Briggs v Jones

[2013] SADC 42

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

BRIGGS v JONES

[2013] SADC 42

Judgment of His Honour Judge Beazley

3 April 2013

REAL PROPERTY - GENERAL PRINCIPLES - INCIDENTS OF ESTATES AND INTERESTS IN LAND - JOINT TENANCY AND TENANTS IN COMMON - TENANTS IN COMMON - GENERALLY

Application for order for sale of land - tenants in common - claim of life interest, or irrevocable licence by defendant in addition to his interest as co-owner - whether order for sale ought be made.

Alleged promise by the non-occuying co-owner that the occupying co-owner could continue to reside at the property, the subject of the tenancy in common, "for as long as he required upon condition that he paid all outgoings and reasonably maintained the property" - whether a contract - whether any intention to be bound - whether any consideration for such a contract - whether any such contract enforceable - whether occupying owner breached the term of such contract by failing to reasonably maintain the subject property - whether any asserted agreement contains terms that are insufficiently certain to constitute an otherwise valid contract.

Equitable estoppel - general principles - alleged unconscionable conduct - whether grant of exclusive possession by one co-owner of land to the other co-owner irrevocable - effect of failure to comply with condition imposed upon the grant - whether imprecision in a promise will prevent an equitable estoppel arising - the extent of any equitable remedy.

Co-ownership - whether non-occupying owner entitled to order for sale - whether non-occupying owner entitled to occupation fee or mesne profits - principles applicable to relationship of brother and sister.

EVIDENCE

Admissibility of evidence of communications in connection with an attempt to negotiate a settlement of the dispute - consideration of section 67C(1) of the Evidence Act 1929 - whether a Jones v Dunkel or Blatch v Archer inference ought be drawn against the plaintiff for failing to give evidence.

WORDS AND PHRASES

"Reasonably maintain".

Residential Tenancies Act, 1995 ss 69(3) & (4) and 80; Evidence Act, 1929 s 67C(1); Law of Property Act 1936 ss 70, 71 and 83, referred to.
Payne v Rowe [2012] NSWSC 685; W v D [2012] SASCFC 142; Ermogenous v Greek Orthodox Community [2002] 209 CLR 95; King v King [2012] QCA 39; Van Dyke v Sidhu [2012] NSWSC 118; Kuhl v Zurich Financial Services Australia Limited [2011] 243 CLR 361 at [63]; Vinden v Vinden (1982) 1 NSWLR 618; Blatch v Archer (1774) 1 COWP 63 at 65; Evans v Evans [2011] NSWCA 92; Evans v Secretary of Department of Families [2012] FCAFC 81; Darmanin v Cowan [2010] NSWSC 118; Delaforce v Simpson-Cook [2010] NSWCA 84; Yeoman's Row Management Ltd v Cobbe [2008] 1 WLR 1752; Thorner v Major [2009] 3 ALL ER 945; Ronowska v Kus [2012] NSWSC 280; Jones v Dunkel (1959) 101 CLR 298; Como v Helmers [2011] WASC 179; Hardwick v Johnson [1978] 2 ALL ER 935; Manly Council v Byrne (2004) NSWSC 123; Sion v NSW Trustee and Guardian [2012] NSWSC 949; Barel v Segal (No2) [2012] NSWSC 1054; McEvoy v McEvoy [2012] NSWSC 1494; Nullagine Investments Pty Ltd v Western Australian Club Incorporated [1993] 177 CLR 635; Waddell v Waddell [2012] NSWCA 214; Pizimolas v Pizimolas (No2) (2010) SASC 209; Marriott v Franklin [1993] 60 SASR 457; Francis v Francis [2009] SASC 363; Bradbrook & Croft, Commercial Tenancy Law in Australia 2nd Ed, considered.

BRIGGS v JONES
[2013] SADC 42

Introduction

1. The plaintiff, Adele Norma Briggs, was born on 3 October 1932. The defendant, Edwin Lindsay Barry Jones, who was born on 30 April 1937, is the plaintiff’s brother.

2. This is yet another case of a disputed “family arrangement” between beneficiaries of a deceased estate, which gives rise to complex questions of law.[1] The subject case concerns the circumstances in which an “equitable proprietary estoppel” will arise, as between two co-owners of land in consequence of alleged detrimental reliance by one of them upon a promise, made by the other. It is somewhat complicated by the fact that the “promise” was subject to two conditions to be performed by the promisee.

   [1]    McEvoy v McEvoy [2012] NSWSC 1494; Marriott v Franklin (1963) 60 SASR 457; Tadrous v Tadrous [2012] NSWCA 16; Giacci v Giacci Holdings [2010] WASC 349; Darmanin v Cowan [2010] NSWSC 1118; Payne v Rowe [2012] NSWSC 685; W v D [2012] SASCFC 142; King v King [2012] QCA 39; Van Dyke v Sidhu [2012] NSWSC 118; McKay v McKay [2008] NSWSC 177; Pizimolas v Pizimolas (2010) SASC 209; Delaforce v Simpson-Cook [2010] NSWCA 84; Thorner v Major [2009] 3 ALLER 945; Evans v Evans [2011] NSWCA 111; Vinden v Vinden (1982) 1 NSWLR 618

3. In principle, where an equitable proprietary estoppel is conditional upon the performance by the promisee of certain obligations, the promisee will not be entitled to the benefit of that equitable interest, whilst he or she remains in default, of that obligation, and is incapable of rectifying that default. The substantive question is whether it would be unconscionable for the promisor to act contrary to its promise in the event that the promisee has failed to comply with one of those obligations.[2]

   [2]    Thorner v Major (2009) 1 WLR 776 at [57], Waddell v Waddell (2012) NSWCA 214, Van Dyke v Sidhu [2012] NSWSC 118; Evans v Evans [2011] NSWCA 92 at [14] and [108]; Vinden v Vinden [1982] 1 NSWLR 618 at 625; and Green v Green (1989) 17 NSWLR 343

   Background

4. The proceedings were commenced on 13 November 2009. The subject of the proceedings is a freehold residential property situated on Ilfracombe Avenue, North Brighton in the state of South Australia, being the whole of the land comprised in Certificate of Title Register Book Volume 5647 Folio 536 (“the residence”).

5. The freehold title to the residence is registered in the respective names of the plaintiff and the defendant, as tenants in common, with each registered as holding “1 undivided 2^nd part”. The latter description is more commonly referred to as “one undivided moiety”.[3]

   [3]    See Law of Property Act, 1936, SA; section 70, and Francis v Francis [2009] SASC 363 at [68]-[70]

6. The residence was constructed in about 1950 as a war service home.[4] At that time the plaintiff was aged 18 years and the defendant was aged 13 years. The defendant has lived at the residence for about 60 years, initially with his parents, then with his father, and finally by himself. The condition of the residence, and the level of its maintenance over the years, became the major focus of the trial.[5]

   [4]    T p. 56 and See Ex P 1.1A

   [5]    T p. 67 - 70

7. The defendant had left the residence when he married at age 24 years. There was one child of that marriage. He returned however when that marriage ceased after about 4 years. In or about 1963, the parties’ mother and father finally separated. The defendant remained in the residence with his father. Although there was a dearth of evidence about the plaintiff’s occupancy thereof, I infer that she had left the residence some time prior to 1963.

8. In about 1987, their father was admitted to the Myrtle Bank Hospital. He had been showing signs of dementia for some time before that admission. He was aged about 92 years when he died in 1992.[6]

   [6]    T p. 67 - 68

9. The relationship between the plaintiff and the defendant has, for some reason, unexplained by the evidence, broken down irretrievably. There has been little or no personal contact between them since approximately 1993.[7] I have no doubt from the whole of his evidence that the defendant, in particular, does harbour considerable bitterness towards the plaintiff.[8]  It may relate back to their parents’ separation. It may be reflective of his genuine belief that he had not received his full entitlement from the estate of the deceased, and that he has, at least, a moral right to remain in the residence until his death. He clearly misunderstood his rights as a tenant in common, believing, incorrectly, that his interest would automatically pass to the plaintiff upon his death.[9]

   [7]    T p. 55 - Contrast, however, T p.64

   [8]    T p. 109

   [9]    T p. 71 - 72

10. I will not speculate, however about the source of that bitterness.

11. The plaintiff did not give evidence, and therefore I cannot determine whether this bitterness was reciprocated. However some of the respective animosity is evident from their pleadings.[10]

    [10] See T p. 65 and the pleading in paragraphs 4, 5, 14 and 15 of the Defence, and the plaintiff's Reply in paragraph 2.3, 2.4 and 2.8 as to the defendant's alleged conduct.

12. Each of the parties, as co-owner, has the right to the use and enjoyment of the whole of the residence. At common law, the exercise by one co-owner, of his right of possession will not, of itself, give rise to any cause of action,[11] by a co-owner who elects not to exercise his, or her right to possession.

    [11] C.f. W v D [2012] SASCFC 142; Forgeard v Shanahan (1994) 35 NSWLR 206; and Payne v Rowe (2010) NSWSC 685

13. The 75 year old defendant wishes to remain in the house in which he has resided nearly all of his life. The 80 year old plaintiff, has permitted the defendant to have exclusive occupation of the residence for almost 20 years, and now wishes, late in her life, to receive some benefit, from her interest as tenant in common, in the residence.

14. This is a most unfortunate dispute between siblings, at a time, and at their respective ages, when past grievances ought to have been long forgotten. They find themselves in an impossible situation in which one of these siblings will be devastated by a Court order.[12]

    [12] T p. 109

15. As is patently obvious, the airing of family disputes in court is unlikely to assist in a resolution satisfactory to either party. At the completion of the respective submissions of counsel, the parties were invited to consider whether they ought to adopt a practical means of resolving the subject and any future disputes. This dispute ought to have been easily resolved by the parties, save and except for any respective animosity.

