Graham v McNab
[2016] VCC 1128
•12 August 2016
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
FAMILY PROPERTY LIST
Case No. CI-15-04599
| IAN McPHEE GRAHAM | First Plaintiff |
| and | |
| BETH MAUREEN GRAHAM | Second Plaintiff |
| v | |
| IAN BRUCE McNAB | First Defendant |
| and | |
| ALASTAIR FINLAY McNAB (in their capacity as Executors and Trustees of the Will and Estate of COLIN WILBUR TURNER deceased) | Second Defendant |
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JUDGE: | HIS HONOUR JUDGE SMITH | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19, 20, 21, 25, 26, 27 and 28 July 2016 | |
DATE OF JUDGMENT: | 12 August 2016 | |
CASE MAY BE CITED AS: | Graham & Anor v McNab & Anor | |
MEDIUM NEUTRAL CITATION: | [2016] VCC 1128 | |
REASONS FOR JUDGMENT
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Subject:ESTOPPEL
Catchwords: Proprietary estoppel – alleged promises by the deceased to leave property to the plaintiffs if they moved to his property and looked after he and his wife – whether plaintiffs induced to move and do so – whether there was reliance by the plaintiffs upon the deceased’s promises – whether the plaintiffs incurred detriment in doing so – where the deceased, on his death, left the plaintiffs a mere restricted right of residence – whether the deceased and later his executors held the property on a constructive trust for the plaintiffs – whether the claim was barred pursuant to the Limitation of Actions Act 1958 – whether the defence of laches, acquiescence and delay was open
Legislation Cited: Limitation of Actions Act 1958, s5, s8, s21, s22; Administration and Probate Act 1958, Part IV; Trustee Act 1958
Cases Cited:Evans v Bradock [2015] NSWSC 249; Evans v Evans [2011] NSWCA 92; Harrison v Harrison & Ors [2011] VSC 459; Harrison v Harrison & Ors [2013] VSCA 170; Harrison & Ors v Harrison (No 2) [2012] VSC 74; Flinn v Flinn [1999] 3 VR 712; Watson v Foxman (1995) 49 NSWLR 315; Webb v Ryan [2012] VSC 377; Briginshaw v Briginshaw [1938] HCA 34; Smilevska v Smilevska (No 2) [2016] NSWSC 397; Donis v Donis (2007) 19 VR 577; Giumelli v Giumelli (1999) 196 CLR 101; Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; Nolan v Nolan [2004] VSCA 109; Paragon Finance PLC v DB Thakerar & Co [1999] All ER 400; Feiglin v Ainsworth [2015] VSCA 326; Erlanger & Ors v New Sombrero Phosphate Co & Ors (1878) 3 App Cas 1218; Lindsay Petroleum Company v Hurd, Farewell & Kemp (1874) LR5PC 221; Orr v Ford (1989) 84 ALR 146; Falkingham v Peninsula Kingswood Country Golf Club Limited [2014] VSC 437; Falkingham v Peninsula Kingswood Country Golf Club Limited (2015) ALR 140
Judgment: Judgment for the plaintiffs.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr M McKenzie | Constable Connor & Co Pty Ltd |
| For the Defendants | Mr R Moore | McNab & Starke |
HIS HONOUR:
1 In this proceeding the defendants are the executors and trustees of the Will of the late Colin Wilbur Turner (who I refer to in these reasons as “Mr Turner”). The plaintiffs (who I shall refer to as “the Grahams”) seek a declaration that the defendants hold the property known as 73 Ormond Road, Moonee Ponds (“No 73”) on trust for them, or alternatively damages.
Background
2 The factual matters set out in this part of these reasons are findings of fact by me unless otherwise indicated.
3 For some time prior to 1974, Mr Turner had owned the property situate at and known as No 73 and No 75 Ormond Road. They were semi-detached maisonettes. Mr Turner resided at No 75. The premises at No 73 had been rented out by him for some time.
4 In 1973-1974, Mr Turner was about sixty-four years of age. He was married to Margaret Turner, who was aged about six years younger. They had no children.
5 Mr Turner was a member of the North Suburban Club in Moonee Ponds, a licensed social venue. In 1973, he became friends with another member of the Club, Ian Graham, the first-named plaintiff in this proceeding.
6 At that time, Mr Graham was aged about thirty-one. His wife, Beth Graham (the second-named plaintiff), was aged about twenty-eight.
7 Mr Graham was a Vietnam veteran and a fitter and turner by trade. He had left the army in 1971 and later obtained work as a sales representative. Mrs Graham worked as a bookkeeper and office manager. They had no children, although Mr Graham had children from an earlier relationship. In 1973, the Grahams were living in a one-bedroom flat in Essendon.
8 Mr Turner had been involved in a transport accident in 1972 in which, as a pedestrian, he had been struck by a car. He suffered significant orthopaedic injuries. Mrs Turner suffered from asthma and emphysema and was not in good health.
9 Mr Turner and Mr Graham became good friends, largely in the context of their socialising at the Club.
10 At some stage in 1973, or possibly early 1974, Mr Turner proposed to Mr Graham that he and Mrs Graham might move into No 73.
11 Mr Graham’s evidence was that the offer made by Mr Turner was that he and Mrs Graham would move into No 73 and live there rent free, in exchange for them looking after Mr and Mrs Turner. On Mr Turner’s death, the property would be left to them. It seems to have been assumed by all that Mr Turner would outlive Mrs Turner because of her poor health. Mr Graham said that he would have to discuss the proposal with his wife and he did so soon after. They were both interested in the proposal and Mr Graham conveyed this to Mr Turner.
12 At the time of the initial discussions between Mr Turner and Mr Graham concerning the proposed arrangement, their respective wives had not met each other. Mrs Graham had not met Mr Turner and Mrs Turner had not met Mr Graham. The Grahams were invited to the Ormond Road premises so that all parties could meet each other and could inspect the premises at No 73. At that meeting, Mr Graham said that the two couples appeared to get on well. Shortly afterwards, Mr and Mrs Graham agreed to the proposed arrangement with Mr Turner. They moved into No 73. The precise date of the move is unclear. It appears to have been at some stage in 1974. I do not consider much turns on the precise date.
13 In discussions that followed, Mr Graham insisted on paying some rental and it appears that the final arrangement was that the Grahams would pay $80.00 per week rent, towards municipal rates, and the cost of routine maintenance.
14 The Grahams resided at No 73 from 1974 and continue to reside there now. No written agreement concerning this arrangement was ever prepared or executed. To use the colloquial expression used by Mr Graham in evidence, it was a “handshake” agreement.
15 It was common ground between the parties that $80.00 per week was a low and favourable rental in comparison with other similar properties in the area. Up until that time, the Grahams had been paying rental of $120.00 per week for their one-bedroom flat in Essendon. Not only was the rent less, but the premises at No 73 were larger and of better quality.
16 In November 1980, Mrs Turner died. Mr Turner continued to reside at No 75.
17 On 14 November 1997, Mr Turner died. In his last Will made on 9 March 1994, Mr Turner appointed Mr Graham as one of three executors and trustees of his Will. The other two were the defendants to this proceeding, Ian McNab and Alistair McNab, both of whom were solicitors and partners of the law firm known as McNab, McNab & Starke.
18 On 28 January 1998, probate in the Will of Mr Turner was granted to the two defendants. The probate document states that leave was reserved to Mr Graham, the other executor appointed in the Will, to come in at any time and prove the same.[1]
[1]Exhibit E at Plaintiffs’ Court Book (“PCB”) 152
19 In his Will,[2] Mr Turner provided, in paragraph 3, as follows:
[2]Exhibit B at PCB 144
“3I GIVE AND DEVISE my properties known as 73 and 75 Ormond Road, Moonee Ponds being the land described in Certificate of Title Volume 6206 Folio 122 to my trustees UPON TRUST:-
(a)To take all necessary steps to subdivide the said properties and obtain separate Titles for those parts thereof known as 73 and 75 Ormond Road, Moonee Ponds.
