Galaxidis v Galaxidis

[2004] NSWCA 111

CITATION:	Galaxidis v Galaxidis [2004] NSWCA 111
HEARING DATE(S):	18 March 2004 19 March 2004
JUDGMENT DATE:	20 May 2004
JUDGMENT OF:	Giles JA at 1; Hodgson JA at 2; Tobias JA at 14
DECISION:	The appeal is allowed in part, the cross-appeal dismissed with costs and the declaration and orders made by Austin J on 20 December 2002 to be set aside; The parties to bring in short minutes.
CATCHWORDS:	ESTOPPEL - general principles - promissory estoppel - propriety estoppel - whether representation sufficiently clear and unambiguous - whether a representation insufficiently clear to found a contractual relationship can instead found a promissory estoppel - whether representation gave rise to an expectation - whether detrimental reliance - whether detrimental reliance is necessary for grant of relief - appropriate relief for detriment. - EQUITY - laches - whether plaintiff acquiesced in seeking redress after realising violation of rights. - REAL PROPERTY - whether representation founding estoppel gave rise to proprietary beneficial interest or indefinite licence. - PRACTICE & PROCEDURE - whether a party who has not asked for relief ought to be granted relief - where no controversy exists between party and respondent
LEGISLATION CITED:	Supreme Court Act 1970 (NSW) Supreme Court Rules 1970 (NSW)
CASES CITED:	Austotel Pty Limited v Franklins Self Serve Pty Limited (1989) 16 NSWLR 582 Australian Crime Commission v Gray [2003] NSWCA 318 Blair v Curran (1939) 62 CLR 464 Flinn v Flinn [1999] 3 VR 712 Giumelli v Giumelli (1988) 196 CLR 101 Legione v Hateley (1983) 152 CLR 406 Morris v Morris [1982] NSWLR 61 Riches v Hogben [1985] 2 Qd R 292 Running Pigmy Productions Pty Ltd v AMP General Insurance Co Ltd [2001] NSWSC 431 Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Woodhouse A.C. Israel Cocoa Ltd S.A. v Nigerian Produce Manufacturing Co Ltd [1971] 2 QB 23
PARTIES :	Athanasios Galaxidis Georgia Galaxidis Antonios Galaxidis John Galaxidis Nikolaos Galaxidis
FILE NUMBER(S):	CA 40078/03
COUNSEL:	1A, 2A & 3A:J E Thomson / M J Watts 1R: D A Smallbone
SOLICITORS:	1A, 2A & 3A: Colin Biggers & Paisley 1R: M J Woods & Co, Sydney 2R: G B Fernie & Co, Sydney

LOWER COURTJURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 3884/98
LOWER COURT JUDICIAL OFFICER :	Austin J

CA 40078/03
SC 3884/98

GILES JA
HODGSON JA
TOBIAS JA

Thursday 20 May 2004

ATHANASIOS GALAXIDIS & ORS v JOHN GALAXIDIS & ANOR

Judgment

1 GILES JA: I agree with Tobias JA.

2 HODGSON JA: I agree with the orders proposed by Tobias JA and with his reasons, except in relation to two matters, namely the amount of compensation and the question whether any order should be made in favour of Nikolaos.

3 On the first matter, in my opinion it is desirable in the extreme that these proceedings should be brought to finality as soon as possible and with as little room as possible for further dispute. In my opinion, it would be appropriate to award to John, in addition to a share of an occupation fee, compensation of one-ninth of $897,000.00 plus interest at Supreme Court rates from 19 April 2002. I accept that this will give somewhat lower compensation than if the property were to be re-valued now. However, I think this is appropriate, because in my opinion there should be a small allowance for vicissitudes. John is being compensated for the loss of entitlement to use, together with Nikolaos and Antonios, the southern third of the property indefinitely; and in my opinion the value of this to John alone is slightly less than one-third of the full value of the southern third of the property, if only because possible lack of agreement between the three brothers could have prevented each individual receiving a full one-third of the rental value of the relevant property.

4 On the second matter, in my opinion an order for the same compensation should be made in favour of Nikolaos, subject to Nikolaos filing and serving a notice stating that he seeks such an order.

5 In this case, the promise relied on was a promise made to the three sons, which in my opinion was made to them jointly. Had the case been one in contract, then Pt.8 r.5 of the Supreme CourtRules would have required that any promisee who did not consent to being joined as a plaintiff be joined as a defendant; and then the Court would have been required by s 63 of the Supreme Court Act so far as possible to determine all matters in controversy between the parties. I have not been referred to or located any case that explicitly deals with the form of order to be made in such a case; but in my opinion, if a plaintiff were successful in such a case, the appropriate order would give effect to the rights of all co-contractors, while making provision to ensure that the benefit of the order is appropriately received by the co-contractors who are defendants as well as those who are plaintiffs, whether by partition or by undertakings or orders binding the plaintiffs, or by some other means.

6 In this case, the cause of action was based on estoppel, and even though the promise was made to the sons jointly, the factors giving rise to estoppel could (and in fact did) vary, at least as between John and Nikolaos on the one hand and Antonios on the other, so that the relief claimed by John based on estoppel was certainly not relief to which Antonios was jointly entitled. However, the relief claimed by John in estoppel could possibly still be considered relief to which Nikolaos was jointly entitled; and if John had established entitlement to have the property transferred, it would almost certainly have been transferred, as John sought, to all three. However, the Court has found John is entitled to compensation, not a transfer of property, and the question is whether there should be an order for compensation to be paid to Nikolaos as well. In my opinion, there should, for the following reasons.

7 In the first place, as I have noted, in substance the relief is relief to which John and Nikolaos are jointly entitled: the promise was to the three sons jointly, and the reliance on this promise by John and Nikolaos and the conduct of the promisor to his sons was not such as to in any way differentiate between the cases of John and Nikolaos.

8 Secondly, courts can and do give relief in favour of persons other than plaintiffs. This is so, in my opinion, in the case of joint contracting parties, as mentioned above. It is certainly so where it is considered appropriate to give specific performance of a contract to give a benefit to a third party, as discussed in Coulls v. Bagot’s Executor & Trustee Co. Limited (1967) 119 CLR 460, Beswick v. Beswick [1968] AC 58, and Woodar Investment Developments Limited v. Wimpey Construction UK Limited [1980] 1 WLR 277. There is also the case of representative actions, as discussed in Carnie v. Esanda Corporation Limited (1995) 182 CLR 398, and (1996) 38 NSWLR 465.

9 Thirdly, Nikolaos’ entitlement to relief was in my opinion squarely made an issue in this case. John’s claim was for the transfer of property to Nikolaos and Antonios as well as to himself; and Nikolaos’ entitlement was pleaded and advanced by John, and was directly relevant to whether a transfer as sought by John should be ordered. I do not accept the contrary submission of the appellants. I accept the submission of the respondents that the conduct of the trial, in particular the cross-examination of Nikolaos and the submissions, showed that the appellants appreciated that they were confronting a claim for orders benefiting Nikolaos.

10 Fourthly, if no order is made in favour of Nikolaos, there would in my opinion be no estoppel in his favour on the issue of his reliance on the relevant promises or action by him to his detriment or what would be the appropriate remedy in his favour; because the primary judge’s findings on these questions would not be necessary to support the remaining orders in favour of John alone: see Blair v. Curran (1939) 62 CLR 464 at 531-2. Thus, if Nikolaos subsequently sought to enforce an estoppel in his favour, he would have to litigate these questions again.

