) 174 CLR 64, 83 (Mason
CJ & Dawson J) (references omitted).
601 Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd [1981] HCA 3; (1981) 145 CLR 625
(Barwick CJ).
602 PTB E, pages 35 - 36
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is still the date of sale of 9 June 2023 ([399]). It is inevitable that
during the course of this litigation Links Road would have been sold.
740 There are three aspects to the compensation. The first is the rent.
Ms Marr did not call any expert to give evidence as to the fair market
rent of Links Road had it been let commercially. Rather, she adduced
this evidence from Mr Sanchez in cross-examination. His evidence was
that:603
(a) as at 2016, the commercial rent would have been close to
double the residential rent of $300, that is, $600;604
(b) by 2021, the commercial rent 'might' have been $800 to $1,000,
'but it just depends';605 and
(c) for a business like a chiropractor, 'somewhere around the 6 to 7
hundred dollars a week'.606
In re-examination, Mr Sanchez confirmed that management fees are not
payable for a retail business and would have be deducted from these
amounts.607
741 The way in which Mr Sanchez was asked to give his opinion was
unsatisfactory. Mr Scott did not have the opportunity to have
Mr Sanchez undertake the sort of detailed valuation exercise that he did
with his report on the residential rent. In fairness to Mr Scott, it is
appropriate that I adopt a conservative approach. I am not persuaded
that the commercial rent (less agents fees and commission) for the
period from 1 January 2018 to 9 June 2023 would have been in excess
of an average of $650 across this period. This figure is around double
the residential rent which I have found in [597].
742 There are two periods. The first is when Mr Scott was in
occupation, being 1 January 2018 to 21 February 2020, being
111 weeks. I have already assessed Ms Marr as being entitled to
$14,985 by way of occupation fees (see [599]). The commercial rent
received would have been $72,150 ($650 x 111). She is entitled to half
of this being $36,075 ($72,150 x 50%). I then need to take off the
603 Transcript 19.6.26, pages 1676 - 1677 (Sanchez).
604 Transcript 19.6.26, pages 1676 - 1677 (Sanchez).
605 Transcript 19.6.26, pages 1676 - 1677 (Sanchez).
606 Transcript 19.6.26, page 1683 (Sanchez).
607 Transcript 19.6.26, page 1685 (Sanchez).
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amount she is entitled to for the occupation fee to avoid double
counting which gives $21,090 ($36,075 less $14,985).
743 The second is when Ms Butler and Mr Pearce were in occupation,
being 22 February 2020 to 3 June 2023, being 171 weeks. Ms Marr is
entitled to 50% of the rent received, being $30,329 ($60,658 x 50%).
The commercial rent received would have been $111,150 ($650 x 171
weeks). She is entitled to half of this being $55,575 ($111,150 x 50%).
Again, I need to take off the amount she is entitled to for the rent
actually received to avoid double counting which gives $25,246
($55,575 less $30,329).
744 In summary, Ms Marr is entitled to equitable compensation in the
amount of $46,336 ($21,090 + $25,246). This amount should be
deducted from the amount which Mr Scott would otherwise have
received from the funds in court.
745 The second aspect to the compensation is outgoings. Mr Sanchez
gave evidence a commercial tenant would ordinarily pay outgoings,
specifically:608
(a) Council rates;
(b) land tax;
(c) water rates; and
(d) building insurance.
746 There is no reason to suggest that this would not have been the
case had Links Road been let commercially. In other words, had this
occurred, the tenant, and not Mr Scott and Ms Marr, would have been
liable to have paid the outgoings at [745]. From Mr Scott's perspective,
had he complied with his fiduciary duty and Links Road had been let
commercially, he would have been reimbursed for these expenses by
the tenant. So he cannot now claim them from the funds in court. The
way this should be brought to account is not to allow Mr Scott to claim
any of these expenses for the period from 1 January 2018.
747 In relation to insurance, the amount claimed by Mr Scott of
$9,832.50609 needs to be reduced by $3,535 which leaves $6,297.50, as
follows:610
608 Transcript 19.6.26, pages 1678 - 1679 (Sanchez).
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Expenses to be Deducted from Full Amount Claimed ($9,832)
Date of Expense Particulars Amount Totals
26 November 2018 WFI Sydney $541.00
10 December 2019 WFI Sydney $573.00
7 December 2020 WFI Home Ins $635.00
20 January 2021 WFI NetBank BPAY 172… $52.00
4 November 2021 WFI NetBank BPAY 172… $721.00
1 November 2022 WFI NetBank BPAY 172… $714.00
13 June 2023 Direct Credit 387579 WFI… $299.00
Subtotal $3,535
Balance $6,297.50
748 In relation to water rates and charges, the amount claimed by
Mr Scott of $23,363.51611 needs to be reduced by $7,698.64 which
leaves $15,664.87 as follows 612
Expenses to be Deducted from Full Amount Claimed ($23,363.51)
