Levingston v Lola May Levingston as Executrix of the Will of the Late Robert Ian Edwin Partridge [No 2] - [2016] WASC 133

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

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

CORAM: TOTTLE J

HEARD: 9-11 & 16 NOVEMBER 2015

DELIVERED : 29 APRIL 2016

FILE NO/S: CIV 1817 of 2010

BETWEEN: LOLA MAY LEVINGSTON
Plaintiff
AND
LOLA MAY LEVINGSTON AS EXECUTRIX OF THE WILL OF THE LATE ROBERT IAN EDWIN PARTRIDGE
First Defendant
RHYS CURJEL PARTRIDGE
Second Defendant

Catchwords:

Wills - Where deceased had formal will - Where deceased and plaintiff lived together as husband and wife - Where plaintiff and deceased sent a letter to their solicitor concerning their testamentary intentions - Where deceased and plaintiff each signed the letter to the solicitor - Where plaintiff claims an interest in deceased's estate or personal property - Where letter was no more than an instruction - Turns on own facts

Wills - Contract - Contractual construction - Whether letter is an agreement between the plaintiff and the deceased - Whether parties intended to make a binding and enforceable agreement - Where court is required to make objective assessment of the parties' intention - Ermogenous v Greek Orthodox Community of SA Inc - Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd - Where the letter was no more than an instruction it does not give rise to an agreement

Equity - Estoppel - Where plaintiff claims to have suffered detriment by relying on promise made by the deceased - Whether the deceased by words or conduct induced the plaintiff to rely on the assumption or expectation - Reliance by plaintiff on words or conduct of deceased not established

Equity - Trusts - Walton Stores (Interstate) Ltd v Maher - Whether letter to solicitor created an implied or a constructive trust over deceased's estate or personal property - Where letter to solicitor signed by both deceased and plaintiff - Where letter was no more than instruction it does not give rise to trust relationship

Legislation:

Nil

Result:

Action dismissed

Category: B

Representation:

Counsel:

Plaintiff:     Mr M J McPhee
First Defendant              :     No appearance
Second Defendant         :     Dr P R MacMillan

Solicitors:

Plaintiff:     M J McPhee Barrister & Solicitors
First Defendant              :     No appearance
Second Defendant         :     Slater & Gordon Lawyers

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

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

Introduction

Robert Ian Edwin Partridge died on 6 October 2008. By his will made on 29 December 1995 he appointed the plaintiff, Mrs Lola Levingston, executrix and left his entire estate to his only son, Mr Rhys Curjel Partridge, the second defendant. The late Mr Partridge and Mrs Levingston lived together as husband and wife for 12 years prior to his death. She claims that he agreed to leave her his entire estate, alternatively his personal estate, and she has commenced this action to enforce her rights.
In these reasons I will refer to the late Mr Partridge, as 'Ian', the name used by him, and to the second defendant as 'Rhys'. In doing so, I intend no disrespect.
The primary basis of Mrs Levingston's claim is a letter dated 13 April 2005, signed by her and Ian and sent to their solicitor, Mr Jonathan Meyer. It is this letter that is said to constitute the agreement by which Ian agreed to leave his estate, or his personal estate, to Mrs Levingston. It read as follows:
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.
Mrs Levingston contends that the words 'personal estate' mean all of Ian's estate. In the alternative, she contends that the words mean all of his estate other than his real property.
Mrs Levingston claims, in the alternative, that if the letter dated 13 April 2005 does not constitute an enforceable agreement, Rhys is estopped from denying the existence of such an agreement because, in his lifetime, Ian conducted himself in such a way as to induce her to assume that he would leave her his entire estate (apart a sum of about $600,000 to be left to Rhys). In return, she would allow Ian to live in her home at 13 Australind Road, Australind rent free for the remainder of his life, and she would make a will including a provision to that effect. Mrs Levingston says that Ian knew that she acted upon the assumption to her detriment.
Mrs Levingston advances her claim on two other bases, both relied upon 'in the further alternative'; namely, that if there was no agreement, as she claims there was, the letter of 13 April 2005 gave rise to either a resulting trust or a constructive trust over Ian's estate, or his personal property, in her favour.

Structure of these reasons

In these reasons I will:
1.identify the issues;
2.outline the factual background against which the issues must be determined;
3.consider whether there was an agreement as Mrs Levingston contends;
4.consider whether Rhys is estopped from denying Ian's estate should be distributed as if there was an agreement; and
5.consider whether Ian's estate is subject to the trusts alleged by Mrs Levingston.

