McNamee v McNamee & Anor
[2024] NTCA 1
•22 March 2024
CITATION:McNamee v McNamee & Anor [2024] NTCA 1
PARTIES: McNAMEE, Mitchell
v
McNAMEE, Clinton Blake (as Litigation Guardian for Lorna Jennie PASCOE)
and
McNAMEE, Tiarni (as Litigation Guardian for Lorna Jennie PASCOE)
TITLE OF COURT: NORTHERN TERRITORY COURT OF APPEAL
JURISDICTION: APPEAL from SUPREME COURT exercising Northern Territory jurisdiction
FILE NO:AP 12 of 2022 (22236104)
DELIVERED: 22 March 2024
HEARING DATE: 28 September 2023
SUPPLEMENTARY
WRITTEN SUBMISSIONS: 10 and 17 October 2023
JUDGMENT OF: Grant CJ, Kelly and Brownhill JJ
CATCHWORDS:
LAND LAW – Torrens title – Unregistered interests – Existence of unregistered interests
Appeal against summary judgment for possession of land pursuant to Order 53 of the Supreme Court Rules – Procedure intended to apply only in clear cases where no question to try – Order for possession may be made notwithstanding factual dispute only if Court able to satisfy itself as to material facts summarily – Factual dispute concerning whether appellant a licensee who remained in occupation without the respondents’ licence or consent – Relevant question whether intention of owner and appellant that appellant have exclusive possession of property or part of it for an agreed period – Relevant question whether appellant acted on common assumption that he could reside in property and acted to his detriment in reliance on that assumption – Whether appellant had equitable lease or proprietary interest turned on disputed factual issues that could not be determined on summary hearing – Appeal allowed.
Supreme Court Rules 1987 (NT) O 53
Framlingham Aboriginal Trust v McGuiness [2014] VSC 24, Framlingham Aboriginal Trust v McGuiness [2014] VSC 354, Hoare v O’Neill (1961) 78 WN (NSW) 882, In Re Sharpe [1980] 1 WLR 219, Inverugie Investments Ltd v Hackett [1995] 1 WLR 713, Milton v Proctor (1988) 4 BPR 9654, NZI Insurance Australia v Baryzcka (2003) 85 SASR 497, Pappas v Bowmark Pty Ltd [1998] VSCA 120, Radaich v Smith (1959) 101 CLR 209, Ramsden v Dyson (1866) LR 1 HL 129, Stephenson v Morgan [1963] 80 WN(NSW) 1719, Varilla v Marsicovetere [1954] VLR 550, Walsh v Lonsdale (1882) 21 Ch D 9, Western Australia v Ward (2002) 213 CLR 1, referred to.
P Butt, Land Law, 6th ed, 2010, Lawbook Co, [15.10], [15.41], [15.42], [15.43], referred to.
REPRESENTATION:
Counsel:
Appellant:D McConnel SC
Respondents: A Harris KC
Solicitors:
Appellant:Piper Grimster Jones
Respondents: Maher Raumteen Solicitors
Judgment category classification: B
Number of pages: 28
IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINMcNamee v McNamee & Anor [2024] NTCA 1
AP 12 of 2022 (22236104)
BETWEEN:
MITCHELL McNAMEE
Appellant
AND:
CLINTON BLAKE McNAMEE (as Litigation Guardian for LORNA JENNIE PASCOE)
First Respondent
AND:
TIARNI McNAMEE (as Litigation Guardian for LORNA JENNIE PASCOE)
Second Respondent
CORAM:GRANT CJ, KELLY and BROWNHILL JJ
REASONS FOR JUDGMENT
(Delivered 22 March 2024)
THE COURT:
This is an appeal from judgment for possession of certain land given for the respondents (then plaintiffs) following a summary hearing pursuant to Order 53 of the Supreme Court Rules 1987 (NT) (‘SCRs’).[1]
Procedural history and evidence
The freehold estate in the land at 3A Neptuna Court, Larrakeyah (‘the Land’) is held by Lorna Pascoe. She is the mother of both the appellant (‘MM’) and the respondents (‘CM’ and ‘TM’). She is 91 years old. She acquired the Land in early 2020. A townhouse has been built on the Land (‘the Property’). The Property is virtually complete, but no occupancy permit has yet been issued for it.
MM and his daughter reside in the Property.
On 30 October 2021, Ms Pascoe suffered a stroke, causing her to lose legal capacity. On 7 March 2022, CM and TM were appointed her guardians for financial and personal matters. Ms Pascoe lives in a nursing home providing her with 24 hour care.