Date of Expense Particulars Amount Totals
18 July 2018 Water Corp Payment - Link… $493.83
26 November 2018 Water Corporation - Balcatta... $200.49
26 November 2018 Water Corporation Balcatta $323.51
19 March 2019 Water Corporation… $509.16
19 July 2019 Water Corporation - Balcatta $401.29
2 May 2020 Water Corporation… $428.70
6 February 2020 Water Corporation - Balcatta $227.48
31 August 2020 Water Corporation… $471.24
20 April 2021 Water Corporation … $386.80
21 April 2021 Water Corporation … $303.47
2 August 2021 Water Corporation … $251.21
18 October 2021 Water Corporation … $242.43
4 November 2021 Water Corporation … $237.19
19 December 2021 Water Corporation … $243.90
24 February 2022 Water Corporation $312.32
21 June 2022 Water Corporation … $578.86
27 October 2022 Water Corporation $1338.74
23 February 2023 Water Corporation $748.02
Subtotal $7,698.64
Balance $15,664.87
609 Exhibit 18, pages 2 - 3.
610 Drawing the figures from Exhibit 18, page 1.
611 Exhibit 18, pages 4 - 5.
612 Drawing the figures from Exhibit 18.
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749 In relation to land tax, the amount claimed by Mr Scott of
$4,935.40613 needs to be reduced by $3,568 which leaves $1,367.40, as
follows:614
Expenses to be Deducted from Full Amount Claimed ($4,935.40)
Date of Expense Particulars Amount
12 November 2021 Land Tax NetBank BP… $1,170
2022 Land Tax NetBank BP… $1,170
2023 Land Tax NetBank BP… $1,228
Subtotal $3,568
Balance $1,367.40
750 In relation to council rates, the amount claimed by Mr Scott of
$32,265.90615 needs to be reduced by $7,873.03 which leaves
$23,116.90, as follows:616
Expenses to be Deducted from Full Amount Claimed ($32,265.90)
Date of Expense Particulars Amount Totals
26 November 2018 City of Melville - Booragoon… $1,621.03
25 August 2019 City of Melville NetBa… $408.76
31 August 2020 City of Melville NetBa… $1,419.37
26 October 2020 City of Melville NetBa… $397.86
19 January 2021 City of Melville NetBa… $392.20
24 February 2021 City of Melville NetBa… $392.20
1 August 2021 City of Melville NetBa… $1,582.18
2022 N/A N/A
20 February 2023 City of Melville NetBa… $1,659.43
Subtotal $7,873.03
Balance $23,116.87
751 In each case, I am conscious that I have not broken the figure for
2018 into the charge accrued before and after 1 January 2018.
However, the analysis undertaken is sufficient given the broadbrush
approach I need to adopt.
613 Exhibit 18, page 6,
614 Drawing the figures from Exhibit 18.
615 Exhibit 18, page 7.
616 Drawing the figures from Exhibit 18.
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752 The overall result may be summarised as:
Category Amount able
to be claimed
Deduction in
lieu of
equitable
compensation
Net amount
able to be
claimed
(rounded)
House insurance $ 9,832.50 $3,535 $6,298
Water Corporation $23,363.51 $7698.64 $15,665
Land tax $ 4,935.40 $3,568 $1,367
Melville City
Council
$30,989.90 $7,873.03 $23,117
Repairs and general
charges
$32,208.20 N/A $32,208
Mr Scott is only entitled to claim in the apportionment the amounts in
the far right column.
753 The third aspect to compensation is that Ms Marr claims the
difference between the purchase price that would have been received
had the property been zoned commercial and the purchase price in fact
received.617 Ms Marr relies on an expert report by Glenn Cooper of
Valuations HQ, which is in the bundle of documents tendered.618
However, as Mr Cooper was not called to given evidence (and be
available for cross-examination), his opinion in not admissible.
Ms Marr gave evidence as to what she thought the value would have
been.619 However, she is not qualified to give this opinion. In the end,
the position is that there is no admissible evidence that, had Links Road
been let to a commercial tenant when sold, it would have sold for a
higher price. I also reiterate that by Links Road had been rezoned to
commercial in April 2014, so the uplift in value as a result of the
rezoning is presumably reflected in the sale price in fact obtained.
Ms Marr has not established any entitlement for equitable
compensation based on a loss arising from the price at which Links
Road was sold.
754 Ms Marr also claims interest on any equitable compensation
awarded. Had Links Road been let commercially, the additional rental
would have first gone to paying the expenses of the property, in
particular the mortgage. On the evidence before the court, even let
commercially, I am not persuaded that Links Road would have been
617 Plaintiff’s Closing Submissions, par 69.
618 PTB E, pages 88 - 124.
619 Transcript, pages 638 - 639 (Marr).
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cashflow positive. So it is not the case that Ms Marr would have been
receiving a regular flow of income from Links Road, which she has
been deprived of. On this basis, I am not persuaded that Ms Marr is
entitled to interest on the equitable compensation I have found.
Further, as a matter of equity and discretion, Mr Scott has an equally
valid claim to interest on the amounts he paid out for expenses which
have now been allocated to Ms Marr.620 The fair and equitable exercise
of the discretion in PLA s 126(1) in this case requires there to be no
allowance to any party for interest.