The issues

In summary the issues are 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 did not constitute an agreement, is Rhys estopped from denying the existence of an agreement in the terms claimed by Mrs Levingston?
5.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 Mrs Levingston's favour?

The factual background

Before setting out the factual background I need to make some short observations about the ambit of the evidence and to explain why it has not been necessary for me to make factual findings on the wide range of matters canvassed in the evidence.
In addition to the evidence of Mrs Levingston and Rhys, I received evidence from 20 witnesses. Much of the evidence adduced on Mrs Levingston's behalf was directed to establishing, on the one hand, that she had a loving spousal relationship with Ian and that Ian had a close relationship with her son and his family; and, on the other hand, that Ian had a difficult relationship with Rhys. The evidence canvassed various aspects of the history of both relationships.
Rhys responded by adducing evidence which emphasised the positive aspects of his relationship with Ian, and drew attention to matters from which it might be inferred that Ian's relationship with Mrs Levingston was not as healthy as she portrayed it to be.
It is understandable that the parties want their respective cases to be viewed in the context of their perception of the family relationships. Ultimately, however, much of that evidence was of no utility in resolving the narrow factual issues in this case. For that reason, my findings in relation to the background are limited to those aspects of the history that inform the resolution of the issues. I set out those findings in the paragraphs which follow.
Ian was 76 years old when he died. His family were farmers in the south‑west of Western Australia. Ian and his brother, David Partridge, were in a farming partnership together, under the name of W S Partridge & Sons, from 1949 until 1983.
In December 1966 Ian married Pamela Curjel. In October 1967 their only child, Rhys, was born. Ian, Pamela and Rhys lived in Western Australia.
In 1969 Ian incorporated Ian Partridge Pty Ltd (IPPL) for the purpose of holding his interest in land which had been gifted to David and him by their parents.
The share capital of IPPL was divided into 'A' class shares, 'B' class shares and 'C' class shares. On incorporation, Ian was issued with one 'A' class share which, by cl 4A of the articles of association of IPPL, conferred on him during his lifetime all of the rights and privileges of a governing director. Such rights and privileges ceased upon his death. One 'B' class share was issued to Pamela. This share conferred upon Pamela all of the rights and privileges of a governing director in the event of Ian's death. Once again, those rights and privileges ceased upon Pamela's death. 10,002 'C' class ordinary shares were issued to Rhys.
Pamela was English and in 1977 she and Rhys went to live in England. Ian, Pamela and Rhys did not live together as a family after that. Pamela and Ian divorced in 1994.
In 1983 Ian retired from the W S Partridge & Sons partnership on terms that left IPPL's interest in the partnership land available to the partnership to be farmed pursuant to lease agreements. Subsequently, David's son, Michael Partridge, purchased various parcels of IPPL's land.
Ian was a talented and skilful mechanical engineer. His reputation was such that he had the nickname 'Prof'. After retiring from the W S Partridge & Sons farming partnership Ian became involved in a business repairing and hiring out amusement machines and the like. This business was known as Royston Amusements. The business was carried on through a unit trust known as the Royston Unit Trust, which was controlled by Ian. Royston stopped trading in 1995.
In the 1980s and early 1990s a friendship developed between Mrs Levingston's son, John Levingston, and Ian. They shared an interest in mechanical engineering. As a result of his friendship with John, Ian became acquainted with Mrs Levingston and an increasingly close friendship developed between them. On 29 December 1995 Ian made a new will and appointed Mrs Levingston executrix. By this will Ian left the entirety of his estate to Rhys. (Probate of this will was granted to Mrs Levingston.)
In November 1994 Rhys returned to live in Australia. He moved into Ian's home at 56 Leisure Drive, Australind. The house was on a bush block of about 13 acres with development potential in the centre of Australind. It was valuable land.
