Lorenz v Riffat
[2017] VCC 110
•22 February 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-15-04275
| YASMIN MELEK LORENZ | Plaintiff |
| v | |
| LEYLA SENGUL RIFFAT (also known as LEYLA SCHOCKMAN) | Defendant |
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JUDGE: | HER HONOUR JUDGE MARKS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16, 17, 18, 21 November 2016 | |
DATE OF JUDGMENT: | 22 February 2017 | |
CASE MAY BE CITED AS: | Lorenz v Riffat | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 110 | |
REASONS FOR JUDGMENT
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Catchwords: Daughter seeks transfer of property by mother to her, relying on Trust Deed – Mother alleges life interest in property – Interpretation of Trust Deed – Whether creation of life interest by way of estoppel – Whether detriment suffered.
Legislation Cited: Instruments Act 1958 (Vic); Administration and Probate Act 1958 (Vic); Age of Majority Act 1977 (Vic).
Cases Cited:Schreuders v Grandiflora Nominees Pty Ltd [2016] VSCA 93; Legione v Hateley (1983) 152 CLR 406; Flinn v Flinn [1999] VSCA 109; Gillett v Holt [1998] 3 All ER 917; Donis v Donis [2007] VSCA 89.
Judgment: Judgment for plaintiff.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr N Jones | Portfolio Law |
| For the Defendant | Self-represented |
HER HONOUR:
1For over 20 years Leyla Riffat has lived at a property at 28 Flint Crescent, Delahey, which her father initially purchased for investment purposes in 1988. Her daughter Yasmin Lorenz was born there in 1995. Leyla brought up Yasmin and Yasmin’s two older brothers there, although Yasmin moved out to live with her grandparents when she was 13. In 2005, when Yasmin was 10, Leyla’s father Behich Riffat and brother Altan Riffat (who were the registered proprietors) and Leyla executed a Deed in relation to the property. It was to the effect that the property was being given to Yasmin, and that title was to be transferred to Leyla to be held on trust for Yasmin until Yasmin reached the age of majority. Three months later, Leyla became the registered proprietor. A caveat was put on title to protect Yasmin’s interest.
2Yasmin is now over 18 and wants the Delahey property transferred to her. Relying on the Deed, she asked Leyla to transfer the property to her. Leyla refused. Leyla claims that she was promised a life interest in the property by her father, Behich, by representations made in 1994 and 2005, prior to her signing the Deed. She says that she relied on the representations to her detriment in that she did not apply for Housing Commission accommodation, continued living at the property, and she signed the Deed. Leyla claims that Yasmin is estopped from insisting on the terms of the Deed being carried out without regard to Leyla’s life interest and says that any interest that Yasmin has in the property is subject to Leyla’s life interest.
3At the heart of this case is whether Leyla needs to transfer the property to Yasmin, and, if so, whether it should be transferred on the basis that Leyla has a life interest in the property.
Summary of issues
4The parties agreed that the following are the relevant issues:
(a)Whether Yasmin is entitled to enforce the trust created in the Deed by requiring Leyla to transfer the property to her, having satisfied the requirements of the Deed or trust by having reached the age of majority.
(b)Whether Leyla acquired a life interest in the property by way of an estoppel.
Summary of findings
5 The Deed provided for the property to be transferred into Leyla’s name to be held on trust for Yasmin until Yasmin reached the age of majority, and then transferred by Leyla to Yasmin. Yasmin has now reached the age of majority.
6 Leyla has not acquired a life interest in the property by way of an estoppel.
7 I will order that the property be transferred to Yasmin.
8Leyla’s case depends on the Court being satisfied that representations were made to her before the Deed was executed on which she relied to her detriment, and which had the effect of giving her a life interest in the property. The Deed does not mention Leyla having any interest in the property other than as trustee for Yasmin until Yasmin reaches the age of majority. Leyla and her father, Behich, (and brother, Altan) executed the Deed. I am not satisfied on the evidence that any representation was made to Leyla which had the effect that Leyla was granted a life interest in the property. Even if such a representation were made, there is no evidence Leyla acted to her detriment in relying on it.
The pleadings
9The claim was instituted by Writ by Yasmin on 4 September 2015. Yasmin seeks an order for the transfer of the property, or alternatively an order that the trust be wound up and the property be transferred to her. She also seeks damages being rent from 16 May 2013 (the date when Yasmin achieved the age of majority) or for loss of use of the property. (In final submissions, Counsel for Yasmin limited the damages claim to seeking rent from Leyla from ‘a reasonable time’ after a letter demanding Leyla transfer the property to Yasmin was sent in December 2014).
10By an amended defence and counterclaim dated 13 November 2015 (“the defence”), Leyla admits the validity of the Deed but says that Yasmin’s interest is subject to Leyla’s life interest.
11Leyla seeks orders that give effect to her life interest, putting the claim in a variety of ways.
12In paragraph 4A of the defence, Leyla alleges that the circumstances in which she executed the Deed included those set out below. (The statements she relies on that were allegedly made by her father are in italics).
(a)In 1994 Leyla informed her parents that she was experiencing financial difficulties and that she intended to make an application to the Housing Commission of Victoria for public housing.
(b)At that time, her father, Behich, told her that she should not apply for public housing, that instead she should move into the property, that the property was for her to live in and that she should pay some rent only when she could.
