Ronowska v Kus

[2012] NSWSC 280

Supreme Court

New South Wales

Medium Neutral Citation:	Ronowska v Kus [2012] NSWSC 280
Hearing dates:	20, 21 and 22 March 2012
Decision date:	22 March 2012
Jurisdiction:	Equity Division
Before:	Pembroke J
Decision:	See paragraph [47]
Catchwords:	ESTOPPEL - Equitable proprietary estoppel - primary importance of providing just and conscionable satisfaction of the plaintiff's expectation - no requirement that unfulfilled expectation be precisely quantified and valued - relevance of change in circumstances after promise made CONTRACT - Intention - Contracts between family members - relevance of the relationship between parties, context and absence of formality
Legislation Cited:	Migration Regulations, 1994 (Cth) Succession Act, 2006
Cases Cited:	Ashton v Pratt (No 2) [2012] NSWSC 3 Delaforce v Simpson-Cook (2010) 78 NSWLR Giumelli v Giumelli (1999) 196 CLR 101 Jennings v Rice [2002] EWCA Civ 159 Riches v Hogben [1985] 2 Qd R 292 Tadrous v Tadrous [2010] NSWSC 1388
Texts Cited:	Estoppel & The Protection of Expectations, Elizabeth Cooke [1997] 17 LS 258 The Remedial Discretion in Proprietary Estoppel, Simon Gardner (1999) 115 LQR 438
Category:	Principal judgment
Parties:	Krystyna Urszula Ronowska - plaintiff Ludwig Kus - defendant
Representation:	Counsel: D M Roberts - for the plaintiff M W Hadley - for the defendant Solicitors: George West - for the plaintiff Maclarens Lawyers - for the defendant
File Number(s):	2011/257705

Judgment

Introduction

1. The plaintiff is a 67-year-old widow. She was born in Poland and lived there until 2005. Her husband died in 1995. She has a son and a daughter. The defendant is the uncle of the plaintiff. He is now at least 90 years of age, suffering from dementia and unable to give evidence. His wife died a considerable time ago. The plaintiff's case is that at the defendant's request she gave up her life in Poland and came to live with the defendant in his home at Greystanes in Sydney. She says she did so because the defendant promised her that she could live in his house for the rest of her life in return for caring for him. The defendant's sons have now evicted her from the house and entered into a contract for the sale of the property.

1. The case raises an issue about the nature and extent of relief to which a plaintiff is entitled in an equitable proprietary estoppel claim. In particular, it concerns the importance of making good an expectation by encouragement or representation and it raises a question as to whether the aim of this type of estoppel is to fulfil the plaintiff's expectations or to quantify her detrimental reliance and compensate her accordingly, or whether some intermediate objective is appropriate. See: Estoppel & The Protection of Expectations, Elizabeth Cooke [1997] 17 LS 258; The Remedial Discretion in Proprietary Estoppel, Simon Gardner (1999) 115 LQR 438.

1. There is, I think, no controversy in New South Wales, as to the applicable general principles. They are embodied in the following statements by Allsop P in Delaforce v Simpson-Cook (2010) 78 NSWLR 483 at [3] - [5]:

...relief in such cases is not to be measured by weighing detriment too minutely in order that it be converted into some equivalent of cash or kind, as if one were measuring the consideration for a commercial bargain. Equity will look at all the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character. Equity has always had a place in keeping parties to representations or promises."

Proportionality of the claimed interest or remedy...should not, however, be transformed into a necessary constitutive element of a cause of action...To do so would elevate one consideration above others, and in particular above the importance of making good an expectation by encouragement or representation...The equity is a broader one based on the just and conscionable satisfaction in appropriate fashion of the equity arising from the expectation created in another by encouragement or representation.

The importance of keeping a party to a representation or encouragement previously made is all the stronger where, as here, the encouragement or representation has been relied upon by a party to abandon a course of conduct that could possibly have led to a different outcome.

1. In his judgment in Delaforce (supra), Allsop P was endeavouring to explain the reasoning of the High Court in Giumelli v Giumelli (1999) 196 CLR 101. In that decision Gleeson CJ, Gummow and Callinan JJ at [35] approved certain statements by McPherson J in Riches v Hogben [1985] 2 Qd R 292 including the following:

...what attracts the principle is not the promise itself but the expectation which it creates.