On 21 March 2022, CM’s and TM’s solicitor wrote to MM withdrawing any consent of Ms Pascoe for him to reside in the Property and requiring him to vacate the Property within seven days. It was said that, if MM did not vacate the Property within seven days, proceedings would be commenced under Order 53 of the SCRs seeking possession.[2] MM replied asking for the seven days to be extended to 21 days, for the expenses of his vacating, and for an immediate mediation with CM and TM.
On 22 March 2022, CM’s and TM’s solicitor replied to MM suggesting he engage a solicitor. MM replied saying he did not intend to engage a solicitor, but sought to engage with CM and TM and their solicitor to articulate his concerns.
On 1 April 2022, CM’s and TM’s solicitor wrote to MM indicating that, as the time for MM to vacate the Property had passed, a Supreme Court proceeding for recovery of possession of the Property was being prepared. It was said MM had no arguable defence to such a claim, whatever Ms Pascoe may have said or done in the past, and that all MM had were ‘privileges’ granted by Ms Pascoe which were withdrawn by CM and TM. It was also said that CM and TM declined to meet with him, and that if Ms Pascoe could return to living in her home in Brinkin, she would require expensive care which could be paid for by a return on the Property.
MM remained in possession of the Property.
On 28 April 2022, CM and TM commenced proceedings in the Supreme Court against MM for the recovery of possession of the Property under Order 53 of the SCRs, being proceedings numbered 2022-01009-SC, and separate proceedings for the recovery of possession of a vehicle, being proceedings numbered 2022-01010-SC. The originating motions were supported by an affidavit made by CM on 14 April 2022. CM attested that he believed MM had entered into possession of the Property after Ms Pascoe’s stroke, that MM had taken undue advantage of Ms Pascoe’s generosity and frailty prior to her stroke, that he had access to her cheque books and bank cards after her stroke, and that he was in possession of her vehicle and the Property despite paying no rent or any other costs associated with the Property.
At the first mention of the proceedings on 19 May 2022, MM was legally represented, but the notice of appearance had been withdrawn. The matter was adjourned to allow MM time to instruct his lawyers.
At the directions hearing on 26 May 2022, MM was self-represented. He initially sought a 12 week adjournment, and then a nine week adjournment. The matter was adjourned for two weeks to enable him to get legal representation.
At the directions hearing on 9 June 2022, MM was again self-represented. He informed the Court he resisted the orders sought, had identified lawyers and was in the process of engaging them. Orders were made requiring MM to file affidavit evidence by 30 June 2022, and requiring CM and TM to file any affidavit evidence in reply by 13 July 2022.
At the directions hearing on 23 June 2022, MM was once again self-represented. He sought an extension of time to file his evidence, which he indicated would be from himself, his brother who was in England (not CM), his sister (not TM) and his bank manager. No orders were made and the application for an extension of time was adjourned in the hope that MM would file his evidence prior to the next listing.
On 30 June 2022, MM filed two affidavits made by himself.
An affidavit made on 29 July 2022 comprised six pages and 352 pages of attachments but the filed version was missing the second page.[3] On 6 July 2022, MM filed a re-sworn version of this affidavit, including the missing second page.[4] In that affidavit, MM deposed that:
(a)He had had numerous and substantial business and personal dealings with Ms Pascoe for over 25 years.
(b)Those included building a ‘forever home’, as distinct from an investment home, on the Land, in which he had built a room for Ms Pascoe to reside with him during the renovation of her home at Brinkin ‘and thereafter if she chose to return to [the Property] in her much older years’.
(c)Ms Pascoe had set out to provide accommodation for MM and his six year old daughter, close to the daughter’s school in Larrakeyah. The Land was identified by MM for this purpose and Ms Pascoe purchased it. From that time, MM and Ms Pascoe had a verbal agreement that, in lieu of payment for his project management services in relation to the build of the Property, MM and his daughter could live in the Property for six years, being the duration of his daughter’s primary schooling.
(d)As part of that agreement, Ms Pascoe gave MM full control of the Land and the build of the Property, with Ms Pascoe signing the agreements with builders and making payments by cheque.
(e)During the build, MM lived in rented accommodation paid for by Ms Pascoe as part of their verbal agreement.
(f)MM worked with the builders and consultants in relation to the build, often for seven days per week, for eight months. He effectively identified that the cost of his work was $425,000 plus his expenses during the build.
(g)About five weeks before Ms Pascoe had the stroke, she proposed a variation of their agreement, by reducing the six years to two years.
(h)MM did not agree with the proposed variation because by then the build was almost complete. In response, he told Ms Pascoe to finish the house herself and pay him for his work.
(i)Ms Pascoe then withdrew her proposed variation and went back to the six year agreement. She also agreed to pay the ‘costs of the house’ for the first two years or until he found a job, whichever came first.
(j)In accordance with the agreement, the build was completed and MM lived in the Property thereafter, with his daughter living there when he had her care, which was every second week.