11 Fifthly, there is the possibility that Nikolaos would be precluded from obtaining relief on the basis of estoppel by reason of the principle in Port of Melbourne Authority v. Anshun Pty. Limited (1981) 147 CLR 589. The appellants have conceded that this would not be precluded, if Nikolaos’ reasons for not pursuing his claim in these proceedings were his difficult financial position and concern at the risk of being made liable for costs: cf. Running Pigmy Productions Pty. Limited v. AMP General Insurance Co. Limited [2001] NSWSC 431. However, in my opinion that does not altogether exclude the possibility.

12 Sixthly, in all the circumstances, in my opinion such an order in favour of Nikolaos is required by s 63 of the Supreme Court Act 1970, which provides as follows:

63 Final determination
The Court shall grant, either absolutely or on terms, all such remedies as any party may appear to be entitled to in respect of any legal or equitable claim brought forward in the proceedings so that, as far as possible, all matters in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of those matters avoided.

13 I would not propose that the order be unconditional. It is possible that Nikolaos may prefer not to obtain an order against his father, because he may take the view that this would further damage his relationship with his father. So I would propose that an order be made to the effect that, provided Nikolaos within 28 days file and serve a notice that he seeks such an order, the appellants pay the same compensation to Nikolaos as to John.

14 TOBIAS JA: I can do no better than to commence this judgment by expressing my agreement with the opening remarks of the primary judge, Austin J, in his judgment when, sadly I suspect, he described the dispute between the parties as:

"an unfortunate case in which two sons are in a bitter dispute with their father and mother and, perhaps worse still, with their younger brother. It is a case about a father, committed to Greek traditions, seeking to control the social and financial lives of his sons in a way that young people in today's Australia would find repugnant. The two eldest sons rebelled against his domineering attitude, and consequently the family has broken apart. What makes the case distinctive is that the father sought to bolster his control by promising his sons that he would give them property, and now the two eldest sons are calling him to account."

15 Before the primary judge the two oldest sons made good their case that their father had promised them property and that they had acted to their detriment in the expectation that he would not resile from that promise. But resile he did. Accordingly, on 20 December 2002, his Honour made a declaration that the parents held the property on trust for the sons and consequent orders to give effect to that trust and otherwise to relieve the sons of their father's unconscionable conduct were made. The parents now appeal to this Court from that decision.

16 Like the primary judge, and without any disrespect, for ease of identification I shall refer to the three brothers by their first names: John (the plaintiff and first respondent), Nikolaos (the third defendant and second respondent) and Antonios (the fourth defendant and third appellant). I shall refer to their father and mother (the first and second defendants and now the first and second appellants respectively) as Mr Galaxidis and Mrs Galaxidis.

17 Although Nikolaos was originally a joint plaintiff with John, he later (with consent) discontinued his action because, having a wife and young family, he wished to avoid the risk of any liability for costs. Although he was joined as a defendant, he has at all times supported John's claim against Antonios and his parents. Antonios was joined as a defendant at the same time as Nikolaos ceased to be a plaintiff and became a defendant. However, Antonios has always supported his parents in these proceedings. On the appeal to this Court, Antonios became an appellant with his parents and was represented by counsel who appeared for them jointly. Nikolaos did not participate in either the hearing at first instance or the appeal but filed in each a submitting appearance except as to costs. Nonetheless, in the proceedings before the primary judge, John successfully obtained relief against his parents and Antonios on behalf of himself and Nikolaos. John seeks to maintain that relief on his and his brother's behalf in the appeal. I mention this matter because, as will appear later in these reasons, a real question arises as to whether Nikolaos is entitled to relief when he was not a plaintiff in the court below and, therefore, was never at any relevant time a claimant for relief.

The background facts

18 Mr and Mrs Galaxidis immigrated to Australia from Greece in February 1963. Their eldest son, Nikolaos, was born in 1965. John was born in 1967 and Antonios in 1972.

19 Soon after their arrival the family purchased and lived in a house in Bexley. Thereafter, Mr and Mrs Galaxidis bought and sold several properties. One such property was at Unanderra, which they purchased in 1965. A house was later constructed on this property and in 1973 the family moved there. In 1977 they sold the Unanderra property and purchased a property at 7 Stafford Street, North Wollongong (the Stafford Street property) as joint tenants.

20 The family resided in a three bedroom, weatherboard cottage on the Stafford Street property from 1977 to 1994. Upon moving into the property Mr Galaxidis commenced and continued to conduct a business therefrom trading under the name of A G Motors. The business provided smash repair, panel beating and spray painting services for motor vehicles as well as mechanical servicing. In addition, Mr Galaxidis sold second-hand motor vehicles from part of the property, which was a licensed car yard.

John and Nikolaos work for their father

21 John and Nikolaos assisted their father in the A G Motors business after school hours and on weekends and holidays from 1977 to 1982. They did not receive any wages or remuneration from their parents during this period even though they worked extensive hours. Their parents provided them with food and clothing and their mother gave them small amounts of pocket money on a regular basis. However, they made frequent requests of their father for spending money, which were refused and this led to many family discussions and arguments.

22 From 1982 to 1984 John and Nikolaos continued to work for their father in the A G Motors business. Again, no wages were paid to them and there were frequent quarrels between the sons and their father about financial arrangements. The primary judge found that by the time they commenced attending TAFE in 1982, John and Nikolaos each worked seven days per week exclusively in their father's business. Furthermore, during the time they attended TAFE, his Honour found that they continued to work substantial hours, part-time, in the business.

23 Although Mr and Mrs Galaxidis permitted John and Nikolaos some use of cars during this period and provided them with pocket money, food and board, again they received no wages for their efforts in the business. Furthermore, for some of the time between 1983 and 1988 John and Nikolaos received unemployment benefits even though they were working long hours for their father. The primary judge found that they gave at least part of these benefits to their parents.

24 During 1985 John, who had been studying real estate as part of his TAFE course, was offered a full time job as a property manager with an agency in Kiama provided he had his own motor vehicle. His father refused to provide the vehicle and he and his wife objected to the idea of John working outside the family business. Accordingly, John continued to work with his father. In mid-1985 Mr Galaxidis leased premises at 74 Flinders Street, North Wollongong and moved the second-hand car business of A G Motors to that address. It would appear that Flinders Street was in an area where there were many motor industry businesses and was a prime location for the sale of second-hand motor vehicles. During the ten months that A G Motors operated from that address, the retail sales division of the A G Motors business flourished. Again, John and Nikolaos worked in that part of the business but received no wages for their efforts.

25 The primary judge found that between December 1985 and August 1987 John and Nikolaos worked full-time in the A G Motors business for an average of 70 to 80 hours per week. Nikolaos continued to receive unemployment benefits that were paid into an account, the passbook for which was held by his mother, and from which he withdrew only small amounts.