16. In Evans v Evans[13] the Court of Appeal (NSW), when considering a similar matter said at [146]:

    … a mediation can deal with aspects of the relationship, both past and future, of the parties to a dispute in a way that is not possible for court proceedings. When a dispute involves members of a family, as the present one does, that feature of mediation can make it a particularly useful tool for dispute resolution.

    [13] [2011] NSWCA 92

17. Having heard nothing from the parties, I now publish my reasons in this action.

    The subject proceedings

18. The genesis of the dispute between the parties lies in the terms of the Will, dated 17 May 1983, of their respective father,[14] the late Edwin Norman Jones (“the deceased”), who died on 14 September 1992. The deceased appointed Public Trustee to be the sole trustee and executor of his Will.

    [14] Contrast the irrelevant pleading in paragraphs 4 and 5 of the Defence.

19. In his Will, save for some minor personal property which was bequeathed to the defendant, the deceased devised and bequeathed the residence and the balance of his estate to the plaintiff and the defendant as tenants in common in equal shares.

20. On or about 27 April 1993, the freehold title to the residence was transmitted to the plaintiff and the defendant.

21. Since the death of the deceased, the defendant has been the sole occupant of the residence, and has paid the insurance, rates and taxes including the Emergency Services Levy[15] levied on the residence.

    [15] T p. 92 - 93

22. In or about 2001, the defendant received a letter (“the first letter”) written by someone on behalf of the plaintiff. It referred to her “expectation” that he must maintain the residence and pay the insurance for the residence. He responded by writing the word, “Bullshit” on the envelope, and placing it back in the plaintiff’s letterbox. He otherwise disregarded the letter.[16]

    [16] T p. 109, 120 - 121

23. Until 2009, the plaintiff had not sought to exercise her common law right to occupy the residence, nor had she otherwise inspected the residence.[17]

    [17] T p. 93 - 94

24. On 19 October 2009, the plaintiff’s solicitors forwarded a letter of demand to the defendant.[18] In that letter the plaintiff conceded that she had been prepared to allow the defendant to remain exclusively in the residence following the death of the deceased. She explained that her circumstances had adversely altered in consequence of the increase in value of the residence. She wished to realise her share of the residence, “so as to benefit her children, and undertake renovations to her home”. She subsequently complained that the defendant had permitted the residence to fall into a state of substantial disrepair, such that its highest value is solely as vacant land in an otherwise highly desirable location.

    [18] See Ex D4

25. The defendant has not paid any occupation fee or “mesne profit”[19] to the defendant for his exclusive use. The defendant has also refused to make any offer for the purchase of the plaintiff’s interest in the residence. He is a pensioner with little savings, and would in any event, be unable to afford any such purchase.[20]

    [19] See W v D [2012] SADCFC 142 at [28]

    [20] He estimated that he had savings of about $6,250. T p. 80 - 118

26. The defendant alleges that the plaintiff is estopped from seeking any order for the sale of the residence. He asserts that the plaintiff had entered into a “verbal agreement, arrangement, or understanding”, with him, to the effect that he became entitled to exclusively occupy the residence “for as long as he required during his lifetime”.[21]

    [21] Amended Defence paragraph 16

27. The plaintiff, thereafter, gave notice of her intention to seek, inter alia, orders that the defendant either elect to purchase her interest in the residence at market value, or alternatively that the residence be sold, pursuant to the powers set out in the Law of Property Act (1936) SA[22] (“the Act”).

    [22] See sections 70, 71 and 83

28. Section 70 of the Act, provides:[23]

    On any application for partition, if the party or parties interested individually or collectively, to the extent of one moiety or upwards in the property, request the court to direct a sale of the property and a distribution of the proceeds, instead of a division of the property between or among the parties interest, the court shall, unless it sees good reason to the contrary, direct a sale of the property accordingly, and shall give all necessary or proper consequential directions.[24]

    [23] Francis v Francis [2009] SASC 363, Kelton v Brownrigg [2004] SASC 408; and Critchley v Collins [2004] SASC 10

    [24] The "Court" includes the District Court

    The nature of the proceedings

29. In Nullagine Investments Pty Ltd v WA Club Inc[25], Brennan J detailed the historical bases for such a remedy, as follows:

    The share or interest which a tenant in common has in land is an "undivided" share, that is to say, "a distinct share in property which has not yet been divided among the co-tenants.” A division of the property is repugnant to the nature of a tenancy in common, for it is an essential characteristic of a tenancy in common that each of the tenants has the right to occupy the whole of the property in common with the others. Like joint tenants, tenants in common have a unity of possession; unlike joint tenants, they need not have a unity of interest, nor a unity of title, nor need there be a unity in the time when the interests of the co-owners vest. Each tenant in common has a separate and individual title to the property, limited according to the estate or term granted to or acquired by the tenant. Thus one tenant in common may be seised of an estate in fee simple, another seised of an estate for life, while a third may be a tenant for a term of years, each of their interests being separately acquired at different times. There is no right of survivorship among tenants in common. And thus, at common law, a tenant in common who wished to sell his interest in land was constrained to sell subject to the right of any co-tenant to remain in possession of the whole of the land. The vendor could neither seek a division of the land among the co-tenants nor compel the other co-tenants to join in a sale of the land. In 1539 and in 1540, the first statutes ((6) 31 Hen.VIII c.1 in relation to estates of inheritance, extended to tenants for life or for a term of years by 32 Hen.VIII c.32.) were enacted to authorize the issuing of writs of partition.

    ….

    A tenant in common who is entitled to a half share or upwards and who applies to the Court for relief under a statute in the form of s.126(1) has a right to either an order for partition or an order for sale. Before the Court was authorized to order sale in lieu of partition, the co-tenant having an interest of a moiety or upwards was entitled as of right to a writ of partition, however inconvenient it might have been. The Court's discretion to order partition rather than sale is confined by the statutory direction that sale is the remedy to be afforded to a co-tenant entitled to a half share or upwards "unless (the Court) sees good reason to the contrary." There may be a wider discretion to deny a remedy reposed in courts exercising a jurisdiction under statutes which permit the appointment of trustees for the sale of land held by co-tenants. That remedy is an order for sale of the Property and a division of the proceeds unless the Court sees good reason why the remedy should be partition. Here, the Property is unsuited to partition.

    ….

    The purpose of such Acts is to provide a statutory mechanism for terminating the co-ownership of land when the co-owners fail themselves to agree on the manner in which the co-ownership shall be terminated. By affording the remedies provided by the Partition Acts, the legislature has facilitated the alienability of the land itself and alienability of land is a policy which the law supports except where inalienability is required for the protection of a disadvantaged class (36) … where there is no agreement between or among co-owners which provides for the termination of the co-ownership or where an agreement between or among co-owners would prevent the termination of the co-ownership, it would be contrary to the policy of the Partition Acts to deny the remedies they afford. To deny those remedies would be to leave the land in the hands of the co-owners who may be unable or unwilling to agree on its management and use and who have made no agreement for its disposition ((38) (citations omitted)

    [25] (1993) 177 CLR 635 at [3], [5] and [12]

    The Pleadings

30. The pleadings were, ultimately, not particularly helpful for reasons which will become clear. It is however necessary to set out a synopsis of them. Logically the starting point is the defendant’s pleading. Prima facie, the plaintiff as a tenant in common, to the extent of one moiety, is entitled to an order for the sale of the residence. The defendant was therefore, in effect, dux lites, to establish why it is that the Court ought to restrain the plaintiff from exercising her right of possession as a co-owner, and to prevent the sale of the residence.

    ·The Amended Defence and Counterclaim

31. In his Amended Defence and Counterclaim, the defendant asserts that after the death of the deceased, the plaintiff accompanied him to meet with Public Trustee. He asserts, in paragraph 16.1 thereof, that, on that occasion and prior to the transmission of the Title, the plaintiff promised (“the promise”) that the defendant:

    would continue to reside on the property for as long as he required during his lifetime on the following conditions that:

    • The defendant paid all outgoings relating to the property and

    • The defendant reasonably maintained the property. (my emphasis)

1. The defendant alleges that, at the time of the “promise”, he was entitled to seek additional maintenance from the estate of the deceased as he was the deceased’s primary carer. He further asserts that the deceased had also represented to him, in his lifetime, that “it was his intention that the defendant be permitted to continue to live in the residence for as long as the defendant required”. (my emphasis)

2. The defendant asserted that the plaintiff had received monies from the estate and had wrongfully retained those monies. He alleges that, in consequence of the plaintiff’s promise to him, he did not pursue a claim for further maintenance against the estate of the deceased; did not request the Public Trustee to recover any alleged wrongful payment from the plaintiff; and by implication, did not pursue a claim in equity for the whole of the residence.[26]

   [26] See paragraphs 16.7 of the Amended Defence and Pizimolas v Pizimolas [2010] SASC 158 and [2010] SASCFC 34 (an appeal)

3. The defendant asserts that the plaintiff holds her legal interest as co-owner in the residence “subject to an equitable interest in his favour to reside on the residence for as long as he wishes pursuant to an express, resulting or constructive trust”.

4. The defendant seeks an injunction to restrain the plaintiff from “disturbing the defendant’s occupation” of the residence. He also seeks a declaration that the plaintiff holds her interest as tenant in common upon trust permitting the defendant to remain in occupation of the residence “for as long as he requires”.