(k)Obtaining the certificate of occupancy was in the hands of CM.
(l)Ms Pascoe has sufficient earnings and wealth to be appropriately accommodated and cared for in her home in Brinkin.
This affidavit annexed an affidavit of Paulo de Jesus, the second builder engaged to finish the build of the Property, an affidavit of Tessa Brittain, an officer of Ms Pascoe’s bank, and an affidavit of Desmond Robertson, the architect engaged to design the Property.
MM’s other affidavit, made on 30 June 2022, related largely to the vehicle sought to be recovered by CM and TM in proceeding 2022-01010-SC. In it, MM attested that Ms Pascoe’s house in Brinkin had been ready for her return to it after her stroke, but she had remained in the 24 hour care facility.[5] This affidavit annexed the same affidavit from Tessa Brittain referred to above, numerous documents relating to the vehicle and documents relating to the sale by MM of chattels for in excess of $100,000 (which he later attested he paid to Ms Pascoe).
At the directions hearing on 21 July 2022, MM was self-represented. At MM’s request, the times for MM to file additional evidence, and for CM and TM to file evidence in reply, were extended, and the matter was listed for mention before the Judge who would hear the matter.
On 8 August 2022, MM filed an affidavit made by himself on that date.[6] In that affidavit, he attested that a power of attorney from Ms Pascoe to CM and TM was not signed by her and was invalid. He also revised the cost of his work on the build to approximately $420,000 plus expenses. He also attested that he was having difficulty contacting his other brother and other sister to obtain affidavits from them to establish ‘matters and events surrounding the history’, which was ‘imperative to this trial’. Numerous documents were annexed, including a copy of the power of attorney and some of the documents from Ms Pascoe’s guardianship proceedings.
At the directions hearing on 24 August 2022, at MM’s request, the times for the filing of affidavit material were extended and the matter was listed for hearing on 21 October 2022.
On 8 September 2022, MM filed an affidavit made by him on 6 September 2022, annexing phone records which MM attested were proof of his efforts as project manager on the build of the Property, and invoices created by MM for the work he had undertaken on the build. The affidavit also annexed part of a further affidavit from Paulo de Jesus and an affidavit from Andrea Rice, the interior designer engaged to decorate the Property.
On 21 September 2022, MM filed a writ seeking payment from CM and TM of an invoice for the project management services Ms Pascoe had engaged him to perform in relation to the build of the Property. The writ was served on CM’s and TM’s solicitor on 4 October 2022.
On 28 September 2022, CM and TM filed affidavits made by them on that date in reply to MM’s affidavit evidence. Those affidavits contain serious adverse allegations against MM in relation to his influence and conduct affecting Ms Pascoe’s money and financial position.
On 5 October 2022, CM’s and TM’s solicitor wrote to the Court asking for all three proceedings to be heard together, and for the proceedings commenced by CM and TM to proceed as if commenced by writ, with MM’s claim to be pleaded as a counterclaim.
On 7 October 2022, the Court made orders in chambers consolidating the two proceedings commenced by CM and TM, dismissing MM’s proceedings and granting leave to MM to file a defence and counterclaim in CM’s and TM’s proceedings containing the information from MM’s writ. MM was given seven days to do so.
On 10 October 2022, CM and TM filed written submissions regarding the summary application for recovery of the Land. On 14 October 2022, their counsel’s objections to MM’s affidavit evidence were filed. Those objections were to almost all of the affidavit evidence filed by MM.
On 14 October 2022, MM filed a defence and counterclaim. It is voluminous and contains much material in the nature of evidence and submissions.
On 20 October 2022, MM filed an application for an adjournment of the hearing, and an affidavit in which he sought a further two weeks to file his affidavit evidence, which he attested would address matters in the affidavit of TM and matters relating to his defence and counter-claim. He referred to his efforts to brief counsel (which consisted of two emails sent on 19 October 2022 to the senior counsel of his choice, who was then on holidays), his health issues related to some hearing loss and assessment by a psychiatrist due to stress, and his difficulties preparing for a hearing whilst caring for his six year old daughter.
On 21 October 2022, the application for possession of the Property was heard and determined. CM and TM were granted judgment for possession of the Land under SCR 53.07. CM and TM were granted leave to issue a warrant of possession once the three months under SCR 53.08(1)(a) had elapsed without compliance with SCR 53.08(1)(b). MM’s defence and counterclaim were listed to be heard on 27 February 2023.
The decision below
The hearing Judge refused MM’s application for an adjournment of the application for recovery of possession of the Land, for the reasons set out below.
(a)The medical reasons relied on by MM were not such as to deprive MM of the ability to be able to conduct the proceedings, there being no evidence to that effect expressed by the doctors in their letters annexed to MM’s affidavit.