18. Is Ms Marr entitled to a greater than 50% beneficial interest in
Links Road?
18.1 Ms Marr's position
755 As set out in section 9.2, Ms Marr claims that by virtue of the
factual matters she identifies and 'as a matter of law', she acquired an
aggregate 62.4% beneficial interest in the Property by about
11 November 1998. The factual matters identified are:621
(a) the Marr-Scott Sale Agreement;
(b) the Joint Endeavour;
(c) her initial contributions;
(d) the Indemnity; and
(e) the Rancore Discount.
756 Ms Marr refers to the facts relating to the sale of Links Road
which I deal with in Part 8. She pleads that the sale of Links Road
effected a termination of the parties' joint ownership of Links Road and
of the Joint Endeavour as of the date of sale.622 She then pleads:623
In the premises, it would be unconscionable for the defendant to deny
that the plaintiff acquired a beneficial interest in the Net Proceeds (and
later, the Final Proceeds), arising from the matters pleaded in
paragraphs 17 [expense claim] and 27 - 28 [sale of Links Road] above.
Accordingly, the defendant holds his interest in the Net Proceeds (and
the Final Proceeds) upon a constructive or alternatively a resulting trust
620 Callow v Rupcev [2009] NSWCA 148 [75] - [76] (the court).
621 Claim, par 16.
622 Claim, par 28.
623 Claim, pars 29 - 31.
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for the benefit of the plaintiff, proportionate to her contributions to the
Property, in light of the Joint Endeavour and/or pursuant to any
accounts and enquiries that are necessary to determine the plaintiff's
entitlements to the Net Proceeds and/or the Final Proceeds.
Further or alternatively to the pleaded claims by the plaintiff as to a
beneficial interest in the Net Proceeds (and later, the Final Proceeds),
the plaintiff claims compensation for any excess contributions she made
toward the property between 12 November 1998 and 9 June 2023.
757 I have already found that Ms Marr has not proven that as at
September to November 1998, a constructive trust arose by virtue of
the common intention of the parties (see section 9.8). In this Part, I
deal with the second basis on which Ms Marr could assert a
constructive trust, being a remedial constructive trust where the parties
have made a contribution to a joint endeavour. I also address whether a
resulting trust should be imposed.
758 In addition to her claims for Occupation Rent and lost potential
income (which I have dealt with at Part 12), Ms Marr further pleads
that she is entitled to an account in relation to the loss or reduction of
value of Links Road because it was not rezoned and rented out as a
commercial property.624
759 The way in which the trial has been managed and conducted is that
as part of the trial process, I have in effect carried out the account
sought by Ms Marr. This was on the basis that the discovery
obligations on each party have ensured that whatever documents still
exist are in evidence. Given the comprehensive manner in which the
parties have approached the issues relating to money expended and
received, and my consequent compressive findings, there is no basis for
any further account to be conducted.
18.2 Mr Scott's position
760 Mr Scott denies that there was a joint endeavour as pleaded by
Ms Marr and says that the parties owned Links Road as co-owners. He
denies the plea of unconscionability and says that there should be an
account on a common basis between the parties as co-owners of Links
Road.625
761 He pleads that to the extent Ms Marr is pleading a constructive
trust or resulting trust, he denies this and reiterates that there should be
624 Claim, par 32.
625 Defence, pars 12, 13.
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an account on a common basis between the plaintiff and Defendant as
co-owners of Links Road.626 Likewise to Ms Marr's claim that she has a
beneficial interest.627
18.3 Relevant law - Joint Endeavour Constructive Trust
762 In certain circumstances the court will impose a constructive trust
where parties have made a contribution to a joint endeavour to preclude
the unconscionable assertion of legal title. I will refer to this principle
as a Joint Endeavour Constructive Trust. The principle was
enunciated by Deane J in Muschinski v Dodds in the following
terms:628
… the principle operates in a case where the substratum of a joint
relationship or endeavour is removed without attributable blame and
where the benefit of money or other property contributed by one party
on the basis and for the purposes of the relationship or endeavour would
otherwise be enjoyed by the other party in circumstances in which it
was not specifically intended or specially provided that that other party
should so enjoy it. The content of the principle is that, in such a case,
equity will not permit that other party to assert or retain the benefit of
the relevant property to the extent that it would be unconscionable for
him so to do:
763 In Muschinski, the appellant, Ms Muschinski, and the respondent,
Mr Dodds, were an unmarried couple who had been living together
since 1972. In 1975 they purchased a property on which stood a
dilapidated cottage. They intended to restore it for use by
Ms Muschinski as an arts and crafts centre and to construct a
prefabricated house on another part of the property in which to live.
Ms Muschinski paid the purchase price of the property ($20,000) from
her own funds and agreed to include Mr Dodd's name on the title if he
undertook to renovate the cottage and pay for the prefabricated house.
