Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith

[2019] NSWSC 843

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith [2019] NSWSC 843

Hearing dates:

26 February 2019 to 1 March 2019

Date of orders:

08 July 2019

Decision date:

08 July 2019

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

(1)   Extend the time for the making of the Family Provision claims by each of Julie Anne Roberts (Julie), Jason Richard Smith (Jason) and Brandon James Smith (Brandon) to the dates on which their respective proceedings in this Court were instituted.
(2)   Order that, to the extent necessary to accommodate the orders for family provision here made, the property referred to in these reasons as the Argenton property be designated as notional estate.
(3)   Order in favour of the executors of the estate of the late James Richard Smith for possession of the land comprised in Folio Identifier D/394327 (the Glendale property), such order to be stayed for six months from the date of these orders.
(4)   Order that vacant possession of the Glendale property be provided by no later than the date six months from the date of these orders.
(5) Order that, pursuant to s 59 of the Succession Act 2006 (NSW), provision be made out of the estate and notional estate of the deceased in favour of the respective applicants for family provision in accordance with Order 6 below.
(6)   Order that payment be made out of the proceeds of sale of the Argenton property and of the Glendale property as follows:
(a)   first, in payment of the estate’s debt to Pam of $100,000;
(b)   second, in payment of the sum of $10,000 to Julie;
(c)   third in payment of $5,800 to Julie as equitable compensation for certain of the improvements carried out on the Glendale property;
(d)   fourth, in discharge of the estate’s legal costs on an indemnity basis capped at $200,000;
(e)   fifth, in payment to Pam of the sum of $150,000 towards the cost of repair of the termite damage;
(f)   sixth, after setting aside a sum (as calculated according to [312]-[313] of these reasons) towards payment of the legal costs of the respective applicants (the Legal Costs Sum), for payment to each of Kristie, Jason, Brandon and Julie of an equal share of 80% of the balance; and for the remaining 20% of the balance to Pam as a lump sum for future contingencies;
(g)   seventh, order that, of the Legal Costs Sum, 40% be paid to Julie; 40% be paid to Kristie; and 20% be paid jointly to Jason and Brandon for their respective legal costs.
(7)   Liberty to apply on 48 hours’ notice if necessary for the implementation of any of these orders.

Catchwords:

SUCCESSION – Family provision orders – Applications by adult children and sister of deceased – Whether adequate provision for proper maintenance, education and advancement in life made for the applicants by the deceased in his Will

 

EQUITY – Trusts and trustees – Express trusts – Constructive trusts – Resulting trusts

  EQUITY – Equitable remedies – Equitable compensation

Legislation Cited:

Conveyancing Act 1919 (NSW), ss 23C, 66G
Family Provision Act 1982 (NSW)
Succession Act 2006 (NSW), ss 57, 58, 59, 60, 63, 65, 66, 73, 76, 78, 83, 87, 89, Div 3, Pt 3.2, Ch 3, Note to Pt 3.3
Succession Amendment (Family Provision) Act 2008 (NSW), cl 11(1)
Supreme Court Rules 1970 (NSW), Sch J

Cases Cited:

Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495
Anderson v McPherson (No 2) [2012] WASC 19
Bahr v Nicolay [No 2] (1988) 164 CLR 604; [1988] HCA 16
Ball v Newey (1988) 13 NSWLR 489
Benney v Jones (1991) 23 NSWLR 559
Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060
Bloch v Bloch (1981) 180 CLR 390; [1981] HCA 56
Buffery v Buffery [2006] NSWSC 1349
Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26
Calverley v Greene (1984) 155 CLR 242; [1984] HCA 18
Churton v Christian (1988) 13 NSWLR 241; [1988] NSWCA 23
Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752; [2008] UKHL 55
Collings v Vakas [2006] NSWSC 393
Commonwealth of Australia v Verwayen (1990) 170 CLR 394; [1990] HCA 39
Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 333 ALR 384; [2015] HCA 26
Currie v Hamilton [1984] 1 NSWLR 687
Damberg v Damberg [2001] NSWCA 87
Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84
Delaney v Jones [2008] NSWSC 229
DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348
Donis v Donis (2007) 19 VR 57; [2007] VSCA 89
Doueihi v Construction Technologies Australia Pty Ltd (2016) NSWLR 247; [2016] NSWCA 105
Drever v Drever [1936] ALR 446
Dyer v Dyer (1788) 2 Cox Eq Cas 92; (1788) 30 ER 42
E Co v Q [2018] NSWSC 442
Elddin v Hamed (No 2) [2015] NSWSC 654
Evans v Evans [2011] NSWCA 92
Fiorentini v O’Neill [1998] NSWCA 79
Flinn v Flinn [1999] 3 VR 712; [1999] VSCA 109
Foley v Ellis [2008] NSWCA 288
Ford v Simes [2009] NSWCA 351
Fowkes v Pascoe (1875) LR 10 Ch App 343
Foye v Foye [2008] NSWSC 1305
Fulton v Fulton [2014] NSWSC 619
Galaxidis v Galaxidis [2004] NSWCA 111
Gardiner v Gardiner [2014] NSWSC 435
Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10
Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641; [1937] HCA 58
Hamed v Elddin [2016] NSWCA 9
Harris v Harris [2018] NSWCA 334
In the Estate of the late Anthony Marras [2014] NSWSC 915
Kastrounis v Foundouradakis [2012] NSWSC 264
Kauri Timber Co (Tas) Pty Ltd v Reeman (1973) 128 CLR 177; [1973] HCA 8
Kauter v Hilton (1953) 90 CLR 86; [1953] HCA 95
Knight v Knight (1840) 3 Beav 148; (1840) 49 ER 58
Leary v NSW Trustee and Guardian [2017] NSWSC 1113
Mann v Starkey [2008] NSWSC 263
Martech Energy Systems Pty Ltd (in liq) v Bell [2005] VSC 198
Massie v Laundy (NSWSC, 7 February 1986, unreported)
Maxwell v Public Trustee [2001] NSWSC 764
McKenzie v Baddeley [1991] NSWCA 197
McNab v Graham [2017] VSCA 352
Murtagh v Murtagh [2013] NSWSC
Nguyen v Cosmopolitan Homes [2008] NSWCA 246
Nguyen v Phan (No 2) [2015] VSC 634
Ong v Lottwo Pty Ltd (in Liq) [2013] SASCFC 57
Page v Page [2017] NSWCA 141
Plimmer v The Mayor, Councillors and Citizens of the City of Wellington (1884) LR 9 App Cas 699
Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19
Priestley v Priestley [2017] NSWCA 155
Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76
Ryan v Dries [2002] NSWCA 3
Ryan v Ryan [2012] NSWSC 636
Sadiq v NSW Trustee and Guardian [2015] NSWSC 716
Shepherd v Doolan [2005] NSWSC 42
Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19
Singh v Singh [2015] NSWSC 1457
Slack v Rogan; Palffy v Rogan [2013] NSWSC 522
Spata v Tumino; Estate of Gina Spata [2017] NSWSC 111
Sreckovic v Sreckovic [2018] NSWSC 1597
Steinmetz v Shannon [2018] NSWSC 1090
Steinmetz v Shannon [2019] NSWCA 114
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stewart v McDougall (NSWSC, 19 November 1987, unreported)
Stone v Stone [2014] NSWSC 1655
Sullivan v Sullivan [2006] NSWCA 312
Taylor v Farrugia [2009] NSWSC 801
Thomas v Pickering; Byrne v Pickering [2011] NSWSC 572
Thorner v Major [2009] 1 WLR 776
Verzar v Verzar [2012] NSWSC 1380
Warren v McKnight (1996) 40 NSWLR 390
Watson v Foxman (1995) 49 NSWLR 315
Weige v Cupton Pty Ltd [2012] NSWCA 414

Texts Cited:

Brendan Edgeworth, Butt’s Land Law (LawBook Co, 7th ed, 2017)
G E Dal Pont and K F Mackie, Law of Succession (LexisNexis, 2013))
Mason and Handler, Succession Law and Practice (NSW)
Practice Note SC EQ 7

Category:

Principal judgment

Parties:

2016/0045802
Kristie Lee Curtis (Plaintiff)
Pamela Joy Smith (First Defendant)
Tracey Grant (Second Defendant)
Julie Anne Roberts (Applicant)

 

2017/170682
Julie Anne Roberts (Plaintiff)
Pamela Joy Smith (First Defendant)
Tracey Grant (Second Defendant)
Kristie Lee Curtis (Third Defendant)
Jason Richard Smith (Fourth Defendant)
Brandon James Smith (Fifth Defendant)

 

2017/00243096
Jason Richard Smith (First Plaintiff)
Brandon James Smith (Second Plaintiff)
Pamela Joy Smith (First Defendant)
Tracey Grant (Second Defendant)

  2018/00147223
Tracey Grant (First Plaintiff)
Pamela Joy Smith (Second Plaintiff)
Julie Anne Roberts (First Defendant)

Representation:

Counsel:

 

K Morrissey (appearing for Kristie Lee Curtis)
J Armfield (appearing for Julie Anne Roberts)
B Burke (appearing for Pamela Joy Smith and Tracey Grant)
PW O’Hearn, solicitor (appearing for Jason Richard Smith and Brandon James Smith)

 

Solicitors:

  Szabo & Associates Solicitors (Plaintiff, 2016/0045802)
Baker Love Lawyers (Defendants, 2016/45802; First and Second Defendants, 2017/00243096; Defendants, 2017/00243096; Plaintiffs, 2018/00147223)
Cantle Carmichael Legal (Applicant, 2016/45802; Plaintiff, 2017/00170682 )
O’Hearn Lawyers (Plaintiffs, 2017/00243096)

File Number(s):

2018/00147223; 2017/00243096; 2017/00170682; 2016/00045802

Publication restriction:

Nil

Judgment

1. HER HONOUR: Before me for hearing earlier this year were a number of related sets of proceedings concerning the estate of the late James Richard Smith (the deceased). With no disrespect, I will refer to the parties in these proceedings (all members of the deceased’s family) for convenience by their first names.

2. By way of broad summary, the deceased died on 1 March 2015, aged 52. He was survived by his widow, Pam, and their two adult sons, Jason and Brandon; his adult daughter, Kristie, from an earlier relationship; and his sister, Julie. There is another sibling, Dennis, but he makes no claim in relation to the estate. Pam is one of the two executors of the deceased’s estate (the other being Tracey Grant, the niece of the deceased). (Pausing here, I note that Ms Grant’s name is spelt variously in the documents as “Tracy” and Tracey”. I will adopt the latter spelling as it is consistent with the spelling on the affidavit sworn by her as executor on 14 June 2015.)

3. Each of the deceased’s children has made a family provision claim for provision out of the deceased’s estate, as has his sister. Julie has, however, also brought a claim asserting an entitlement (variously by way of express, constructive or resulting trust) in respect of a property in Glendale (the Glendale property) in which she and her partner (Glenn) currently reside (or in the alternative for equitable compensation in respect of an equitable estoppel claim).

4. The deceased’s actual estate is relatively small, comprised of: the Glendale property (estimated at varying amounts, from $250,000 according to the inventory of property annexed to the executors’ initial joint affidavit – sworn in June 2015 by each of the executors, to $310,000 in the executors’ more recent estimation, to $410,000-$450,000 in a kerbside valuation obtained by Julie) and household and personal effects of $1,000; with liabilities as at June 2015 of $49,837.14 (now increased by the debt owing to Pam for funds she has supplied to the estate to meet various liabilities, including the discharge of the mortgage over the Glendale property). The property which would be available to be designated as notional estate is that which passed to Pam by way of survivorship on the deceased’s death, namely, the deceased’s half-share as joint tenant with Pam in their matrimonial home (the Mount Hutton property); another property in Argenton (the Argenton property); and the proceeds of a superannuation or insurance policy received by the deceased shortly before his death (of around $579,000) of which roughly half was paid out by Pam after his death to discharge the then mortgage on the Argenton property (and a second mortgage which had been taken out on the Mount Hutton property at the time of acquisition of the Argenton property).

