Plymin v Bruce
[2023] VCC 1249
•21 July 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
BANKING AND FINANCE LIST
Case No. CI-21-01520
| Raymond John Plymin | Plaintiff |
| v | |
| Kevin Bruce | Defendant |
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JUDGE: | Her Honour Judge Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30-31 May 2023, 1 June 2023 and 23 June 2023 | |
DATE OF JUDGMENT: | 21 July 2023 | |
CASE MAY BE CITED AS: | Plymin v Bruce | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 1249 | |
REASONS FOR JUDGMENT
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Subject:PROPERTY – EQUITY – EQUITABLE COMPENSATION – REPRESENTATION – UNCONSCIONABILITY – ORAL AGREEMENT
Catchwords: whether plaintiff is entitled to an order for possession – whether defendant has a right to possession – whether defendant has a life interest – equitable damages
Legislation Cited: Property Law Act 1958 (Vic), ss 52 and 53, Administration and Probate Act1958 (Vic) s28 and 30
Cases Cited:Donis v Donis (2007) 19 VR 577; Sidhu v Van Dyke (2014) 251 CLR 505; Watson v Foxman (1995) 49 NSWLR 315; Hampson v Hampson [2010] NSWSC 217; Sullivan v Sullivan [2006] NSWCA 312; Graham v McNab [2016] VCC 1128; Bird v Bird [2012] NSWSC 648; Zekry v Zekry [2020] VSCA 336; MAPA Pearls Pty Ltd v Haliotis Fisheries Pty Ltd [2023] VSCA 108
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | L Virgona | Taylor & Whitty Pty Ltd |
| For the Defendant | J Ribbands with A Campbell | Hibbert & Hodges Lawyers |
HER HONOUR:
Introduction
1 This proceeding concerns a claim by the plaintiff (“Ray”) for an order for possession of the real property known as 66 Betka Road, Mallacoota, Victoria (“the Property”). The defendant (“Kevin”, or “Bluey”), counterclaims for an order or declaration to the effect that Kevin has an interest in the Property as life tenant and seeks damages, including equitable damages.
2 The parties are brothers in law.
3 The issue is whether Kevin has an in personam claim against his deceased sister, Cheryl, that survives against her estate. The question is whether the alleged representations made by Cheryl to Kevin give rise to an actual cause of action against the deceased such that the estate would need to satisfy that claim before distributing the estate. For Kevin to succeed, he must rely upon the doctrine of proprietary estoppel to protect his interest in the property. To make an effective case for proprietary estoppel, Kevin needs to prove that Cheryl made a representation that she had granted him a life estate in the Property, that Kevin had suffered a detriment in reliance on that representation, and that it would, therefore, be unconscionable if that representation were not upheld. In addition to this, Kevin will need to prove that equity should intervene in a manner which overrides Ray’s indefeasible title.
4 For the reasons that follow, I am satisfied that equity ought to intervene to ameliorate the unconscionable consequence to remove Kevin from the Property.
5 Therefore, I will make a declaration that the defendant has an interest in the Property as a life tenant and the claim is dismissed. I further propose to order that the plaintiff pay the defendant’s costs of and incidental to the proceeding on the standard basis, to be taxed in default of agreement, unless either party can show a basis for seeking a different order to costs. I invite the parties to prepare draft orders to give effect to these reasons, and any further issue as to costs will be determined on the papers.
Factual Background
6 Ray and Kevin are brothers in law. Ray married Kevin’s sister, Cheryl, in about 2000. Cheryl died on 21 July 2017 and Ray is the executor of her estate. In 2017, Cheryl purchased the Property in her sole name. Kevin lives at the Property and has done so for the past 25 years.
7 Ray is the registered proprietor of the Property, having been left the Property by Cheryl pursuant to her Will.
8 Ray claims that it was only after Cheryl’s death that he discovered Kevin had not been paying rent since Kevin began residing there in 1999. Ray then took steps to formalise Kevin’s occupation in the Property.
9 Kevin refused to enter into a lease (“Lease”) and raised with Ray (Ray says, for the first time) an alleged agreement with Cheryl made in 1998 (which Ray says he was never aware of) that Cheryl would purchase a property for Kevin to live rent-free for the rest of his life.
10 Ray initially brought this proceeding as an Order 53 County Court Civil Procedure Rules 2018 application. He seeks an order that he be granted possession of the Property.
11 Kevin contends that there is no such Lease, and he occupies the Property in reliance on a promise made by Cheryl that he could live there for the rest of his life if he established a dwelling on the Property, paid the outgoings and left the estate to her two sons.
12 A notice to vacate was sent to Kevin in January 2020 and complies with the requirements under the Residential Tenancies Act 1997 (Vic) (“RTA”). In those circumstances, it was common ground that if Kevin was unsuccessful in his claims, then Ray was entitled to possession and no RTA issue would be pressed by Kevin.
Issues
13 The parties agreed to the following list of issues for determination.
14 Did Cheryl agree with, or represent to, Kevin that he could live at the Property for the rest of his life (“Representation”)?
15 If the answer to paragraph 14 is yes:
(a) has Kevin reasonably relied on the Representation to his detriment?
(b) would it be unconscionable if the Representation were not upheld?
16 Is Ray entitled to an order for possession of the Property?
17 Is Kevin entitled to declaratory relief recognising a life interest in the Property?
18 If the answer to the preceding question is no, is Kevin entitled to equitable compensation?
Ray’s Submissions
19 Ray contends that, as the registered proprietor of the Property, he is entitled to possession of the Property unless another party establishes a greater right to that possession.
20 Ray notes that Kevin relies on two grounds.
21 First, Kevin alleges that an agreement was reached in about 1998, whereby:
(a) Cheryl would purchase the Property;
(b) Kevin would be liable for all rates and maintenance expenses;
(c) Kevin would execute a will leaving the whole of his estate to Cheryl’s children; and
(d) Kevin would be entitled to remain at the Property for the rest of his life.
22 Ray submits that the agreement as alleged is not capable of creating any interest in land pursuant to ss52 and 53 of the Property Law Act 1958 (Vic). Further, the terms of the alleged agreement are also entirely inconsistent with the terms of the will Cheryl executed some 18 months after the alleged agreement was apparently made (“Will”).
23 Ray relies on clause 1 of the Will, which states if Ray survived Cheryl by a period of 30 clear days, then the succeeding clauses of the Will, including clause 6, were to be of no effect. Clause 6 is the clause granting a life interest to Kevin. Therefore, in accordance with the terms of the Will, the whole of Cheryl’s estate – including the Property – was to be left to Ray. Only in circumstances where Ray predeceased Cheryl was Kevin to have any interest in the Property.
24 Ray notes that the Will is the only documentary evidence which has been produced to the Court which provides any assistance in determining what Cheryl’s intentions were with respect to the Property and, accordingly, should be given considerable weight when considering what transpired in the time leading up to the execution of that document.
25 The second basis on which Kevin seeks to rely is a case of proprietary, or promissory, estoppel. Ray contends that, in order to succeed on the estoppel claim, Kevin will need to establish that he relied on the alleged representations, such reliance resulting in a change of position on the basis of the representations which were made.
26 Ray cited the relevant test in respect of reliance as laid down in Sidhu v Van Dyke,[1] which was expressed by Gageler J as follows:
“[the respondent] needed to establish that having the belief and taking the belief into account made a difference to her taking the course of action or inaction: that she would not have so acted or refrained from acting if she did not have the belief”.
[1] (2014) 251 CLR 505 at 531.
27 Closely related to this concept is the need for Kevin to establish that any reliance was to his detriment. In this respect, it appears that Kevin is seeking to establish that he “planned his life around being able to live at the Property”. Such a concept was discussed by Nettle JA in Donis v Donis[2] (referred to with approval in Sidhu), where his Honour noted:
“[H]ere, the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature… beyond the measure of money and such that the equity raised by the promisor’s conduct can only be accounted for by substantial fulfilment of the assumption upon which the respondent’s actions were based”.
[2] (2007) 19 VR 577 at [34] (“Donis”).
28 Ray contends that there was no relevant change in the course which Kevin would otherwise have taken, and it cannot be said that he suffered any detriment whatsoever, had he not been presented an opportunity to reside at the Property by Ray and Cheryl.
29 Ray concludes that, in the unlikely event that Kevin can establish that Cheryl did make the promises Kevin says she made only a short time before she executed her Will, Kevin cannot establish that he has taken a course of action and suffered a detriment in pursuit of his alleged life interest.
30 Ray submits that Kevin has resided at the Property rent-free for more than 20 years, made no more than the most minor of contributions that any occupier would be expected to make towards the expenses relating to the Property, and had not the means to acquire any other opportunity to reside elsewhere.
31 Ray argues that Kevin falls well short of establishing the elements he needs to in order to succeed.
Kevin’s submissions
32 Kevin relies on the doctrine of estoppel. He accepts that he must show that there was a representation that he reasonably relied on to his detriment and that it would be unconscionable to permit the representor to resile from the representation.
33 Kevin relies on the following matters:
(a) Cheryl made the Representation to him in 1997 that he could live at the Property for the rest of his life if he maintained it and paid outgoings for it and left his property to Cheryl’s sons upon his death;
(b) Kevin relied on the Representation in that he:
(i)procured a house to be relocated to the Property and paid for it to be moved;
(ii)procured the relevant permits to be issued by the local council;
(iii)organised and paid for the connection of services such as electricity, water and sewerage to the Property;
(iv)since 1999, has paid all of the rates and outgoings in relation to the Property;
(v)made a Will leaving his estate to Cheryl’s children;
(vi)undertook improvement works at the Property;
(vii)consolidated and built his life around his right to reside at the Property; and
(c) It would be unconscionable to permit Ray to resile from the Representation because:
(i)Cheryl (and Ray) knew that Kevin acted in reliance on it;
(ii)Ray is a volunteer who stands to gain a significant windfall because of the increased value brought about by the construction of the dwelling; and
(iii)Kevin’s financial circumstances and health are such that it would be unjust, if not impossible, to procure alternative long-term accommodation in the area, assuming such accommodation is even available.