(c)She, her children, and her de facto partner then moved into the property. She and her children stayed on there after her de facto relationship broke down a year later.
(d)In 2005, Behich and Melek Riffat (Leyla’s mother) were concerned to ensure that none of their children were ever without a home to live in, to make provision for their children during their lifetimes and to ensure Leyla would not be able to transfer the property to the Church of Scientology.
(e)At that time, Behich told Leyla that:
· the property was hers to live in;
· the property was for her and her children; and
· the property was hers and Yasmin’s.
(f) In about July 2005 the Deed was executed.
13At paragraph 4B of the defence, Leyla alleges that, by reason of the matters alleged in paragraph 4A, Behich, Melek and Altan represented to Leyla that:
(a) The property was Leyla’s to use and enjoy for her life;
(b)The property was for Leyla to use and enjoy for her life and to raise her children in; and
(c)They would transfer the property to Leyla to be held on trust for Yasmin but subject to the right to Leyla to occupy the property for her life.
14Leyla pleads that in reliance upon the representations, to her detriment and in the belief that she would have a life interest to occupy the property, she:
(a)Refrained from applying for accommodation from the Housing Commission of Victoria in 1994 or any time thereafter;
(b)Continued living in the property; and
(c)Executed the Deed.
15Leyla alleges that at no time prior to execution of the Deed was she given the opportunity to obtain legal advice as to its terms and effect, as to whether it conformed with the representations, as to whether it provided a life interest to her, as to whether she should execute the Deed and as to whether she was provided with a life interest in it.
16By paragraph 4F of the defence, it is alleged that as the person ultimately entitled to the beneficial interest in the property (after the life interest enjoyed by Leyla):
(a)Yasmin’s interest in the property is made under or through the interest in the property previously held by Behich and Altan.
(b)Yasmin is a privy of Behich and Altan in respect of her claim in this proceeding.
17At paragraph 4G it is alleged that Yasmin unconscionably:
(a)Insists upon the terms of the Deed being carried out without regard to the life interest to occupy the property enjoyed by Leyla.
(b)Denies that Leyla has a life interest to occupy the property.
18Leyla pleads that she will suffer detriment if Yasmin is permitted to do these things, being the loss of her life interest to occupy the property. She says that Yasmin is estopped from denying that the terms of the Deed are to be carried out without regard to her life interest. Alternatively, she pleads that if Yasmin is entitled to a transfer, Yasmin holds her interest on trust for Leyla to use the property for life and thereafter for Yasmin absolutely. She seeks a declaration that Leyla has the right to occupy the property for the term of her life; and (or alternatively) if Yasmin is entitled to a transfer of the legal title, a declaration she holds her interest on trust for Leyla to use the property for life and thereafter for herself absolutely.
19Alternatively again, it is alleged that Leyla holds the property on a constructive trust for herself for life and thereafter for Yasmin absolutely, and that the effect of the matters pleaded in paragraph 4A is that Behich, Altan and Leyla agreed that Behich and Altan would transfer the property to Leyla, Leyla would enjoy the use of the property for her life and Leyla would hold the property on trust for Yasmin but subject to her life interest.
20Yasmin denies Leyla’s claims and pleads that:
(a)The Deed is in writing and is not expressed to be subject to Leyla’s alleged life interest.
(b)Alternatively, Leyla’s alleged life interest is inconsistent with the terms of the Deed.
(c)Alternatively, if the alleged life interest was created it was void and unenforceable.
(d)From 3 December 1993 until 6 October 2005, Altan was a registered proprietor with Behich of the property and Behich could not deal with his interest as alleged and any such dealings were of no legal effect.
(e)If any representations were made they were subsumed by the Deed and cease to have any effect on execution of the Deed.
(f)If the alleged representations were made, no claim can be made against Yasmin in relation to them as she did not make them or no claim can be made in relation to the property as Behich and Altan no longer have any interest in it.
(g)Leyla did not act to her detriment in relying on the representations if they were made, in that she has benefitted from living in the property without the payment of rent from 1994 to now; and that if she had applied for accommodation from the Housing Commission of Victoria there is no certainty she would have been successful in obtaining it; and if she had been she would have been liable to pay rent.
(h)Behich and Altan were under no obligation to ensure Leyla obtained independent legal advice before she signed the Deed.
(i)Yasmin’s claim is not made under or through the interest in the property previously held by Behich or Altan, but is made in her independent capacity as a beneficiary of a trust created by the Deed in respect of the property in which Leyla is the trustee.
(j)On the execution of the Deed and the transfer of the property Behich and Altan ceased to have any interest in it, and Yasmin cannot be acting as their privy and cannot be acting under or through them.
(k)Yasmin denies she is acting unconscionably.
(l)If the alleged life interest was created in favour of Leyla, it was a disposition of an interest in land and there is no agreement in writing regarding it and it cannot be enforced.
(m)Leyla cannot hold the property on a constructive trust as alleged, as it is inconsistent with the express trust in the Deed and would amount to her holding the property on a constructive trust for herself.
(n)The terms of any agreement between Behich, Altan and Leyla were contained in the Deed and the alleged terms contradict the terms of the Deed.