...it represents the precise converse of...the basis for enforcing the contract.

It is not the existence of an unperformed promise that invites intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise.

The Plaintiff's Evidence

1. As the defendant was unable to give evidence and was in no position to confirm or contradict what the plaintiff attributed to him, I have adopted a cautious approach to her evidence: Ashton v Pratt (No 2) [2012] NSWSC 3 at [18]. However, its central elements and most of its detail are plausible. It is also supported by written statements made by the defendant at the time. I am quite satisfied, on the balance of probabilities, that the plaintiff's evidence represents a reliable account of the underlying facts. Except where I have expressly stated otherwise, I have accepted it as a truthful account. I was impressed by her and formed a favourable impression of her honesty.

The Encouragement & Assurances

1. Between 1996 and 1999 the defendant made the following representations to the plaintiff:

Krystyna, please come to Australia and stay with me. I want you to stay with me forever. When you come to Australia I will do everything for you. I will support you. I will provide everything for you. I provide your entertainment. You will have your own room as you did when you last stayed with me together with your own private bathroom. You will always have the use of the whole house and the garden. I want you to live in Australia forever. The house will be yours for your life. When I die, I want you to support my son Robert and look after him.

1. Between 1999 and 2003 there were many further conversations between the plaintiff and the defendant during which the defendant reiterated his desire that the plaintiff come to Australia to care for him. Prior to 2001 he told the plaintiff:

Krystyna, you will be the perfect carer for me. If my health deteriorates, if you study a course in nursing and caring for elderly people, that will assist you to care for me in my declining years.

1. From 1999 the defendant's health started to deteriorate and, partly as a consequence, the plaintiff adopted the defendant's suggestion and enrolled in a course in Warsaw relating to the nursing and caring of the elderly. She obtained a certificate of completion of the course in June 2001.

1. In 2003 the defendant came to Poland and stayed with the plaintiff and her father. His appearance and physical condition had deteriorated. The plaintiff was saddened by his condition. He renewed his request for her to come to Australia and live with him.

1. 2003 was a difficult year for the plaintiff. In March her best friend died and in May her mother died. She told the defendant she did not think she was quite ready to come to Australia. She said she would think very carefully about his suggestion. He reiterated to her that when she came to Australia the house would be hers to live in for the rest of her life. He said she would have her own room and bathroom, and the rest of the house to use. He emphasised that all he wanted was that she would care for him and that when he dies she care for his younger son, Robert. He said she would always have her own home to live in.

1. On this issue the plaintiff was supported by her daughter Aneta, who came to Australia on a student visa in 2008. Until then she had resided in Poland and was present on several occasions in 2003 during some of the conversations between the plaintiff and the defendant that I have just recounted. I accept her evidence. It was credible and consistent with the evidence before and after 2003.

1. In those conversations, Aneta said that the defendant said to her mother in her presence:

I promise you that I can organise your entry to Australia so that you can come to my home. You can live in one of the bedrooms. You can live there for the rest of your life. I will give this to you in writing.

At that stage the plaintiff responded, once again, by saying:

I have family and friends in Poland. I would prefer to stay in Poland. I'm not young. It's not a good idea to come to Australia at my age.

1. In October 2004 the plaintiff travelled to Australia again. She had been informed the defendant had suffered a stroke. She lived with the defendant and cared for him. She undertook all of the cooking in the home for the defendant and his son Robert. She also did the house cleaning, washing and ironing. She accompanied the defendant to the doctor. Sometimes Robert drove them. On other occasions they went by taxi.

1. The plaintiff stayed with the defendant until December 2004. During the period between October and December the defendant said to her more than once:

It would mean so much to me if you would be here with me and care for me for the rest of my life. I've told you before and I repeat that you will always have a home to live in, in Australia. All I wish is that you remain here with me and that you care for me and care for Robert

1. The plaintiff replied on these occasions that she was thinking very hard about it. She said, however, that her son was negative and that he argued with her about the proposal. She then returned to Poland.