34 Kevin relies on the same facts and circumstances in support of his claim in contract. He says that, in consideration of the improvements which were carried out by him on the Property (including the erection of the dwelling and leaving his estate to Cheryl’s children), Cheryl agreed that Kevin could reside at the Property for the remainder of his life.
35 Kevin also argues that Ray cannot rely on indefeasibility of title to override Kevin’s claim, as Ray prematurely transferred the property into his own name in breach of his duties as executor of Cheryl’s estate.
The witnesses
36 Ray gave evidence in support of his case.
37 Ray was not an impressive witness. Although some of this may be explicable by the effluxion of time (which was considerable) and the challenges of the court environment, his evidence was marked by references to matters he “did not know” or “could not recall”.
38 Ray is an 81-year-old man. Ray gave evidence that he and Cheryl first met in the 1970s in Traralgon where she lived as a neighbour to a friend of his and their children were friends when they visited. He commenced a romantic relationship with Cheryl in about 1997/1998 after Cheryl was divorced and he was “heading that way”. Cheryl ended her relationship with a Mr Barry Nation and commenced a romantic relationship with Ray. The relationship was secret at first as Ray was still married.
39 Cheryl purchased the Property at auction for $16,000.00. Ray was in Queensland at the time and he gave evidence that he gave $10,000.00 to Cheryl to purchase the Property and Cheryl contributed $6,000.00. He did not know if Cheryl applied the funds to the purchase as he was still interstate. The reason why the land was put into Cheryl’s sole name was because they were not married at that stage. No document could be produced to prove that Cheryl used the $10,000.00 to the purchase of the Property.
40 Ray said that Cheryl told him about the house for relocation because of the business that he was in, which involved transporting existing houses on to different properties.
41 Ray said that he got permits from VicRoads and the Council, he needed two “escorters” from VicRoads for wide loads. Ray said that he did this $25,000.00 job for no cost for the two of them.
42 Ray said he had 7 houses in his paddock for storage. He would sell them off to other people and relocate them. Ray said Cheryl had a conversation with Kevin about the dwelling and that Kevin will have to pay rent. Ray said that Kevin paid the $5,400.00 to relocate the dwelling, which was only a fraction of the actual costs. However, Ray also says the this $5,400.00 paid by Kevin was for two years or 12 months’ rent upfront. Ray said that he was not very good at maths and his former wife and subsequently Cheryl did all the bookkeeping for his business.
43 Ray claimed that he was under the impression that for the first 2 years Kevin would pay $8,000.00 as rent, and he assumed that Cheryl had put it in place a lease as she used to be a real estate agent and used to do leases. Ray said he found out 18 years later that Cheryl had not put the lease in place and had not collected the rent from Kevin. Ray said that the first time he heard it was not in place was after Cheryl passed away when Kevin said to him at Kevin’s house in around 2018 that he did not pay rent and Cheryl said he did not have to. Ray said that he did not say anything to Kevin and he went to see solicitors.
44 Ray denied saying to Kevin words to the effect of “[d]on’t worry Bluey, you’re right for life. You don’t have to move”. Ray said that he could not even recall if Kevin was even at the house on the day that Cheryl passed away.
45 By letter dated 26 November 2019, Ray’s solicitors, Taylor & Whitty, sent a request to Kevin to provide him with a lease.
46 Ray said that he thought the land was in both his and Cheryl’s names as he had signed the documents and found out after Cheryl passed away that she had not signed the documents.
47 Ray said that if he charged Kevin for the removal and relocation of the dwelling commercially, it would cost $25,000.00 and not $5,400.00. Ray said that he paid for the cost of the relocation of the house and the $5,400.00 was for 2 years of rent and not a discount on the cost of the moving of the house. Ray gave evidence that Kevin knew that the money was attributed to the rent. Ray said that Cheryl organised the relocation of the house and entered the contract, not Kevin. Ray said that he did not recognise the two page contract[3] but he did sign the Schedule[4]. He said that the first 2 pages of the contract had been produced “somewhere along the lines” and someone had attached it to the Schedule. He claimed that Kevin’s “other sister” made it up. He asserted that, at the time he signed the contract, it was a single page only. Ray subsequently changed his evidence that he “may have spoken” to Kevin about the rent upfront when he produced the one page for “additional works by contractor” and signed “for and on behalf of the contractor” and “the owner” for the sum of $5,400.00. He conceded that the one page had nothing to do with rental. It refers to “a contractor”.
[3] Court Book p72–73.
[4] Ibid p75.
48 Page 1 of the contracting agreement with RJ & JL Plymin Transport (Contractor) refers to a Schedule and the “owner”. Ray said that he never read the contract and had nothing to do with it. He refused to read the document. Ray denied that the contract was a contract between him and Kevin to move the dwelling from Mirrabooka to Mallacoota. He said it was a forgery and it was not a standard form contract that his business used at the time. I find Ray’s evidence about the 3 page contract to be implausible. It is clearly a contract to move the dwelling to the Property and not an agreement that Kevin pay rent upfront.
49 Ray had “no idea” about the 2 page contract. He then said that the first time he saw it was years ago when someone showed it to him, that it might have been when he started the lease business and that he threw it out as he believed it was a fake and had nothing to do with him.
50 In relation to the building permit, Ray said that he noted Kevin as an “owner builder” to save on the insurance costs.
51 Ray said that he provided and paid for the timber for the decking which Kevin then installed years later. Ray said he also paid for the insurance on the Property after Kevin moved in. There was a break after Cheryl accidentally cancelled the insurance because it covered house and contents instead of just the house. Ray then reinstated the insurance on the house.
52 Ray said that Cheryl never said to him he had to look after Kevin after she died or that Kevin could live on the Property until he died. Ray has only been to the Property on 2 occasions over the past 25 years and cannot comment on the condition of the Property.
53 Ray said that Cheryl did not discuss the contents of her Will. She did say that she organised Kevin’s Will and that their mother had left $15,000.00 to Kevin and she organised a personal loan for him. Ray did not know if the loan amount was for $20,000.00.
54 Ray denied that he dealt only with Kevin regarding the movement of the dwelling direct and not via Cheryl. Ray said that the three of them did it together.
55 Ray gave evidence that he sold their house in Mallacoota which had a mortgage on it, and claimed that Cheryl had a lot of debts such as credit card debts and a loan from one of her brothers. There was hardly anything in her bank account. He was told that she spent all the money gambling on the pokies. There was $15,000.00 left after Ray paid the mortgage and other debts. Ray said he was not aware of Cheryl’s debts until after she died. Ray pays $100.00 per week rent to his daughter while he lives with her.
56 Ray intended to move to Mallacoota and live in the house. But given the stories being told about him, he thinks he will not be welcome in Mallacoota now so he will sell the property and find a new property elsewhere. He does not have sufficient resources to purchase his own property. Ray got a valuation from a local real estate agent stating that the Property was worth about $250,000.00.
57 On 23 March 2018, Ray was appointed executor of Cheryl’s estate by grant of probate by the Supreme Court. Taylor & Whitty acted on behalf of Ray. Ray said that the first time he saw Taylor & Whitty was early 2018 about the probate issues and chasing up what was going on about the Property.
58 Ray said that he asked his solicitors to send Kevin a letter and a lease for him to sign. Ray’s position was that Kevin already had a lease and had not paid rent on it for over 20 years which he found out after Cheryl’s death. As the executor of Cheryl’s estate, his duty was to also chase up all the monies owed to Cheryl. Ray said that he was not going to chase up the outstanding rent because the property was in Cheryl’s name only. He wanted “to be fair” and only charge Kevin rent under the lease moving forward because he “was family”.
59 In January 2020, Taylor & Whitty sent a notice to vacate after sending Kevin a letter and lease three times. Each time, Marion Trewin (Kevin’s sister) told him to ignore it. After three times, Ray told his solicitors that “it was enough” he “wanted him out”.
60 Ray’s position was that Cheryl had gambled away their money. Ray said that he would go on a Friday night and spend $20 to $50 on the pokies but, unbeknown to him, Cheryl was gambling every day. Kevin said that it was Ray who was the gambler and not Cheryl. Ray said “if you believe Kevin you would believe anything”. Ray denied that he asked Kevin to help him out by paying rent and that he had fallen on some hard time.
61 Ray said that the financial circumstances that led to the sale of the two properties was because money had disappeared out of the bank. Ray said that the money from the sale of their properties should have been in the bank account but it was not.
62 Despite Ray’s affidavit deposing that “due to [his] financial circumstances” he now needed to sell the Property, he has not produced any financial statements to support the assertion. Ray denied that the financial peril was not his but rather was Cheryl’s. Ray said that he recalled paying $23,000.00 to his solicitors recently but could not recall paying $40,000.00 to Taylor & Whitty in respect of legal work regarding the estate. The Taylor & Whitty invoices produced subject to a call for production indicate that Ray has paid $103,821.76 in legal costs and have been paid from the proceeds of sale from his two properties.
63 Ray said that Kevin was a bad debtor because he went to the hotel every night and spent his money. He denied that he says this out of spite because his relationship with Kevin has broken down.
64 Overall, I am unable to be confident that I can generally rely on the evidence of Ray absent an objective foundation. In any event, given Ray was not a direct witness and was not privy to what Cheryl said or did in relation to Kevin and the alleged representation, his evidence is largely unhelpful. Rae Strauss (“Rae”) was called to give evidence on behalf of Kevin. Rae generally presented as a careful, considered witness who was ready to make appropriate concessions. Rae has lived in Mallacoota since 1989 to work an abalone license. Her husband, Mark Searle (“Mark”), passed away in 2002. In about 1990, they purchased 41 Mirrabooka Road, Mallacoota, and planned to demolish the existing dwelling and build a new, bigger house for their children. At the time, they spent 6 months in Shoal Bay, north of Newcastle in New South Wales, and 6 months in Mallacoota.