(b)The extension of time for CM and TM to file evidence in reply, to which MM consented, did not create any impediment to the application in relation to the Land from proceeding. Rather, it gave MM more time to produce his evidence, which was always going to have to establish his right to remain in the Property.
(c)MM had had ample opportunity to obtain assistance from counsel, and had not filed any evidence regarding his unsuccessful efforts to obtain legal representation from others or the reasons why those efforts were unsuccessful.
(d)MM’s application was made only the day before the hearing, meaning CM and TM had lawyers attending the hearing ready to proceed.
The Court was prepared to grant an adjournment in relation to the remainder of the proceedings, that is, MM’s claim for damages and CM’s and TM’s claim for recovery of the vehicle.
As regards the Land, the Court held that, at its highest, MM’s case was that he had a verbal agreement with Ms Pascoe permitting him to occupy the Property for a period of time in exchange for him undertaking work as a project manager in relation to the build of the Property. It was held that the agreement could not constitute a lease because the agreement did not contemplate that MM would have exclusive possession. Nor could the agreement constitute a tenancy under the Residential Tenancies Act 1999 (NT) because that Act does not apply to an agreement under which no rent is paid and services are provided in return for the granting of a right to occupy premises for the purpose of residence (s 6(1)(c)). It was held that, putting MM’s case at its highest, MM had a contractual licence which could be revoked by the grantor (Ms Pascoe) or her guardians (CM and TM), with such revocation sounding only in damages. As CM and TM had revoked the licence, MM had no right to occupy the Property and no defence was available to MM regarding his continued occupation of the Land. Consequently, judgment was granted to CM and TM for possession of the Land.
The appeal
On 18 November 2022, MM filed a notice of appeal. On 12 January 2023, MM filed an amended notice of appeal. By that notice of appeal, MM sought a stay of the judgment giving CM and TM possession of the Land. On 8 February 2023, a stay was granted pending the determination of the appeal.
The amended notice of appeal, drafted by MM without the benefit of legal representation, was said by MM’s counsel in oral submissions at hearing of the appeal to distil to three distinct grounds of appeal, as follows:
(a)MM was denied procedural fairness by:
(i) the refusal of the adjournment of the hearing of the application for possession of the Land; and
(ii) the determination of the application for possession of the Land by a summary process, particularly where the facts were contentious and those facts were not tested.
(b)The Court erred by confining its consideration to whether or not MM held a licence rather than considering whether MM held a proprietary right.
(c)The Court failed to consider whether CM and TM were properly appointed as Ms Pascoe’s guardians.
The third ground was not pressed at hearing of the appeal.
Summary procedure for recovery of possession in Order 53
In Framlingham Aboriginal Trust v McGuiness,[7] Derham AsJ set out the following principles gleaned from the authorities in relation to the operation of Order 53:
(a)It is intended to enable a speedy resolution in favour of the proprietor of land of a dispute whereby trespassers are keeping the proprietor out.[8]
(b)It is intended to apply only in clear cases where there is no question to try.[9]
(c)The existence of a factual dispute does not deny the applicability of Order 53 where it is possible to resolve the dispute readily and fairly.[10]
(d)While an order for possession may be made notwithstanding that there is a factual dispute between the parties, such an order will only be appropriate if the Court is able to satisfy itself as to the material facts that bring the case within Order 53.[11]
(e)The jurisdiction should be exercised with great care.[12]
(f)Where an issue does emerge, the judge has discretion whether simply to dismiss the proceeding, to determine the issue, or cause the issue to be subsequently tried. This includes giving directions as to the further conduct of the proceeding or ordering the proceeding to continue as if begun by writ pursuant to Rule 4.07.[13]
(g)Where the Court gives judgment for possession under Order 53, it may grant a stay of execution.[14]
CM’s original affidavit made no mention of any agreement or consent on the part of Ms Pascoe to MM’s occupation of the Property. TM’s affidavit response to MM’s evidence about an agreement with Ms Pascoe for his occupation of the Property was that she was unaware of any such agreement, and her understanding of Ms Pascoe’s intentions for the Property were that it was an investment property. CM’s affidavit response to MM’s evidence about an agreement with Ms Pascoe for his occupation of the Property was that, before her stroke, Ms Pascoe told him she wanted to allow MM to live in the Property for one year and she intended to sell the Property after a couple of years, and that she subsequently told him MM would stay in the Property for about two years. Both TM and CM attested that they were unaware of Ms Pascoe hiring MM as a project manager for the build of the Property, at least until MM began issuing them with invoices for his services after the build was effectively completed.
