Davis v Davis (No 2)

1. [1]

   The defendant was born in 1942. His daughter, the plaintiff, was born in 1968. They are now suing each other. The plaintiff’s case is set out in an amended statement of claim filed on 20 October 2022. The defendant’s case is contained in an amended statement of cross-claim filed on 6 December 2022.

2. [2]

   The relief sought by the plaintiff is said to be sanctioned by the Property (Relationships) Act 1984 (NSW) (the Act). Although the defendant also relies upon the Act, it is to a much lesser degree. Rather, his action is derived from his asserted rights under a deed executed by the parties on 24 November 2005.

3. [3]

   The plaintiff relies on the following affidavits:

   1. (1)

      the plaintiff sworn on 11 January 2021, 18 October 2021, and 16 December 2022 respectively;

   2. (2)

      Mr Blake Davis-Lynch sworn on 18 October 2021; and

   3. (3)

      Ms Irene Rowsell sworn on 18 October 2021.

4. [4]

   The defendant relies on the following affidavits:

   1. (1)

      the defendant sworn on 29 August 2021 and 1 June 2023 respectively;

   2. (2)

      Mr Brian Crompton sworn on 29 August 2021;

   3. (3)

      Mr Denis Norman Sutton affirmed on 27 March 2023; and

   4. (4)

      Ms Wendy Jean Hillery affirmed on 19 April 2023.

5. [5]

   The parties tendered joint expert evidence of property valuations. The defendant tendered separate expert valuation evidence.

A brief background

1. [6]

   There were many facts in dispute between the parties. I do not think the following facts are controversial:

2. [7]

   Three properties feature in the case:

   1. (1)

      42 xxxxxxx, xxxxxxx;

   2. (2)

      38 xxxxxxx, xxxxxxx; and

   3. (3)

      121 xxxxxx, xxxxxxx.

3. [8]

   Macksville and Yarranbella are both towns close to the coast in northern New South Wales. They are about 18 km apart.

4. [9]

   I will refer to the properties by their street number. No 42 was purchased by the defendant and his then wife, now Ms Irene Rowsell, in 1973. It became the family home. Besides the plaintiff there is one other child of the marriage, John. Ms Rowsell already had a daughter, Patricia, from a previous relationship.

5. [10]

   The defendant and Ms Rowsell divorced in 1985. The defendant remained at No 42 with the plaintiff and John. Patricia went to live with her mother. Some years later John moved to Sydney. Part of the divorce settlement involved the defendant becoming the sole owner of No 42. In order to become the owner, the defendant required a loan from Bananacoast Community Credit Union. He also borrowed $9,000 from the plaintiff, representing about 20% of the value of No 42.

6. [11]

   The defendant retired from his occupation as a butcher/slaughterman in about 2003.

7. [12]

   The plaintiff left school when she was 14 years of age. She had various employments and, for a period, ran her own alterations business. Since 2010 she has worked on a full-time basis for Australia Post. She has also operated her own tailoring business.

8. [13]

   In 1993 the plaintiff was involved in a relationship with a Mr Warren Lynch during which she lived, at least some of the time, with him in a caravan. She became pregnant. In May 1994 the plaintiff gave birth to a son, Blake. Due to the confines of the caravan, she returned to No 42 with her son but without Mr Lynch. The relationship with Mr Lynch ended in 1998. Blake lived with his mother at No 42 until 2014.

9. [14]

   In July 1996 the plaintiff placed a caveat on No 42 to ensure her asserted interest in No 42 was registered.

10. [15]

    In 2005, the plaintiff and the defendant entered into a deed whereby:

    1. (1)

       the plaintiff’s contribution to the care of her father and to the maintenance and improving of the property was acknowledged;

    2. (2)

       the legal ownership of No 42 was to be transferred to the plaintiff; and

    3. (3)

       the defendant was to have a “life interest” in No 42, giving the defendant “a right to reside as his principal home in the dwelling situated on the property for life.” As will be seen below, the wording is important.

11. [16]

    The ownership of No 42 was transferred to the plaintiff. The defendant’s life interest was registered on the title as a “life estate”. The plaintiff and the defendant continued to live at No 42.

12. [17]

    Also in 2005, the plaintiff invested $45,000 of her own money into renovations of No 42.

