Barnes v Alderton

[2008] NSWSC 107

CITATION:	Barnes v Alderton [2008] NSWSC 107
HEARING DATE(S):	4 February 2008
JUDGMENT DATE :	20 February 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
DECISION:	Proceedings dismissed with costs.
CATCHWORDS:	CONTRACTS [17] [77] [79]- Lack of intention to create legal relations- Lack of consideration- Lack of act of part performance by plaintiff that is unequivocally referrable to the alleged agreement. ESTOPPEL [32]- Proprietary estoppel- Proceedings brought by plaintiff against defendant to claim half interest in family home- Alleged oral promise made by the defendant that he will give one half of the property to the plaintiff "when the time comes"- Whether the defendant made a representation in circumstances that show the promise made is understood to be irrevocable- Whether the plaintiff suffering a detriment, if any, is a necessary ingredient of proprietary estoppel- The quantum of relief given must be proportionate to the reasonable expectation of the plaintiff balanced by the monetary value of the detriment suffered- Plaintiff's case essentially that the defendant promised to make a gift- No equity- Case fails.
LEGISLATION CITED:	Conveyancing Act 1919, s 23C
CATEGORY:	Principal judgment
CASES CITED:	Attorney General (Hong Kong) v Humphreys Estate (Queen's Gardens) Ltd [1987] AC 114 Austin v Keele (1987) 10 NSWLR 283 Commonwealth v Verwayen (1990) 170 CLR 394 Donis v Donis [2007] VSCA 89 Flinn v Flinn [1999] 3 VR 712 Galaxidis v Galaxidis [2001] NSWSC 1123 Galaxidis v Galaxidis [2004] NSWCA 111 Gillett v Holt [1998] 3 All ER 917 Gillett v Holt [2001] Ch 210 Giumelli v Giumelli (1999) 196 CLR 101 Greasley v Cooke [1980] 1 WLR 1306 J C Williamson Ltd v Lukey & Mulholland (1931) 45 CLR 282 Jennings v Rice [2003] 1 P & CR 100 Jones v Jones [1977] 1 WLR 438 Maddison v Alderson (1883) 8 App Cas 467 Matharu v Matharu (1994) 68 P & CR 93 Ramsden v Dyson (1865) LR 1 HL 129 Regent v Millett (1976) 133 CLR 679 Riches v Hogben [1985] 2 Qd R 292 Riches v Hogben [1986] 1 Qd R 315 Rodgers v Moonta Town Corporation (1981) 55 ALJR 710 Sledmore v Dalby (1996) 72 P & CR 196 Sullivan v Sullivan [2005] NSWSC 10 Sullivan v Sullivan [2006] NSWCA 312 Taylor v Dickens [1998] 1 FLR (Eng) 806 Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Wratten v Hunter [1978] 2 NSWLR 367
PARTIES:	Colleen Barnes (P) Noel Alderton (D)
FILE NUMBER(S):	SC 6443/06
COUNSEL:	T Alexis SC and R Hardcastle (P) D E Grieve QC and E Petersen (D)
SOLICITORS:	Hazan Hollander (P) A C Knibb Kaine & Associates (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Wednesday 20 February 2008

6443/06 – BARNES v ALDERTON

JUDGMENT

1 HIS HONOUR: This is a dispute between sister and brother over a property at Umina, NSW. I will simply refer to this as “the Property”.

2 There is no doubt that in about June 1953, the defendant and the parties’ late father became registered as proprietors as joint tenants of No 8 Gross Avenue, Umina, the property in question in this case. They purchased it with the assistance of the Gosford and District Co-operative Building Society which took a mortgage. The defendant says that at the time of the purchase he was 21, and his sister, the plaintiff, 15. He says that because his father was working on the central coast and his mother in Sydney, the family was divided and they were looking for a house in which they could all reside. However, the only family members who looked at the Property before it was purchased, were his father and himself. The defendant’s memory is that he and his father borrowed £2,200 from the Building Society, and paid the balance and associated costs from a joint savings account that they had with the Commercial Bank of Australia.

3 Later in 1953 the parties’ mother and the plaintiff joined the men at Umina.

4 The defendant says from June 1953 onwards his father and himself paid off the Building Society mortgage by making regular monthly repayments. He says the plaintiff commuted to Sydney for work and never contributed any monthly repayments or any costs of the property.

5 The plaintiff moved out of the house in 1957. She was married in 1958. The defendant moved out of the house on his marriage in May 1964. The parties’ father and mother continued to reside in it.

6 The defendant trained as a fitter and turner and completed his apprenticeship in 1953. The parties’ paternal grandfather had a business selling seafood at Woy Woy. In 1951, the parties’ father joined this business and expanded it by cooking and selling takeaway food. The business expanded and when the defendant had completed his apprenticeship he went to work in the seafood shop. The business was that of the father and the defendant was paid a wage. It would also appear from the evidence that from 1953 the parties’ mother worked in the business, but what wage she got, if any, is not disclosed in the evidence.

7 The parties’ father died on 29 December 1979. Their mother continued to occupy the premises in circumstances which I will consider in more detail, until 1998 when she went to live with the plaintiff.