5. I mention, in passing, that in the Amended Defence and the Amended Reply,[27] each party pleaded some "past grievances” as against the other. Prima facie they were relevant to the pleaded case of the defendant that he had acted to his detriment by abandoning claims that he may have had against the estate, and to have caused the estate to recover monies from the plaintiff. They may also have had some relevance to the nature and effect of any promise made by the plaintiff to the defendant.[28]

   ·The Amended Statement of Claim and Amended Reply

   [27] Amended Defence - paragraphs 3, 4, 5, 13; and Amended Reply - paragraphs 2.3, 2.4, 2.8 and 2.11

   [28] H Stanke & Sons Pty Ltd v Von Stanke [2007] SASC 130; Wide Bay Conservation Council Inc v Burnett Water Pty Ltd [No 3] [2009] FCA 530; Archer v Channel Seven Perth [2002] WASC 160; Millington v Long (1880) 6 QBD 190

6. The plaintiff did not specifically plead to the defendant’s assertion of the “promise” in paragraph 16 of the Amended Defence. However in her Amended Statement of Claim, she pleaded that although the defendant had “paid rates and taxes for the property since 1993, [he] has not kept the property properly maintained”.[29]

   [29] See paragraph 9 and 10 of the Amended Statement of Claim

7. The plaintiff denied the defendant’s allegations of wrongfully obtaining funds from the deceased. She admitted receiving the sum of $70,000 from the deceased estate,[30] but pleaded that that such monies, as were received by her from the estate, were payments made for the benefit of the deceased or alternatively intended as a gift by the deceased.

   [30] Reply paragraphs 2.9 - 2.11 inclusive

8. The plaintiff disputes that the defendant had an arguable claim for further maintenance from the estate. On his own admission the defendant had been aware of the terms of the Will for many years before the death of the deceased, and had not complained.

9. She asserts that the residence is in “desperate need of repair”, and, in consequence of the defendant’s default, its value can only be assessed as a vacant allotment.

10. The plaintiff complains that the defendant has not paid any sum to her for his exclusive occupation of the residence, since it was transmitted to the plaintiff and the defendant on 27 April 1993.

11. The plaintiff seeks an order for the sale of the residence because the defendant has refused to either offer to purchase her interest in the residence or to consent to the sale of the residence.

12. She also seeks an order for payment by the defendant of “occupation rent, calculated at fair market rent from 19 October 2009 to the determination of the within action”.

    Issues arising from the pleadings

13. The issues were as follows:

    ·that in so far as it is established there was such an “agreement”, did the parties intend to be legally bound by it. Was there any consideration for the agreement. Were the terms of the “agreement” sufficiently certain.[31]

    ·if so then what is the proper construction of the terms of the alleged agreement and in particular, the respective phrases, “for as long as he required in his lifetime”, and “reasonably maintaining the residence”;

    ·In so far as it is established that the promise did not give rise to a binding agreement, is the defendant is entitled to equitable relief, and what is the extent of such relief?[32]

    ·Where a promise is conditional, what is the consequence of a failure by the promise to satisfy that condition?

    ·In the subject case is the defendant entitled to any interest more than a revocable licence to have the use of the residence to the exclusion of the plaintiff?

    ·Is a tenant in common of real estate, in equal shares entitled, as a matter of course, to an order for sale of that property?

    ·In what circumstances is the non occupying co-owner is entitled to an “occupation fee”.[33]

    [31] Como v Helmers [2011] WASC 179 at [69]

    [32] Vinden v Vinden (1982) 1 NSWLR 618 and Evans v Evans (2011) NSWCA 92

    [33] W v D [2012] SASCFC 142; Payne v Rowe [2012] NSWSC 685; McKay v McKay [2008] NSWSC 177

    Procedural matters and the conduct of the trial

14. It is trite that any relief ordered by a Court ought to be determined upon the issues identified by the parties in their respective pleadings.[34]The parties may however, by agreement, limit the issues to be determined, and the extent of any relief claimed.[35]

    [34] Banque Commerciale SA v Akhil Holdings (1990) 169 CLR 79; Branir Pty Ltd v Owston Noninees (No2) Pty Ltd (2001) 117 FCR 424

    [35] See Gould and Birbeck v Mt Oxide Mines (1916) 22 CLR 490 at 517, and Corrandini v Lourinov (2000) 77 SASR 125 at 139

15. At the commencement of the trial, counsel for the plaintiff intimated that the parties had agreed to limit the issues for the Court to decide.

16. In opening the case for the plaintiff, he said:[36]

    The trial is different from what you’ve read in the copy documents because for the purposes of the trial we ask the Court to assume that the agreement pleaded by the defendant was entered into. What that means, is that the trial dispute shrinks to whether there is non-compliance with the condition of the agreement alleged by the defendant. We assert that he ought not be afforded his accountable entitlements under the principle of estoppel, constructive trust or the like … we accept that the agreement would create an estoppel making it unconscionable for my client to preclude [the defendant] from living in the property if he performed his side of the bargain by maintaining the property and making good his expenses, then he would be able to stay there for as long as he chose, which is not a life estate, it is something else (my emphasis) … The only issue before your Honour is: is there compliance by the defendant with the conditions to the plaintiff’s promise and what are the consequences of non-compliance?

    [36] T. p2, 5 and 49

17. Implicitly, counsel seemed to concede that not only had a promise in those terms been made by the plaintiff but that there had been some detrimental reliance upon it by the defendant such as to satisfy the prerequisites for equitable relief.[37]

    [37] Giumelli v Giumelli (1999) 196 CLR 101 at [6]; Delaforce v Simpson-Cook (2010) 78 NSWLR 483 at [81], and Waddell v Waddell [2012] NSWCA 214 at [54]

18. The use of the expression “life estate” is unhelpful. A life tenant has quite extensive rights, including the right to let the property to others during his lifetime. Amongst the obligations of a life tenant, are that he must avoid voluntary waste, and act in the best interest of the property. Thus in Chirnside v Chirnside,[38] a life tenant was restrained from evicting tenants, who held a remainder interest, and had been in possession for 28 years. The termination of their tenancy was deemed not to be in the best interest of the property.

    [38] (1947) WLR 183

19. In the event neither party in the subject case submitted that the defendant was entitled to relief “as a life tenant”.

20. The question, on the plaintiff’s case, is what consequences flow from the alleged failure of the defendant to “reasonably maintain” the residence.

21. In essence, counsel for the plaintiff submitted that the only live issue in the trial was the question as to whether the defendant had reasonably maintained the residence. He submitted that if the defendant had not complied with that condition, then he could not be entitled to any equitable relief. With respect, this submission somewhat overlooked two subsidiary issues namely the health, and financial position of the defendant.

22. On the scenario submitted by the plaintiff, it would still be necessary for the Court to determine whether the defendant was physically capable of rectifying any maintenance failures, or was in a financial position to pay for others to do so.

23. The parties are, of course, to be commended for any attempt to simplify the proceedings. In particular I accept that the plaintiff was anxious to put to one side any vexatious allegations or “past grievances” between the parties and solely, concentrate upon the state of repair of the residence in consequence of the defendant’s exclusive occupation of it.

24. The manner in which the trial was in fact conducted, however, led to some difficulties. It was not readily apparent that there was ad idem between the parties as to the relevant issues. I expressed concern to counsel that there was a risk that the issues were not sufficiently identified.[39]

    [39] T p. 45

25. Counsel for the plaintiff sought to restrict the evidence to the state of the maintenance of the residence.  The only witnesses called by the plaintiff were respectively Noel Leslie Weightman, a valuer, who gave evidence as to the condition of the residence, and opinion evidence as to the best use of the land and its value; and Sue Irene Midson, a Property Manager with a real estate firm, who expressed an opinion as to its rental value.

26. Counsel for the plaintiff, at least initially, submitted that “an agreement” had been entered into to enable the defendant to remain in the residence, subject to the specified conditions.

27. Accordingly, he submitted that any evidence as to pre-contractual discussions or events was irrelevant.

28. Counsel for the defendant disavowed any suggestion that the defendant had entered into a binding agreement with the plaintiff for him to remain in the residence.[40] He submitted that the defendant’s case was that he had suffered detriment in consequence of the subject promise made to him by the plaintiff, and, accordingly, he ought be given equitable relief to the effect that he be permitted to remain in exclusive possession of the residence for as long as he wished, presumably until his death or until he is obliged to move into a retirement home.

    [40] T p. 43

29. He submitted that the conditions pleaded in paragraph 16 of the Amended Defence were “implied conditions”, and not expressed.[41] That submission, with respect, did not accord with the defendants’ own pleadings. He made no application to amend the pleadings. In his final address, he did not submit that anything turned upon whether the conditions were expressed or implied. Again, the use of the expression “implied conditions”, is somewhat unfortunate. I however have taken the defendant’s counsel to mean that the defendant admits that any equitable interest entitling him to remain rent free in the residence was subject to the defendant reasonably maintaining the residence and paying the outgoings.

    [41] T p. 45

30. Counsel for the defendant did ultimately accept that the only live issue was whether the defendant had reasonably maintained the residence. He submitted however that, in some way, the question as to whether the plaintiff had received some money from the estate:

    “is relevant in terms of your Honour considering the nature and extent of the implied condition about reasonably maintaining the property … It doesn’t help your Honour to determine as to whether he has fulfilled the condition as such. But it helps your Honour in interpreting what the condition means, and your Honour needs to take into account what happened because the receipt of the money is the very foundation upon which the equitable interest arises.”[42]

    [42] T p. 51 - 53

31. I determined that I would hear that evidence.[43] Notwithstanding the concession by the plaintiff that the defendant would be entitled to some form of equitable relief, had he satisfied the conditions attached to the plaintiff’s promise, it will be necessary to weigh up, from all of the circumstances, whether it would be unconscionable if the plaintiff did not continue to honour her promise.[44]

    [43] T p. 53

    [44] See Duic v Duic [2013] NSWCA 42

32. In Delaforce v Simspon-Cook,[45]the Court of Appeal (NSW) adopted the dicta of Hoffmann, LJ in Walton v Walton as follows:

    … equitable estoppel [by contrast] with contract … does not look forward into the future … [it] looks backwards when the promise falls due to be performed and asks whether, in the circumstances which have actually happened it would be unconscionable for the promise not to be kept.

    [45] [2010] 79 NSWLR 483

33. The Court attended a view of the subject residence in the company of the parties, counsel and solicitors. A transcript was taken of the matters addressed by each of the parties on that view. It is trite that the purpose of the view was to enable the Court to understand the issues and to follow the evidence. What was seen on the view is not evidence in the case. As it transpired it simply confirmed the oral evidence, expert report and photographs as to the poor state of the residence.