There was therefore clearly a factual dispute between the parties as to whether or not the pre-requisites to the application of Order 53 existed,[15] namely (relevant to this case):
(a)whether MM entered into occupation of the Property without Ms Pascoe’s licence or consent; or
(b)more relevantly, whether MM was a licensee who had remained in occupation without Ms Pascoe’s guardians’ licence or consent.
As set out above, the existence of a factual dispute does not deny the applicability of Order 53 where it is possible to resolve the dispute readily and fairly and the Court is able to satisfy itself as to the material facts that bring the case within Order 53. The Judge below sought to do so by dealing with the application on the basis most favourable to MM, which was found to be that, at its highest, MM had a verbal agreement with Ms Pascoe permitting him to occupy the Property for a period of time in exchange for him undertaking work as a project manager in relation to the build of the Property.
Counsel for MM argued that the Judge below did not consider whether, on that case, MM had an equitable lease over, or some other equitable proprietary interest in, the Land. It was contended that, on either basis, MM had the reasonable possibility of a defence, which raised a triable issue that should not have been determined by way of the summary procedure in Order 53.
Equitable lease
An agreement to execute a lease in the future is treated in equity as if it were a lease.[16] The agreement must identify the parties, the premises, the starting date, the duration and, if rent is to be paid, the amount of rent or a procedure to determine the amount.[17] It must be for value and evidenced in writing or supported by sufficient acts of part performance, which is generally satisfied by the tenant being let into possession under the agreement.[18]
The touchstone of a lease is the grant of a right of exclusive possession, that is, a right to occupy and possess the leased land to the exclusion of all others, including the lessor.[19] In order for the agreement between MM and Ms Pascoe to constitute an agreement to execute a lease in the future (when the build of the Property was complete), the agreement would have to contemplate that MM would have an entitlement to exclusive possession.
Counsel for CM and TM argued that, on MM’s evidence, the agreement with Ms Pascoe contemplated that she could reside in the Property whilst her home in Brinkin was being renovated, and that she could reside in the Property in her later years if she wished. The Property was constructed to include a room suitable for her to do so on the ground floor.
Counsel for MM argued that an agreement under which Ms Pascoe would live in a room in the Property would nevertheless have preserved to MM exclusive possession of at least some part of the Property, including his own bedroom, his daughter’s bedroom and the upstairs bathroom. Exclusive possession of part only of a premises was said to be sufficient for a conclusion that there could have been an agreement for a lease.
Counsel for MM relied on Stephenson v Morgan.[20] In that case, with nothing reduced to writing, the owner of a house permitted a family to live in the house with him and have exclusive occupation of some rooms and the use of other rooms together with the owner. The family paid periodical sums for the accommodation, which continued for some seven years. The owner then went into a convalescent home and subsequently died some 18 months later. Before his death, the owner did nothing about the home or the family occupying it. An action for ejectment of the family was brought by the executors of the owner’s will. The executors sought leave to enter judgment summarily. Walsh J held that the question whether the family were tenants (lessees) or lodgers (licensees) was a question of fact for the jury and dismissed the application for summary judgment.
Walsh J considered (at 1721) that the factual enjoyment of exclusive occupation by the family of their rooms provided some, although not conclusive, evidence of the existence of an intention between the parties that the home owner had granted the family the right to exclusive possession of the rooms, rather than the home owner retaining dominion and control over the rooms.
In that case (at 1724), Walsh J adhered to the view he had earlier expressed in Hoare v O’Neill[21] that the non-exercise over a long period of any right of entry by the owner also living in the premises to that part of the premises occupied by another person pointed to the owner having given up their right to exclusive possession of that part. With that and other evidence, the Court was satisfied there was evidence that could support a finding that a tenancy had been granted over part of the property and dismissed the application for summary judgment for possession. Walsh J held in Stephenson v Morgan that the non-exercise of any right of entry was a fact from which an inference could be drawn that the owner had not retained the right of possession and control in relation to the rooms which the defendants separately and exclusively occupied in fact. In Hoare v O’Neill, the occupation of rooms by the defendant had lasted for 11 years. In Stephenson v Morgan, Walsh J contrasted the occupation of rooms by the defendant for nine weeks in Varilla v Marsicovetere,[22] which was held not to amount to a tenancy.
Walsh J held (at 1724):
In relation to the factor of actual exclusive use, or to the description of payments as rent, as well as other factors, these may occur in circumstances and in a setting such that a court will say that, upon the whole of the material, there is no sufficient basis for a finding of a tenancy. But in other situations, one or more of these factors may properly be regarded as affording of an intention to create a tenancy and thus may warrant the leaving of the question of tenancy or no tenancy to the tribunal of fact. That tribunal will weigh these matters against the counter-veiling fact that the premises in dispute are part of the owner’s house, in which he also lives, which fact tends towards the conclusion that the intention was not to create a tenancy.