Ian spent increasing amounts of time with Mrs Levingston and, in about August 1996, they began living together in Mrs Levingston's house at 13 Australind Road. From that time onwards, Ian and Mrs Levingston lived together as husband and wife.
Ian regarded IPPL and its assets as belonging to him. In late 1997 Ian sought advice from accountants, RSM Bird Cameron, in relation to the affairs of IPPL. He wanted advice on how he could restrict Rhys's involvement in the affairs of IPPL.
In February 1998 Ian appointed Mrs Levingston as a director of IPPL.
In December 1998 IPPL purchased 7A Unwin Crescent, Salter Point, Perth. This property was located opposite the home of Mrs Levingston's son and daughter-in-law, John and Yvonne. Ian had a close relationship with John and Yvonne. When John and Yvonne had children, he had a loving and grandfatherly relationship with them. After the purchase, Ian and Mrs Levingston divided their time between her house in Australind and 7A Unwin Crescent.
Although Ian and Mrs Levingston did not operate a joint bank account, they shared expenses. Mrs Levingston paid all of the outgoings on the 13 Australind Road. Ian paid all the outgoings on 7A Unwin Crescent. Living expenses were shared and Ian paid travel and entertainment costs. They each had access to and used the other's credit cards.
Mrs Levingston was a pharmacist and she owned a pharmacy in Australind known as the Australind Village Pharmacy.
Mrs Levingston was seven years younger than Ian. She said, and I find, Ian encouraged her to sell the pharmacy so that they could spend more time together. She sold her pharmacy in 1999 for $1.4 million. Ian proposed that they invest their funds together to generate an income for their retirement and, in 2001, they invested in the purchase of a shopping centre in Kalamunda. The vehicle for the investment was a company, Levgiles Developments Pty Ltd. Mrs Levingston and her family members each held one-third of the issued shares in Levgiles. Levgiles purchased the shopping centre. The property had potential for redevelopment and adjoined land owned by companies associated with Mrs Levingston's mother. The purchase price was $895,000 but, with stamp duty and other expenses, the amount required to settle the acquisition was $936,000. Of this sum, Mrs Levingston contributed $500,000 by way of a loan to Levgiles, $200,000 was contributed by way of a loan from IPPL and $100,000 was contributed by way of a loan from the Royston Unit Trust. The balance was provided by Mrs Levingston's mother.
These loans were made on the basis of agreements that they would bear interest at the rate of 6.5% per annum. Levgiles paid monthly interest payments in respect of the loan monies. The arrangements between Levgiles, IPPL and the Royston Unit Trust were entirely oral. Mrs Levingston's evidence was, and I find, that she and Ian trusted each other completely. The loans were unsecured.
In August 2001 Pamela died. Rhys inherited approximately £662,000 from his mother.
On 3 March 2005 Mrs Levingston and Ian met Mr Meyer. Mrs Levingston had been a client of Mr Meyer for some time. Mr Meyer did not know Ian. In that meeting Mr Meyer discussed with Mrs Levingston and Ian their wills and some other business matters.
Ian told Mr Meyer about IPPL and that he wanted to give control of the company to Mrs Levingston so that she would have absolute control over 7A Unwin Crescent.
Ian also told Mr Meyer of the loans to Levgiles and that he wanted those loans released on his death.
Ian told Mr Meyer that he would like him to come up with a concept as to how control of IPPL could pass to Mrs Levingston on his death and to deal generally with his other assets. Mr Meyer said that, with respect to those, Ian wanted Mrs Levingston to have his personal estate.
Ian said that he would obtain a copy of his existing will and copies of the articles of association of IPPL and send them to Mr Meyer.
On 31 March 2005 Ian caused IPPL to loan $263,000 to John's company, Sarum Pty Ltd. Sarum was the trustee of a trust for Mrs Levingston's grandchildren. It was also the operating company for John's business.
Both John and Yvonne gave evidence, which I accept, to the effect that Ian had spoken to them separately about making a sizable contribution to the grandchildren's trust to assist with the costs of their education. John's evidence was that Ian had said to him that the money which he had advanced to Sarum was to eventually go into the children's trust. Ian had said to him that he did not expect the money to be repaid but that he did need to be paid interest. The loan was unsecured and undocumented.