5. By affidavit sworn 30 November 2016, Pam has deposed to payment out of a Newcastle Permanent Building Society (Building Society) account that had been held jointly with the deceased (in which as at the date of death the amount held was $592,784.76) of various amounts totalling $488,885.77 (including the amounts referred to at [4] above) including amounts in respect of the Argenton property ($259,926.06; $67,165.39; and $4,114.38), a payment on 14 March 2015 to Julie of $10,000 (described by Pam as repayment of a debt owed to her); repayment of a loan on the Glendale property on 3 September 2015 ($48,445.72); and the purchase of a car in the name of Jason but regarded as jointly owned by Pam and Jason ($42,595). Another amount of $10,000 was paid by Pam to Julie on 19 March 2015.

6. The mortgage on the Glendale property was discharged on 16 October 2015. Therefore, with the funds from the deceased’s payment of superannuation and insurance proceeds or otherwise, as loaned by Pam to the estate, both the Glendale and Argenton properties are now unencumbered. (Pausing here, tendered in evidence and admitted provisionally over objection as to relevance – Exhibit C – was a copy of the payment details in relation to the deceased’s superannuation and total and permanent disablement benefits in the sum of $579,355 on 18 January 2015. The proceeds paid to the deceased in that regard are clearly relevant to the size of the notional estate. Insofar as it was admitted provisionally subject to relevance, my ruling is that it now be admitted without qualification.)

7. Pam has also deposed to the making of loans by her to the estate for various purposes (including some $60,000 for the need to fund those legal proceedings) and that the estate is presently insolvent.

8. Unfortunately for all concerned, the conduct of the respective sets of proceedings has been complicated by the fact that Julie’s claims were brought only after agreement in principle had been reached for the settlement by the executors of Kristie’s family provision claim (a settlement that contemplated the sale of the Glendale property and the payment of a lump sum amount to each of Kristie, Jason and Brandon). For obvious reasons, this would affect Julie’s position, since she remains in occupation of the Glendale property – something that Kristie, who has a close relationship with her aunt, Julie, is concerned not to disrupt. When notified, Julie objected to the settlement and shortly afterwards she commenced her proceedings. This was followed not long after by the admittedly “defensive” claims for family provision brought by Jason and Brandon.

9. Hence, there have been additional costs (and delay) associated with the resolution of the claims made against the estate beyond those that it might be expected would have been incurred had the matter progressed to a concluded hearing with all relevant parties involved in the first place. The matter was candidly (and colloquially) described by Counsel for Julie in the course of submissions as a “train crash” or “train wreck” (see T 200.26) (a description which no one suggested was inapt) and it was recognised by various of the claimants that the capping of recoverable costs would be warranted (and perhaps heavily so) (see, for example, Counsel for Julie at T 200.18; 200.33; Counsel for Kristie at T 217.45; 222.11).

10. In that regard, as I understand it, other than Kristie none of the parties is represented on a contingency basis though Counsel for Julie made clear that there might in effect be a willingness on the part of Julie’s legal representatives to approach the matter on that basis (see T 200.40ff). Counsel for Kristie informed me that the solicitors’ costs estimate in her case was contingent on a successful outcome (see T 223.4 and the most recent costs affidavit filed by Kristie’s solicitor in that regard).

Background

11. By way of further brief background, I note the following.

12. The deceased and Kristie’s mother had a sexual relationship when both were in their teens. Kristie was born in 1982. The relationship broke down in 1984.

13. Pam was the deceased’s partner from the time they began living together in 1984, after the breakdown of the deceased’s relationship with Kristie’s mother. The two were married in 1998 and worked together to establish a commercial cleaning business (which Pam still operates). Their sons, Jason and Brandon, were born in 1985 and 1986, respectively.

14. Kristie is married to Simon with whom she has three children (the eldest of whom is now in secondary school – T 178.8; and the youngest has started pre-school – T 178.17). Kristie runs a child day-care business from her home. Her husband, Simon, runs his own truck driving business (having formerly worked in the mines).

15. Neither Jason nor Brandon is married or has dependants. Both live with their mother, Pam. Jason works as a cleaner in his mother’s business. Brandon does not work and is in receipt of a disability pension.

16. Julie, the deceased’s sister, works as a cleaner in her partner (Glenn)’s cleaning business (Lake Macquarie Cleaning Services Pty Ltd) and she has resided in the Glendale property since that property was purchased in late 2000.

17. As noted earlier, Pam and Tracey are the executors of the deceased’s estate. Probate of the deceased’s last Will dated 16 October 2014 (the Will) was granted to Pam and Tracey on 22 July 2015.

18. Under the Will, the deceased made the following provision in relation to the Glendale property:

5.   I give any right, title or interest that I may have as at the date of my death in the [Glendale property] to my trustees on the following basis:

(a)   Julie Roberts may live in the house for her life or as long as Julie Roberts wishes provided that she pays rent to my wife Pamela Joy Smith at the same rate that she currently pays to Pamela and I. Such rent to be increased annually by the CPI (Sydney Index) or at such other rent that Pamela and Julie agree. If my wife dies and Julie is still living in the Rose Avenue Property I direct Julie to pay the rent to such of my sons Jason Richard Smith and Brandon James Smith as are then living and if more than one in equal shares.

(b)   The right of Julie Roberts to reside in the property shall be terminable if she ceases to pay rent for a period of more than one month.

(c)   When Julie Roberts ceases to live permanently in the home than all right, title and interest in the Rose Avenue Property shall be given to such of Kristie Lee Curtis, Jason Richard Smith and Brandon James Smith as are living at the date Julie Roberts ceases to live permanently in the home and if more than one in equal shares as tenants in common.

19. Pausing here, the proper construction of a provision in a will conferring a right to reside in a property for life is a question of construction in the context of the document read as a whole. As I discuss in more detail below, in Butt’s Land Law (LawBook Co, 7th ed, 2017) the distinction is drawn between a provision in a will permitting a beneficiary to “continue to reside” in the family home (as creating a mere personal right) and a provision permitting a beneficiary to have “full use and enjoyment” of a property “during her lifetime”, or “to be used by him as long as he wishes” (as creating a life estate), though it is noted that, depending on the context, a right to “use occupy and enjoy” a property may confer only a right of residence and not an estate in the land.

20. Here, the Will, in my opinion, did no more than confer a personal right of residence (on particular conditions) not a life estate, given that the right to reside in the property was conditional (on the payment of “rent”, increasing annually) and was terminable if “rent” was not paid for more than a month, coming to an end if the beneficiary (Julie) ceased to live “permanently” in the property.

21. Clause 4 of the Will dealt with any money the deceased held at the time of his death but, as the only money to which he was entitled at the date of his death was held jointly with Pam, that passed by survivorship to Pam and, thus, cl 4 was of no effect.

22. By cl 6 of the Will, the deceased left the residue of his estate to Pam. The only assets the deceased held in his sole right, other than the Glendale property, comprised household and personal items of negligible value.

The respective proceedings

Kristie’s Family Provision claim (2016/0045802)

23. The first proceeding to be commenced, by way of summons filed 12 February 2016, was the claim by Kristie for a family provision order under Ch 3 of the Succession Act 2006 (NSW) (Succession Act). The summons noted each of Pam, Julie, Jason and Brandon as eligible persons. However, for reasons not apparent from the material before me, no formal notice of the proceeding (as prescribed) was served on Julie (nor, as I understand it, on Jason and Brandon).

24. Kristie’s claim was set down for hearing before Hallen J on 14 February 2017. The hearing commenced on that day but, after an adjournment, the parties notified his Honour that the proceedings had been settled. Short minutes of order were prepared. Hallen J was informed of the terms of settlement and asked to make orders in accordance with the settlement. In circumstances where the orders proposed by the parties affected the interests of Julie (as the orders required that the Glendale property be sold and that the proceeds of sale be distributed between Kristie, Jason and Brandon after the payment of costs and other expenses), his Honour stood the matter over so that Julie could be informed of the orders proposed by the parties. As noted above, Julie objected to those orders being made.

Julie’s Trust/Family Provision claims (2017/00170682)

25. Julie commenced proceedings three months later, by statement of claim filed 7 June 2017. In those proceedings, Julie claims, by way of principal relief, a declaration that the executors hold their right, title and interest in the Glendale property on an express, or alternatively a constructive, trust on the following terms (prayer 1 of the relief claimed in the statement of claim) :

a.   a life estate or alternatively a right to reside for life in favour of [Julie]; and

b.   an interest in reversion or alternatively in remainder in favour of such of the Third, Fourth and Fifth Defendants [Kristie, Jason and Brandon] as are living at the date that [Julie] dies or ceases to live permanently in the Property and if more than one in equal shares as tenants in common.

26. Alternatively, Julie seeks a declaration that the executors are estopped from denying a constructive trust in the above terms (prayer 2) and, further in the alternative, a declaration that the executors hold their right, title and interest in the property on a resulting trust in shares commensurate with the respective contributions by Julie and the deceased towards the purchase of the Glendale property (prayer 3). Julie seeks orders as to the transfer of title to the Glendale property in effect to reflect the determination by the Court as to the interests in the property (prayers 4 and 5).

27. Further or in the alternative, Julie seeks an order for equitable compensation or damages (prayer 6).

28. In the alternative to the above, Julie makes a family provision claim for provision out of the deceased’s estate and/or notional estate (for which she seeks an extension of the time for the making of that application up to and including the date of filing of the statement of claim) (prayers 7 and 8).

Jason and Brandon’s respective Family Provision claims (2017/00243096)

29. Following the filing of Julie’s proceedings, Jason and Brandon, by summons filed 10 August 2017, commenced their own proceedings, each seeking provision out of the deceased’s estate and an order extending the time for the making of that claim.

Executor’s Possession proceedings (2018/00147223)

30. Finally, Pam and Tracey, by statement of claim filed 10 May 2018, in their capacity as executors of the deceased’s estate, commenced proceedings in the Common Law division seeking an order for possession of the Glendale property or alternatively the appointment of trustees for sale pursuant to s 66G of the Conveyancing Act 1919 (NSW) (Conveyancing Act).

Hearing of the proceedings

31. All four proceedings were heard together, with evidence in the one being treated as evidence in the other. As Julie’s claim to an interest in or entitlement to reside for life in the Glendale property will have a significant impact on the size of the estate, that claim (in its various emanations) will be dealt with before the respective family provision claims.

32. I will summarise the relevant evidence when I deal with the respective claims. Suffice it at this stage to note that, although there was criticism made of the completeness of the affidavit evidence of various of the parties (particularly that adduced by Kristie) and complaint as to the late provision of information relevant to the claims, on the whole I considered that each of the witnesses cross-examined before me (and I note that neither Jason nor Brandon was required for cross-examination) did his or her best to answer the questions truthfully and to the best of his or her recollection and ability. There is no call for me to make any adverse credit findings.

33. Finally, by way of introduction, this is one of those very unfortunate cases where the needs of all family members simply cannot be met and where, it seems to me, the deceased carefully considered the competing claims on his testamentary bounty and (to anticipate my conclusion as to the Family Provision claims and leaving aside the impact of Julie’s trust claims) balanced them in a way that could not be said to be out of kilter with his moral obligations as husband, father and brother (though assessed at the time of this hearing the position has changed in that regard, principally due to the impact of legal costs on the estate).

Julie’s trust/equitable compensation claims

34. Julie’s contention that she has a beneficial interest in the Glendale property is put in various ways, as adverted to above.

35. Principally, her claim is that the deceased held the Glendale property pursuant to an express trust on terms that Julie had a life estate (or alternatively a right to reside for life) and that there was an interest in reversion or alternatively in remainder in favour of such of Kristie, Jason and Brandon as are living at the date of Julie’s death or if she ceases to live in the property (and, if more than one, in equal shares as tenants in common). Alternatively, it is alleged that there is a constructive trust on the same terms (imposed either because it would be fraudulent for the executors to rely on any absence of writing or by reason of an equitable estoppel arising from representations made by the deceased to Julie upon which it is alleged she acted to her detriment). Alternatively, Julie makes a claim for equitable compensation arising out of the same factual allegations as support the second way in which the constructive trust claim is put. Further in the alternative, it is alleged that there is a resulting trust pursuant to which the executors hold the property on trust for Julie and the deceased’s estate in the proportions to which Julie and the deceased contributed to the purchase price.