65 When Rae and her family outgrew the house, they initially planned to demolish the house in Mallacoota. They had plans drawn up for a 4 bedroom house with 2 bathrooms, bigger laundry and kitchen and rumpus room. Mark used to go to the hotel on Friday night with the abalone divers and local people in town. Mark told her that “Bluey Bruce” needed to get out of the house that he was living in because his mother had passed away and it had been sold to one of the sister’s children, Debbie Trewin, one of Marion’s daughters. The house at the time was not worth much – there was no front deck, no stairs to the front door and the back door had a porch but not stairs. It was a basic house and Rae thought they would not get any money for it and Mark suggested giving it to “Blue”. Rae did not have a problem with it as long as Bluey removed it from the property and it did not cost Rae and Mark anything.
66 Bluey told her that he could move the dwelling and his sister had a block of land and she said that he could live there until he died and then it would go to her children. Rae did not know Cheryl and never met or had any conversations with her.
67 Bluey said he knew someone who could move the house. He did not tell Rae who was going to move the house.
68 Rae said that she made her first payment to the builders to do work on the house on 1 May 1999 and that they were out of the dwelling at the end of 1998 as they went to Shoal Bay. When they returned to Mallacoota, she rented a property on 30 March 1999. Rae said she was onsite when the dwelling was removed.
69 There was an old brick fireplace and the concrete stumps on the property and Dennis McLeod cleaned up the property to start construction. On 17 May 1999, Triple Co Nominees did the lining up of the footings for the new house. Rae said that Kevin organised for these works.
70 Rae and Debbie (Marion’s daughter) were friends. Mark was friends with Kevin. She said the house was only worth about $3,000.00. She had been living in the house for about 9 years before giving it to Bluey.
71 Rae says that she sees Bluey driving around the Mallacoota streets in his car. She no longer goes to the hotel for drinks.
72 Kevin generally presented as a careful, considered witness who was ready to make appropriate concessions. There certainly were gaps in his recollection given the flux of time and he had difficulty recalling dates. However, his memory lapses were generally explicable by the extensive effluxion of time involved with this case.
73 Kevin returned from working in Busselton, Western Australia, for 4 years from around 1980 where he rented a house for a short time while he was married. After his marriage ended, he was living in his 20ft caravan in a caravan park by himself. He then lived in Melbourne in the caravan parked in a friend’s yard for some months and then he moved back in with his mother in Mallacoota for 5 years. Kevin said that his mum had been sick for some time and he lived there until the house was sold.
74 When his mum passed away, the rest of his siblings wanted to sell the house. Kevin did not know how the sale came about. Kevin said that his niece, Debbie, Marion’s daughter, bought his mum’s property. He did not have discussions with Debbie about staying on at his mum’s property. Debbie indicated that she did not want the shed located on his mum’s property. Kevin said he knew there was another house “coming up” because Mark and Rae Searle were wanting to demolish and rebuild. Kevin asked Mark at the pub one night if he could have their house. It was an informal deal between Mark, Rae and him.
75 Cheryl said that she would purchase one of the 5 blocks coming up for auction in Mallacoota and he could move the house onto the vacant land for him to live in. He thought that the timing of everything was working out “good”. Kevin agreed that the house was probably worth about $3,000.00 in 1999.
76 Kevin said that he had met Ray prior to this. Ray moved a couple of houses into Mallacoota and Kevin used to give Ray a hand. Kevin knew that Ray was in the business of moving houses.
77 Kevin was “pretty sure” that Ray was at the auction of the land and only knew that Ray was “tracking” Cheryl at the time because he was still married and his wife was still alive.
78 Kevin said that Ray set some sort of price to move the house. Kevin said that he paid $5,000.00 to $6,000.00 to Ray to move the house. He said that there was no discussion about any discount. Kevin did not agree that the Schedule that he signed for the payment of $5,400.00 was payment of rent for the property. He said that Ray’s evidence that the document evidenced a lease was wrong. Kevin did not know where the first 2 pages of the agreement came from as he did not have a computer or mobile phone at the time.
79 Kevin denied that he gave the first 2 pages of the contract to Ray. He had no way of producing such documents.
80 Kevin said that the agreement with Mark and Rae was that he had to knock the chimney down, which he and Dennis McLeod did by removing brick by brick; stack the bricks and stumps of the house out the back; remove the fence to get the house out; stack the posts in the shed and number the posts to replace; and not damage the driveway.
81 Kevin said that he sourced the decking from the mill and he built the deck. He and his friends had a “busy bee” and built the deck. Cheryl told him that she wanted her boys to have the land once Kevin died and he could live there for as long as he wanted. This was how it was reflected in his Will. He could not recall the signing of the Will.
82 Kevin understood that the house and the shed were his property to give to Cheryl’s boys. The land was Cheryl’s.
83 Kevin said that there was never any rental agreement between him and Cheryl.
84 Kevin said that he took out a personal loan from Bank of Melbourne himself for $20,000.00 to do improvements with the house and paying bills. He paid the loan back. He also inherited a modest amount from the sale of his mum’s house in about 1999. He said that the sum of $15,000.00 sounded “roughly about right”. Some of the funds went into the house and cleaning the block. He paid rates from the beginning. He did not pay insurance for the Property.
85 Kevin said that, in hindsight, he could have bought one of the 5 blocks of land himself. This is in contrast with paragraph 6 of Kevin’s affidavit dated 26 August 2021 affirmed in the proceeding that he did not have sufficient funds to purchase the land and move a house onto the land. Kevin gave evidence that he did not know how much the land would be sold for in 1998. He thought they would go for more than $16,000.00. Kevin was interested in this particular block because it had a lane and had access down the side. He did not explore taking out a loan himself. Kevin did not ask his siblings to borrow money. He did not look at anything else at the time. This was the only block of land in Mallacoota at the time that Kevin was interested in.
86 Kevin said that he did not know about their personal life but he knew that Ray played the pokies too so he could not believe that Cheryl was the only one who gambled away all of their money. Both Ray and Cheryl played the pokies and Kevin had played the pokies with Ray in a club in Merimbula after he came to pick him up from Bega Hospital. Kevin said that Ray could not blame Cheryl for gambling when Ray played the pokies as well.
87 Kevin said that when Cheryl passed away, Ray told him that he could stay in the house. He said that he was surprised that Ray said this as it was always his understanding that he could live there for life. Kevin said that they all gathered together when Cheryl died and Ray told him “[d]on’t worry Blue, you’re right for life. You don’t have to move”. Kevin denied that the allegation was made up on 30 May 2023 (the first day of trial) and said that Ray is lying because he now wants him out of the house.
88 Kevin said that Ray called him and said that he did not have any funds and he wanted to get Kevin out. Kevin then got a letter from Ray’s solicitors dated 26 November 2019 wanting $220.00 per week to live in his own house that he had put on the block. This was the first time that he heard about a lease and rent.
89 By letter dated 30 March 2020, Kevin caused his former solicitors, Warren Graham & Murphy, to send a letter to Ray’s solicitors. He paid their fees himself. The letter was in response to the notice to vacate dated 7 January 2020. His solicitors stated that he was of the understanding that he was the beneficiary of a life interest in the Property.
90 Kevin said that he ignored what Ray was sending him. The deal with his sister was that he live there for the rest of his life and, if he did not want it, then the house and land was for Cheryl’s boys. Kevin said that it had nothing to do with Ray.
91 Kevin said that Mallacoota got burned out from the bushfires. The rates for renting a house in Mallacoota were tourist rental prices and renting Airbnb-type houses were “completely out of [his] league”[5]. There was no alternative accommodation.
[5] Transcript p141 lines 25–27.
92 Kevin said that he paid $2,000.00 for connection for water and he paid for the sewerage and electricity. Kevin said that the $5,400.00 sum had nothing to do with connection of services for the house or rent. He could not get a permit to live in the house unless it was all connected up to services.
93 Kevin said that he removed some trees and cleared the block, put up the fence, and installed the shed from his mum’s house. Kevin said that he did not insure the Property. Kevin said that he was not living there rent free, he owned the house and his sister owned the land.
94 Kevin has not had discussions with his youngest brother, Noel, who lives in Mallacoota and has a considerable acreage. Kevin agreed that Noel’s “got more money than you can poke a stick at” but that had “nothing to do with this”.
95 Marion Trewin is Kevin’s sister. Marion presented as a careful and considered witness.
96 Marion said that from 1992, her mum was unwell. Marion said that Ray’s evidence that her mum was still working in 1997 or that she was cooking the meals at the local hotel every night for dinner was incorrect. She had appendicitis and hemochromatosis and she was in Sale Hospital in the period up to 1982. Marion said that her mum stopped working at the hotel once her father got a war pension in around 1970. Marion said she did not work at the hotel from 1992 onwards. Her mum lived at her house in Mallacoota from 1985. Kevin moved into his mum’s house around early 1990s.
97 Marion said that in the early 1990s, Cheryl was settling up her divorce with Denis Opak, her second husband, and said that there was very little by way of assets coming from that marriage.
98 Marion said that she was close to Cheryl. Marion said that when their mum deteriorated, Kevin moved into her Rasmus Street property to give her comfort and for someone to be there for her at night time. In around 1993–1994, Cheryl said that she would buy a block of land for Kevin to put a shed on with the possibility of improving the land and putting a house on it. It was an idea to solve a problem because their mum was concerned about Kevin and his shed that he had put on her block, which had lots of equipment and “bits and pieces” because he was restoring an old Land Rover.
99 Marion’s husband initially suggested each sibling put in some money to buy a block for Kevin. The next day, Cheryl told Marion that she wanted to buy an investment property to leave to her boys. She was desperate to do something to give back to her sons.