1. By November 2005 she had made up her mind. In that month there was another conversation in which the defendant said to her:

My home is your home for your use for the rest of your life. You must feel it is your home. I want you to stay with me and care for me. You are prolonging my life. You are my lifeguard.

1. Understandably, the plaintiff regarded this as a promise that she would always have a home in Australia. She decided that she would accede to the defendant's requests and make the move from Poland to Australia. She committed herself to remaining with the defendant for the rest of his life in the belief she would have a home to live in for the rest of her life.

The Reliance

1. It was contended on behalf of the plaintiff that the November conversation was the occasion when a binding contract came into existence between the plaintiff and the defendant. For the reasons I will later explain, I do not accept this is a correct legal characterisation of the events that occurred. However, the decision in November 2005 to come to Australia and stay permanently with the defendant crystallised the plaintiff's detrimental reliance on the assurances that the defendant gave to her.

1. The plaintiff arrived in Australia in November 2005 with $8,000 and the Polish pension to which she was entitled as a result of her prior career as a schoolteacher. She gave up her ties of friendship in Poland, her two children who remained in Poland and a lifetime of social and cultural connection with the country of her birth. And she incurred the unhappiness of her son who did not approve of her decision.

1. Although the evidence on this aspect was not as satisfactory as it could have been, the plaintiff also gave up an apartment which she owned in Poland. I am at least satisfied that she gave the apartment to her son and that it was subsequently sold by a mortgagee upon the son's default. It was implied but not expressly submitted, and it was certainly not proved, that the plaintiff may have had some monies or some remaining interest in the apartment. But there is no basis on which I could make such a finding.

1. I do not, however, regard the question of the apartment as the main issue. It is no small thing to come to a new country at an advanced age and start a new life caring for an elderly relative. The plaintiff's commitment to the defendant and her willingness to comply with his request for assistance, far from her native country where she had lived and worked and raised a family for over 60 years, was, in my view, more than sufficient detrimental reliance.

Permanent Residence

1. Between 2006 and 2009 the plaintiff applied to the Department of Immigration for permanent residence status and designation as the defendant's carer. She was sponsored by the defendant, who payed the fees and charges of $5,675 that were payable in respect of her application. The statements in the documents held in the department's file, some of which are from the defendant, are entirely consistent with the plaintiff's evidence:

(a)   On 10 April 2006, the defendant completed a form for the sponsorship of the plaintiff's migration to Australia. He signed the form and stated that she would 'live in my 3 bedroom house with me'.

(b)   On 16 August 2006, the defendant's eldest son Peter swore a statutory declaration in support of the sponsored migration in which he said that it was impossible for him to assist in the care of his father.

(c)   On 20 November 2006 the defendant wrote to the Minister for Human Resources, stating that he has 'invited a niece from Poland Krystyna Ronowska she is an excellent nurse... we decided that she will be my carer for longer time'. He also stated that he had stipulated in his will that, not only his son Robert, but also his niece could live out their lives in his house after his death.

(d)   In 2008, the defendant wrote another letter to the Department of Immigration in which he requested that consideration of her sponsored migration be expedited. He said that the plaintiff cares for him; that she came to Australia to care for him 'in the spirit of a humanitarian mission'; that she had already taken care of him for more than a year; that he was attached to her and preferred her to be his carer; and that she has completed a special course in Poland for the care of old and sick people.

(e)   On 6 June 2009. Dr Huynh wrote to the department on behalf of the plaintiff and the defendant, stating that to his knowledge the plaintiff was the defendant's primary carer.

(f)   Finally, on 24 June 2009, a Complex Care Officer employed by the department wrote a report in which she concluded that she was satisfied that the plaintiff was a 'carer' within the meaning of the Migration Regulations, 1994.

Extent of Care

1. A significant amount of the evidence was directed to the precise extent of the care provided by the plaintiff to the defendant. This seemed to me to be misdirected. I was never going to be asked to value and quantify the precise extent of the work done by the plaintiff and there was no evidence which would have enabled me to do so. The case turns on the expectation of the plaintiff engendered by the defendant's assurances and her detrimental reliance, not on the minute detail of whether she provided caring and nursing services to the defendant at every hour of the day on every day of the week. Her substantial reliance, which gives rise to her equity, was her decision to leave Poland.

