Beverley Joy Priestley as Executor of the Estate of the Late Gordon Wedlock Priestley v Priestley

[2017] HCATrans 266

[2017] HCATrans 266

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S200 of 2017

B e t w e e n -

BEVERLEY JOY PRIESTLEY AS EXECUTOR OF THE ESTATE OF THE LATE GORDON WEDLOCK PRIESTLEY

Applicant

and

DUNCAN JAMES PRIESTLEY

Respondent

Application for special leave to appeal

BELL J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 DECEMBER 2017, AT 12.07 PM

Copyright in the High Court of Australia

MR J.M. MORRIS, SC:   May it please the Court, I appear with my learned friend, MR S. CHAPPLE, in this application, for the applicant.  (instructed by Nelson, Keane & Hemingway)

MR T.A. ALEXIS, SC:   May it please the Court, I appear with my learned friend, MS M.R. CAIRNS, for the respondent.  (instructed by Cole & Butler Solicitors)

BELL J:   Yes, Mr Morris.

MR MORRIS:   Your Honours, firstly there is a procedural issue and that is we require leave to proceed out of time and we rely on the affidavit of Leanne Sharon Mansour at the application book, page 157.

BELL J:   Yes, I think it is a modest extension, is that ‑ ‑ ‑

MR MORRIS:   Modest, yes.

BELL J:   Yes.  Any objection?

MR ALEXIS:   Not opposed, your Honour.

BELL J:   Yes.  You have that leave.

MR MORRIS:   May it please the Court.  Your Honours, bearing in mind the overarching principle behind all of the equitable remedies as to effect justice between the parties so as to alleviate the injustices and the harshness of the common law, the matter that this case presents for your Honours’ consideration is whether a person asserting estoppel can do so on the basis of a hope or expectation where at all times the person knows of the nature and extent of their position and, to that extent, we submit that there is a divergence of authority between Court of Appeal authorities DHJPM v Blackthorn and another case Austotel, and Doueihi v Construction Technologies Australia.

KEANE J:   Mr Morris, before you get to that divergence of authorities you start from the premise that this is a case where all that the respondent had was a hope or expectancy.  Now, that seems to be a hotly contested proposition, to say the very least.  To characterise the findings of the Court of Appeal as going no higher than the conclusion that your opponent’s client had a hope or expectancy does seem to me to be doing some violence to their Honours’ findings.

MR MORRIS:   Well, your Honour, this is where the consideration of these two cases ‑ which I was to draw your Honours’ attention to – this is where I guess the judicial reasoning process comes for consideration.  For instance, in DHJPM v Blackthorn Justice Meagher made the observation that you have actually got to look very closely at what the representation is.  What is the nature of it?  What is the – one needs to carefully attend to the assumption or expectation which was the object of the estoppel and the quality of the assurance and the understanding of the nature and extent of the interest before you then proceed further.

In the alternate case, which is Doueihi, we look at the representation and then we look at the validity of the reliance on the representation.  In other words, what is the focus of the judicial process?  Does one look at the statement “I have made a will in your favour” and a promisee is aware that the will may be changed at any time in the future and that he expresses a hope that his father will stick with him if he remains on the farm, or is it as compared to a statement which is a promise of a testamentary gift on death?

KEANE J:   Or just “all this will be yours one day if you keep working on the farm”.

MR MORRIS:   Well, your Honour, this is where the – that is not what was stated in this case.  The representation was by Mr Butler who says “your father has left the property to you in his will”, full stop.  If it was “one day this will all be yours on my death”, that is a different quality of representation because at all times the promisee in this case understood that the will could be changed.  He understood that his father – to use his words – may not stick with him but he hoped that he would.

Your Honours, it is our submission that there is a fundamental quality – difference in quality – between the two types of representations which only becomes apparent when one pays careful attention to the precise representation that was made and one has to pay careful attention to the promisor’s understanding of that representation rather than looking to the reliance and detriment in order to qualify.

BELL J:   Can I just take this up with you?  As I understand the Court of Appeal – that is, Justice Emmett with whom I think it was Justice McColl agreed – at application book 128, paragraph 132 his Honour summarises that in the way the matter was approached before the primary judge it was on the basis of a proprietary estoppel of the Dillwyn v Llewellyn kind, and that had been the way the matter was argued in the Court of Appeal, is that so?  Well, that is what his Honour says, and now it seems as though you are endeavouring to craft ‑ just by that last submission, you are critical of an analysis that looked to the representation and the detrimental reliance.

MR MORRIS:   Your Honour, there is no doubt that the Dillwyn v Llewellyn issue was a focus.  But when one looks at the way the debate unfolded it was clear enough that my predecessor was making the argument that a hope or expectation was simply not enough, and that the promisee had a clear understanding that the will that had been made in 2004 was capable of revocation and adjustment.