13. [18]

    The defendant had a half-brother and a half sister who lived together in a house in Lurnea (a Sydney suburb). They apparently died within a short period of each other in January 2013.

14. [19]

    The plaintiff and the defendant prepared the house in Lurnea for sale. It was sold in October 2014 for $518,000, this amount went to the defendant together with about $400,000 in cash, from the estate of his half siblings.

15. [20]

    Utilising his inheritance from his half siblings, the defendant purchased No 38 in February 2015 and No 121 in November 2016.

16. [21]

    Blake, accompanied by his daughter Ivy, returned to live at No 42 in 2018. The defendant and Blake fell out in 2019. On 13 June 2019 Blake obtained an Apprehended Violence Order (an AVO) against the defendant. This caused the defendant to move out of No 42 and then, after a short period to move into No 38.

17. [22]

    On 2 August 2019 the defendant, via a solicitor, demanded that the plaintiff leave No 42 because the defendant had an exclusive right of possession. The plaintiff did not leave. She has remained at No 42 with Blake and Ivy. The defendant is still at No 38.

18. [23]

    On 4 February 2021 the defendant sold No 121 for $350,000.

The parties’ aspirations from the litigation

1. [24]

   The plaintiff seeks an order that the defendant transfer his interest in No 42 to the plaintiff. The claim for $400,000 made in the amended statement of claim was abandoned at the commencement of the hearing. This meant that the whole of the plaintiff’s claim is based on s 20 of the Act.

2. [25]

   The defendant seeks declarations to the following effect:

   1. (1)

      that the defendant holds a life interest in No 42 and the plaintiff holds an estate in remainder;

   2. (2)

      that the defendant is entitled to exclusive possession of No 42, or alternatively is entitled to a “personal right of residence” at No 42; and

   3. (3)

      that the plaintiff had a personal licence, restricted to her alone, to reside at No 42, which licence has been validly revoked by the defendant.

3. [26]

   The defendant is also asking for orders that:

   1. (1)

      he be given possession of No 42 and accordingly has leave to issue a writ of possession;

   2. (2)

      there be specific performance of his right to exclusive possession for the remainder of his life, of No 42;

   3. (3)

      the plaintiff pay the defendant mesne profits on account of, effectively, unpaid rent since 20 June 2019 and continuing up until either the plaintiff gives the defendant vacant possession or ensures Blake no longer resides at the property;

   4. (4)

      he receive compensation pursuant to the Property (Relationships) Act; and

   5. (5)

      he be paid damages for breach of contract, trespass and, alternatively, damages in equity.

The Deed

1. [27]

   The deed is dated 24 November 2005. It is at the centre of the parties’ competing allegations. I think it necessary to set it out in full:

2. [28]

   I immediately note the following:

   1. (1)

      the deed does not refer to any right of exclusive possession being given to the defendant;

   2. (2)

      the burden of the defendant’s affidavits, to the effect that he was a significant contributor to everyday life, is contradicted by the acknowledgement that “Paula has looked after Victor for the last 20 years and spent monies maintaining and improving the property”; and

   3. (3)

      the plaintiff was to remain responsible for certain expenses including the telephone account, insurance and “all maintenance of the property to ensure the property remains comfortable for Victor.” The payment of insurance is consistent with the transfer of the title to the plaintiff. The payment of the telephone account is inconsistent with the plaintiff not living at the property. The payments for the defendant’s “comfort” are inconsistent with the right of exclusive possession;

   4. (4)

      the acknowledgement that “Paula is spending $45,000 on improvements to the property” is confirmation that the plaintiff was to continue living in the property. The $45,000 was to be spent on renovations including a sewing room and a client room for the plaintiff’s business. I note the defendant, although begrudgingly accepting that he had approved the renovations, was unhappy with them because he said that if the plaintiff were to leave in the future he would be ‘saddled’ with a larger house than he was comfortable with.

3. [29]

   The defendant submitted that the interest created by the deed was a life interest giving him exclusive possession. This is to some extent confirmed by the “life estate” registered on the transfer of the property.

4. [30]

   I accept that normally a life interest, or a life estate, will be associated with exclusive possession and in turn a right to dictate who may live in the property and to derive an income from it, including rent. A claim for rent is part of the defendant’s cross-claim.