100 Marion knew that Cheryl had around $40,000.00 kept over from her divorce. They discussed the price that she could afford to purchase a property. Her limit was $20,000.00. Kevin said that he was prepared to live in his shed on the property.
101 Marion said that Mark and Rae then offered Kevin their old house. Cheryl became excited that he could move the house for nothing. Cheryl said that he had to improve the block and any improvements would go to “the boys”.
102 Kevin had been helping Ray block houses up prior to this. Kevin told Marion that he knew someone who moved houses.
103 Marion said that the house and the block all happened around the same time. Cheryl instigated the house on the land so she could have something to hand onto her boys.
104 In June 1999, Marion saw flowers at Cheryl’s work and was told they were for her sister and from a florist in Traralgon. Marion said that Cheryl told her they were from “the house moving fella” and that “he was keen”.
105 Marion said that two weeks before Cheryl died, they had a discussion at Marion’s kitchen table about what she intended to do with her things after she passed away. She wanted a niece to have their mum’s engagement ring, she also had a sapphire ring that she wanted to go to her niece and for Kevin stay in the house until he decided to leave or dies and, in that instance, it was left to her boys.
106 Marion said that the night Cheryl passed, they all gathered at her house to say their goodbyes. As they were all leaving, she saw Ray put his arm around Blue’s shoulder who was crying and said words to the effect “it is alright, mate, you are safe where you are you do not have to move.” Marion said it was a touching moment where Ray was acting more like a brother than a brother in law. However, after a couple of years Marion asked Ray about a headstone for Cheryl and if the siblings could all contribute to pay of it. She said Ray got upset and took off.
107 Marion said that she never knew Cheryl to have a gambling problem. She knew Ray had a gambling problem. She used to stay with them quite often when they lived in Traralgon and Ray had intimate knowledge of the gambling venues in the area. He always told them how much he had won and it was the highlight of his conversation. Cheryl had a sick son who she helped out from time to time. Marion said that, to her knowledge, Cheryl was not a gambler. She would play the pokies but just because that was the environment she was in. Marion recalled sitting with her husband at the hotel in Traralgon and all their meals went cold as they waited for Ray to finish gambling.
108 Marion knew Mark and Rae. Marion said that her mum’s house had been on the market for 15 months and everyone was keen to have it sorted out financially. Cheryl got the block of land and “Blue” had the arrangements for the house. Marion said that “the bottom had fallen out of the housing market”. They originally had the house on the market for $140,000.00 but it did not sell. Debbie had gone through a divorce and was looking for a house. Marion was not involved in the sale of the house apart from signing the sale documents. The house was sold for $90,000.00 and Debbie became the registered proprietor on 15 July 1999.
109 Marion said that Bluey took out the $20,000.00 loan to pay Ray to move the house, to pay for the connections for services such as water, power and gas, have the house rewired, and fix up the house. Marion said that they did not know that Cheryl’s Will allowed Kevin the opportunity to buy the Property. She said that the family would have acted as guarantor for him if they had known.
110 Marion said that Cheryl and Kevin both showed her their Wills. Cheryl showed Marion her Will in 1999 setting out that Kevin had a life interest in the Property. Marion said that Ray organised for some friends to do the Wills in 2001. Marion inconsistently said that the 2001 Will was the one she saw providing the life interest to Kevin. Marion said that Ray had organised the Wills.[6] Marion said that she only read the paragraph about Kevin staying at the property for as long as he wants. She now wishes that she had read the whole document at the time.
[6] Cf para 7 of Kevin’s affidavit in which he deposes that Cheryl arranged for him to see a solicitor in Morwell to make a Will.
111 Marion said that Cheryl was employed by Ray’s business and drove the courtesy car. She did not know if Cheryl did bookkeeping.
112 Dennis Macleod is a friend of Kevin’s.
113 Dennis said that he has known Bluey for 60 years. He was involved in moving the house and cleaning up Mark and Rae’s block so that it was nice and clean and he levelled out the earth. He pulled some posts out and cleaned up the slab. Dennis said he offered to do the work for Bluey on a “she’ll be apples job” because Bluey promised to clean up the site. He took his directions from Bluey.
114 Dennis knew the house was going to the block of land that Cheryl purchased. He spoke to Cheryl about the block of land when Bluey had the house on it. She told him that Bluey was able to live free of charge on the land until he dies and then the block of land and house would all go to her two children.
115 Dennis was a witness to Kevin’s Will dated 20 May 2001. He vaguely remembered signing the Will. The main thing he remembered was the conversation with Cheryl after Bluey had the house shifted.
116 Dennis said that he signed the Will at Bluey’s house. Dennis said that Bluey had cleaned up the chimney himself.
117 In terms of the Representation case, particular complaints will be dealt with further below. However, as I have set out above, I generally found the account of Kevin to be cohesive, plausible and consistent with the objective documentation, to the extent there is any.
118 Although not perfect witnesses, I have generally preferred the account of Kevin, Rae, Marion and Dennis over that of Ray, particularly as to the events leading up to the purchase of the land and the moving of the house.
Did Cheryl agree with, or represent to, Kevin that he could live at the Property for the rest of his life?
Ray’s submissions
119 Ray says that the only document which records Cheryl’s intentions with regards to the property is the Will dated 18 June 2001.
120 Clause 1 of the Will states that if Ray survives Cheryl by more than 30 days, Ray will inherit her “whole real and personal estate”. Ray argues that this demonstrates that it was Cheryl’s intention that the Property be left to Ray.
121 Ray says that this clause, when read with the remainder of the Will, only provides for Kevin’s interest in the property if Ray had predeceased Cheryl or not survived her for a period of 30 days.
122 Ray concedes that proprietary estoppel, or other equitable relief, can still be found in circumstances where there is conflict with a testamentary promise, and for these reasons does not seek to rely on the Will as the only evidence for defeating Kevin’s claim. However, Ray maintains that, because the Will is the only written evidence of Cheryl’s intentions, it is the best evidence of Cheryl’s intentions around the time of the purchase of the Property and her plans regarding its ownership going forward.
123 Ray says that it is unlikely that, after making a Will which clearly set out her intentions with regards to the Property, Cheryl would have spent the next 20 years making representations to Kevin which undermined her Will.
124 Ray says that Kevin has not established that Cheryl ever made a representation to Kevin that he could live at the Property for the rest of his life. Ray says that Kevin gave no evidence of any specific conversations, which is something Kevin also admitted to in his affidavit, where he stated “I cannot recall the precise dates and circumstances of the discussion Cheryl and I had concerning the acquisition of the property at Betka Road”.
125 Ray argues that Marion similarly gave no evidence about a conversation that she ever witnessed between Kevin and Cheryl during which such a representation was made.
126 Ray argues that Kevin’s recollection regarding the representations made by Cheryl has been coloured by years of litigation. Ray draws upon the views of Justice McClelland in Watson v Foxman[7] where his Honour talks about the fallibility of human memory, and the notion that over the passage of time, especially when litigation is afoot, human memory can change such that it protects one’s own interest.
[7] (1995) 49 NSWLR 315 at 319.
127 Ray says Kevin’s evidence has been altered by a changing memory. He points out that that, in his oral evidence, Kevin has conflated several events which occurred at different points in time. Kevin claims that he formed views about his interests in the Property owing to representations that were made at the time of purchase, and at the time of Cheryl entering into her Will. The implication here is that those events took place contemporaneously, when in fact these events were separated by several years.
128 Ray says that Marion and Kevin’s recollection as to what had been promised by Cheryl to Kevin had been influenced by the presence of clause 6 in the Will, a clause which provided for Kevin’s interest in the event of Ray dying prior to or 30 days after Cheryl’s death. According to Ray, both Marion and Kevin seemed to be under the impression that the Will provided for Kevin, with Marion stating “Yes but he (Kevin) had a life interest in it. According to the Wills that they both held”, and Kevin stating “that’s how it’s worded in the will too”.
129 Ray argues that while Marion gave evidence that, in around 1994, she and Cheryl first floated the idea of purchasing a block of land for Kevin from their mother’s estate, there is no evidence that this was disclosed to Kevin, at least not until the time of the auction some four years later.
130 Ray disputes Marion’s recollection that, on the night of Cheryl’s death, Ray patted Kevin on the back and said, “it’s alright mate, you’re safe where you are, you don’t have to move”. Kevin also gave evidence that as he was leaving, Ray “said I could stay in the house”, which Kevin thought was strange because he already knew that to be the case. Ray disputes that this interaction took place and does not recall even seeing Kevin there that evening.
131 Ray argues that, even if he did say to Kevin on the night of Cheryl’s death that he was safe and would not have to move, this statement is entirely consistent with Ray’s belief that Kevin was living at the Property as an unpaid tenant and is also consistent with Ray’s subsequent offer for Kevin to enter into a lease should he wish to continue residing at the Property.
132 Ray claims that it was always his understanding that there was a lease in place between Kevin and Cheryl. Ray points out that, on Kevin’s evidence from the time the property was purchased for “the next 20 years”, he never mentioned his supposed agreement with Cheryl to Ray, and, therefore, Ray remained under the impression that there was a lease on foot.
133 Ray says that he was under the impression that the $5,400.00 Kevin paid to his business was for 12 months or two years rent in advance, and not for the removal of the Searle’s property. On his version of events, this is more evidence that Kevin was a tenant.
Kevin’s submissions
134 Kevin argues that the contract he executed with Ray’s business for moving the Searle’s house from Mirrabooka Road to Betka Road is consistent with his claim that he undertook works which would permit him to reside at the Property in accordance with his agreement with Cheryl, and by extension, inconsistent with Ray’s assertion that Kevin was to pay rent.