36. In oral submissions, Counsel for Julie, in effect, ranked Julie’s various claims in order of priority as follows. It was said that her “best case” is the trust case in terms of an express trust for a life estate (the principal claim adverted to above) or alternatively, a constructive trust, either by want of writing or by reason of the alleged estoppel. The “next best scenario”, although initially identified as the resulting trust claim, is (as I understand it) the submission that Julie should receive, by way of a family provision order, either a third of the Glendale property (said to be “pretty line ball with the resulting trust case”) or a life estate.

37. I mention this at the outset not because her preference as to the outcome of the proceedings is determinative of her claim (for example, the resulting trust claim is a matter for proof on the evidence of issues such as the actual contributions made by Julie to the acquisition of the property and, as acknowledged by Counsel for Julie, her respective claims cannot be understood as consistent with each other) but because, as I understand it, if Julie were to fail on her express/constructive trust claims but to succeed on her resulting trust claim, but in circumstances where she might secure a better outcome in terms of a right to occupy the Glendale property on her family provision claim, then she might elect not to press the resulting trust claim. A right of election between inconsistent remedies, though not expressly sought, seems to be encompassed by the pleading of her claims in the alternative. For present purposes, I simply emphasise that ultimately what Julie is seeking, by whatever cause of action produces such a result, is the right to continue to reside in what she clearly regards as her family home.

Express Trust

Relevant principles

38. Even apart from the fact that the express trust claim is Julie’s principal claim, it is logical for such a claim to be determined before the alternative resulting trust claim because (as explained in Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 (Amit Laundry) at [113]) a claim based on an express trust presupposes an actual (express or inferred) intention to create a trust, whereas a resulting trust typically arises where there is a dearth of evidence (or deficiencies in respect thereof) on the question of intention.

39. As to the intention necessary to establish an express trust, what is required is a sufficiently certain manifestation of an intention to create a trust. The question of intention is to be determined objectively; some private, subjective, intention being insufficient (see Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26 at 277 (Gummow and Hayne JJ; at 290 (Heydon and Crennan JJ)). It is relevant, particularly in the family context where the question here arises, to note what was said in Nguyen v Phan (No 2) [2015] VSC 634 (at [237]), by Elliott J, namely that:

In order to find an express trust was created, it is not necessary for the plaintiffs to prove the parties specifically and formally turned their minds to the fact that a trust was being created; no special or technical language needs to be used; it is sufficient if the intention to create a trust may be ascertained from what the parties actually agreed or said. The intention is imputed when manifest in what is expressly agreed or declared. That intention must be clear from the language used, as objectively understood in the relevant circumstances of the case, including the relationship of the parties. More than once, Gummow J has observed that the precision that might be expected in arms-length commercial transactions is not to be expected in private family dealings. [footnotes omitted]

40. It is also necessary for there to be certainty of subject-matter and certainty of object (Knight v Knight (1840) 3 Beav 148 at [173]; (1840) 49 ER 58; Kauter v Hilton (1953) 90 CLR 86 at 97; [1953] HCA 95).

41. In Amit Laundry, I pointed to authorities criticising too great a reluctance to infer an intention to create a trust, there referring to the statement by Mason CJ and Wilson J in Bahr v Nicolay [No 2] (1988) 164 CLR 604 (at 618-619); [1988] HCA 16 that “[i]f the inference to be drawn is that the parties intended to create or protect an interest in a third party and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then there is no reason why in a given case an intention to create a trust should not be inferred”.

The evidence

42. It is necessary at this stage to note some further background relevant to the circumstances in which the Glendale property was acquired.

43. Julie was formerly married. That marriage broke down in late 1999. Julie was then living in Queensland. She moved from Queensland and stayed for a time with her brother, Dennis, in Allworth also renting in Allworth for a time, and then moved to the Hunter Valley to look for work. She resided for a period, at that stage, with the deceased and Pam in their then home in Gateshead.

44. Julie has affirmed a number of affidavits deposing to the circumstances in which the Glendale property was acquired: the first, affirmed 14 March 2017 filed in Kristie’s family provision proceedings; the second, affirmed 23 October 2017, filed in her own proceedings (the main 23 October 2017 affidavit) (she also affirmed a second affidavit on 23 October 2017 responding to Pam’s 17 August 2017 affidavit).

45. In her first 14 March 2017 affidavit, Julie deposes, fairly summarily, that the deceased purchased the property in September 2000 following her relocation from Queensland to Newcastle and that:

My marriage had broken down and I was awaiting my property settlement with my former husband. My brother said words to the effect to me:

“I want you to have somewhere to live and be secure, let’s buy a house together. You can contribute the money you received from your property settlement to the purchase”.

46. Julie then goes on to say that she and Pam looked at “many” properties before the Glendale property “was settled on as being suitable and affordable”; that the deceased made an offer on the house in the sum of $107,000, which was accepted ([4]); and that in or about July or August she received the proceeds of her property settlement in the sum of $50,000 and deposited $30,000 of the proceeds into the deceased’s Newcastle Permanent Building Society account (and that Pam was with her when this occurred) (see [5]).

47. In her later, main 23 October 2017 affidavit, Julie expands on the above evidence.

48. There, Julie deposes that she separated from her first husband in late 1999 ([7]); that in about January 2000, she relocated from Queensland and moved in with her brother Dennis at Allworth ([9]); and that her property settlement was paid into the Commonwealth Bank account following Family Court orders made on 13 July 2000 ([10]). A copy of those orders is annexed to that affidavit (Annexure B), from which it appears that the total settlement was in the sum of $60,000 ($7,500 within seven days and the balance on or before 31 October 2000). Julie’s evidence is that, of that amount, a proportion was paid to her solicitors.

49. Julie then deposes to conversations with the deceased between January and July 2000 in which she says she told him that she wanted to move to the Newcastle area once her settlement money came through because it would be easier to get a job ([11]) and that the deceased said to her “[w]e should think about getting a place together. Somewhere for you to be stable …”. In her oral evidence, Julie placed this conversation as closer to July 2000 than January 2000 (T 53.16) and said that the conversation took place when she was living in Allworth.

50. Julie deposes (at [13]) that later, in about July 2000 “or earlier”, she and the deceased spoke about buying a house and the deceased said;

I want you to have somewhere to live and be secure, let’s buy a house together. You can contribute to the money you receive from your property settlement to the purchase.

51. At [14] of her main 23 October 2017 affidavit, Julie says that after that conversation, but before they started looking at houses, the deceased said to her:

I want you to have something so you can stay for as long as you want. It will be yours. You won’t have to worry about moving. You will have somewhere stable to live.

52. Julie deposes that on different occasions, both before and after the purchase, the deceased said that: “[t]he house will be yours as long as you want it”; “I want you to have a place to live in as long as you want to”; and “[y]ou can do whatever you want with the house because it is yours for as long as you want” (see her main 23 October 2017 affidavit at [16]).

53. Julie recalls a conversation with the deceased after she found out how much money she was going to get from her property settlement (she says she found this out in February or March 2000 but definitely before July 2000) in which the deceased said “We can’t go over my budget of $100,000” (see her main 23 October 2017 affidavit at [19]). (Pausing here, it is clear, from Julie’s account of this and the conversations referred to above, that the conversations in her affidavit cannot be in strict chronological order – because she initially puts the conversation at [13] as taking place in July 2000 (“or earlier”) but the conversation at [19] as definitely before July 2000. This illustrates the difficulty in placing reliance on the frailty of human memory.) Reference to the deceased having a “budget” of $100,000 is consistent with Pam’s evidence in cross-examination that the deceased had a verbal approval for a loan of that amount (see T 123.14) and with the loan application(s) ultimately submitted by the deceased (see below), all of which suggests that the $30,000 deposited by Julie was not in fact required as part of the purchase moneys.

54. Julie recalls a further conversation with the deceased about July 2000 at the deceased’s home in which she says she told him she was going to get $50,000 (from her property settlement) and that she also wanted to get a car from that; and that the deceased said “[g]ive me $30,000 towards a house for you” (see her main 23 October 2017 affidavit at [20]), after which Julie says she purchased a 1995 Hyundai Excel for the sum of $9,900 (when Pam was with her) (see her main 23 October 2017 affidavit at [22]).

55. The reference to Julie giving the deceased $30,000 “towards a house” for her is capable of conveying a number of meanings not necessarily only that the $30,000 would be applied as part of the purchase price. Indeed, Julie later deposes that, prior to her contributing the $30,000, the deceased said to her that if she paid $30,000 in before the loan application was made, it would “look better” for the loan application (see her main 23 October 2017 affidavit at [51]).

56. During the course of the hearing, a copy of a receipt was tendered (Exhibit A) recording the receipt from Julie of a deposit in the sum of $8,990 for the motor vehicle in question. The receipt is dated 9 August 2000. There is also, as part of that Exhibit, a copy of a motor sales warranty recording the date of sale as 9 August 2000.

57. That is relevant because, if Julie’s recollection that she bought the car after depositing the $30,000 in the deceased’s account is correct then, by 9 August 2000, the sum of $30,000 had already been deposited into the deceased’s account. (Pausing again here, as a general rule I place more weight on the contemporaneous documentary evidence than on the witnesses’ recollection of events that occurred many years ago – for obvious reasons, not least being the caution experienced in Watson v Foxman (1995) 49 NSWLR 315 as to the frailty of human memory to which I have already adverted.) However, that only reliably places the date of purchase of the car (at 9 August 2000). It does not establish (or corroborate Julie’s evidence) as to whether the $30,000 was deposited before or after 9 August 2000; and there is no contemporaneous bank statement or record of the date on which the $30,000 was in fact deposited into the deceased’s Building Society account.

58. Julie’s evidence is that, in around July or August 2000, she received the proceeds of her property settlement in the sum of about $52,500 after the payment of legal fees and that she deposited this cheque into her Commonwealth Bank account (her main 23 October 2017 affidavit at [23]) and then (at [24]) that she obtained a cheque for $30,000 and deposited it in Pam’s presence in the deceased’s Building Society account (and then – see at [25] – telephoned the deceased to tell him the money was “in there, ready to go”).

59. Although in her first affidavit Julie said that she and Pam inspected “many” properties before the Glendale property was “settled on”, in her main 23 October 2017 affidavit she deposes that in about August 2000 she and Pam inspected four houses, two of which being a property in Park Avenue, Argenton – to which I will refer as the Park Avenue property (not the Argenton property to which reference has earlier been made as part of the potential notional estate) and the Glendale property – see at [27]). Julie deposes that the deceased went with her to the Park Avenue property but not to the Glendale property (though she says they did “go together to drive by the house” – see at [27]). Indeed, Julie says that the first time the deceased inspected the Glendale property was after she moved in (in December 2000) (see T 56.26).

52. Of no little relevance, in my opinion, in understanding the sequence of events relating to the purchase of the Glendale property, is the fact that before the decision was made to acquire that property steps were taken with a view to the acquisition of the Park Avenue property instead.

53. A deposit was paid for the Park Avenue property in the sum of approximately $10,200. The contract for sale in respect of that property (see Exhibit 4), completed on the coversheet in handwriting, identifies the purchasers as Julie and the deceased (without marking whether they were to be as joint tenants or as tenants in common in equal shares). In passing, I note that, for the Park Avenue contract, the vendors were noted as acting for themselves (which may explain why the details on the coversheet of the printed standard form document are in handwriting rather than typed).

54. It appears that the cheque for the deposit was drawn on the deceased’s Building Society account. Shortly after that contract was signed, a decision was made not to proceed with the sale (Julie says this was because the deceased ascertained from a building inspection report that there was lead in the soil, but nothing turns on why it did not proceed). Julie’s evidence is that, when the decision was made not to proceed with the Park Avenue purchase, at the deceased’s request she picked up the deposit cheque from the real estate agent and put it back into the deceased’s Building Society account (see at [32] of her main 23 October 2017 affidavit).