It follows from this decision that actual occupation of part of a premises by the owner does not prevent another person in occupation of another part of those premises from being classified as a lessee.
On MM’s evidence, he and his daughter were in occupation of the Property from late November 2021.[23] CM’s and TM’s solicitor wrote to MM demanding he leave the Property on 21 March 2022. MM remains in occupation of the Property. Ms Pascoe never actually occupied the Property at any time.
It must follow from the decision in Stephenson v Morgan and the authorities there referred to that an intention by MM and Ms Pascoe at the relevant time that she would or might occupy some part of the Property during the agreed period of MM’s occupation is not necessarily inconsistent with an intention to grant to MM a right of exclusive possession to at least part of the Property (being the rooms to be exclusively occupied by him and his daughter). The relevant question is whether it was the intention of Ms Pascoe and MM, at the time they made the agreement, that MM would have, for the agreed period, exclusive possession of the Property or part of it.
As set out above, the Judge below found that the agreement did not contemplate that MM would have exclusive possession of the Property. The only basis for that finding was MM’s evidence that Ms Pascoe would or might live in the Property whilst her Brinkin home was being renovated or in her later years. On the basis of the above authorities, it could not be concluded on a summary basis that, taking MM’s case at its highest, the agreement did not contemplate that MM would have exclusive possession for that reason alone. As the authorities show, it is a question of fact whether or not it was the intention of Ms Pascoe and MM to create an entitlement to exclusive possession of at least part of the Property, an entitlement which can exist even where the home owner is also in occupation of the home.
If that question of fact were to be answered affirmatively, MM would have an arguable case for an equitable lease which entitles him to be treated in equity as if he has a lease over at least part of the Property. This is not to say that MM’s evidence in that respect would be accepted at trial, or even that it is particularly compelling. It is only to say that there is an arguable case if his evidence is taken at its highest. There would also remain a factual dispute between the parties as to the duration of any equitable lease, given MM’s evidence that the agreed period was six years and CM’s evidence that Ms Pascoe told him MM could stay in the Property for two years.
Counsel for CM and TM referred to MM’s evidence that, after saying he could stay in the Property for six years, Ms Pascoe told MM he could stay for two years instead of six years, from which it could be inferred that her intention was to create an arrangement variable or terminable at her discretion (and so, not a lease). While that inference may be open, it is also potentially open to infer that, as MM attested, Ms Pascoe had ‘proposed [a] reduction in payment and variation of our agreement’, which was not agreed to by him as he ‘had already completed the work’. That inference is supported by MM’s evidence that Ms Pascoe ‘then withdrew her new demand and went back to the 6 year agreement’.
Counsel for CM and TM referred to MM’s evidence of his response to Ms Pascoe, which was to tell her to finish the Property herself and pay him the money owed. It was argued that MM’s conduct was not consistent with his understanding that Ms Pascoe had promised him an interest in the Land or the Property, namely a lease as distinct from a licence, because he did not say to her that she had promised him he could stay there for six years, or that she had promised him an interest in the Land. Rather, MM’s response was a ‘contractual’ response. Even if that conclusion were drawn, it is not implausible that a lay person would not understand, or claim, that their verbal agreement about occupying a house for a period of years conferred on them an equitable lease, a proprietary equitable interest or even an interest in land. While it might be inferred from MM’s response that he had always understood that Ms Pascoe could withdraw her consent to him living in the Property and, if she did, he would only be entitled to be paid for the work he had done, it would also potentially be open to infer that, in the face of Ms Pascoe’s denial of his legally enforceable entitlement to remain in the Property for six years, he was simply reminding her that he had executed his part of the agreement.
Nor does MM’s commencement of proceedings for the recovery of the value of his project management work, without legal assistance, necessarily operate as some sort of concession that the agreement with Ms Pascoe was intended by her to convey to him merely a licence the revocation of which entitled him only to damages. The same may be said of the inclusion in MM’s Defence and Counter-claim of the following:
Effectively, my daughter and I were to permanently reside there or at the very least 6 years subject to our verbal contract in exchange for searching and finding the land and building the house and my mother to intermittently reside there ...
First, that statement is not sworn evidence; it is a pleading. Second, it is unclear whether MM intended by that statement to convey that the term of the agreed occupation was not certain (so as to preclude a finding of an equitable lease). Third, the statement is not inconsistent with MM’s affidavit evidence that he and his daughter were to live in the Property for six years under the verbal agreement between himself and Ms Pascoe. The reference to permanently residing there may be to MM’s hope that their residence would extend beyond the agreed six years. What, if anything, should be made of that statement could only be determined following its exploration in cross-examination of MM.