Now, one of the problems that we have is that if we approach this solely from the validity of the reliance there is a tendency – and we use that to influence the actual nature of what the representation is, the precise terms of the representation – then one ends up with potentially a situation analogous in tort law where the retrospective reasoning gives rise to a self‑fulfilling prophecy with respect to – if you look at the breach and use that to influence the scope and content of the duty of care you get to an answer that is a self‑fulfilling prophecy.

So to that extent, what is the proper focus?  What is the proper prism by which we resolve these issues?  In our submission, the starting point always must be the precise nature of the representation, firstly, and secondly, the person’s understanding of it because that then influences whether there is reliance on the representation and whether the reliance was reasonable, whether there is in fact detriment, because, your Honours, my friend may raise against me that one needs to differentiate purely commercial causes as against a family situation like this.

The point is well made except for this, that it is even more important to properly identify these representations and so forth and the reliance because there are all sorts of other competing situations which may give rise to the conduct which is said to be the detriment.  For instance, in this case we have got the filial obligation, or a sense of filial obligation, we have got the fact that ‑ ‑ ‑

KEANE J:   It is pretty clear the respondent was not going to do all that he did out of a sense of filial obligation.

MR MORRIS:   Well, that is in part true but it is also clear that there were advantages to him in the provision of water rights by various agreements and there was a finding that a substantial amount of the work was the generation of the water system which provided water to both his property and his father’s.

So it is in fact a more complicated situation with a family situation, and the other thing is what we are essentially doing here is, on one view, constraining the freedom of testamentary capacity, and where it becomes important also is not just in reliance and concepts of the assessment of detriment but also what is the appropriate remedy in order to do justice to alleviate the injustice which is said to exist.

The trial judge accepted that there was detriment and the trial judge sought to address that by way of compensation by way of unjust enrichment so as to adjust ‑ ‑ ‑

BELL J:   And the Court of Appeal applying that the reasoning in Sidhu v Van Dyke took a different view.

MR MORRIS:   That is correct, but what they did not do – and this is to be found at 134 and following – was to actually look at the nature of the representation, the precise nature of the representation.  That is for some reason – I do not mean any disrespect, that seemed to glide by in the judicial analysis but it was the starting point for the analysis, in my respectful submission.

What happened was they started with the fact that there was a representation ‑ which there was, we do not – did not assess the particular terms or the understanding of the promisee, which was, we say, critical to the argument, and they then went on to deal with the person relying on it to their detriment.  In other words, we say that the – it is our submission, it is my submission, that in fact what has happened is because the precise nature of the representation was not analysed and the specific understanding of the respondent we then ended up with an analysis which, as it were, defaulted to the remedy of estoppel to the exclusion of other people with a particular interest rather than an alternative remedy.

So, your Honours, that is why – and I understand the submission that will be put against me that there was acquiescence and so forth, but in order to determine whether it was acquiescence in the true sense one needs to look at the representation, one needs to look at the promise because in a sense if the promise was limited and the respondent understood that then there was really, on one view, a clear understanding by both parties as to how they were proceeding.

BELL J:   The respondent had made clear that he was not going to continue to work for his father’s benefit for no reward back in 1999.

MR MORRIS:   That is right, and that matter was resolved as part of the 2004 settlement.

BELL J:   It is against that background that one needs to assess the representation made by Mr Butler but while the father was present ‑ ‑ ‑

MR MORRIS:   Yes.

BELL J:   ‑ ‑ ‑ that the son would inherit – it was not just Salt Glen, he would also get the water rights, was the understanding.

MR MORRIS:   Well, my recollection is that the water rights had not been created at that point.

BELL J:   I thought that ‑ ‑ ‑

MR MORRIS:   Is that correct?  No, sorry, I stand corrected.  Thank you.  My friend had the benefit of being at the trial.  That may be correct, but that is one aspect of the equation but that, with respect, was resolved and the second representation, as it were, was of quite a different nature.  And one of the issues that we have got here is the statement that he was not prepared to work for no reward.  On that occasion, he submitted an account to his father and eventually it was paid and so on and so forth.  And it was paid, I think, by reason of the creation of a loan account, secured over a property and then ‑ ‑ ‑

BELL J:   I thought that he rendered an account for something of the order of $500,000 ‑ ‑ ‑

MR MORRIS:   Yes, $500,000.

BELL J:   ‑ ‑ ‑ and I think the property was valued at some $250,000.  Is that right?

MR MORRIS:   That was, I think, the property that was purchased as part of a land deal and the deed.

BELL J:   Yes.  And, then, there was an entry made in the loan account, yes.

MR MORRIS:   Yes, that is right.  And so, to that extent, even if we take that into account, the question then is:  what is the appropriate remedy?  And the choice of remedy depends on the nature, in our respectful submission, of the representation, the precise nature of the representation ‑ ‑ ‑

KEANE J:   Well, that is true and understanding the precise nature of the representation involves looking at all the facts, all the dealings between the parties and working out what could reasonably be taken, reasonably be relied upon, by Duncan from all those facts.  It is not a case where you can present it as being he believed he was in the will and that was all there was to it.  It is not the hope of succeeding that a beneficiary under a will who has had no other dealings with the testator has.

