Levingston v Levingston

[2017] WASCA 91

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   LEVINGSTON -v- LEVINGSTON [2017] WASCA 91

CORAM:   BUSS P

MURPHY JA
BEECH J

HEARD:   20 APRIL 2017

DELIVERED          :   11 MAY 2017

FILE NO/S:   CACV 38 of 2016

BETWEEN:   LOLA MAY LEVINGSTON

Appellant

AND

LOLA MAY LEVINGSTON as Executrix of the Will of the late ROBERT IAN EDWIN PARTRIDGE (Dec)
First Respondent

RHYS CURJEL PARTRIDGE
Second Respondent

ON APPEAL FROM:

Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA

Coram  :TOTTLE J

Citation  :LEVINGSTON -v- LOLA MAY LEVINGSTON AS EXECUTRIX OF THE WILL OF THE LATE ROBERT IAN EDWIN PARTRIDGE [No 2] [2016] WASC 133

File No  :CIV 1817 of 2010

Catchwords:

Contract - Whether letter to solicitor signed by two clients constituted agreement between clients - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Category:    B

Representation:

Counsel:

Appellant:     Mr M J McPhee

First Respondent           :     No appearance

Second Respondent      :     Dr P R MacMillan

Solicitors:

Appellant:     M J McPhee Barrister & Solicitors

First Respondent           :     No appearance

Second Respondent      :     Slater & Gordon Lawyers

Case(s) referred to in judgment(s):

Ashton v Pratt [2015] NSWCA 12; (2015) 88 NSWLR 281

Australian Goldfields NL v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191

Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20; (1954) 92 CLR 424

Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2009) 39 WAR 1

Birla Nifty Pty Ltd v International Mining Industry Underwriters Ltd [2014] WASCA 180; (2014) 47 WAR 522

Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95

Fazio v Fazio [2012] WASCA 72

RCR Tomlinson v Russell [2015] WASCA 154

Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679

Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547

Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387

REASONS OF THE COURT:   

Introduction

1. Robert Ian Edwin Partridge died on 6 October 2008.  By his will made on 29 December 1995, he appointed the appellant, Mrs Lola Levingston, as his executrix and left his estate to his only son, Mr Rhys Partridge, the second respondent.  The late Mr Partridge and Mrs Levingston lived together as husband and wife for 12 years prior to his death.  Mrs Levingston appeals against the dismissal of her action in which she claimed that the late Mr Partridge agreed to leave her his entire estate or, alternatively, his personal estate.

2. The primary judge and the parties to the appeal referred to the late Mr Partridge as Ian (the name by which he was known) and to the second respondent as Rhys.  We will do the same.

3. Mrs Levingston's contentions on appeal substantially reflect the submissions she put to the primary judge.  As explained in detail below, the primary judge was right to reject the appellant's claims for the reasons that his Honour gave.  Consequently, the appeal must be dismissed.

Mrs Levingston's claims at trial

1. Mrs Levingston pleaded claims in contract, estoppel and constructive and resulting trusts.

2. Mrs Levingston's primary claim was in contract and based on a letter dated 13 April 2005 that she and Ian signed and sent to their solicitor, Mr Jonathan Meyer.  Mrs Levingston claimed that that letter constituted an agreement in writing between Ian and Mrs Levingston, the terms of which were that Ian would be entitled to live in a property owned by Mrs Levingston for the rest of his life, and her will would so provide, and Ian would leave his personal estate to Mrs Levingston.[1]  The letter said to constitute the agreement was in the following terms:

   [1] Statement of claim [4] ‑ [6].

   Dear Johnathon

   Please find enclosed

   1signed leases for Calold WA Pty Ltd

   2Letter to state Administrative Tribunal and cheque for $29.00

   3.Copy of will       L M Levingston,

   4Copy of will       Robert Ian Edwin Partridege

   5Articles of Association for Ian Partridge Pty Ltd

   Ian is concerned for the most cost effective way for Lola to have control of the Company on his death.

