COUNSEL: Ms. S. Hill for appellant Mr. R. Harper SC with Mr. T. Bors for respondents
SOLICITORS: CBD Law for appellant Blunden Law, Pennant Hills for respondents
CATCHWORDS: EQUITY ESTOPPEL - Proprietary estoppel - Representation that plaintiff could occupy a house for life - Plaintiff gives up housing commission accommodation - Whether representation sufficiently certain - Whether detriment proved, in absence of evidence as to rent paid to Housing Commission and as to security of tenure - Whether estoppel made out - Extent of relief.
LEGISLATION CITED:
DECISION: See pars.98-100 of judgment.
JUDGMENT:
IN THE SUPREME COURT IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL
CA 40116/05 SC 2476/04
HANDLEY JA HODGSON JA McCOLL JA
Tuesday 14 November 2006
SULLIVAN V. SULLIVAN & ORS. Headnote
FACTS
In a Christmas card in 1995, the first and second respondents, husband and wife, represented that they would purchase a house for the appellant, the first respondent’s sister, to live in for life with the requirement to pay minimal rent after the first year. In March 1996, the appellant gave up her Housing Commission accommodation and moved to the house bought by the third respondent company, of which the first and second respondents are the sole directors and shareholders. The appellant refused to vacate the property when requested to do so by the first and second respondents on 30 January 2004, and brought proceedings claiming that the respondents were estopped from evicting her since she had acted to her detriment in reliance on the representation by giving up her Housing Commission accommodation and spending money on improving the house.
The primary judge held that, in the absence of evidence concerning her rent or security of tenure at the Housing Commission accommodation, it was not unconscionable for the respondents to go back on their representation and refuse to repay the sums she spent on maintenance. The appellant’s appeal from that decision involved four issues:
(1)Whether the representation was sufficiently certain to support an estoppel;
(2)Whether detriment was proved in the absence of evidence as to rent and security of tenure at the Housing Commission accommodation;
(3)Whether proprietary estoppel was made out; and
(4)The appropriate extent of relief.
HELD (allowing the appeal)
(1) Although there was some uncertainty as to the conditions on which the appellant was to occupy the house, the representation was sufficiently certain to support an estoppel.
(2) The primary judge accepted that Housing Commission accommodation is subsidised, the Court can take judicial notice that Housing Commission accommodation is generally below market rent…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Sullivan v Sullivan [2006] NSWCA 312
Case
[2006] NSWCA 312
Decision Date
CaseChat Overview and Summary
The case of *Sullivan v Sullivan* involved a dispute between the appellant, who claimed a right to occupy a property for life, and the respondents, who sought to sell the property. The appellant's claim was based on an equitable estoppel arising from representations made to her, which she alleged induced her to give up her Housing Commission accommodation and move into the property in question. The primary judge had considered the appellant's claim, and the appeal concerned the extent to which the court could grant relief based on proprietary estoppel.
The central legal issues before the court were whether the representations made to the appellant were sufficiently certain to found an estoppel, whether the appellant had suffered sufficient detriment in reliance on those representations, and if an estoppel was made out, what relief was appropriate. Specifically, the court had to determine if the appellant's act of relinquishing her Housing Commission accommodation constituted a detriment, given the lack of evidence regarding the rent paid and the security of her tenure in that accommodation. The court also considered whether the third respondent, who purchased the property, was bound by any equity established between the appellant and the first two respondents.
The appellate court, in considering the appeal, found that the appellant had not sufficiently established detriment in relation to giving up her Housing Commission housing, as there was no evidence of the rent paid or the security of her tenure. However, the court acknowledged the appellant's reliance on the representations and the unconscionability of the respondents departing from them. The court reasoned that to do justice, the appellant should be permitted to remain in the house for a further period of seven years, subject to paying a weekly rent of $65.00 with CPI adjustments and maintaining the property. This period was intended to provide her with reasonable time to seek alternative accommodation.
The court also ordered that protection be afforded against any potential purchaser of the property, either through a restraint on disposition or by expressing the relief as a constructive trust, allowing for the lodging of a caveat. The court directed the parties to bring in proposed Short Minutes of Order, including submissions on costs, to facilitate the finalisation of the appeal.