Equitable proprietary interest
Under the principle of proprietary equitable estoppel, if a person with a verbal agreement with a land owner for a certain interest in the land, or with an expectation created or encouraged by the land owner that they will have a certain interest in the land, takes possession of the land with the consent of the land owner and, in reliance on the promise or expectation, with the knowledge of the land owner and without their objection, expends money on the land, a court of equity will compel the land owner to give effect to the promise or expectation.[24]
It is not MM’s case that he expended money on the Land, but in more recent times, the principle has been expressed as follows:
...[I]f the parties have proceeded on a common assumption that [one party] is to enjoy a right to reside in a particular property and in reliance on that assumption [that party] has expended money or otherwise acted to his detriment, [the other party] will not be allowed to go back on that common assumption and the court will imply an irrevocable licence or trust which will give effect to that common assumption.[25]
In that case, the New South Wales Court of Appeal characterised the defendant’s interest as ‘a licence coupled with an equity’ arising from her expenditure on the premises, with the knowledge of the plaintiff, in the expectation that she could remain there for life. The equity was held, in principle, to be sufficient to sustain an action for relief from forfeiture. In the circumstances of the case it was held that the plaintiff had not acted unconscionably in terminating the licence.
On MM’s affidavit evidence, taken at its highest, he and Ms Pascoe had a common assumption that he would have a right to live in the Property for six years and, in reliance on that assumption, he acted to his detriment by performing project management work for the build of the Property for a period of some two years. That evidence raises the possibility that he has a licence coupled with an equitable proprietary interest in the Land precluding, in principle at least, the termination of the licence by Ms Pascoe or her guardians, CM and TM, before the expiry of its six year duration.
Counsel for CM and TM argued that, unlike the promise or assumption of a right to occupy the property for life in Milton v Proctor, the evidence here is not such as to suggest any common assumption that MM had an interest in the Land. This argument rests on the same matters referred to in paragraphs [56] and [57] above. For the reasons there set out, those matters do not lead necessarily to the conclusion that MM’s interest was contractual only. On MM’s affidavit evidence, if accepted, it would be open for a court to find that there had been a common assumption between Ms Pascoe and MM that MM would have a right to live in the Property for six years from the time of its completion and that he had acted to his detriment in reliance on that assumption with the knowledge of Ms Pascoe.
Counsel for CM and TM argued that expenditure of money or money’s worth in return for a right to occupy a property does not, of itself, create an equitable interest in the land. This appears to be a restatement of the observation of McHugh JA in Milton v Proctor (at 9660-9661), where his Honour said that expenditure on improvements on land by a licensee to the licensor’s knowledge does not by itself create any equity. His Honour went on to quote the passage from In re Sharpe set out in paragraph [60] above and said that, accordingly, his view was that equity will prevent a licensor from revoking a licence during the period of the licence agreement if the licensee has expended money on land upon the common assumption that the licensee is to have the right to reside on that land.
The Judge below did not consider whether MM has, in addition to a licence, an equitable proprietary interest in the Land. His Honour’s ex tempore reasons make no reference to equity or equitable principles, concluding only that MM did not have a lease or a residential tenancy and consequently had, at best, a contractual licence. Nor were any oral submissions put to him on behalf of CM and TM about equity or equitable principles. Their counsel’s written submissions made only two references to equity. The first was a reference to the obiter dicta of McHugh J in Western Australia v Ward[26] to the effect that a licensee ejected from land by the grantor may obtain an injunction to restrain the grantor from breaching the contract. The second was a submission that, if equity could intervene, MM’s conduct in his dealings with his mother gave rise to unclean hands such that equity would not intervene.
Order 53 was an inappropriate process
For the reasons set out in paragraphs [50] and [62] above, there were questions to be tried, namely whether or not MM had an equitable lease or an equitable proprietary interest in the Property. Those questions turned on disputed factual issues that could not be readily determined on a summary hearing. The case was, therefore, not one to which the summary procedure in Order 53 properly applied. This ground of appeal has been made out.
The proper course is for the proceedings seeking recovery of possession of the Land to proceed as if commenced by writ and heard and determined at a trial.
Other grounds of appeal
That conclusion makes it unnecessary to consider the other grounds of appeal.
We do not intend to do so, save to say that we do not accept that MM was denied procedural fairness in the failure to grant him an adjournment. The Judge below determined the Order 53 application on the basis of MM’s evidence about the essential features of his agreement with Ms Pascoe in relation to the Property. There was no suggestion that there were additional relevant elements of that agreement that MM did not have the opportunity to put before the Court. Whatever difficulties MM may have had in gathering and preparing evidence and in making legal submissions, the Judge below proceeded on the basis of the essential facts relating to the agreement as pressed by MM.