8 The defendant became the sole registered proprietor by reason of a notice of death dated 5 August 1981, lodged with the Registrar General on 16 October 1981 and registered on 28 October 1981. However, he became the unregistered proprietor from his father’s death in December 1979. The father evidently did not leave much by way of property, about $5,000 worth of shares. The defendant, with the assistance of a local solicitor, filed an Affidavit M under the Stamp Duties Act, paid the relevant death duties and testamentary expenses, transferred those shares to his mother so that she would have a small fund from which to pay her living expenses, and in due course, became registered proprietor as surviving joint tenant.

9 The plaintiff says in para 16 of her principal affidavit that -

“In or around 1981 or 1982 there was a conversation at the Property between my brother (the defendant) my mother and myself. I recall the conversation with words to the following effect:
My brother said: ‘I have been to the solicitor to see whether we should transfer dad’s share of the property into mum’s name. The property is now in my name and the solicitor said it would be fairly expensive to transfer it to you, mum. The solicitor said it would be better to give you a life tenancy so that you can live in the property for the rest of your life. When the time comes I will sell the property. I will give half to you Colleen as that is what dad always wanted. Are you happy with that mum?’
My mother said: ‘Yes. I am happy with that as I can stay here and you both get half of the property’.”

10 The plaintiff proceeded to say in para 17 of her affidavit:

“I was also happy with this. At no time did my brother say to me or my mother that the property was his, or that he had paid for it or that I did not have an interest in the property. From the time of this conversation, I understood that my mother could live in the property for as long as she wanted to and that my brother would give me half of the sale proceeds of the property when it was eventually sold. If my brother had not said this, I would have spoken to my mother about obtaining legal advice and I would have sought legal advice in relation to my father’s estate. If I thought that my brother would not honour the arrangement, I would have taken steps to formalise the arrangement in a document.”

11 The defendant denies that there was any such conversation.

12 The parties’ mother suffered a stroke in 2000, and between then and 2006 she lived in a nursing home. She died in March 2006.

13 The defendant arranged for his daughter Lynda and her husband Scott to live in the Property. He informed the plaintiff about this and they both agreed that it was good to have someone living in it to protect it against vandals. However, on 28 May 2004 he transferred the Property to his daughter and son-in-law for one dollar.

14 The plaintiff says that she only found out about this in about November/December 2004, and when she did so, she telephoned her brother and indicated her fury. The conversation was terminated by the plaintiff hanging up on the defendant. The defendant’s wife Barbara said she endeavoured to ring the plaintiff back, but the plaintiff just kept hanging up. Barbara Alderton then wrote a letter to the plaintiff which the plaintiff put in evidence and which the defendant agreed was accurate.

15 In view of the letter being proffered by the plaintiff as evidence in her case, and the defendant agreeing that it is factually correct, I should refer to it as part of the admitted facts. The letter reads, so far as is relevant, as follows:

“Colleen, I don’t think you know the full story of the house at Gross Ave. Did you know that your mother and father could not buy that house without Noel’s help? He had to counter sign the loan and paid half of the repayments when for the first few years that we were married we had a mortgage, a second a mortgage, a car loan and he still tried to keep up payments. It wasn’t until I gave up work to have Lynda that we had to say that we couldn’t do it any more. Every little while they couldn’t keep up payments and we would have to tighten up, (Noel had to extend the car loan) and I know Mummu [that was the parties’ grandmother] had to help a couple of times. When your mum and dad wanted to break away from Peter Walker a loan was needed to pay Peter out so Noel had to counter sign again and a mortgage was taken out against the house. Again we had to help pay it off. You wonder why I hated that shop and house, all they did was pull us down. There was just too much drink, too much showing off what a big business man he was. Did you know that when your dad finally gave up the shop that he had nothing behind him. All those years of being the big man and nothing to show for it. Noel was pulled off a trade to run a shop and be the lackey to walk out 13 years later with the shirt on his back. No bonus no “good job” the $5,000 that your mum had in AGC I am pretty sure was from Mummu. We were the ones that changed her bank account so that she was at least getting a little bit of interest and making her life a little better. So if Noel feels that he owns that house he had paid for it time after time. I have no happy memories of either the shop or the house, only too much drink and too many fights, too much wasted time and too much wasted money.
I don’t know how you are going to take this letter but I feel a bit better getting some of it out in the open. It is not something that I can talk to Noel about.
Barbara”

16 There was never any reply to the letter.

17 The facts clearly are that at least prior to the end of 1981, the plaintiff made no contribution or at least no contribution of any moment to the Property and very little, if any, since.

18 The mother’s estate has never been put before the Probate Registrar. However, it seems common ground that she left her property to her children jointly. The defendant has paid the funeral and testamentary expenses and there is about $10,000 to be divided, though doubtless that will be used in part for the costs of these proceedings.

19 The plaintiff pleaded her case in a rather strange manner. Paragraph 4(i) pleads that the parties’ father was unable to purchase the Property in his own name because the Building Society would not loan him moneys needed due to his age and it was necessary for him to purchase the Property jointly with the defendant to procure the moneys needed to purchase the Property, but that it was the intention of the father that one-half of the Property be held in trust for the plaintiff.

20 Paragraphs 8 and 9 read:

“8. On or about 5 August 1981 the defendant executed a notice of death and upon its registration, the defendant became the registered proprietor of the property and held one-half of the property on constructive trust for the plaintiff (‘the Trust’).
9. In or about late 1981, the defendant orally represented to the plaintiff and to the mother at the property that:
(i) the property was now registered in his name;
(ii) it would be expensive to transfer the property;
(iii) the mother had a ‘life tenancy’ and that she could continue to live at the property for the rest of her life; and
(iv) when the time comes, the property would be sold and the plaintiff would receive half the proceeds of sale.”