   Is the issuing of another 'B' class share a possibility.

   Or to issue the balance of the C class shares to LM Levingston.

   Or Issue another class of share similar to aims and objects of the 'B' Personal estate left to Lola

   RE:  Lola Levingston

   I now have two great grandchildren and would like to include them as beneficiaries in the event of Johns death.  ? trust or what.  (Alana and Liam)

   Ian to have full use of 13 Australind Road until death.

   Many thanks

   Yours truly.

   The letter was signed by both Mrs Levingston and Ian.

3. Alternatively, Mrs Levingston claimed that if the letter of 13 April 2005 did not constitute an agreement, Rhys was estopped from denying the existence of such an agreement because, during Ian's lifetime, Ian conducted himself in such a way as to induce Mrs Levingston to assume that he would leave to her his entire estate (apart from a sum of $600,000 in favour of Rhys).  Mrs Levingston claimed that, as Ian knew, she acted to her detriment upon that assumption by, among other things, allowing Ian to live with her, as her husband, rent free for a period of about 12 years until he died.[2]

   [2] Statement of claim [12].

4. The primary judge found that the constructive and resulting trust claims failed as a consequence of the failure of Mrs Levingston's contract and estoppel claims.[3]  The challenge on appeal, by ground 4, to the rejection of the trust claims proceeds on the premise that the appeal on grounds 1 or 2 succeed.[4]  For the reasons explained below, grounds 1 and 2, challenging the failure of the contract and estoppel claims, fail.  Consequently, it is not necessary to say anything more about the claims of constructive and resulting trusts. 

   [3] Primary reasons [99].

   [4] Appellant's submissions [29]; appeal ts 22.

The primary judge's reasons

1. The primary judge summarised the issues as follows:

   (1)Does the letter of 13 April 2005 constitute an agreement and, if so, what were its terms?

   (2)If the letter of 13 April 2005 does not constitute an agreement, is Rhys estopped from denying the existence of an agreement in the terms claimed by Mrs Levingston?

   (3)If there was no agreement and no estoppel, did the letter of 13 April 2005 create either a resulting trust or a constructive trust over Ian's estate or his personal property in favour of Mrs Levingston?[5]

   [5] Primary reasons [8].

2. The primary judge made detailed and unchallenged factual findings about the parties, their relationship, and their communications, including with their solicitor Mr Meyer.[6]  We incorporate those findings into these reasons. 

   [6] Primary reasons [13] ‑ [57].

3. The primary judge addressed the question of whether the letter of 13 April 2005 constituted an agreement.  His Honour identified that the essential question was whether Ian and Mrs Levingston intended the letter of 13 April 2005 to constitute a binding contract and that, in order to resolve that question the court must consider the terms of the letter and make an objective assessment of the state of affairs existing between Ian and Mrs Levingston to determine whether there was an intention to create contractual relations.  Further, his Honour identified that intention is used in an objective sense referring to what is conveyed by what was said or done having regard to the circumstances in which those statements and actions happen.  There is no challenge to the primary judge's statement of the legal framework in which the issue was to be determined.  As will be seen, we agree with it.

4. The primary judge identified the following relevant matters regarding the state of affairs between Ian and Mrs Levingston as at April 2005:

   (1)By that time the parties had been living together in a loving and supportive relationship for almost nine years.  They were astute people who had been involved in business and who trusted each other completely.  They did not consider it necessary to document the other commercial arrangements that existed between entities they controlled.

   (2)The parties divided their time between two properties, one of which was maintained by her and the other by him.  They shared living expenses.  Mrs Levingston did not depend on Ian for financial support; she had substantial assets in her own right.  Ian was concerned to ensure that Mrs Levingston would use the property he owned after his death.  Ian wished to ensure that two companies controlled by Mrs Levingston should be released, after his death, from loans made to them by entities he controlled, but he required advice as to how this could be done.  Mrs Levingston was concerned to ensure, that after her death, Ian should be permitted to live in the property she owned.  She required advice in relation to aspects of her estate planning.

