Hyatt v Public Trustee; Public Trustee v Hyatt

[2007] NSWSC 1525

CITATION:	Hyatt v Public Trustee; Public Trustee v Hyatt [2007] NSWSC 1525
HEARING DATE(S):	15 and 16 August 2007
JUDGMENT DATE :	16 August 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	Windeyer J at 1
EX TEMPORE JUDGMENT DATE:	16 August 2007
DECISION:	Order for possession made
CATCHWORDS:	EQUITY - estoppel by representation - cross-claim to claim for possession - handing over title deeds with statement "it is yours" - whether reliance on this in light of knowledge deceased intended to make will to provide for this - whether any detriment
PARTIES:	Paula Anne Hyatt (Plaintiff in 4742/06 and First Defendant/First Cross-Claimant in 4742/06)) Public Trustee Company of New South Wales (Defendant in 4742.06 and Plaintiff/Cross Defendant in 5795/06) Roger Hyatt (Second Defendant /Second Cross-Claimant in 5795/06)
FILE NUMBER(S):	SC 4742/06; 5795/06
COUNSEL:	Mr D Macfarlane (Hyatt) Mr L Ellison SC (Public Trustee)
SOLICITORS:	John R De Mattia & Co (Hyatt) Clinch Neville Long Leatherbarrow (Public Trustee)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

THURSDAY 16 AUGUST 2007

4742/06 - PAULA ANNE HYATT v PUBLIC TRUSTEE
5795/06 - PUBLIC TRUSTEE v PAULA ANNE HYATT & ORS

JUDGMENT

1 HIS HONOUR: Frank Freeman died on 24 January 1994. At that time he was married to Marcia Freeman. He had been previously married to Doreen Freeman but she had died in 1986. Mr Freeman and his first wife owned a property at 9 Grandview Street, Penrith as joint tenants. The property, therefore, would have passed to Mrs Freeman by survivorship, but the title was not adjusted and remained in the names of the joint tenants.

2 Mr Freeman married Mrs Marcia Freeman on 16 January 1991 and they lived together at Grandview Street. Mr Freeman and his first wife had a daughter, Paula, born on 6 May 1970. She married her present husband, Mr Roger Hyatt, in June 1991.

3 Mr Freeman died intestate. No application for a grant of administration of this estate was made by his widow. By 1998 Marcia, whom I will now call Mrs Freeman, was in ill health, having suffered a stroke and a heart attack. She moved to a nursing home at Seven Hills in October 1998, and from there moved in 2001 to a different nursing home at St Marys where she currently resides.

4 On 3 June 2004 an order was made by the Guardianship Tribunal committing the management of the estate of Mrs Freeman to the Protective Commissioner. As a result of this, at the request of the Protective Commissioner, the Public Trustee applied for and obtained a grant of letters of administration of the estate of Mr Freeman on 29 April 2005. Title to the Grandview Street property was then transmitted into the name of the Public Trustee.

5 In 1993 Mr and Mrs Hyatt purchased a home at Cranebrook for $120,000. Quite how this was funded is not clear, but there was a mortgage to Permanent Trustee Company Limited of $45,763, and it seems most, if not all, of the balance of the purchase money was obtained through what was described as a residential lease scheme, or some housing lease scheme, which must have been available for low income earners. In any event, whatever the position, Mr and Mrs Hyatt had little, if any, equity in the property. The funder, apart from the trustee company, was, according to a settlement statement when the property was sold, NSW Rent-Buy Pty Ltd.

6 In 1995 a Mr Tomkin moved into the Grandview Street home while Mrs Freeman was still there. The arrangement was supposed to be that he provide assistance to her in the house and garden, and with shopping and such matters. He remained there after Mrs Freeman moved to the nursing home. It seems he was expected to pay rent, but there is no evidence whether he did pay or did not. What is clear is that he did not look after the house. It fell into disarray, and there were complaints from neighbours. Mr and Mrs Hyatt ejected him in July 2001.