34. The defendant was critical of the plaintiff for failing to give evidence, and submitted that an inference adverse to her case ought be drawn, referring to the principles in Jones v Dunkel[46] and Blatch v Archer[47]. The plaintiff submits that no adverse inference ought be drawn against her. Counsel submitted that she was simply not in a position to give any evidence as to the state of maintenance, which was the only live issue in the trial.

    [46] (1959) 101 CLR 298

    [47] (1774) 1 Cowp 63 at 65

35. There was a dispute between the parties as to the tender of various documents. The plaintiff had initially sought to tender a book of correspondence between the parties, which included various proposals, which were likely to have been inadmissible, pursuant, to s 67C(1) of the Evidence Act. Ultimately she withdrew the application.[48] Counsel for the defendant initially attempted to lead evidence from the defendant as to his knowledge of discussions, and of correspondence, as between the plaintiff and officers of Centrelink.

    [48] T p. 151

36. As to the correspondence, the defendant sought to tender a record wherein “someone” had estimated a value in 1993 of the residence. The source was not identified, and its weight was negligible.[49] The second document was a letter apparently written by the plaintiff and dated 29 June 1993, in which she asserted that “I have an agreement with my brother to allow him use of the [residence] without rent for as long as he wishes”.[50] While that letter, being an admission by the plaintiff, is clearly otherwise admissible, it contains terms less favourable to the defendant, and is, in various respects, inconsistent with the defendant’s pleaded case.

    [49] T p. 149 - 150

    [50] T p. 66 - 67 and 147 - 149

37. The plaintiff and the defendant had both accepted that the terms of “the promise” were those contained in paragraph 16.1 of the Amended Defence. An application to tender documents from that file was ultimately not pursued by the defendant.[51]

    [51] T p. 148

    The witnesses

38. It is appropriate to comment briefly upon the witnesses called at the trial.

39. The defendant was the sole witness called to give evidence as to the background facts, and the matters raised by him in the Amended Defence.

40. In the event most of the relevant facts were not in dispute.

41. As I have already noted, neither the plaintiff nor her husband gave evidence.

42. It is convenient to briefly refer to some of the evidence of witnesses other than the defendant.

43. The plaintiff called as witnesses, Noel Leslie Weightman; and Sue Irene Midson.

44. Mr Weightman, a valuer, had produced a Valuation Report,[52] which was tendered, and gave oral evidence as to the “best use of the land”, and as to the condition of the residence.

    [52] Ex P 1.1

45. On occasions, however, he engaged in some speculation. An example was his “opinion” that the residence had not been painted for 20 years. He admitted that he was not a building consultant, and that his “opinion” on that topic did not fall within his expertise. As it transpired the defendant subsequently conceded that he had not undertaken any painting on the residence for at least 16 years.

46. He said that the residence was in such a poor condition that a commercial rent could not be charged. He explained that its best current use for the purpose of valuation was as a vacant allotment for development. He accepted that the poor state was the consequence of weather rather than active damage; together with a lack of proper maintenance.

47. He said that it was “below par” in condition. Accordingly there was now no point in painting it or bringing it up to a reasonable condition because the benefit of that work would be lost when it was sold as a vacant allotment.

48. Although Mr Weightman was cross-examined as to the basis of his valuation of the residence at $600,000, there was no fundamental dispute about his admissible evidence. In any event I accept the evidence of Mr Weightman, in respect of his valuation and the basis for it, and his description of the residence as being in a poor condition.

49. Sue Irene Midson was a Property Manager with some 25 years experience in rental valuations. She opined that the residence could be rented out at $220 per week. In the event, nothing turned upon that evidence, which I accept.

50. A letter from the Environmental Health Officer of the City of Holdfast Bay, Mr McInnes, and dated 29 April 2011[53] was tendered by the defendant with the consent of the plaintiff. That letter set out his opinion that the residence was, at that time, “fit for habitation”. Its weight in respect of the question of “reasonably maintained” was the subject of final addresses.

    [53] Ex D3

    The Defendant

51. The defendant presented, in colloquial terms, as an uncomplicated “salt of the earth” type of person.

52. He had left school at age 15 to commence an apprenticeship as a panel beater/mechanic. He had thereafter worked as a bricklayer and as a painter/decorator. He had had a difficult life. The health of the defendant and his capacity to maintain the residence became a major focus of the trial.

53. He had suffered a series of strokes about 20 years ago,[54] and has been in receipt of a Disability Pension and subsequently an Aged Pension since that time. About 12 months ago he had suffered a fracture of his right patella, which required him to use a walking frame.[55]

    [54] T p. 56

    [55] T p. 85 - 87

54. Although the defendant gave evidence, supported by a note from his general practitioner that he had recovered well from the fractured patella, he conceded that he had in the past been significantly affected by those strokes. He described the medication that he is obliged to take, and conceded that he suffers from pain in his joints. He still maintained that he was physically capable of undertaking the necessary painting work. The defendant did not produce any medical notes as to his general health.

55. He was obviously attached to the residence as the only home that he has really known.

1. He explained:[56]

   A“Everything I’ve done, I’ve accumulated – its – I’ve just grown with that house virtually, yes. Everything I do, the rotation around me, there’s a shop and bank you know, the bowling club I used to – and all that sort – everything was there within five minutes from my home and I just lived a plain, simple life. I’m not involved in any way. It’s just been my home, family and that’s it.

   QWhat would be the effect on you if the house was sold.

   AI would be heartbroken and I just wouldn’t know what to do with myself without my workshop and tools and everything. It keeps me alive”.

   [56] T p. 109

2. Despite the concession by the plaintiff as to the detail of the promise made by her to the defendant as pleaded by the defendant in paragraph 16 of the Amended Defence, there is a need to consider with some caution the evidence generally of the defendant as to events which have occurred many years ago.

3. I have no doubt that he did his best to accurately recall the relevant events. At times he had some difficulty in remembering when it was that maintenance work was undertaken by him. When questioned about what work had been undertaken after the plaintiff had made the promise in 1993, he tended to refer to work undertaken by him prior to his father’s death in 1992.

4. In Watson v Foxman,[57] McLennand CJ in eq, said:

   … human memory of what was said in the conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervenes, and the processes of memory are overlaid, often subconsciously, by perceptions of self interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary common experience.

   [57] [1995] 49 NSWLR 35

5. Those dicta as to the inherent doubts which arise as to the reliability of oral recollections of events which occurred many years ago were consistent with those of other Courts including the High Court of Australia in West v GIO (NSW),[58] and by the Supreme Court of Western Australia in Bell Group Ltd v Westpac Banking Corporation (No9).[59]

   [58] [1981] 148 CLR [62] at [69]

   [59] [2008] WASC 239

6. In Chidiac v Maatouk,[60] and in Tadrous v Tadrous,[61] the Supreme Court of New South Wales have affirmed that:

   Where claims are made against the estates of deceased persons, or based on oral agreements with deceased persons, careful scrutiny is required. The Court generally looks for corroboration of those claims … considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of cause of action … in the absence of some reliable contemporaneous record or other satisfactory corroboration.

   [60] [2010] NSWSC 386 at 102 and See

   [61] [2010] NSWSC 1388

7. There was one curious piece of evidence by the defendant.

8. The defendant had explained that he had last spoken to the plaintiff, whom he described as “his sister Norma”,[62] about 20 years ago, following the death of their mother. Yet he later remembered a conversation with the plaintiff’s husband; which he said had occurred about seven years after the death of the deceased. He said that he had told the plaintiff’s husband that “your family will get half the house in any case because it is in joint names”.[63]

   [62] T p. 55

   [63] See T p.53, 64 and 65

9. He repeated the answer as follows:

   QIf you had this discussion with your sister about really she having the money and you having the house, why didn’t you ask for the property to be put in your name alone rather than in both names?

   ABecause I had nobody, virtually, no family, except my daughter, and I said, well in my own mind, dad left half to both children, you know my sister and I, and I think it’s only fair that I leave half of my estate as father did, to the sister or grandchildren.

10. While I readily accept that the defendant did not understand the difference between the right of survivorship vested in a joint tenant, as contrasted with the rights of a tenant in common, I did find it odd that there would have been such a discussion in light of the animosity between the parties. If he believed that the residence would pass by survivorship, did he assume that he would pass away before his older sister?

11. Despite the curious nature of that evidence, I accept the defendant to be an honest witness, but one who has undoubtedly convinced himself over time as to his moral right to exclusive possession of the residence.

    The Legal Principles

    ·Contractual Issues

12. The basic principle is that consideration is essential for a binding contract. Consideration may consist of the abandonment of a bona fide claim.[64]

    [64] Foakes v Beer (1894) 9 AC 605

13. The Courts have long recognised the difficulties in determining whether family members intend that their arrangements ought have binding legal effect. In Balfour v Balfour,[65] Lord Atkin described, as a presumption of fact that family arrangements do not give rise normally to binding contracts.

    [65] (1919) 2 KB 571 at 578-580, and see Cohen v Cohen (1929) 42 CLR 91 per Dixon J

14. In Jones v Padavatton,[66] Salmon LJ wrote that these disputes “derive from experiences of life and human nature, which show that in general, men and women usually do not intend to create legal rights and obligations, but to rely on family ties and mutual trust and affection … however there may be circumstances in which arrangements between close relatives are entitled to have the force of law”.