The Flinders Street property is purchased

26 In March 1986 Mr Galaxidis purchased 8 Flinders Street, Wollongong (the Flinders Street property) with a view to selling second hand motor vehicles from that property. The purchase price of $175,000 was provided from Mr and Mrs Galaxidis' financial resources. The Flinders Street property comprised (at least in part) a car yard but was in poor condition and generally unimproved except for a small brick office. It backed onto the Stafford Street property, which apparently enabled the A G Motors business to be conducted on both properties without physical interruption. Furthermore, the Flinders Street property was physically (although not legally) divided into three generally separate allotments. Each comprised approximately one third of the property. They were known as, and are hereafter referred to as, No. 8A, No. 8B and No. 8C, Flinders Street.

27 At the time of the purchase of the Flinders Street property, John and Nikolaos were still not receiving wages and arguments would constantly break out with their parents over money. At that time Nikolaos was about 21 and John about 19. The older they became, the more they wanted their own income but their father was adamant that he would not provide it.

28 After the Flinders Street property had been acquired, Mr Galaxidis sealed the yard and built a new office together with a covered, but open, workshop. John and Nikolaos worked with Mr Galaxidis for the first year or so after the acquisition. Antonios helped after school hours. The family was not a happy one at that time and John and Nikolaos continued to complain that they were not paid any wages and had to depend on their parents for spending money. There were various disagreements within the family concerning this and other matters.

Mr Galaxidis responds to his sons' request for wages

29 It is appropriate to interpolate at this point of the narrative, and in the context of the consistent and repeated refusal by Mr Galaxidis to pay wages to John and Nikolaos, that the primary judge found ([35]) that from 1978 to 1986 (when the Flinders Street property was acquired), Mr Galaxidis constantly said to his sons:

"One of these days, this property and this business will be yours. I'm not going to take it with me to the grave. When I retire, I'll give it to you. The money that I'm not giving you is staying in the [A G Motors] business, so that one day you will have something to show for it, so you are not left with nothing when I'm gone."

As this statement of Mr Galaxidis became one of the factual foundations for John's claim against his parents, I shall refer to it, as did the primary judge, as the "first conversation".

30 Mr Galaxidis' version of what he told his sons was that they would get whatever was left when he died. However, the primary judge ([23]) preferred the evidence of John and Nikolaos to that of Mr and Mrs Galaxidis and Antonios where there was a conflict between them and no other reliable means of resolving the conflict. Accordingly, his Honour found ([37]) that Mr Galaxidis:

"…told them that he was putting as much money as he could into the [A G Motors] business, so they would benefit from the value of the [A G Motors] business at a later stage. Additionally, weighing up all the evidence, I find that Mr Galaxidis represented to his sons that they would benefit by taking over the [A G Motors] business when he retired, not when he died, and that in saying so, he implied that they (and their younger brother, Antonios) would become the proprietors of the [A G Motors] business to the exclusion of himself and Mrs Galaxidis."

A further response by Mr Galaxidis to Nikolaos' need for an income

31 To return to the narrative. In August 1987 Nikolaos went to Greece to pursue a relationship with a Greek woman he had met while she was holidaying in Australia in November 1986. He returned to Australia in February 1988 and resumed working for his father in the A G Motors business until May 1988. He married on 21 May 1988 and moved out of his parents' home. After his marriage, Nikolaos conducted his own business called "Nick's Cars". For the purposes of that business he used his father's motor dealer's licence and sold his cars from the Flinders Street property. John remained living at home. In May 1988 John had a conversation with his father in which he informed him that he needed an income. The primary judge found that Mr Galaxidis responded to that request in the following terms:

"No way. Not even one cent. I can't afford to pay you and Nick. I still owe money. When the properties are paid then everything will be passed on to you. Besides, if I paid you your money you would just waste it. This way, I will invest it and you will eventually have something."


This statement also formed a factual foundation for the relief claimed by John. Like his Honour, I shall refer to it as the "second conversation".

Mr Galaxidis proposes to retire from the A G Motors business

32 In May 1988 John obtained employment with Strathfield Car Radios. However, his Honour found that John continued to do some work for his father after hours although it was not substantial.

33 In June/July 1988 Nikolaos moved his business "Nick's Cars" to a rented workshop at Fairy Meadow as his father had asked him to leave the Flinders Street property.

34 Some time during the period from November 1989 to June 1990, Mr Galaxidis told Nikolaos that he and his wife intended to travel to Greece and Canada and would be gone for four to six months. Mr Galaxidis asked Nikolaos to manage the A G Motors business in his absence. He informed Nikolaos that he could draw $150 per week out of the business for living expenses. Nikolaos agreed but said it would be very difficult to run the business on his own.

35 Subsequently, Mr Galaxidis invited John to help Nikolaos run the A G Motors business while he was away. John initially refused on the basis that he had a responsible job with Strathfield Car Radios.

36 The primary judge found ([73]-[74]) that the following conversation then took place between John and Mr Galaxidis at which Nikolaos, Mrs Galaxidis (and possibly Antonios) were present:

"…
Mr Galaxidis: As you are aware, Nick's going to leave his business to run AG Motors.
John: Well, if Nick's going to leave his business, I gather that I have to as well. I can't leave my job, come and run your business for 3, 4, 5 or 6 months and then expect to go back to my job, because someone else will fill my position. Therefore I want to know what your intentions are as far as the family business is concerned.
Mr Galaxidis: I'll make you and Nick signatories on the chequebook. I am retiring. I want you and Nick to take over the [A G Motors] business, so you'll have no more problems as far as going back and trying to start again from the bottom of the ladder.
John: Well, since it's going to be mine and Nick's business, we're going to run it the way we want. We're going to renovate the yard, paint the fences with a new colour scheme for the yard. We're going to landscape the yard. We'll put in new floodlights, new awning lights and signs, etc.
Mr Galaxidis: It's your business. Do what you like. Don't go overboard and spend money where it is not needed. I'm going to Greece because I'm very tired. I don't want to work anymore. I'm too old."

37 The primary judge further found ([75]) that when Mr Galaxidis told his sons that he was retiring, he meant that his retirement would take effect when he stopped working in the A G Motors business prior to his departure overseas which occurred on 8 June 1990. According to his Honour ([77]), Mr Galaxidis' retirement prior to his overseas departure satisfied the condition he had placed upon his earlier promises about the Stafford and Flinders Street properties, but nothing was done to transfer them to his sons. One of the reasons attributed by his Honour to this lack of implementation was that Mr Galaxidis was averse to legal formalities and, in particular, keen to avoid documentation that might lead to an obligation to pay stamp duty.

38 After the conversation referred to in [36] above, John and Nikolaos left their respective jobs and started running the A G Motors business. The primary judge accepted ([78]) their evidence that they would not have done so but for the specific inducement held out to them by their father that the business was theirs to run and that he would retire from it.

39 During the time their parents were overseas, John and Nikolaos operated the business profitably, spending the profits on the Flinders Street property by renovating the yard and purchasing equipment. Furthermore, they supported their parents and Antonios from the revenue of the business, sending a total of $32,000 to their parents while they were overseas. On his return, Mr Galaxidis, according to John and Nikolaos, saw what they had done to the premises and approved the improvements they had made. However, he complained that the cost of the changes to the business had been borne by him out of his cheque account (which was the business cheque account) and that he had not received any income from a new car detailing business which John and Nikolaos had commenced.