21 Paragraph 10 pleaded the same thing as para 9 except as a contract. Paragraph 11 pleaded that the defendant owed the plaintiff a fiduciary duty not to deal with the property inconsistent with her beneficial interest and to account to her for any dealings with the property and para 25 said that:

“Further and in all the circumstances, it would be unconscionable for the defendant not to pay to the plaintiff one-half of the market value of the property at the time of transfer and is liable in the premises to do so.”

22 The proceedings came on for hearing before me on 4 February 2008, Mr T Alexis SC and Mr R Hardcastle appearing for the plaintiff and Mr D E Grieve QC and Mr E Petersen appearing for the defendant.

23 The matter concluded on that day, save and except Mr Alexis asked for time to put in further written submissions on two points that had arisen. I reluctantly agreed to this. However, I indicated that in my view in this Division from now onwards the judges would expect counsel to be ready to complete their argument at the hearing and not to consider as appears to have almost become common during 2007 that they can ask to supplement their argument at the end of the case. It is different if something unexpected happens during the course of the case, but it is necessary for the necessary despatch of business in this Division for cases to be concluded at the end of the oral argument if at all possible, and the court will be reluctant in the future to grant this leave.

24 I then reserved my decision.

25 At the beginning of the hearing, I asked Mr Alexis to state what were the bases of his client’s claim. He said:

(1) that there was a promissory estoppel. Particulars were that the defendant made the representation referred to in para 16 of the plaintiff’s affidavit. The plaintiff and her mother relied on those representations to their detriment and so did not take any action to enforce their rights;

(2) that there was a contract between the plaintiff and her mother on the one part and the defendant on the other part whereby in consideration of not enforcing their rights, the defendant made the promise referred to in (1); and

(3) it would be unconscionable, in the circumstances, for the defendant not to account to the plaintiff for half the value of the Property.

26 However, as the argument progressed, the first claim changed from promissory estoppel to proprietary estoppel by encouragement.

27 Mr Grieve QC appeared a trifle surprised at the way in which the plaintiff’s case was actually presented compared with how it was pleaded, and made that comment more than once in his closing address, but appeared well able to deal with the case as it arose.

28 The plaintiff and the defendant and Mrs Barbara Alderton were cross-examined. None of them were really affected by the cross-examination and there was nothing in their demeanour which would enable me to choose between one or the other.

29 There was, however, some difference between the brother and sister on some significant matters in the case.

30 First, of course, the defendant says that the conversation in para 16 of the plaintiff’s affidavit never took place. The mother is the only other witness to this and she is deceased. The defendant has pleaded laches.

31 It is clear that by November/December 2004, the plaintiff knew that the defendant had transferred the Property to his daughter Lynda and his son-in-law. She had her solicitor write a letter protesting in 2005, but did not commence the current proceedings until December 2006 by which time the mother had died. There is no explanation for the delay apart from that which was proffered by Mr Alexis from the bar table, and that is, the plaintiff was too poor to afford faster service. However, it would not seem that the death of the mother in the intervening period alters the situation because it seems common ground that the mother would not have been able to give evidence after her severe stroke in 2000.

32 Apart from denial of the conversation, the defendant says that the plaintiff’s action is prevented by s 23C of the Conveyancing Act 1919 as there is no writing. The plaintiff attempts to counter this by relying on the doctrine of part performance.

33 One could approach the decision in this case by one of two routes, first by dealing with questions of fact, or, first by dealing with questions of law. It seems to me that the second way is more efficient. Accordingly, I will consider the matters that arise between the parties under the following heads:

(1) The case as pleaded;

(2) Proprietary estoppel:

(a) generally;

(b) representation;

(c) the requirement of detriment;

(3) The case in contract;

(4) Conveyancing Act 1919, s 23C;

(5) Part performance;

(6) Unconscionability;

(7) The facts;

(8) The result of the case.

34 (1) I have set out para 8 of the statement of claim. It is rather odd in that, literally read, and indeed the natural meaning of the words, is that on 28 October 1981 when the defendant became the registered proprietor, at that moment he held the Property as to one-half on trust for the plaintiff. No particulars are given as to why this is so. There is no evidence of any unconscionability as to why it is so unless one can say (and one usually cannot) that the mere fact that both joint tenants contributed to the Property somehow or other raises a constructive trust in favour of the descendants of the first to die. Moreover, in the light of what happened in para 16 of the plaintiff’s affidavit, if believed, the allegation is inconsistent with there being a trust in favour of the mother for life and thereafter some trust in favour of the plaintiff.

35 Paragraph 9 really gets no better. The oral representation is said by Mr Alexis to be what is in para 16 of the plaintiff’s affidavit. Literally read, the representation is merely a representation that “when the time comes” there would be a gift which even if made out, would not constitute the plaintiff with any equity. The plaintiff would be a mere volunteer.

36 Paragraph 11 of the statement of claim alleges that from the time pleaded in para 8, there was a fiduciary duty, but as para 8 has to fail, so does para 11.