(b)Upon issue of a new separate Title in respect of the property known as 75 Ormond Road, Moonee Ponds to transfer the said property known as 75 Ormond Road, Moonee Ponds to my sister GLENYS MADGE SIMMONS of 33 Patrick Street, Portland for her own use and benefit absolutely.
(c)To permit the said IAN GRAHAM and his Wife ELIZABETH GRAHAM to reside rent free in that part of my property as is known as 73 Ormond Road, Moonee Ponds during their joint lives and the lives of the survivor of them and while they continue to pay all rates, insurance premiums and all reasonable maintenance charges in respect of the said property or until both of them remain away from the said property for a period of three months or advise my Trustees in writing that they no longer wish to reside in the said property.
(d)Subject to sub-paragraph (c) hereof to transfer the said property known as 73 Ormond Road, Moonee Ponds to the Freemasons Hospital of 166 Clarendon Street, East Melbourne or as the board of the said hospital shall direct.
(e)I direct that all costs of and incidental to survey, subdivision and legal costs for the obtaining of new Titles in respect of the said properties at 73 and 75 Ormond Road, Moonee Ponds shall be paid from the residue of my estate.”
20 In addition, Mr Turner made a number of relatively small specific bequests of sums of money to various other relations. The residue of his estate was left to his sister, Glenys Simmons.
21 It can be seen that, in his Will, Mr Turner effectively left to Mr and Mrs Graham a limited right of residence in No 73. They had the right to reside at that property for their respective lives subject to the payment of rates, insurance premiums and reasonable maintenance charges, and also subject to them not remaining away from the property for a period of three months.
22 Mr Turner did not leave No 73 to Mr and Mrs Graham for their own use and benefit absolutely.
23 Mr Graham was shown a copy of Mr Turner’s Will on the day of Mr Turner’s funeral service on 19 November 1997, by Finlay McNab, who was the father of the defendants and a partner in the same firm. Finlay McNab had been Mr Turner’s solicitor for some years and had prepared the last Will in March 1994. He had also prepared what appears to have been the penultimate Will in August 1993.
24 Upon learning that the property at No 73 had not been left to them as he and his wife had understood it would be, Mr Graham informed Finlay McNab that Mr Turner had promised to leave No 73 to them if they looked after him and Margaret. His evidence was that he told him that he wished to challenge the Will regarding No 73 on that basis. He stated that Finlay McNab told him that he had no hope of success and that if he made such a claim, Finlay McNab would defend it.[3]
[3]Exhibit F at PCB 169; Transcript (“T”) 51
25 Finlay McNab died in 2004. His files relating to the making of Wills by Mr Turner, the application for probate of the last Will, and the administration of the estate of Mr Turner have not been retained by the firm.
26 The Grahams took no steps to either challenge the Will or seek other relief for many years. Mr Graham stated that he knew Finlay McNab as a “no nonsense, straight talking bloke who knew his job”.[4] He relied upon Mr McNab’s comment about his chances of success in challenging the Will as being without hope. It did not occur to him to seek independent legal advice about the matter at that time.
[4]Exhibit F at PCB 169
27 Since 1997, the Grahams have continued to reside at No 73. There was no issue between the parties that they had paid all rates, insurance premiums and reasonable maintenance charges in respect of the property. It was not submitted that they had been absent from the property for more than three months at any time. Accordingly, by the terms of the Will, they are entitled to reside at the property on that basis until the last of them dies.
28 The properties known as numbers 73 and 75 have since been subdivided by the defendants and No 75 has been sold by them as executors of Mr Turner’s estate. Although there was no evidence of it, I assume that the proceeds of the sale were distributed to Glenys Simmons in accordance with the Will.
29 During 1999, Mr Graham ceased working due to ill health. He was granted a Pension in 2001 on the basis that he was totally and permanently incapacitated. In 2002, Mrs Graham ceased work in order to care for Mr Graham. She obtained a Carer’s Pension. Later that year, Mr Graham was diagnosed with gastric cancer.
30 In 2013, Mr Graham continued to be in poor health. He became concerned about the position of Mrs Graham in the event that he died. He did not have an understanding that Mrs Graham would be able to continue to live in No 73 in the event that he did die. Soon after, the Grahams saw a newspaper advertisement in which a solicitor advertised that he could act in matters concerning disputes under a will on a “no win – no fee” basis. The Grahams proceeded to seek legal advice about their rights concerning the property at No 73.
31 In October 2013, an Originating Motion was issued in the Supreme Court by solicitors acting for the Grahams claiming provision for their maintenance under Part IV of the Administration and Probate Act 1958. In May 2014, the proceeding was dismissed on the basis that the Court had no jurisdiction, as they had no standing to claim under Part IV.
32 In August 2014, Mr and Mrs Graham commenced an application under the Property Law Act 1958 at VCAT. In March 2015, this was also struck out for lack of jurisdiction.
33 The current proceeding was commenced by Writ issued in this Court on 28 September 2015.
34 I accept that neither Mr nor Mrs Graham have any legal training or knowledge concerning such rights or claims. The earlier unsuccessful claims in the Supreme Court and VCAT were commenced in those jurisdictions upon legal advice provided to them.
35 In this proceeding, the Grahams claim, in essence, that:
(a) Mr Turner represented or promised to them that if they moved into No 73 and looked after him and his wife whilst they were alive, he would allow them to live at No 73 rent free and the property would become theirs on his death;
(b) In reliance on the representations or promises made to them by Mr Turner, they moved into No 73 in 1974 and looked after Mr and Mrs Turner until their respective deaths in 1980 and 1997;
(c) Over the years following 1974, Mr Turner told them on a number of occasions that he would be leaving No 73 to them;
(d) Further, in reliance upon the representations, Mr and Mrs Graham:
(i) terminated the tenancy of their flat in Essendon;
(ii) refrained from purchasing any other property as their family home;
(iii) looked after Mr Turner until his death in 1997;
(iv) looked after Mrs Turner until her death in 1980;
(vii) made a number of improvements to No 73 at their own cost;
(e) Accordingly, they allege they suffered a detriment in acting as they did in reliance upon Mr Turner’s representations;
(f) Mr Turner was bound in conscience to leave No 73 to Mr and Mrs Graham on his death;
(g) The executors of Mr Turner’s estate were similarly bound, on Mr Turner’s death, to provide to them the property at No 73;
(h) They were entitled to expect that the property would be held on trust for them by the executors pursuant to the arrangement made by Mr Turner during his lifetime;
(i) Mr Turner was estopped from denying their legal title to No 73 in his Will;
(j) A constructive trust arose over No 73 in favour of them;
(k) The defendants held the fee simple title to No 73 on trust for them.
36 The defendants, as executors and trustees of the estate of Mr Turner, deny the claim.
(a) They deny the arrangement between Mr Turner and the Grahams was as alleged and say that it was far more likely that Mr Turner only ever agreed to Mr and Mrs Graham residing at No 73 at a favourable rental and on the basis that they would be permitted to live there at No 73 for their respective lives;
(b) They deny that the defendants hold the property on trust for Mr and Mrs Graham;
(c) Further, they say that the claim brought by Mr and Mrs Graham is statute barred pursuant to s5, s8, s21, and s22 of the Limitation of Actions Act 1958;
(d) Further, they allege that the claim is unenforceable by reason of laches, acquiescence and/or delay.
37 In reply to the limitation of actions defence, Mr and Mrs Graham allege that, pursuant to s21 of the Act, there is no period of limitation prescribed.