The property was transferred to the parties as tenants in common in
equal shares. In 1980 the parties separated permanently. The cottage
had not been renovated and the prefabricated house had not been
acquired. Ms Muschinski claimed sole beneficial ownership of the
property. The High Court, by a majority (Gibbs CJ, Mason and
Deane JJ, Brennan & Dawson JJ dissenting), decided that the parties
held their legal interests in the property upon trust, after payment of any
joint debts incurred in improving the property, to repay to each of them
his or her contribution, and as to the residue for both of them in equal
626 Defence, par 12.5.
627 Defence, par 12.6.
628 Muschinski v Dodds (1985) 160 CLR 583, 620 (Deane J, with whom Mason J agreed) (Muschinski).
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shares. Mason and Deane JJ based this conclusion on their finding that
it would be unconscionable, after the failure of the joint venture
between the parties, for Mr Dodds to assert his legal entitlement
without recognising Ms Muschinski's payment of the purchase price.
764 Mason J generally agreed with Deane J but observed:629
The failure of the projected development of the land…through no fault
of the parties, provides a firm basis for declaring that the parties hold
their respective interests in the property as tenants in common on a
constructive trust, after payment of any debts incurred in the
improvement of the property, to repay to each his or her respective
contributions and as to the residue for them both in equal shares. The
circumstances of the case, viewed in the light of the common intention
that Mr. Dodds was to take an immediate and unconditional interest in
the property, did not make it inequitable that he should retain that
interest, notwithstanding the failure of the projected development. But it
would be inequitable for him to retain his interest without crediting to
Mrs. Muschinski the contributions which she made to the acquisition
and improvement of the property. Although Mrs. Muschinski intended
that he should take an immediate and unconditional half interest, that
intention was accompanied by an expectation, shared by Mr. Dodds,
that the projected development would take place for their mutual benefit
and that Mr. Dodds would be making substantial contributions to it.
765 The passage I have quoted from the decision of Deane J at [762],
was approved by and applied by Mason CJ, Wilson and Deane JJ in
Baumgartner v Baumgarnter.630 In that case, the parties to a de facto
relationship pooled their incomes for living expenses and fixed
commitments. They lived at first in a unit owned by the respondent,
which they sold when they acquired a house in his name (referred to as
the Leumeah property). The Leumeah property was purchased with the
aid of a mortgage in the name of the respondent who also contributed
the net proceeds of sale of a unit. The parties' aggregate earnings were
pooled in the proportions roughly of 55 per cent by the respondent and
45 per cent by the appellant. They later separated and the respondent
asserted that the Leumeah property was his sole property. The High
Court held that the respondent held the Leumeah property on trust for
the parties in the proportions in which they had contributed their
earnings to its acquisition, subject to a charge in the respondents' favour
for the net proceeds of the unit.
629 Muschinski 599 (Mason J).
630 Baumgartner v Baumgarnter (1987) 164 CLR 137, 148 (Mason CJ, Wilson and Deane JJ)
(Baumgartner).
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766 Mason CJ, Wilson and Deane JJ said of the relationship:631
The case is accordingly one in which the parties have pooled their
earnings for the purposes of their joint relationship, one of the purposes
of that relationship being to secure accommodation for themselves and
their child. Their contributions, financial and otherwise, to the
acquisition of the land, the building of the house, the purchase of
furniture and the making of their home, were on the basis of, and for the
purposes of, that joint relationship. In this situation the appellant's
assertion, after the relationship had failed, that the Leumeah property,
which was financed in part through the pooled funds, is his sole
property, is his property beneficially to the exclusion of any interest at
all on the part of the respondent, amounts to unconscionable conduct
which attracts the intervention of equity and the imposition of a
constructive trust at the suit of the respondent.
It therefore becomes necessary to determine the terms of that
constructive trust. The facts that the Leumeah property was acquired
and developed as a home for the parties and that, at least indirectly, it
was largely financed out of money drawn from the pool of their
earnings, this being one of the purposes which the pool was to serve,
combine to support an equality of beneficial ownership at least as a
starting point. Equity favours equality and, in circumstances where the
parties have lived together for years and have pooled their resources
and their efforts to create a joint home, there is much to be said for the
view that they should share the beneficial ownership equally as tenants
in common, subject to adjustment to avoid any injustice which would
result if account were not taken of the disparity between the worth of
their individual contributions either financially or in kind. The question
which has caused us particular difficulty is whether any such
adjustment is necessary in the circumstances of the present case to
avoid any injustice which would otherwise result by reason of disparity
between individual financial contributions. The conclusion to which we
have come is that some such adjustment is necessary.
767 As the decisions in Muschinksi and Baumgartner illustrate, the
issue of whether a Joint Endeavour Constructive Trust should be
imposed often arises in the context of the breakdown of a family
relationship. Even then, the mere existence of a de facto relationship,
in combination with express or implied undertakings to provide support
and accommodation, will not constitute a sufficient basis for imposing a
constructive trust under which a proprietary interest in the home
occupied by the parties is created.632 However, as a matter of principle,
it is not limited to that circumstance. The intervention of equity will be
justified where it is unconscionable for the legal owner to rely on their
631 Baumgartner 149 - 150.
632 Willis v The State of Western Australia [No 3] [2010 WASC 56 [65] (Willis).
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legal title. However, a constructive trust is not imposed in accordance
with idiosyncratic notions of what is just and fair. It is only imposed 'to
preclude the retention or assertion of beneficial ownership of property
to the extent that such retention or assertion would be contrary to
equitable principle'.633 The core equitable principle is that there must
be unconscionable conduct.