37 Accordingly, strictly on the pleadings the plaintiff has no case, except perhaps as to contract which I will deal with in sections (3) to (5).

38 (2) However, Mr Alexis’ prime thrust at the hearing was on proprietary estoppel.

39 (a) Proprietary estoppel has two branches to it: (a) estoppel by acquiescence, its passive form; and (b) estoppel by encouragement, its active form. If anything this case is in the latter category.

40 In the seminal case of Ramsden v Dyson (1865) LR 1 HL 129 at 170, Lord Kingsdown said:

“If a man under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a court of equity will compel the landlord to give effect to such promise or expectation.”

His Lordship continued at 171:

“If, on the other hand, a tenant being in possession of land, and knowing the nature and extent of his interest lays out money upon it in the hope or expectation of an extended term or an allowance for the expenditure, then, if such hope or expectation has not been created or encouraged by the landlord, the tenant has no claim which any court of law or equity can enforce.”

41 In Rodgers v Moonta Town Corporation (1981) 55 ALJR 710, 712, Gibbs CJ with whom four other Justices agreed said, when approving that passage:

“It is of course not enough to give rise to an equitable estoppel in the present case that the appellants should have spent money on the faith of an expectation that they would get a 10 year lease. It would be necessary that the expectation was created or encouraged by the council … .”

42 No equity arises to raise a proprietary estoppel unless the person in whose favour it is being raised, has acted to their prejudice or detriment in some way whether in terms of direct expenditure or on some other basis: Greasley v Cooke [1980] 1 WLR 1306 at 1314. However, the detriment may not necessarily be expenditure of money, commonly a claimant leaves her job, moves in with the promisor and does his housekeeping for many years, such as in Jones v Jones [1977] 1 WLR 438. However, as set out in Pawlowski on the Doctrine of Proprietary Estoppel (Sweet & Maxwell, London, 1996) at pp 69 and following, minor expenditure such as day to day living expenses or minor repairs will not qualify.

43 In Donis v Donis [2007] VSCA 89 at [19]; (2007) V ConvR 54-737; BC 200703434, Nettles JA, with whom Maxwell ACJ and Ashley JA agreed, said:

“The estopped party, having promised to confer a proprietary interest on the party entitled to the benefit of the estoppel, and the latter having acted upon the promise to his or her detriment, is bound in conscience to make good the expectation. It follows that the detrimental reliance that supports the estoppel need not constitute in any sense a consideration moving to the party bound. It is a unilateral element of the estoppel and not the price paid for it.”

His Honour in a footnote said that he had placed reliance on the judgment of Handley JA in Sullivan v Sullivan [2006] NSWCA 312 at [20] remarking that whilst Handley JA dissented in the result his judgment contains a thorough and persuasive analysis of the relevant authorities. He continued at [20]:

“The object of the exercise is to do equity and for that purpose ‘detriment’ is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances.”

44 Mr Alexis relied on some words of Austin J in Galaxidis v Galaxidis [2001] NSWSC 1123 at [157] where his Honour said that as he read the majority judgment in Giumelli v Giumelli (1999) 196 CLR 101, especially at 120-125, the High Court “assumed rather than decided that detriment is a necessary ingredient for the application of the equitable doctrine, and clearly the Court regarded evidence of detriment as relevant to the kind of relief that would be ordered; and in particular, proof of the plaintiff’s detriment would be relevant to the question whether the defendant should be ordered to make good the encouraged assumption or merely reverse that detriment.”

45 He then put that Campbell J at first instance in Sullivan v Sullivan [2005] NSWSC 10 at [26] had said:

“There is uncertainty in the law at present concerning whether a plaintiff who invokes the law of proprietary estoppel must prove not only reliance on an encouraged assumption in circumstances where departure from the assumption would be unconscionable, but also that the reliance was detrimental in order to be entitled to relief.”

Campbell J made reference to Austin J’s review of the relevant cases in Galaxidis and remarks of the Court of Appeal in Galaxidis v Galaxidis [2004] NSWCA 111 at [118] and says:

“I shall assume, without deciding, that detriment is not a separate element.”

46 With great respect, these observations seem to me to cloud the issue rather than assist in clarifying the elements. It is abundantly clear that the doctrine of proprietary estoppel does not assist a person who hears a statement from someone who says that they are intending to make the hearer a gift and who says to themselves, “I’m very happy with that, for instance when John dies I will get a million dollars”. The hearer must actually change his or her position or suffer some prejudice. Initially, the prejudice was making an expenditure of money on property which the hearer expected to own. As time went by, it was extended to situations where a person gave up her job in order to look after somebody else on the basis of a promise. As Pawlowski shows, cases such as Matharu v Matharu (1994) 68 P & CR 93, indicate that even a wife who is induced to abandon divorce proceedings which if successful would have meant she had priority accommodation for public housing, on the promise by her in-laws that she would have a home, has suffered sufficient detriment to rely on proprietary estoppel.

47 It may well be that the difficulty is merely one of terminology and that the element of detriment has been watered down to prejudicial change of position, but to my mind the authorities show it clearly exists. Not only does it exist in working out whether there is an equity, but it also comes into the picture when considering what is the appropriate order to atone for the unconscionable conduct of the promisor.