135 Kevin says that all relevant pages of the contract were executed as one document, and that the Court should reject Ray’s evidence that the first two pages of contract between Ray’s business and Kevin for the moving of the house from Mirrabooka Road to Betka Road are “all fake”. Although Ray admits that he witnessed Kevin sign the Schedule, that he produced the Schedule and handwrote the parties and price on that page, with regards to the rest of the contract Ray states, “somebody forged those”. Further, Ray stated that Kevin’s “other sister produced that paperwork and attached it to” the Schedule. Kevin rejects these claims.
136 Kevin says that Ray has provided no evidence to substantiate his claim that Cheryl told him she was going to collect rent from Kevin. Ray argued that the $5,400.00 Kevin paid Ray under the contract for removal of the house was “towards 12 months’ rent or two years rent”, however, for the reasons stated above relating to the formality of the contract, Kevin rejects this claim.
137 Kevin points out that, despite Ray claiming that the money paid by Kevin for the removal of the house was 12 months or two years’ rent in advance, Ray does not suggest that he ever gave those funds to Cheryl. Kevin notes that while Ray remains committed to his position regarding the upfront rent, Ray otherwise claims unawareness as to all other financial consequences of property ownership such as the payment of rent, rates, or utilities.
138 Kevin argues that Ray must have known about the agreement he had with Cheryl given that, as executor, he did not take any steps to recover any outstanding “rent” that he saw as owing to the estate. Although Ray says that he did ask Kevin for rent in conversations prior to distributing the Property, Kevin says that Ray’s requests for rent were under the guise of helping him out, not for the benefit of the estate.
139 On the night Cheryl died, both Kevin and Marion confidently recall that Ray told Kevin he could remain at the Property for as long as he likes. Kevin says that this was Ray confirming his life estate.
140 Kevin says that the deal he made with Cheryl was that he would live on the Property “for the rest of [his] life, or if [he] didn’t want to stay there, it went straight to the boys”.
141 Kevin says that both Marion and Dennis independently gave clear evidence of their discussions with Cheryl during which she told them of the arrangement with Kevin. In her evidence, Marion recalled that Cheryl said to her, “Kevin will stay in the house until he decides to leave, or he dies, and in that instance the house was to go to her boys”. Dennis recalled that Cheryl called him and said:
“I want to tell you what I’m doing with the block of land now that Bluey’s got a house on it…I’m going to get him to make a will up, ‘cause he hasn’t got a will, and I’m going to stipulate that he’s allowed to stay free of charge until he dies, and then the block of land and the house, and all Bluey’s – what money’s left over he’s got after the funeral expenses and that, all goes to Cheryl’s two children”.
142 Kevin argues that clause 6 of the Will plainly contemplates Cheryl’s intentions that she laid out to Dennis, Marion and Kevin. Kevin argues that the key players seemed to be under the impression that the buildings on the Property were removable and, therefore, able to be disposed of by their “owner” – Kevin. This is entirely consistent with Cheryl’s desire to have Kevin make a Will whereby he leaves all of his assets to her two sons as a house and land package.
Ray’s reply submissions
143 Ray submitted that there is a lack of detail from Kevin about the representation that he relies upon. The other witnesses brought in to, in part, substantiate his story also did not give evidence about witnessing a conversation between Cheryl and Kevin that he could live there for the rest of his life. Ray claims that it does not matter if Cheryl said to Marion that Kevin could live on the Property for the rest of his life and that, even if the Court accepts the Representation was made, the timing is critical.
144 Although Ray concedes that the level of evidence does not have to be the level of a contract but there must be sufficient detail, he referred to paragraph 25 of the counterclaim in which he claims it only broadly asserts when the alleged conversations between Cheryl and Kevin took place. He contends that there was a lack of detail as to when the Representations were said to have occurred, which is an obstacle to the propriety estoppel claim sought to be made.
145 Ray cited Hampson v Hampson[8] in which the Court was critical of the lack of detail of the alleged representation where the reliance is based on historical conversations, notwithstanding the family context and the informality that comes with that.
[8] [2010] NSWSC 217 at [16].
146 Ray also noted the following evidence given at trial:
“Cheryl said to you that she’ll buy the land and if you set the house and everything up, you can live there for the rest of your life.[9]
…my deal with my sister was that I lived in there for the rest of my life, or if I didn't want to stay there, it went straight to the boys.[10]
…I'm leaving the whole lot to the kids, 'cause Cheryl's ‑ the understanding was that I stayed there until I died, or if I got out, then it went straight to the kids.”[11]
[9] Transcript 140 line 15.
[10] Transcript 167 line 20.
[11] Transcript 168 line 19.
147 Ray argues that the evidence noted above:
(a) does not state the time in which the alleged representations took place;
(b) are not representations that Kevin could live on the Property for life;[12]
(c) indicated that Kevin’s memory has evolved over time and in a litigious environment;[13] and
(d) the highest evidence is the evidence about the drafting of the Will and what forms Kevin’s view about what occurred which post-dated the time in which the Representation was said to have occurred.[14]
[12] Transcript 127 lines 31 and 128 line 19.
[13] Transcript 135 line 28.
[14] Transcript 136 line 1.
Analysis: Representation
148 Contrary to the submissions made by Ray, I find that Kevin’s evidence in relation to the Representation are clear and unequivocal. Ray’s argument ignored the sworn evidence of Kevin given in his affidavit in opposition to the O53 application. Paragraphs 6 and 7 of Kevin’s affidavit answers the substance of the Representation, the timing and place as follows:
(a) Kevin had discussions with Cheryl regarding the Searle’s house and the blocks for sale and his need to vacate his mother’s house;
(b) he did not have sufficient funds to purchase the land and move a house onto the land;
(c) it was agreed that Cheryl might provide some funds to assist, and if they were able to acquire one of the house blocks at auction for a reasonable price, then Kevin would arrange at his cost for the removal of Rae’s house on to the house block;
(d) Kevin would arrange for all necessary permits and services required;
(e) Cheryl and Kevin agreed that he would be able to live in the house and occupy the Property solely during his lifetime, but upon Kevin’s death, the Property would pass to Cheryl's two sons;
(f) Kevin could not recall the precise dates and circumstances of the discussion between Cheryl and him had concerning the acquisition of the Property;
(g) those discussions occurred at various times in the period leading up to the auction of the Property and thereafter;
(h) some of the discussions took place at Cheryl's property at Mallacoota and possibly at their mother's home;
(i) Kevin deposed it was clearly agreed and understood between himself and Cheryl that he would live in the house in Betka Road for the rest of his life and the Property would then pass to Cheryl's boys;
(j) as part of their discussion, Cheryl asked Kevin to make a Will leaving his estate to her two boys. He agreed to do this;
(k) Cheryl arranged for Kevin to see a solicitor in Morwell to make a Will. He attended to this, and in or about May 2001, executed a will providing that his estate pass to Cheryl's sons, Shayne and Warren. That Will remains current.
149 The Representation needs to be made by Cheryl to Kevin. Kevin is the one who is claiming to act on the Representation to his detriment. However, I accept that the repetition of the Representation, or the state of affairs, by Cheryl to Marion and Dennis, corroborates Kevin’s case as set out below.
150 As conceded by Ray, the fact that clause 1 of Cheryl’s Will vests all of her Property with Ray does not preclude Kevin from making a claim under proprietary estoppel. There are numerous cases in which representations conflict with testamentary promises, and equity has come to the relief of the representee.
151 Although the Will remains the only written acknowledgement of Cheryl’s wishes, it is not impossible, as argued by Ray, that Cheryl made subsequent representations to Kevin, as well as other family and friends, which contradict her Will. It is entirely possible that Cheryl was under a misconception as to how her Will distributes her property. Considering the evidence elicited at trial outlining her wish for Kevin to stay on the Property for his life and for the Property to subsequently pass to her two boys, Cheryl was likely under the impression that clause 6 provided for Kevin and her children despite clause 1. This is supported by Marion’s evidence that during her last interaction with Cheryl, some two weeks before she passed away, Cheryl reiterated her desire for Kevin to stay in the Property for life and for it to pass to her two sons.
152 There were three separate witnesses — Kevin, Marion and Dennis — who gave evidence that Cheryl wished for Kevin to stay on the Property for his life and for it subsequently pass to Cheryl’s children. Although it is argued that clause 6 coloured the impressions and memory of two of these witnesses (Marion and Kevin), it is possible, and I accept, that clause 6 actually coloured Cheryl’s own understanding as to how the Property was to be distributed.
153 Kevin’s decision, at Cheryl’s behest, to make a Will with the same lawyers at the same time as Cheryl made hers supports the view that Cheryl and Kevin wanted the Property to remain with Kevin and to ultimately transfer to Cheryl’s children. There was no necessity for Kevin to make a Will, especially given his lack of assets. It appears that he was encouraged by Cheryl to make a Will for Cheryl’s peace of mind, so that she was confident the land would end up with her sons. Although this is inconsistent with clause 1 of Cheryl’s Will, it is yet more evidence that there was a disconnect between what Cheryl wanted her Will to say, and what it actually said.
154 Marion also provided evidence that Cheryl had been concocting a plan to provide a place for Kevin to live indefinitely prior to her purchase of the Property, and this is consistent with their family dynamics and the impression that the siblings held of Kevin, that is, that he needed to be provided for by his friends and family. This was a pattern that played out throughout Kevin’s entire adult life.
155 There are two accounts that Ray comforted Kevin on the night of Cheryl’s passing and told him that he could remain on the Property. These accounts come from Marion and Kevin. Although Ray disputes this, saying that he cannot remember seeing Kevin there, Ray is subject to greater credibility concerns and, as such, his recollection cannot fully be trusted as set out above. However, even if it is accepted that Ray did confirm with Kevin that he could remain on the Property, this might have meant something different in Ray’s mind than that of Kevin and Marion. On Ray’s case, he might have been under the impression that Kevin was there subject to a lease and was paying rent to Cheryl.