5. The judge gave 10 reasons for his conclusion that the letter did not constitute a binding and enforceable agreement, and was no more than a preliminary letter of instruction to Mr Meyer which did not create any legal obligations as between Ian and Mrs Levingston.  Those reasons may be summarised as follows:

   (1)The language of the letter does not suggest the existence of an agreement.  The absence of any words reflecting the existence of a consensus was described by the primary judge as a significant factor in his reasoning that Ian and Mrs Levingston did not have an intention to create contractual relations.

   (2)The evident purpose of the letter was not to make an agreement but to provide documents to their lawyer and to set out the legal advice they required from him.

   (3)Ian and Mrs Levingston had not documented any of their financial dealings with each other, as they trusted one another.  That suggested it was unlikely that Ian and Mrs Levingston intended to create a binding agreement between them in relation to their respective testamentary intentions.

   (4)The letter showed that Ian required advice on the transfer of control of the company referred to as IPPL, which he controlled, to Mrs Levingston at his death.  The provision of that advice might have altered his approach to estate planning.

   (5)No suggestion was ever made to Mr Meyer that Ian and Mrs Levingston had reached a binding agreement in respect of a disposition of their estates.

   (6)It is unlikely that Ian, an astute businessman, would have made an agreement in relation to the disposition of his estate that did not mention his most valuable asset, his property in Australind, or his only son Rhys, who was then the sole beneficiary of his estate under his then will.

   (7)Subsequently, neither Ian nor Mrs Levingston made wills in accordance with the alleged agreement.

   (8)At a meeting between Ian, Mrs Levingston and Mr Meyer on 19 December 2006, there was a discussion about granting Mrs Levingston a life interest in Ian's property in Salter Point.  At that meeting there was no discussion of the agreement said by Mrs Levingston to be constituted by the letter of 13 April 2005.

   (9)In a letter dated January 2009 from Mrs Levingston to Rhys, Mrs Levingston did not suggest that she and Ian had reached an agreement as to his estate in 2005.

   (10)An intention to create a contract could not be inferred from the fact that both Ian and Mrs Levingston signed the letter.  The primary judge concluded that they both signed the letter in order to assure Mr Meyer that the contents of the letter reflected their instructions.[7]

   [7] Primary reasons [66] ‑ [75].

6. The primary judge then turned to Mrs Levingston's estoppel claim.

7. His Honour applied the statement by Brennan J in Waltons Stores (Interstate) Ltd v Maher[8]of the requirements in order to establish an equitable estoppel.  No issue is taken with that approach on appeal.  His Honour expressed some reservations about Mrs Levingston's evidence.  He observed that it was apparent that she possessed a deeply held conviction that her understanding of Ian's testamentary wishes should be honoured and that she had a tendency, perhaps subconsciously, to rationalise what had occurred in order to make it reflect her understanding of Ian's wishes and to conform with what was required to succeed in her action.[9]  His Honour gave examples of this tendency.  Further, he identified inconsistences between Mrs Levingston's pleaded case and evidence‑in‑chief, on the one hand, and her evidence in cross‑examination on the other:[10] 

   [8] Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387.

   [9] Primary reasons [85].

   [10] Primary reasons [87] ‑ [88].

   In the pleaded case and in her evidence-in-chief Mrs Levingston alleged that, in reliance upon what Ian had communicated to her, by words and conduct, about his testamentary intentions she:

   •allowed him to live rent free in 13 Australind Road;

   •sold her pharmacy; and

   •invested in the acquisition of the shopping centre with him.