On 13 April 2005 the letter set out in the introduction to these reasons was prepared. Mrs Levingston said that she had typed the letter and that those parts which related to Ian's affairs were dictated by him and those parts which related to her affairs were composed by her. They both signed the letter and sent it to Mr Meyer.
Mr Meyer met Ian and Mrs Levingston again on 13 September 2005 to discuss passing control of IPPL to Mrs Levingston. Mr Meyer advised that one way of giving Mrs Levingston control of the assets was to liquidate IPPL, but he said that all of the shareholders would need to receive the assets on a winding up. Mr Meyer advised that if IPPL was going to continue as a going concern, Rhys's shares would need to be acquired, and that there might be capital gains tax implications if that occurred. At the meeting on 13 September 2005 Ian confirmed that he wanted to ensure that Mrs Levingston obtained control and ownership of IPPL on his death, and that she should receive his personal estate - that is, the shares in IPPL, its assets, his car, his money and the debts due by Mrs Levingston and Levgiles to IPPL. Mr Meyer understood that Ian wanted Mrs Levingston to inherit everything other than the Leisure Drive property. When asked about the origin of the phrase 'personal property', Mr Meyer said that he thought the phrase was his interpretation of Ian's suggestions, but could not be sure, adding Ian was a 'fairly astute man' (ts 131.1).
Mr Meyer understood that Ian and Mrs Levingston were going to seek accounting advice before coming back to him with further instructions on the transfer of control and ownership of IPPL.
By September 2006 Mr Meyer had heard nothing further from Mrs Levingston and Ian in relation to the question of their wills or the winding up of IPPL. Accordingly, on 19 September 2006, Mr Meyer wrote to Mrs Levingston in the following terms:
Dear Lola
GENERAL MATTERS
Quite some time ago I attended you and Ian to provide some advice concerning your Will and that of Ian's Will.
Matters transpired with the death of your brother and nothing, in fact, took place. The issue was to ensure you would have the right to use certain property in Mt Pleasant belonging to Ian and Ian would continue to live in Australind Road until his death.
Could you please contact me and we will make a time to discuss these matters as they need to be finalised. (my emphasis)
Mr Meyer had a further meeting with Ian and Mrs Levingston on 19 December 2006 at which they discussed the issue of giving Mrs Levingston control and ownership of IPPL. Mr Meyer understood this issue had not been resolved due to tax problems in winding up the company. Nothing was resolved in relation to IPPL. There was also discussion about IPPL granting Mrs Levingston a life interest in 7A Unwin Crescent. Ian told Mr Meyer that he wanted the letter of 13 April 2005 to be treated as a codicil to his will and confirmed that he wanted Mrs Levingston to receive all his personal estate on his death. Mr Meyer made a brief handwritten note of the discussion which read as follows:
Wants Lola to have a 'B' share as per memo.
Advised this creates a TAX issue as the Company owns land and he is giving control to Lola.
Would need to have the other SH [shareholder] ie Son - Not likely
He wants a life interest to Lola but needs to be granted by company as property in company's name
Stamp duty on value of Lola life interest - consider this re costs
Does son as Shareholder need to consent?
All my (Ian) Personal Estate to Lola.
Ian will get info on Properties.
Mr Meyer understood that once the issue of transfer of control and ownership of IPPL was resolved, Ian and Mrs Levingston would instruct him to prepare new wills. However, neither Ian nor Mrs Levingston instructed Mr Meyer to prepare new wills.
In 2007 Ian sought advice from RSM Bird Cameron about winding up the affairs of IPPL. That firm provided advice by letter dated 7 February 2007. RSM Bird Cameron estimated the costs of the liquidation were approximately $18,000. RSM Bird Cameron attached a distribution schedule to their letter. This schedule recorded that, following a winding up of IPPL, Rhys would receive over $1,300,000 and that each of Mrs Levingston and Ian would receive $130.
Ian told Rhys that he was considering winding up IPPL and that the shares (Rhys's shares) were worth over $1 million (ts 226.5).