5. [31]

   However, the normal situation is not the only option. In Butt’s Land Law (7th ed, 2017, Lawbook Co), the following is stated (omitting references) at [3.140]:

6. [32]

   In Finlay v Tucker [2015] NSWSC 560, from [46]-[48], Slattery J summarised some of the authorities concerning the distinction between a right of residence and a genuine life estate:

7. [33]

   Although the deed is obviously not a will, the principles relating to the construction of wills are of assistance. In Hatzantonis & Anor v Lawrencecox v Lawrence [2003] NSWSC 914 Bryson J said at [6]:

8. [34]

   A case not involving a will is Calderone v Perpetual Trustees Victoria Ltd [2008] VSC 373, in which Beach J set out principles consistent with those expressed in the “will” cases at [20]-[21]:

9. [35]

   Clearly, the life estate found in the transfer of the property must be viewed against the terms of the deed. I have pointed out some of these terms above to the effect that the plaintiff was to continue living in the property, meeting some expenses, paying for renovations associated with her business and the absence of any direct statement of exclusive possession.

10. [36]

    I particularly note that the deed gave the defendant “a right to reside as his principal home in the dwelling …”. I think the intent of the deed is that the defendant would not have exclusive possession of the property. The intended continued residing in, and use of the property, by the plaintiff overwhelmingly favours a conclusion that she was to remain at No 42, necessarily contradictory to any right of exclusive possession on the part of the defendant.

11. [37]

    Therefore, I reject the defendant’s case that his apparent life interest or life estate had, as an ingredient, a right of exclusive possession, in particular one which gave him the ability to exclude any other person from the premises or to live there unfettered by the rights of the plaintiff.

12. [38]

    With this background it is now necessary to look at the basis for the plaintiff’s claim.

The Property (Relationships) Act 1984 (NSW)

1. [39]

   Section 8(1) of the Act states:

2. [40]

   It can immediately be seen that there is a qualifying element to s 8. The parties must have been in a domestic relationship. A domestic relationship is defined in s 5:

3. [41]

   The defendant initially (including the first day of the hearing) submitted that he and the plaintiff had not been in a domestic relationship. In particular she had not provided him with domestic support and personal care. While the parties may have provided each other with care or support from time to time, this was not enough, submitted the defendant, it was simply “the natural consequence of a father and daughter sharing a house together over time”.

4. [42]

   By the second day of the hearing, supposedly based on the oral evidence that had been adduced, the defendant conceded the existence of a domestic relationship. While I am obviously grateful of being relieved of the need to reach a finding on this point, I should say that such a finding would have been easily made. The defendant’s reluctance is I think consistent with his overall attitude to the plaintiff, expressed by him in this way:

5. [43]

   The deed itself acknowledges, inter alia, that “Paula has looked after Victor for the last 20 years. …” How can such an acknowledgement preclude domestic support and personal care?

6. [44]

   Another difficulty that faced the defendant, the first being the terms of the deed, is his credit. Wherever there is any conflict with the evidence of the plaintiff, or in fact any other witness, I do not believe the defendant. To describe him as an irascible and difficult man would be an understatement. I had the overwhelming impression that he vehemently resented his grandson, Blake, because Blake, in particular as an adult, had interfered, by his simple presence, in the very deep relationship the defendant had with the plaintiff. He said in oral evidence:

7. [45]

   At one stage he seemed to suggest a nefarious intent on the plaintiff’s part to benefit Blake:

8. [46]

   There are indications in the evidence of the relationship between the plaintiff and the defendant being most inappropriate. For example, the suggestion that upon Mrs Rowsell leaving the home the defendant moved into the plaintiff’s bedroom. Also, that he would watch her in the shower without her knowledge. The evidence does not allow me to reach a conclusion that any criminal conduct took place and I certainly do not reach such a conclusion.

9. [47]

   However, I do reach a conclusion that the defendant was very close to the plaintiff. He described her as his “best friend” and “really good mate”. When she requested that her boyfriend (Blake’s father) be permitted to return to the house with her, he refused. I suspect this was because he did not wish there to be any interference in his relationship with his daughter.