Mr Galaxidis comes out of retirement and reclaims the business

40 Either immediately upon or shortly after returning from overseas, Mr Galaxidis informed his sons that he had decided to take over the business again. He set out terms upon which the business would be run in the future and the conditions upon which money could be withdrawn from it. John and Nikolaos rejected these terms. However, they did not seek to prevent their father from returning to the business on the ground that he had given it to them, apparently because they believed it would be pointless to do so. Instead, according to the primary judge ([85]), they proposed to open a separate business to be run by themselves in partnership trading as "Nick's Cars" while at the same time looking after the car yard on the Flinders Street property and selling motor vehicles for their father. His Honour found that by agreeing, reluctantly, to return the business to Mr Galaxidis, they gave up the rights to the business that their father had given to them prior to his departure overseas.

41 John and Nikolaos continued to work in their father's business until 1994. However, eventually, Mr Galaxidis refused to let them carry on the separate business of "Nick's Cars" from the Flinders Street property, which resulted in that business eventually petering out. During this time (1990-1994) Antonios was studying for a university degree and was providing some limited assistance to his father in the business. In August or September 1991 Mr and Mrs Galaxidis acquired some vacant land at Balgownie and, about a year or so later, commenced the construction thereon of a significant house (referred to by John and Nikolaos as "a mansion"). According to the primary judge ([89]), the house became something of an obsession with Mr Galaxidis and he needed to find money to make progress with its construction. He did so by extracting significant amounts from the business between 1991 and February 1994. Furthermore, in order to fund the building works, he borrowed $150,000 by way of commercial bills from the National Australia Bank on the security of the Stafford Street property.

42 In 1993 and 1994 Mr Galaxidis rented No. 8A (being the northern third of the Flinders Street property) to Budget Rent-a-Car for about $50,000 per annum. That lease (and renewals thereof) has remained in place up to and including the present time.

The 1994 deal

43 Some time prior to 14 April 1994 there was a family conference in which, as found by the primary judge ([91]), an agreement was reached with respect to the Stafford Street property and other matters. Although there was a dispute between the parties as to what was said, his Honour accepted the version advanced by John and Nikolaos. John's version of the exchange between he and his father was as follows:

"He said: I want to retire and I need funds to finish my house. I want to retire and spend time in my house. I'm too old to work anymore. I've had enough.
At that time he had a $150,000 loan secured over the 7 Stafford Street premises.
He said: For me to finish my mansion, I have to get this debt off my shoulders and since it's such a good property and makes good money, the panel shop here, I would rather it stay within the family. I would like to transfer the land and the loan to yours, Nick's and Tony's name. I won't need the [A G Motors] business, you'll have to take over the $50,000 overdraft and $10,000 worth of bills, which the stock covers.
I said: You want us to buy Stafford Street, when you promised that you'd give it to us for nothing because of all this work we did. You said that one day it would be ours, and now we have to buy it? You're giving us a debt, we're buying it.
He said: I know I promised you Stafford Street, but I'm going to make up for it with Flinders Street.
I said: You told us you were going to give us Flinders Street anyway. Now it's going to come at a price where I have to hock myself, to help you move into your mansion.
He said: Well, the mansion's going to be yours one day as well. I'm not going to take it 6 foot under with me.
…
Nikolaos and Antonios said: We'll go ahead with it.
I said: No.
He said: If it's not all three of you, it's no deal.
I said: As long as we don't get stuffed up and you guarantee us that we get a third of the 8 Flinders Street yard to retail our motor vehicles to service such a large debt. Put it in writing that you're going to give us this third.
He said: Don't you trust me, I'm your father. It's all going to be yours anyway. Why pay extra money for solicitors and stamp duty?
I said: I'll do it."

Again, the statements by Mr Galaxidis in the above exchange between John and himself form part of the factual foundation for the relief sought by John. I shall hereafter refer to them, as did the primary judge, as the "third conversation".

44 Nikolaos' version of the conversation supported that of John. However, he went a little further, saying that at one stage John raised the "need for legal documents to set out the agreement" to which his mother responded as follows:

"Don't you trust your own parents? We are doing all of this for your own good, and mainly for John and Tony so that they can settle down."

45 Although not referred to in his Honour's judgment, it is relevant to set out the paragraph in Nikolaos' affidavit immediately following his version of the conversation referred to in [44] above:

"After a lot of deliberating we also came to an agreement in relation to occupation of the yard [ie the Flinders Street property], that,
'You will have 1/3 of the yard to sell cars and run A G Motors while Budget has use of 1/3 and the other 1/3 will be rented out in the future to assist in my house'.
The conditions were that:
'because you are taking over all my debts so as I can build my house, you won't pay rent for your 1/3 of the yard'.
The total debt was $200,000 which was transferred into all the brothers' and my wife's names."

46 Objection was taken to the word "agreement" in the above passage but it was admitted by his Honour as evidence of Nikolaos' understanding. It is not clear, however, whether the words in the first person apparently attributed by Nikolaos to his father were admitted as direct evidence of what was said or whether they also were encompassed in his Honour's ruling as to the use to be made of the word "agreement". In the end, I do not think it matters as, even on the latter basis, the evidence establishes that Mr Galaxidis made statements which led to Nikolaos' understanding in the terms deposed to. The relevance of this understanding of Nikolaos will appear later in these reasons when considering what interest, if any, Mr Galaxidis promised his sons in the Flinders Street property.

47 The three brothers agreed to proceed with the deal. They took over the A G Motors business, the panel shop and, according to his Honour ([97]), "one-third of the Flinders Street yard" being that part of the Flinders Street property known as No. 8C. The Stafford Street property was transferred into the names of the three brothers and Nikolaos' wife. John and Antonios each took a one-third share as tenants in common and Nikolaos and his wife took the other one-third share, holding it as joint tenants. The transfer of the property acknowledged receipt of a consideration of $170,000 which was the valuation placed upon the property by a real estate agent at John's request and which he had procured, according to his Honour, for the National Australia Bank which was effectively transferring the parents' loan secured upon the Stafford Street property to himself, his brothers and Nikolaos' wife.

48 The three brothers and Nikolaos' wife thereafter signed a registered mortgage over the Stafford Street property in favour of the National Australia Bank securing an amount of $200,000. Mr and Mrs Galaxidis guaranteed the loan. The previous mortgage of $150,000 over the Stafford Street property was discharged. That loan together with the fully drawn $50,000 overdraft of A G Motors was transferred into the names of the three brothers and they thereupon took responsibility for the outstanding debts of the business. They continued to operate the business until July 1996. At about that time (at the request of Mr Galaxidis) the National Australia Bank discharged the guarantee given by Mr and Mrs Galaxidis for the loans taken over by their sons upon Nikolaos giving security to the Bank over his house.

Mr Galaxidis changes his mind

49 In or about May 1996 Mr Galaxidis had a discussion with his sons about the state of the A G Motors business. He said he was not happy with the way it was being conducted and proposed a new venture in which a rental car business would be started up on the Flinders Street property with him in charge and all three sons working for him. He indicated that he intended to borrow against the security of the Flinders Street property to finance the acquisition of a fleet of rental cars. John and Nikolaos responded negatively to the proposal. Antonios supported it.