21By her reply to defence to counterclaim filed during the trial, Leyla pleads that if any life interest created in her favour was unenforceable, then she had partly performed the agreement she alleged had been made. She pleads that this part performance consisted of the facts that she executed the Deed, refrained from applying for accommodation from the Housing Commission of Victoria in 1994 or at any time thereafter, continued living in the property, paid rates, taxes and insurance and generally maintained the property, accepted a transfer of the property from Behich and Altan, and permitted a caveat to be lodged over it on behalf of Yasmin. She also pleads that the creation of a life interest in land is not a disposition within the meaning of section 126 of the Instruments Act 1958 (Vic).
Conduct of the trial
22Yasmin was represented throughout the lead up to the trial and at trial by a solicitor and a barrister. Leyla represented herself at trial. She was, however, represented by a barrister and solicitors initially, and the pleadings were prepared by that barrister. On the final day of the trial Leyla was given leave to rely on an amended reply to defence to counterclaim, which was based on a document prepared by her previous barrister but never filed.
23Leyla opened her case and gave evidence herself, and called her witnesses. She cross-examined her daughter Yasmin, her mother Melek, and the real estate agent called on behalf of Yasmin. Whilst, occasionally, I needed to direct the evidence back towards the issues in the case (and away from evidence about family arguments or discussions which were not relevant), generally Leyla made her points clearly and consistently. On occasion I stopped the hearing of the case to allow Leyla or a witness to regain composure when the hearing of the family dispute became too emotional. Leyla did not want to make final submissions.
The evidence
24Yasmin, her grandmother Melek, and a real estate agent, Sam La Spina, gave evidence on behalf of Yasmin. Leyla gave evidence on her own behalf, and so did her brother Altan, cousin Bahire Yabas, sister Nevin Saathoff and her two sons, Jesse Riffat and Marlon Riffat.
25Behich and Melek had six children. In 1988, Behich and Melek transferred a house at 28 Baguley Crescent, Deer Park into the names of five of the children, including Leyla (and not including another daughter Zerin). Each of the five children held a 1/5th share as tenant in common in the Deer Park property.
26That same year, Behich purchased the Delahey property as an investment property. His son, Altan, was also on title as a proprietor but only because it was required by the bank which had advanced mortgage funds. The property was actually owned by Behich. Altan contributed no part to the purchase price. He was on title as 1/6th owner at the suggestion of the solicitor that his father consulted, with his father having a 5/6th share. Altan gave evidence that he regarded the property as his father’s.
27Melek gave evidence that whilst she and Behich initially intended the property as an investment property, they later decided to offer it to their daughter Zerin to live in. Zerin did not want to. In 1994, when Leyla was given notice at the rented accommodation she was living in, Behich and Melek offered the Delahey property to Leyla to live in with her family. At that stage Leyla was in a de facto relationship, and her two sons Jesse and Marlon were young boys. She was pregnant with Yasmin.
28Leyla says that representations were made to her in 1994 by Behich before she moved in. I will come back to those below.
29A year later the de facto relationship had broken up, and Leyla stayed on in the property with Jesse, Marlon and Yasmin, who had been born in the meantime. As a single mother, Leyla worked out of the home and her parents spent a lot of time looking after the children while she was busy. This included often having the children stay overnight. This was particularly the case in relation to Yasmin.
30By the time Yasmin was seven years old, it was clear that she was not well. She was in constant pain and had swollen joints. Eventually juvenile arthritis was diagnosed. Her grandparents were very concerned about what this meant for her future and whether she would ever be able to work. Melek gave evidence that in 2005 that she and Behich decided to give Yasmin the Delahey property so that she would have security for her future. Melek said that they had already given their other children property, referring to the transfer of the Deer Park property to five of their six children (including Leyla).
31On 14 July 2005 the Deed was made between Behich, Altan and Leyla. The Deed sets out in the Recital that Yasmin is of minority age and unable to hold the said property in her own name as registered proprietor.[1] It further sets out that the parties have determined to enter into a deed of gift in favour of Yasmin in the manner provided in the Deed.[2]
[1]Paragraph D of the Recital in the Deed.
[2]Paragraph E of the Recital in the Deed.
32The relevant clauses are:
[Clause 1] That in consideration of their natural love and affection for Yasmin, Behich and Altan hereby grants by way of gift to Leyla as Trustee for Yasmin sole proprietorship of the property.
[Clause 2] That Behich and Altan do hereby jointly and severally direct Leyla to hold such proprietorship as Trustee for Yasmin until such time as she attains majority age and direct Leyla to transfer the legal title of said property to herself as sole beneficial owner.
[Clause 4] That for better securing Yasmin’s beneficial interest, Leyla hereby consents to the lodgement of a caveat by or on behalf of Yasmin in the Land Titles Office.
[Clause 5] That the parties hereto and hereby undertake to do all things and to execute all such documents as shall be reasonably necessary to give effect to the intentions of the parties as evidenced by this Deed.
33On 6 October 2005 the Delahey property was transferred from Behich and Altan to Leyla with the Transfer of Land stating it was “in consideration of their natural love and affection”. A caveat was lodged on behalf of Yasmin the same day noting Yasmin’s interest, being an equitable estate in fee simple, “pursuant to a Deed of Agreement dated 14 July, 2005 between Leyla Sengul Riffat as trustee for the caveator and Behich Riffat and Altan Riffat”.