48 It must be remembered too that in Riches v Hogben [1985] 2 Qd R 292 at 301, McPherson J said, “It is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise.” It is the defendant’s unconscionable conduct in permitting the plaintiff to suffer prejudice by virtue of his or her action that is the equity. Detriment in the modern sense must accordingly be an element. Although Riches v Hogben went on appeal to the Full Court, see Riches v Hogben [l986] 1 Qd R 315, the words of McPherson J at first instance remain in full force. Indeed this passage was approved by the High Court in Giumelli at p 121.

49 However, as is clear from books like Pawloski, the trend has been away from listing fixed criteria in proprietary estoppel cases towards a broader formulation based on the notion of unconscionability, see Pawlowski at 181. This trend seems to have culminated in the decision of Robert Walker LJ as a member of the English Court of Appeal in Jennings v Rice [2003] 1 P & CR 100, where his Lordship said at [44]:

“The need to search for the right principles cannot be avoided. But it is unlikely to be a short or simple search because (as appears from both the English and Australian authorities) proprietary estoppel can apply in a wide variety of factual situations, and any summary formula is likely to prove to be an over-simplification. The cases show a wide range of variation in both of the main elements, that is the quality of the assurance which give rise to the claimant’s expectations and the extent of the claimant’s detrimental reliance on the assurances. The doctrine applies only if these elements in combination, make it unconscionable for the person giving the assurances … to go back on them.”

At [49] his Lordship said that the equity arises not from the expectations alone but from ”the combination of expectations, detrimental reliance, and the unconscionableness of allowing the benefactor … to go back on the assurances.”

50 It must be remembered too that one of the key cases on this sort of proprietary estoppel is Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 404 where Mason CJ and Wilson J stated the principle, “A person whose conduct creates or lends force to an assumption by another that he will obtain an interest in the first person’s land and on the basis of that expectation the other person alters his position or acts to his detriment, may bring into existence an equity in favour of that other person, the nature and extent of the equity depending on the circumstances.”

51 It also seems clear from the authorities that where one has the situation that the detriment is incurred in circumstances where the person incurring the detriment knows that the other person may change their mind, there is no relevant representation; see eg Attorney General (Hong Kong) v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114 at 124.

52 It was for this reason that it was thought for some years that a person could not get relief in a proprietary estoppel case of a promise to leave money by will unless there was also an assurance by the promisor that she would not revoke her will; see Taylor v Dickens [1998] 1 FLR (Eng) 806. However, in Gillett v Holt [2001] Ch 210 at 227, the English Court of Appeal rejected that proposition. The leading judgment was given by Robert Walker LJ as his Lordship then was, with whom Waller and Beldam LJJ agreed. Robert Walker LJ said:

“The inherent revocability of testamentary dispositions … is irrelevant to a promise or assurance that ‘all this will be yours’. Even when the promise or assurance is in terms linked to the making of a will … the circumstances may make clear that the assurance is more than a mere statement of present (revocable) intention, and is tantamount to a promise.”

His Lordship continued at 228 by reference to the judgment in Gillett’s case at first instance by Carnwath J [1998] 3 All ER 917, when in following Taylor v Dickens Carnwath J said at 929-930:

“I think that homely expression [not to count his chickens before they were hatched] is an apt statement of how, in normal circumstances, and in the absence of a specific promise, any reasonable person would regard – and should be expected by the law to regard – a representation by a living person as to his intentions for his will. Subject to specific statutory exceptions (such as for dependants), the right to decide, and change one’s mind as to, the devolution of one’s estate is a basic and well understood feature of English law. The law allows one to disappoint the expectations of those who have no more than a moral claim on one’s affections, however strong. During the lifetime of the potential testator, that is a risk which anyone seeking to rely on such a representation necessarily faces.”

53 In the Court of Appeal at 228, Robert Walker LJ said of that statement:

“In the generality of cases that is no doubt correct, and it is notorious that some elderly persons of means derive enjoyment from the possession of testamentary power, and from dropping hints as to their intentions, without any question of an estoppel arising.”

However, his Lordship went on to say that in the instant case there had been assurances repeated over a long period, usually before an assembled company on special family occasions some of which were completely unambiguous. The plaintiff after speaking with his wife decided he could rely on Mr Holt’s assurances because “Ken was a man of his word”. On the facts, the assurances were intended to be relied upon and were relied on to the detriment of the plaintiff.

54 The same result was reached in the Court of Appeal in Victoria in Flinn v Flinn [1999] 3 VR 712. At 736 Brooking JA said that it all depends on the circumstances. Everyone knows that people can change their wills, but the circumstances may show that the promise was intended to be, and was reasonably understood to be, not of a revocable testamentary instrument but of a gift by will taking effect on death. Charles and Batt JJA agreed.

55 The final general comment I would make is that contract and proprietary estoppel are mutually exclusive. As McPherson J said in Riches case at 301:

“What distinguishes the equitable principle from the enforcement of contractual obligations is, in the first place, that there is no legally binding promise. If there is such a promise, then the plaintiff must resort to the law of contract in order to enforce it, it being the function of equity to supplement the law not to replace it.”

56 Indeed, the cases over the last 30 years have made it quite clear that proprietary estoppel is an independent equity against the conscience, and is not designed to extend the boundaries of either the law of contract or the law of negligent misstatement.