38 I shall deal firstly with the findings concerning representations allegedly made by Mr Turner, the nature of any promises made by him, and issues of estoppel and constructive trust. I shall then deal with the defences referred to above concerning the Limitation of Actions Act and laches, acquiescence and delay.
The arrangement – What promises were made?
39 The initial conversations and representations upon which the Grahams’ claim is based occurred more than forty years ago. Not surprisingly, memories as to exactly what was said and the precise order of events have become somewhat blurred. I accept that human memory is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time. I accept that processes of memory can often be overlayed, even subconsciously, by perceptions of self-interest, as well as conscious consideration of what should have been said or could have been said.[5]
[5]Watson v Foxman (1995) 49 NSWLR 315 at 318-9
40 A number of witnesses gave evidence as to conversations with Mr Turner that similarly occurred many years ago.
41 Further, I accept that where an allegation is made that a testator effectively abused his freedom of testation, a court will treat uncorroborated evidence of such communications with considerable caution.[6] In the main, and unsurprisingly, the conversations constituting the representations by Mr Turner to Mr and/or Mrs Graham were held in private.
[6]Webb v Ryan [2012] VSC 377 at paragraph [22]
42 Mr Graham’s evidence was that the earliest discussions concerning the arrangement occurred in 1973 at the Club. He stated that Mr Turner had asked whether he and Mrs Graham would like to come and live at No 73, which had become vacant, and look after him and Mrs Turner. He said he would like Beth to meet Margaret and discuss staying there and looking after them. Mr Graham had spoken to his wife and agreed to go and meet the Turners and discuss the proposed arrangement with them.
43 In his affidavit sworn in February 2014[7] and adopted by him as true and correct in evidence at the trial (subject only to minor corrections), Mr Graham stated that Mr Turner had proposed that he and Mrs Graham could move into No 73, look after him and his wife and in return, they could live there rent free and the property would become theirs on Mr Turner’s death. Mr Graham said that over the following few months, he and his wife discussed Mr Turner’s proposal, met with Mr and Mrs Turner, decided to accept the proposal and then ironed out the details. Mr Turner had wanted to continue to use the garage at No 73 for his storage purposes and in due course Mr Graham erected a carport for his car on the property.
[7]Exhibit F at PCB 157
44 Mr Graham told Mr Turner that he was uneasy about not paying something by way of rent and in due course it was agreed that they would pay $80 per week rental to Mr Turner to cover rates, utilities, insurance and routine repairs and maintenance. They continued paying that rent from the time they moved into No 73 until the date of Mr Turner’s death in 1997.
45 Mr Graham recalled that it was in early 1974 that he and his wife took up Mr Turner’s offer. Shortly afterwards, they moved into No 73.
46 Mr Graham’s evidence was that over the years that followed their move, Mr Turner had confirmed to both him and his wife on many occasions that he would be leaving No 73 to them when he died. He told them on many occasions to treat the house as if it was their own, and they did so.[8] Mr Turner informed them that they could renovate the house as they wished and that they did not require his prior approval before carrying out any improvements or renovations. The only exception to this was that Mr Turner wanted to continue to use the garage at No 73 for his own storage purposes.[9]
[8]T37, 44, 112
[9]T40 and 41
47 Mr Graham stated that Mrs Turner was often present when such statements were made and she herself had made similar statements to the effect that No 73 would be theirs after Mr Turner died.[10] There appeared to be an assumption that, because of her health problems, Mrs Turner was likely to pre-decease Mr Turner. As things turned out, that was correct.
[10]Exhibit F at PCB 165
48 About one year after the Grahams moved into No 73, Mr and Mrs Graham decided that it was an ideal time for them to attempt to purchase a property as they were both working and he was entitled to a war service loan. They approached Mr Turner and offered to purchase No 73 from him. Mr Turner advised them that the property was worth about $32,000 but that he was reluctant to sell it because he wished to retain control of both properties during his lifetime.[11] In the end, he declined to sell it to them. Notwithstanding, he assured them that it would be theirs after his death.
[11]T76
49 In his affidavit, Mr Graham frankly conceded that it was difficult to remember the exact sequence of events. This is not at all surprising.
50 Mr Graham was cross-examined by counsel for the defendants extensively. Much concerned the order of events and precisely what was said on various occasions.
51 It was submitted by counsel at the conclusion of the trial that I ought not to accept the evidence of Mr and Mrs Graham as to what was alleged to have been said to by Mr Turner.
52 I accept that there were some discrepancies in the evidence between Mr and Mrs Graham. Notwithstanding, I consider that both Mr and Mrs Graham were impressive witnesses. I consider that they gave their evidence honestly and as best they could recall the relevant happenings and conversations. I do not regard the inconsistencies in their evidence to be indicative of a lack of honesty. Nor do I regard them as indicative of lack of reliability such that I should place reduced weight on their evidence.
53 I accept that they moved to No 73 because of the promises made by Mr Turner that if they moved there and looked after him and his wife during their respective lifetimes, then he would leave the property to them on his death.
54 I accept the submission of counsel for the defendants that the legal burden of proof is borne by the plaintiffs, who bear the onus of establishing that:
· a promise was made or an assurance was given;
· they believed the promise or assurance; and
· on the faith of that belief, they took a course of action or inaction which would turn out to be to their detriment were Mr Turner (or the executors of his estate) be permitted to depart from that promise or assurance.
55 I am satisfied that the Grahams have established each of those matters.
56 Counsel for the defendants submitted that such a promise or assurance must be “clear and unambiguous” before it can found any equitable estoppel. However, he conceded that the promise may lack the certainty or specificity to satisfy the requirements of an enforceable contract at law. In this regard, one assesses the question of clarity and certainty practically and sensibly, as well as contextually.[12]
[12]Evans v Bradock [2015] NSWSC 249 at paragraph [242]
57 I note further that the expectation of a person to whom such a promise or assurance was given might reasonably derive from words or specific actions but need not depend on the words of a single conversation, but could arise from conduct over a period of time.[13]
[13]Evans v Evans [2011] NSWCA 92 at [107]
58 In Harrison v Harrison & Ors,[14] at first instance, Kaye J said:
“It is now well established that a promise may form an appropriate basis for a claim in proprietary estoppel, notwithstanding that it lacks sufficient certainty or specificity to satisfy the requirements of an enforceable contract at law. … while a promise may be insufficiently clear at law to be the foundation of an enforceable contract, nonetheless, if it is acted on by the promisee to his or her detriment, equity will enforce it.”[15]
[14][2011] VSC 459 (per Kaye J)
[15]At paragraph [374]
59 His Honour cited the judgment of Brooking JA in Flinn v Flinn,[16] where it was said, relating to proprietary estoppel:
“As the review of the authorities over the last two hundred years shows, uncertainty preventing the creation of a contract has never been regarded as necessarily preventing the beneficial intervention of equity. Time and again an equity has been held to exist when no contract had arisen, the court often going a long way to giving effect to what the law of contract would ignore as an impossibly loose arrangement.”[17]
[16][1999] 3 VR 712
[17]At paragraph [375]
60 The trial judge’s decision in Harrison was comprehensively affirmed by the Court of Appeal.[18]
[18]Harrison v Harrison [2013] VSCA 170
61 In addition to the evidence of Mr and Mrs Graham, evidence was led by both parties concerning statements said to have been made by Mr Turner during his lifetime.
62 Mr and Mrs Graham called Magdalena Pilarinos, Lexie Baker, Anthony Parker, Julia Bird and Kaye Batchelor. The defendants called Elva Johnson, Ian Johnson and Pamela Johnson.