55. What is relevant in this context is that there is, in the evidence, a copy of a loan application made by the deceased (part of Exhibit 4) to the Building Society (obtained on subpoena from the Building Society) in respect of the proposed purchase of the Park Avenue property. That loan application, dated 16 August 2000, notes the purpose of the loan as “Purchase Investment Property” and the amount sought as $96,000 (approximately 90% of the purchase price of $107,000). Not insignificantly, as I will explain in due course, the loan application also states (as information relevant to income) the (anticipated) “[r]ent from [Park Avenue] $150.00 pw”.

56. The Park Avenue loan application also notes, under the heading “[d]eposit (show funds available to complete purchase) and major assets”, reference to funds held in a Building Society account of $39,833. (On Julie’s case, this sum included the funds she had deposited in the deceased’s account of $30,000. Certainly, by then, it can be assumed that in the ordinary course those funds would have been credited to the account if, as Julie contends, the deposit made by her was before her 9 August 2000 acquisition of the car. Further, the inclusion of an additional $30,000 as moneys held on deposit would presumably have “looked better” on the relevant loan application (consistent with Julie’s recollection of the conversation with the deceased to that effect). However, again, that does not mean that those funds were actually applied to the purchase price itself.

57. A file copy of the Building Society’s Home Loan approval summary sheet records the loan amount (in connection with the Park Avenue property) as $96,000 and records the approval date as 21 August 2000. In the documents there is also a copy of a mortgage loan agreement signed 21 August 2000 by the deceased.

58. That chronology thus suggests that it was the deceased’s cheque (and money) that was used for the Park Avenue deposit and then, in effect, reapplied to the Glendale property purchase.

59. Julie’s evidence is that what then occurred was that, in about August 2000, she and Pam inspected the Glendale property; that she rang the deceased (who was driving at the time) and told him that she really liked the property; and that he said “[g]o ask the real estate guy if you can get it for $107,000” ([34]); that she did so and that she told the real estate agent, once the real estate agent had replied “[i]t is yours”, that “[o]k, as soon as my brother comes back I will come in with the deposit” ([35]). (This evidence is seemingly inconsistent with her first affidavit in which she says the deceased made the offer.)

60. Julie’s evidence in cross-examination was that she did not say anything to the real estate agent when she made the $107,000 offer as to who was to be the purchaser (T 62). Julie did not know anything about a deposit of $500 held for the property (T 56) or whether the deceased had made contact with the real estate agent (though she assumed he had) (see T 61ff).

61. The relevance of this is that, produced by the Building Society and part of Exhibit 4, is a copy of a letter dated 31 August 2000 from Dalton Partners, real estate agents, to the solicitors who ultimately acted on the conveyancing transaction (Baker Love Lawyers) stating that “[w]e wish to advise that we have taken a deposit on the above mentioned property” and noting that they had requested the vendor’s solicitor to prepare contracts for exchange and forward a copy to Baker Love as soon as possible. A sales advice was enclosed. The sales advice identified the purchaser as the deceased; his address and solicitors’ details; and the amount of the deposit held in trust of $500 (the remaining portion of the 10% deposit required, thus, being $10,200).

62. Given Julie’s evidence that she was not aware of the $500 deposit, and that she did not provide details of the purchaser to the real estate agents, one would readily infer that it must have been the deceased who did so (or someone else on his behalf – and the only likely other candidate for this would have been Pam, who does not give any evidence of this). Any suggestion that instructions for preparation of the contract for sale would have come from the Building Society, as the financier, seems unlikely and there is nothing to support this on the building society’s file (rather, the communications referred to above suggest to the contrary). This is relevant because it is consistent with what Julie seems to accept was the case – namely, that the deceased’s intention (at least by the time the contract was signed) was for the Glendale property to be acquired in his name only.

63. The coversheet for the contract for sale of the Glendale property (Exhibit 4) (as noted above) was typed and it names only the deceased as the purchaser.

64. There is, as part of Exhibit 4, a copy of the Building Society’s subsequent internal Home Loan Approval Summary Sheet dated 7 September 2000 which records approval for a loan of $96,000 to the deceased and states under the heading ‘Conditions’:

This loan offer replaces the loan offer we made you dated 21/08/2000. That earlier offer no longer applies. If you have accepted the earlier loan offer, any agreement formed by your acceptance of it is terminated. If you have not accepted the earlier loan offer, it is revoked.

73. On the same date, there is a letter to Baker Love from the Building Society’s Loan Processing Manager recording that their instructions dated 21/08/2000 (in relation to the Park Avenue property) may be cancelled (and a similar notification made to another entity).

74. The final signed Home Loan Agreement in relation to the Glendale purchase is dated 13 September 2000 (Exhibit 4). Julie’s evidence (see her main 23 October 2017 affidavit at [27]-[36]) is that, a couple of days after the offer was made for the Glendale property, she and the deceased went to the bank; the deceased obtained a cheque for the deposit; and she delivered the cheque personally to the real estate agent. Annexure “C” to her affidavit is a copy of the receipt for the deposit. The receipt is dated “01/09/20 [sic]” and records receipt of the sum of $10,200 paid by the deceased by bank cheque drawn on a Building Society account.

75. As to the name in which the property was to be acquired, Julie’s evidence (at [17] of her main 23 October 2017 affidavit) is that on about three occasions before the purchase of the Glendale property she asked the deceased “[t]he house is going to go in both names isn’t it?” and the deceased said “[y]es”. (That is inconsistent with what ultimately happened. It is also inconsistent with Pam’s account of the deceased’s reaction when he learnt that the Park Avenue property contract had noted Julie’s name as a joint purchaser – see at [44] of Pam’s affidavit affirmed 28 March 2018.)

76. As adverted to above, the contract to purchase the Glendale property was executed by the deceased at the office of Baker Love on 27 October 2017. Julie’s evidence is that she attended on that occasion and that it was at this time the deceased told her that “[t]he house is going in my name”. The contract must already have been prepared by then (and therefore the deceased’s instructions at some earlier point must have been to that effect). Julie says that there was a conversation in the presence of a conveyancing clerk in which she said words to the effect “[w]ell I put $30,000 toward it. I would really like to put the house in both name [sic]” and that the deceased said:

It is better if it’s just in my name as Newcastle Permanent [Building Society] will not give finance to you when you are unemployed. [Julie’s main 23 October 2017 affidavit at [42]].

77. At [6] of her affidavit of 14 March 2017, Julie says that she was unemployed at the date of purchase – evidence not, however, consistent with her evidence in cross-examination. In cross-examination, Julie accepted that by 10 September 2000 (and, hence, by the time of the conversation at the offices of Baker Love) she was employed. Accordingly, if the conversation was in October 2017, as Julie deposes, it is difficult to see how the deceased’s explanation for her name being not on the title would have made sense to her.

78. Julie recalls the conveyancing clerk querying the contract being in the deceased’s name alone and telling her “you know, you cannot change this later”; and deposes that there was then a conversation as follows:

Deceased:   Wake up to yourself, everything will be fine, that’s your house. This is what you are doing this for, for you to get a house.

Julie:   I trust my brother, he has told me he will look after me and make sure that I can always live in this house.

Deceased:   You happy now?

Julie:    Yes I am

79. The conveyancing and mortgage documents were then signed. The purchase of the property was completed in about November 2000. Julie moved into the property in December 2000. She continues to live there (with her long term partner, Glenn).

80. Julie’s evidence is that, after she moved in, she made payments to the deceased. In her 14 March 2017 affidavit, she states (at [9]) that “I paid rent at the outset to [the deceased]” and says that the deceased told her that he applied the rent towards the mortgage and that it fully funded the repayments. Apart from the fact that the evidence makes clear that the $150 per week that Julie paid probably did not fully refund the mortgage payments (which were set initially at $683 per month), this evidence is to some extent inconsistent with the later evidence (at [46] of her main 23 October 2017 affidavit) where Julie says that she told the deceased that she had worked out her money situation and could afford to pay about $150 per week and that the deceased said “[y]eah that is fine. That will go towards the payments on the house”.

81. Pausing here, if Julie’s account of events is correct, then there is an uncanny prescience to the deceased having earlier noted on the loan application documents an expectation of receiving $150 per week rent for the property. In any event, Julie seems to have understood the amount she was paying ($150 per week) as rent (inconsistent with it being “her” property). I ultimately place no weight on how Julie characterised the payments in her affidavit (or oral evidence) in these proceedings. More relevant, is how the payments were treated by Julie and the deceased at the time (and in that regard Julie accepted that the deceased had treated the weekly payments as income in his tax returns – see T 131).

82. Julie deposes to conversations with the deceased after she moved into the Glendale property (a couple of times before and after the deceased was diagnosed with cancer – which puts the later of the conversations after September 2014) in which she says that the deceased said to her “you can stay there as long as you want to”.

83. Julie submits that the above evidence evinces an intention (on the part of both herself and the deceased) that she would have a life estate or, alternatively, a right of residence in the property. It is submitted that the conversations about Julie contributing towards the purchase price, having a place to live in as long she wanted and being on the title (albeit that this did not occur) give rise to the inference that there was an intention to create an interest in the property of which Julie would have the benefit.

84. Thus, it is submitted by Julie that the deceased was not entitled to deal with the fee simple interest in the property by his Will (as he held it on trust on the terms contended for by Julie) and that the only interest he could dispose of by Will was the interest in reversion or remainder which remained in his hands. It is submitted that this interest was disposed of by cl 5(c) of the deceased’s Will to such of Kristie, Jason and Brandon who might be living at the time Julie’s interest in the property comes to an end and, if more than one, in equal shares as tenants in common.

85. It is relevant here to note that the first basis on which Julie contends that if there is no express trust then there is nevertheless a constructive trust (in the terms of the alleged express trust) (namely that equity will impose a constructive trust to give effect to an express trust which is not evidenced in writing because it would be fraudulent for the alleged trustee to rely on the modern equivalent of the Statute of Frauds (see s 23C Conveyancing Act), does not here arise, since the executors have not taken such a point.

Executors’ submissions as to Julie’s express trust claim

86. While the executors accept that the evidence contains several statements made by the deceased in relation to his clear desire that Julie would reside at the Glendale property for as long as possible “and possibly her whole life”, the executors submit that the equitable interests or equities claimed by Julie are not supported by the evidence. It is submitted that some of the claimed equitable interests (for example, a life estate pursuant to an express trust) cannot be made out.

87. The executors submit that if there was an agreement pursuant to which Julie was entitled to a “right to reside”, the terms of that right to reside would need to be able to be determined with certainty on the evidence; and that, whatever that right might have been during the deceased’s lifetime, the right pursuant to which Julie resided in the property did not go beyond the right to reside referred to in the Will.

Determination as to express trust claim

88. It is relevant here to point to the distinction between a life estate and a personal right to occupy (as adverted to above). The former has been defined as an estate of freehold that entitles the holder (namely, the “life tenant”) to seisin of the land when it vests in possession (see Brendan Edgeworth, Butt’sLand Law (LawBook Co, 7th ed, 2017) at [3.120]), the author there commenting, on an “ordinary life estate”, (at [3.130]) that:

In modern Australian property law, the life estate occurs predominantly as the creation of a will, as where a testator wishes to provide for a spouse for life. A life estate gives the spouse the right to reside in the property or receive the income from it – or both – but with no power to grant any interest in it that lasts beyond the spouse’s lifetime. In this way the spouse has security of tenure for life, but no power to jeopardise the interests of those with rights to the fee simple after the spouse’s death. [footnotes omitted]

and providing the following guide to the distinction between a life estate and a personal right to occupy, the latter being understood as a personal right to reside on land for life (see at [3.140]), as:

a right “to reside” or “to live” on land confers a personal right only, since it must be exercised in person, while a right to “use and occupy” a property points to a life estate, since “use” or “occupation” may be exercised in person or through another (such as a tenant). [footnotes omitted]

89. In the present case, whatever was in fact said in the conversations leading up to execution of the conveyancing and mortgage documents, it is clear that, by the time the contract was executed, the deceased’s position was that only his name would be on the title and Julie accepted this. Statements to the effect that this was being done for Julie “to get a house” and so that she would be secure do not, in my view, carry with them the necessary certainty of intention to give rise to an express trust, having in mind the authorities I have cited above on this point. What was conveyed to Julie by such statements, in my opinion, was (at most) that she would be permitted to live in the property indefinitely (or that she would be able to live there as long as she wanted). That does not in my opinion go beyond a personal right to occupy, as distinct from a life estate or beneficial interest in the property.