10. [48]

    An area of dispute between the parties was the reason that the plaintiff left school. She said it was at the insistence of her father who wished her to take over the home duties that had previously been done by her mother. The plaintiff said that she had hoped to be a nurse. An indication of the defendant’s attitude is contained in this answer he gave under cross-examination:

11. [49]

    In relation to school, the defendant made no effort to stop her leaving. When asked why this was the case he said:

12. [50]

    The defendant denied that he had demanded the plaintiff leave school to take over house duties. But he did give this evidence about her activities after her mother left the home:

13. [51]

    This somewhat condescending answer ignores the fact that not only were these household tasks performed by the plaintiff, but she also, at age 15, took on a full-time job as a kitchen hand and then, when she was older, working at the bar in an RSL club. In later times the plaintiff was working 80 hours a week and still doing the bulk of the household tasks.

14. [52]

    Support for the plaintiff’s assertion about the situation after her mother left home is to be found in the affidavit of Ms Rowsell at paras [27] and [30]:

15. [53]

    The defendant sought to make much of his babysitting of Blake when the plaintiff was working. The plaintiff gave this evidence about this period:

16. [54]

    My overall conclusion is that the plaintiff continued to do the bulk of household chores throughout the time she lived at No 42 with the defendant. This was regardless of who else lived in the house, what work the plaintiff was doing and what other demands there were on her time.

17. [55]

    Once the threshold question of the existence of a domestic relationship has been answered, it is necessary if the plaintiff is to succeed in her application for an adjustment to property rights, to do so through s 20. The section states:

18. [56]

    The defendant gave eight reasons to reject the plaintiff’s claim. I will comment on each of them as I list them.

    1. (1)

       Removing the life interest would deprive the defendant of its value, assessed at $185,000. The difficulty with this submission is that it relies on a finding that the defendant had a right of exclusive possession to the property. I have found that he did not.

    2. (2)

       When looking at what is just and equitable, the plaintiff, by the deed, had been elevated from a position of no interest to a full interest in the property which she would have upon the death of the defendant. The defendant’s provision of this interest was said to be gratuitous. I completely reject the submission. Not only had the plaintiff contributed $9,000 (about 20% of the value of the property) when Ms Rowsell was “bought out” but she had, since leaving school made significant contributions both to the welfare of the defendant and to the property.

    3. (3)

       The plaintiff had received a significant benefit in that she had been able to live in the property from 1992 to 2023 without paying any rent, a benefit assessed at in excess of $390,000. Again, this submission is defeated by the defendant not having exclusive possession of the property and also by the plaintiff’s contributions, when seen on both a monetary and labour involvement, probably exceeding the unpaid rent.

    4. (4)

       The defendant had at least equally contributed to the running of the house and the welfare of the plaintiff. The plaintiff conceded that general “household duties and day-to-day jobs” were shared between her and the defendant. I do not however accept that the sharing was equal and I am satisfied that the plaintiff’s contribution far exceeded that of the defendant.

    5. (5)

       The defendant had received no support from the plaintiff since 2019 when he left No 42. Although the plaintiff submitted that the defendant was not obliged by the provisional AVO to leave the premises, I think the environment created by living with Blake, would have been a reasonable basis for him to leave. I accept this factor favours the defendant.

    6. (6)

       If the life interest was extinguished one of the effects would be to improve Blake’s position as an adult because he would continue having the benefit of living at No 42 although he has never had an entitlement to do so. Factually, I think this is correct and is another factor in the defendant’s favour.

    7. (7)

       If the defendant is compelled to remain at No 38 he will not have the option to rent out No 38 and thereby be deprived of an income which will no doubt be of significant benefit as he ages. The defendant’s assertion is correct. But it must be balanced against the fact that he benefited significantly (to the extent of some $800,000) from the estates of his brother and sister, a benefit which he had promised, at least in part, to the plaintiff but never honoured his obligation. The same may be said of his promises in relation to No 121. I stress that in reaching this conclusion I rely on my acceptance of the plaintiff’s assertions concerning the sale of the property in Lurnea and surrounding the purchase of No 121.

    8. (8)

       The extinguishing of the life interest was not envisaged by the deed which had already conveyed significant benefits upon the plaintiff. I have to some extent dealt with this point under (3) above but add that the deed recognised the plaintiff’s contributions up to 2005 and gave them a formality through its terms. However, the deed did not exclude the possibility of continuing contributions by the plaintiff, in particular of the type envisaged by s 20. I am satisfied that after 2005 the plaintiff continued to make significant contributions to the property as well as the welfare of the defendant.