63 Lexie Baker is Beth Graham’s sister. She resides in Tasmania. She met Mr Turner on occasions when he travelled to Tasmania with the Grahams on holidays and stayed with her and various other relatives of Mrs Graham. On one such occasion, she said Mr Turner had stated to her that he would leave the house at No 73 to Mr and Mrs Graham. Those present when that conversation occurred were Mr and Mrs Graham, Mrs Baker and her husband. She was cross-examined thoroughly. Counsel for the defendants put to her that Mr Turner might have only referred to the Grahams having a right to occupy the premises during their lifetimes. However, she was insistent that the words used by Mr Turner were that he was “leaving the house” to Mr and Mrs Graham.
64 Mrs Pilarinos is aged eighty. She gave evidence that she had met Mr Turner in about 1980, some thirty-six years ago. She would regularly visit him. She resided at 55 Ormond Road, Moonee Ponds, a short distance down the road from No 73 and No 75. Her evidence was that Mr Turner had told her on a number of occasions that he intended to leave No 73 to Mr Graham.[19] She had always spoken to Mr Turner in the English language. I considered that her English language skills were such that it would be preferable for her to give her evidence through a Greek interpreter. That is not to say that she spoke no English, but I was of the view that in an unfamiliar court room in potentially stressful circumstances, her evidence would be more reliable in her first language. I accept that she regularly visited Mr Turner and conversed with him in English. I consider she was likely to have been able to distinguish between a statement that Mr Turner intended to leave the house to Mr Graham as opposed to an intention to leave a life interest only and then to another person or entity. Mrs Pilarinos stated that although she had met Mr and Mrs Graham, she had had no particular friendship with them and did not have one now. She had spoken with Mr and Mrs Graham about a year ago at an auction of another house in the same street and commented to them that they had been lucky to inherit their house from Mr Turner. She was aware that the Grahams were still living at No 73 and had apparently assumed that it had been left to them.
[19]T178, T180
65 I found Mrs Pilarinos to be a truthful witness. Although I accept that her interpretation of what Mr Turner allegedly said to her might be questionable given her poor English, I consider her evidence has probative value, especially when I consider it to be consistent with other evidence.
66 Anthony Parker is Beth Graham’s brother. He recalled Mr Turner telling him that Mr and Mrs Graham had been very good to him and that he would be “looking after them”. Mr Turner had told him that they would be “okay”.
67 Julia Bird is also a sister of Beth Graham. She recalled Mr Turner telling her that the Grahams would be lucky people and that they would be looked after.
68 Kaye Batchelor is also a sister of Beth Graham and a resident of Tasmania. Mr Turner had told her that he regarded Beth Graham as a daughter.
69 The evidence of Mr Parker, Ms Bird and Ms Batchelor, whilst not inconsistent with that of Mr and Mrs Graham, Ms Baker or Ms Pilarinos, is of limited assistance, as it is also consistent with Mr Turner having an intention to leave the Grahams a life interest (or similar) in the property.
70 Elva Johnson is the niece of the late Margaret Turner. Mr and Mrs Turner had visited her in Queensland regularly until Ms Johnson left home when aged eighteen. When in Melbourne, she would visit Mr and Mrs Turner at No 75. From time to time, she accompanied Mr Turner to his hobby farm at Riddles Creek near Melbourne. Her evidence was that in the period around 1986 to 1989, he discussed his finances and investments with her. He told her that he had the property next door (No 73) tenanted and that the tenants could live there for their lifetimes but not if they left the home for three months.[20] She said she was aware that his Will provided that the tenants were to pay minimal or no rent until their deaths and the property would then pass to Freemasons Hospital.[21] I am unclear as to what will she was referring as the only evidence before me is that of Wills made by Mr Turner in May 1993[22] and March 1994.[23] Her mother, Margaret Turner’s sister, had told her about the contents of Mr Turner’s Will before he died. She thought this was in the late 1980s or maybe 1990 to 1991.
[20]T219
[21]T220
[22]Exhibit 5 at Defendants’ Court Book (“DCB”) 239
[23]Exhibit B at PCB 144
71 Ian Johnson was also a nephew of Margaret Turner and resided in Queensland. He had known Mr and Mrs Turner since he was a young child. They had visited and stayed with him for about a week at No 75 in 1984 and he was aware of the Grahams living next door at No 73. His evidence was that in 1984, Mr Turner had told him that he had left the house to Mr and Mrs Graham until they died or moved out and then left it to Freemasons Hospital.[24] In 1992, he said Mr Turner had said the same thing again to him.
[24]T228, 229
72 Mr Johnson said that that discussion regarding No 73 in 1984 had just “come up in general conversation”. He said it had come up in general conversation again in 1994 and that was the last time he had seen Mr Turner.
73 Pamela Johnson was married to Lindsay Johnson, a nephew of Margaret Turner. She said she was not close to Margaret but was close to Mr Turner in his later years. She lived near Colac. Mr Turner visited twice a year, often at Christmas. This was especially after Mrs Turner had died. When he visited, he would come for a couple of weeks. She had seen Mr Turner at Moonee Ponds twice. She said that he had told her that the house at No 73 was to end up with Freemasons Hospital and that his sister was going to get No 75; he had said that No 73 was for Mr and Mrs Graham until they died or moved on. She said that he told her that No 73 was “never to be theirs”.[25] “I heard him say that two or three times, that No 73 was to go to the Freemasons Hospital”.
[25]T238
74 Despite some doubts concerning Mr Johnson’s evidence, I consider, that in all likelihood, each of the witnesses referred to above was telling the truth as best as their recollections enabled them to do so. It may well be the case that their memories as to when the various conversations occurred is inaccurate.
75 It follows that I consider that it was likely that Mr Turner was telling his relatives one thing and the Grahams, Ms Baker and Ms Pilarinos something quite different. It is unnecessary for me to reach a firm finding as to a motive for him to do so. However, if it was always his intention to leave No 73 to Freemasons Hospital then it may have been the case that he did not wish to broadcast this to persons connected in any way with the Grahams out of concern that they would cease to provide further services to him.
76 If indeed it is correct that, from time to time, Mr Turner told his relatives that he intended to leave the Grahams with a right to reside at No 73 for their lives and, on their death or deaths, for the property to go to the Freemasons Hospital, it does not, in my opinion, follow that he was saying the same thing to the Grahams.
77 In about 1974, Mr Turner was unwell. He had been a pedestrian knocked down by a car and had suffered serious orthopaedic injuries. At that time, he was walking with the assistance of two sticks. Mrs Turner, at that time, was unwell. She suffered from asthma and from emphysema. I can readily understand why it might be that Mr Turner considered that he and his wife needed assistance at that time and that their respective conditions might well deteriorate with time, resulting in a need for someone to look out for them, or look after them. I can understand why it might have suited him to have such a person or persons living in close proximity in the adjoining premises.
78 Indeed, in the six years that followed 1974, Mrs Turner’s health did deteriorate and she died in 1980. For the next seventeen years, Mr Turner was on his own. Again, I can well understand why it would have suited him to have persons such as the Grahams living in close proximity, assisting him where necessary and being able to look out for him and, if necessary, look after him.
79 In the end, it comes down to whether I am satisfied that Mr and Mrs Graham were witnesses of truth in relation to the statements they said were made on numerous occasions by Mr Turner and whether they acted in reliance upon such statements. Whether the required standard of proof is the mere balance of probabilities or the Briginshaw[26] standard (as was submitted by the defendants’ counsel), I am satisfied on either standard that the substance of the evidence of Mr and Mrs Graham is correct. I am comfortably satisfied that Mr Turner promised that if they came to live next door at No 73 and looked after him and his wife, then he, on his death, would leave the property at No 73 to them. I am satisfied that they moved to No 73 and looked after Mr and Mrs Turner in reliance upon this.
[26]Briginshaw v Briginshaw [1938] HCA 34
Was there a proprietary estoppel created?