1. Much of the evidence on this issue, which was led by the defendant's son Peter, was carping. At times I thought it was mendacious. It was designed to devalue the extent and quality of the care provided to the defendant by the plaintiff. Ultimately, however, the allegations that the plaintiff did not care for the defendant as often as she contended went nowhere. They serve no useful forensic purpose. The defendant had never required the plaintiff to be at his side at all times. She said herself that she was not a "prisoner" in the defendant's home. She was a comfort to him and a trained carer. She knew what was required, but she also had an independent life.

1. The plaintiff is a devout Catholic. On Sundays she attended church and afterwards went to the Polish Club. She had her own friends. There was a period when she provided some assistance to another elderly gentleman, Isaac Danziger, but the evidence about this topic was contentious and unsatisfactory. On any view of the relationship, the plaintiff was the defendant's primary carer. This is amply supported by the hospital's records and the contemporaneous written records of the occupational therapists, the physiotherapists and medical practitioners who attended the defendant. Those records contain numerous statements to the effect that the plaintiff was providing full-time care to the defendant; that she was the defendant's primary carer; and that she attended to his medical management and daily needs. Some of the information was provided by the defendant's son Peter.

1. I regard the documentary medical evidence as a reliable indicator of the true factual situation. To the extent that the two sons suggested otherwise, I prefer the evidence of the plaintiff. It is not, in any event, clear to me what the sons were trying to achieve other than to denigrate the plaintiff and diminish the extent of the assistance she provided. It was driven, I think, by the misconception that the resolution of the issues in this case required some kind of weighing in the balance of the respective contributions to the defendant's welfare made by all of those who might in due course have a claim on his estate. This was the wrong approach.

1. On the particular question of the plaintiff's attendances on Isaac Danziger I make clear, for what it is worth, that I reject the contention that the plaintiff engaged in some form of extensive paid employment with Mr Danziger, during the course of which she frequently and regularly stayed overnight in Mr Danziger's home. The evidence called on behalf of the defendant seemed to imply, without saying so expressly, that at least for a time the plaintiff did not fulfil her obligations to the defendant. This was not the case.

1. I should add that not only was the plaintiff's evidence as to her care for the defendant supported by many contemporaneous statements in the medical and hospital records, but it was also corroborated by the plaintiff's daughter Aneta. She lived with the plaintiff and the defendant from December 2008 to September 2009 and had firsthand knowledge of the situation. I thought the plaintiff and her daughter were truthful witnesses. They were both measured, direct and, I thought, honest.

Defendant's Witnesses

1. I did not form the same view of the defendant's witnesses. The first witness was a Mr Danziger, the son of Isaac Danziger. His affidavit was carefully constructed and extremely precise in its assertions about the supposed fact that the plaintiff worked for a lengthy period of time for Isaac Danziger and was paid by him. On the other hand, when he was cross-examined about this matter his evidence represented a distinct contrast. When he was asked whether his evidence suggested that the period of employment was more than 12 months, all he could say was "It was on and off; I think he had a variety of carers during his illness."

1. He accepted that his father employed other carers during his lifetime. He could produce no wage records or any record of any payment to the plaintiff. When asked whether he could assist with the time during which the plaintiff came to be employed, he simply said he was not able to assist with any accuracy as to a date. When asked with what regularity the plaintiff attended Isaac Danziger he simply responded "I can't tell the regularity." When asked how long the plaintiff was employed, he simply said "I can't tell, I was not there at the time."

1. His evidence became almost risible when he later explained that the occasions when he was present at his father's house, when he said he observed the plaintiff working for his father, were only those occasions when he physically forced his way in to the house, against the will of his sister, in response to a call for assistance from his father. I do not regard Mr Danziger's evidence as cogent.

1. As far as Peter was concerned, I did not regard his evidence as satisfactory. He was frequently non-responsive. He frequently sought to volunteer information and to embellish answers. He frequently sought to denigrate the plaintiff's contribution. He clearly overstated the position and was unhelpful. I formed the view he was inclined to say what he thought would advance the financial interests of the defendant and indirectly of himself.