34In July 2005, at about the same time as the Delahey Deed was executed, Behich and Melek executed a Deed in relation to a property at 28 Baguley Crescent, St Albans. In the St Albans Deed, Behich and Melek gave their son, Tanyol, sole proprietorship of the St Albans property. The St Albans Deed provided that there was no consideration passing between the parties to the transfer, and that the transfer “was subject to a life tenancy at the said property in favour of Behich and Melek”. It was prepared by the same solicitors who prepared the Delahey Deed.
35A year later, the solicitors who had acted for Behich and Melek in relation to the transfers of both the Delahey property and the St Albans property wrote a letter to Behich dated 27 July 2006. It was put into evidence by Leyla. It stated:
“We refer to the above matters and your attendance at our office on Tuesday, 25th July, 2006 and confirm having referred to our file notes conducted at our first interview on 13 May, 2005.
Our records indicate your motives for transferring the above-named properties were as follows:
1. Firstly, in relation to 28 Flint Crescent, Delahey purchased in 1994, your instructions were that your daughter Leyla Sengul Riffat was at that time having marital problems with her husband and experiencing financial hardship. You were keen to ensure that she and her children would have security of a home in the event, as eventuated, her marriage would fail.
Up to December 2002 a nominal rent was paid but no rental has been paid since.
The transfer in favour of Leyla’s daughter Yasmin Melek Lorenz was in recognition of her disability, namely, juvenile arthritis, and a desire to make provision for her as she gets older.
2. Secondly, the transfer of 28 Baguley Crescent, St Albans to your son Tanyol Denizer Riffat was to be in recognition of his contributions towards payment of loan instalments and in part consideration for his agreement to transfer his one-fifth interest in the property owned by your children at 31 Birchwood Boulevard, Deer Park to your other daughter Zerin Knight.
We confirm that your underlying intention was to make provision for your children during your lifetime and not as part of a testamentary disposition since you were concerned about the possibility of litigation between your children under the Testators Family Maintenance provisions of the Administration and Probate Act 1958.
We also confirm that at no time were any instructions given or advice sought concerning your then existing or future social security entitlements.”
36On 16 May 2013, Yasmin turned 18. She was no longer living at the Delahey property. The evidence was that she and her mother had fought a great deal over her teenage years and she had moved to her grandparents’ house at the age of 13, came back again and left home for her grandparents’ house completely by 15. She has not lived at the Delahey property since.
37On 1 May 2014, Behich went into residential care, suffering from dementia. It is apparent from the evidence that the next couple of years were a time of strain for the family. Leyla’s brother, Tanyol, was diagnosed with terminal cancer. Leyla did a great deal to look after her parents at this time. She gave evidence that she was concerned to ensure that she would be in a financial position to continue doing so and asked her mother, Melek, to give her the St Albans house which had previously been given to Tanyol. Her mother refused to do so, saying she had given the house to Tanyol and could not ask for it back now that he was dying.
38Leyla then suggested to Yasmin that Yasmin mortgage the Delahey property and use those funds to purchase another property. Leyla gave evidence that she intended the other property would either be lived in by her (and possibly Jesse and Marlon), or by Yasmin. She said that she, Jesse and Marlon would pay off the mortgage. Yasmin refused to mortgage the Delahey property.
39On 22 December 2014, a letter of demand was sent from solicitors acting for Yasmin to Leyla referring to the Deed and saying:
“As our client has now attained the age of majority, she is entitled to be registered on title to the property. Accordingly, we request that you sign the enclosed Transfer of Land … so that we may effect the Transfer.
Please note that our client would like to take possession of the property in the New Year but she does not wish to place you in an unnecessarily difficult situation in terms of accommodation. We invite you to propose a date by which you feel you could vacate the property and we will revert to you shortly after to confirm agreement or otherwise.
If we do not receive any communications from you by 16 January, 2015, we will advise our client of appropriate steps.”
40On 9 February 2015, solicitors responded on behalf of Leyla. Relevantly, their letter stated:
“Whilst your letter, and on the face of it the Deed, may suggest that our client holds the property on trust for your client Ms Yasmin Melek Lorenz upon her attaining the age of majority, this was not the motivation of the transferors at the time the transfer was affected, it being at all times their intention to ensure that our client would have the security of the property as a home for herself (and her children during their minority) during her lifetime.…
Whilst it was understood by all parties that Mr and Mrs Riffat senior wish to make some provision for your client, as opposed to their other grandchildren, any benefit to be conferred by your client was not intended to interfere with our client’s use and enjoyment of the property during her lifetime as there was always an intention that the equity was our clients whilst she lived.…
The Deed is clearly not a complete expression of the transferors’ intention and can therefore reasonably be challenged. The equitable principles of promissory estoppel and implied trust appear to have particular application in this dispute.…
The Deed was prepared in a process in which our client was actively involved in she was treated by the firm akin to a client. Our client entered into the Deed as a result of the discussions had with her family and the lawyer for the family and without the benefit of independent legal advice with respect to the consequence of the transaction…”
41Subsequently these proceedings were instituted.
Is Leyla required to transfer the property to Yasmin?
42Yasmin’s case relies on the Deed. The Deed itself is clear and unambiguous. It provides the property is gifted to Yasmin and is to be transferred to Leyla to be held on trust until Yasmin reaches the age of majority. It is then to be transferred to Yasmin by Leyla.