80 In order to invoke the intervention of equity based on proprietary estoppel, Mr and Mrs Graham must establish the following:
(a) That Mr Turner made to them promises that he would confer on them an interest in No 73, namely an absolute interest by leaving the property to them in his Will;
(b) That they acted in reliance on those promises in moving to No 73 in 1974 and looking after Mrs Turner until the date of her death, and Mr Turner until the date of his death;
(c) That Mr and Mrs Graham acted reasonably in so relying on the promises made to them by Mr Turner;
(d) That Mr Turner knew or intended that the plaintiffs would rely on his promises and would thereby move to No 73 and look after him and his wife;
(e) That Mr and Mrs Graham have suffered detriment as a consequence of the failure by Mr Turner to adhere to his promise.[27]
[27]Adapted from the words of Kaye J in Harrison v Harrison [2011] VSC 459 at paragraph [371]
81 In Harrison v Harrison,[28] the Court of Appeal set out a number of principles relating to the existence of a proprietary estoppel:
[28][2013] VSCA 170 at paragraph [141]
“(a) A proprietary estoppel may be established where the conduct of the party estopped did not define the expectation;
(b) The quality of the assurances which give rise to the claimant’s expectations is an important factor and may influence the issue of reliance which is often intertwined with detriment;
(c) The court must look at the circumstances in each case to decide in what way the equity can be satisfied;
(d) There is no requirement that the court frame the relief to enforce the minimum equity to do justice to the plaintiff — rather prima facie the estopped party can only fulfil his or her equitable obligation by making good the expectation that he or she has encouraged;
(e) Where the plaintiff’s expectation or assumption is uncertain or extravagant or out of all proportion to the detriment which the plaintiff has suffered, the court should recognize that the plaintiff’s equity may be better satisfied in another and possibly more limited way;
(f) Relief may be moulded to meet practical considerations, and take into account the impact of its orders on third parties and any hardship or injustice they may suffer;
(g) Relief may be limited if the plaintiff’s expectation would be out of all proportion to the detriment; and
(h) The court should prime facie enforce a reasonable expectation which the party bound created or encouraged.”
(My emphasis)
82 The necessary elements of proprietary estoppel were recently described by Slattery J in the New South Wales Supreme Court in Smilevska v Smilevska (No 2)[29] in the following terms:
“The necessary elements of a proprietary estoppel are well established. The plaintiff must show: (1) the owner of property encouraged or induced in the plaintiff an expectation of obtaining an interest in property; (2) the expectation has arisen reasonably from the defendant’s conduct; (3) knowledge by the defendant of the plaintiff’s expectation or belief; (4) the plaintiff altered his or her position in reliance on the expectation; (5) the plaintiff would suffer an identifiable detriment from his or her change of position were the expectation not fulfilled; (6) the circumstances render it unconscionable for the defendant to disappoint the expectation.”
[29][2016] NSWSC 397 at paragraph [112]
83 In Donis v Donis,[30] Nettle JA (as he then was) stated:
[30](2007) 19 VR 577 at 582-3, paragraphs [18], [19] and [20]
“Each of the appellants’ arguments is to some extent premised on the idea that equitable estoppel ‘permits a court to do what is required in order to avoid detriment to the party who has relied on the assumption induced by the party estopped, but no more’. That idea finds support in some of the judgments …
…
As the more recent decision in Giumelli v Giumelli[31] shows, however, there is no such restriction in cases where the expectation which is encouraged is the acquisition of an interest in property. In such cases the remedy relates to the understanding of the parties and the expectation that has been encouraged. Prima facie the estopped party can only fulfil his or her equitable obligation by making good the expectation which he or she has encouraged. The estopped party, having promised to confer a proprietary interest on the party entitled to the benefit of the estoppel, and the latter having acted upon the promise to his or her detriment, is bound in conscience to make good the expectation. It follows that the detrimental reliance that supports the estoppel need not constitute in any sense a consideration moving to the party bound. It is a unilateral element of the estoppel and not the price paid for it.
The prima facie position will yield to individual circumstances. Principle and authority compel the view that where a plaintiff’s expectation or assumption is uncertain or extravagant or out of all proportion to the detriment which the plaintiff has suffered, the court should recognise that the claimant’s equity may be better satisfied in another and possibly more limited way. Thus, as was also said in Giumelli, before granting relief the court is required to consider all of the circumstances of the case, including the possible effects on third parties, and to avoid going beyond what is required for conscientious conduct or would do injustice to others. But that does not mean that the court is required to be ‘constitutionally parsimonious’ or that it is necessary for there to be substantial correspondence between expectation and the monetary value of the detriment suffered, or which but for the relief to be accorded would be suffered. The object of the exercise is to do equity and for that purpose ‘detriment’ is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances.”
(My emphasis).
[31](1999) 196 CLR 101
84 Most recently, in Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd,[32] Gageler J said:
“Proprietary estoppel affords relief against unconscionable conduct where departure from an assurance means that the representor’s conduct is to be regarded as contrary to good conscience. In proprietary estoppel, it is necessary to consider both the subjective reliance of the representee and the extent to which the representor can, in good conscience, be held to be responsible for the representee’s actions. The representor is not acting contrary to good conscience in refusing to conform its conduct to the predicament produced by the representee’s unreasonable misunderstanding of a representation made to it.”
[32][2016] HCA 26 at paragraph [146]
85 I am of the view here that the promises made by Mr Turner were such as to create in the minds of the Grahams a clear and reasonable expectation that No 73 would be left to them upon Mr Turner’s death. This is not a case of the expectations of a claimant being uncertain as to what was being promised so as to give rise to an argument that specific vindication of that promise was not the appropriate relief.
86 It is possible that Mr Turner, being a person with no known legal knowledge, may himself have been confused as to the concepts of leaving property to someone in his Will absolutely and merely leaving a life estate (or right of residence) in such property. Nevertheless, the reasonable expectation, as I have found, of Mr and Mrs Graham, based upon the words used by Mr Turner, was that he would leave No 73 to them on his death. I consider that the expectation, reasonably held by them was that by those words he meant he would leave the property to them absolutely, on his death.
87 I am satisfied that:
(a) Mr Turner made to them promises that he would leave No 73 to them on his death by leaving the property to them in his Will;
(b) They acted in reliance on those promises in moving to No 73 in 1974 and looking after Mrs Turner until the date of her death, and Mr Turner until the date of his death;
(c) Mr and Mrs Graham acted reasonably in so relying on the promises made to them by Mr Turner;
(d) Mr Turner knew or intended that the plaintiffs would rely on his promises and would thereby move to No 73 and look after him and his wife;
(e) Mr and Mrs Graham have suffered detriment as a consequence of them rendering services to Mr and Mrs Turner and by the failure by Mr Turner to adhere to his promise.
88 It follows that I consider that such conduct on Mr Turner’s part gave rise to a proprietary estoppel.
89 Counsel for the defendant challenged the notion that the Grahams had suffered any detriment by entering into arrangement with Mr Turner.
90 I accept that merely moving from their Essendon flat to No 73 would not have involved discernable detriment. The suburbs were nearby. No 73 was a larger and more comfortable residence.
91 However, I am satisfied that for more than six years the Grahams did look after Mrs Turner and for some twenty-three years they looked after Mr Turner. The fact that they carried out their side of the bargain without complaint should not be held against them.