90. Accepting that in family situations the requirement for certainty may be satisfied by something less formal than in other situations, I am nevertheless not persuaded to the requisite level of satisfaction that the deceased objectively manifested an intention to hold the Glendale property subject to a life estate (or even a right to residence for life, without the payment of rent) in favour of Julie. The express trust claim is therefore not made good.

Constructive trust estoppel claim (and alternative equitable compensation claim)

91. The second way in which Julie makes her trust claim is by reference to the principles relating to equitable estoppel (as a result of detrimental reliance on representations made to her) (relying upon Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 and Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 (Sidhu v Van Dyke)).

92. Reliance is placed both on the conversations already referred to above and on conversations which are said to have taken place after Julie moved into the Glendale property as containing representations made by the deceased that Julie could remain in the property for life (see Julie’s main 23 October 2017 affidavit at [54]-[67]).

93. Apart from the conversations that included remarks such as: “[y]ou can stay there as long as you want to” ([54]), Julie refers to the following: a conversation in about 2013 when she says the deceased said” “[i]f anything happens to me all the houses will be paid out” ([55]); a conversation, at a time she does not recall, when she says the deceased said “[i]f anything happens to me and the house gets paid out, you can stay there as long as you want and I will put it in my will to make sure it will happen” ([56]); and a conversation after the deceased became sick when (in the presence, she says, of Pam) Julie says that the deceased said words to the effect that because he had life insurance all the houses were going to be paid out “[s]o you don’t have to worry about your house” ([57]).

94. Julie deposes (at [58]) to having several other conversations at different times with the deceased where she says the deceased said: “[i]f anything ever happens to me, you will be ok”; “[y]ou will have the house as long as you like for the rest of your life. I will make this happen”; and “I am going to put you in my will to make sure that you will be able to remain in the property for the rest of your life” (and see also at [64], [65] and [67] the references to the deceased putting her in his Will).

95. Julie says (at [69]) that she made payments of $150 per week, as well as paid for general expenses such as electricity, water usage, water rates from around 2003, Foxtel, home contents insurance and phone/internet. (Those payments do not seem to go beyond payments of a kind any tenant might make in relation to rented property.) Julie says (at [70]) that the deceased paid the Council rates and building insurance.

91. Julie says that in about 2007, she started paying the deceased $170 per week. She says that the deceased had said to her he wanted to increase the “rent” by $30 but she was not able to pay that much and he agreed to accept a $20 increase.

92. As to contributions allegedly made by Julie (in addition to the $30,000 and “rent” payments) these are listed at [82] of her main 23 October 2017 affidavit as follows:

(1)   Installation of a new hot water system around 2001 at a cost of approximately $1,100;

(2)   Installation of an air conditioning unit/system around 2001 at a cost of approximately $1,300;

(3)   Extension of the verandah around 2006 at a cost of approximately $2,000;

(4)   Erection of a shed at the rear of the property around 2010 at a cost of approximately $800;

(5)   Repainting of the inside of the house in around 2012 at a cost of approximately $1,600 (being the cost of the paint).

(6)   Erection of a shed at the rear of the property around 2014 at a cost of approximately $800;

(7)   A contribution of approximately 50% of the cost of erecting a dividing fence on or about 6 June 2015 at a cost of approximately $600;

(8)   Payment of all water bills between 2003 and the date of death, being about 1 March 2015. Julie estimates she paid about $13,704 for this, including the water usage from 2000 onwards;

(9)   Replacing the water meter pipe which had broken around 2009 at a cost of approximately $1,200;

(10)   Establishing a vegetable garden built from treated timber at a cost of approximately $372;

(11)   Replacing tap washers at a cost of approximately $105;

(12)   Installation of fly screens for the front and back doors at a cost of approximately $300;

(13)   Replacing light bulbs at a cost of approximately $400;

(14)   Installation of a floating floor in one of the rooms at a cost of approximately $1,600;

(15)   Erection of two television aerials at a cost of approximately $200;

(16)   Payment of plumbing fees at a cost of approximately $299;

(17)   Replacing the element in the oven at a cost of approximately $150;

(18)   Installation of a new rotary clothesline at a cost of approximately $258;

(19)   Installation of external blinds over windows at a cost of approximately $500;

(20)   Replacing roofing tin at a cost of approximately $200; and

(21)   Installation of air conditioning units in each bedroom around 2009 and 2010 at a cost of approximately $2,000.

98. Julie estimates that these contributions cost about $35,000 (at [84]). It is submitted that Julie would not have made these contributions if the representations were not made; rather, she would have applied the moneys she expended towards acquiring a home (see Julie’s main 23 October 2017 affidavit at [99]-[101]). Reference is also made to contributions being made by Glenn to the Mount Hutton property.

99. In these circumstances, it is submitted that the Court would impose a constructive trust giving effect to the representations (or award equitable compensation).

Executor’s submissions as to Julie’s constructive trust and equitable compensation claims

100. It is said by the executors that the mortgage payments were made from funds belonging to the deceased (or the deceased and Pam) and the land rates, insurance and most other outgoings were paid by the deceased (or the deceased and Pam).

101. The executors say that the contributions made by Julie and Glenn to the Glendale property “were minor and were, in most instances, contributions to maintenance of the property”. It is submitted that the fact that Julie and Glenn carried out these items of work is unsurprising in circumstances where (it is alleged) Julie and Glenn were residing at the property as long term tenants.

102. Insofar as Julie contends that she is entitled to an interest in the property as a result of paying the sum of $30,000 to the deceased, the executors say that this does not take into account that she has accepted from the deceased’s personal representatives the repayment of at least $20,000 of that money and that she has retained that money for years (i.e., since 2015). It is submitted, for the executors, that the Court ought not grant equitable relief in favour of Julie in such circumstances.

103. Julie’s explanation for the amounts received from Pam after the deceased’s death (totalling $20,000), being $10,000 about 14 March 2015 and a further $10,000 about 19 March 2015) is given at [107]-[109] of her main 23 October 2017 affidavit. Julie gives an account of conversations with Pam when she says that Pam said to her that the deceased would like her to pay Julie back the $20,000. (That is consistent with the deceased treating the sum of $10,000 which was spent on Julie’s car as part of the $30,000, which does not seem to have been the case given the date of the receipt for the car, but is otherwise consistent with the deceased’s understanding that Julie had provided the sum of $30,000 to him as a loan or otherwise for funds to be held in his account at the time of the loan application for the purchase of the Glendale property but not necessarily referable to or used for the acquisition of that property (other than so far as it provided a basis for the lender to be satisfied that there were funds on deposit).)

104. Julie says that she did not know what the sums of $10,000 were for but assumed it had “something to do with the $30,000 deposit” that she put into the deceased’s account in 2000. I interpose here to note that the fact that Pam made the two repayments gives strong support, to my mind, for the conclusion that the deceased had in fact treated the $30,000 as no more than a loan in the sense of funds to be held in his account; because otherwise it seems an extraordinary coincidence that Pam should have proffered these payments at the time, without any demand by Julie.

105. For completeness, I note that there was some evidence from Pam to the effect that Julie had given the sum of $30,000 to the deceased for him to hold as she did not have a bank account or cheque account. That seems implausible (since it seems the $30,000 deposit came from a cheque from Julie’s Commonwealth Bank account) but nothing turns on this in circumstances where the reason that I cannot conclude that the $30,000 was used as part of the purchase moneys – see below – does not turn on Pam’s account of a conversation as to whether Julie had a cheque account at the time.

Legal principles

106. I have considered in some detail in E Co v Q [2018] NSWSC 442 the principles relating to proprietary estoppel, with particular regard to the decision of the High Court in Sidhu v Van Dyke on which Julie here relies, and I do not propose here to repeat that analysis. The submissions on Julie’s equitable estoppel claim did not suggest that there was any relevant distinction to be drawn in the application of those principles in the present case by reference to the different streams of proprietary estoppel (i.e., proprietary estoppel by encouragement – in terms of the representations or promises that it is alleged that the deceased made; and proprietary estoppel by acquiescence or standing by – in terms of the alleged knowledge of the deceased as to improvements in relation to the property); and hence it is not necessary to dwell on questions of mere academic interest to the present case.

107. Suffice it to note, in summary, that the matter proceeded on the basis that what was required was that Julie establish on the balance of probabilities that her conversations with the deceased, both before and after the acquisition of the Glendale property, amounted to a representation by him that she had or would have a life estate (or right of residence for life) in respect of the property, on the basis of which she assumed or expected that she had or would have a proprietary interest, and that she relied upon that assumption or expectation to her detriment in incurring expenditure in relation to the property and in not otherwise using the funds so expended (for example, to support Glenn’s business or to save for a property of her own).

108. The question of detrimental reliance can be determined by posing a counterfactual based upon knowledge of the true state of affairs (see the judgment of the plurality of the High Court in Sidhu v Van Dyke at [77] and of the Court of Appeal in Priestley v Priestley [2017] NSWCA 155 at [124] in this regard). In the present case, such a counterfactual might well have been as to what Julie would have done had the deceased told Julie, as at the time of acquisition of the Glendale property (or later when she effected improvements to the property), that there might come a time (say, due to his immediate family’s circumstances) when she would not be able to continue to reside there. That was not explored in any detail in the proceedings. In particular, there was no analysis of the position, as at the time various items of expenditure were incurred, by reference to what Julie would or could have done at that stage had she been aware that she might not be able to remain in the property after the deceased’s death. By way of example, insofar as reliance is placed on the conversations at or around the time that the deceased was diagnosed with cancer in 2014, this could obviously not have been a factor in decisions made at the time the property was acquired in 2000. Moreover, any hindsight evidence of that kind from Julie would need to be scrutinised with the care advocated in Damberg v Damberg [2001] NSWCA 87 by Hedon JA (as his Honour then as) (at [45]).

109. That said, it is not necessary that the “only” reason for acting in the particular way in which the party alleging proprietary estoppel has done is the expectation or representation from which the maker of the representation (here, the deceased through his executors) estate now seeks to resile (as made clear by the facts in Sidhu v Van Dyke). What is required is that the expectation be a “contributing cause”, and that is something that the plurality in Sidhu v Van Dyke said can be inferred as a matter of fact on the balance of probabilities, having regard, among other things, to the experience of human nature.

110. In the present case, the difficulty that arises to my mind is as to whether the representation (of lifetime or indefinite residence) was sufficiently certain and un-equivocal or unconditional (particularly as to the nature of the interest that Julie was encouraged to believe she had in the Glendale property).

111. Drawing a conclusion as to the adequacy of the alleged representation or promise requires “careful identification of the nature of the assumption by the plaintiff” (Doueihi v Construction Technologies Australia Pty Ltd (2016) NSWLR 247; [2016] NSWCA 105 (Doueihi) at [186]). The alleged representation or promise is to be assessed by reference to the circumstances of each case (Doueihi at [186], citing Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 445; [1990] HCA 39 (Verwayen); see also, Thorner v Major [2009] 1 WLR 776 at [56]).

112. In Flinn v Flinn [1999] 3 VR 712; [1999] VSCA 109 (Flinn v Flinn), where Counsel had submitted that a “representation” in the context of proprietary estoppel had to be “unambiguous”, “clear” or “unequivocal”, Brooking JA (with whom Charles and Batt JJA agreed) reviewed the law in this area (at [80]-[93]), characterising the authorities as exhibiting a “liberal approach” (at [94]). The relevant passages from Flinn v Flinn have been cited approvingly on numerous occasions (see, for example, Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 (Delaforce) at [55]; Evans v Evans [2011] NSWCA 92 (Evans v Evans) at [121]; DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348 (DHJPM) at [54]; Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 333 ALR 384; [2015] HCA 26 (Crown Melbourne) at [215]; cf [159]).

