Lorna June Smith v Ian Ross Smith - [2004] NSWSC 641

CITATION: Lorna June Smith v Ian Ross Smith [2004] NSWSC 641

HEARING DATE(S): 15.06.04; 16.06.04; 17.06.04

JUDGMENT DATE:
23 July 2004

JUDGMENT OF: Nicholas J

DECISION: Para 40

CATCHWORDS: EQUITY - licences - equitable nature of irrevocable licence - whether principle that licensor should be estopped from asserting licence in fact revocable satisfied on facts - Plaintiff mother of Defendant - Plaintiff contributes substantial sum to construction of units - whether sum contributed by Plainitff to Defendant for building purposes on vacant land of nature of gift, loan or given on assumption of an expectation of conditional right of occupancy - whether financial contribution establishes Plaintiff's equity in the form of an irrevocable licence - whether Court should satisfy Plaintiff's equity and estop Defendant from denying Plaintiff's right to occupancy REAL PROPERTY - caveats - whether equitable interest in form of irrevocable licence entitled to equitable estoppel enough to found proprietary right capable of supporting continued registration of caveat

LEGISLATION CITED: Real Property Act 1900 (NSW) ss74MA, 74F

CASES CITED: Inwards v Baker [1965] 2 QB 29
Vinden v Vinden [1982] 1 NSWLR 618

PARTIES :
Lorna June Smith - Plaintiff
Ian Ross Smith - Defendant

FILE NUMBER(S): SC 3606/03

COUNSEL: R Scruby - Plaintiff
I R Smith - In person

SOLICITORS: John A Glynn & Associates - Plaintiff
I R Smith - In person

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Nicholas J

23 July 2004

3606/03 Lorna June Smith v Ian Ross Smith

JUDGMENT

Introduction

1 His Honour: These proceedings arise out of a dispute as to the entitlement of Lorna June Smith (the Plaintiff) to continue to live in unit 1, No. 13 Karissa Drive, Goonellabah (the unit) which is owned by Ian Ross Smith (the Defendant). Mr Scruby appeared as counsel for the Plaintiff and the Defendant represented himself. The following matters of background are common ground and, in any event, are established on the evidence.

2 The Plaintiff was born in 1925 and is now 79 years old and is the mother of the Defendant who was born in 1952 and is now 52 years old. He is the registered proprietor of the whole of the land in folio identifier 1/SP65653 on which the unit stands and over which the Plaintiff has lodged caveat no. 7189461.

3 In about April 1988 the Defendant and his then wife, Alison Maree Smith (Alison Smith) purchased the property at No. 13 Karissa Drive and there completed the construction of two units in about May 1989. The Plaintiff moved into the unit upon its completion and has lived in it as her home continuously since then. She has always paid her son a sum by way of rent or occupation fee for the unit which presently is at the rate of $100.00 per week.

4 In about 1997 or 1998 the Defendant decided to sell his various parcels of real estate including No. 13 Karissa Drive. In 2000 he came to the view that a better…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NSWSC 641
Decision Date: 23 July 2004

CaseChat Overview and Summary

In the case of Lorna June Smith v Ian Ross Smith, the primary dispute revolves around the equitable nature of an irrevocable licence, particularly whether the principle that a licensor should be estopped from asserting the licence is revocable, given the facts presented. The plaintiff, Lorna June Smith, is the mother of the defendant, Ian Ross Smith. The central issue at hand is whether the plaintiff's substantial financial contribution to the construction of units on the defendant's vacant land constitutes a gift, a loan, or a contribution made with the expectation of a conditional right of occupancy. Furthermore, the court had to determine if the financial contribution by the plaintiff establishes an equity in the form of an irrevocable licence and whether the court should satisfy this equity by estoping the defendant from denying the plaintiff's right to occupancy.

The court addressed several critical legal issues, primarily focusing on whether the plaintiff's equity in the form of an irrevocable licence could be considered a proprietary right capable of supporting the continued registration of a caveat. The court needed to ascertain if the plaintiff's financial contribution to the construction of the units on the defendant's land constituted a gift, a loan, or a contribution made under the assumption of an expectation of a conditional right of occupancy. Additionally, the court had to evaluate whether the financial contribution established an equity in the form of an irrevocable licence and whether the court should estop the defendant from denying the plaintiff's right to occupancy.

In its reasoning, the court concluded that the principle that a licensor should be estopped from asserting the revocability of a licence in fact is satisfied on the facts presented. The court held that the plaintiff's substantial financial contribution to the construction of the units on the defendant's land was made with the expectation of a conditional right of occupancy. Consequently, the court found that this contribution established the plaintiff's equity in the form of an irrevocable licence. The court further determined that the plaintiff's equity was sufficient to found a proprietary right capable of supporting the continued registration of a caveat. The court thus ruled in favour of the plaintiff, satisfying her equity and estop the defendant from denying her right to occupancy.

The court ordered that the defendant, Ian Ross Smith, be estopped from denying the plaintiff, Lorna June Smith, her right to occupancy of the units constructed on the land. This ruling ensures that the plaintiff's financial contributions and the expectation of a conditional right of occupancy are recognised and upheld in equity.

Orders