   In contrast, in cross-examination Mrs Levingston said:

   •she would never have claimed rent from Ian under any circumstances (ts 45) because she would not charge her husband rent and that she never contemplated doing so (ts 123);

   •she did not continue working because Ian had asked her to retire and the decision to retire was made by them together so that 'we could live a life together' (ts 119);

   •she placed no reliance upon statements made by Ian, prior to the shopping centre investment, to the effect that she was going to receive his assets in due course (ts 74.3) and the decision to invest part of the proceeds of sale from the pharmacy in that acquisition had nothing to do with whether she was going to inherit any of Ian's assets (ts 58); and

   •in 1999 and 2005 she had no need for any of Ian's assets and whether she received them by way of an inheritance was not particularly important to her (ts 68.6 and 116).

8. The primary judge also observed that the fact that Mrs Levingston did not mention either the alleged agreement or the matters she says gives rise to the estoppel in the letter she handed to Rhys when they met in January 2009 gave cause for concern about the reliability of Mrs Levingston's evidence.[11] 

   [11] Primary reasons [89].

9. His Honour referred to evidence of Mr Meyer, which he evidently accepted, as to the three meetings Mr Meyer had with Mrs Levingston and Ian (namely the meetings held on 3 March 2005, 13 September 2005 and 19 December 2006).  Nothing was said at those meetings by Ian to the effect that he intended to leave his most valuable asset, namely the property, to Mrs Levingston.  The focus of the discussions was on trying to achieve a winding up of IPPL or to find another mechanism by which Mrs Levingston would control the company on Ian's death so as to ensure that she could continue to have the use of the Salter Point property.  Mr Meyer did not give any evidence of Mrs Levingston raising any concern that what Ian was saying to Mr Meyer about his testamentary intentions differed from what he had said to her.[12]

   [12] Primary reasons [92].

10. His Honour concluded, taking into account Mr Meyer's evidence, and his (the primary judge's) reservations about Mrs Levingston's evidence, that he was not satisfied that Ian made statements to her to the effect that she would receive all his property apart from the sum of $600,000.

11. Further, his Honour found that, having regard to Mrs Levingston's evidence given in cross‑examination, he was not satisfied that Mrs Levingston relied upon anything said or done by Ian in relation to his testamentary intentions in making decisions about allowing Ian to live in her home rent free, retiring from and selling the pharmacy business or investing with Ian, through a subsidiary, in the acquisition of the Kalamunda Shopping Centre.[13]  Consequently, Mrs Levingston's estoppel claim failed, in that she had failed to prove the representations she alleged and her actions in reliance upon the assumption induced by those representations.[14]

    [13] Primary reasons [97].

    [14] Primary reasons [98].

Grounds of appeal

1. Mrs Levingston advances four grounds of appeal.  Her grounds may be summarised as follows:

   1.The trial judge erred in concluding that the letter of 13 April 2005 was not an agreement and was not intended to create legal relations between the signatories to the letter, namely Mrs Levingston and Ian.

   2.His Honour erred in failing to find that Mrs Levingston had proved all elements of her estoppel claim.

   3.The trial judge erred in law in not proceeding to interpret the letter of 13 April 2005 as to whether Ian agreed to leave Mrs Levingston all of his property, as distinct from the assets owned by his company IPPL, or all of his personal, as distinct from real, estate.

   4.Subject to the results of the preceding grounds, the primary judge erred in failing to consider the application of a constructive or resulting trust in favour of Mrs Levingston.

2. Ground 3 only arises if ground 1 succeeds.  As already noted, ground 4 only arises if ground 1 or ground 2 succeeds.

3. We begin with ground 1.

Ground 1:  Mrs Levingston's submissions

1. Mrs Levingston's submissions were not, in all respects, easy to follow. They may be summarised as follows:

   1.Each of the primary judge's 10 reasons was equivocal and 'capable of at least one other meaning'.[15]

   2.While parts of the letter provided documents and sought advice, other parts of the letter were expressed in a way that reflected an agreement between Ian and Mrs Levingston.[16]  The question should be approached by ignoring or expunging the 'irrelevant' parts of the letter.[17]  When that is done, the letter can be seen as a letter addressed to the solicitor that includes the statements 'Personal estate left to Lola' and 'Ian to have full use of 13 Australind Road until death', reflecting an agreement between the parties to that effect.[18]

   3.Both Ian and Mrs Levingston signed the letter.[19]

   4.The parties must have agreed on the terms of the letter, otherwise Mr Myer, the solicitor, could not accept instructions from more than one party without having a conflict of interest.[20]

   5.While, being an instruction, what was said in the letter of 13 April 2015 could be withdrawn, there was no plea of withdrawal or any finding to that effect.[21]

   [15] Appellant's submissions [9].

