Sykes v Equity Trustee Executors & Agency Co Ltd
[1999] VSC 218
•16 June 1999
SUPREME COURT OF VICTORIA
CAUSES JURISDICTION Do not Send for Reporting Not Restricted
No. 6045 of 1997
| IAN GRANT SYKES | Plaintiff |
| V | |
| EQUITY TRUSTEE EXECUTORS & AGENCY CO LTD & ANOR | Defendants |
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JUDGE: | Warren J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2, 3, 4 and 8 May 1999 | |
DATE OF JUDGMENT: | 16 June 1999 | |
CASE MAY BE CITED AS: | Sykes v. Equity Trustee Executors & Agency Co Ltd & Anor | |
MEDIA NEUTRAL CITATION: | [1999] VSC 218 | |
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Constructive trust – Resulting trust – Common intention – Equitable estoppel – Detriment – Mutual wills agreement - Contract
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APPEARANCES: | Counsel | Solicitors |
| The plaintiff appeared on his own behalf | ||
| For the First Defendant | Mr P.J. Cosgrave | Moores |
HER HONOUR:
The plaintiff, Ian Grant Sykes, brings this claim against the first defendant as the executor and trustee of the estate of Yvonne Jeanette de Savery, deceased who died on 8 January 1996 ("the deceased"). The plaintiff seeks against the first defendant a declaration of an entitlement to a life interest in a property owned by the deceased during her lifetime, an order that the first defendant pay from the estate of the deceased the costs of reinstatement of the property in which a life interest is claimed, an order that the first defendant pay from the estate the sum of $46,000 to the plaintiff and an order that a collection of opals be returned by the first defendant to the plaintiff. Other related claims against the second defendant were stayed by order of Master Kings pending the determination of the present matter against the first defendant.
Mr Sykes in his lifetime has been an extremely entrepreneurial and successful businessman owning and running an oil company XL Petroleum ("XL"). Mr Sykes progressed from frugal days as a university student to a period when he amassed wealth worth over $30M in the 1980s to the present time where he has little or no means whatsoever.
Mr Sykes and the deceased met in early 1970. At that time Mr Sykes' financial star was on the rise. The business of XL Petroleum was starting to boom. Mr Sykes, a geologist, spent much time in outback Australia searching for oil and opals. He would go away drilling and mining for weeks on end and leave the management of XL to the company auditor. In 1971 Mr Sykes advertised for a bookkeeper. The deceased was the successful applicant. At the time, the deceased and Mr Sykes met, the deceased had been married previously and had a son from that relationship, Rodney James Buthin who is the second defendant in this proceeding. When the deceased and Mr Sykes met, the deceased owned a property at 82 Alma Terrace, Newport ("the Alma Terrace property"). Whilst working for XL the deceased developed accounting skills, studied accounting and eventually qualified as an accountant. She came to do much of the accounting work for XL and other companies associated with Mr Sykes.
During the early 1970s whilst the deceased was working for XL she and Mr Sykes became companions. He would accompany her on various occasions including medical appointments from time to time. Mr Sykes alleges that in about 1973 or 1974 the deceased raised with Mr Sykes the question of their having children. The deceased suggested some type of agreement be entered into. Mr Sykes resolved not to marry the deceased but told her he was prepared to consider an agreement between them provided there was sufficient specificity to such agreement. It is the case of Mr Sykes that between 1974-1975 discussion continued between he and the deceased until on an indeterminate date during that period, Mr Sykes and the deceased entered into an oral agreement (and to which I refer hereafter as "the agreement") in the following terms:
1.Mr Sykes and the deceased would live together for the purpose of having three children, each child to be born, so far as possible, two years apart.
2.The Alma Terrace property would be the home of the deceased and the first two children of the relationship and when the time came to conceive the planned third child, Mr Sykes would provide the finance for a larger family home to be chosen by the deceased.
3.Mr Sykes would finance the larger family home, in part, by giving to the deceased 5,000 shares in a mining company owned by him known as Jervois Sulphates (NT) Limited. The shares were to be provided on the basis of 4,000 in number thereof to be a gift from Mr Sykes to the deceased and 1,000 thereof to be given to the deceased as a "staff bonus".