92 I am satisfied that between 1974 and 1997:
(a) The Grahams became, in effect, carers of Mr Turner and, until her death in 1980, Mrs Turner;
(b) The Grahams would regularly check on Mr and Mrs Turner, usually on a daily basis;
(c) As Mrs Turner’s asthma and emphysema worsened and became chronic, Mrs Graham would check on her every day and cook meals for both Mr and Mrs Turner. In addition, Mr and Mrs Graham performed a variety of household chores for them;
(d) In the period leading up to Mrs Turner’s death, Mr and Mrs Graham purchased medication from a nearby pharmacy for them;
(e) On the death of Mrs Turner, Mrs Graham assisted in the organising of her funeral and in addition, organised the wake which was held at No 73;
(f) Following Mrs Turner’s death and over the ensuing years, Mr Turner became far more dependent on Mr and Mrs Graham. He had apparent trouble coping with her death and his consumption of alcohol increased;
(g) Before going to work each day, Mr Graham went into No 75 and arranged Mr Turner’s breakfast. Mrs Turner cooked his other meals;
(h) As Mr Turner’s health declined, Mr Graham drove him to and from medical appointments and to and from various hospital admissions. During hospital stays, Mr Graham visited him each night. Mr Turner had no other visitors that were observed by Mr Graham or that he was told about by Mr Turner;
(i) As his health declined, Mr Turner suffered from urinary and bowel incontinence. In the period leading up to his death, he was required to be showered and dressed each morning by Mr Graham. Mr and Mrs Graham changed and washed his clothing and bed sheets when he soiled himself, which occurred frequently;
(j) On regular occasions, Mr Turner went to No 73 for his evening meal. At other times, Mr or Mrs Graham prepared his meal and took it over to No 75;
(k) On occasions, Mrs Graham would return home from work to find Mr Turner waiting outside No 73 in a disheveled state, speaking incoherently. She would take him into No 73 and look after him until Mr Graham arrived home. He would then be taken back to his house before or after having dinner, depending on the circumstances;
(l) On three occasions, Mrs and Mrs Graham took Mr Turner with them to visit Mrs Graham’s family in Tasmania;
(m) Mr Graham performed a number of renovations to No 73, both to the interior and exterior of the home. He paid for materials and performed much of the work himself. Included in these activities were:
§ knocking down the existing asbestos-ridden garage
§ building a carport
§ constructing concrete paths in the rear garden
§ laying a brick barbecue area
§ erecting a shed
§ erecting a gazebo
§ making a crushed rock driveway
§ installing decking in the backyard
§ paying a contractor to cut down rotting trees in the backyard
§ erecting the back fence and side fence between No 73 and No 75
§ erecting gates in the backyard
§ painting the interior and exterior of the house on several occasions
§ repairing cracks in the interior and exterior of the house
§ tiling the kitchen, bathroom and backroom floors
§ painting the tiles in the bathroom and kitchen
§ painting the kitchen and bathroom cupboards and drawers
§ installing light fittings
§ installing an air-conditioner
§ carpeting the spare room at the premises
§ replacing various taps; and
§ installing a canopy over the backdoor.
93 With regard to the improvements made to No 73 by Mr Graham, I accept the submission made by the defendants that some of these had been performed after 19 November 1997 when Mr and Mrs Graham became aware of the terms of Mr Turner’s Will and during the period when they did not believe they had rights to claim in respect of No 73. It could not therefore be said that those improvements were done in reliance upon Mr Turner’s promises to leave the property to them. In any event, the Grahams have resided at the property for some forty-two years and they have had the benefit of those improvements over that period. I accept that any equity arising merely from such expenditure and effort has been partly amortized over the period.
94 However, I consider that the balance of the matters referred to above plainly reflect detriment to the Grahams. In any event, the authorities are clear that this issue is not to be approached on the basis of the market value of the services provided by the Grahams to or on behalf of Mr Turner and the market value of the property promised to them. In any event, at the time this arrangement was entered into and the promises made, it could never have been clear to either Mr Turner or the Grahams as to precisely what would be involved in the looking after of Mr and Mrs Turner. People age in a variety of ways. They can age and remain healthy. They can age and deteriorate in health quickly or slowly. Some elderly people may need little or no assistance. Others may need considerable assistance. Some live to a very old age. Some die much earlier. I accept that from time to time the degree to which the Grahams “looked after” Mr Turner would have varied. An example was the evidence that on one occasion, probably in the mid-1990s, Mr Turner was able to drive himself in a motor vehicle as far as Bundaberg and later, back to Melbourne.[33] How long he took to do so was not in evidence. That would plainly point to him being, at that particular time, in reasonably good health. However, I am satisfied that Mr Turner is likely to have entered into the arrangement and made the promises that he made to Mr and Mrs Graham on the basis that he was aware that his wife and he might well require considerable assistance in the future.
[33]T228
95 I am satisfied that Mr and Mrs Graham performed their end of the bargain with Mr Turner.
96 I am satisfied that Mr Turner acted unconscionably in not leaving No 73 to the Grahams in his Will.
97 In the circumstances, I am satisfied that Mr Turner held No 73 on a constructive trust for the Grahams and hence, upon his death and upon proof of his Will, the defendants held that property on a constructive trust for them.
Limitation of Actions Act defence
98 The defendants submit that the Grahams’ claim is statute barred by virtue of the operation of s22 of the Limitations of Actions Act 1958 (“the LOAA”).
99 Section 22 is expressed to be subject to the provisions of s21(1).
100 Section 21(1)(b) provides that no period of limitation prescribed by the LOAA shall apply to an action by a beneficiary under a trust, being an action to recover from the trustee trust property or the proceeds thereof, or previously received by the trustee and converted to his use.
101 The issue here is whether s21 applies. If it does, there is no limitation period and the defence on this issue fails. If it does not apply, then I consider that s22 does apply. If that were the case, I consider that the date when Mr and Mrs Graham’s right to receive the claimed interest in No 73 accrued on either the date of Mr Turner’s death or, at the latest, on the date upon which the Grahams learned of the contents of his Will. It would follow that the claim could not be brought after the expiration of fifteen years from that date. The parties were in agreement that, if the fifteen-year expiration period applied, it had expired by late 2012. The proceeding was commenced on 28 September 2015.
102 In s3 of the LOAA, the words “Trust” and “Trustee” are defined respectively as having the same meaning as in the Trustee Act 1958. Section 3 of the latter Act provides:
“trust does not include the duties incident to an estate conveyed by way of mortgage, but with this exception the expressions trust and trustee extend to implied and constructive trusts and to cases where the trustee has a beneficial interest in the trust property, and to the duties incident to the office of a personal representative, and a trustee where the context admits, includes a personal representative, and new trustee includes an additional trustee.”
(My emphasis).
103 Counsel referred me to a number of authorities concerning the difference between institutional constructive trusts and remedial constructive trusts and their relevance to s21(1)(b).
104 The thrust of those authorities was that a remedial trust was not, in reality, a trust at all but merely a catchphrase to describe the remedial obligations which the law imposes.[34]
[34]Paragon Finance PLC v DB Thakerar & Co [1999] All ER 400 at 408-9; Feiglin v Ainsworth [2015] VSCA 326 at paragraphs [38]-[39]
105 In Nolan v Nolan,[35] Ormiston JA said:
“A person becomes an institutional constructive trustee because there is evidence from which it may be inferred either that that person intended to hold property on behalf of others or that he or she should have had such an intention.”
[35][2004] VSCA 109 at paragraph [60]
106 In the subject case, I have accepted the evidence that Mr Turner made the promises that he would leave No 73 on his death to the Grahams if they were to move to No 73 and look after him and his wife. I consider that that is evidence that he intended to hold the property on behalf of them or, at the very least, that he should have had such an intention.
107 I do not consider that this is a case involving a mere remedial trust.
108 I have formed the view that s21(1)(b) applies here. That is, that this is an action to recover trust property from the defendants (acting in their capacity as trustees). The trustees stand in the place of Mr Turner following his death. It follows that I am satisfied that no period of limitation applies to this proceeding.
109 Counsel for the Grahams also submitted that s21(1)(a) of the LOAA applied. It was submitted that the actions of Finlay McNab, in advising Mr Graham that his case to challenge the Will was hopeless, constituted a fraud or equitable fraud upon the Grahams. I reject that submission.