57 (b) With these general principles in mind I now turn to the alleged representation in the instant case. In para 16 of the plaintiff’s affidavit it is said that there was a conversation between the defendant, his mother and the plaintiff, but the plaintiff herself did not actually say anything in the conversation, or at least nothing is recorded. According to the plaintiff, the defendant’s statement ended, “When the time comes I will sell the property. I will give half to you Colleen as that is what dad always wanted. Are you happy with that mum?”. The mother then replied she was happy, although the plaintiff said that she was also happy, there is no evidence that she ever voiced that happiness or what she understood by it, except that she says that the mother would live in the Property as long as she wanted to and the defendant would give her half the sale proceeds when it was eventually sold.

58 It must be inferred that the plaintiff was well aware that the legal title was in her brother’s name because that’s what he had told her and that there is no suggestion in the statement that the brother at that stage held the Property in trust, merely that he would give her half the proceeds when it was eventually sold. There is no evidence that the plaintiff ever thought that that was an irrevocable promise. The general view of the cases I have referred to indicate that the court infers unless there is evidence to the contrary that people are well aware that everyone can change their will as often as they like. That is the ordinary case and in an ordinary case a testamentary promise is very difficult to form the basis of a proprietary estoppel. As Gillett vHolt and Flinn v Flinn show, this is not impossible but one has to show circumstances that the promise was given and understood to be irrevocable. That may be shown by circumstances short of an explicit statement that the promise is irrevocable.

59 Apart from the problem of people revoking their wills, it seems to be also clear from what happened in 1981 that the parties’ prime focus was on protecting their mother. The mother was then in her late sixties or early seventies and anyone would realise that her need for accommodation and living expenses may well change over the years.

60 In the present case there is just no evidence on the point as to whether the alleged promise should have been taken as being irrevocable despite the general understanding about the revocability of testamentary promises.

61 Although the present case is not strictly one of testamentary promise, it is in the same plight in that it was only to be fulfilled at some uncertain time and probably only if the mother’s needs had not exhausted the Property or the brother had not died before the “when the time comes” trigger occurred.

62 Accordingly, I have great difficulty and in fact do not accept that this was a representation in the circumstances of the instant case which in the authorities could found a proprietary estoppel.

63 (c) As to detriment, the alleged detriment is that if the statement had not been made, the plaintiff would have taken steps to formalise the arrangement in a document.

64 It must be remembered that all this occurred before the coming into force of the Family Provision Act 1982 which operated on and from 1 September 1983 in relation to a deceased person who died on or after that date. As at 1981 or 1982, there was no capacity in a court to award a claimant under the Testator’s Family Maintenance Act 1916 relief against notional property such as the interest that the deceased had immediately before his death in property he held as a joint tenant. The father’s estate consisted only of his interest as joint tenant and some shares worth about $5,000 which were given to the mother in any event. There being no evidence of any constructive trust before 1981 there was absolutely nothing that the plaintiff could have done to improve her position. Her position simply was that she had never made any contribution to the Property and that all she had at the very most was an oral promise to make her a gift. She says that she would have sought to have her brother put it all in writing. This would have assisted so far as s 23C of the Conveyancing Act is concerned, but she had no means at all to force her brother to put it all in writing.

65 Furthermore, even since the mother ceased living in the Property in 1998, the plaintiff has suffered no detriment. She was quite content with the defendant’s daughter and son-in-law living in the Property and never asked for any accounting of notional rent, she never spent anything on the Property. The most we have is that whilst the mother was in occupation the plaintiff says, and the defendant denies, and there is no corroboration of the plaintiff’s statement, that she “organised” some painting and renovation.

66 Accordingly, I do not consider that the plaintiff’s claim on proprietary estoppel can succeed.

67 If I were of the contrary view, then I would need to assess what would be the appropriate relief. Whilst ordinarily in cases of proprietary estoppel by encouragement, fulfilment of the promise is usually the appropriate way of relief unless such relief would be inequitably harsh (see Deane J in Commonwealth v Verwayen (1990) 170 CLR 394 at 443).

68 In Jennings v Rice which followed Sledmore v Dalby (1996) 72 P & CR 196 Robert Walker LJ said at [50]:

“The court’s natural response is to fulfil the claimant’s expectations. But if the claimant’s expectations are uncertain, or extravagant, or out of all proportion to the detriment which the claimant has suffered, the court can and should recognise that the claimant’s equity should be satisfied in another (and generally more limited) way.”

69 This approach dovetails with what the High Court said in Giumelli where the court noted that Deane J’s prima facie entitlement might be qualified if relief based on that entitlement would exceed what could be justified by the requirements of conscientious conduct and would be unjust to the estopped party.

70 A helpful summary of the principles that apply to proprietary estoppel following Giumelli is given by Nettle JA in Donis v Donis at [20], where his Honour explained that the court is not restricted to reversing detriment in cases of proprietary estoppel, but that:

“The prima facie position will yield to individual circumstances. Principle and authority compel the view that where a plaintiff’s expectation or assumption is uncertain or extravagant or out of all proportion to the detriment which the plaintiff has suffered, the court should recognise that the claimant’s equity may be better satisfied in another and possibly more limited way [his Honour cited Jennings v Rice ]. Thus, as was also said in Giumelli , before granting relief the court is required to consider all of the circumstances of the case, including the possible effects on third parties, and to avoid going beyond what is required for conscientious conduct or would do injustice to others. But that does not mean that the court is required to be ‘constitutionally parsimonious’ or that it is necessary for there to be substantial correspondence between expectation and the monetary value of the detriment suffered, or which but for the relief to be accorded would be suffered.”