113. In Evans v Evans at [116] Campbell JA (with whom Giles JA and Sackville AJA agreed) accepted, in effect, that the precise content of the assumption and expected arrangements flowing from the relevant representation or promise need not always be susceptible to precise legal analysis. Accordingly, a claim premised on proprietary estoppel by encouragement does not fail merely on the ground that the relevant interest has not been “expressly indicated” (Plimmer v The Mayor, Councillors and Citizens of the City of Wellington (1884) LR 9 App Cas 699 at 713), and a proprietary estoppel “may be established where the conduct of the party estopped did not define the expectation” (Delaforce at [55] (Handley JA, with whom Giles JA and Allsop P agreed)) and “notwithstanding that the expectation contains elements that would not be sufficiently certain to amount to a valid contract or is formed on the basis of vague assurances” (DHJPM at [54] (Meagher JA, with whom Macfarlan JA agreed); cf Crown Melbourne at [35]; [143]; [147]; [211]; [212], in relation to promissory estoppel). However, it is necessary that the relevant representation be sufficiently certain to support the estoppel alleged.

114. It has been said that the representation or promise is sufficiently clear “if it is reasonable for the representee to have interpreted the representation in a particular way being a meaning which it is clearly capable of bearing and upon which it is reasonable for the representee to rely” (Galaxidis v Galaxidis [2004] NSWCA 111 at [93] (Tobias JA)). See also what was said by Hodgson JA in Sullivan v Sullivan [2006] NSWCA 312 at [85] (cited with apparent approval in Evans v Evans at [124], Doueihi at [187] and in Crown Melbourne at [147]-[148]):

Generally, a promise or representation will be sufficiently certain to support an estoppel if it was reasonable for the representee to interpret the representation or promise in a particular way and to act in reliance on that interpretation, thereby suffering detriment if the representor departs from what was represented or promised. Generally, if there is a grey area in what is represented or promised, but it was reasonable for the representee to interpret it as extending at least to the lower limit of the grey area and to act in reliance on it as so understood, I see no reason why the Court should not regard the representation or promise as sufficiently certain up to this lower limit.

115. As adverted to earlier, a distinction has sometimes been drawn between arms-length/commercial cases and domestic/family cases when assessing adequacy of an assurance or the reasonableness of an expectation or assumption (see, for example, DHJPM at [104]-[105]). In Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752; [2008] UKHL 55, Lord Walker made the following observation (at [68]):

… In the commercial context, the claimant is typically a business person with access to legal advice and what he or she is expecting to get is a contract. In the domestic or family context, the typical claimant is not a business person and is not receiving legal advice. What he or she wants and expects to get is an interest in immovable property, often for long-term occupation as a home. The focus is not on intangible legal rights but on the tangible property which he or she expects to get. The typical domestic claimant does not stop to reflect (until disappointed expectations lead to litigation) whether some further legal transaction (such as a grant by deed, or the making of a will or codicil) is necessary to complete the promised title.

116. In the present case, I consider that (accepting for this purpose Julie’s version of the conversations) the representation conveyed to a reasonable person in Julie’s position would rise no higher than a personal right of occupation (not a life estate as such). The deceased was expressing an understandable concern that his sister have secure and stable accommodation (I consider that this was understandable back in 2000 at a time when Julie had just suffered the breakdown of her marriage). However, it is significant, in my view, that the deceased did not agree that Julie be registered on the title to the property. That is inconsistent, in my opinion, with any objectively manifested intention, or representation, that Julie would have a beneficial interest in the property.

117. Moreover, if the family context in which the representations were made is taken into account, it is difficult to accept that a reasonable person in Julie’s position would have understood the promise of secure accommodation for life to be immutable. It is not necessary here to explore that issue (which was not squarely raised in the cross-examination of Julie). I note, however, that if the issue were here to be explored questions would surely arise as to whether, even if such a representation had been made in sufficiently clear terms, Julie was to be able to live as long as she wanted in the property; and, if relied upon as Julie contends, whether it would have been unconscionable in all circumstances for the deceased to have departed from such a representation.

118. I accept that Julie understood (from the conversations she has deposed to with the deceased) that she would be permitted to reside in the Glendale property on an indefinite basis during her life (subject only to the payment of amounts that she herself has characterised as rent in her affidavit evidence). She accepted in cross-examination, that what she had understood (from the time of the meeting with the solicitors on 27 October 2000 up until the time of the deceased’s death) was that she was not on the title to the property but that she would be able to live in the property (and treat it as her home).

119. While I consider that the evidence does not establish that the deceased encouraged any expectation that Julie had or would obtain a proprietary interest (by way of life estate) in the property, I accept that the deceased encouraged an expectation (on which Julie relied at least in the sense that the expectation was a contributing cause in the incurring of certain of the expenditure in relation to the property) that (at least absent a change in the deceased’s family circumstances) she would be permitted to reside in the Glendale property indefinitely during her life (and could, in effect, treat the property as her home while she was there).

120. As to reliance upon the relevant assumption or expectation, there is no presumption of reliance; reliance is a fact to be found (Sidhu v Van Dyke at [58]). What is required is satisfaction from the whole of the evidence of the fact of reliance on the balance of probabilities (see Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [55]). Reliance in the context of estoppel by encouragement was considered by the High Court in Sidhu v Van Dyke. It is not necessary that the relevant assumption be the “sole inducement operating on the mind of the party setting up the estoppel” (Sidhu v Van Dyke at [71]); the threshold is lower: it need only be a “contributing cause” (at [71]-[73] (French CJ, Kiefel, Bell and Keane JJ); [90] (Gageler J)).

121. Determining whether, on the balance of probabilities, the relevant assumption was a “contributing cause” (Sidhu v Van Dyke at [71]-[73]; [90]) to the steps taken by Julie in relation to the property, in the sense that Julie would have acted differently but for that encouraged assumption (Sidhu v Van Dyke at [91] (Gageler J); Stone v Stone [2014] NSWSC 1655 at [46] (Darke J)), I am satisfied that it is likely that certain of the improvements made to the Glendale property (in particular, the verandah, floating floor, two sheds and dividing fence contribution) were made by Julie (as she has deposed) in reliance on the belief that the property was her home and would not have been made by her had she not been of that belief. Other expenditure (such as that relating to the painting of the inside of the house or the installation of a hot water system, air conditioner or internal blinds) is more likely characterised as expenditure of the kind ordinarily incurred by a tenant of property and I have more difficulty in accepting that that kind of expenditure would not otherwise have been incurred in the ordinary course; i.e., had Julie been made aware that the promise of residence would be subject to a change of circumstances.

Section 60(2)(e) – financial circumstances of any person with whom the applicant is cohabiting

249. As to Kristie, she lives with her husband, Simon. In his affidavit sworn 16 August 2016, Simon deposed to his assets being a property at Greta (the family home) (the Greta property) which he said had an estimated value of $445,000; an adjacent block of land with an estimated value of $115,000; a car valued at $18,000 and a small boat valued at $6,000, totalling $584,000 (see his affidavit at [21]). He also deposed to having purchased his truck for $50,000 with a cash deposit of $20,000 and a business loan leased from Macquarie Leasing of $30,000. A kerbside valuation of the properties as at August 2016 valued them in the range of $435,000-$455,000 and $110,000-$120,000, respectively. (The net value of the land is said to be $123,000 after taking into account the mortgage.)

250. From July 2016, Simon has been a self-employed truck driver. In his affidavit of August 2016 (just after he commenced his truck driving business) he described the haulage contracts work as casual. His evidence is that his income varies (Kristie’s Counsel describes it as “sporadic and modest” in the written submissions), depending upon whether he can obtain haulage contracts in the Hunter Valley area. It is submitted that the couple is “struggling to make ends meet”.

251. By the time of the hearing, Simon’s asset position had changed in that, by then, the home loans had been refinanced and Kristie is now the registered proprietor of a half share in the Greta property. It also became apparent that there had not been full disclosure of his assets in his first affidavit. For example, when cross-examined, Simon acknowledged that the motorbikes that had been purchased for his children had not been included as assets in his first affidavit (though they had been included in a subsequent home loan application). Other assets omitted from Simon’s first affidavit included a Toyota Tarago (allegedly Kristie’s car), a boat, an excavator, a Nissan Skyline, effects and contents insurance and superannuation; with a combined value of $288,000 (see T 177). Counsel for the executors suggested that the omissions of the assets from Simon’s first affidavit was deliberate to give “the worst picture [Simon] possibly could” (an assertion that Simon affirmed) (see T 176).

252. As to Jason and Brandon, each lives with his mother Pam. Her financial circumstances have been taken into account above.

253. As to Julie, she lives in a long term relationship with Glenn (aged 62). His financial circumstances are set out in his affidavit affirmed 19 June 2017. He is the owner and operator of his own cleaning business and has resided with Julie at the Glendale property since 2002. He deposes that he pays himself a wage of $500 per week (consistent with Julie’s evidence) and that in the financial year ended 30 June 2016, the business had a net profit of $2,798.07. As at June 2017, his assets included: superannuation of around $70,000; an account balance of $33,977.05 which he withdrew from his superannuation to meet legal fees associated with the matter; and business assets at a written down value of around $20,000; with no current liabilities (see his affidavit at [6]; [8]). He did not ascribe a value to his business as he said that he just did “piecemeal work as it comes” (at [77]). Julie is employed by him (see at [2]).

Section 60(2)(f) – any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person’s estate that is in existence when the application is being considered or that may reasonably be anticipated

254. Both Jason and Brandon were assessed, when in secondary school, as having a level of intellectual disability (Jason, a mild intellectual disability; Brandon, it seems, a greater level of disability). During his school years, Brandon was placed in special classes for children with intellectual disabilities (when available). Brandon has been in receipt of a disability pension for some time (and, as noted above, he has never worked).

Section 60(2)(g) – the age of the applicant when the application is being considered

255. The respective ages of the applicants for provision are as follows: Julie is 54; Kristie is now 37, Jason is 34 and Brandon is 32. For completeness, I note that Pam is now 56 years old.

Section 60(2)(h) – any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person’s family, whether made before or after the deceased person’s death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant

256. The contributions made by the respective applicants to the deceased are broadly non-financial, although Julie and Glenn has given evidence as to work carried out by Glenn on the deceased’s Mount Hutton home (see for example Glenn’s affidavit at [4]) while the deceased was alive.

Section 60(2)(i) – any provision made for the applicant by the deceased person, either during the deceased person’s lifetime or made from the deceased person’s estate

257. On Julie’s own case, the deceased has made provision for her in terms of assistance with her accommodation since 2000. (For the executors, it is said that the evidence by Julie as to the $30,000 payment, if accepted, shows that she provided consideration for or towards the provision of that assistance.)

258. As to Jason and Brandon, the deceased (with Pam) made provision for them during their childhood. Pam has denied that she and the deceased provided for their sons after their childhood but it is evident that there was continuing family support for them by the deceased (and Pam) during their adulthood until the time of the deceased’s death.

259. As to Kristie, it is submitted for Kristie that the deceased made no contribution to her support during her childhood. (Pam denies this to the extent that she says that there was an arrangement at some stage in relation to maintenance payments to Kristie’s mother. There is evidence that the deceased and Pam became bankrupt at one stage. Kristie gives evidence of some payments made (to contribute to the cost of her wedding) after the deceased and Kristie had re-established a relationship from about 2010. (As noted above, it is submitted for Kristie that the fact that the deceased did not provide support for her during her childhood assisted the deceased insofar as he was then able to devote his support to Pam and their sons.)

Section 60(2)(j) – any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person

260. The evidence of the deceased’s testamentary intentions (other than as disclosed by the Will) largely comprises the evidence of conversations to which reference has already been made, as to the ability of Julie to continue residing in the Glendale property.

261. Pam gives evidence that in October 2014 (not long after the deceased was diagnosed with inoperable pancreatic cancer) he said to her that “[a]t least now we will be able to get the termites fixed” and that if there was not enough left out of the life insurance and superannuation after he had paid for everything he wanted her to sell the Argenton property to have the termite damage at the Mount Hutton property fixed (see Pam’s 14 April 2016 affidavit at [17]).