   [16] Appellant's submissions [9(ii)].

   [17] Appeal ts 6, 14.

   [18] Appeal ts 6, 14.

   [19] Appellant's submissions [9(x)], appeal ts 14.

   [20] Appellant's submissions [2] ‑ [6], [9(x)], appeal ts 6, 14.

   [21] Appellant's submissions [11].

The merits of grounds 1

1. In our opinion, ground 1 is entirely devoid of merit.  For the reasons that follow, the primary judge's conclusion that the letter did not constitute a contract was plainly correct. 

2. It is of the essence of what the law regards as a contract that there is a voluntary assumption by the parties of a legally enforceable duty.[22]  In order that a contract be constituted by an offer and acceptance, the putative offer must reveal an intention to give rise, upon acceptance, to an obligation.[23]  In this context, as generally elsewhere in the law of contract, intention is assessed objectively; that is done by reference to what is conveyed to a reasonable person in the position of the parties by what was said and done, and having regard to the circumstances in which those statements and conduct happened.[24]  In making that assessment, the conduct of the parties subsequent to the making of the alleged agreement may be taken into account.[25]

   [22] Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 [24]; Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20; (1954) 92 CLR 424, 457.

   [23] Australian Woollen Mills (457).

   [24] Ermogenous [24]; Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 [97] ‑ [99]; Ashton v Pratt [2015] NSWCA 12; (2015) 88 NSWLR 281 [69], [224].

   [25] Vantage Systems v Priolo [110].

1. As the primary judge pointed out,[26] it is important to notice that Mrs Levingston's case is that the letter of 13 April 2005 constituted the agreement.  It was not said to evidence an agreement that had been made orally or by conduct.  Nor does Mrs Levingston allege that the parties made an inferred agreement without an identifiable offer and acceptance.[27]  Thus, the language and evident purpose of the letter is of central significance.  As the primary judge found in his first two reasons for rejecting the contract claim, the language and evident purpose of the letter militate firmly against a conclusion that it constituted an agreement between Ian and Mrs Levingston.

   [26] Primary reasons [58].

   [27] As to which see Fazio v Fazio [2012] WASCA 72 [188] ‑ [195].

2. In cases where a letter is said to constitute an agreement, the letter would usually be sent by one party to the agreement to the other party to the agreement.  That is not so in this case.  Rather, the letter is sent by the two alleged parties to the agreement to a third person - their solicitor - who is not said to be a party to the alleged agreement.  That is an unpromising context for an allegation that a letter constitutes an agreement.

3. Contrary to Mrs Levingston's submissions, the question of whether the letter constitutes an agreement between Mrs Levingston and Ian is not to be approached by ignoring or expunging those parts which Mrs Levingston asserted were irrelevant.  The letter must be read as a whole, in order to determine whether it reveals any intention on the part of Mrs Levingston and Ian to enter into binding obligations to each other in relation to the testamentary disposition of some or all of their property. 

4. The aspects of the letter on which Mrs Levingston fixes are a relatively minor proportion of the letter.  Reading the letter as a whole, it is obvious that its purpose and character is for Ian and Mrs Levingston to provide information and instructions to Mr Meyer in order that he provide advice to them.  There is no warrant in the language or in any other aspect of the letter for singling out two single lines of the letter as revealing a purpose and effect of a fundamentally different character, namely to create binding obligations between Mrs Levingston and Ian.