156 Ray’s argument that he believed Kevin was a tenant hinges on the contract he had with Kevin for the removal of the Searle’s house. Ray says that the $5,400.00 paid by Kevin to his business was for 12 months or two years rent in advance. If Ray’s version of events is accepted, then he may have been under the impression that Kevin had been subsequently paying rent.
157 However, Ray’s claim that this money was for rent is inconsistent with the contract itself and seems implausible based on evidence elicited in cross-examination. Ray’s claim that the body of the contract had been forged and retroactively “clipped on” by one of Kevin’s siblings seems unlikely, was not pleaded and appeared for the first time under questioning at trial in relation to the contract.
158 Ray simultaneously claims that he had accepted the $5,400.00 on behalf of Cheryl but that he also had nothing to do with Cheryl’s finances. These claims are inconsistent, and his evidence is implausible. It is also unclear given the conflicting evidence given by the witnesses as to whether Ray was in fact in a relationship with Cheryl at the time of the signing of the contract,[15] so it seems even less likely that he was accepting money as rent on her behalf. In my view, it is more probable on the evidence before the Court that Ray and Cheryl commenced their relationship in early to mid-1999, after the purchase of the Property and after Kevin moved the dwelling.
[15] Ray places the commencement his relationship with Cheryl in 1997 because her mother was still working at the Hotel. This was disputed by Marion who said that Madge Bruce had retired in 1970 and had health problems from 1992. In June 1999, Marion saw flowers at Cheryl’s work. Kevin said at the time of the auction, Ray was “tracking” Cheryl but was still married and his wife was still alive. Cheryl became the registered proprietor of the Property on 12 June 1998.
159 Given the implausibility of Ray’s assertion that the $5,400.00 was for rent in advance, it is likely that at some point in his relationship with Cheryl, Ray became aware of Kevin’s arrangement with Cheryl. It is, therefore, more likely that his comments to Kevin on the night of Cheryl’s death confirmed Kevin’s life estate.
160 The fact that Ray likely did ask Kevin for rent in 2018 does not prove that he was always under the impression that Kevin was paying rent. Due to his declining financial circumstances, it is more likely that he started requesting rent from Kevin because he was looking for a supplementary income.
Has Kevin reasonably relied on the Representation to his detriment?
Ray’s Submissions
161 Ray says that, after the death of Kevin and Cheryl’s mother, when it became clear that Kevin needed to move out from their deceased mother’s home, Kevin’s only option was to live on the land that Cheryl offered him.
162 Ray insists that moving on to the Property offered by Cheryl was a better option that any other living option which may have been available to Kevin.
163 Ray argues that Marion’s evidence that Kevin had been “looking for other places to live”[16] was unclear and never explained, and, therefore, this statement does not rebut the position that Kevin had no other available options.
[16] Transcript p192 lines 11–14.
164 Ray points out that, on Kevin’s evidence, other than a short time where he was renting a house with his former wife, as far as Kevin could remember, he had been living in a caravan from around 1980 until moving in with his mother in 1992. During this time, Kevin parked his caravan in Busselton in Western Australia, later at a friend’s house in Melbourne and, finally, at his mother’s backyard in Mallacoota.
165 Ray says that Kevin had not given real thought to where he would live after his mother died. Marion said that Kevin and Cheryl had both been involved in the “vote” to decide whether or not they were going to sell their mother’s property to Marion’s daughter, although Kevin cannot recall being a part of this vote. Regardless, Ray submits that in the decade preceding Cheryl purchasing the Property, Kevin had been dependant on friends and family for places to live, having previously spent more than a decade living in caravan parks. Through this evidence, Ray implies that given Kevin’s transient living situation, along with his lack of interest in the distribution of his mother’s estate, it is clear that Kevin intended to remain dependant on friends and family for living arrangements going forward.
166 Ray contends that Kevin was financially destitute at around the time Cheryl purchased the property. Ray says that, although Kevin did receive some money after his mother’s death, on Kevin’s own evidence he “needed the money” which he proceeded to spend “on different things, probably paying bills and Christ knows what, I don’t know”.[17] Ray says that the only time it appears that Kevin had any money or paid for anything was when he paid the amount of $5,400.00 for the removal of the Searle’s house.
[17] Transcript p160 lines 12–14.
167 Ray cites the case of Sullivan v Sullivan[18] and argues that the detriment in that case demonstrates the high watermark for the requisite detriment in the cases of proprietary estoppel. Sullivan involved a brother and sister relationship. The sister gave up her housing commission accommodation for which she had waited 7 years on faith of a promise made by her brother. Ray submits that Kevin’s paying for a house to be moved onto some land, connecting services, paying for rates and undergoing general upkeep is not sufficient detriment when taking into account the threshold outlined in Sullivan.
[18] [2006] NSWCA 312 at [84]–[85], [89]–[91].
168 Ray says that the question of detriment has to be more than a course of action; that moving onto a property is not enough. Here, Ray draws upon Graham v McNab (“McNab”),[19] where a couple moved into a large property in Essendon for the purposes of looking after an elderly couple. Ray notes that the moving into the property was not enough, and that, in fact, it was a better option than the couple’s existing living situation (a small flat). The relevant detriment in McNab, therefore, was not the moving into the property, but spending 20 years looking after an elderly couple under the expectation that they would be left the property in the will.
[19] [2016] VCC 1128 at [90].
169 In applying McNab, Ray argues that Kevin’s actions of simply moving onto the land, especially in circumstances where he had no better option, should not be considered a sufficient detriment.
170 Ray dismisses the argument that Kevin’s works to improve the Property should be considered a sufficient detriment. Ray takes issue with the assertion made in Kevin’s submissions that construction of the house occurred, noting that the house was already constructed and was simply moved onto the Property whereby services were connected. Ray argues that, other than the construction of a deck, little constructive work took place in the sense of renovating or improving the house.
171 Ray argues that the other incidental upkeep jobs performed by Kevin, such as mowing the lawns and gardening, are simply acts which benefit the occupier of the Property. This can be contrasted with the maintenance jobs undertaken in Sidhu v Van Dyke,[20] where maintenance jobs were performed for somebody else’s benefit. As Kevin was the principal beneficiary of his own labour in these circumstances, this cannot amount to evidence of a detriment.
[20] (2014) 251 CLR 505
Kevin’s submissions
172 Kevin argues that Ray understates the amount of work that Kevin undertook in terms of preparing the land for installation of the house, and the subsequent upkeep, maintenance and improvement Kevin undertook in relation to the house and the land.
173 In exchange for the Searle’s house, Kevin had to dismantle the chimney, remove the fence on the property, remove the stumps, number all items and clean up the block. Once the house had been placed on the land at Betka Road, Kevin placed the house on stumps and paid for the connection of all services. Kevin put up bearers and the veranda and, with the help of a friend, constructed the back deck. Kevin also added two smaller sheds on the block, put up a dividing fence and removed trees on the side of the block near the drain.
174 Kevin paid rates on the Property and, apart from insurance, made all other payments associated with ownership of the Property.
175 Kevin states that he borrowed $20,000.00 from the bank which he invested in the upkeep of the Property.
176 Kevin argues that his organising and paying for the movement of the Searle’s house onto the Property, and his improvement works in making the house liveable significantly added to the capital appreciation of the land.
177 Section 157(3) of the Local Government Act1989 (Vic), which was in operation at the relevant time, states that:
“For the purposes of calculating the site value, the net annual value or the capital approved value of rateable land, a council must use the current valuations made in respect of the land under the Valuation of Land Act 1960 by a valuation authority”.
178 For the avoidance of any doubt on the question, under s9 of the Valuation of Land Act 1960 (Vic), the Valuer‑General is the valuation authority.
179 Kevin argues that he can rely on the valuation provided by the East Gippsland Shire Council. On this basis, the valuation made on 2 August 2000 places the capital improved valuation at $66,000.00, with a site value of $20,000.00. Kevin’s improvements to the land resulted in a threefold increase in the value of the Property. This suggests that Kevin’s improvement to the land is not insignificant.
180 By planning and building his life around the prospect of living in the Property for the rest of his life, Kevin insists that he has undertaken a “life changing decision”. Kevin argues that such a “life changing decision” has met the requirement outlined by Nettle JA in Donis v Donis:[21]
“[H]ere, the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature… beyond the measure of money and such that the equity raised by the promisor’s conduct can only be accounted for by substantial fulfilment of the assumption upon which the respondent’s actions were based”.
[21] (2007) 19 VR 577 at [34].
181 There are two parts to the “life changing decision” argument. The first is that after deciding to live in the Property, Kevin built a life around living in Mallacoota. This crossroad could, therefore, be deemed a “life changing decision”.
182 The second part of the “life changing decision” is that, contrary to Ray’s submission, Kevin did have options to live elsewhere. Kevin argues that the fact that he was able to take out a loan from the bank and pay this loan back quickly means that he could have purchased his own block of land. Instead, Kevin says that he used the proceeds of the loan to connect the Property to services and make it generally liveable.
183 Kevin argues that he did not have the need to look for other accommodation because everything lined up for him in relation to the Property. The coalescence of factors, such as Cheryl’s wish to purchase a property, Cheryl’s promise to Kevin and the Searle’s house becoming available meant that everything fell into place such that there was no necessity to look elsewhere. If everything had not lined up for him to move into the Property, Kevin would have had to contemplate other living situations.
Analysis: Detriment
184 The test for proving detriment in the case of proprietary estoppel was outlined in Donis. Detriment is not just limited to money, it must have “life changing” consequences of a “profoundly personal nature”. In Kevin’s case, it will be difficult for him to argue that he has suffered a detriment if it is proven that living on Cheryl’s Property was better than any alternative living situation.
185 There is some case law[22] which suggests that detriment will be established when better (or at least as good) opportunities have been forgone, and the loss, therefore, is the decision to pursue the promise and not alternate opportunities. It follows that, in the absence of better or alternate opportunities, and where the promise offered is the only reasonable option available, detriment will not have been incurred.