19. [57]

    My rejection of most of the factors raised by the defendant obviously goes a long way in the plaintiff’s favour. However, the plaintiff retains the onus and must, herself, establish the right to relief under s 20.

20. [58]

    I am satisfied that she has done so. Even if one were to quarantine her contributions prior to 2005 as having been ‘rewarded’ by the deed, her contributions continued until the defendant’s departure in 2019. She carried on doing the bulk of the housework (cooking, washing, and cleaning) notwithstanding the pressures on her time caused by her work commitments and she contributed significantly on a monetary basis.

21. [59]

    The parties drew up schedules comparing the monetary contributions of each party. They are not complete, and some matters are unknown. For example, the defendant said that he was a regular user of cash and would purchase groceries with cash. His bank accounts certainly reveal frequent and regular withdrawals of cash. I cannot say how much of the cash was used on groceries as opposed to, as suggested by the plaintiff and Ms Rowsell, perhaps on alcohol and motorcars.

22. [60]

    Ms Rowsell, reflecting on her time living with the defendant, stated in her affidavit at paras [20]-[21]:

23. [61]

    Ms Rowsell then describes the need she had to find employment as well as to look after the children. The defendant’s assumption of the plaintiff as a housewife following the departure of Ms Rowsell has the same ingredients.

24. [62]

    In relation to the financial contributions, it is impossible to reach a mathematical conclusion about which party paid precisely how much money. I am however satisfied that the defendant’s contributions did not exceed those of the plaintiff and that her contributions of a non-monetary nature far exceeded those of the defendant.

25. [63]

    Even if these contributions, essentially as a homemaker, are isolated from the financial contributions, I think it just and equitable to make an order under s 20 for adjustment of the property interests in respect of No 42.

26. [64]

    A significant point that arises from this conclusion is the date from which the adjustment should take place. The order that I make will necessarily call for an adjustment in the near future. This raises the question, particularly relevant to the cross-claim, of whether the defendant should receive some compensation arising from the last four years, that is, from his leaving No 42 to the present.

27. [65]

    I could not say that the departure was the fault of the defendant. The domestic dispute between him and Blake is no doubt multifaceted and does not give rise to a conclusion that the defendant was, or was not, to blame for leaving No 42.

28. [66]

    If his departure was not his fault, then theoretically he may have a claim arising from his inability to live at No 42. The claim could arise from him being deprived of the benefits of living at No 42 or his inability to receive rental payments from No 38.

29. [67]

    In my view the defendant is not entitled to any such compensation. This is because:

    1. (1)

       I have concluded that he did not have a right of exclusive possession to No 42 and therefore did not have any rights, for example, to receive a rental from No 42;

    2. (2)

       if I am wrong about the absence of a right of exclusive possession then, as I have said above, I think there should be an effective backdating of the extinguishment of his life interest, notwithstanding that orders to that effect will only be made at the conclusion of the case; and

    3. (3)

       the inability to receive rent from No 38 falls under the umbrella of reaching a conclusion as to what is just and equitable between the parties. If just and equitable includes, as I think it does, the effective backdating of the extinguishing of the defendant’s rights in respect of No 42 then I think No 38 assumes the result of simply being an asset of the defendant which he could choose to utilise as he saw fit, to live in or to rent, but not to the detriment of the plaintiff.

30. [68]

    There is one caveat in my conclusions in respect of No 42. The defendant has continued to pay the council rates for the property. He has paid $6,815.27 since he left No 42 in mid-2019. I think he should get credit for this amount as he has derived no benefit from No 42 since he departed.

31. [69]

    The question then arises as to how this credit should be applied. It cannot be a product of the cross-claim which, as will be seen below, should be dismissed. I think the best way to deal with it is to make an order in the plaintiff’s case requiring payment by her of the above sum to the defendant.

32. [70]

    Before turning to the cross-claim I wish to make the following comments about the evidence. Besides the parties, the only witness to give oral evidence was Mr Blake Davis-Lynch (Blake). I did not see great relevance in his evidence. He did concede that his previous partner, Moriah, had caused some damage at No 121. He said that when he left No 121 he had been told by the defendant to move to No 42. The defendant denied any such instruction. As I have already said I have the clear impression that the defendant regards Blake as an impediment to his relationship with the plaintiff.