110 Where a solicitor states to a client, or even a non-client, that a legal claim is hopeless, that is an expression of opinion. The fact that his opinion may later be found to be incorrect does not mean that the solicitor was acting fraudulently (as opposed to reasonably or even negligently) when he made the statement. There are numerous legal opinions which are genuinely held by some lawyers which are disputed by others. They cannot all be correct but that is far from saying that one or more of them must be acting dishonestly or fraudulently in expressing them. It might be different if there was some evidence to show that, at the time when the person gave the advice, he well knew or believed that it was false, but nevertheless gave it to a person knowing it would be relied upon. I do not consider there is any such evidence here.
111 Likewise, it was submitted on behalf of the Grahams that s27 of the LOAA applied in circumstances where the claim was for relief from the consequences of a mistake. The “mistake” relied upon was the alleged mistake by Finlay McNab in advising the Grahams that their claim to dispute the Will was hopeless. This is not how the claim is pleaded. The claim pleaded is that the Grahams are entitled to the property because of promises made by Mr Turner and the reliance on them by the Grahams created a proprietary estoppel, leading to a constructive trust in their favour. In any event, I am not satisfied that Finlay McNab’s statement was a mistake. In fact a claim brought by the Grahams under Part IV of the Administration and Probate Act was dismissed. A further claim in VCAT was also dismissed. Before one could find that Finlay McNab was mistaken in his advice, one would have to know what type of claim he understood was intended by the Grahams and whether the precise nature of the proposed claim was explained to him. Even then, the issue of whether the advice given was mistaken in the sense of being wrong would, in my view, be a matter on which expert legal evidence would be required.
Laches, acquiescence and delay
112 The defendants have also pleaded the defence of laches, acquiescence and delay. They refer to the statement of Lord Blackburn in Erlanger & Ors v The New Sombrero Phosphate Company & Ors:[36]
“… And a Court of Equity requires that those who come to it to ask its active interposition to give them relief, should use due diligence, after there has been such notice or knowledge as to make it inequitable to lie by. And any change which occurs in the position of the parties or the state of the property after such notice or knowledge should tell much more against the party in morâ, than a similar change before he was in morâ should do.”
[36](1878) 3 App Cas 1218 at 1279
113 Likewise, Lord Blackburn made reference to Lindsay Petroleum Company v Hurd, Farewell & Kemp,[37] where it was said:
“The doctrine of laches in Courts of Equity is not an arbitrary or technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.”
[37](1874) LR5PC 221
114 The defence was considered by the High Court in Orr v Ford.[38] There, the majority of the Court held that the defence was not made out in the circumstances there applicable. Although Deane J formed part of the minority decision concerning the outcome of the defence, his commentary regarding the legal principles is helpful:
“There has, over the years, been considerable criticism of the loose use of the word ‘acquiescence’ as a broad conjunctive or disjunctive companion to ‘laches’. … Such criticism has obvious force in that, so used, the word has a chameleon-like quality which adds little besides confusion to an already vague area of equity doctrine. Strictly used, acquiescence indicates the contemporaneous and informed (knowing) acceptance or standing by which is treated by equity as ‘assent’ (ie consent) to what would otherwise be an infringement of rights … . The word is commonly also used to refer: (i) to a representation by silence of a type which may found an estoppel by conduct …; or (ii) to acceptance of a past wrongful act in circumstances which give rise to an active waiver of rights or a release of liability …; or (iii) to an election to abandon or not enforce rights … . A plaintiff may, however, lose his right to relief by an ‘inferior species of acquiescence’ … which does not amount to assent, waiver or election or give rise to an estoppel. In these cases, acquiescence may be used in at least one of three ways. First, it is sometimes used as an indefinite overlapping component of a catchall phrase also incorporating ‘laches’ or ‘gross laches’ and/or ‘delay’. While such phrases may provide a convenient means of referring to a general area of equity, they tend to obscure principle rather than to assist in its identification. Secondly, acquiescence is used as a true alternative to ‘laches’ to divide the field between inaction in the face of ‘the assertion of adverse rights’ (acquiescence) and inaction ‘in prosecuting rights’ (laches): … Upon analysis, that use of the word ‘acquiescence’ is not helpful since laches (‘an old French word for slacknesse or negligence or not doing’): … comprehends silence or inaction in the face of an unwarranted assertion of adverse rights by another as well as inaction or delay in prosecuting one's own rights. Thirdly, and more commonly, acquiescence is used, in a context where laches is used to indicate either mere delay or delay with knowledge, to refer to conduct by a person, with knowledge of the acts of another person, which encourages that other person reasonably to believe that his acts are accepted (if past) or not opposed (if contemporaneous) … .”[39]
(My emphasis).
[38](1989) 84 ALR 146 (“Orr”)
[39]Orr (supra) at 157-8
115 In Orr, acquiescence was relied upon in the sense of “calculated” (i.e. deliberate and informed) inaction in standing by which encouraged another reasonably to believe that his assertion of rights and consequent actions were accepted or not opposed.[40] Deane J said:
“The availability of a defence of laches and what will suffice to make it good depends upon the nature of the claim. … .”[41]
[40]Orr (supra) at 159
[41]Orr (supra) at 159
116 His Honour discussed the term “gross laches” and concluded that the use of the phrase did little to aid in the identification of particular circumstances in which a defence of laches would preclude relief being granted to a beneficiary or a trust. He considered that the ultimate test effectively remains that enunciated by Lord Selborne LC in Lindsay Petroleum Co v Hurd, Farewell & Kemp[42] to which I have previously referred.
[42]Supra
117 Of some relevance to the case at hand, his Honour said:
“Ordinarily, it is difficult to envisage circumstances, falling short of waiver, release, election or estoppel, in which the laches of a beneficiary would produce a situation in which it was inequitable and unreasonable to grant relief in proceedings for the enforcement of an express trust in relation to trust property which remained in the possession of the trustee (or his personal representative). There are, however, at least two categories of case where that is not so. The first is where there is or has been dispute or mistake about the existence of the trust or the identity or extent of the trust property. The second category is where prejudice to third parties, such as other beneficiaries, is involved. In the first category of case, unreasonable delay in instituting proceedings to enforce the claim may of itself give rise to the serious and unfair prejudice necessary to constitute ‘gross laches’ in that it may bring about a situation in which the means of resisting the claim, if it be unfounded, have perished. … In determining what constitutes ‘unreasonable delay’ regard must be had to all the circumstances, including the nature of the claim and the conduct of the parties. … .”
(Citations omitted).
118 In the present case, the relevant dates appear to be:
· 14 November 1997 – Mr Turner’s death;
· 19 November 1997 – Mr Turner’s funeral and the date upon which the Grahams became aware of the contents of his Will;
· 28 January 1998 – Probate granted to the defendants;
· 1999 – Mr Graham ceases work due to ill health;
· 2001 – Mr Graham granted a total and permanent incapacity pension;
· 2002 – Mrs Graham ceases work to care for Mr Graham and obtains a Carer’s Pension;
· 2002 – Mr Graham diagnosed with gastric cancer;
· 28 October 2013 – The Grahams commenced a Supreme Court proceeding pursuant to Part IV of the Administration and Probate Act;
· 7 February 2014 – Mr Graham swore an Affidavit in Support of the Supreme Court proceeding[43] (I assume that it was served on the defendants reasonably soon after the date it was sworn);
[43]Exhibit F at PCB 157
· 26 August 2014 – The Grahams commenced a proceeding in VCAT which I was informed by counsel was brought under the Property Law Act;
· 28 September 2015 – Writ issued in this proceeding.
119 On any view, the delay between late 1997 and 2014 or 2015 is considerable. In that period, Finlay McNab died in 2004; Glenys Simmons (Mr Turner’s sister) died in 2006; and the files of McNab, McNab & Starke relating to the making of Mr Turner’s 1993 and 1994 Wills and which might have contained file notes of relevance have been destroyed.