7 After they had obtained possession, Mr and Mrs Hyatt commenced clearing up and renovating the property. It should be remembered that this is the house where Mrs Hyatt lived prior to her marriage. The clearing up and renovation was a big task, but, by September, the evidence is that it was well on its way to completion and at least two thirds of the work had been done by then. Mrs Hyatt says that she and her husband took Mrs Freeman to visit the house and to see the work which had been done. She says that the following conversation took place:

Paula: Something has to be done to the house when we are finished.

Marcia: I do not want to rent it. I do not want it damaged again. I want you to move in and live there. Where is the biscuit tin with all the papers in it? I want you to get the house deeds out please.

8 After the biscuit tin was produced Mrs Freeman said to Paula and her husband: "Look, the home is yours. I want you to move in. Take these deeds. I want you to have the house. You live here. It is all yours." Paula says that she and her husband sold their Cranebrook home to move to Grandview Street, and that they would not have sold it had Mrs Freeman not given the Grandview Street property to them, and that thereafter they paid rates on the Grandview Street property.

9 Mr Roger Hyatt, Paula's husband, says, as to that conversation, that the following conversation took place:

Marcia: I do not want to rent it. I do not want it damaged again. Why don't you live in it?

Paula: We can't. We can't rent our home because we are under a rent-buy scheme.

10 He also said that, after asking them to fetch the biscuit tin, Marcia took the deeds and said: “The house is yours. I want you to have the house. I want you to live here. The house is now your home.”

11 Mrs Barbara Hyatt, who is the mother of Roger, said she was asked by Mrs Freeman to take her to a solicitor to make a will. This was some time after the renovations had been completed. She said that Mrs Freeman said to her: "I want to leave the home to Paula. Her siblings will have nothing to do with me, and Paula is the only one who has done anything for me." She said that at one Christmas lunch Mrs Freeman had said: "I want to leave the home to you, Paula." This would indicate that Paula was present, as this statement was made to her.

12 There is in evidence an affidavit of Mrs Freeman which essentially denies these conversations and is to the intent that the house always remained hers, and it is true to say that she made statements to doctors and in the guardianship papers to that effect. Nevertheless, the evidence is that she is now very ill. It had been intended that the evidence of Mrs Freeman would be taken at the nursing home, but it is accepted that is no longer possible. However, her affidavit was sworn on 21 September 2006 before a solicitor and must be given some weight, although it cannot be given a great deal of weight as it was not possible to cross-examine the deponent on an important issue.

13 There are statements in that affidavit somewhat critical of Paula, but in the circumstances, one must accept that people who are beginning to suffer mental problems change their views of the people to whom one would otherwise expect they would be well disposed.

14 So far as this case is concerned, I accept the evidence given by the Hyatts. The question then is, what does this lead to? This is not a case where it is suggested that there has been a valid gift. It is not a case where it is contended that there was a donatio mortis causa; in other words, a gift of the property to take effect on death. What is claimed is that Mrs Freeman represented to Mr and Mrs Hyatt that the house was theirs, that they relied upon that representation in selling their house and perhaps expending some amounts of money on the Penrith property, and that they had, accordingly, suffered detriment, so that it would be unconscionable for Mrs Freeman to act contrary to the representations which I have accepted were made.

15 I should say, at the start, that most of the renovations to the Grandview Street property had been completed before the representations relied upon were made. That is not really the issue. What Mr and Mrs Hyatt claim is that they considered the actions of Mrs Freeman amounted to her giving the property to them, and as a result of what she said and her actions with the deed, that they sold their Cranebrook house and moved into the Penrith property, and that they have acted to their detriment in doing so. If they succeed in all of that, then the likelihood is that they have made out a case for estoppel by representation, and it may be that an order should be made that the expectation be made good.

16 The evidence about the Cranebrook property is somewhat uncertain, but, on the evidence of Mr Roger Hyatt, he and his wife had, from time to time, been unable to make the mortgage payments, and I accept that to some extent this was due to his ill health. I should say that I found both he and his wife to be generally honest witnesses. In his evidence he accepted that the periodic failures to pay interest under the mortgage were becoming more frequent. Mrs Hyatt did not really agree with that, but she did accept that there had been defaults in interest payments, from time to time.