    [66] [1969] 1 WLR 328

15. There have been marked differences in dicta in subsequent case law as to whether there is such a “rebuttable presumption”, or “usual expectation” that arrangements made in a family context are normally not legally binding.[67]

    [67] See Tadrous v Tadrous [2010] NSWSC 1388; Darmanin v Cowan (2010) NSWSC 118; Delaforce v Simpson-Cook [2010] NSWCA 84; Ashton v Pratt (No 2) (2012) NSWSC 3, Ronowska v Kus [2012] NSWSC 280

16. It is trite that binding legal contracts may be entered into notwithstanding informality or even vagueness in cases of close familial relationships.[68]

    [68] See Boviard v Frost [2009] NSWSC 337 and Sion v NSW Trustee and Guardian [2012] NSWSC 949

17. In the context of an alleged presumption against an intention to create contractual relations in the engagement of a minister of religion, in Ermogenous v Greek Orthodox Community of SA,[69] the plurality of the High Court rejected the utility of any such presumptions, stating:

    Intention to create contractual relations

    It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty.” To be a legally enforceable duty there must, of course, be identifiable parties to the arrangement, the terms of the arrangement must be certain, and, unless recorded as a deed, there must generally be real consideration for the agreement. Yet "[t]he circumstances may show that [the parties] did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts.

    ….

    In this context of intention to create legal relations there is frequent reference to "presumptions". It is said that it may be presumed that there are some "family arrangements" which are not intended to give rise to legal obligations and it was said in this case that it should not be presumed that there was an intention to create legal relations because it was a matter concerning the engagement of a minister of religion. For our part, we doubt the utility of using the language of presumptions in this context. At best, the use of that language does no more than invite attention to identifying the party who bears the onus of proof. In this case, where issue was joined about the existence of a legally binding contract between the parties, there could be no doubt that it was for the appellant to demonstrate that there was such a contract. Reference to presumptions may serve only to distract attention from that more basic and important proposition.

    More importantly, the use of the language of presumptions may lead, as it did in this case, to treating one proposition (that an intention to create legal relations is not to be presumed) as equivalent to another, different proposition (that generally, or usually, or it is to be presumed that, an arrangement about remuneration of a minister of religion will not give rise to legally enforceable obligations). References to "the usual non-contractual status of a priest or minister" and factors which "generally militate against" a finding of intention to create legal relations illustrate the point. The latter proposition may then be understood as suggesting, in some way, that proof to the contrary is to be seen as particularly difficult and yet offer no guidance at all about how it may be done. Especially is that so when the chief factor said to justify the proposition that an intention to create legal relations must be proved (the essentially spiritual role of a minister of religion) is then put forward as the principal reason not to find that intention in a particular case, and any other matters suggesting that there may be an intention to create legal relations are treated as dealing only with "collateral" or "peripheral" aspects of the relationship between the parties.  In practice, the latter proposition may rapidly ossify into a rule of law, that there cannot be a contract of employment of a minister of religion, distorting the proper application of basic principles of the law of contract.

    It is equally important to notice that the second form of proposition that we have identified may hide the making of some unwarranted assumptions that certain principles and practices of church governance are "usual" or "general", or that a particular kind of relationship between clergy and the church or community in which they work is the norm. No such assumptions can be made.

    [69] [2002] 209 CLR 95 at [24]

18. The notion of a rebuttable presumption in a wider family context was also criticised by the Full Court of the Federal Court of Australia in two recent cases, Branir v Owston Nominees,[70] and Evans v Department of Families.[71]

    [70] (2001) 117 FCR 424 at [293]

    [71] (2012) 289 ALR 237

19. In the latter case the Court somewhat tempered its criticism by noting that:

    Nonetheless courts must be careful not to convert informal situations that frequently arise in circumstances that involve …. concomitant human emotional feelings of duty or responsibility, into the stuff of daily commercial life. Hence, the importance of considering, objectively, all the circumstances in arriving at a conclusion in respect of whether the parties intended to enter into contractual relations, free from suggested presumptions. The surest and safest way to proceed is, as the plurality held in Ermogenous 209 CLR at 106 [26]-[27], by examining objectively the actual circumstances and context of the parties’ dealings to ascertain whether what they said and did evinced an intention to contract as opposed to expressing a sincere, but legally insufficient, promise or commitment that reflected the trust or love shared between them.

20. In the subject case because of the way in which the parties limited their respective addresses to equitable relief, it is not strictly necessary to further discuss the question of contract.

    Equitable relief

21. In the event that an arrangement as pleaded by the defendant was entered into by the plaintiff, but was not such as to establish a legally binding agreement, the question arises as to whether the plaintiff is estopped in equity from refusing to fulfil a promise in circumstances whereby the defendant will suffer detriment if the plaintiff departs from her promise.[72]

    [72] Sullivan v Sullivan (2006) NSWCA at [85]

22. I do not need to address the question as to a “constructive or resulting trust”. Both parties proceeded upon the basis of an equitable proprietary estoppel.

23. For an equitable estoppel to operate there must be some encouragement by the plaintiff in the defendant of an assumption that a promise will be performed, and reliance on that by the defendant, in circumstances where departure from it by the plaintiff would be unconscionable. The detriment need not consist of the expenditure of money. However it must be something which is substantial.

24. In Pizimolas v Pizimolas, Kourakis J. set out the relevant principles as to the cause of action in equitable estoppel, relevantly as follows:

    Proprietary estoppel (or estoppel by encouragement) is said to arise where the owner of property, by words or conduct, induces another to believe that he or she either has or will be granted an interest in that property. The belief might be induced by encouragement to build upon land or by analogous conduct … A proprietary estoppel will support an equitable cause of action which prevents the enforcement of the defendant’s legal rights and confers proprietary rights on the plaintiff.

    A promissory estoppel is based on a voluntary promise that the promissor will not enforce his strict rights against the promissee which induces the latter to change his position in a way that would expose him to detriment if the promissor were free to resile without notice from his promise. A promissee must of course change his position in a meaningful way. A promissory estoppel prevents the enforcement of legal rights where it would be inequitable to do so. It is an equitable cause of action which entitles the promisee to an injunction to restrain enforcement of the right with the possibility of an award of equitable compensation.

    To support a promissory estoppel the promise must be unequivocal and it must be intended to affect legal relations. A casual conversation cannot support a promissory estoppel. The promissor must be aware of the rights that he or she has promised not to enforce.

25. In Gillett v Holt [73]it was said that:

    There must be sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded – that is, again, the essential test of unconscionability. The detriment alleged must be pleaded and proved.

    [73] [2001] Ch 210 at 252

26. In the subject case, the alleged detriment by the defendant was his alleged abandonment of a claim for greater provision of the deceased estate. If the defendant were to establish an entitlement to equitable relief the question which arises is the extent of such relief.

27. In principle it has been accepted that the remedy ought be the minimal order necessary “to relieve the conscience of the promisor”.[74]

    [74] Hogan v Basenden (1997) 8 BPR 15,723

28. In Ronowska v Kus,[75] Pembroke J said as follows:

    There is, I think, no controversy in New South Wales, as to the applicable general principles. They are embodied in the following statements by Allsop P in Delaforce v Simpson-Cook(2010) 78 NSWLR 483 at [3]–[5]:

    … relief in such cases is not to be measured by weighing detriment too minutely in order that it be converted into some equivalent of cash or kind, as if one were measuring the consideration for a commercial bargain. Equity will look at all the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character. Equity has always had a place in keeping parties to representations or promises.

    Proportionality of the claimed interest or remedy … should not, however, be transformed into a necessary constitutive element of a cause of action … To do so would elevate one consideration above others, and in particular above the importance of making good an expectation by encouragement or representation … The equity is a broader one based on the just and conscionable satisfaction in appropriate fashion of the equity arising from the expectation created in another by encouragement or representation.

    The importance of keeping a party to a representation or encouragement previously made is all the stronger where, as here, the encouragement or representation has been relied upon by a party to abandon a course of conduct that could possibly have led to a different outcome.

    In his judgment in Delaforce (above), Allsop P was endeavouring to explain the reasoning of the High Court in Giumelli v Giumelli (1999) 196 CLR 101. In that decision Gleeson CJ, Gummow and Callinan JJ at [35] approved certain statements by McPherson J in Riches v Hogben [1985] 2 Qd R 292 including the following:

    … what attracts the principle is not the promise itself but the expectation which it creates.

    … it represents the precise converse of … the basis for enforcing the contract.

    It is not the existence of an unperformed promise that invites intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise.

    [75] [2012] NSWSC 280 at [3] - [5]

29. It is trite that in order to obtain equitable relief the defendant must “do equity”. In the subject case “doing equity” involved him abiding by his obligation to reasonably maintain the residence. The relevant time is the time when the defendant claims entitlement to equitable relief.

30. An issue in the trial is the nature and extent of relief to which the defendant may be entitled in an “equitable estoppel” claim. The Court will not grant relief which exceeds that which can be justified.[76]

    [76] Giumelli v Giumelli (1999) 196 CLR 101 at [443] and Delaforce v Simpson-Cook [2010] NSWCA 84 AT [77]

    The Evidence

31. I do not propose to detail all of the evidence given at the trial.

32. It will however be necessary to address some of the evidence called by the parties on the following topics:

    ·The maintenance of the residence.

    ·Whether the defendant had “foregone” a claim for further maintenance from the estate.

    ·Whether the defendant had “forgone” causing Public Trustee to recover any unaccounted monies received by the plaintiff.

    ·The “promise” made by the plaintiff to the defendant at the Office of Public Trustee in 1993.

    ·The state of health and the financial capacity of the defendant to undertaken maintenance or rectification work.

33. As to the maintenance of the residence, the defendant had explained that before his father’s death, he had renovated the residence.

34. He said that in the 1980’s the residence was in very poor condition – “far worse than it is now”. He said that in the three years before his father’s death, he had at his own expense, replaced the gutters, renovated the kitchen, inserted tiling and had “completely repainted inside and out”.[77]

    [77] T p. 68 - 70, 80 and 111 - 112

35. There was no other evidence as to the state of the residence as at the date of the “promise”. I infer that the residence was in reasonable condition at the time of the promise.

36. He said, in chief, that since his father had died, he did the general maintenance on the residence, while occasionally employing plumbers whenever a problem arose. He explained that the hot water service and, by inference, the whole water system need to be replaced.

37. He had received a quotation to replace the system “about 18 months ago”, which estimated a cost between $4,000 and $6,000. If the painting were done by someone else it would cost “thousands”.