71 In the instant case, there is no strong evidence as to the value of the Property save that it would appear that it had a value of $400,000 in 2004. The defendant has had no benefit because he gave the Property to his daughter and her husband. The plaintiff has suffered either no detriment or a very minor detriment and to give her anything like $200,000 would not be an appropriate way of satisfying any equity she may have. I would have thought that some very small amount of money to compensate for the loss of a chance would be the way in which the court would look at the matter rather than reward her expectations of half the Property or a quarter of the Property as the case may be.

72 (3) The fact that the plaintiff’s lawyers put so much emphasis on the claim for proprietary estoppel shows that they rightly considered the claim in contract which is inconsistent with the claim of proprietary estoppel as only a second string to the bow, and in this they were quite correct.

73 Establishing a contract has a number of difficulties. The first is that family arrangements have to get over the hurdle of showing that the parties intended to create legal relations. It was quite clear that the mother’s interest of a “life tenancy” was not being granted in the approved legal manner because the solicitor said it was too expensive. Accordingly, what was happening was something that was based other than on legal relations but on family confidence in each other in doing the right thing. This tends to indicate that so was any interest that the plaintiff was to take.

74 Secondly, the plaintiff gave no consideration for any promise. As I indicated when dealing with detriment, she suffered no detriment. She never ever did anything which would constitute consideration, nor did she promise anything. Thirdly, there is the problem with s 23C of the Conveyancing Act.

75 (4) Section 23C(1)(b) of the Conveyancing Act 1919 is as follows:

“Subject to the provisions of this Act with respect to the creation of interests in land by parol:
(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person’s will.”

76 Mr Grieve QC says that the decision of Needham J in Wratten v Hunter [1978] 2 NSWLR 367 exactly covers the instant case. In that case, a man had transferred his land to his son and then died the same year. The day after his funeral the son said to his brothers and sisters, “I promise to live in the home and care for the home and property for us all.” This statement was said to be made whilst the defendant was holding in his hand the family bible. This was said to set up a trust. It was agreed that the preliminary point as to whether, if there was such a trust, it was defeated by s 23C(1)(b) of the Conveyancing Act should be dealt with as a separate question. Needham J held that the section clearly applied to that case and that the alleged trust was unenforceable.

77 The instant case, so far as it alleges a trust, is indistinguishable to my mind from Wratten’s case. In so far as contract is alleged, other parts of s 23C would cause similar failure of the plaintiff’s claim.

78 (5) The plaintiff seeks to escape from the operation of lack of writing by reference to the doctrine of part performance. She says that the contract or arrangement was partly performed relying on four matters. These are:

(a) that in 1998/99 she had a telephone conversation with her brother in which the brother said, “Colleen I want to give Lynda my half of the property. Would you take $50,000 for your share?”. The plaintiff said she did not want to talk about this now and that we should wait until the time comes. The defendant denies that conversation ever took place, but for the moment I will accept it did.

(b) that some time shortly afterwards the defendant said, “I have made a will Colleen and I have left half the house to you.”

(c) that on 17 November 2004, there was a telephone conversation in which the plaintiff said that she understood that alterations were being done to the Property and she had no notice of this and the defendant said it had nothing to do with her, the plaintiff replying “Where does this leave me and my kids? What about my share? You told me you had made a will and you also previously offered to pay me $50,000 for my share. I trusted you and you have done this to me” and then she hung up.

(d) that the defendant’s wife wrote the letter which I have already set out shortly after this conversation.

79 I cannot see how any of these matters amount to part performance. As Dr Spry says in his Equitable Remedies 7th ed (2007) at p 271:

“Equitable relief is obtainable only by a person ‘who in pursuance of his contract has done acts of performance consistent only with some such contract subsisting’.”

The quote is from J C Williamson Ltd v Lukey & Mulholland (1931) 45 CLR 282 at 297. The learned author continues at p 273:

“So it is clear that not only the acts of the defendant, but also the acts of third parties, cannot be properly regarded as part performance of a contract for these purposes, unless on the principles of agency or otherwise they should be regarded as acts of the plaintiff, although it appears that what would be a sufficient act of part performance if performed by the plaintiff is not prevented from being sufficient merely because it is performed by an independent contractor, for example, on his authority.”

80 The learned author continues:

“It is necessary that a plaintiff seeking specific performance on the ground of part performance should be able to show not only unequivocal acts in performance of his obligations, but also, circumstances that render unconscionable or fraudulent any reliance by the defendant on a lack of writing.”

81 On this latter matter the actions of a defendant may be relevant, but otherwise what the plaintiff has to show is that she has done acts which are consistent only with the sort of contract being alleged. As Selborne LC said in Maddison v Alderson (1883) 8 App Cas 467 at 479:

“All the authorities show that the acts relied upon as part performance must be unequivocally, and in their own nature, referrable to some such agreement as that alleged.”

That statement was applied by the High Court in the case strongly relied on by Mr Alexis, namely Regent v Millett (1976) 133 CLR 679 at 683.

82 Accordingly, one must look for evidence of acts by the plaintiff (by herself, her servants, agents or independent contractors) which unequivocally refer to a contract such as that which she alleges. There are no such acts demonstrated by the evidence in this case. The actions of the defendant, even if established, would not be sufficient to show part performance.

