Perman v Wentholt-Dwyer [2004] NSWSC 48

The plaintiff claimed to be entitled to a charge or lien over some land owned by the first defendant.

On the plaintiff’s case the defendant promised to give the plaintiff a life interest in respect of part of the land (portion 68) owned by the defendant and thereafter the plaintiff, in the expectation that she had or would obtain that interest, spent money and effort improving the property with the knowledge and acquiescence of the defendant.

The plaintiff and the defendant were formerly good friends, but they were no longer. The plaintiff went to live on portion 68 in 1986, and had lived there ever since, in a bus. 2 prior people lived there under a similar arrangement since 1979.

 The principal area of contention related to the terms of the arrangement between the plaintiff and the defendant. On the plaintiff’s case, she bought a life estate in portion 86 from the defendant for the sum of $5,040, which sum the plaintiff paid to the defendant in about March 1986. On the defendant’s case, she made an offer to the plaintiff that the plaintiff could “live in Diedre’s old house”, on the same terms that Mr Fortescue and Ms Schofield had lived there, that is that each of the three of them would pay “a bond” which the defendant would refund if and when they left, that the four parties would live amicably, treat the land with respect and not have any guns on the property. The “bond” was to be repaid at the discretion of the defendant upon each of Mr Fortescue, Ms Schofield and the plaintiff leaving the property, having complied with the other terms of the arrangement. The amount of the bond was $5,000 in each case.

Both gave evidence and were accepted as truthful witness, however what they said was irreconcilable and the plaintiff’s account was held more likely to be generally reliable than the account of the defendant.

The defendant took another point, that since the plaintiff had not obtained a “building permit”, it would be illegal for her to occupy portion 68, a defence of illegality, although it was also said to be a matter going to the question of unconscionability.

The defendant relied upon the decision of the Judicial Committee in Chalmers v Pardoe [1963] 1 WLR 677, a case involving the purported assignment of an area of land the subject of the Native Land Trust Ordinance of Fiji. Section 12 of that Ordinance provided:

“…it shall not be lawful for any lessee under this Ordinance to alienate or deal with the land comprised in his lease or any part thereof, whether by sale, transfer or sub lease or in any other manner whatsoever without the consent of the Board as lessor … and any sale … or other unlawful alienation or dealing effected without such consent shall be null and void.

 In that case the assignee failed by reason of that section. However, it is to be contrasted with the legislation now relied upon by the defendant, and with the circumstances of this case.

The defendant relied upon ss 76B, 81A, 109C and 109M of the Environmental Planning and Assessment Act 1979. None of those provisions were in force at the relevant time: the applications were made under earlier legislation. Putting this aside, however, s 76B provides that: “A person must not carry out” development work without approval, and s 126 provides for the imposition of a maximum penalty of 10,000 penalty units (that is a fine of $110 x 10,000). Section 81A provides that the erection of a building “must not be commenced” without approval; and s 126 provides the same penalty for breach. Section 109C defines “occupation certificate”, and s 109M provides that a person “must not commence occupation or use of a new building” without an occupation certificate; and the maximum penalty for a breach of s 109M is 25 penalty units.

Perhaps more to the point, s 121B provides that the Council might make an order for the demolition or removal of a building, in respect of which there had not been given a relevant development consent or construction certificate. On the evidence, it was scarcely likely that the Council would do that, having regard to the nature of the buildings, their location, and the length of time the structures had been there. The Council seemed to be content to act passively in the matter. Additionally, as the plaintiff pointed out, the dwelling erected by the defendant on portion 69 appeared to suffer from the same lack of Council approval.

Whatever the merits about these matters, it cannot be said that the Environmental Planning and Assessment Act had the effect of making the arrangement between the plaintiff and the defendant an illegal one, or that it operated otherwise so as to give rise to a defence of illegality. Even if it were taken to be the fact that the buildings now erected on portion 68 were erected without the relevant consents, the statute did no more than expose the defendant and, perhaps, the plaintiff to a monetary penalty.

Further, these circumstances do not go to the question of unconscionability, as between the plaintiff and the defendant: they are simply irrelevant to that question.

It was held that the arrangement made between the plaintiff and the defendant in 1985 and 1986 was to the effect that, in consideration of the payment by the plaintiff to the defendant of $5,040, which sum was paid and accepted, the defendant agreed to permit the plaintiff to occupy portion 68, for so long as the plaintiff lived.

The Court also held that the plaintiff thereafter expended a considerable amount of time, money and effort improving portion 68, and that in doing so she acted upon the expectation induced by the arrangement I have mentioned that she could live on portion 68 for the rest of her life.

Given these findings, and the defendant’s subsequent conduct in seeking to expel the plaintiff from portion 68, the plaintiff was entitled to succeed in her claim for some equitable relief. The only relief she claimed was the imposition of an equitable charge or lien, on the basis that it would be unconscionable for the defendant to retain the improvements effected, whilst denying the plaintiff the right to occupy portion 68.

The estrangement of the parties made it inappropriate to grant any remedy other than an equitable charge.

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