38. At times he gave evidence that he had painted the residence since the promise.[78]

    [78] T p. 83

1. He subsequently conceded that he had only done some minor painting for a few years after the death of his father, and had done no painting since that time.[79]

   [79] T p. 83 - 84 and T p. 109 - 110

2. He conceded that the painting inside and outside the residence needed to be done, as did the plumbing work. He explained that he had planned to do the painting, more so the outside than the inside, about a year earlier.

3. He could not do it because of his fractured patella. He could not afford to pay others to do the work.[80] Even now he intended to wait until the plumbing was replaced because of rust stains.

   [80] T p. 124 - 125

4. I do not propose to detail the condition of the residence, including the state of the plumbing and the poor state of the kitchen. The defendant acknowledged that the kitchen needed to be repaired, but that there “was no use doing it until I replace the water heater, in case the water pours out again”.

5. He thought that he may be able to do the work in the future. He was however unable to carry the steps and would need help from someone.

6. He explained that he maintained the garden including regularly poisoning the weeds. He conceded that the garden had changed significantly since his father died. It now effectively ceased to exist.[81]

   [81] T p. 84, 113

7. He attributed that condition to the water restrictions. He explained that there was a “carcass” of an old Valiant motor vehicle which had been in the back yard for about 5 years.

8. He had stripped it of its parts but had left the carcass there.[82]

   [82] T p. 91

9. He spent most of his time working in his shed which was kept neat and tidy with his fishing gear and tools.

10. As to the pleading that the defendant had foregone a claim for further maintenance from the estate, the defendant had said that he had been the sole carer for his father. He essentially maintained the residence, cooked meals for him, and occasionally gave him some money for bills. He described this as “just part of the natural things you do for a father”.[83]

    [83] T p. 106

11. The defendant deposed that he had had some discussions with the deceased in about 1985, about 2 years after the Will was signed by him. The deceased told him that the residence and the balance of the estate, other than the household contents and effects, would be left by his Will to the plaintiff and himself equally.[84] He knew at all times that, unless his father changed his Will, the plaintiff and the defendant himself, would each receive, inter alia, a one half interest in the residence. He did not complain to his father. He did not suggest to him that he should receive a greater share for the care he had given his father. At or about that time the deceased was showing some signs of dementia. He was later admitted to the nursing home.

    [84] T p. 62 and 108

12. As to the promise, the plaintiff said that this occurred when the parties travelled together to see Public Trustee,[85] sometime after their father’s death.

    [85] T p. 60 - 61

13. The defendant, in chief, said:[86]

    [86] T p. 61

    A … I asked my sister “you have money?” and she said “yes” … and anyway, we went into the Public Trustee’s and the estate was read out, and then we left the Public Trustee and I said “well, you’ve got the money, I’ve got the house’, and she said “yes”.

    QYou continued to live in the property after the property was put in your name and your sister’s name.

    AYes. I continued to live in the property ever since.

    QWhy did you do that?

    AWell, as far as I was concerned, [the plaintiff] was quite happy with the arrangements, I stay in the house and she kept the money.

    QWas there a discussion with your sister about the terms that you would stay in the house.

    AVirtually “you have the money, I’ll stay in the house” and I had decorated at that stage. I had already decorated the house before my father deceased, I had gone through the inside and the outside at my own expense.

    QDid your sister say anything about the terms that you were allowed to stay there?

    AJust that she was quite happy that I was in there, and she was happy with the money, you know, because she was going to get the house when I deceased in any case.

    His Honour

    QWhat did you say?

    ABecause it was in joint names, she would have got half of the house when I deceased in any case. So she had money, and was going to get the house in any case when I died, half the house, and so I was quite happy with the arrangement at that to say “I died”, right, “half the house goes to your estate”. That’s what I was quite happy with.

    QIs that something you thought or did you say that to her at some state.

    AWell I’ve even sat down on the back verandah having coffee and I said “well, at least when I die, half the house will go to your estate, like your children, and that’s just a verbal thing we spoke about amiably.

    …

    QAnd so this discussion you are having about having half the house – that occurred some time later.

    AYes

    QAfter you had been to the Trustee.

    AYes, yes.

    QSo is it some years later you had this discussion.

    AWell, I couldn’t say exactly, probably about six or seven years after my father’s death. We sat, just sat on the back verandah. Just conversation. I was talking to Fred, her husband, and I said “Well Fred, you know, your family will get half the house in any case because it is in joint names”.

    QDid you get any legal advice or speak to a conveyance or anything about the … transfer from Public Trustee.

    ANo. All the proceedings happened one day about two hours in the Public Trustee, the whole estate went through just like that.

    His Honour

    QThe question you are really being asked is this: If you had this discussion with your sister about she having the money and you having the house, why didn’t you ask for the property to be put in your name alone rather than both names.

    ABecause I had nobody virtually, no family, except my daughter, and I said, well in my own mind, dad left half to both children, you know, my sister and I and I think it’s only fair that I leave half of my estate as my father did, to the sister, or grandchildren.

14. As to the pleading that the defendant had foregone causing Public Trustee to recover any unaccounted monies received by the plaintiff, the defendant said:[87]

    [87] T p. 105

    QDid you say in the presence of the plaintiff anything about your father’s bank accounts to the Public Trustee.

    ANo. The main thing was that – the Public Trustee – my sister had money, I said I gave her a cheque for a thousand only a few weeks ago, it was a dividend, and I said I put it in my father’s bank account and she said to the Public Trustee that thousand was to get from –

    His Honour

    QSo in your presence your sister had said to you and the Public Trustee that some monies that you had received were a gift to her. Is that the position? In your presence and in front of the Public Trustee your sister had said that certain monies which had been received were a gift to her.

    AShe said all the monies she had received were a gift.

    XN

    QDid you respond to that?

    AI sure …. Well I thought – I suppose.

    His Honour

    QNo don’t tell us what you thought – If you said something to the Public Trustee about that in her presence please tell us. If you didn’t –

    AWell I couldn’t say much. I couldn’t prove anything.

    XN

    QDid you take any action about that statement?

    ANo.

    Submissions of Counsel

    ·The plaintiff’s submissions

15. Counsel for the plaintiff submitted that the evidence was overwhelming that the defendant had failed to meet his obligation to reasonably maintain the residence.

16. He submitted that the residence is best described as “dilapidated”, and that the Court ought find that he had, in effect, performed little or no maintenance over some 19 years.

17. He further submitted that in light of the limited funds available to the defendant and the state of his health, the Court ought find that there is no prospect that maintenance will be brought up to date, nor continued in the future.

18. He submitted that this constituted a gross breach of the bargain reached between the parties, and that the defendant, in those circumstances, was not entitled to the equitable relief he claimed, nor indeed any relief at all. He referred to the principles expressed in Vinden v Vinden,[88] to the effect that “there is no prospect that an equitable estoppel will arise, if the party claiming it does not come to Court with clean hands because it has not upheld its own part of the bargain”.

    [88] (1982) 1 NSWLR 618, and Evans v Evans, supra

19. He restated the plaintiff’s position that any order for sale should allow sufficient time for the defendant to find alternative accommodation.

20. The plaintiff’s counsel submitted that the Court ought order that the defendant pay occupation rent to the plaintiff from 19 October 2009.

21. At that time the plaintiff had sought to exercise her rights as co-owner. He submitted that the Court ought conclude that from that time the defendant had, in effect, denied the plaintiff those rights. He referred to Scapinello v Scapinello.[89]

    [89] (1968) SASR 316; c.f. W v D [2012] SASCFC 142

22. He properly conceded that “the occupation rent claim is a very small part of the dispute between the parties”.[90]

    ·The Defendant’s submissions

    [90] T p. 175

23. Counsel for the defendant referred to the plaintiff’s letter of 19 October 2009. It had made no mention of the need for maintenance.

24. He submitted that the Court ought conclude that the plaintiff was in reasonably good health notwithstanding his age, the fractured patella and the prior strokes. He correctly submitted that it was not for the Court to form any moral judgment about the state of cleanliness of the house. He criticised the plaintiff for the absence of any particulars in the Amended Reply as to the maintenance items. He did however concede that those particulars were provided in the report of Mr Weightman. He submitted that the Court should construe the “reasonable maintenance” condition in the same manner as the obligation upon a tenant to use the premises in a “tenant – like” manner. He submitted that there was no obligation upon such a tenant to repair damage caused by fair wear and tear. He submitted that the defendant had not caused the residence to deteriorate. It had simply been “fair wear and tear”.

25. He submitted that, in some way, the defendant ought be given credit for the work he had undertaken before the death of his father.

26. The difficulty with that submission is that, on his own evidence, the defendant had improved the residence to a reasonable quality at the time of the subject promise. It had not been maintained to that standard since that time.

27. He submitted that the obligation upon the defendant ought be no higher than that of a tenant under s 69(4) of the Residential Tenancies Act.

28. He submitted that an opportunity should be given to the defendant to bring the residence up to standard or pay the cost of doing so.

29. He submitted that events had overtaken the parties because the best value of the residence was as a vacant allotment.

30. Accordingly there was no benefit to either party in expending money to rectify the residence.

31. Finally he submitted that there was no basis in law for an order for occupation rent in light of the promise from the plaintiff.

    Discussion

32. Before determining the substantive issue as to whether the defendant is entitled to relief, in equity, to prevent the plaintiff from seeking an order for the sale of the residence, I will deal with some general issues that arose from the evidence and the submissions.

    ·Submissions as to Jones v Dunkel[91] and/or Blatch v Archer[92]

    [91] (1959) 101 CLR 298

    [92] (1774) 1 Cowp 63 at 65

33. It is convenient to discuss the submission of the defendant that the Court ought draw an inference adverse to the plaintiff because of her failure to give evidence at the trial.

34. The relevant principles were recently set out by the Court of Appeal (WA) in Fazio v Fazio:[93]

    [93] [2012] WASCA 72 at [132]-[136].