43Although conflicting evidence was given of Behich’s intention at the time the Deed was executed, this evidence is inadmissible in terms of construing what the Deed means. The intention of the parties is to be derived from the words of the Deed and not from any subjective evidence. As recently stated by the Victorian Court of Appeal in Schreuders v Grandiflora Nominees Pty Ltd [2016] VSCA 93 at paragraphs 12 to 14:
“12. The principles governing the interpretation of contracts apply also to trust instruments. The High Court has ‘reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract.’ The meaning of the terms of a contract is to be determined by what a reasonable person would have understood those terms to mean.
13. In Australian Broadcasting Commission v Australasian Performing Right Association Ltd, Gibbs J stated:
It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another.
14. In the same case, Barwick CJ stated:
[I]f [a] result is produced by the application of the words in which the parties have expressed themselves, it is no part of the function of a court by some process of divination as distinct from construction of the language employed to attribute to parties an intention to do something for which their express words do not provide.” [Citations omitted]
44The reference in clause 2 to Leyla being directed to transfer the “legal title of the property to herself” as “sole beneficial owner” read in the context of the clause and the Deed as a whole, must mean Leyla is directed to transfer the legal title to Yasmin once Yasmin is of majority age. Clearly Leyla could not have ever have transferred the legal title to Leyla herself. Behich and Altan had the legal title initially, then transferred it to Leyla, thus giving her the legal title. She held the property beneficially for Yasmin until Yasmin reached majority age. She was then directed to transfer legal title to Yasmin. The “herself” in clause 2 is therefore a reference to Yasmin.
45The terms of the Deed should be given effect. Yasmin has now passed the age of majority, which is 18 years.[3]
[3]Age of Majority Act 1977 (Vic), s3.
46I will order that the property be transferred to Yasmin.
Does Leyla have a life interest in the property?
47A life interest is “an estate which at common law, is limited to the duration of the lifetime of a grantee...A life estate holder is a tenant for life."[4]A life tenant has the right to possession of the property to the exclusion of the registered proprietor until he or she dies.
[4]LexisNexis, Halsbury's Laws of Australia, 355 Real Property “1 Introduction – Real Property” [355-110].
48At the centre of Leyla’s claim is what she says she was promised by Behich in 1994 when she moved into the property and in 2005 when she signed the Deed. Leyla pleaded in the defence that Behich, Melek and Altan made the representations she relied on. However, Melek was not a registered proprietor of the property. No representation made by her to Leyla of itself could be relied on as a basis for Leyla’s claim to a life interest in the property. Altan was a registered proprietor as to a 1/5th share of the property. However, no material fact was pleaded to found a claim that any representation was made by Altan, and no evidence was led that he made any representation to Leyla. Accordingly, I deal below with the pleadings and evidence relating to Behich’s alleged representations only.
49Leyla has no documentary evidence of any promises allegedly made by Behich. She is relying on her recollection of comments made to her by her father 22 years ago and 11 years ago respectively.
50It is a requirement of an estoppel by representation that the alleged representation must be clear and unambiguous.[5] The words or conduct relied on must go beyond a “mere statement of intention”.[6]
[5]Legione v Hateley (1983) 152 CLR 406 at 436-437 (Mason and Deane JJ).
[6]In Flinn v Flinn [1999] VSCA 109, the Victorian Court of Appeal dealt with a claim in proprietary estoppel based on a promise to leave an interest in farming property to the promisor’s adopted son. Brooking JA (with whom Charles and Batt JJA agreed) referred at [73] with approval to the statement of Carnwath J in Gillett v Holt [1998] 3 All ER 917, 930 that, “the plaintiff needs to show words or conduct by the prospective testator which go beyond mere statements of intention, and which, having regard to all the circumstances, he can reasonably claim to have regarded as amounting to an irrevocable promise by the prospective testator as to how his estate would be disposed of.”
51It is necessary to look carefully at the evidence given by Leyla to see whether what Leyla recalls was said to her would amount to a promise of a life interest, even if the court could be satisfied that her recollection is correct.
52The relevant statements made by Behich that Leyla alleges in the defence are:
(a)Prior to Leyla moving into the Delahey property in 1994, Behich, told her that she should not apply for public housing, that instead she should move into the property, that the property was for her to live in and that she should pay some rent only when she could.
(b)In 2005 (before she signed the Deed) Behich told her that:
·the property was hers to live in;
·the property was for her and her children; and
·the property was hers and Yasmin’s.
53Leyla said in evidence that Behich told her in 1994 before she moved in:
(a)“Behich had separately said to me on several occasions that the property was for me and for my children, given that I needed help and, you know, they needed to be looked after”;[7]
[7]T109/L11-14.
(b)“…my father said, you know, ‘Well, you know, we've got a house. It's for you. Make use of it’, you know.”;[8]
[8]T110/L25-2.
(c)Her Honour: “For you and your children?”
Leyla: “Yes, ‘For as long as you need it,’ actually were his words at the time I moved in in that instance.”[9]
[9]T111/L24-26.