5. When the letter is read as a whole, it is plain that, as the primary judge found, it is objectively intended to do no more than provide information and instructions and identify questions on which advice is or will be sought from the solicitor.  The letter falls a long way short of revealing an intention on the part of Ian and Mrs Levingston to undertake obligations to each other.

6. That conclusion is apparent from a consideration of the terms of the letter, without any necessity to refer to the surrounding circumstances and subsequent events.  The conclusion is reinforced by the surrounding circumstances and subsequent events to which the primary judge referred, for the reasons his Honour gave.

7. Mrs Levingston's submissions[28] based on the solicitor's asserted conflict of interest if the parties had not agreed are misconceived.  The substance and character of the letter of 13 April 2005 is not influenced by the solicitors' subsequent decision to act on the parties' joint instructions in the letter.  In any event, parties may provide joint instructions to a solicitor without having entered into binding obligations, each to the other, in relation to the matters the subject of the instructions.

   [28] See point 4 in [22].

8. For these reasons, ground 1 fails.

Ground 2:  the estoppel claim

1. Ground 2 challenges the primary judge's finding that the elements of an equitable estoppel had not all been proven.

2. The primary judge applied the statement of Brennan J in Waltons Stores v Meagher of the necessary elements of an equitable estoppel.  There was no challenge to that approach.  Brennan J's outline was applied by Owen J in Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [29] in passages which have been approved in this court.[30]

   [29] Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2009) 39 WAR 1 [3539].

   [30] Australian Goldfields NL v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 [194]; Birla Nifty Pty Ltd v International Mining Industry Underwriters Ltd [2014] WASCA 180; (2014) 47 WAR 522 [110].

3. The appellant challenges the primary judge's findings of fact about whether Ian made the alleged representations and whether she acted to her detriment in reliance on any assumption induced by such representations.  The judge's findings were based, in part, on the adverse view he formed as to Mrs Levingston's credibility.[31]  The appellant's submissions do not grapple with the difficulty an appellant faces in overturning findings of fact, such as were made by the primary judge, based on an assessment of the credibility of witnesses.  The appellant submits that this is a case where this court can substitute its own decision for that of a trial judge, with the facts not being in issue.[32]  There is no basis for that submission.  The facts as to the assumption, the representation, and acts in reliance, were all in issue and were the subject of findings adverse to Mrs Levingston. 

   [31] Primary reasons [84] ‑ [89], [93].

   [32] Appellant's submissions [22].

4. In both oral and written submissions, Mrs Levingston relied heavily on what she had said in her witness statement.  It was submitted on her behalf that she swore that she did rely on Ian's representations.[33]  It was submitted that Ian's representations 'had to have been made' because 'she swore it'.[34]  These submissions miss the point:  the primary judge recognised the content of Mrs Levingston's evidence but came to a considered decision not to accept that evidence.

   [33] Appeal ts 18.

   [34] Appeal ts 20.

5. Where, as here, a trial judge makes findings of fact based in part at least on the judge's assessment of the credibility of witnesses, those findings will not be reversed on appeal unless it is demonstrated that the findings are flawed by reference to incontrovertible facts or uncontested testimony, or that they are glaringly improbable or contrary to compelling inferences, or that the trial judge has failed to use or has palpably misused their advantage as trial judge.[35]

   [35] Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 [43]; RCR Tomlinson vRussell [2015] WASCA 154 [58].

6. Mrs Levingston did not attempt to demonstrate, by reference to any of these matters, that the primary judge's findings of fact were wrong. 

7. In our view, the primary judge's findings of fact were well open, and were supported by cogent reasoning.  His Honour's findings cannot be said to be demonstrated to be wrong by incontrovertible facts or uncontested testimony, nor are they contrary to compelling inferences.  The appellant's challenge by ground 2 to the trial judge's findings of fact fails.

Grounds 3 and 4

1. As already explained, given that grounds 1 and 2 fail, these grounds do not arise for decision.

Conclusion

1. For the reasons we have given, the appeal must be dismissed.