At some stage, however, Ian formed the view that the value of Rhys's shares in IPPL was $600,000.
On 23 May 2007 Ian made Mrs Levingston an alternate governing director of IPPL and transferred a 'C' class share in IPPL to her. Ian (wrongly) regarded the appointment of Mrs Levingston as an alternate governing director of IPPL as a solution to the problem of how to enable Mrs Levingston to control IPPL on his death. Ian said to Mrs Levingston, 'I have solved the problem as to how you can control the company after my death. I have made you an alternate governing director'.
Rhys had lived at 56 Leisure Drive since his return to Australia in 1994. From early 2001 until 2008 Vicki Scott and her son, Riley, lived with Rhys. Although the close personal relationship between Vicki and Rhys had now ended, they remained friends. When they lived together at 56 Leisure Drive, Vicki and Rhys, with Ian's consent and encouragement, undertook a number of improvements to the house and grounds. Rhys's evidence, which I accept, was to the effect that Ian had told him on a number of occasions that he would not sell 56 Leisure Drive. Rhys's evidence, again which I accept, was to the effect that this assurance was important to him because without it he would not have undertaken the improvements on the property.
56 Leisure Drive excited the interest of property developers. Rhys said that he was frequently approached by real estate agents and others expressing interest in the land. It was his practice to give Ian's contact details to those who spoke to him about the land. At some stage, Ian became fed up with the number of approaches he received and Rhys stopped giving out Ian's details and instead passed on the agent's details to Ian.
In 2008 it appears that Ian had a change of mind as to whether he wished to sell 56 Leisure Drive. He had two meetings with a Mr Noel Jones of Elders Real Estate. Mr Jones was representing National Lifestyle Villages, who had an interest in buying 56 Leisure Drive. In the course of these meetings, Ian asked for $6 million for 56 Leisure Drive. No offer was, however, made for the property. $6 million appears to have been substantially more than the property was worth.
I have noted that Ian did not give Mr Meyer instructions to prepare a new will, though Ian had a further discussion with Mr Meyer. In this discussion, Ian raised the possibility of giving Mrs Levingston a share in 56 Leisure Drive. In a letter to Mrs Levingston dated 5 February 2009, a copy of which Mrs Levingston provided to Rhys, Mr Meyer gave the following account of the further discussion:
Subsequently, Ian spoke with me again concerning the arrangements relating to the company and advised he was making arrangements to have the company control vested in yourself.
He also spoke to me subsequently about dealing with his real property in Australind which had considerable value and instructed me not to prepare the Will as he wished to consider what steps he would take concerning that property. He was not specific in what he wanted but explained to me he was considering giving you a share. He made it clear his position re the company and personal estate had not changed.
In the course of re-examination (ts 138.6), Mr Meyer made the observation that Ian was not 'a speedy person' and 'seemed very slow in making decisions'. I infer from this observation, and from the fact that some three years has elapsed between the first meeting between Ian and Mrs Levingston attended with Mr Meyer to discuss their wills and Ian's apparent change of heart in 2008 about the sale of 56 Leisure Drive, that Ian found it difficult to make the decisions he needed to make regarding his estate planning.
In July 2008, Ian discussed the possibility of selling 56 Leisure Drive with Rhys. There was conflicting evidence about how this discussion arose, what was said, and how it ended. It is unnecessary to resolve the conflict. The discussion was a heated one.
Ian passed away on the night of 6/7 October 2008.
Ian's funeral service was held on 13 October 2008. Eight days later, on 21 October 2008, Mrs Levingston purported to hold a meeting of the directors of IPPL, at which her son John was appointed a director. At the same meeting it was resolved to approve the transfer of Ian's 'A' class share in IPPL to her.
On 10 January 2009 Mrs Levingston and Rhys met at Mrs Levingston's house. At the meeting Mrs Levingston handed a letter to Rhys. The letter was incorrectly dated 8 January 2008. The letter read as follows:
As you are aware your father was in the process of negotiating the sale of Lot 56 Leisure Drive Australind when he died.
His intention was to sell this land and pay out the shares he had put in your name in the Company Ian Partridge Pty Ltd as he wanted to simplify his life and dissolve the Company and be free of any complications.
In 2005 he had previously instructed his Solicitor
1.All personal property was to be left to me.
2.Total control of the company. (This was intended so that if the company had not been wound up by his death I would be the managing director.)
This intent supersedes the old will of 1995 a copy of which you have.
The will of 1995 and the instructions of 2005 does not reflect the situation at the time of his death.
The Company Ian Partridge Pty Ltd is a separate legal entity and does not enter Ian's personal estate, only the 'A' class share. Under the will this share passes to me as personal property.
As an executor of the will I am legally obliged to comply with the intent of the law and hold the 'A' class share which entitles me to vote, I also hold one share and directorship of the company which entitles me to a vote, you as a beneficiary share holder also has one vote.
As a wife of 15 years I would be entitled to 50% of the total estate or more and as the land 56 Leisure Drive is not according to law part of Ian's personal property this is the only area which needs clarification.
To simply matters I propose.
All shares you hold in Ian Partridge Pty Ltd to be returned to the Company so you will have no further interest. Approximate value of your shares are
That the property 56 Leisure drive be given to you including all the tools and personal property which is on this land to do as you wish, except on sale of the property I retain the right to 50% of the sale price.
In April 2009 Mrs Levingston commenced proceedings to prove the 13 April 2005 letter addressed to Mr Jonathan Meyer and signed by her and Ian was a codicil to Ian's 1995 will. That application was withdrawn.