[22] See McNab and Sullivan.
186 Prior to moving into the Property, Kevin had lived a transient lifestyle for almost a decade, spending several decades living in a caravan, often parked on friends’ and family’s property before finally living with his mother. At first glance, it would appear that the prospect of living rent-free in a free-standing house was a substantial improvement. It would also appear that, given that Kevin had been dependent on friends and family for accommodation for much of his adult life, this was not only a better option but the only option for stable housing.
187 However, I accept that Kevin probably did have other housing opportunities available to him, he just may not have been aware of them as there was no immediate necessity to pursue them. There is evidence that Kevin procured a $20,000.00 loan from Bank of Melbourne around about the time of moving into the Property, which he claims to have promptly paid back. Even Ray acknowledges that Cheryl helped Kevin obtain a loan at some point. If it is accepted that he did take out this loan, then he would have been able to afford a property similar to Betka Road which sold for $16,000.00. However, apart from Marion stating that she was aware of the loan, Kevin has provided no other corroborating materials such as receipts or transaction records which confirm the veracity of the loan. The strongest evidence of the loan is the fact that Kevin was able to pay for the connection of services, initial rates and maintenance costs needed to make the property liveable. As Kevin was not known for having cash readily at hand (he had spent his mother’s inheritance and the only other mention of him possessing money relates to the $5,400.00), it seems likely that he did obtain a $20,000.00 loan and invested it in the Property. Also, the fact that the house ultimately added $46,000.00 to a $20,000.00 land valuation further suggests that Kevin paid for some substantial improvement.
188 Even if Kevin did not procure the $20,000.00 loan, given that he did have $5,400.00 on hand to pay for the moving of the Searle’s dwelling, it must be noted that $5,400.00 is roughly a third of the price Cheryl paid for the Property, and so it is not impossible that he could have made other attempts to obtain enough money to pay for a similar property.
189 Given the probability that Kevin could have sought alternate (and not necessarily worse) living arrangements, he should not be penalised for the fact that he made no attempts along these lines. The opportunity to live at the Property involved a great deal of good fortune. Kevin needed Cheryl to have the cash and the inclination to purchase, a suitably priced block of land needed to become available given her $20,000.00 budget, and most importantly, the offer of a free moveable house. Kevin would have not been acting in his own interests if he did not pursue this opportunity, and I accept that it simply was not necessary to seek alternate accommodation.
190 Even though Donis provides that detriment is not limited to financial contributions, financial contributions will nevertheless be relevant where they involve substantial life changing amounts of money. In my view, Kevin’s general lack of means would indicate that his outlay of $5,400.00, plus paying for the connection of services, upkeep and rates did amount to a life-changing amount of money. Detriment needs to be assessed on the facts, and from Kevin’s perspective. Investing this amount of money would not have been a decision he made lightly, it would have had life-changing consequences in terms of Kevin’s overall personal wealth.
191 Finally, I accept that Kevin’s investment in the Property also vastly increased the value of the land, as evidenced by the valuation report which demonstrated that Kevin’s contributions added $46,000.00 of value to the land (when the land at that point was valued at $20,000.00). That the sum of Kevin’s works on the Property resulted in such a dramatic increase in property value speaks to the amount of effort, skill and care that went into Kevin making the house liveable. Although Ray says that these outlays were no different from any actions that any occupier would take, that he chose to invest his time and money into making the Property liveable, thereby increasing its value, does contribute to the overall conclusion that Kevin suffered a substantial outlay and detriment.
Would it be unconscionable if the Representation were not upheld?
192 Assuming that Kevin is successful in the above issues, Kevin submits that it would be unconscionable to permit Ray to resile from Cheryl’s (and his) Representation to Kevin. Kevin’s health and financial circumstances mean that it is impossible for him to otherwise stay in Mallacoota, an area in which he has built his life around for the past 25 years.
193 As evidence of his poor health, Kevin notes that he has recently had “two or three stints in hospital”[23], and he faces the prospect of further operations on his back.[24]
[23] Transcript 141 lines 12–13.
[24] Transcript 141 lines 11–10.
194 I accept that Kevin has no means to earn enough income to stay in Mallacoota if his life interest were not granted. He was forced into early retirement due to his poor health[25] and, along with his hardness of hearing, would find it nigh impossible to re-enter the workforce generate the income necessary to stay in Mallacoota.
[25] Transcript 146 lines 1–7.
195 I find that unconscionability is also brought about because Ray is a volunteer, and, therefore, stands to gain a significant windfall from improvements that Kevin made to the value of the property. These improvements have already been outlined, and include the procurement of a dwelling, as well as its upkeep and maintenance.
196 Finally, I conclude that that unconscionability arises on the facts because Cheryl (and Ray) knew that Kevin had acted in reliance on their representations (and given my anterior finding that Kevin has proven detriment).
Is Ray entitled to an order for possession of the Property?
Kevin’s submissions
197 Kevin argues that it would be unconscionable to permit Ray to rely on indefeasibility of title, and that good conscience dictates that equity should intervene and recognise Kevin’s life interest.
198 Although Ray argues that Kevin does not have a life estate and is instead a tenant who has not paid rent for more than 20 years, Kevin says that Ray knew he possessed rights which exceeded that of a tenancy because Kevin was registered as the rated owner of the Property and had been paying rates for the past 20 years.
199 As the executor of Cheryl’s estate, Kevin argues that Ray has fallen short of his obligations to Cheryl’s estate by failing to call into account all assets and chase up all liabilities. Here, Kevin draws upon the authority of Bird v Bird[26] (which states at 104 and 105):
“there's no dispute that executors are under a positive duty to call in and collect the assets of the deceased. The executors, if necessary, must bring proceedings to that end, but can as an alternative set off a debt owed to the estate against a legacy due to a beneficiary…once it's established that there is a debt owed to the estate, it's incumbent on the executor to show why he did not get it in”.
[26] [2012] NSWSC 648.
200 Kevin says that Ray did not adequately address Kevin’s claim, and he did not undertake all measures to take vacant possession of the Property. By failing to account for the assets and liabilities of Cheryl’s estate, Kevin says that Ray never uncovered the true position of Cheryl’s estate.
201 Kevin says that Ray’s letter demanding he pay rent is only partial fulfillment of his obligations as executor and is not a sufficient attempt to get in all assets of the estate.
202 In supporting his claim that Ray did not adequately discharge his duties as executor, Kevin points towards s28(1) of the Administration and Probate Act1958 (Vic), which states:
“the personal representative of a deceased person shall, when lawfully required to do so exhibit on oath or by affirmation in the court a true and perfect inventory and account of the real and personal estate of the deceased”.
203 Kevin says that Ray did not provide the Court with an accurate inventory of the estate of the deceased because he did not take into account Kevin’s life tenancy.
204 Kevin says that Ray not only undermined his potential claim, but the claim of any party wishing to assert a right over the estate, including Cheryl’s two sons who may have wished to pursue a Testator Family Maintenance application.
205 Kevin says that, if Ray had been correctly administering his duties as executor of the estate, Ray would have put all potential claimants on notice by serving a notice under s30 of the Administration and Probate Act 1958 (Vic), which states that the executor:
“having notice… that any claim has been or may be made against the estate of which he is the personal representative, may serve upon any person making or potentially and possibly entitled to make such a claim a notice requiring such person to take within a period of three months from the date of receiving such notice all proceedings proper to enforce or to establish such claim and/or to duly prosecute the same”.
206 If no claims are made in response to the notice, then the executor is entitled to consolidate the estate on the assumption that no outstanding claim will be pursued.
207 Kevin says that, while Ray served him the proposed lease and the notice to vacate in his capacity as executor, he then chose to transfer the Property to himself as beneficiary. He subsequently took up the proceedings against Kevin in his capacity as registered proprietor and beneficiary, when he should have done so prior to distributing the Property, when he was still the executor. Transferring the Property to himself as beneficiary and becoming the registered proprietor such that he is able defeat Kevin’s claim is evidence of Ray’s misconduct as executor.
208 Kevin says that, due to the above misconduct, Ray has acted with a conflict of interest and obtained an unauthorised benefit, both of which serve to defeat his claim for indefeasibility.
209 The conflict of interest arises from the fact that Kevin has favoured his interests as beneficiary over his duties as executor, and the unauthorised benefit relates to the premature transferring the Property into his own name in breach of his obligation as executor.
210 Kevin also cites Zekry v Zekry,[27] which states:
“It must be accepted that the conduct and knowledge registered proprietor before he or she becomes registered may be relevant to whether or not, once registered, he or she is liable to share or convey the land to another party pursuant to a trust. The context in which the person became the registered proprietor, including whether he or she did so as a volunteer, will also be relevant to any assessment of whether a subsequent denial of a beneficial interest would be unconscionable. [emphasis added]… however, his knowledge, in this instance, his knowledge and conduct at the time he became the registered proprietor is relevant to whether it would be unconscionable for him to hold his title free of the equitable interest claimed by the applicant”.
(Emphasis added.)
[27] [2020] VSCA 336 at [71] (“Zekry”).
211 On Kevin’s interpretation of Zekry, while knowledge of a third-party claim is not enough in itself to establish unconscionability, it is still relevant. Kevin says that when Ray was standing in Cheryl’s shoes as executor of the estate, he did have knowledge of Kevin’s life estate because he was aware that Kevin had not paid rent for the preceding 20 years.
212 Kevin also distinguishes the facts surrounding his claim from those in which cases like Zekry arise, noting that Ray was not just a purchaser who knew of an outstanding claim, but was acting as both executor (vendor) and beneficiary (purchaser). This, in Kevin’s view, reinforces the inequity of Ray’s conduct.