262. Kristie gives evidence that in 2014 the deceased, at a barbecue at Julie’s place, said to her that he was going to leave all of his children a house and that hers would be the property at Argenton (see her affidavit sworn 5 February 2016 at [41]).

Section 60(2)(k) – whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person’s death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so

263. To the extent that the deceased and Pam were supporting their sons at home during his lifetime, there is evidence that Jason and Brandon were being maintained at least partly by the deceased.

Section 60(2)(l) – whether any other person is liable to support the applicant

264. Brandon is, as already noted, in receipt of a disability pension. Both Jason and Brandon, it may readily be inferred, will still enjoy the support of their mother, Pam.

265. As to Julie and Kristie, it seems reasonable to infer that each will continue to enjoy the support of Glenn and Simon, respectively. The financial circumstances of each have been set out above.

Section 60(2)(m) – character and conduct of the applicant before and after the date of the death of the deceased person

266. There is nothing disentitling in the character and conduct of any of the applicants. All enjoyed a close relationship with the deceased leading up to the deceased’s death.

Section 60(2)(p) – any other matter the Court considers relevant, including matters in existence at the time of the deceased person’s death or at the time the application is being considered

267. The most relevant matter to take into account in addition to the above matters is the quantum of costs that have been incurred by each of the parties. They were colloquially described by me earlier in these reasons as eye-watering. I do not shy away from that description. The executors’ costs on an indemnity basis total $230,000 (see the affidavit of Janine Wilson sworn 4 January 2019); Kristie’s costs are (conditional on a successful outcome of the proceedings) in the order of $166,000-$170,000 (see the affidavit sworn 22 February 2019 of George Szabo); Julie’s costs are $130,000 (see the affidavit sworn 21 December 2018 of Beverley Cantle); Jason and Brandon’s costs are in the order of approximately $82,000-$91,000 for the hearing and nearly $3,500 in filing fees and mediator’s fees (see the affidavit sworn 19 December 2018 of Maryanne McGrath).

Executors’ submissions as to the family provision claims

268. In her first affidavit sworn 14 April 2016, Pam deposed that she, Jason and Brandon were happy for Kristie to have a one-third share in the Glendale property but wished their circumstances to be taken into account if Kristie were to press for more (see at [22]). That position seems now to have been overtaken by subsequent events.

269. As to Julie’s family provision claim, in the event that it is held (as I have now concluded) that Julie satisfies the eligibility criteria for the purposes of s 57(1)(e), the executors submit that she has not demonstrated that, having regard to all of the circumstances of the case, there are factors warranting the making of the application for the purposes of s 59(1)(b).

270. It is submitted that in an estate the size of the deceased’s estate and in all the circumstances, especially taking into account the circumstances of the deceased’s widow and children, the provision made for Julie under the Will was adequate and the Court ought not exercise its discretion to make orders in Julie’s favour for further provision from the estate or notional estate.

271. As to Kristie’s family provision claim, the executors submit that there are no factors which show Kristie’s claim on the estate is a particularly strong claim and they similarly submit that, given the size of the estate and the circumstances of other family members, the provision made for Kristie under the Will was adequate.

272. The executors note that, during Kristie’s life there were periods of very limited contact with the deceased and, in particular, that during Kristie’s early 20s this was because Kristie decided not to make contact with her father for a period. It is accepted that the reconciliation between Kristie and the deceased led to a happy relationship during the final years of his life but it is submitted that there is no factor which would lead the Court to find Kristie has a strong claim as an adult daughter.

273. The executors submit that Kristie’s financial position is quite a secure: she is married with children and her family enjoys the ownership of their family home and a residential block next door. It is accepted that those properties are subject to mortgages, but it is submitted that that there appears to be no difficulty in paying expenses relating to them.

274. The executors point to the Kristie’s childcare business, which has operated for a number of years, as providing “an adequate income” and the security that comes with the ongoing business; and similarly they point to Simon’s trucking business (which has operated for more than two years).

275. It is submitted for the executors that Kristie’s circumstances in life are “superior” to those of her half-brothers, Jason and Brandon, and, especially taking into account Kristie’s age, that she is in a better position in life than Pam.

276. As to Jason and Brandon’s family provision claims, the executors say that Jason and Brandon were provided for by the deceased in as fair a way as possible. They argue that the circumstances of the estate have changed and that the provision made under the Will has been placed at risk by the prosecution of the proceedings commenced by Kristie and Julie.

277. It is submitted that Jason and Brandon’s claims must be weighed against Pam’s needs and the needs of Kristie; and that, when Pam’s circumstances are taken into account, none of Pam’s assets should be the subject of notional estate orders.

278. The executors accept that Jason and Brandon will have ongoing needs but argue that, as a result of the proceedings which have been brought and as a result of the size of the estate, this is a case in which there simply is not enough available to satisfy the needs of Pam and each of the three children.

279. The executors, thus, argue that the claims brought by Kristie and Julie should be dismissed with costs. They say that the estate is in a position in which it has outstanding debts which need to be repaid and that the only asset of the estate, the Glendale property, should be sold to allow the estate to pay its debts. It is submitted that the executors should not be out of pocket in relation to their costs and an order should be made that executors costs be paid on the indemnity basis from the estate.

Jason and Brandon’s submissions

280. It is submitted for the respective brothers that they need provision to buy a home together so that each can live independently (with each other). A half share of an average suitable low maintenance home in the Mount Hutton area has been identified as approximately $225,000.

281. It is submitted that Jason also needs provision to buy his own motor vehicle so he can be independent from Pam. A new Toyota Corolla which is identified as a suitable vehicle for Jason’s needs costs approximately $29,000. Further, it is submitted that Jason needs provision: to buy household items including whitegoods and furniture for when he lives independently (the estimated cost of which is approximately $8,900); to pay for future dental treatment and check-ups (at a cost of approximately $20,000); to attend a further education course such as in Digital Media and Technology (at a cost of $2,640).

282. In the event that Jason and Brandon are unable to receive provision to buy a home together, they have identified a need for provision for future contingencies.

283. For Brandon the following needs are identified (in addition to the provision for a home with Jason or for future contingencies), provision: to pay for driving lessons to enable him to get a driver licence (approximately $1,500); to buy a motor vehicle (a late model Toyota Corolla costs approximately $26,000); for future costs of replacement of prescription glasses (at an approximate cost of $12,000 over his lifetime); to pay for future dental treatment and check-ups (at a cost of approximately $20,000); to buy household items for when he lives independently (the estimated cost of which is approximately $5,000); and to pay for an Independent Living Skills program to assist him with learning skills to live independently (at a cost of $5,720).

Kristie’s submissions

284. At the outset I note that, as to the competing interests of Julie, Kristie says that they enjoy a good relationship which neither wishes to damage. Kristie submits that Julie’s occupancy of the Glendale property (in which she has resided continuously since its purchase in 2000) should not be disturbed, noting that Julie is 54 years of age and in modest circumstances. Kristie’s claim for provision arises from the fact that Julie has a life expectancy of approximately 28 years.

285. What Kristie seeks is to crystallise now the value of the one third remainder interest in the Glendale property she receives under the Will, and to accelerate payment to her of a lump sum, but to do so without disturbing Julie’s occupancy. On the basis that Julie has a life expectancy of 28 years, and on the assumption that she would wish to remain at the Glendale property indefinitely, it is said that the gift to Kristie under the Will is of no practical value to her (and could be postponed for some decades).

286. Kristie submits that adequate provision for her proper maintenance, education or advancement has not been made under the Will in circumstances where she has been given a one third share of a remainder interest in the Glendale property which cannot be realised until Julie no longer resides there. It is submitted that there was an obligation on the deceased to provide an immediate benefit to Kristie on his death because he made no financial provision, and gave her no meaningful financial support, during her life time.

287. It is submitted that, both at the time of her father’s death and at the time of the hearing, Kristie has a substantial present financial need, having no assets, other than a half share in the mortgage encumbered home in which she lives with Simon and their three children under the age of 12.

288. It is submitted that the deceased was able to provide a degree of financial security for Pam and their two children, Jason and Brandon, indirectly at Kristie’s expense.

289. Kristie says that she and Simon cannot make any financial progress, despite both working full time, using their modest income to pay for essential goods and services. Her future needs are identified as: to help reduce the balance owing on their mortgage (currently at $320,000); to provide the costs of other works on their home ($20,000); to construct suitable premises to conduct her child care business ($40,000); to enable her to pursue studies in child care ($15,000); to purchase a suitable vehicle for the child care business (8 seater) ($30,000); for private health care ($50,000); and for future education for children, $35,000 (totalling $350,000) (see Kristie’s primary affidavit sworn 5 February 2016 at [54]).

290. Kristie seeks an order for provision in her favour from the actual and/or notional estate of the deceased and an order for the payment of costs on the ordinary basis, to be capped.

Determination of family provision claims

291. In Sgro v Thompson, the Court of Appeal made clear that what is required by s 59(1)(c) is an evaluative judgment as to the adequacy of provision for the applicant’s proper maintenance, education or advancement in life having regard to all the relevant circumstances, not merely the parties’ financial circumstances; that inquiry including the taking account of matters such as the competing claims on the deceased’s testamentary bounty and the family circumstances (see White JA at [86], with whom McColl JA agreed).

292. This is a case where the Court is (regrettably) confronted with a situation where there is a relatively small estate and competing needs of a number of deserving applicants to be balanced against the needs of the deceased’s surviving spouse. Moreover, this is a case where it can be seen that the deceased was conscious of the competing claims on his testamentary bounty in that he sought to make provision for each of his spouse, children and siblings in his Will.

291. It was readily apparent by the end of the hearing (as Counsel for the parties candidly acknowledged) that the competing needs of all the parties cannot adequately be met out of the estate, particularly having regard to the costs that have been incurred to date. Indeed, this is a “train wreck”, as Counsel for Julie acknowledged at the outset. That is, in my opinion, because, had the parties been able to resolve between themselves, at an early stage, how best to deal with the wish by Kristie to accelerate her interest in the deceased’s estate, it might have been possible for that to be done without disturbing Julie’s occupation of the Glendale property. As, however, the number and costs of the proceedings mounted, it must have been increasingly apparent to those involved in the conduct of the proceedings that it was inevitable that (unless Julie’s express trust claim succeeded) it was likely that the Glendale property (the only substantial asset in the deceased’s actual estate) would have to be sold.

292. The outcome for which Julie and Kristie contend (Julie having failed on the express, constructive and resulting trust claims) is, in effect, that the Argenton property be sold to meet the claims of Kristie, Jason and Brandon; and for Julie to have a lifetime right of residence by way of provision out of the deceased’s estate (or alternatively provision representing something approaching a one-third interest in the Glendale property).

293. Any scenario that leaves Julie in occupation of the Glendale property (and the executors unable to realise that asset to meet expenses of the estate) means that the Argenton property cannot possibly meet all of the then competing needs: the debts of the estate to Pam (in the order of at least $100,000); the costs of the respective proceedings (on a solicitor/client basis of some $230,000); the estimated costs of repair of the Mount Hutton property (close to $300,000); and the needs of each of Kristie, Jason, Brandon and, on this scenario, Pam (who would not then have any income from the Argenton property – albeit that she would have the continued income from the Glendale property, at what on Julie’s case is a concessional (not market) rate). And there has been no suggestion (nor could there seriously have been any suggestion in my opinion) that the half share of the Mount Hutton property be designated as notional estate – it being the family home of the deceased’s surviving spouse (his wife of some 21 years), in which the couple’s two adult sons continue to reside (and no doubt will remain if there is insufficient funds in the estate to accommodate their wish for independence in that regard).

294. Even on the more favourable view of the value of the Argenton property (which in my opinion fails to take into account the evidence as to the state of that property), there is insufficient value in that property to meet all of those competing needs.

295. Therefore, before even beginning to address the question of adequacy of provision by the deceased for the respective applicants, it is apparent that there will be a need for both the Argenton and Glendale properties to be sold if any of the family provision claims succeed. For that purpose it is necessary, having regard to the matters set out in s 89(1) of the Succession Act, I am persuaded that it is necessary to declare the Argenton property (to the extent necessary) as notional estate of the deceased.