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

Before turning to the relevant legal principles it is important to emphasise that Mrs Levingston's case is that the letter of 13 April 2005 itself constituted the agreement. Mrs Levingston does not contend that the letter evidenced an agreement made in some other way, for example, by word of mouth or by conduct.
The issue of whether parties intend to make a binding and enforceable agreement is distinct from the issue of what the terms of any such agreement might be, though they may often be closely related. Each issue requires the court to make an objective assessment of the parties' intentions. The court is not concerned with uncommunicated subjective motives or intentions: Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 [25] (Gaudron, McHugh, Hayne & Callinan JJ), and Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 [93] - [113] (Buss JA, with whose reasons McLure P & Newnes JA agreed).
The essential question is did Ian and Mrs Levingston intend the letter of 13 April 2005 to constitute a binding contract. To resolve this question the court must consider the terms of the letter and make an objective assessment of the state of affairs that existed between Ian and Mrs Levingston to determine whether there was an intention to create contractual relations. In this context, 'intention' describes what it is that would be objectively conveyed by what was said or done having regard to the circumstances in which those statements and actions happened.
For the purposes of determining whether a binding agreement has been reached by the parties, the court may take into account the dealings and communications between the parties after, as well as before, the formation of the alleged agreement: Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [110].
What then was the state of affairs between Ian and Mrs Levingston in April 2005?
My assessment is as follows. In April 2005 Mrs Levingston and Ian had been living together in a loving and supportive relationship for nearly nine years. Each of them had been involved in business. They were astute people. They trusted each other completely. They did not consider it necessary to document the commercial arrangements between their various entities. I take this as a measure of the trust that existed between them.
Ian and Mrs Levingston divided their time between 13 Australind Road (maintained by her) and 7A Unwin Crescent (maintained by him). They shared living expenses. Mrs Levingston had substantial assets in her own right. She was not dependent on Ian for financial support. Whether she received anything by way of an inheritance from Ian was not important to her (ts 116). Ian was concerned to ensure that Mrs Levingston would use 7A Unwin Crescent after his death and that Levgiles and Sarum should be released from the loans made to them by his entities after his death but he required advice as to how these objectives could be achieved. Equally, Mrs Levingston was concerned to ensure that Ian should be permitted to live in 13 Australind Road after her death. She required advice in relation to aspects of her estate planning.
Against that background, does the letter of 13 April 2005 constitute a binding and enforceable agreement? In my view, it does not. My reasons are as follows.
First, the language employed in the letter does not suggest the existence of an agreement. Ian and Mrs Levingston were lay people and it would be unrealistic to expect them to record an agreement using the words that lawyers might use. That said, the agreement for which Mrs Levingston contends is not complicated and is capable of being expressed simply. The absence of any words reflecting the existence of a consensus is a significant factor in my reasoning that Ian and Mrs Levingston did not have an intention to create contractual relations.
Secondly, the ostensible purpose of the letter of 13 April 2005 is not to make an agreement but to provide documents to Mr Meyer and to set out the issues on which his advice was required.
Thirdly, Ian and Mrs Levingston had not recorded any of their financial dealings with each other in documents. They trusted each other completely and, as Mrs Levingston said, whether she received an inheritance from Ian was not important to her. Those factors make it unlikely that Ian and Mrs Levingston intended to create a binding agreement between them in relation to their respective testamentary intentions. In an effort to overcome the apparent inconsistent approach to the perceived requirement for written agreements, in cross-examination, Mrs Levingston tried to distinguish 'normal business arrangements' between herself and Ian which did not need to be documented with the subject matter of the letter which was '… talking about our life together and what Ian wanted' (ts 111.6). I found this explanation unconvincing.
Fourthly, it is clear from the letter that Ian required advice in relation to a transfer of control of IPPL to Mrs Levingston on his death. The provision of that advice might have altered his approach to estate planning. In those circumstances, it seems unlikely that Ian and Mrs Levingston intended to create a binding contract before Mr Meyer provided legal advice.
Fifthly, no suggestion was ever made to Mr Meyer that Ian and Mrs Levingston had reached a binding agreement in respect of the disposition of their estates. This is plain from the content of Mr Meyer's letter to Mrs Levingston of 19 September 2006 in which he had set out his understanding of what Ian and she were trying to achieve, namely, that she should have the use of 7A Unwin Crescent after his death, and that he should have the use of 13 Australind Road after her death. It is significant that the letter does not record or refer to the existence of an agreement that Ian would leave his entire estate to Mrs Levingston.
Sixthly, it was unlikely that Ian would have made an agreement in relation to the disposition of his estate which did not mention his most valuable asset, 56 Leisure Drive, or Rhys. At the time, Rhys was the sole beneficiary of his estate and he was living in 56 Leisure Drive. These are matters one would expect an astute man such as Ian to address in any document concerning his testamentary intentions.
Seventhly, the fact that neither Ian nor Mrs Levingston made wills in accordance with the alleged agreement with Mrs Levingston is conduct which reflects adversely on the claim that the letter of 13 April 2005 was a binding agreement.
Eighthly, at the meeting between Ian, Mrs Levingston and Mr Meyer on 19 December 2006, there was a discussion of granting Mrs Levingston a life interest in 7A Unwin Crescent and no discussion of the agreement which Mrs Levingston contends was constituted by the 13 April 2005 letter. If the letter had constituted an agreement that Ian would leave his estate to Mrs Levingston, I would have expected some mention of the agreement to have been made at the meeting.
Ninthly, in the letter that Mrs Levingston gave to Rhys in January 2009, Mrs Levingston did not suggest that she and Ian had reached an agreement in 2005 of the nature she now relies upon.
Tenthly, I do not think the existence of an intention to create a contract can be inferred from the fact both Ian and Mrs Levingston signed the letter. I infer they both signed the letter to assure Mr Meyer the contents of the letter reflected their respective instructions to him.
In making the finding that the 13 April 2005 letter did not constitute an agreement, I have not relied upon any presumption about intentions to create legal relations. I have drawn inferences about the intentions of Ian and Mrs Levingston from the letter itself and the state of affairs that existed between them.
In my view, the letter of 13 April 2005 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.
As I have found that there was no agreement as claimed by Mrs Levingston it is not necessary for me to consider the question of what was meant by the phrase 'personal property'.