213 Kevin drew upon the case of MAPAPearls Pty Ltd v Haliotis Fisheries Pty Ltd[28] to outline when a claim can be brought in personam relief against a registered proprietor. In MAPA the Court of Appeal said:
“… in order for an individual who seeks in personam relief against a registered proprietor to succeed, he or she must establish a known legal or equitable cause of action against the registered proprietor. In Horvath v Commonwealth Bank of Australia, Tadgell JA encapsulated this requirement as follows: ‘it should now be acknowledged that … a claim in personam encompasses only known legal or equitable causes of action’ …
Legal or equitable causes of action which can give rise to in personam relief against the registered proprietor include: a unilateral or common mistake about the interest to be transferred pursuant to an underlying instrument; and equitable fraud.
… Put another way, equitable fraud involves conduct that is abhorrent to the good conscience upon which the principles of equity are based.
… In Westpac Banking Corporation v Bell Group Ltd (in liq) [No 3], Drummond AJA stated that in order for a case to fall within the fourth head of equitable fraud, there must first be ‘an agreement that works an imposition or deceit on persons not parties to the agreement but who are in such a relationship with one or other of the parties that they will be affected by the agreement’. He went on to state that it is not necessary to show an actual intention to deceive or that the fraudulent agreement has been kept secret from the third parties affected by it. Secondly, he said that the agreement must infringe some head of public policy so as to require equitable intervention”.
[28] [2023] VSCA 108 (“MAPA”).
214 Kevin says that Ray has committed equitable fraud under the definition outlined in MAPA, and that this is his equitable cause of action for an in personam claim.
215 Kevin asserts that the fraudulent agreement is between Ray as executor and Ray as beneficiary, and that Kevin is the third-party who, although not party to the agreement, is nevertheless impacted by it. Kevin says that Ray’s decision to transfer the Property to himself as beneficiary without calling into account all assets, without putting him on notice, and in a manner which ultimately undermined his (and anyone else’s) claim, amounts to fraudulent conduct for the purposes of equitable fraud.
216 With regards to the requirement that the equitable fraud infringes on an area of public policy, Kevin argues that regulating the conduct of an executor in distributing an estate is one such area.
Ray’s submissions
217 Ray submits that even if Kevin can establish the existence of a life interest, Ray is afforded the protection of indefeasibility of title under ss42 and 43 of the Transfer of Land Act 1958 (Vic).
218 Ray says that even though he is a volunteer, he is entitled to indefeasibility of title. This is supported by the Court of Appeal decision in Zekry,[29] which states:
“It necessarily follows that … to the extent that the applicant held any equitable interest in Hampton Park by reason of a common intention trust, joint endeavour constructive trust or resulting trust, it was a right against Samir who was then the registered proprietor. However, establishing such a claim would not in itself bind the respondent as a subsequent registered proprietor. When the respondent became the registered proprietor of Hampton Park, she acquired title by registration. Even though she was a volunteer, in the sense that the property had been transferred to her for a stated consideration of love and affection, her title was indefeasible. As we have stated, the applicant has not pleaded any fraud on her part in relation to the registration of Hampton Park or Roxburgh Park. However, her knowledge and conduct at the time she became the registered proprietor are relevant to whether it would be unconscionable for her to hold her title free of the equitable interest claimed by the applicant”.
(Emphasis added.)
[29] Zekry at [74].
219 Ray argues that he should not lose his indefeasibility of title because he has not breached his duties as executor.
220 Ray says that he did provide Kevin with sufficient notice of his intention to transfer the land to himself as registered proprietor and had given Kevin the opportunity to respond. Ray points towards the letter asking Kevin to sign the lease on 26 November 2019, and the subsequent notice to vacate in January 2020, as evidence that steps were taken in his capacity as executor to deal with Kevin’s claim.
221 Ray argues that his failing to evict Kevin does not amount to a failure to call in the assets of the estate. Ray says that if it was the duty of every executor to evict any tenant on title, then no lease would survive the death of the landlord.
222 Ray points out that s30 of the Administration and Probate Act (Vic), which outlines the process for serving notice on any existing claimants to an estate is not couched in mandatory terms. Although Ray did not serve the s30 notice, he argues that his attempting to have Kevin sign the lease and the subsequent conversations about paying rent amounts to sufficient notice, and that Kevin could not have been oblivious to the fact that Ray was taking steps to assert his rights in relation to the property.
223 On Ray’s recollection, the issue of Kevin paying rent to stay at the Property was first raised in conversation by Ray sometime in 2018. Although Kevin argues that two and a half years elapsed before Ray took any steps towards asserting his rights over the Property, Kevin admitted in evidence that prior to receiving letters he had been “ignoring the whole lot” when it came to Ray’s inquiries about the Property. Ray argues that, given Kevin admits to ignoring some attempts on behalf of Ray to discuss matter relating to the Property, Ray’s evidence regarding the conversation in 2018 should be accepted.
224 Ray argues that, given Kevin’s persistent ignoring of Ray’s attempt to engage with Kevin over the Property, he had no way of knowing the true nature of the Kevin’s alleged interested until his solicitors received the letter on 30 March 2020 — some seven days after he had already transferred the Property to himself.
225 Ray draws upon a different passage in Bird at [107], which states:
“the defendants also point out that an executor, in performing his office, must conduct the business of the trust estate with the same care as an ordinary prudent businessman would apply to his own business affairs… The executor will be exonerated if he proves that the steps would not have been effective (or there are reasonable grounds for thinking the steps would not have been effective)”.
(Emphasis added.)
226 Ray says that consistent with Bird, it was not reasonable to expect that he would pursue Kevin any further or attempt to sue him. Any attempt to sue Kevin would have been based on an uncertain debt, as he had limited knowledge of Kevin’s arrangement with his wife. Ray also says that he was also aware that Kevin had no money, and, therefore, suing him would be a waste of the estate’s funds.
227 Ray says that a s30 Notice is permissive and not mandatory. Ray says this should be seen through the lens of the letters from his lawyers seeking entry into a formal lease and notice to vacate. Ray concedes that it may be good practice to send a notice, however, a failure to send a notice in the present case cannot be a breach of fiduciary duty giving rise to a claim to defeat indefeasibility. Ray had numerous attempts to assert his rights against the property with respect to Kevin.
Analysis: Indefeasibility
228 Although Ray asserts that his indefeasibility of title should prevail over Kevin’s interest in the Property, there are circumstances in which equity will intervene and override indefeasibility.
229 For Kevin to successfully bring an in personam claim, Kevin must prove that he has an equitable (or legal) cause of action. Kevin does have an equitable cause of action; he has a claim under equitable fraud in the sense outlined in MAPA.
230 Kevin claims that Ray acted fraudulently when, as executor, he prematurely entered into an agreement with himself as beneficiary to transfer the land into his own name, such that Kevin (and any other potential claimants) were no longer able to make a claim against the estate. If Kevin can prove that Ray prematurely transferred the Property into his own name in breach of his duties as executor, then he will have made out a case for equitable fraud.
231 Ray never served a s30 notice under the Administration and Probate Act (Vic). Although serving of this notice is not mandatory, had he done this it would be impossible for Kevin to argue that he never had the opportunity to bring his claim for life tenancy against the estate. Ray also never presented the Court with a true inventory of the assets of Cheryl’s estate pursuant to s28(1) of the Administration and Probate Act (Vic). Although these two failures do not, in themselves amount to a breach of executor’s duties to such an extent that equity ought to intervene, they are, nevertheless, relevant to the overall assessment.
232 Kevin also says that Ray did not take adequate steps to get all assets and liabilities in prior to distributing the Property, a requirement outlined in Bird. Had he taken adequate steps, such as serving the s30 notice, he would have been made aware of Kevin’s claim, and this would have led to a dispute between Kevin and the estate.
233 Ray says that he did take adequate steps, being that he served Kevin with a lease to sign, and a subsequent notice to vacate. The lease and the notice to vacate were designed to gain some certainty over what Kevin owed and what his relationship with the property was. Kevin did have the opportunity to explain his position to Ray following the serving of the lease and the notice to vacate, however, he waited until 30 March 2020, some 7 days after the Property was transferred, to serve a notice outlining his life estate.
234 Despite these attempts as executor to engage with Kevin and open the door for a discussion, Ray should have gone further and should have brought proceedings to obtain a vacant property. Ray argues that it is too onerous to expect that he would initiate proceeding in these circumstances, especially when the debt is uncertain, and he did not know the extent of Kevin’s interest.
235 Therefore, the question as to whether Ray should have done more to engage with Kevin rests upon whether Ray could have been aware that Kevin claimed to possess a life estate. The fact that Kevin had not paid rent for 20 years does not definitively prove this, as according to Ray, Kevin was just a tenant who had not paid rent. The fact that Kevin was paying rates is more convincing evidence. More importantly, when the totality of the evidence is taken into consideration, specifically, the comments made by Ray on the night of Cheryl’s death, along with the fact that Cheryl told a number of family and friends about her plans for Kevin, it seems improbable that she would not have told the same to her husband, Ray.
236 On this interpretation of events, Ray was aware of the extent of Kevin’s claim, and, therefore, should have commenced proceedings as executor, providing Kevin with the opportunity to make a claim against the estate.
237 Given the above findings, I conclude that Ray committed equitable fraud by prematurely transferring the title into his own name as beneficiary, and, therefore, equity should intervene despite his indefeasible title.
Is Kevin entitled to declaratory relief recognising a life interest in the Property?
238 For the forgoing reasons, the answer is: Yes.
If the answer to the preceding question is no, is Kevin entitled to equitable compensation?
239 Given my anterior findings, it is not necessary to answer this question.
Conclusion
240 Accordingly, for the foregoing reasons, I am satisfied that the claim ought to be dismissed and there is judgment on the counterclaim in favour of the defendant against the plaintiff in the form of a declaration that the defendant has an interest in the Property as life tenant.
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Certificate
I certify that these 51 pages are a true copy of the judgment of Judge Burchell delivered on 21 July 2023
Dated: 21 July 2023
Gideon Lipinksi
Associate to Judge Burchell
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