4.The deceased would have the final say with respect to the children of the relationship, the family home and family assets. Mr Sykes would have the final say with respect to any business matter relating to XL.
5.If Mr Sykes predeceased the deceased she would have a life interest in the larger family home that was to be purchased. If the deceased predeceased Mr Sykes, he would have a life interest in that family home.
6.Upon the purchase of the larger family home, the son of the deceased, Rodney Buthin would be entitled to inherit the Alma Terrace property.
7.Any antique furniture in the possession of the deceased was to be hers absolutely.
8.The deceased would own her motor vehicle absolutely.
9.The deceased and Mr Sykes would be faithful to one another until the death of the other.
10.Prior to the birth of each child, Mr Sykes would change his surname to "de Savery" and after the birth of each child change his surname back to "Sykes".
11.Before the birth of the first child, the deceased would change her surname from "de Savery Buthin" to "de Savery".
12.Mr Sykes would sign the necessary birth certification documents to disclose him as the father of each of the children.
13.Mr Sykes would buy the food for the family and pay for outgoings, clothing, education and home expenses.
14.The deceased and Mr Sykes would execute mutual wills upon the birth of the first child of their relationship that provided:
(1) Rodney Buthin was to inherit the Alma Terrace property.
(2) Any children of Mr Sykes and the deceased would inherit equally the whole of the residual estate of each of them subject to each child attaining 28 years.
(3) Mr Sykes and the deceased would appoint the other as executor of his or her will as the case may be.
Up until 1976 the relationship between Mr Sykes and the deceased was platonic. They commenced cohabitation in early 1976 and subsequently three children were born: Mark Grant de Savery on 8 August 1977, Janine Louise de Savery on 6 July 1979 and Louise Rachelle de Savery on 14 November 1986. An Extract of Birth Registration was provided by Mr Sykes with respect to the last born child, Louise Rachelle de Savery. The document entitled "Notification of Birth" relating to that child disclosed that the mother of the child is identified as "Yvonne". The father of the child is disclosed as "Pierre Henri de Savery". The date of marriage of the parents of the child is shown as 14 July 1962. The document is not otherwise identified or certified. Mr Sykes and the deceased were never in fact married. No birth certificates were tendered for the two older children, Mark Grant de Savery and Janine Louise de Savery. There is no dispute between the parties that the three children are the children of the deceased and Mr Sykes.
Mr Sykes tendered a photocopy of an extract of a deed poll dated 19 July 1977 lodged by solicitors disclosing that "Yvonne Jeanette de Savery Buthin" changed her name by deed poll to "Yvonne Jeanette de Savery". Mr Sykes produced a deed poll dated 15 December 1986 that changed his name from "Pierre Henri de Savery" to "Ian Grant Sykes".
Mr Sykes gave evidence that in about August 1980 the deceased told him that she wished to complete the family, presumably meaning that she wished to have the third child as allegedly agreed. Mr Sykes gave evidence that, as a consequence, the term of the agreement between he and the deceased was triggered whereby the time had arrived for him to finance the purchase of the larger family home in accordance with the terms of the agreement. Mr Sykes alleged he gave shares in a company called Jervois Sulphates (NT) Ltd ("the Jervois shares") to the deceased together with $6,000 by way of deposit for the purchase of the house. Mr Sykes believes, so far as he recalls, that the Jervois shares were sold by the deceased for over $53,000. On 13 December 1980 the deceased entered into a contract of sale for the purchase of the property at 3 Rupert Street, Newport ("the Rupert Street property") for the sum of $53,000. The property consisted of a large double block of land upon which was erected a large, old Victorian home of eight rooms and a sleep‑out. The Rupert Street property required some renovation work at a cost of about $23,000. There is some confusion as to whether and what amounts of money were paid in relation to the renovation work included in the sum of $9,000 for repairs to the roof of the Rupert Street property. At the time the property was purchased Mr Sykes was away working interstate. Mr Sykes claims that in early 1981 the deceased informed him that the Rupert Street property was registered in her name only as he was away when the property was bought. Mr Sykes gave evidence that at that time he agreed with the deceased that he would have a life interest in the property, provision for which would be made by the deceased in her will or on the birth of the third child.