33. [71]

    Blake accepted that he had not paid any rent at No 42. This was because he regarded No 42 as his mother’s property. He denied that the AVO was part of a deliberate strategy to evict the defendant. He said that he did not actually wish to live there himself. He was providing emotional support to his mother.

34. [72]

    The defendant relied on affidavits from a number of persons who were not cross examined. Mr Brian Crompton is a plumber. He said that in 2018 he did plumbing work in the bathroom at No 42 on behalf of the defendant for which he was paid, by the defendant, $875 in cash. He understood that the defendant had purchased the items necessary for the plumbing work.

35. [73]

    Mr Denis Sutton lives close to No 42. He observed the alterations to the bathroom that had been carried out by Mr Crompton. He saw the defendant doing physical work on the premises. In July 2019 he noticed the defendant apparently spending a good deal of time in his utility vehicle at the rear of No 38. He ascertained that the defendant was living in the utility vehicle. He offered the defendant accommodation which was accepted. The defendant stayed until late August 2019.

36. [74]

    Ms Wendy Hillery also lives close to No 42. She has an advantage point from her premises from which she has seen the defendant doing gardening work at No 42. She had made these observations for over 30 years.

37. [75]

    In June 2019 the plaintiff told Ms Hillery about the AVO. A few weeks later she noticed the defendant sitting on a chair next to his utility accompanied by his dog and appearing to be cooking on a gas burner. She spoke to him and discovered that he was effectively living in the utility. She invited him to bathe at her home, a convenience he accepted “every couple of days”.

38. [76]

    Ms Hillery made meals for the defendant from time to time. She thought he lived in the utility for a few months.

39. [77]

    The evidence of Mr Crompton, Mr Sutton and Ms Hillery corroborated some of the assertions made by the defendant but none of these assertions played any substantial part in resolving the issues between the parties.

The cross-claim

1. [78]

   I have found that the defendant did not have a right of exclusive possession to No 42. I have also found that the deed envisaged the plaintiff continuing to live in the premises, and in fact spending substantial money (the $45,0000) on the premises for its improvement.

2. [79]

   It follows that the right of the plaintiff to reside in the property was not one subject to the will or inclination of the defendant. Therefore, the defendant did not have the right to terminate or revoke any licence that the plaintiff had, and the defendant has no corresponding right to demand the plaintiff’s eviction.

3. [80]

   In addition, as I have already stated, if I am wrong on my conclusion about exclusive possession, then the adjustment of the parties’ rights in the property, pursuant to s 20, should, in the application of a just and equitable result, be treated as if backdated to a time prior to the defendant leaving No 42.

4. [81]

   Accordingly, I will dismiss the cross-claim.

5. [82]

   A final matter is that the defendant says that a number of his possessions remain at No 42. This is largely acknowledged by the plaintiff. I have not however been asked to make any orders in respect of these possessions; rather the parties have suggested that their respective solicitors will be able to liaise on arrangements for the return of the possessions.

Costs

1. [83]

   The plaintiff has succeeded in her claim and on the cross-claim. There can be no result other than that the defendant should pay the plaintiff’s costs of both claims. I will however give the parties leave to make any application to vary my costs order.

Orders

1. [84]

   I make the following orders:

   1. (1)

      The defendant is to transfer to the plaintiff for no consideration the whole of his interest in the property known as 42 xxxxx, xxxxx in the State of New South Wales and comprised in folio identifiers xxxxx of xxxxx in xxxxx and xxxxx of xxxxx in xxxxx.

   2. (2)

      The defendant is to do all such things and execute all such documents which are necessary to transfer the interest referred to in Order (1) above.

   3. (3)

      Should the defendant default in complying with Order (2) above, the Registrar in Equity is to do all of those things and sign all necessary documents in order to give effect to Order (1) above.

   4. (4)

      The plaintiff is to pay to the defendant the sum of $6,815.27 within 42 days of the date of these orders.

   5. (5)

      The cross-claim is dismissed.

   6. (6)

      The defendant is to pay the plaintiff’s costs of the proceedings including the cross-claim.

   7. (7)

      The parties have leave to request any amendment to the costs order.