120 The defendants submit that they have been prejudiced by the delay and that the delay is unreasonable.
121 I accept the evidence of Mr Graham that he was told on the date of Mr Turner’s funeral by Finlay McNab, a person who had been Mr Turner’s solicitor for many years and whom was well regarded, that any challenge to Mr Turner’s Will would be hopeless. Mr Graham accepted that statement as a correct one.
122 Whilst, with hindsight, the Grahams might be criticised for not seeking a second legal opinion (preferably from a lawyer independent of Mr Turner’s estate), I do not consider such criticism would be justified. Neither Mr nor Mrs Graham had any legal qualifications or any apparent experience with will disputation or other litigation. In those circumstances, it does not seem unreasonable for them to have accepted what Finlay McNab told them. Further, there was no apparent need for them to act immediately. Their right to possession of No 73 was not being interfered with. I accept that it was only when, as a result of his own failing health and his concern for where his wife would be able to live if he died, that he and his wife did seek a second legal opinion on what he understood would be a no win-no fee basis. They promptly consulted that solicitor and from that time, it is not suggested that there was any undue delay on their part.
123 Although there was no specific evidence to the point, I have no doubt that the cost of obtaining alternative legal advice would have been seen as a deterrent by the Grahams in 1997 and in the years that followed. I consider it common knowledge that “no win – no fee” litigation in the personal injuries field is relatively common and has been for some years. I do not consider that such terms are commonly known to be available in commercial disputes, disputes concerning wills or claims in equity for propriety estoppel or the like. I have no difficulty accepting that the advertisement would have been seen by the Grahams as a real opportunity to establish once and for all whether they did have some legal rights in relation to their arrangement with Mr Turner. I consider that, but for the statement made by Finlay McNab on the day of Mr Turner’s funeral, it is likely that the Grahams would have sought legal advice. On accepting, as I do, the statement attributed to Mr McNab, I consider that it was inappropriate for a solicitor acting for the testator and likely to continue acting for the estate, to be giving any advice to others concerning claims contemplated against the estate. However, I do not consider that Mr Graham would have appreciated that.
124 Counsel for the defendants rightly pointed out that Mr McNab had died in 2004 and hence the opportunity of obtaining specific instructions from him as to what was said on the day of the funeral was lost. Although the defendants are not able to specify what evidence Finlay McNab or Glenys Simmons might have been able to give, there is no reason why prejudice might not still be raised in answer to such a claim:
“The question of prejudice resulting from unavailability of evidence necessarily involves some degree of speculation, but it is not a question of pure speculation. The issue is not whether evidence may have been lost but whether evidence which may have cast a different complexion on the matter has been lost. … .”[44]
[44]Orr (supra) at 152
125 Counsel for the defendants submitted that Mr McNab’s evidence may have touched upon matters said to him at the time that he drew the 1993 and 1994 Wills on behalf of Mr Turner and to any other conversations between 1974 and 1997 regarding what was to happen to the property at No 73. Whilst that may be so, even assuming that Mr Turner may have made it absolutely clear to Mr McNab that he wished to leave the property merely on a life tenancy (or similar) basis to the Grahams and thereafter leave the property to the Freemasons Hospital, that would be of very limited assistance to me. As previously referred to, the issue in respect of whether or not the conduct of Mr Turner was such to create a propriety estoppel leading to a constructive trust in favour of the Grahams was essentially to be assessed on the basis of what promises were made by Mr Turner to the Grahams, not what he may have said to his relatives or to his solicitor. For reasons previously expressed, I have accepted the evidence of the Grahams as to the content of Mr Turner’s promises to them. The same comments could also be made in respect of the evidence that Glenys Simmons may have been able to give had the claim been brought during her lifetime.
126 The conclusion that I have come to in respect of this matter is similar to that expressed by the majority in Orr, where it was said:
“The question of the loss of evidence as to such matters is entirely suppositional and is thus not a matter which can properly be said to amount to prejudice of the character which might defeat the appellant’s claim.”[45]
[45]Orr (supra) at 153
127 The crucial evidence that I accept is that within a very short time after Mr Turner’s death, his solicitor of many years advised Mr Graham that any claim to challenge Mr Turner’s Will would be hopeless and would be defended. In such circumstances, I do not consider that it could be said to be unreasonable on the part of Mr Graham to have taken no further action at that time or for a considerable time until he saw the advertisement to which I have previously referred.
128 Further, I also take into account that Finlay McNab was an experienced solicitor. I accept that on the day of Mr Turner’s funeral, Mr Graham told him of his belief that he was entitled to the title to No 73 and at least put Mr McNab on notice that there might possibly be a claim against the estate to that effect. I do not consider that this is a matter in any way similar to the facts in Orr where the claimant had the opportunity during the testator’s lifetime of bringing the claim to his notice. Instead, the claimant there maintained silence concerning his alleged rights and stood by whilst the testator spent considerable sums of money improving the property, in the belief that it was his and his alone. Even so, the majority of the High Court concluded that the laches defence was not open to the defendants.
129 This is not a case where the defendants alleged that the delay in the Grahams bringing this claim has resulted in the defendants acting to their detriment or to the detriment of some third party on the assumption that no claim would be made. Here, the delay in no way encouraged the defendants or anyone else to conclude that there would be no challenge or no claim made by the Grahams. It would, of course, have been quite different had, during the period of the delay, the property been sold by the defendants to a third party, such as was the case in Falkingham v Peninsula Kingswood Country Golf Club Limited.[46]
[46][2014] VSC 437 per Robson J at first instance; and (2015) 318 ALR 140 before the Court of Appeal
130 In Falkingham, it was crucial to the end decision of the trial judge and the Court of Appeal that the property in question had already been sold by the time the claim was brought and that there was a prospect of significant damage being sustained if the sale process were to be aborted. It can readily be seen that there would have been very significant prejudice had that been the case. In the present case, there is no such complication. The Grahams have continued to occupy No 73 pursuant to the terms of Mr Turner’s Will.
131 In all the circumstances, I am not satisfied that the defence of laches, acquiescence and delay is made out.
Conclusion
132 For the reasons expressed above, I am satisfied that the plaintiffs have made out their claim that they are entitled to a declaration that the defendants hold the property at No 73 on trust for them. I adopt the words used by Nettle JA in Donis that here it is appropriate to make good the expectation which Mr Turner encouraged.
133 I provided these reasons to the parties in advance of today’s date to give them an opportunity to consider the form of orders that ought to be made.
134 Counsel agreed that, in the light of these reasons, the form of orders made by Kaye J in Harrison & Ors v Harrison (No 2)[47] were appropriate.
[47][2012] VSC 74
135 The Orders will be as follows:
(1) There will be Judgment for the plaintiffs.
(2) The Court declares that the defendants hold on constructive trust for the plaintiffs as joint tenants the land described in Certificate of Title Volume 10399 Folio 699, being the land situate at and known as 73 Ormond Road, Moonee Ponds in the State of Victoria, subject to any encumbrances noted thereon.
(3) The defendants do all such things and execute all such documents as are necessary to transfer to the plaintiffs as joint tenants the land described in Certificate of Title Volume 10399 Folio 699, being the land situate at and known as 73 Ormond Road, Moonee Ponds in the State of Victoria, subject to any encumbrances noted thereon.
(4) The plaintiffs pay the costs of the defendants of and incidental to the plaintiffs’ application heard on 12 May 2016 fixed in the sum of $2,200 and to be set off against the costs payable by the defendants in accordance with paragraph (5) hereof.
(5) Subject to the Order set out in paragraph (4) hereof, the defendants pay the plaintiffs’ costs of and incidental to the proceeding to be determined by the Costs Court in accordance with the County Court scale on the standard basis in default of agreement.
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