Orders
Orders of the court
Doing the best I can, I would hold that what is justified by the requirements of conscientious conduct and is not unjust to the respondents would be to make an order ensuring that the appellant can remain in the house for a further period of seven years from the present, subject to payment of rent of $65.00 per week with CPI adjustments, and subject to her taking reasonable care of the property. This would give her a reasonable time for seeking suitable Housing Commission accommodation, although in the absence of evidence the Court cannot conclude that this time is likely to be sufficient for her to obtain such accommodation; and in my opinion it would not be unfairly burdensome on the respondents.
In my opinion also, there should be some protection against
any possible purchaser of the property. This could either take the form of a restraint on disposition of the property, or expressing relief in terms of a constructive trust so that a caveat could be lodged.
The respondents sought an opportunity to make further submissions about costs, in the event that the appellant was partially successful in the appeal. Beyond indicating that the appeal should be allowed, I will not propose any definite order at this stage, but I would direct that the appellant within 21 days bring in either agreed Short Minutes of Order or else bring in her proposed Short Minutes of Order, including orders as to costs, and submissions in support thereof; and in the latter event, that the respondents within a further 14 days submit their proposed Short Minutes and submissions in support thereof.
I would give the appellant a further 7 days to submit
submissions strictly in reply.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
On 30 January 2004, solicitors for the first and second respondents wrote to the appellant giving her six weeks’ notice to vacate the property, so that it could be sold. The appellant refused to vacate the property, and commenced the proceedings. DECISION OF PRIMARY JUDGE The primary judge set out the basis of the appellant’s claim as follows:20 The plaintiff’s claim is based upon an equitable estoppel. She says that in reliance on the representations in the Christmas card, she acted to her detriment both by giving up her Housing Commission property, and also by moving into the Green Point property and spending money on improving it. The plaintiff submits that the interest in the property to which she is entitled is a personal right to stay in the property for as long as she wishes. The terms of that occupancy are that she should pay a minimum amount which is consistent with her financial position – Mr Wilson, for the plaintiff, suggested that perhaps $65 per week subject to CPI increases would be a proper way of quantifying that amount, or perhaps, instead, it could be quantified by imposing on her an obligation to pay rates, taxes, insurance and repairs. He assumed, without deciding, that the representation in the Christmas card was sufficiently precise to be able to give rise to an estoppel. He assumed, without deciding, that the fact that the third respondent was completely under the control of the first and second respondents, and purchased the house so that the first and second respondents could carry through the plan outlined in the Christmas card, had the consequence that the third respondent was bound by any equity with existed between the appellant on the one hand and the first and second respondents on the other. The primary judge raised the question whether a plaintiff who invokes the law of proprietary estoppel must prove, not only reliance on an encouraged assumption in circumstances where departure from the assumption would be unconscionable, but also that the reliance was detrimental. He assumed, without deciding, that detriment was not a separate element. The primary judge then continued:27 Here, the plaintiff has relied upon the representation of the first and second defendants in moving out of the Housing Commission house, and into the Green Point house. The plaintiff has the onus of showing facts which made it unconscionable for the defendants to go back on their representation. She has had the occupancy of the house for nearly nine years, at a rental well below market rental. Considered by itself, that looks like a significant act of generosity on the part of the defendants. The plaintiff has the onus of proving facts which show that notwithstanding this apparent generosity, her moving out of the Housing Commission house involved her putting herself in a position such that it would be unconscionable for the defendants not to keep on allowing her to live in the house. There is no evidence concerning the rent she was paying to the Housing Commission, nor concerning what, if any, security of tenure she had in the Housing Commission house. Nor is there any evidence of the practices or policies of the Housing Commission, which might have given some feel for what the plaintiff might, in reality, have had happen to her if she had not given up the Housing Commission house, regardless of whether she had a legal entitlement to be so treated by the Housing Commission. In these circumstances, the plaintiff has not established that her giving up the Housing Commission house at the instigation of the first and second defendants, is something which makes it unconscionable for the first and second defendants to now go back on their representation that the house would be hers to live in for life.