Is Rhys estopped from denying the existence of an agreement in the terms claimed by Mrs Levingston?

An overview of the estoppel case

In summary, Mrs Levingston's case was that she acted to her detriment on the basis of an assumption, or expectation, that Ian would leave his entire estate to her, save for the sum of approximately $600,000 to be left to Rhys. In return for which she would allow Ian to live rent-free in her home during his life and would make a will which included a provision to that effect.
The detriment identified by Mrs Levingston was three-fold: first, she allowed Ian to live in her house without paying rent for 12 years; secondly, Levgiles incurred debts to IPPL and the Royston Trust to assist with the purchase of the Kalamunda shopping centre; and thirdly, she says that she retired from, and sold, her pharmacy business in order to enter into the transactions with Ian's companies. She alleged that but for the inducement she would have continued to work in the business. She also alleges that she could have sold the business on better terms if she had not retired when asked to do so by Ian.
Mrs Levingston says she was induced to act to her detriment by Ian's statements that it was his settled intention to leave his entire estate, save for $600,000 to be gifted to Rhys, to Mrs Levingston in return for a life interest in her home, and that she should retire and sell her pharmacy and invest the proceeds of sale with him. Mrs Levingston says the letter of 13 April 2005 is something which induced the expectation.
Mrs Levingston claims that Ian knew that she was acting to her detriment. Finally, Mrs Levingston alleges that because Ian failed to fulfil the expectation or assumption, for her benefit, by failing to make a will in the terms which she says were agreed, he is unable to withdraw from the expected legal relationship with her.

Relevant legal principles

It was common ground that the matters to be proved to establish an equitable estoppel were those set out in the judgment of Brennan J (as his Honour then was) in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, namely:
(1)the plaintiff assumed that a particular legal relationship existed, or would exist, between the defendant and himself and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship;
(2)the defendant induced the plaintiff to adopt that assumption or expectation;
(3)the plaintiff acted or abstained from acting in reliance on the assumption or expectation;
(4)the defendant knew or intended him to do so;
(5)the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and
(6)the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.

Mrs Levingston's evidence

Where it is alleged that a person promised to leave his or her estate in a particular way, evidence given about that promise after the person's death must be scrutinised very carefully. I have some reservations about the reliability of Mrs Levingston's evidence.
It was apparent from Mrs Levingston's evidence that she possessed a deeply held conviction that her understanding of Ian's testamentary wishes should be honoured. In my assessment, Mrs Levingston had a tendency, perhaps subconsciously, to rationalise what had occurred in order to make it reflect her understanding of Ian wishes and to conform with what was required to succeed in her action. Her explanation for the making of the agreement she says was constituted by the letter of 13 April 2005, when written agreements on other matters were not required, is an example of this tendency to rationalise.
Other examples were highlighted by inconsistencies between Mrs Levingston's pleaded case and her evidence-in-chief on the one hand and her evidence in cross-examination on the other.
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).

Independently of the matters to which I have referred, the fact that Mrs Levingston did not mention either the alleged agreement or the matters that she says give rise to the estoppel in the letter she handed to Rhys when they met in January 2009 gives me cause for concern about the reliability of her evidence.