768 In Meiners (by her next friends the Public Trustee) v Gunn
Seaward J identified three requirements which must be established for
there to be a Joint Endeavour Constructive Trust:634
(1) the parties had a common intention to enter into a joint
endeavour or joint enterprise. That joint endeavour must have
been in some way concerned with the generation of wealth to
provide for the parties' mutual material welfare and security;
(2) the parties acquired property pursuant to that joint endeavour or
contributed to that joint endeavour in some manner; and
(3) the joint endeavour has failed or the substratum been removed,
and it would be unconscionable in all the circumstances for the
defendant to retain the benefits of the joint endeavour in
circumstances where that was not intended. In the course of
considering this matter, it is appropriate to have regard to the
conduct of the parties. However, in circumstances where the
substratum of a joint endeavour is a family or domestic
relationship, this is not for the purposes of identifying moral
responsibility for that breakdown, but rather as part of
considering the unconscionability as claimed, and whether the
plaintiff is themselves responsible for the breakdown.
769 Her Honour went on to add:635
Whilst I have outlined the above matters in three separate paragraphs, I
am conscious that in the course of considering an equitable remedy
such as a constructive trust, it is important to consider the above matters
and the circumstances as a whole and not as separate elements as in a
tortious claim.
770 A number of other principles relating to a Joint Endeavour
Constructive Trust are well established:
(a) the claimant must identify with some precision that nature,
purpose and second of the joint endeavour alleged;636
633 Muschinski 614, 615, 617; Baumgartner 148.
634 In Meiners (by her next friends the Public Trustee) v Gunn [No 2] [2025] WASC 529 [668] (Seaward J)
(Meiners).
635 Meiners [669].
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(b) the joint endeavour must be established as a matter of fact;637
(c) the declaration of a constructive trust to preclude the
unconscionable assertion of legal title may be made regardless
of actual or presumed agreement or intention of the parties;
and638
(d) however, the intentions of the parties may be relevant to
determining whether it would be unconscionable for the parties
to be held to their legal interests - if 'the parties have expressly
contemplated the very situation which has arisen, and have, in
advance, agreed how the assets built up as a result of their joint
efforts should be divided in that situation, it would often be the
case that there is nothing unconscionable in holding the parties
to their agreement'.639
18.4 Was there a Joint Endeavour Constructive Trust?
771 Mr Scott's position is that, subject to an account, both he and
Ms Marr are entitled to 50% of the net sale proceeds of Links Road. As
to the account:
(a) each party is entitled to be credited their actual contributions;
(b) each co-owner is entitled to be credited with 50% of actual
income received; and
(c) the actual expenditure of each party must be brought to account
and to the extent there is an imbalance, the amount of the
imbalance is credited to be party who paid more.
772 Mr Scott says that this is the position at law as between him and
Ms Marr as co-owners of land. I agree. I then add that equity will
intervene to not allow one co-owner to claim from the other an
imbalance in expenses without bringing to account the benefit which
that party had by virtue of their sole occupation of the property. This I
have done in the analysis to date. Based on my findings so far, I find
that:
(a) the parties engaged in a common business enterprise (or joint
endeavour) to purchase Links Road and improve it with the
636 Willis [72]; Trajkoski [30].
637 Lloyd v Tedesco [2002] WASCA 63 [9] (Miller J).
638 Muschinski (614); Willis [64] (Buss JA, with whom McLure and Owen JA agreed).
639 West v Mead [2003] NSWSC 161 [62] - [64] (Campbell J); Willis [64].
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intent of either using it for commercial purposes or renting it for
commercial purposes;
(b) they had a joint mortgage; and
(c) funds were (at least initially) pooled into a common bank
account out of which the mortgage and other expenses were
ordinarily paid.
773 However, for the purposes of considering the imposition of a Joint
Endeavour Constructive Trust, the crucial issue is whether it would be
unconscionable for Mr Scott to rely on his legal rights. For two short
reasons, I am of the view that it would not.
774 First, there is no contribution made, or money expended, by
Ms Marr which I have not taken into account in the analysis so far.
There is no benefit which it would be unconscionable for Mr Scott to
retain.
775 Second, the account is being carried out, and the asset divided, in
accordance with the agreement initially entered into by the parties.
There is nothing unconscionable in that.
776 Ms Marr has not established this aspect of her claim.
18.5 Was there a resulting trust?
777 The relevant principles are conveniently summarised by Beazley P
in Iain v Amit Laundry Pty Ltd:640
(a) Where property has been purchased in joint names, equity
presumes a trust in favour of the party who has contributed the
whole of the purchase price: per Gibbs J at 255.