(d)“…in ‘96 he [Behich] made representations to me about the property and those representations were that the property was for me and my children for as long as we needed it.”[10]
(e)“He [Behich] told me that property was for me and my children for - to live in. That's it.”[11]
(f)Mr Jones: “…your father said to you…that you should move into the property, the property was yours to live in and you should pay some rent when you could. Is that still your evidence as to what he said to you before you moved in?”
Leyla Riffat: “At the time I moved in?”
Mr Jones: “Yes.”
Leyla Riffat: “Yes, but that changed in 2005 when the property was transferred because he'd paid the property off and then I had to pay the rates as if it was my own home and that's what he told me, ‘It's now yours, you look after it’.”[12]
[10]T127-128/ L29-1.
[11]T135/L24-26.
[12]T136/L18-27.
54The only evidence Leyla gave about what was said to her by Behich about the property in 2005 around about the time the property was transferred is “it is now yours, you look after it”. It was not clear from her evidence whether this was said before she signed the Deed or afterwards.
55Leyla also gave evidence that before the Deed was signed her father told her he wanted to make provision for Yasmin because of her illness.
56The representations pleaded in Leyla’s defence as having been made by Behich to Leyla differ from what Leyla gave evidence about in court. The pleading stated that in 1994 Behich simply told her “that the property was hers to live in”. Her evidence went further, alleging variously that he told her at that time “the property was for me and for my children”; “the property was for me and my children for as long as we needed it”; and “the property was for me and my children to live in”. She also said that he told her in 2005 when the property was transferred “it is now yours, you look after it”.
57Leyla did not give evidence that in 2005 before she signed the Deed Behich told her “the property was hers and Yasmin’s”, although this had been pleaded as a statement made to her by Behich.
58Leyla gave evidence that she gave instructions to her solicitor about the alleged representations made, before the defence and counterclaim was drafted. She said she later checked the defence and counterclaim when it was filed and pointed out an error and that she did not point out any error in the manner in which the alleged representations were pleaded. Cross-examined about this, she said, “I have not looked at the arguments there in terms of the representations. I was looking at this …because I was trying to understand the legal arguments”. Given the care with which Leyla approached presentation of her case I do not accept that she did not review the whole defence and counterclaim carefully, including the promises that she said were made to her. Rather I find that at the time she gave instructions and reviewed the defence, the representations set out there were more likely to be those she remembered had been made to her by Behich. The fact that those representations are different to the representations she gave in evidence during trial is an illustration of the inherent unreliability in trying to recall oral representations so long after the event.
59Leyla gave evidence that it was her understanding that although her parents wanted to give Yasmin some interest in the property, it was subject to Leyla being able to live there for the rest of her life. She also said that she understood that her sons could live there for the rest of their lives if they needed to and Yasmin could as well, and that they could move in and out if they needed to.[13] Cross-examined as to how this would work in practice once Yasmin and her brothers grew up and had their own families, she said that she did not think Yasmin could bring a partner to live the property or the boys could bring partners to live the property. She was not clear on whether she herself could have brought a partner to live at the property.
[13]T148/L12-21.
60Leyla said after she signed the Deed she still understood she could live there long as she needed to. She said:
“I do not know what a trustee is but my understanding at the time was … that it was not to entitle her to absolute ownership of the property and it certainly was not intended to exclude me”.
61She referred to the fact that the Transfer of Land said the property was gifted to her out of love and affection “so that contradicted” the Deed. Leyla gave evidence that she did not know what a life interest was until 2012, when she became aware that her father had a life interest in the St Albans property given to Tanyol.
62Evidence was given as to what different people in the family over the years before and after the Deed was signed understood the position to be with the property, about what Behich had said to them, who was entitled to live at the house and for how long. However, the only direct evidence as to what was said to Leyla by Behich in 1994 and 2005[14] before she signed the Deed was given by her. Behich, who Leyla said had made the statements to her, was suffering from dementia and was unable to give evidence.[15]
[14]The times the alleged representations were allegedly made.
[15]Behich and Altan were joined as defendants to counterclaim to the proceeding by Leyla but no orders were sought against them. Altan gave evidence on behalf of Leyla. Otherwise Behich and Altan took no part in the proceeding.
63As set out below, I am not satisfied on the basis of the evidence that Leyla was given a life interest in the property.
64Whilst Melek gave evidence as to discussions she and Behich had about the property at different times, she was not present when the relevant statements were allegedly made by Behich to Leyla. Leyla gave evidence that in 2005, Melek told her that Melek said she “can't go to her grave knowing that one of her children will be on the street.”[16] Melek denied ever saying this. Cross-examined by Leyla about whether she said this to Leyla, Melek was quite definite: “I never tell you that. Never”. She went further when asked by Leyla whether she wished to give Leyla the security of a place to live and said:
“I did not, Leyla, because how should I give you house as well when I have another 5 children just I give you the share in another house as well”.
[16]T123/L27-29.
65Melek said that she and Behich had intended the property to be Yasmin’s. She said when they visited a solicitor about the transfer, they were told someone needed to be caretaker for Yasmin until she was 18. She said if Leyla had not agreed to be trustee someone else would have been asked to take on that “caretaker” role and to later transfer the property to Yasmin. She said she remembered the Delahey Deed and the St Albans Deed being signed in circumstances where she and Behich went to a solicitor because “we decided to give it to Yasmin Flint Crescent and to Tanyol my house.”