What did Ian communicate to Mrs Levingston about his testamentary intentions?

In her evidence-in-chief Mrs Levingston said that before she sold her pharmacy and made the investment in the acquisition of the shopping centre Ian said to her, 'You have no need to worry about investing with me, it is all coming to you in the end anyway' and 'Everything will come to you, including the shares in the company and real estate, including the land at Leisure Drive, except the value of Rhys's shares in Ian Partridge Pty Ltd.' As already noted, she says that she relied upon those statements.
In cross-examination Mrs Levingston was asked about whether Ian had said that she would receive everything other than the value of Rhys's shares in IPPL or the shares themselves. Her answer was that, 'it was always that with the proviso that the shares ‑ that Rhys would get the shares in ‑ Partridge Pty Ltd so that was correct as such' (ts 74.7) and she said it was a constant theme that Rhys's shares would be carved out of anything she might receive (ts 75.6).
The effect of Mr Meyer's evidence was that at the three meetings he had with Mrs Levingston and Ian (the meetings held on 3 March 2005, 13 September 2005 and 19 December 2006) there was nothing said by Ian to the effect that he intended to leave his most valuable asset 56 Leisure Drive to Mrs Levingston. The focus of the discussions was on trying to achieve a winding up of IPPL or find some other mechanism by which Mrs Levingston would control IPPL on Ian's death so as to ensure that she could continue to have the use of 7A Unwin Crescent. There was no evidence that Mrs Levingston raised any concerns in these meetings to the effect that what Ian was saying to Mr Meyer about his testamentary intentions differed from what he had said to her.
I have expressed some reservations about Mrs Levingston's evidence and, taking those reservations, together with Mr Meyer's evidence on what Ian said about his testamentary intentions in Mrs Levingston's presence, I am not satisfied that Ian made statements to the effect that she would receive all his estate (including 56 Leisure Drive), save for approximately $600,000, which form the foundation of the estoppel plea.
In reaching this conclusion, I have given consideration to the evidence given by two of the witnesses called by Mrs Levingston, Ms Karen Mills and Ms Helen Evers, about statements made by Ian about his testamentary intentions which were relied upon to corroborate some aspects of Mrs Levingston's case.
Ms Mills gave evidence that she had a discussion with Ian in 2004 in his study at 13 Australind Road. She said he had his will in front of him on the desk and she saw him drawing marks on the document. She said that Ian said that he would be 'damned if [Rhys] gets the money and wastes it like he wasted his mother's money', that he was disappointed with Rhys, and that he had to organise the business affairs of his company. I do not consider these statements provide any significant assistance to Mrs Levingston's case. Accepted at face value, the statements do not suggest a settled testamentary intention on Ian's part to leave his entire estate to Mrs Levingston.
Ms Evers gave evidence about statements made by Ian in September 2008 about his intentions. Objection was taken to some aspects of Ms Evers's evidence about these statements. It is not necessary for me to determine the objection or set out the evidence in any detail, because what was said by Ian in September 2008 is no assistance in determining what he said to Mrs Levingston between seven and ten years earlier when she placed reliance on the statements said to have been made to her.

Did Mrs Levingston rely on the assumption to her detriment?

I have referred to Mrs Levingston's evidence given in cross-examination which undermined her claim that she acted in reliance on the assumption she says she was induced to make by Ian's words and conduct. Having regard to that evidence, I am not satisfied that Mrs Levingston relied upon anything said or done by Ian in relation to his testamentary intentions in making decisions about any of the following: allowing Ian to live in her home rent free; retiring from, and selling, her pharmacy business; or, investing with Ian, through Levgiles, in the acquisition of the Kalamunda shopping centre, including permitting Levgiles to borrow funds from Ian and his entities.

Conclusions on the estoppel claim

I have found that Mrs Levingston has not made out two of the critical elements of her estoppel claim: she has failed to prove that Ian made the representations about his testamentary intentions upon which she relies, and she has failed to prove that she acted to her detriment in reliance on any such assumption. In the light of those conclusions, it is unnecessary to consider the other elements of her claim.

The resulting trust/constructive trust claims

A consequence of Mrs Levingston failing on her contractual and estoppel claims is that these claims fail as well. As I have found, the letter of 13 April 2005 was nothing more than an instruction to Mr Meyer. It did not give rise to any trust relationship.

Mrs Levingston's action must be dismissed

In the light of my findings, Mrs Levingston's action must be dismissed. I will hear the parties in relation to costs.