Disposition
For the reasons set out above, we make the following orders:
1.The appeal is allowed.
2.The orders of the Court made on 21 October 2022 are set aside.
3.Pursuant to Rule 4.07 of the SCRs, the proceeding commenced by the amended originating motion for recovery of land under Order 53 of the SCRs is to continue as if it had been commenced by writ.
4.The proceedings are remitted to the Registrar for case management directions and to fix a date for trial.
We will hear the parties as to costs if need be.
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[1]The Court’s reasons are set out in the transcript of the hearing on 21 October 2022, at pp 21-22.
[2]The return of a vehicle said to belong to Ms Pascoe was also sought within seven days.
[3]Appeal Book ('AB'), Tab 38.
[4]AB, Tab 34.
[5]Appeal Book (‘AB’), Tab 35.
[6]AB, Tab 30.
[7]Framlingham Aboriginal Trust v McGuiness [2014] VSC 24 at [41]. This decision was upheld on appeal and the parties on appeal did not dispute the principles identified by Derham AsJ: see Framlingham Aboriginal Trust v McGuiness [2014] VSC 354 per Ginnane J, esp at [6].
[8]Citing Pappas v Bowmark Pty Ltd [1998] VSCA 120 at [13] per Tadgell JA (Callaway and Chernov JJA agreeing).
[9]Citing Palazzo v Pullen (unreported, SCV, Brooking J, 24 July 1992, BC9200663). In that case, Brooking J observed that Order 53 would normally apply only in virtually uncontested cases or in clear cases where there is no issue or question to try, ie where there is no reasonable doubt as to the claim of the plaintiff to recover possession of the land or as to wrongful occupation of the land without licence or consent and without any right, title or interest thereto. In Tolhurst Druce & Emmerson v Maryvell Investments Pty Ltd [2007] VSC 271, Dodds-Streeton J said that Order 53 provides for a summary procedure which is usually reserved for relatively clear-cut cases in which the defendant occupier has no arguable defence and there is no reasonable doubt as to the plaintiff’s claim to possession.
[10]Citing Pappas v Bowmark Pty Ltd [1998] VSCA 120 at [13] per Tadgell JA (Callaway and Chernov JJA agreeing); Melbourne Anglican Trust Corporation v Greentree (unreported, SCV, Vincent J, 29 May 1997); Tolhurst Druce & Emerson v Marywell Investments Pty Ltd [2007] VSC 271 at [193]-[195] per ? J; Byrne v Ritchie [2009] VSC 114 at [17 per Kyrou J.
[11]Citing Byrne v Ritchie [2009] VSC 114 at [17] per Kyrou J.
[12]Citing Melbourne Anglican Trust Corporation v Greentree (unreported, SCV, Vincent J, 29 May 1997); Max Moar & Quuenbridge Pty Ltd v Shazia Duman [2007] VSC 266 at [2] per Pagone J.
[13]Citing Palazzo v Pullen (unreported, SCV, Brooking J, 24 July 1992, BC9200663).
[14]Citing Parker v Mielicki [2003] VSC 263.
[15]See Pappas v Bowmark Pty Ltd [1998] VSCA 120 at [13] per Tadgell JA (Callaway and Chernov JJA agreeing).
[16]See P Butt, Land Law, 6th ed, 2010, Lawbook Co, [15.41] and Walsh v Lonsdale (1882) 21 Ch D 9 at 14-15.
[17]See P Butt, Land Law, 6th ed, 2010, Lawbook Co, [15.43] and NZI Insurance Australia v Baryzcka (2003) 85 SASR 497 at 506.
[18]See P Butt, Land Law, 6th ed, 2010, Lawbook Co, [15.42].
[19]See Radaich v Smith (1959) 101 CLR 209 at 214 per McTiernan J, 217 per Taylor J, 220 per Menzies J, 222 per Windeyer J. See also P Butt, Land Law, 6th ed, 2010, Lawbook Co, [15.10] and Inverugie Investments Ltd v Hackett [1995] 1 WLR 713.
[20]Stephenson v Morgan [1963] 80 WN(NSW) 1719.
[21]Hoare v O’Neill (1961) 78 WN (NSW) 882.
[22]Varilla v Marsicovetere [1954] VLR 550.
[23]AB, Tab 38, Affidavit of MM, [9] and Annexure I1 (invoice of furniture removalists).
[24]Ramsden v Dyson (1866) LR 1 HL 129 at 170 per Kingsdown LJ.
[25]In Re Sharpe [1980] 1 WLR 219, cited in Milton v Proctor (1988) 4 BPR 9654 at 9669 per Clarke JA (Mahoney JA agreeing), at 9661 per McHugh JA.
[26]Western Australia v Ward (2002) 213 CLR 1 at [504].
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