83 (6) I need not spend much time on the allegation of unconscionability because it would seem to me that this must fail for the reasons given under proprietary estoppel.

84 (7) The Facts. I have so far assumed the facts put out by the plaintiff and consider that even if I do accept those facts the plaintiff cannot succeed in the proceedings.

85 I would not, however, wish it to be thought that I do accept everything the plaintiff said. As I remarked earlier, the parties were not affected by cross-examination, each of them appeared to be endeavouring to tell the truth as they remembered it but there were very severe differences in their accounts.

86 Although onus of proof rarely is a decisive factor in a case, it must be borne in mind that a plaintiff always has to prove her case to the satisfaction of the court.

87 Mr Alexis says that the defendant just does not remember any such conversation and thus as the plaintiff has given evidence of it, and her evidence is credible, I should accept it. I do not consider that that conclusion follows logically. In any event a tribunal of fact uses its common sense and experience of the world and people tend to remember and indeed often gloss in their favour a statement made by another person which statement the other person considers to be of no consequence and so forgets. It would be dishonest for the defendant to say that he did not make the statement when he has no memory. I consider that I need to evaluate the statement in connection with the rest of the evidence.

88 The plaintiff says, in her affidavit, (I rejected this statement in para 10 but I am sure it got in elsewhere or in the statement of counsel), that the reason why the defendant’s name was on the title was that the bank would not lend the father the money due to his age. This seems to be incredible as the father was only 40 at the time, and so in the prime of his earning years. It would seem more likely that the reason why the bank or building society would not lend to the father if that indeed be the case, was because of his capacity to earn as a result of his fish shop business was inadequate, whereas the defendant was a trained tradesman. Either the plaintiff has misremembered her father’s statement, or alternatively, the father told an untruth in order to salvage his pride.

89 The plaintiff produced in evidence Barbara Alderton’s letter. I rejected it at first, but when the defendant in the witness box said that its contents were true, I later admitted it as Exhibit PX06. It was thus tendered in the plaintiff’s case and it was tendered as evidence of the truth. What the letter discloses is far from the situation being that the defendant was a young boy just over his age of majority helping out in his father’s shop for wages, that it was actually the defendant who was the prime support of the family and was indeed the person who bailed out his father when the father needed to buy out Peter Walker.

90 Furthermore, the letter shows that the defendant never thought in terms of his share or his father’s share, rather that he considered that his efforts had well and truly paid for the Property which was his.

91 In the light of this, it is most unlikely that he would talk in terms of “dad’s share” or wish to give up to his sister an advantage which he had acquired through his own hard work and by depriving his family of luxuries during the early part of his marriage in favour of his sister who never appears to have borne any share of the family burdens.

92 One would have thought that there would be some external material available from the solicitor who handled the father’s estate or from the Stamp Duties Office with the Affidavit M that was lodged in the father’s estate, but nothing was produced. All we have is the uncorroborated statement of the plaintiff which the defendant does not remember, and about which I feel uncomfortable in the light of the other evidence to which I have referred.

93 Accordingly, I am not satisfied on the balance of probabilities that the defendant did say what the plaintiff puts in para 16.

94 The other disputed conversation is the one relating to the $50,000. The plaintiff puts that this was an offer to buy her out for $50,000. It was admittedly in 1998 or 1999 when the mother commenced living with the plaintiff. On her own version, the plaintiff did not consider that it was really an offer because she said that everyone should wait until the relevant time. The defendant says that the $50,000 was to assist the plaintiff because the mother would be living with her. Mr Alexis says the defendant has given two different versions as to why he offered the $50,000, but I believe that is too harsh. As I understand the defendant’s evidence, the $50,000 was intended so that the mother might live on the ground floor of the plaintiff’s premises, which might require alterations. In fact it would seem no such alterations were ever contemplated by the plaintiff.

95 I prefer the defendant’s version. To reinforce my view an offer of $50,000 when neither party had got a valuation is rather hard to accept as having anything to do with buying out the sister’s interest, especially when no-one knew at that time whether something might have to be done to protect the mother which might erode the interest in any event.

96 (8) The result of the case is that whichever way one looks at it, the proceedings must be dismissed with costs. In Austin v Keele (1987) 10 NSWLR 283, in the last appeal to go from NSW to the Privy Council, Lord Oliver, giving the judgment of their Lordships said at 291:

“A trust does not come into being merely from a gratuitous intention to transfer or create a beneficial interest. There has first of all to be the additional ingredient of an intention or at least an expectation that the cestui que trust will act in a particular way, normally, though not necessarily exclusively, by making some contribution towards the cost of acquisition of the property in which the interest is intended to subsist.”

97 This is similar to the submission of Mr Grieve in the instant case that what the plaintiff is really doing is to seek to enforce a statement made by her brother that he would give her a share in the Property when the time comes.

98 Especially when one realises that the prime focus of the plaintiff and the defendant was caring for their aged mother and it was just unknown what needs the mother might have had, the fact that the Property was preserved in specie whilst the mother was still alive makes one consider, even as a question of fact without going into all the discussion of equitable principles, that what the plaintiff has alleged is insufficient to give her any interest.

99 Thus the proceedings are dismissed with costs. The exhibits, which are paper exhibits, may be retained.

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