MR MORRIS:   Yes.  But, you see, I accept that, but the question is:  what is the ‑ if you do not look at the precise terms of the representation and the understanding of the person then, in our respectful submission, if you take those two factors into account, one then addresses the remedy not by reason of the fulfilment of a promise but a less onerous remedy such as a payment for unjust enrichment, as the trial judge did.

And so, to that extent, it is our submission that the trial judge was correct in not only the assessment of the estoppel claim but also, even if the estoppel claim was upheld, the remedy which he chose in order to adjust the relationships between the parties.  And we say this in our submissions, but one of the elements that needs to be addressed in the choice of remedy is also the terms of the 2004 deed, to which both the testator and the respondent were parties, as were the wife, Beverley, Claire and Christopher, I think, which gave a release against any prospective Family Provision Act claim and at that time the 2002 will was extant.  That will was a four‑way split between the three children and the mother.  And, really, all the  ‑ ‑ ‑

BELL J:   But against the difficulties that had emerged that had led to the family law proceedings and the equity proceedings, the deed of settlement put Salt Glen and the other property in the hands of the father and the respondent and other of the properties in the hands of Christopher and Claire, did it not?

MR MORRIS:   Yes, there was a redistribution of properties.

BELL J:   So against that background for the representation, shortly after that settlement had been achieved on that basis, for Mr Butler, in the respondent’s presence, to make the representation that he did – for my part, I have some difficulty seeing that you call in aid, successfully, the terms of the deed as against the conclusion that the Court of Appeal arrived at.

MR MORRIS:   Well, just this point, that people proceeded to enter into that will and agree to various property transactions with that term in play, with the will being as it was at that point in time, which goes into a question of unconscionability and the choice of remedy.  Because the question of unconscionability in one way one needs to assess all of the matters in order to form an opinion as to whether it was unconscionable or not.

BELL J:   The respondent continued working the property and in other ways contributing to the success of the venture.  Claire and Christopher added nothing.

MR MORRIS:   That is not quite right because, by May 2007, Claire came back on and started helping her father with the preparation of books, organising contractors, subcontractors, labour and so forth, which is what started to lead to the rapprochement within the family.  And, to that extent,

it is not correct to say that there was no contribution being made by her at all.  She came back into the fold and she started assisting her father herself.

BELL J:   And the father did not then mention the change in the will in circumstances where the primary judge found the clear reason for that was the knowledge of how the respondent would react.

MR MORRIS:   And we are stuck with that finding.  I accept that.  Just on that last point, at the time that the father changed the will but did not tell the son, the son knew that the father could change the will at any time.

BELL J:   Yes, I understand.  Yes, Mr Alexis.

MR ALEXIS:   Your Honours, could I start with Justice Keane’s insightful observation that the question of whether or not all that the respondent relied upon was a hope or an expectation was and is a hotly contested proposition.  It clearly was, and our learned friends have the very strong findings of the Court of Appeal against them on that.  We have collected them in our written submissions.  I do not perhaps need to take your Honours’ time going to them now.  And so ground 1 therefore, in our respectful submission, proceeds on, we would submit respectfully, as a mischaracterisation of the Court of Appeal’s findings of fact. 

In any event, even if we be wrong about that, the Court ought to appreciate, as I am sure the Court does, that as the reasons of Justice Emmett at application book 128, paragraphs 132 and 133, seem to make plain and your Honour the presiding Judge already adverted to what he said in 132.  But there was no relevant controversy as to the characterisation of the respondent’s proprietary estoppel case.  And, importantly, that included, although it is said at the end of paragraph 132 that it “had the flavour of a Dillwyn v Llewellyn proprietary estoppel”, it also had the flavour of a Ramsden v Dyson estoppel.

And quite significantly and this is, with respect, a fundamental answer, we would say, to ground 1, the reliance was informed not only by the conversation from the solicitor but also the conduct of the deceased father over about seven or eight years, during which he received all the benefit of all of the work, all of the third‑party loans that were paid, all of the debts that were incurred, all of the agistment income that he received off both Salt Glen and his son’s farm, known as Caramba.  And so a central feature of the findings below are not just what the solicitor said and what ought to be drawn from that but also the acquiescence case that was run and clearly, in our submission, accepted.

So, in our submission, ground 1 does not raise any question of general importance or principle because it will ultimately come down to a question of characterising the findings of the court below.

Your Honours, our friend did not address the issue of proportionality or conscionability, which are the matters arising in grounds 2 and 3.  I am not sure if your Honours wish me to address that or ‑ ‑ ‑

BELL J:   No, thank you.

MR ALEXIS:   As your Honours please.

BELL J:   Thank you.  Mr Morris.

MR MORRIS:   I have nothing else to add on that point.

BELL J:   Yes, thank you.

In our opinion there are insufficient prospects of success to warrant the grant of special leave in this matter.  Special leave is refused with costs.

Adjourn the Court to 3.30 pm on Monday, 5 February 2018 in Canberra.

AT 12.33 PM THE MATTER WAS CONCLUDED