50 In mid-1996 Mr Galaxidis informed John and Nikolaos that he had found someone who had offered to take a lease on No. 8C Flinders Street at a rent of $500 per week, being the one third of the property being used by the brothers for the retail car sales part of the A G Motors business. He told them that if they did not pay rent of that amount he would be forced to accept the offer. At that time another one third of the property was vacant (No. 8B) and John suggested to his father that he should rent out that part instead. Mr Galaxidis refused and demanded they pay $500 per week rent. They refused and a bitter family argument ensued.

John and Nikolaos are ejected from the Flinders Street property

51 At about the same time there were arguments amongst the brothers concerning a demand by Antonios to draw more money out of the business. He objected to Nikolaos withdrawing substantially more than himself even though he (unlike his brother who had a family to support) was living at home without paying board. This dispute led to the termination of the partnership between the brothers. In July/August 1996 Antonios froze the A G Motors overdraft with the National Australia Bank and left the business. Mr Galaxidis then locked his sons out of the Flinders Street property and ordered them to take their stock of motor vehicles and leave. That was effectively the end of the A G Motors business as John and Nikolaos did not have a motor dealers licence, which would have enabled them to continue the business at a different location.

52 Some months later Mr Galaxidis, together with Antonios, commenced a new business from the Flinders Street property called "Compact Car Rentals". He executed a mortgage over the Flinders Street property to obtain finance for the business without, according to the primary judge ([120]), informing Nikolaos or John. At that time the Flinders Street property was valued at $650,000. According to his Honour, the evidence indicated that Compact Car Rentals became a successful business operating at a high profit.

53 As John and Nikolaos had no business income with which to service their loans from the National Australia Bank, it was necessary to sell the Stafford Street property, which they did in September 1997 for the sum of $182,000. In March 1998 John lodged a caveat over the Flinders Street property and, in September 1998, commenced the proceedings. By June 2000 the Flinders Street property was valued at $900,000. At that time No. 8A was still leased to Budget Car Rentals, No. 8C was used by Compact Car Rentals and No. 8B (previously vacant) was leased as a car sales yard known as "Tony's Car World".

The proceedings at first instance

54 The primary relief claimed by John, and supported by Nikolaos, in the proceedings as ultimately pleaded was a declaration that the Flinders Street property was held by Mr and Mrs Galaxidis in trust for the three brothers and an order that Mr and Mrs Galaxidis execute (in registrable form) a transfer of the property in their favour free of encumbrances. A number of consequential orders were also sought including an order that Mr and Mrs Galaxidis and Antonios account to John and Nikolaos for the profits that they had earned from the Flinders Street property since John and Nikolaos were excluded from it in or about July 1996.

55 The relief referred to was founded on contract, proprietary (or, perhaps more accurately, promissory) estoppel, constructive trust and wrongful exclusion from the use and enjoyment of land. Alternatively, John claimed that Mr and Mrs Galaxidis promised to give their property to their sons upon the death of the survivor of them. However, the primary judge (at [126]) considered that the facts did not support this contention and John did not cross-appeal against that finding.

56 However, at the eleventh hour in the hearing before us, John attempted to resurrect this alternative basis for relief as a final fallback position. Mr and Mrs Galaxidis objected to this issue being raised at the last minute given that they had not made any written or oral submissions with respect to it. Leave was granted to them to provide a supplementary submission as to why this further matter should not be entertained. They have done this and I shall return to it later in these reasons.

The primary judge's findings in his judgment of 6 December 2001

57 As I have observed, John's claims were founded on what I have referred to as the first, second and third conversations. The primary judge summarised them in the following paragraphs of his judgment:

" The first conversation
128. In the first conversation, repeated constantly during the period from 1978 to 1988, Mr Galaxidis said in the presence of Mrs Galaxidis, to John and Nikolaos, 'one of these days, this property and this business will be yours', and 'when I retire, I'll give it to you'. These statements were made in response to requests by John and Nikolaos to be paid pocket money, and later wages, for their work in the A G Motors business. After Mr Galaxidis made these statements, on each occasion that he did so, his sons continued to work for him in the A G Motors business, knowing their father's attitude to the payment of wages, and in fact not receiving wages.

The second conversation
129. Just before John went to work for Strathfield Car Radios and Nikolaos was married, in May 1988, there was a single conversation between John and his father in which Mr Galaxidis said 'when the properties are eventually paid off, then everything will be passed on to you'. The conversation took place when John told his father that he needed an income. After the conversation, in which his father made it clear that he would not satisfy that need, John left the [A G Motors] business and went to work for Strathfield Car Radios.
The third conversation
130. This is the conversation, in or prior to April 1994, in which the three brothers and their parents reached an arrangement for the transfer to the sons and Maria of the Stafford Street property, the transfer of the [A G Motors] business to the sons, and the conferral on the sons of an equitable interest in the Flinders Street property. In return, the sons and Maria accepted responsibility for [the debts of the A G Motors business]... Mr Galaxidis, on behalf of himself and his wife, promised his sons that the Flinders Street property was to be theirs, subject to the parents retaining an entitlement to receive rental income from the property other than the one third where the [A G Motors] business was conducted. After the third conversation, the Stafford Street property was transferred to the sons and Maria, and the [A G Motors] business was taken over by the sons and was conducted in the Stafford Street and Flinders Street properties."

58 The primary judge held that none of the conversations gave rise to an enforceable contract between Mr and Mrs Galaxidis and their sons. He further rejected John's claims based on a constructive trust and wrongful exclusion from the use of land. It is unnecessary to consider these claims further as there is no appeal against his Honour's findings with respect to them. However, his Honour, in the context of his findings with respect to the contract claim, considered that the promises of Mr Galaxidis, made in the first and second conversations, although evincing an intention to create a binding obligation, were both incomplete and uncertain in that in neither case was there any specific consideration expressed or implied. As to the third conversation, his Honour was of the view that ([139]):

"…the representations and arrangements with respect to the Flinders Street property arising from that conversation cannot be treated as terms of the contract, because they were too vague and uncertain. Mr Galaxidis said that he would 'make up for it' with Flinders Street, but he did not say precisely how he would do so. John demanded a guarantee that the sons would get one-third of Flinders Street, but he demanded it 'to retail our motor vehicles', while insisting that his father 'put in writing' that he would 'give' the sons one-third. The demand is ambiguous as to whether it was a demand for a proprietary interest or just for a licence to use the property for business purposes. The response by Mr Galaxidis, who said 'it's all going to be yours anyway', is even more ambiguous. …"

59 Notwithstanding the ambiguity referred to by the primary judge in the passage cited above, his Honour was able to resolve that ambiguity for the purpose of the estoppel claim, by holding that it was a promise of a proprietary interest in the whole of the Flinders Street property.

60 When dealing with the disputed evidence with respect to the terms of the third conversation (and after concluding that he preferred the evidence of John and Nikolaos with respect thereto), the primary judge held that the arrangements so reached were substantially less beneficial to the brothers than what their father had previously promised them in the first and second conversations. He then observed ([103]):

"They acquired the Stafford Street property and the [A G Motors] business burdened with debt. They did not receive the use of the whole of the Flinders Street property, but only one-third of it"

61 Having then held that his findings as to the arrangements made in 1994 pursuant to the third conversation implied that those arrangements were in substitution for the previous promises made by Mr Galaxidis in the first and second conversations, his Honour continued ([105]):

"The critical question of fact is how the 1994 arrangement treated the ownership of the Flinders Street property. It was a part of the arrangement that the three sons would have the use of one-third of the Flinders Street property for the purpose of conducting the business of A G Motors there. In my view, on the evidence, this use of the property was to be indefinite and not merely limited to two years, as Mr Galaxidis subsequently claimed. On the other hand, I accept (as John acknowledged in cross-examination) that the parties to the arrangement agreed that Mr and Mrs Galaxidis would be entitled to receive the rent paid by Budget Rent-a-Car for their occupation of one-third of the Flinders Street site, as the rental was to provide them with a retirement income."