(b) Where two purchasers contribute to the purchase price and the
property is conveyed to them as joint tenants, equity presumes
that they hold the equitable interest in the property in shares
proportionate to their contribution: per Gibbs CJ at 246–247;
Mason and Brennan JJ at 258; Deane J at 269
(c) The material time for determining the beneficial ownership of
property is at the time of acquisition: per Gibbs CJ at 252;
Mason and Brennan JJ at 262. The same point was made in
Bloch v Bloch per Wilson J at 398
640 Iain v Amit Laundry Pty Ltd [2019] NSWCA 20 [89] (Beazley P), referring to Calverley v Green (1984)
155 CLR 242.
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(d) The purchase price is what is paid to the vendor to acquire the
property. Mortgage instalments, being paid not to the vendor but
to the lender, do not constitute a payment of the purchase price:
per Mason and Brennan JJ at 257(e) The entry into a
mortgage constitutes a contribution to the purchase of the
property as, under a mortgage, each mortgagor undertakes a
joint and several liability in respect of the repayment of the
mortgage: per Mason and Brennan JJ at 257–258
(f) The equitable presumptions may be displaced, rebutted or
qualified by evidence of a contrary intention that is common to
all contributors to the purchase price: per Gibbs CJ at 251;
Mason and Brennan JJ at 261; Deane J at 269
(g) Usually, the common intention of the contributors to the
purchase price is to be inferred from what the parties do or say,
not their own uncommunicated state of mind: per Mason and
Brennan JJ at 261; Deane J at 269–270
778 In the present case, Links Road was conveyed to the parties as
tenants in common in equal shares, and not joint tenants. The starting
point is that equity follows the law: each has an equitable interest
co-extensive with their legal interest. So the principles expressed by
Beazley P relating to joint tenants have no direct application. There
could potentially be some application of resulting trust principles to the
disproportion between the contribution to the purchase price and the
50% legal interest. However, any equitable presumption to this effect
has been firmly displaced by the actual agreement I have found in
section 9.7. Moreover, the unequal contribution of Mr Scott to the
purchase price of $13,150 was discharged by the agreement made in
relation to Home Loan 2 (see section 9.9). So there can be no basis for
the imposition of a resulting trust on the basis of unequal contributions
to the purchase of the property held in common in equal shares.
19. How should the funds in court be apportioned?
19.1 Approach
779 As set out in section 10.1, the power to distribute the proceeds of sale is
a statutory discretion. The common law and equitable principles
relating to common ownership of land provides an appropriate basis to
exercise this discretion. However, in this case I add the principles by
which equitable damages are assessed for a breach of a fiduciary duty.
780 I begin with the identification and allocation of actual inflows and
outflows of funds in relation to Links Road (section 19.2). From this I
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derive the figure by which, in this case, Mr Scott has in fact contributed
more to the maintenance and preservation of Links Road than Ms Marr
(Inflow Outflow Balance). This is in substance a common account.
781 I then consider the adjustments that need to be made to Inflow Outflow
Balance due to the various other claims made by each party. At this
point, I bring to account the Trial Expenses (section 19.3).
782 The analysis in sections 19.2 and 19.3 leads to the Final
Adjustment Amount. The Final Adjustment Amount is then brought
into account in the distribution of the funds in court.
783 In closing submissions, Mr Scott submitted that the amount in
court should be distributed:641
(a) $233,594.56 to Ms Marr; and
(b) $475,109.00 to Mr Scott.
I have accepted most of the arguments of Mr Scott going to the
account. However, the occupation fees and amount relating to
equitable damages mean that he receives less than he has submitted he
should receive.
784 In closing submissions, Ms Marr submitted that the entire amount
in court should be distributed to her and that, in addition, Mr Scott pay
her the shortfall. This is on the basis that:642
(a) as a starting point, Ms Marr's base entitlement is 62.4% of the
sale price ($579,364.19) and Mr Scott's to 37.6% ($349,104.06);
(b) Mr Scott is liable for the difference between actual rent received
and market rent from 2009 to 2014 on the basis Links Road was
a residential tenancy and 2014 to 2023 on the basis that it was a
commercial tenancy, in the amount of $203,808.07;
(c) Mr Scott has not caught up on the shortfall of $11,000 from his
initial contribution to the purchase price;
(d) Ms Marr disputes that Mr Scott is entitled to the amounts he
withdrew from Streamline 1 and Streamline 2 to pay his Visa
card;
641 Defendant’s Closing Submissions, Annexure B.
642 Plaintiff’s Closing Submissions, Schedule.
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(e) there is a net adjustment of $314,297.69 based on disputed
transactions and withdrawals;
(f) Ms Marr is entitled to compound interest of $400,089.94 on the
amounts she is owed;
(g) Ms Marr's final proposed entitlement is $1,293,751.82;
(h) when Mr Scott's base entitlement in (a) is deducted from the
amount in (f), the balance is $928,468.25;
(i) Ms Marr is entitled to all the funds and court; and
(j) Mr Scott is liable for the shortfall.