In early 1981 the deceased became pregnant. Mr Sykes gave evidence of his belief that the deceased underwent an abortion. Consequently, the third pregnancy as a result of the relationship between the deceased and Mr Sykes did not lead to the birth of a child. Mr Sykes produced a handwritten note of which he gave evidence that the deceased was the author. The note was dated 28 May 1981 and was in the following terms:
"Dear Ian,
You will not be pleased with the following but the situation was not of my making.
The week after next I go into hospital to have a pregnancy terminated. I know your comments on such matters, but I also know that you have no intention of contributing in a true sense to your children's upbringing.
I am very upset and unhappy that I've been forced to such a decision.
Yvonne".
Mr Sykes gave evidence that in accordance with the agreement between he and the deceased he made various wills and codicils and provided a copy of the same to the deceased. The first will he tendered was an executed copy of a will dated 15 September 1977 in which Mr Sykes appointed the deceased as executrix and left all of his estate to the child Mark Grant de Savery and any other child or children of Mr Sykes born to Yvonne de Savery subject to such child attaining 28 years. Mr Sykes tendered a document that purported to be a codicil to the 1977 will. It provided that the document was to be attached to the 1977 will and stated that the names of the children are "Mark de Savery and Janine de Savery". The document was signed by Mr Sykes and witnessed by another person on 25 October 1982. Mr Sykes produced a document that purported to be a further codicil to the 1977 will made on 27 March 1986 in which he confirmed that the names of the children were "Mark Grant de Savery" and "Janine de Savery". Mr Sykes produced an original will dated 11 December 1986 in which he appointed the deceased as executrix and left all of his estate to his children Mark Grant de Savery, Janine Louise de Savery and Louise Rachelle de Savery subject to their attaining 24 years.
Mr Sykes produced a copy of a will and said that it was given to him after the deceased died. The copy will was dated 17 April 1984. It is the last will of the deceased for which probate was granted to the first defendant. It appears to have been executed in the presence of a solicitor. The will appointed one Joyce Paula Casaretto otherwise, the first defendant as executor and trustee. Under the 1984 will the deceased left all her furniture and articles of personal or household use to be divided between her children other than Rodney Buthin subject to such child attaining 25 years. There was further provision in the will that the trustee sell and convert the residue of the estate into money to be divided equally between the children of the deceased, other than Rodney Buthin subject to such child attaining 25 years. Mr Sykes gave evidence that he first obtained a copy of the will of the deceased after her death. He gave evidence that he asked the deceased for a copy of her will during her lifetime and in response to such request the deceased said that it was "somewhere" and when she found it she would provide Mr Sykes with a copy. He never received a copy of such will until after her death. Mr Sykes gave evidence that when he gave the deceased a copy of his December 1986 will he asked the deceased whether his life interest in the Rupert Street property had been recorded. Mr Sykes gave evidence that the deceased told him she had done so but that she had made a change because Mr Sykes was a beneficiary and she had "put him out as executor". Mr Sykes gave evidence that he told the deceased that was acceptable. In about April or May 1986, presumably whilst the deceased was pregnant with the third child, the deceased and Mr Sykes had a falling out as a result of an alleged incident of infidelity by the deceased. Mr Sykes gave evidence that after discovering the alleged episode he immediately left the Rupert Street property and never stayed in the house again. He gave evidence that there was an attempted reconciliation in about May 1987 but it was rejected by Mr Sykes.
Prior to May 1986 Mr Sykes did not stay at the family home overnight very often. He was generally away interstate and would stay at the property occasionally on weekends. After his departure in May 1986 he visited the Rupert Street property to take the two older children out from time to time. He used the XL premises at 324A Bell Street, Coburg as his residence in Melbourne. Occasionally, Mr Sykes saw the deceased and the children but relationships were difficult, exacerbated by allegations of sexual abuse made by the deceased against Mr Sykes.