62 The primary judge then considered ([106]) that there were two competing interpretations of the arrangement founded on the third conversation. The first was that Mr and Mrs Galaxidis promised or represented to their sons that they were granting to them an indefinite right or licence to occupy one third of the Flinders Street property which did not confer any proprietary interest therein because Mr and Mrs Galaxidis retained the right to rent the other parts of the property and to enjoy the rental income therefrom. The second was that the parents promised or represented to their sons that they would make them the beneficial owners of the Flinders Street property, subject to the sons allowing them to receive the rental from the portion of property that was "externally rented" (later varied by his Honour in his supplementary judgment of 19 November 2002 to refer to the rental from the northern one-third of the Flinders Street (No. 8A) property which was leased at the time to Budget Rent-a-Car).

63 The primary judge resolved this issue of interpretation in the following terms:

"107. Weighing up all the evidence, I prefer the latter interpretation to the former. I take into account the fact that before the arrangement was entered into, the sons had the benefit of previous promises that their parents would give them the Stafford and Flinders Street properties when their father retired. The previous promises indicate the probability that proprietary ownership of the properties was on the minds of everyone concerned when they came to make the new arrangement in 1994. On the version of the discussion which I accept, Mr Galaxidis said in response to John's complaint that he had promised to give his sons the Stafford Street property, that he was "going to make up for it with Flinders Street". Later John demanded that his father "put in writing" that he was going to give his sons one-third of Flinders Street and that his father should "guarantee" that the sons would get one-third of that property, and Mr Galaxidis replied by asking his sons to trust him and by saying he did not want to pay extra money for solicitors and stamp duty. This part of the conversation strongly suggests that Mr Galaxidis, on behalf of himself and his wife, intended that the arrangement would give his sons a proprietary interest in the Flinders Street property, although in other respects is very vague.
108. Although part of the conversation refers to giving the sons one-third of the Flinders Street property, in all the circumstances I take that to mean that the sons were to receive the beneficial ownership of the whole property subject to Mr and Mrs Galaxidis retaining their right to receive the rental income from the two thirds of the property that were not designated for use by A G Motors."

64 The primary judge then turned to the proper legal analysis of John's proprietary estoppel claim. After citing from the judgment of Priestley JA in Austotel Pty Limited v Franklins Self Serve Pty Limited (1989) 16 NSWLR 582, 610, his Honour noted that the equitable doctrine identified three ingredients, namely, encouraged assumption, reliance and unconscionability.

65 Under the heading "Encouraged Assumption", the primary judge posed for himself the question of whether his finding that none of the conversations gave rise to contractual promises prevented John from making good his claim to relief under the doctrine of equitable estoppel. In response to a submission on behalf of Mr and Mrs Galaxidis and Antonios that a representation or a promise will not found an estoppel unless it has been made in clear and unambiguous terms, his Honour cited a passage from the judgment of McPherson J in Riches v Hogben [1985] 2 Qd R 292, 300-301 which had been cited with approval by the High Court in Giumelli v Giumelli (1988) 196 CLR 101, 121 [135].

66 After citing from the judgment of Brooking JA (with whom Charles and Batt JJA agreed) in Flinn v Flinn [1999] 3 VR 712, 738 [80]-[81], the primary judge observed that a proprietary estoppel may give rise to an equity even though the interest to be taken is unclear or the promise or expected interest is uncertain.

67 In the foregoing context, the primary judge then observed ([151]):

"It seems to me that in the present case the three conversations should be considered as a series, to be evaluated together in order to ascertain the intention of Mr and Mrs Galaxidis and the meaning of the words that Mr Galaxidis used. In the first conversation he established an intention to give his property and business to his sons when he retired, the property at that stage being only the Stafford Street property. When Mr and Mrs Galaxidis acquired the Flinders Street property, Mr Galaxidis conveyed to John, in the second conversation, their intention that their gift would be extended to the Flinders Street property as well as the Stafford Street property and the [A G Motors] business. In the second conversation the intended gift was not tied to the retirement of Mr Galaxidis, but rather to when the properties were paid off. …"

68 Having reiterated that the circumstances were changed by the third conversation and that the arrangements to which it referred were intended by all parties to replace the promises made in the first and second conversations, the primary judge held that Mr and Mrs Galaxidis were no longer promising to do something in the distant future when Mr Galaxidis retired because he was in fact retiring from the business of A G Motors then and there as was evidenced by his transfer of the Stafford Street property and the business to his sons. He continued ([152]):

"…In that context, the statement by Mr Galaxidis that he was 'going to make up for it' with Flinders Street, and John's demand that his father 'put in writing that you're going to give us this third' were not references to the conferral of a beneficial interest at some future time conditional upon the happening of some further events. The language that they used meant that upon the implementation of the arrangement reached in the third conversation, Mr and Mrs Galaxidis would thereupon hold an interest in the Flinders Street property for their sons, who would be permitted forthwith to take over the [A G Motors] business and continue it in operation there. "

69 His Honour then concluded the issue of "encouraged assumption" in the following passage ([153]):

"My finding of fact at paragraph 108 above is that the promise or representation by the parents was that they would make their sons the beneficial owners of the Flinders Street property, subject to the sons allowing them to receive the rental from the portion of the property that was externally rented. By participating as they did in the third conversation, Mr and Mrs Galaxidis encouraged in their sons the assumption that they would become the beneficial owners of the Flinders Street property, subject to that qualification with respect to rental income."

As already observed, in his supplementary judgment of 19 November 2002, his Honour substituted for the words " externally rented " in the above paragraph the words " leased to Budget Rent-a-Car ".

70 The primary judge then turned to the issue of "reliance". He referred to John specifically asking his father about putting his promise concerning the Flinders Street property in writing and Mr Galaxidis inviting his sons to trust him: which his Honour interpreted as an invitation to ([154]):

"alter their positions by implementing the transaction, in reliance of his representation in the third conversation"

71 His Honour then held ([155]) that the brothers and Nikolaos' wife implemented the arrangements with respect to the Stafford Street property and the brothers implemented them for the A G Motors business in both cases relying on what their father had said.

72 An issue then arose as to whether it was necessary that the brothers' reliance upon Mr Galaxidis' assurances was required, as a matter of law, to be to their detriment. His Honour considered ([157]) that Priestley JA in Austotel had held (as he understood it) that reliance must be proved but that it was unnecessary for the plaintiff to prove detriment in order to make out an entitlement to relief. However, he considered that "detriment" was a wide concept encompassing the loss of the property that the plaintiff was encouraged to expect. Accordingly, he found that detriment in this sense had been sustained.