For the reasons I have set out in detail, I do not accept any of the
propositions in (a) to (j).
19.2 Actual inflows and outflows
Initial contributions
785 In section 9.7, I found that:
(a) Ms Marr's initial cash contribution was $34,014; and
(b) Mr Scott's initial cash contribution was $7,702:
Rent
786 In Part 12 I found that the that the total rent in fact received was
$157,796, of which each of Ms Marr and Mr Scott is entitled to 50%,
being $78,898.
Contributions
787 In section 14.1, I found that Mr Scott paid $1,515 by for expenses
from the Scott & Associates cheque account.
788 In section 14.3 I found that:
(a) Ms Marr made net contributions through Streamline 1 of
$18,688;
(b) Mr Scott made net contributions through to Streamline 1 of
$90,656;
(c) Ms Marr made no contributions through Streamline 2;
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(d) Mr Scott made net contributions through Streamline 2 of
$74,267; and
(e) Mr Scott made net contributions through his visa account of
$54,342.
789 In section 15.3, I found that
(a) Ms Marr made direct contributions to Home 1 of $3,464;
(b) Ms Marr made direct contributions to Home 2 of $12,160;
(c) Mr Scott made a direct contribution to Home Loan 1 of $7,228;
and
(d) Mr Scott made no direct contributions to Home Loan 2.
Mortgage expenses
790 In section 15.3 I also found that:
(a) the total mortgage repayments made on Home Loan 1 were
$242,364;
(b) the total mortgage repayments made on Home Loan 2 were
$55,794; and
(c) each of Ms Marr and Mr Scott is liable for half of the total
amounts paid.
Other expenses
791 In section 16.3, I found that Mr Scott that Mr Scott paid the
following expenses in relation to Links Road set out in the second
column in the table which follows. In section 17.7 I then reduced the
amounts for all expenses aside from repairs and general changes in lieu
of equitable compensation. The result was:
Category Amount able to
be claimed
Deduction in
lieu of equitable
compensation
Net amount
able to be
claimed
(rounded)
House insurance $ 9,832.50 $3,535 $6,298
Water
Corporation
$23,363.51 $7698.64 $15,665
Land tax $ 4,935.40 $3,568 $1,367
Melville City $30,989.90 $7,873.03 $23,117
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Council
Repairs and
general charges
$32,208.20 N/A $32,208
Inflow Outflow Balance
792 The inflows comprise:
(a) the proportion of rent which Mr Scott in fact received ([584]);
(b) the proportion of rent which Ms Marr was entitled to receive,
but did not ([584]);
(c) the additional contributions in fact made by each party;
(d) the proportion of expenses which Mr Scott in fact paid; and
(e) the proportion of expenses which Ms Marr is required to
contribute.
793 The net result of balancing both parties' inflows and outflows is
that Mr Scott paid $167,384 more than Ms Marr to maintain Links
Road over the nearly 25 years the two of them owned it (which I have
referred to as the Inflow Outflow Balance):
Item Total Marr Scott
Inflows
Initial cash contributions $34,014 $7,702
Expenses paid from Scott &
Associates account
$1,515
Rent in fact received $157,796 $78,898 $78,898
Contributions to Streamline 1 $18,688 $90,656
Contributions to Streamline 2 $74,267
Contributions to visa card $54,342
Direct contributions to Home
Loan 1
$3,464 $7,228
Direct contributions to Home
Loan 2
$ 12,160
Total Inflows (TI) $147,224 $314,608
Outflows
Home Loan 1 $242,364 $121,182 $121,182
Home Loan 2 $55,749 $27,874 $27,874
Water charges $15,665 $7,832 $7,832
Council Rates $23,117 $11,558 $11,558
Insurance $6,296 $3,148 $3,148
Land tax $1,367 $684 $684
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Repairs and general charges $32,208 $16,104 $ 16,104
Total Outflows (TO) $188,382 $188,382
Balance of Inflows and Outflows
(TI - TO)
(-$)41,158 $126,226
Inflow Outflow Balance $167,384
19.3 Adjustments to the Inflow Outflow Balance
Trial expenses
794 In Part 8 I recorded that:
(a) the original amount paid into court on 27 June 2023 was
$865,639.86;
(b) each party received $70,000 ($140,000 paid out of court);
(c) Ms Marr was allocated, but had not received, Trial Expenses of
$4,842 ($4,841.64 rounded) out of the funds in court;
(d) Mr Scott was allocated and has received $16,936 ($16,936.31
rounded) on account of Trial Expenses; and
(e) as at the date of judgment, the balance remaining in the
Supreme Court is $708,703.55 ($865,639.86 - $140,000 -
$16,936.31).
795 The payment out of trial expenses was on the basis that the parties
had liberty to apply as to the final attribution of this cost. Counsel for
Mr Scott addressed the issue in closing submissions. Ms Marr did not.
However, to assist the parties, I will express my preliminary view.