296. Furthermore, this is a case where the criticism made by Basten JA in Harris v Harris of the stage to which these proceedings have progressed without orders for the capping of costs is not inapt. That is because of the risk that a costs order in Pam’s favour may not allow her to recoup all of her (not insignificant) legal expenses. Basten JA noted in Harris v Harris (at [18]) that the fact that the surviving wife had had to expend “a significant portion of a modest estate, and one almost entirely comprised of notional estate” in defending the proceedings (and, one might assume, of the unsuccessful appeal therefrom) suggested that the beneficial provisions relating to family provision could operate unfairly. This is another such case.

297. Turning then to the particular claims that have been made, I deal first with Julie’s claim, since she is maintaining a claim for provision by way of a life estate or lifetime right to occupy the only real asset of the estate (i.e., the Glendale property).

298. Assessed as at the date of the deceased’s death, the provision made for her under the Will was in my view more than adequate. True it is that it made provision for the payment of “rent” adjusted on a CPI basis (where there had been no such arrangement at the time that Julie first occupied the Glendale property) but it is obvious that this amount was still well below market rent for the area. Similarly, the provision that the right of residence terminate if Julie were permanently to vacate the property (to which it seems Julie took objection when she first learnt of the provisions of the Will) does not seem to have been discussed at the time she commenced occupation of the property (and does not accord with what she said in cross-examination was her understanding of the arrangements made at the time) but it seems not unreasonable to me and well within the scope of what the deceased (in weighing the competing claims on his testamentary bounty consistent with his moral obligations in that regard) could conclude was appropriate in all the circumstances.

299. What is apparent as at the time of this application, however, is that Julie is at risk that the executors will have to sell the Glendale property to meet the estate’s legal expenses (even if those expenses are capped) and the possession proceedings are testament to their intention to do so. In those circumstances, where Julie has no security of tenure in the Glendale property, the question is whether there has been adequate provision by the deceased for her maintenance. I have concluded, with some hesitation, that there has not.

300. In my opinion, the deceased’s moral obligation to his sibling, in circumstances where she had been permitted to remain in residence in the Glendale property for some fifteen years as at the date of his death, was to provide Julie at the very least with a period of time in which to secure other accommodation and, to the extent possible in light of the other competing claims on his bounty, to make provision for a legacy to assist her in that regard.

301. As to the position of Kristie, again I am of the opinion that, assessed as at the date of death, there was adequate provision made for her under the Will. She is an adult capable of earning a living; she has the support of her husband; and she has the benefit of secure accommodation which she shares with her husband and their children and a steady income. The fact that the provision for her was a one-third interest in the Glendale property (and might not be realised for some time) does not cause me to come to any different conclusion.

302. However, again, the position by the time this application has come to be assessed is markedly different. On the assumption that the Glendale property is sold, the bequest to her of a one-third interest would provide her with an ample legacy (one-third of the proceeds after the expenses of sale) but the difficulty is that the executors also have the estate debts to cover. If those debts are met out of the proceeds of sale of the Glendale property (and assuming a sale price of around $400,000 - $450,000, which would be the most favourable for Kristie), that would leave only around $50,000 (after deduction of sale expenses) to be divided between Kristie, Jason and Brandon (i.e., $450,000, less the $100,000 liability to Pam, less the $230,000 odd in legal expenses assuming all those expenses were to be recoverable, less sale expenses). The position becomes significantly worse if the Glendale property realises only an amount commensurate with the value placed on it by the executors because it would then probably not even cover all of the estate’s expenses.

303. I have been troubled by the fact that there were significant matters not disclosed in the affidavit evidence as to the combined assets of Kristie and Simon (as emerged in the cross-examination of each). However, I accept that Kristie did ultimately put before the Court, in broad outline, a complete picture of her financial circumstances and I would not dismiss her claim on that basis.

304. In circumstances where Kristie and her husband are not well off and are managing on a modest income from each, and in circumstances where the provision made for Kristie by her father during his lifetime was limited, I have concluded that (assessed as at the time of the hearing) adequate provision has not been made for her under the Will.

305. Finally, as to Jason and Brandon (whose claims were admittedly defensive claims), I again consider that there was adequate provision for them under the Will (when assessed at the date of the deceased’s death) but that in the circumstances which have arisen there has not been adequate provision made for them by the deceased. That is because, like Kristie, they are at risk of receiving only a small legacy if any out of the proceeds of sale of the Glendale property and they both have, and are likely to continue to have in the future, difficulty in living independently without assistance.

306. Accordingly, I find that, for each of the family provision claims, the relevant threshold question has been established. The question then arises as to what, if any, provision should be made for each taking into account the factors considered above. It is here that the position of Pam (though this was earlier taken into account in forming my view as to the adequacy of provision – the threshold question) again comes to the fore.

307. In assessing the evaluative question required under the Succession Act, I consider that of the competing claims on the deceased’s testamentary bounty, the claims of the deceased’s spouse in this case (and I do not suggest that this is some determinative factor in every case where there is a surviving spouse) have priority. Pam and the deceased were married for a long time; they built up a commercial cleaning business together; they acquired their matrimonial home together; and they brought up two children together. The deceased clearly understood that Pam had a strong claim on his testamentary bounty. It is significant in my view that (on Pam’s account of the conversations with the deceased before his death) the deceased contemplated that the superannuation and insurance payments could be used to repair the termite damage to the Mount Hutton home (and thus provide his surviving spouse with secure accommodation after his death). It is in that context that his statements as to the Argenton property being for Kristie (or that each of his children would have a home) should in my opinion be understood. True it is that, on Julie’s and Kristie’s respective accounts, the deceased’s focus seems to have been on discharging the mortgages and leaving a house for each child but ultimately what this indicates is that the deceased mistakenly thought all needs could be met out of the overall assets held by him or in which he had an interest.

308. In fact, Pam used the proceeds from the superannuation and insurance policies largely to discharge the mortgage over the Argenton property. It was submitted that this would enable her to continue to have an income. However, in circumstances where it is now necessary to accommodate not only the claims for provision by Julie, Kristie and the sons but also the estate’s debts, I do not consider that this can realistically be achieved.

309. In my opinion, the appropriate outcome having regard to all the circumstances of the case is as follows: the Argenton property should be designated as notional estate; the Glendale property should be sold (albeit allowing a period of time – in my view six months – for Julie to find alternative accommodation and vacate the property); and the proceeds of sale of the two properties should be disbursed as follows: first, in payment of the estate’s debt to Pam (which I have treated as being $100,000); second, in payment of the sum of $10,000 to Julie (as payment of the balance of the $30,000 provided by her to the deceased in 2000, in circumstances where I cannot see any reliable evidence of any such repayment to date and therefore will treat as a sum repayable to her by the estate); third in payment of $5,800 to Julie as equitable compensation the improvements made by her to the Glendale property over the years that in my opinion go beyond typical payments of a tenant; fourth, in discharge of the estate’s legal costs on an indemnity basis capped at $200,000; fifth, a payment to Pam towards the cost of repair of the termite damage in the sum of $150,000; sixth, after setting aside a sum (see below) towards payment of the legal costs of the respective applicants, for payment to each of Kristie, Jason, Brandon and Julie of an equal share of 80% of the balance; and for the remaining 20% of the balance to Pam for future contingencies.

310. As to the sum to be set aside towards payment of the respective applicants legal costs (the Legal Costs Sum), that sum should in my view be heavily capped; and it should depend on the amount realised from the sale of the two properties. If the net proceeds of sale of the two properties exceed $850,000, then I would set aside the sum of $150,000. If the net proceeds of sale of the two properties exceed $700,000, then I would set aside the sum of $100,000. If the net proceeds of sale of the two properties are less than or equal to $700,000 then I would only set aside the sum of $50,000 towards the legal costs.

311. As to how that sum should be apportioned as between the respective legal costs, as far as Julie is concerned, on an application of the usual rule that costs follow the event, she has not succeeded in her principal claim. I would allow no more than 40% of the sum set aside for Julie’s legal costs of the family provision. As for Kristie, I would also allow 40% for legal costs, noting that it was accepted that her costs should be heavily capped. Both have a claim on the deceased’s testamentary bounty and both have needs unable to be met by the provision made for them under the Will, as circumstances have transpired.

312. As for Jason and Brandon, I accept that it was not inappropriate that they commence separate proceedings in order to protect their position. As noted by Mason and Handler, Succession Law and Practice NSW (at [s 65.4]), “[e]vidence of the financial and other circumstances of beneficiaries may result in the court alleviating the burden of an order against the share of the estate of a beneficiary whose circumstances warrant that outcome” and in that event a separate proceeding would not have been necessary. However, it was submitted for Jason and Brandon that there was a concern that reliance could not be placed on s 66(2) as against notional estate (and hence the need for the commencement of proceedings to protect their position) (see T 225.20). Without needing here to determine that issue, I consider the concern to protect their position to be not unreasonable. That said, I would only allow 20% of the sum set aside for legal costs in respect of their legal costs.

313. As an illustration, on my calculations, if the respective properties (valued as the executors contend) are sold realising sale proceeds of around $620,000, then the balance in the estate divisible as between each of Kristie, Jason, Brandon, Julie and Pam would be $104,200 (in light of the payments out of the estate outlined above at [311]). This means that with the orders for provision that I have proposed, each of Kristie, Jason, Brandon, Julie and Pam would receive as a final lump sum $20,840 (not including amounts payable in respect of specific items or the applicants’ legal costs as calculated according to [312] and [313] above). If the amount reached was $820,000, the balance of funds remaining in the deceased’s estate would be in the order of $254,200 (or $50,840 each) (again, not including amounts payable in respect of specific items or the applicants’ legal costs). If the highest end of the range ($930,000) were to be realised the corresponding figures would be $314,200 and $62,840 each (again, not including amounts payable in respect of specific items or the applicants’ legal costs).

314. I accept that the above necessarily involves a broad brush approach to costs (and that it involves heavy cost capping) but, in the circumstances of this this case, I consider it appropriate taking into account all of the factors set out above.

Orders

317. For those reasons, I make the following orders:

1. Extend the time for the making of the Family Provision claims by each of Julie Anne Roberts (Julie), Jason Richard Smith (Jason) and Brandon James Smith (Brandon) to the dates on which their respective proceedings in this Court were instituted.

2. Order that, to the extent necessary to accommodate the orders for family provision here made, the property referred to in these reasons as the Argenton property be designated as notional estate of the deceased.

3. Order in favour of the executors for possession of the land comprised in Folio Identifier D/394327 (the Glendale property) but stay the operation of that order for six months from the date of these orders.

4. Order that vacant possession of the Glendale property be provided by no later than the date six months from the date of these orders.

5. Order that, pursuant to s 59 of the Succession Act 2006 (NSW), provision be made out of the estate and notional estate of the deceased in favour of the respective applicants for family provision in accordance with Order 6 below.

6. Order that payment be made out of the proceeds of sale of the Argenton property and of the Glendale property as follows:

1. first, in payment of the estate’s debt to Pam of $100,000;

2. second, in payment of the sum of $10,000 to Julie;

3. third in payment of $5,800 to Julie as equitable compensation for certain of the improvements carried out on the Glendale property;

4. fourth, in discharge of the estate’s legal costs on an indemnity basis capped at $200,000;

5. fifth, in payment to Pam of the sum of $150,000 towards the cost of repair of the termite damage;

6. sixth, after setting aside a sum (as calculated according to [312]-[313] of these reasons) towards payment of the legal costs of the respective applicants (the Legal Costs Sum), for payment to each of Kristie, Jason, Brandon and Julie of an equal share of 80% of the balance; and for the remaining 20% of the balance to Pam as a lump sum for future contingencies.

7. seventh, order that, of the Legal Costs Sum, 40% be paid to Julie; 40% be paid to Kristie; and 20% be paid jointly to Jason and Brandon for their respective legal costs.

7. Liberty to apply on 48 hours’ notice if necessary for the implementation of any of these orders.

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Amendments

09 July 2019 - [53] - inclusion of transcript reference number

10 July 2019 - [57] 'back' to 'bank'

Decision last updated: 10 July 2019