    …. the appellant referred to the principles in Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969, 970, and Jones v Dunkel (308), (312), (321), and in particular their application to a failure by a party to give evidence on an issue in the case. The appellant referred to the observations of Heydon, Crennan and Bell JJ in Kuhl v Zurich Financial Services Australia Ltd[2011] HCA 11 ; (2011) 243 CLR 361 [63]:

    The rule in Jones v Dunkel is that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party’s case. That is particularly so where it is the party which is the uncalled witness. The failure to call a witness may also permit the court to draw, with greater confidence, any inference unfavourable to the party that failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn.

    …

    The relationship between the principles enunciated in Blatch v Archer and Jones v Dunkel was further explained by Hodgson JA (with whom Beazley JA agreed) in Ho v Powell[2001] NSWCA 168 ; (2001) 51 NSWLR 572. His Honour said (at [14]) that “in deciding facts according to the civil standard of proof, the court is dealing with two questions: not just what are the probabilities on the limited material which the court has, but also whether that limited material is an appropriate basis on which to reach a reasonable decision”, and he referred to his extra-curial writing on the subject (“The Scales of Justice, Probability and Proof in Legal Fact-finding” (1995) 69 ALJ 731). He continued (at [15]–[16]):

    In considering the second question, it is important to have regard to the ability of parties, particularly parties bearing the onus of proof, to lead evidence on a particular matter, and the extent to which they have in fact done so: cf 69 ALJ at 732–733, 736, 740 …

    The case of Jones v Dunkel (1959) 11 CLR 298 is a particular application of this principle. That case itself related to a situation where there was evidence supporting an inference against a party, and that party did not give or call evidence, which that party was plainly in a position to have given or called, in order to explain or contradict the material presented. In my opinion, a similar principle applies where a person bearing the onus of proof does not give or call evidence which that person is plainly in a position to give or call; and unless some explanation is given of this failure, the tribunal of fact is entitled to infer that this evidence would not have assisted that person’s case: cf Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd(1991) 22 NSWLR 389.

    Presumably Jones v Dunkel is a “particular application” of Blatch v Archer, in the sense that the reason why the court can be confident about drawing inferences against a party who has chosen not to give evidence is that it was within the power of the party to produce evidence on that matter. Blatch v Archer is a wider principle because it is also available against the person bearing the onus of proof, where that person does not adduce evidence that he or she was plainly in a position to adduce.

    …

    [134] Although not referred to by the appellant, it is also to be noted that in civil cases, the unexplained failure of a party to give evidence, call witnesses or tender material is not treated as evidence of fear that it would expose an unfavourable fact, nor as an assertion of the non-existence of the fact not proved: HML v R[2008] HCA 16 ; (2008) 235 CLR 334 [303]; Brandi v Mingot(1976) 12 ALR 551 at 559–560; Dilosa v Latec Finance Pty Ltd (1966) 84 WN (Pt 1) (NSW) 557 at 582; Manly Council v Byrne[2004] NSWCA 123 [46]–[51].

    [135] The observations of the majority in RPS v R[2000] HCA 3; (2000) 199 CLR 620 [25]–[26] should also be noted:

    It is necessary to keep at the forefront of consideration that the mode of reasoning which is described proceeds from the premise that the person who has not given evidence not only could shed light on the subject but also would ordinarily be expected to do so. …

    In a civil trial there will very often be a reasonable expectation that a party would give or call relevant evidence. It will, therefore, be open in such a case to conclude that the failure of a party (or someone in that party’s camp) to give evidence leads rationally to an inference that the evidence of that party or witness would not help the party’s case and that:

    where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference. (emphasis in original) (footnotes omitted)

    [136] Further, as the learned author in Heydon JD, Cross on Evidence (8th Aust ed, 2011) [1215] said with reference to a consideration of Jones v Dunkel:

    The rule cannot be employed to fill gaps in the evidence, or to convert conjecture and suspicion into inference. Nor does the rule prevent any inference favourable to the party who has failed to call the witness from being drawn: other evidence may justify the drawing of the inference.

    Thirdly, the rule only applies where a party is “required to explain or contradict” something. What a party is required to explain or contradict depends on the issues in the case as thrown up in the pleadings and by the course of evidence in the case. No inference can be drawn unless evidence is given of facts “requiring an answer”. (footnotes omitted)

    Discussion and conclusion on this topic

35. The plaintiff and indeed her husband were available to give evidence. If there were a reasonable expectation that either was “required to explain or contradict something”, then I would have drawn an appropriate inference against the plaintiff.

36. I do not need to address the question of any onus of proof. In light of the agreement reached between the parties that the only live issues were the question of reasonable maintenance of the residence, and any consequences arising from the alleged failure of the defendant to meet his obligations in that respect. On those matters neither the plaintiff nor her husband could have contributed any evidence.

37. The plaintiff could not have given any evidence as to any work undertaken by the defendant at the residence at any time whether before or after the death of the deceased. Nor could she give any evidence about conversations between the defendant and the deceased.

38. As to the topic of the plaintiff receiving money from the estate, the plaintiff had admitted, in the Reply, receiving $70,000. The only dispute was whether it was $70,000 or $140,000. Clearly the receipt of money by the plaintiff would give rise to some concern particularly because of the “dementia” of their father. However the defendant admitted that he did not press the issue because he could not prove it. Ultimately nothing turned upon the quantum because the defendant was unable to establish any basis, other than speculation, for his assertion of $140,000.[94]

    [94] In his opening Counsel for the defendant referred to the sum of $130,000

39. In the end there was no dispute about the terms of the “promise” having been made to the defendant, by the plaintiff.

40. As explained in Bell Group Ltd (In Liq) v Westpac Banking Corporation (No9): [95]

    The rule only applies where a party is required to explain or contradict something. What a party is required to explain or contradict depends on the issues in the case as shown in the pleadings and by the course of the evidence in the case.

    [95] [2008] WASC 239 at [1012]

41. In my opinion, having considered all of the evidence in context there was no need for the plaintiff, to explain or contradict anything. Accordingly I draw no inference adverse to the plaintiff in consequence of her failure to give evidence.

    ·Reasonable Maintenance

1. There can be no doubt on the whole of the evidence that the residence is in very poor condition. I accept the plaintiff’s submission that little or no maintenance has been undertaken by the defendant at the least since 2001 when the defendant received the first letter written on behalf of the plaintiff. Indeed he had conceded that no painting had occurred since about 1995.

2. In those circumstances it is not strictly necessary to construe the expression “reasonable maintenance”.

3. In my opinion it must be construed in the light of the relationship as co-owners. Little assistance can be gained from the terms of the Residential Tenancies Act, nor from the case law.[96] This was not a lease. It was an arrangement between them on the basis that the defendant would live rent free.

   [96] See Co-owners leasing premises to another Bradbrook & Croft: Commercial Tenancy Law in Australia, 2nd Ed

4. In Parker v Sell,[97] the Court concluded that in respect of a farming lease which contained a covenant “to keep and maintain in fair and reasonable condition”, the lessee was not obliged to erect a fence but was obliged to maintain the property in “fair and reasonable condition”. I accept the defendant’s submission that the defendant was not obliged to undertake structural alterations.

   [97] (1890) 16 VLR 271; United Petroleum v Skorpos (2012) SASC 151; Bowen Investments v Tabcorp Holdings Ltd [2008] FCAFC 38

5. There is, in my opinion, no basis to imply that fair wear and tear be excluded.

6. However in the subject case, in my opinion, it does not matter in the end. In Haskell v Marlow,[98] case involving an expressed exclusion for fair wear and tear, the Court held that it falls upon the tenant (here the defendant) to establish that the condition arises from fair wear and tear. It held that he was obliged to keep the premises in good condition so as to prevent the consequences flowing from wear and tear causing worse damage.

   [98] [1928] 2 KB 45 at 58-59 and See Regis Property Co Ltd v Dudley [1959] AC 370

7. It falls upon the defendant to establish that his failure to paint and repair the plumbing did not occasion more deterioration.

8. The fact that it was fit for habitation is of no moment.

9. In my opinion in the proper construction of the subject term, the defendant was obliged, as far as was reasonable, to maintain the residence having regard to the condition it was in at the time of the promise. It does not require the defendant to undertake so onerous an obligation as to restore the residence to the condition it was in when the promise was made, but it did oblige the defendant to regularly paint the residence at the least, and to prevent damage caused by water leaks. On any view the defendant has been in breach of his obligation to reasonably maintain the residence. He, in effect, had undertaken little or no maintenance for 16 years.

   ·The Defendant’s pleading that he had foregone a claim for further maintenance from the estate

10. I treat this matter on the same basis as the previous topic.

11. I do not strictly need to resolve this issue because of the plaintiff’s concession that the defendant would have been entitled to an equitable interest in the event that he had complied with the conditions. However since the defendant had raised this matter in his evidence, I will briefly address it. On the evidence presented by the defendant, there was no merit in such a claim.[99]

    [99] See Van Dyke v Sidhu [2012] NSWSC 118

12. I readily accept that the deceased may have said that he intended that the defendant could continue to live in the residence. At its highest, this was no more than a statement of his intention, when he was alive. The defendant did not alter his position in consequence. He knew that the residence would be left to the plaintiff and himself in equal shares. This statement, and we do not know the circumstances leading to it, could not have entitled the defendant to some form of equitable interest in the residence as against the estate, nor would it have entitled him to a claim for further maintenance.[100] I repeat that he did not regard his caring for his father as significant. He was at the time residing at the residence. At no stage did he make any claim or even suggest to his sister or Public Trustee that he may have such a claim. There was no mention of a life interest being vested in the defendant, nor any right of exclusive possession, because of the alleged statement of the deceased.