66Leyla submitted that Melek’s evidence regarding the property should not be accepted. She said that Melek wanted to assist Yasmin in the case, as otherwise she would not have anyone took after her in her old age, as she has fallen out with Leyla. However, having observed Melek give evidence, I am satisfied she was truthful.
67Evidence was given by Altan of reading the Deed upon being presented with it for signing by Behich. He said he had a conversation with Behich before signing the Deed where “I asked him what would happen to Leyla, and he replied that it was not intended to kick her out of the property”. He said that Behich said to him that he hoped amicable agreement would be reached between Leyla and Yasmin, that on turning 18 Yasmin would be entitled to the property, and that he felt that Yasmin and Leyla, once Yasmin was old enough, would be able to work it out.
68Nevin Saathoff, Leyla’s sister, gave evidence that Behich had said to Nevin in May 2005 (before the Deed was signed) about the Delahey property that “that property is for Leyla”. Cross-examined about discussions she had with Leyla later in 2005 after the Deed was signed, she said that Leyla was obviously aware Yasmin would be entitled to the property and “asking her mother to hand over the property” when she was 18: “She had the Deed, so, yes, she was aware of it”. She said Leyla was aware she had to hand over the property but not to vacate it.
69Leyla’s cousin, Bahire Yabas, said she recalled Behich saying in around 2005:
“Financially to help Leyla Riffat he would put the house under Leyla Riffat’s name. Circumstances, because Yasmin was sick, it was thinking by the age of 18 if Yasmin was still going to be sick Leyla would not have the…”[17] [sic].
[17]T196/L22-24.
70Jesse Riffat gave evidence of having conversations with Behich about the house a number of times after 2007, and that “Behich has always intended the property for all of us as long as we wanted to live in the property.”
71Marlon Riffat said when he had arguments with his sister about the house when they were young, Leyla would say “the house is for all of us … and we are all entitled to stay and live there”.
72Yasmin gave evidence that from when she was about 10 her grandfather told her the house was hers forever and that her grandparents continually told her the property was hers. She said her mother told her when she was a young teenager still living at home that the reason her family relatives disliked her was because her grandparents had given the house to her. She said her mother would say to her it was not fair that Yasmin had been given the house. Evidence was given by Yasmin, Leyla, Jesse and Marlon that sometimes in her teenage years when Yasmin fought with her brothers she would tell them that the property was hers. Her mother then told her the property was for all of them to live in. Leyla said she told her sons then that Yasmin did not have the right to kick them out. Yasmin said her mother would say “You are under my roof until you’re 18”, and “until you’re 18 you can’t kick anyone out”. Yasmin gave evidence that the first time she was told by Leyla that Leyla had a life interest was after Yasmin asked her to transfer the property to her in December 2014.
73On all of the evidence, I am unable to be satisfied that anything was said by Behich to Leyla that had the effect of Behich promising a life interest to Leyla or to Leyla and her children. The statements Leyla claims were made by Behich were contradictory and, even if any of them were said, did not have the effect of amounting to a promise that Leyla could live in the property for the rest of her life.
74I cannot be satisfied on the balance of probabilities that Behich in fact said to Leyla any one of the representations pleaded, or about which she gave evidence. Even the representations pleaded in the defence are not consistent. It is not the same thing to say that the property is for Leyla to live in for her lifetime as to say the property is for Leyla and Yasmin or the property is for Leyla and her children. It is further not the same as what was said in the letter sent in December 2014 by Leyla’s solicitors which said that the house was to be for Leyla and her children during their minority. It is not the same as the property was for me [Leyla] and my children for as long as we needed it. Or the property was for me and my children for - to live in.
75The representations that Leyla remembered at various times as having been made, and gave evidence about during the trial, varied. I find that Leyla was doing her best to remember events that had occurred between 11 and 22 years ago, but with the benefit of hindsight and some reconstruction. She said she did not become aware of what a life interest was until 2014. She admitted that her memory is not good, saying “I do not have a memory. Sometimes I forget things then I forget those things”.
76Even if any one of the representations were made, I find that they would not have been made in circumstances where it would be reasonable for Leyla to have relied on them. Leyla’s evidence was that it was not out of character for her parents to say, for example: “I am going to give you everything”. Leyla gave evidence that “my mum particularly would say things like ‘if you marry a Turkish man I will give you all the houses’.” Such broad statements in context were at most a mere statement of present (revocable) intention; not a promise[18]. Her parents helped her out when she had no home and later when she was a single parent, including by letting her stay in the Delahey property with her young children, rent free for most of the 20 years she lived there. Behich could have brought an end to that arrangement on reasonable notice at any time.
[18] See Gillett v Holt [1998] 3 All ER 197 at 227-8 per Robert Walker LJ.
77The evidence is that when Behich and Melek wanted to give their family members property interests they consulted lawyers and arranged legal documents to that effect. This occurred on at least three occasions of which there was evidence before the Court: the transfer of the Deer Park property into the names of five of their six children in 1988; Behich’s gift of the Delahey property to Yasmin in 2005 on the basis of the Delahey Deed; the gift of the St Albans property in 2005 to Tanyol in the St Albans Deed (which gave Behich and Melek a life interest in that property). It is telling that a life interest was created in the St Albans Deed. If Behich had wanted to give a life interest to Leyla in relation to the Delahey property it is likely that he would have instructed his lawyers to arrange for that in a legal document.