73 Under the heading "Unconscionable departure from assumption", the primary judge considered whether Mr and Mrs Galaxidis had unconscionably departed from the assumption which they had encouraged in their sons to the effect that they would receive the beneficial ownership of the Flinders Street property once the transfer of the Stafford Street property and the A G Motors business had been completed. His Honour had no difficulty in holding that both they and Antonios had subsequently departed from that assumption by bringing the A G Motors business to an end and excluding John and Nikolaos from the Flinders Street property. He accordingly held that all three elements of the equitable doctrine of estoppel had been made out.

74 The primary judge then turned to the appropriate remedy or relief that he considered John and Nikolaos were entitled to. He considered ([162]) that the majority judgment in Giumelli established that where the ingredients of the equitable doctrine are satisfied, the plaintiff's equity is more than a "defensive equity". He thus held that it was open to the court to satisfy the equity by going beyond the minimum relief necessary to reverse the plaintiff's detriment. The plaintiff should receive what he expected. Accordingly, his Honour considered that the appropriate relief in the present case was an order that Mr and Mrs Galaxidis transfer the Flinders Street property to their three sons as tenants in common in equal shares subject to the existing leases. Because Mr and Mrs Galaxidis were entitled to receive the rent from No. 8A (which was leased to Budget Rent-a-Car) as part of the arrangement, his Honour considered that there should be an order charging the Flinders Street property (in the hands of the sons) with the obligation to pay Mr and Mrs Galaxidis an amount equivalent to the net rent being received.

75 Finally, the primary judge considered that John and Nikolaos should have the benefit of an order requiring Mr and Mrs Galaxidis and Antonios to pay them two-thirds of an appropriate occupation fee for the use of the one-third of the Flinders Street property that A G Motors would otherwise have occupied for the period commencing upon their exclusion from the site in July 1996 to the date of the court's orders.

76 Mr and Mrs Galaxidis and Antonios had resisted the granting of any relief upon the basis that John had delayed in asserting his interest in the Stafford Street property and then the Flinders Street property and that by the time he acted (by lodging a caveat against the title on the Flinders Street property in March 1998), Mr Galaxidis had changed his financial and business interests. The primary judge held ([178]) that although John was guilty of some delay in lodging a caveat and commencing proceedings, it did not cause prejudice to Mr and Mrs Galaxidis of a kind that would prevent the granting of relief. Accordingly, this defence was rejected.

77 Having published his substantive judgment on 6 December 2001, further disputes and consequent delay then ensued with respect to the formulation of the final declarations and orders. Ultimately, in a supplementary judgment delivered on 19 November 2002, the primary judge confirmed his findings with respect to the assurance by which Mr and Mrs Galaxidis had encouraged their sons' belief that they were to receive a proprietary interest in the whole of the Flinders Street property. In particular, as already noted, his Honour considered that he had been mistaken when he had found that Mr and Mrs Galaxidis had reserved for themselves a right to the income from the rental of Nos 8A and 8B Flinders Street and that that right should be limited to income measured by the net rental income of No. 8A which at all material times had been leased to Budget Rent-a-Car, this being the only portion of the property which was leased at the time of the third conversation. His Honour ultimately held that Mr and Mrs Galaxidis should receive an amount of $38,282.77 per annum, which was to be indexed and secured by way of a charge covenant against the title of the Flinders Street property.

78 Although his Honour recognised the advantage of orders that would permit a clean financial break between John and Nikolaos on the one hand and his parents and Antonios on the other, he rejected the practicality of capitalising the parents' continued income right to which he had held that they were entitled in order to cater for the possibility of the Flinders Street property being sold. He was then forced to fashion a series of complex orders. They included an order that Mr and Mrs Galaxidis and Antonios pay John and Nikolaos compensation by way of an occupation fee in respect of their exclusion from the southern one-third of the Flinders Street (No. 8C) property since July 1996. Based on the valuation evidence of a Mr Ryan, he ordered the payment to John and Nikolaos of $194,042.78 inclusive of interest.

79 Finally, the primary judge dealt with a claim by John for indemnity costs in respect of the period subsequent to 3 October 2000 based upon a Calderbank letter of offer of that date. His Honour considered that the terms of that offer were "categorically different" from the relief which John had sought in the various versions of the Statement of Claim and which the court proposed to grant. Those differences were such that his Honour considered it not unreasonable for Mr and Mrs Galaxidis to refuse the offer. Accordingly, he rejected the claim for indemnity costs.

The appeal

80 The parties filed extensive and detailed written submissions in response to the 13 grounds of appeal a number of which had many sub-paragraphs. However, I do not think I do any injustice to the appellants' submissions if I say that the issues argued may be distilled into the following questions:

* Was the third conversation, insofar as it relates to the Flinders Street property, sufficiently clear and unambiguous as to give rise to a proprietary estoppel?

* If the answer to the first question is yes, did the assurances of Mr Galaxidis, the subject of the third conversation, encourage in John and Nikolaos the expectation that Mr and Mrs Galaxidis would immediately transfer a proprietary interest in the whole of the Flinders Street property to their three sons in equal shares?

* If the answer to the second question is no, what, if any, expectation with respect to the Flinders Street property was engendered in John and Nikolaos by the assurances of Mr Galaxidis, the subject of the third conversation?

* Did John and Nikolaos rely upon the assurances of Mr Galaxidis, the subject of the third conversation and, if so:

Was John and/or Nikolaos disentitled from claiming any relief by reason of their laches acquiescence and/or delay in commencing the proceedings?

136 In the circumstances, the issue raised by this question is confined to John's conduct. The primary judge rejected this defence for the reasons set out in [177] to [179] of his first judgment. The delay in question was between July 1996 when the brothers were ejected from the Flinders Street property and March 1998 when a caveat was lodged and September 1998 when proceedings were commenced.

137 The relevant principles are conveniently stated in Meagher, Gummow & Lehane's Equity Doctrines and Remedies 4th ed at [36-005] in the following terms (omitting citations):

"It [the equitable defence of laches] is a defence which requires that a defendant can successfully resist an equitable (although not a legal) claim made against him if he can demonstrate that the plaintiff, by delaying the institution or prosecution of his case, has either: (a) acquiesced in the defendant's conduct; or (b) caused the defendant to alter his position in reasonable reliance on the plaintiff's acceptance of the status quo, or otherwise permitted a situation to arise which it would be unjust to disturb. Mere delay, of itself, is not enough to constitute either laches or acquiescence."

138 The appellants rely upon the evidence of Nikolaos (Black 2/282M-O), which however, must be read in conjunction with what follows at 282O-R. Furthermore, John's conduct needs to be understood against the background of his experience of his father's previous change of mind in 1990 and of the importance of the Greek tradition of a son not questioning his father's decisions. No doubt, he was resigned to the fact that his father had ejected himself and Nikolaos from the Flinders Street property and that there was nothing he could do about that in physical terms. Furthermore, acquiescence denotes a plaintiff's behaviour in refraining from seeking redress once he knows his rights have been violated and to denote his acceptance of the fact that his rights have been violated. In the present case, there is nothing to suggest that John refrained from seeking redress once he knew of his legal rights or, at least, of his right to seek equitable relief. The evidence seems to indicate that he took action as soon as he had obtained legal advice: (Black 2/331F-R).