    ·The defendant’s pleading that he had foregone causing Public Trustee to recover any unaccounted monies received by the plaintiff

    [100] See Sion v NSW Trustee [2010] NSWSC 949 and Duic v  Duic [2013] NSWCA 42

13. The defendant had asserted that the plaintiff had received $140,000 unaccounted from the estate.[101] In the ordinary course of events I would have drawn a Jones v Dunkel inference adverse to the plaintiff for her failure to give evidence on this topic. However such an inference is not to be drawn to fill a gap in the defendant’s evidence. In my opinion the defendant has reconstructed, albeit unwittingly, the “value” of $140,000.

    [101] T p. 61 - 63

14. As is clear from his evidence, this assertion was based upon mere speculation. The defendant had not seen any of the deceased’s bank books,[102] and simply speculated as to the deceased’s savings in 1992, from a conversation with his father which had occurred in 1985, coupled with own “belief” as to the value of the residence.

    [102] T p. 63

15. In my opinion that evidence of the defendant as to the value of the estate is of little or no weight. He knew at the time that the plaintiff had received some money from the estate. He might not have known that it was $70,000. He probably assumed that it was more. The plaintiff acknowledged that she had received the sum of $70,000, which was received by her as a gift. That explanation was given at the meeting with the Trustee.

16. It is patently clear however from his evidence that the defendant did not believe that he could establish any basis to cause Public Trustee to act to recover such monies. In my opinion there was no merit in any suggestion that the defendant had acted to his detriment by abandoning such an action.

17. On its facts, similar allegations of detriment were dismissed in Van Dyke v Sidhu.[103]

    ·Occupation Fee or Mesne Profits

    [103] [2012] NSWSC 118 by analogy - See Pizimolas, supra, at first instance

18. It is trite that a co-owner in occupation is not liable to pay an occupation fee to any other co-owner, unless he claims an allowance for improvements made by him, or alternatively he has excluded the other co-owner from the residence.[104]

    [104] Forgeard v Shanahan (1994) 35 NSWLR 206; and Barel v Segal (No2) [2012] NSWSC 1054

19. The question as to the scope of “exclusion of a co-owner” has been the subject of recent authority. In W v D,[105] Kourakis CJ, for the Full Court of the Supreme Court, at [28] – [30] detailed the historical basis for an “exclusion” of a co-owner. This involved an actual ouster by force or physical obstruction. His Honour referred to and adopted the recent case law, particularly in the Courts of NSW which extended the concept of “exclusion” to include those cases where “it becomes no longer reasonable or practicably sensible to expect the partners in a domestic situation to co-occupy the premises. The one who remains in possession may be taken to do so to the exclusion of the other, and to be liable to pay an occupation fee”.

    [105] [2012] SASCFC 142

20. Subsequently in Payne v Rowe,[106] Ball J while noting, that the recent case law was limited to cases involving matrimonial or de facto relationships, said:

    There is a question of how far the principle extends. In Callow v Rupchev the parties were in a de facto relationship. However, the court described the case as one where there had been a breakdown in a "domestic relationship"; and held that, in order to claim an occupation fee it was necessary for the party making the claim "to demonstrate affirmatively that it was unreasonable to expect him or her to return to the premises during that period [that is, the period for which the fee is claimed]" (at [74]). It was the fact that it was unreasonable to expect the party who had left to return that made it appropriate for the party who remained in occupation to pay a fee. Both the language used and the rationale advanced are not confined to cases where the parties are in a matrimonial or de facto relationship.

    P Butt states the principle more broadly still in the latest edition of Land Law, 6th Edition (2010), Lawbook Co, at [14 38.1]:

    Logically, this "new" principle should not be limited to matrimonial or domestic relationships. Its underlying rationale is that the occupying co-owner cannot be liable for an occupation fee where the non-occupying co-owner is free to take up occupation but chooses not to. If, in the circumstances, it is unreasonable to expect the non-occupant to take up occupation, then fairness requires the occupying co-owner to compensate the non-occupant for the fact that one has enjoyment of the property but the other has not. [footnote omitted]

    The extension of the principle beyond matrimonial or similar relationships has also been accepted in England in French v Barcham [2008] EWHC 1505; [2009] 1 WLR 1124, where Blackburne J held that a trustee in bankruptcy was entitled to an occupation fee from the bankrupt's wife for her continued occupation of the property after the making of the bankruptcy order. As Blackburne J stated at [34]:

    The essential point, in my view, is that when on inquiry it would be unreasonable, looking at the matter practically, to expect the co-owner who is not in occupation to exercise his right as a co-owner to take occupation of the property, for example because of the nature of the property or the identity and relationship to each other of the co-owners, it would normally be fair or equitable to charge the occupying co-owner an occupation rent...

    In my opinion, there is much to be said for the position taken by P Butt. However, it is doubtful that the Court of Appeal went so far in Callow v Rupchev and it is not necessary to resolve the question in the context of this case. I have already concluded that Jo was not excluded from the property. She chose to leave because the relationship between her and Jeremy had broken down. However, I think that the relationship between Helen, Jo and Jeremy was a domestic one of a type that is covered by the principle stated in Callow v Rupchev. Helen, Jo and Jeremy had lived together as a family. They had bought the property with a view to that continuing indefinitely. It is true that they had intended eventually to occupy separate parts of the property. But that does not alter the fact that they intended to occupy the property together. Having regard to the breakdown in the relationship between Jo and Jeremy, I do not think that it would be reasonable to expect Jo to return to the property.

    [106] [2012] NSWSC 685

21. Finally in Barel v Segal[107] the Court noted that the development of the law had not affected the need to establish exclusion, saying on the facts of that case:

    The plaintiff is not in occupation to the exclusion of the defendant. The defendant has been free to come and go as he pleases … it cannot matter that the defendant is understandably not welcome in the home. The defendant has expressed no desire to enter the house, or has any reason for doing so. There is no injustice and no occasion or need to require the plaintiff to pay an occupation fee to prevent injustice to the defendant.

    [107] [2012] NSWSC 1054

22. I have approached this question on the basis that if indeed the plaintiff has been ousted or it was unreasonable for her to insist upon occupation in light of the breakdown in her relationship with the defendant, then she may seek an order for possession and claim, inter alia, “mesne profits”. If however she has chosen not to exercise her right to occupy the residence, she will be treated merely as an absent co-owner with no right to claim.

23. In my opinion on the subject facts, the plaintiff cannot assert that the defendant has excluded her from the residence, even within the expanded meaning of “exclusion”. The plaintiff had permitted him to remain, rent free, exclusively in possession. It was her change of circumstances which gave rise to the letter of 19 October 2009. I reject the plaintiff’s claim for an occupation fee, from that later date. In my opinion the subject case falls directly within the dicta in the Barel case, supra.

    Conclusion

24. I have approached my determination of this action, in accordance with the concessions made by the plaintiff that had the defendant complied with the obligations pleaded in paragraph 16.1 of the Amended Defence then he would have been entitled to equitable relief. I have done so notwithstanding some disquiet as to whether the defendant had suffered any detriment at all. The scope of that relief may have been to enable him to remain rent free for as long as he wished, in the nature of an equitable irrevocable licence. He had, of course, already, had exclusive possession of the residence for almost 20 years.

25. While the defendant has complied with his obligation to pay the outgoings, I am in no doubt that he has overwhelmingly failed to reasonably maintain the residence. I do not overlook the fact that the defendant is a tenant in common with, a right to occupy the residence. I do not overlook the fact that he had complied with the condition as to outgoings. In my opinion that of itself is of little significance. While the defendant’s health is no doubt a major contributing factor for his failure, the breach is significant. He has been able to reside in the residence rent free for nearly 20 years. He has, for at least, 16 years failed to paint the residence, thereby exposing it to further deterioration.

26. He ignored the demand of the plaintiff in the first letter in 2001.

27. It is plain that the defendant cannot deny that obligation which was a condition of his exclusive possession.[108]

    [108] Jacobs, Law of Trusts [234] - [239, Evans v Evans [2011] NSWCA 92 at [117], and McEvoy v McEvoy [2012] NSWSC 1494

28. I accept the submission of the defendant’s counsel that a breach of a condition does not automatically have the consequence that equitable relief is denied to a defaulting promisee.

29. There are numerous examples where Courts have excused promisees upon the basis that they undertake to rectify the defaults within a certain time, or to pay a sum of money to enable that work to be done by others.

30. Despite the submissions of counsel for the defendant that he be given time to enable the defendant to avail himself of that opportunity, in my opinion such an opportunity would be futile.

31. There was little other evidence as to the plaintiff’s health. While I readily accept that the defendant has recovered from the more significant effects of the strokes and will recover from the effects of the fractured patella, I do not accept that he has either the necessary physical strength to undertake the maintenance work, nor has he the financial capacity to employ another to do it. Indeed if he had made a complete recovery from the strokes, there is even less reason for him not to have reasonably maintained the residence. Relevantly I conclude that he had made his mind up in 2001 to ignore the requirement for maintenance. The defendant is not entitled to the relief sought in the Amended Counterclaim.

32. In my opinion it would not be unconscionable in these circumstances for the plaintiff to withdraw from her promise, and to exercise her rights as a tenant in common to the extent of one moiety.

33. It does not assist the defendant to say that events had overtaken them and that it would be futile to expend money on that work.

34. In my opinion the plaintiff ought not be estopped from seeking by way of relief an order for the sale of the residence. The present impasse cannot continue. There would inevitably be ongoing animosity.

35. Indeed it is in the interest of both of the parties to bring the co-tenancy to an end. The defendant does not have the financial capacity to pay out the plaintiff’s share. Upon a sale of the residence the parties would each respectively receive a 50% share of the net proceeds.

36. I have the power to frame an appropriate order which enables the defendant a reasonable time to obtain other accommodation.

37. I do not propose to make any orders this day. I will adjourn further consideration for a 6 week period. This is to enable the parties to consider their respective positions.

38. I urge the parties to attempt to mediate an appropriate exit for the defendant.

39. In the event that no resolution is possible I will hear argument on the adjourned date as to the appropriate orders for sale, and as to the question of costs.