Detriment
78Even if I had been persuaded that any representation was made by Behich that could be the first step in a claim for a life interest, I would not have been satisfied that Leyla suffered the necessary detriment in relying on it. To found an estoppel claim, it is necessary to show that Leyla acted to her detriment relying on such a representation. The detriment suffered must be substantial.[19]
[19]In Flinn v Flinn [1999] VSCA 109, [96], Brooking JA stated that a claimant must show “substantial detriment…occasioned to the claimant by reliance upon the promise. Unless the reliance occasions detriment, no equity will arise”. In Donis v Donis [2007] VSCA 89, [20], Nettle JA (with whom Maxwell ACJ and Ashley JA agreed) stated that “detriment is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances.” [Citations omitted].
79Leyla claims to have suffered detriment in relying on the alleged representation due to:
(a)Refraining from making an application for Housing Commission accommodation. Leyla gave evidence that when her father invited her to move into the house in 1994 she was considering making an application for Housing Commission accommodation. No evidence was led to suggest that she cannot now make an application for such accommodation if she wants to, or that she is any worse off for not having made the application earlier. The fact she did not make an application for such accommodation in 1994, or in 2005 (when the representations were allegedly made), does not amount to a substantial detriment suffered by her. On the contrary, Leyla has in fact had the advantage of rent-free accommodation for most of her time in the house, and of a stable place in which to bring up her three children.
(b)Continuing to live in the property. No evidence was given to support the suggestion that staying at the property from 1994 until now amounted to a detriment suffered by Leyla. As commented above, she has been able to stay at the property rent-free for most of the period. The only alternative to this that was raised in evidence was that she had been considering applying for Housing Commission accommodation prior to moving into the property.
(c)Signing the Deed. Melek’s evidence, which I accept,[20] is that had Leyla not signed the Deed the property would have been put into the name of someone else to hold it on trust for Yasmin until Yasmin became 18. Leyla did not suffer any substantial detriment in reliance on any representations by signing the Deed.
[20]Melek gave evidence that she went with her husband, Behich, to see the solicitor who arranged the Delahey Deed and the St Albans Deed. It was clear from her evidence that she and Behich decided together to give the Delahey property to Yasmin.
80No estoppel is made out. Leyla does not have a life interest in the property.
Orders
81In the statement of claim Yasmin sought alternative orders to give effect to the transfer of the property. In closing submissions Counsel for Yasmin sought only the order in paragraph “A” of the prayer for relief:
“An order that the defendant transfer to the plaintiff the property situated and known as 28 Flint Crescent, Delahey in the State of Victoria being the land more particularly described in certificate of title volume 10066 Folio 574.”
82I will make that order.
83Damages were also sought. The statement of claim pleaded that by reason of Leyla’s breach of the Deed and/or the trust, Yasmin has suffered and is continuing to suffer loss and damage. Particulars were given being:
(a)Loss of rent from the property from the date that she attained the age of majority or such other date as determined by the court; or
(b) Alternatively, loss of use of the property from the date she attained the age of majority.
84In closing submissions, Counsel for Yasmin sought damages by way of loss of rent from 23 December 2014 (being the date when the letter demanding transfer was sent to Leyla). In closing submissions, he conceded that it would be appropriate for rent to be charged from a reasonable period thereafter. The letter itself requested Leyla respond by 16 January 2015. It also said that although Yasmin would like to take possession of the property in the New Year she did not want to put Leyla in an unnecessarily difficult situation in terms of accommodation and invited Leyla to propose a date by which she felt she could vacate property. On 9 February 2015, Leyla responded by way of her solicitors’ letter asserting the life interest that has now been the subject of this claim. In the circumstances, I find that a reasonable time for loss of damages for rent to commence is 9 February 2015.
85Evidence was called by Yasmin from Sam La Spina, a real estate agent, as to the approximate rental he would expect to have been able to obtain in renting out a property in that location in “poor” condition. He explained that poor condition simply meant that it had not been renovated since it was purchased in 1988. He said he would have expected to receive $320 a week in rental. Leyla gave evidence that the property had not been renovated and did not disagree with the assessment of the property as being in poor condition given that definition of “poor”.
86I accept that the property would have been able to be rented at the rate of $320 per week since 9 February 2015. I allow a deduction of 20% to allow for contingencies such as the premises remaining vacant for some time.
87Damages are assessed at:
The period 9 February 2015 to 22 February 2017 (inclusive) = 106.43 weeks
$320 x 106.43 weeks = $34,057.60
80% of $34,057.60 = $27,246.08
88I order:
1. Judgment for the plaintiff on the claim.
2.The defendant transfer to the plaintiff the property situated at and known as 28 Flint Crescent, Delahey in the State of Victoria being the land more particularly described in Certificate of Title Volume 10066 Folio 574.
3.The defendant pay the plaintiff damages in the sum of $27,246.08.
4.Judgment for the plaintiff on the counterclaim.
89I will hear the parties on the question of costs.
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Certificate
I certify that these 29 pages are a true copy of the reasons for decision of Her Honour Judge Marks delivered on 22 February 2017.
Dated: 22 February 2017
Sam Marinic
Associate to Her Honour Judge Marks
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