796 My preliminary view is that the way the Trial Expenses should be
brought account is that:
(a) the amount in fact paid out of court to Mr Scott on account of
Trial Expenses should be added back to the balance remaining
in court, making the total $725,639.86 ($708,703.55 +
$16,936.31);
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(b) the amounts which have allowed each party should be removed
from the analysis so that each party can pay their expenses from
their allocation; and
(c) the amount actually paid to Mr Scott is then to be reduced by
the amount of $16,936.31 which is has already received.
797 Mr Scott claims he is entitled to be paid out an additional
$5,811.05 from the monies in court. These costs were incurred in
obtaining the transcript for the resumption of trial on 17 - 19 June
2026.643 Given the approach I have taken of grossing out of the money
in court, I do not need to determine this claim. Mr Scott can pay this
invoice out of the funds he ultimately receives.
798 I will give the parties an opportunity to be heard on this issue.
799 The payment out of the $70,000 to each party should be excluded
from the final analysis as it is neutral.
Occupation fees
800 In section 13.3, I found that Ms Marr is entitled to an occupation
fee of $38,205.
Equitable damages
801 In section 17.7, I found that Ms Marr was entitled to equitable
damages over and above any occupation fee of $46,336.
Costs order
802 Mr Scott claims the costs he is entitled to pursuant to the sale
order made by Master Sanderson on 17 November 2022. The costs
order was that:
The Plaintiff pay the Defendant's costs of the action referred to in
order 1 and the costs of the application to be taxed if not agreed.
The action in order 1 was Mr Scott's counterclaim for the sale of Links
Road.
643 Defence Closing Submissions, page 31.
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803 Counsel for Mr Scott submits that the following is the calculation
of the scale costs pursuant to the items of the relevant
determinations:644
Memorandum of Appearance (Item3(a)) $99.00
Defence -Sale Action (Item 3(b)) $2475.00
Counterclaim -Sale Action (Item 3(c)) $2475.00
Summary Judgment Application (10(a)) $8,000.00
Court Filing Fee SJ application (Item 36) $394.00
Landgate Title Search Links Road (Item 36) $ 28.20
Total $13,471.20
804 Ms Marr does not dispute this costs order. However, she disputes
the recovery of these costs from the 'trust fund'. She says that these
costs stand as a 'separate cost order and is properly set off against [her]
ultimate entitlement, not paid from the fund before distribution'.645
805 In my view, the costs order is properly set off set off against
Ms Marr's ultimate entitlement to the funds in court at this stage.
806 As to the amount, I do not allow any costs at this stage in relation
to the Defence (Item 3(b) above). These costs should follow the merits
of the balance of the claim. I allow the other costs set out above in
relation to the counterclaim and sale. The amounts claimed are within
the range of what would have been allowed on a taxation. The total
amount is $10,996 ($10,996.20 rounded).
Final Adjustment Amount
807 The net result is that, of the funds remaining in court, Mr Scott is
entitled to $92,759 more than Ms Marr (which I have referred to as the
Final Adjustment Amount).
Item Marr Scott
Inflow Outflow Balance $167,384
Occupation Fee $ 38,205
644 Legal Profession (Supreme and District Courts) (Contentious Business) Determinations 2020 (WA) and
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA).
645 Plaintiff’s Reply Submissions, par 82.
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Equitable damages $ 46,336
Costs from the sale order $10,996
Total $84,511 (A2) $178,380 (A1)
Final Adjustment Amount
(A1 - A2)
$93,869
19.4 Distribution of the funds in court
808 In section 9.7 I found that Ms Marr had not proven the existence
of a common intention trust. In section 18.4, I found that there was no
basis for the court to impose a constructive trust or resulting trust.
These findings mean that there is no basis to depart from an initial
allocation of the sale proceeds based on Ms Marr and Mr Scott being
tenants in common in equal shares. So after adjustment, each is entitled
to 50% of the funds in court.
809 I subtract from the grossed up amount in court ([796]) the Final
Adjustment Amount to get $631,770.86 ($725,639.86 - $93,869).
Each of Mr Scott and Ms Marr is entitled to 50% of this amount, being
$315,885.43 ($631,770.86 x 50%). Mr Marr is entitled to $315,885.43.
Mr Scott is entitled to this amount, plus Final Adjustment Amount, less
the amount he has ready received for costs, giving $392,818.12
($315,885.43 + $93,869 - $16,936.31). These two amounts total
$708,703.55, which is the amount currently in court ($315,885.43 +
$392,818.12).
20. What final orders are appropriate?
810 If both parties accept my preliminary view as to the treatment of
the Trial Expenses, the appropriate final orders would be:
1. The plaintiff be paid $315,885.43 out of the funds in court.
2. The defendant be paid $392,818.12 out of the funds in court.
3. The balance of the action be dismissed.
811 As I have said, I will hear from the parties as to the way the Trial
Expenses should be brought to account.
812 I will also hear from the parties as to costs.
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I certify that the preceding paragraph(s) comprise the reasons for decision of
the Supreme Court of Western Australia.
OB
Associate to the Hon Justice Gething
5 AUGUST 2026
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