1. Robert was an unsatisfactory witness for different reasons. On paper his affidavit had the clarity of expression which comes only from the mind and pen of an intelligent person. In truth, it was drafted by his legal representatives and bore little resemblance to his evidence in the witness box was. It was apparent in the course of his evidence that he was troubled, that he had problems with alcohol, problems with employment or lack of employment, and that his levels of education and cognitive function were limited. These were no doubt some of the factors that caused the defendant to ask the plaintiff to care for Robert as well as himself. I did not think he went out of his way to denigrate the plaintiff, but I did not think his evidence was reliable.

The Contract Claim

1. That brings me to the relief claimed by the plaintiff. I can dispose of the contract claim briefly. It depends fundamentally on the conversations that occurred in November 2005. It is often difficult to infer an intention to make a binding contract in a domestic family situation. Often the communications lack the requisite certainty and the supposed terms of the contract fail to have the requisite precision. Frequently the parties, the relationship, the context and the absence of formality make it objectively unlikely that a binding legal contract could have been intended: See Tadrous v Tadrous [2010] NSWSC 1388 at [5]. This is such a case. I doubt whether it crossed the plaintiff's mind or the defendant's mind that they were entering into a legally enforceable contract.

The Proprietary Estoppel

1. The plaintiff's principal claim is based on an equitable proprietary estoppel. When the proceedings were commenced she claimed an equitable interest, namely, a life estate in the property at Greystanes. I was informed that the property is now subject to a contract for sale. The sale price is $460,000. There is no agent's commission and the net proceeds of sale will be approximately $455,000. The parties agreed prior to the hearing that a fund of $250,000 would be set aside from the proceeds of sale to meet the plaintiff's claim. No admissions attach to this decision but the reasoning that lay behind the selection of the figure of $250,000 was that it represented approximately 50% of what was then thought to be the value of the property. The plaintiff now claims, in effect, an order that the sum of $250,000 or such lesser sum as is appropriate be paid to her as equitable damages.

1. The claim bears some similarity to the award made in Jennings v Rice [2002] EWCA Civ 159. In that case the claimant provided caring, gardening and household services to an elderly lady. He stayed overnight with her to provide her with security. He acted out of compassion but also because she had assured him that she "would see him right." The claimant's expectation was that he was going to receive all or part of the elderly lady's property on her death. He contended that his equity should be satisfied by making good his expectation and that he should receive a sum equal to the whole of her estate (₤1,285,000) or, alternatively to the value of the house (₤420,000) and the furniture. The trial judge awarded - and the English Court of Appeal upheld - judgment for the sum of ₤200,000 in favour of the claimant.

1. In this case the plaintiff's clear expectation was that she would be entitled to live in the house for the rest of her life. This was not intended to be exclusive. She knew that the defendant also intended that his son Robert be entitled to live in the house for the rest of his life. The defendant stated expressly in a letter to the then Minister for Human Resources in November 2006 that:

I am stipulating in my will that not only my youngest unmarried son, Robert Kus, whom I appointed my executor, can live his life out in my house after I am gone but also my niece if she not find a suitable husband.

Equitable Relief

1. I have already set out certain observations of Allsop P in Delaforce v Simpson-Cook (supra). Among other things, he said that where relief is sought by reference to the detriment suffered by a plaintiff, the relief is "not to be measured by weighing detriment too minutely in order that it be converted into some equivalent of cash or kind, as if one were measuring the consideration for a commercial bargain."

1. Equitable relief in a case such as this should not be so constrained that compensation is only available in circumstances where detriment has not only been proved but also precisely quantified. Equally, in a claim based on an unfulfilled expectation, the equitable remedy does not necessarily require precise valuation and quantification of the disappointed expectation. Cases of this nature are not equivalent to commercial disputes where the parties and the court are entitled to expect a rigorous attempt to prove questions of valuation and economic loss with reasonable specificity. That is not the nature of a case such as this, as the reasoning and the result in Jennings v Rice (supra) demonstrates.

