Ell v Ell

Case [2015] NSWCA 38


Court of Appeal
Supreme Court

New South Wales

Case Name: 

Ell, Richard Austin v Ell, Stephen Maxwell

Medium Neutral Citation: 

[2015] NSWCA 38

Hearing Date(s): 

23 February 2015

Decision Date: 

6 March 2015

Before: 

Basten JA at [1]; 
Ward JA at [60];
Gleeson JA at [61]

Decision: 

(1)Allow the appeal and set aside order (2) made in the Equity Division on 19 March 2014 dismissing the proceedings brought by Richard Austin Ell.

(2)Set aside the order made on 5 May 2014 that the plaintiff, Richard Austin Ell, pay the defendant’s [sic] costs on the ordinary basis.

(3)Declare that, pursuant to cl 5 of the will of Austin Maxwell Ell, deceased, the amount of $857,953 owing by Richard Austin Ell to the deceased was released.

(4)Order that the defendants pay one-half of the plaintiff’s costs of the trial.

(5)Order that the respondents pay the appellant’s costs of the appeal.

(6)Grant the parties liberty to apply, exercisable within 28 days of the date of this judgment, with respect to any consequential orders or directions.

(7)Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW) in respect of the costs of the appeal.

Catchwords: 

CONTRACT – agreement between testamentary beneficiaries on conditional release of debt to the estate – whether agreement created debt enforceable by executors – effect of termination of agreement

ESTOPPEL - estoppel by convention – whether agreement between beneficiaries of the estate founded on common assumption that there was an enforceable debt to the estate – whether agreement revealed adoption of common assumption

SUCCESSION – wills – construction of will – whether the will released debt owing to the testator – whether release conditional upon debtor having provided registered security for debt – use of evidence of surrounding circumstances evidence to identify knowledge and intentions of testator

Legislation Cited: 

Civil Procedure Act 2005 (NSW), Pt 6, Div 1
Succession Act 2006 (NSW), s 32

Cases Cited: 

Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570
Allgood v Blake (1873) LR 8 Ex 160
Coghlan v SH Lock (Australia) Ltd (1985) 4 NSWLR 158
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; 160 CLR 226
Fell v Fell [1922] HCA 55; 31 CLR 268
Grundt v Great Boulder Proprietary Gold Mines Ltd [1937] HCA 58; 59 CLR 641
Legione v Hateley [1983] HCA 11; 152 CLR 406
Osborn v McDermott [1998] 3 VR 1
Petersen v Moloney [1951] HCA 57; 84 CLR 91
The August Leonhardt [1985] 2 Lloyds Rep 28
Thompson v Palmer [1933] HCA 61, 49 CLR 507
Waterman v Gerling Australia Insurance Co Pty Ltd [2005] NSWSC 1066; 65 NSWLR 300

Texts Cited: 

K R Handley, Estoppel by Conduct and Election (2006, Thompson) at [8-004]

Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity – Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) at [17-045]

Category: 

Principal judgment

Parties: 

Richard Austin Ell (Appellant)
Stephen Maxwell Ell…

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AGLC
Ell, Richard Austin v Ell, Stephen Maxwell [2015] NSWCA 38
Case
[2015] NSWCA 38
Decision Date

CaseChat Overview and Summary

The appeal in *Ell v Ell* concerned a dispute between beneficiaries of an estate regarding the enforceability of a debt owed by one beneficiary to the deceased. The primary issue was whether an agreement entered into by the beneficiaries, concerning the conditional release of this debt, created an enforceable obligation that the executors could pursue. The case was heard in the Court of Appeal of New South Wales.

The Court of Appeal was required to determine the construction of the deceased's will, specifically whether a clause within it released the debt owed by Richard Austin Ell. This release was potentially conditional upon Richard Austin Ell having provided registered security for the debt. The court also considered whether an agreement between the beneficiaries, founded on a common assumption that the debt was enforceable, gave rise to an estoppel by convention, and whether this agreement demonstrated the adoption of such a common assumption.

The Court of Appeal reasoned that the construction of the will, particularly clause 5, indicated a clear intention by the testator to release the debt owed by Richard Austin Ell. The court found that the condition precedent for the release, namely the provision of registered security, had not been met. However, the court determined that the subsequent agreement between the beneficiaries, while not creating a new enforceable debt, reflected a common understanding and intention regarding the disposition of the debt. Crucially, the court held that the will's release provision was effective, notwithstanding the beneficiaries' subsequent agreement.

The Court of Appeal allowed the appeal, setting aside the orders of the Equity Division that dismissed the proceedings and ordered the plaintiff to pay the defendant's costs. The court declared that the amount of $857,953 owing by Richard Austin Ell to the deceased was released pursuant to clause 5 of the will. The court also made orders regarding the costs of the trial and the appeal, and granted liberty to apply for consequential orders.

Orders

Orders of the court

(1)Allow the appeal and set aside order (2) made in the Equity Division on 19 March 2014 dismissing the proceedings brought by Richard Austin Ell.

(2)Set aside the order made on 5 May 2014 that the plaintiff, Richard Austin Ell, pay the defendant’s [sic] costs on the ordinary basis.

(3)Declare that, pursuant to cl 5 of the will of Austin Maxwell Ell, deceased, the amount of $857,953 owing by Richard Austin Ell to the deceased was released.

(4)Order that the defendants pay one-half of the plaintiff’s costs of the trial.

(5)Order that the respondents pay the appellant’s costs of the appeal.

(6)Grant the parties liberty to apply, exercisable within 28 days of the date of this judgment, with respect to any consequential orders or directions.

(7)Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW) in respect of the costs of the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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