Mr Sykes tendered in evidence a series of letters exchanged between he and the deceased during the period from about 1971 until 1991. The correspondence appears to support the conclusion that Mr Sykes was accepted as the natural father of the three children and as the person with financial responsibility for the children. In about March or April 1991 the deceased moved to Tasmania and took the children with her apparently without notice or advice to Mr Sykes. The Rupert Street property was barricaded, locked up and otherwise abandoned and remains in that condition to this day.
Upon moving to Tasmania the deceased eventually resided with her children at a property she purchased at Church Street, Wynyard ("the Wynyard property"). The purchase of the Wynyard property is an issue of contention between the parties. Mr Sykes alleges that in about 1992 the deceased asked him to lend her $46,000 for the purposes of buying a property. Mr Sykes gave evidence that he had no idea where the property was located but that he acceded to the request of the deceased and lent her the $46,000. It is unclear as to the basis upon which the money was lent. There is no documentary evidence with respect to the alleged loan and, in particular, there is no acknowledgment of the debt by the deceased. Indeed, there is no record whatsoever. Insofar as Mr Sykes has described the transaction whereby he lent the sum of $46,000 to the deceased he says it was on the basis that the money would be repaid to him when the property to which the monies were to be applied was sold. Furthermore, there was no evidence before me one way or the other as to whether the Wynyard Street property was purchased by using the sum of $46,000 said to have been lent by Mr Sykes to the deceased or in fact if that property has been sold since the death of the deceased.
These are the relevant facts as put forward by Mr Sykes. His evidence in some respects can be accurately described as a "stream of consciousness". Mr Sykes provided a written statement the contents of which has been largely stated already. He supplemented that statement with oral descriptions of events involving his life generally and in particular in relation to the deceased over almost a quarter of a century. Certain matters were common ground between the parties: that the plaintiff is the father of the three children of the relationship, Mark Grant de Savery, Janine Louise de Savery and Louise Rachelle de Savery; that the deceased bought the Rupert Street property for $53,000 on 13 December 1980; that the deceased and the three children went to Tasmania in early 1991. Otherwise, the allegations and claims of Mr Sykes are rejected by the first defendant.
The amended statement of claim drawn apparently by Mr Sykes alleges an entitlement to a life interest in the Rupert Street property, enforcement of an oral agreement for the maintenance of that property, payment of the alleged debt of $46,000 owed by the deceased to the plaintiff and the return of an opal collection. Mr Sykes did not make any submissions of law in the course of his case. Rather, he provided the court with what he considered to be the description of the relevant events together with various documents including extensive correspondence between he and the deceased, the relevant wills and purported codicils, birth extract and deed poll. Mr Sykes opened his case and gave evidence over three days. In his capacity as a plaintiff appearing in person Mr Sykes took the approach of providing the court with what he believed to be all the relevant evidence and left it to the court to sift through that evidence and determine what, if any, legal basis existed for his various claims.
In addition to the claims pleaded I observed in the course of the evidence with respect to the alleged agreement that it was apparent that there was a potential claim that Mr Sykes could make that he and the deceased had entered into an agreement to execute mutual wills and which agreement had been breached by the deceased. Such a claim was not alleged in the amended statement of claim. The evidence given by Mr Sykes in this respect was not the subject of an objection on behalf of the first defendant. An observation can be made that although a court should not decide a question of fact unless it is raised in the pleadings, if one party, without objection introduces evidence to establish a fact which although not pleaded it is open to the court to find the fact in favour of the party making the allegation providing there is no prejudice to the other party. It is a well-established principle of law that cases are determined on the evidence not the pleadings. (See Gould and Birbeck and Bacon v. Mount Oxide Mines Limited (in liq) (1916) 22 CLR 490, 517; Miller v. Cameron (1936) 54 CLR 572, 576; Dare v. Pulham (1982) 148 CLR 658, 664; and Banque Commerciale SA (in liq) v. Akhil Holdings Limited (1990) 169 CLR 279, 297). Accordingly, I raised with counsel for the first defendant in the course of closing addresses that on the basis of the evidence given by the plaintiff during the course of the trial it may be open to him to allege and for this court to find that there was an agreement for mutual wills between the deceased and the plaintiff and which agreement was breached by the deceased. The indication was taken up on behalf of the first defendant and addressed during the course of argument.