17 The evidence does not make the final position quite clear. There is in evidence a settlement statement which sets out the position on sale of the Cranebrook property. That settlement statement shows that the property was sold for $222,000 and that after payment of all mortgages and other charges on it, including an amount to Penrith City Council, presumably for rates which must have been in some arrears, Mr and Mrs Hyatt received the sum of $17,273.87 as a net figure. The important thing, however, is that the amount to discharge the mortgage to Permanent Trustee Company Limited was $45,107, being much the same as the amount originally borrowed, and the amount to New South Wales Rent-Buy Limited was $130,053. In other words, the amounts which were paid to discharge mortgages total about $175,000, yet the amount which had originally been borrowed was not more than $120,000. It follows from this that, although the property was increasing in value over the period which they owned it, the Hyatt’s own financial position was not advancing in any way, and, obviously, the mortgage payments would have been increasing as the amount of the loan to the rent-buy company increased.

18 Mr Hyatt did accept in evidence that moving into the Grandview Street property rent-free and being freed from the mortgage payments was a considerable advantage to him and his wife. It is, of course, the fact that they would have had to pay rates and outgoings on the Cranebrook property and that the liability to pay these rates and taxes on the Grandview Street property probably balanced this, but the freedom from the mortgage payments was a substantial benefit to them.

19 The question, then, is whether or not the estoppel claim is made out. I accept, and it has not really been argued, that although Mrs Freeman did not have the property under her legal control, it was nevertheless possible for her to bind her interest in it and to make representations about it. She was, subject to a discharge of any estate debts or other liabilities, the person who would have been entitled to have the property transmitted to her as the person entitled on the intestacy of her husband.

20 The first question to decide is whether or not the representations were such that Mr and Mrs Hyatt could have relied upon them as being statements by Mrs Freeman on which it was proper to base some expectation. Mr Hyatt at least said, and probably so did his wife, that they considered that when the deeds were handed over the property was theirs. I would have to say I do not accept that part of their evidence and I do not think that it is possible that they could have thought that to be the position. The deeds, if they had looked at them, which I assume they did, were in the names of Mr Freeman deceased, and Doreen. It must have been obvious that something needed to be done to get the property from there into the name of Mrs Freeman, the representor. They had some familiarity, but not much, with lawyers. They knew it was lawyers who brought about or assisted in bringing about changes in title. I do not accept that they thought that the handing over of the deeds made the property theirs.

21 I should say that this finding to some extent is supported by the fact that Mrs Hyatt, at least, knew, as did her mother-in-law, that Mrs Freeman thought that she needed to make a will to leave the house to her. Mrs Hyatt does not say that when that statement was made that she thought the house was already hers. I do not think that she thought that it was, but rather, she thought she had proper expectation of getting it.

22 Even if Mr and Mrs Hyatt thought that the handing over of the document meant that the property was theirs, and that was what Mrs Freeman intended, the question, then, is whether or not they relied on that statement to their detriment.

23 This is not put forward as a case of future intention such as: "If you continue to renovate the house, then I will leave it to you in my will"; or, "come and live in the house so that it is kept in reasonable repair for me in case I can come back into it and if you do that, it will be yours". No such representations are relied on. What is relied on is the handing over of the deeds and the statement “It is yours”. Even if that were a representation of present fact, I am unable to see that Mr and Mrs Hyatt suffered a detriment as a result of their actions in moving into the house and selling their Cranebrook property. It is at least likely they would have had to sell in any event. The evidence seems to me to show conclusively that they obtained a benefit from the sale and from their ability to live in the house rent-free, rather than having acted to their detriment. On that basis, although I have sympathy for them, their defence to the statement of claim based upon estoppel by representation or estoppel by convention of an assumed state of affairs must fail. It follows that the Public Trustee is entitled to an order for possession. There should be a reasonably long period to enable Mr and Mrs Hyatt to endeavour to make some other arrangements for their accommodation.

24 I make the orders sought in paragraph 1 of the statement of claim. Leave to the plaintiff to issue a writ of possession on or after 30 November 2007. Order the cross-claim be dismissed. In matter number 5795/06 order the defendant/cross-claimant pay the plaintiff's costs of the proceedings.

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