139 Nor, in my opinion, was there relevantly prejudice to the appellants. As the primary judge points out ([178]), it is clear that the reason Mr Galaxidis ejected his sons from the Flinders Street property was because they justifiably refused to pay rent in relation to the southern one-third upon which they had been conducting the A G Motors business. Furthermore, the equitable relief to which John is entitled, being confined to compensation, will not involve any disturbance of the activities of Mr and Mrs Galaxidis and/or Antonios upon the Flinders Street property such as the continuation of their Compact Car Rental business. In my opinion, like his Honour, I do not consider that the defence of laches, acquiescence and/or delay has been made out.

Was John entitled to indemnity costs after 3 October 2000?

140 This question would only arise if the orders made by the primary judge were to be maintained which is not the case. As it does not, the first respondent's cross-appeal with respect to this issue must be dismissed. However, it is my understanding that the appellants made a Calderbank offer to the first respondent upon which, so it was indicated, they may wish to rely in the event that the Court substituted an order for compensation for the orders of his Honour. Accordingly, it is appropriate that we receive written submissions on that issue within a specified time limit.

Should John's final fallback position be entertained?

141 In [56] above, I referred to John's belated attempt to resurrect his alternative claim, rejected by the primary judge, that Mr and Mrs Galaxidis promised from time to time and over an extended period to give the Flinders Street property to their sons upon the death of the survivor of them. Mr and Mrs Galaxidis took objection to the Court entertaining this argument on a number of grounds, which were the subject of a supplementary written submission dated 23 March 2004 but one of those grounds was that the claim could not succeed on the facts.

142 It is to be noted that this claim was made in [2] of the Third Further Amended Statement of Claim (the Statement of Claim), as a claim in contract and as an alternative to the contractual claim that Mr and Mrs Galaxidis had promised to give their sons the property upon Mr Galaxidis' retirement. It was also advanced in [6] of the Statement of Claim as an alternative claim in estoppel, the allegation being that Mr and Mrs Galaxidis created in John and Nikolaos an expectation that they would have an interest in the Flinders Street property upon the death of the survivor of them.

143 The particulars to [2] and [6] of the Statement of Claim refer to [5], [8] and [15] of John's affidavit sworn 10 September 1998. Paragraph 5 related to the first conversation; [8] to the second conversation and [15] to the third. So far as the first and second conversations are concerned, they only asserted a promise by Mr and Mrs Galaxidis to give the properties to his sons when Mr Galaxidis retired (the first conversation) or when the properties were paid off (the second conversation): so much was found by the primary judge at [151] and no challenge was mounted by John to this finding. Relevantly, neither conversation supported the promise now being considered.

144 Only the third conversation contained a possible promise by Mr Galaxidis that the Flinders Street property would be "yours one day as well" as he was "not going to take it 6 foot under with me". The primary judge found that this conversation contained a promise by Mr Galaxidis to immediately transfer the property to his sons. I have found ([103] above) that no such immediate transfer of a proprietary interest in the whole of the Flinders Street property was made. This was, in part, because Mr Galaxidis wished to avoid the payment of stamp duty and capital gains tax as evidenced by his saying that "it's all going to be yours anyway": see [105] above.

145 However, the context in which Mr Galaxidis made the promises or assurances referred to in the third conversation demonstrated that they did not generate an expectation in John and Nikolaos (that they would receive the Flinders Street property on the death of the survivor of their parents) upon which they relied to their detriment. The only expectation or assurance generated by Mr Galaxidis upon which there was reliance (and which, therefore, was capable of supporting an estoppel) was, as I have found ([105]), the assurance that the sons would be entitled to use and occupy the southern one-third of the property upon taking over the business of A G Motors and their father's debts with the National Australia Bank. Accordingly, in my opinion the alternative basis for relief relied on by John has no foundation in fact and the primary judge was correct in so finding.

146 In any event, it is far too late for John to press this alternative argument. It was not the subject of considered written or oral submissions by the parties and is inconsistent with the thrust of John's evidence in cross-examination that his father promised he and his brothers an entitlement to the Flinders Street property immediately upon his retirement and/or upon them taking over the A G Motors business and the National Australia Bank debt. Accordingly, insofar as John seeks to amend his Notice of Cross Appeal to raise this issue, that leave should be refused.

147 Furthermore, the claim in question is premature. It is true that Mr and Mrs Galaxidis made new wills in 2001 excluding John and Nikolaos from sharing in their estate. However, wills can be changed and, in time, John and/or Nikolaos may once again be the recipients of their parents' testamentary bounty. Also, it may well be unfair to mandate that Mr and Mrs Galaxidis should now re-make their wills, render them in some way irrevocable and/or injunct them from ever dealing with the Stafford Street property during their lifetime. Surely, Mr and Mrs Galaxidis did not intend, and John and Nikolaos did not expect, that the property could never be sold or encumbered prior to their death even if its sale or mortgage was necessitated by, for instance, the parents or either of them falling on hard times.

148 For the foregoing reasons I am of the opinion that John should not be permitted to rely on the alternative basis for relief for which he contends.

Conclusion

149 In my opinion it follows that the appeal should be allowed in part, the cross-appeal dismissed with costs and the declaration and orders made by Austin J on 20 December 2002 should be set aside.

150 The parties should be directed to obtain a current valuation of the Flinders Street property on the basis to which I have referred in [125] and [126] above. If possible, the parties are encouraged to agree with Mr Ryan providing that valuation. If they cannot so agree then:

(a) the parties should, if possible, agree on a single valuer to undertake the valuation on behalf of them all;

(b) if they cannot so agree within 14 days of the date of this judgment, they should file and serve any valuation of the property upon which they propose to rely within a further 28 days;

(c) if within a further 7 days they cannot agree on a valuation of the property, the issue of the current value of the property is remitted to Austin J for determination;

(d) upon that determination being made by his Honour, the first and second appellants are to pay to the first respondent one-ninth of the value of the Flinders Street property as so determined;

(e) in the event that the parties agree to the valuation being determined by Mr Ryan or some other agreed valuer, then the first and second appellants are to pay to the first respondent one-ninth of the value of the property so determined.

151 The parties should within 14 days bring in short minutes to reflect the directions foreshadowed above. Those short minutes should also reflect the foreshadowed order that the first and second appellants pay the first respondent one-half of the amount referred to in Order 13 made by the primary judge on 20 December 2002, adjusted to account for the period from 19 December 2002 to the date of this Court's orders. Consideration should also be given to whether either or both of the orders reflected in [150] above and in this paragraph should be the subject of a charge on the Flinders Street property. Obviously, the parties should, if at all possible, put in place arrangements that will avoid this added complication to their relationship.

152 So far as the costs of the trial are concerned, subject to any submissions that the parties may wish to make in respect of any special order for costs, the appellants should pay the first respondent's costs of the trial. This is because John has been successful in establishing an estoppel against his parents albeit of a more limited nature than that claimed. The appellants should file any documentary evidence and/or submissions with respect to any special order for costs of the trial within 14 days of today's date and the first respondent should file his reply within a further 7 days.

153 As to the costs of the appeal, as the appellants have only been partially successful, the first respondent should be ordered to pay one-third of the appellants' costs of the appeal but to have a certificate under the Suitor's Fund Act 1951 with respect to those costs if otherwise entitled. However, if the parties wish any different order to be made, any submissions with respect to the costs of the appeal must be included in the submissions relating to the costs of the trial referred to in the preceding paragraph.

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Last Modified: 05/26/2004