1. One of the over-riding considerations that shapes the appropriate relief is the "importance of keeping a party to a representation or encouragement previously made." The equity is a broad one "based on the just and conscionable satisfaction in appropriate fashion...of the expectation that has been created.": Delaforce v Simpson-Cook (supra).

1. It is obvious, however, that a successful plaintiff will not necessarily always be entitled to complete satisfaction of his or her expectation. Much will depend on the circumstances. In this case events have overtaken the original claim for a life interest in the property. The defendant is still alive and the actuarial tables in common use in this court suggest that he may live for another four years.

1. The same tables suggest the plaintiff is likely to live for another 21 years. She has been evicted from the home where she has lived since she came here from Poland in November 2005. If one assumes, as I was asked to do, a rental of $310 per week, the plaintiff will require a capital sum of $257,000 to meet that expense for the rest of her life. These calculations are merely indicative and there was no evidence to support them. The parties were, however, content to address me by reference to them for the purpose of illustrating the range of possibilities.

1. The defendant is now being cared for in an institution and his old-age pension is used to fund his expenses. There was some unexplained suggestion that his pension may be affected by his receipt of the proceeds of sale of the property but this contention was left in a state of opacity and I have my doubts about it. I accept, however, that some allowance must be made for expenses that may be necessary for the defendant. This is a complication that he did not envisage. He contemplated that the plaintiff would live with him during his life and that she would be entitled to stay with him in the house after his life. As a matter of characterisation, he effectively promised the plaintiff a life interest in the property which was to be shared concurrently with the life interest of his youngest son, Robert.

1. I accept also that some allowance must be made for the fact that the plaintiff is now free of any obligation to care for the defendant or to cook and clean for his son Robert. The major factor is however the loss of the promised accommodation for the rest of the plaintiff's life, without which she would not have left Poland.

Conclusion

1. In all of the circumstances, I have reached the conclusion that in order to provide a "just and conscionable satisfaction" of the plaintiff's expectation, she should have an award of $200,000. I do not equate her expectation with an entitlement to 50% of the proceeds of sale of the property. She was promised a life interest, not a legal interest. But given her remaining life expectancy, the difference may not be substantial. I have endeavoured to arrive at a sum which fairly reflects the value of the expectation that has been denied to her but I have done so only after making due allowance for those circumstances that have transpired which were not contemplated by the defendant and having regard to the exigencies and uncertainties the future may hold.

1. For those reasons I have started at a figure that represents 50% of the proceeds of sale and rounded it down to $200,000. I regard this sum as an amount that is fair to the plaintiff. I reject the submissions on the defendant's behalf that I should approach the resolution of the plaintiff's claim as if the circumstances were analogous to a family provision claim under the Succession Act. This is an inapposite analogy involving different juridical concepts. Apart from anything else, the consideration of competing claims in such a case does not ordinarily involve any question of detriment and reliance.

Orders

1. I make the following orders:

(a) I order the defendant to pay to the plaintiff $200,000.

(b) I order that, in order to secure the said sum of $200,000, the plaintiff have an equitable charge:

(i) over the land known as '119 Beechwood Avenue, Greystanes', pending settlement of the sale of the land;

(ii) over the proceeds of sale of the said land, upon settlement of the said sale.

(c) I order the defendant to pay the plaintiff's costs.

Costs

1. I have reached the view that it is reasonable for the usual costs order to apply. Every defendant takes a risk, when it chooses to resist a claim, that it will incur a costs order in favour of a successful plaintiff. The plaintiff's claim was reasonable. It accorded with the documentary records and the evidence which ought to have been known to and accepted by the sons of the defendant.

1. The unfortunate consequence of defending an unsuccessful claim is that the court usually takes the view that costs should follow the event because if the defendant had been well advised and had acted reasonably, the claim need not have been defended. My view as to the credibility and the evidence of the defendant's son Peter suggested to me that there was an absence of reasonableness on his part, which drove the defence of the plaintiff's claim. A more reasonable approach would have been to recognise the validity of her claim, in whole or in part, at an early stage. I therefore think the appropriate order is that the defendant should pay the plaintiff's costs.

Decision last updated: 27 March 2012