I turn now to consider each of the claims made by Mr Sykes against the estate of the deceased including a potential claim I refer to as the mutual will claim.
The life interest claim in the Rupert Street property
In summary, the evidence of Mr Sykes was that the deceased purchased the Rupert Street property using funds supplied by him in accordance with the agreement and that there was a condition attached to the purchase that if the plaintiff were to outlive the deceased he would have exclusive use of the property thereafter and that the deceased and Mr Sykes would make mutual wills recording a life interest. So far as the making of the agreement and its terms are concerned the court has no evidence before it save for the oral evidence of Mr Sykes based upon his recollection of events that occurred over 20 years ago. As for the terms of the agreement it can be accepted that Mr Sykes and the deceased cohabited for a period of time and which cohabitation led to the birth of three children. It can be accepted that Mr Sykes gave to the deceased 5,000 shares in Jervois. It can be accepted, further, that the deceased ran the family and the family home insofar as the unit constituted a family in the traditional sense and Mr Sykes ran the business of XL. Further, it appears that Mr Sykes changed his name to "de Savery" and each of the children of the relationship bear the surname "de Savery". Mr Sykes appears to have made some financial contribution to the family for the payment of outgoings, clothing, education and expenses, however, the extent of such contributions is uncertain. So far as mutual wills are concerned, Mr Sykes executed a will in 1977 wherein he left the whole of his estate to the children of his relationship with the deceased. Notably, Mr Sykes' 1977 will did not make any provision for a life interest for the deceased. Mr Sykes endeavoured to explain this aspect of the will on the basis that as he was older than the deceased he anticipated that he would pre-decease her. Accordingly, he expected in accordance with their arrangement for the deceased to create a life interest in the Rupert Street property in his favour. Nevertheless, in the terms of the agreement described by Mr Sykes he specifically stated in his written statement and his oral evidence that it was a term of the agreement that if Mr Sykes pre-deceased the deceased she would have a life interest in the family home that was to be purchased. The will and purported codicils of Mr Sykes do not reflect such a term.
Mr Sykes claimed that he gave the deceased $6,000 cash in about July 1980 to pay a deposit on a house to be chosen by the deceased. The Rupert Street property was not bought by the deceased until five months later on 13 December 1980. After the deceased signed the contract of sale for the Rupert Street property the share price for the Jervois shares apparently rose from about $1.20 per share to about $25 per share. On 20 December 1980 the deceased sold the Jervois shares and it seems that in all likelihood she applied the proceeds of sale to the purchase of the Rupert Street property. On 31 December 1980 the deceased wrote to the Deputy Commissioner of Taxation as follows:
"Re: Tax Return 1977
After accepting re-employment by XL Petroleum Pty Ltd in August 1975 5,000 shares (valued at $534) in Jervois Sulphates (NT) Ltd were unconditionally transferred to me in September-November 1976.
No dividends were ever received from the company and although principal accounting officer for Jervois Sulphates (NT) Ltd, I personally would never have considered purchasing the shares as an investment.
Being very ill at the time the shares were received, tax implications of the matter have been overlooked. However, the enclosed cheque for $186.90 represents applicable tax."
The fact that the deceased purchased the Rupert Street property some five months after allegedly being given $6,000 cash by Mr Sykes and the fortuitous rise in the share price of Jervois shares create doubts and uncertainties as to Mr Sykes' version of the agreement. The fact that the shares were sold on 20 December 1980 after the contract was entered into for the Rupert Street property on 13 December 1980 points to the fact that the deceased regarded the Jervois shares at all times as her property to dispose of as she wished. Such assessment of the circumstances (some 19 years ago) is strongly supported by the contemporaneous letter written by the deceased on 31 December 1980 to the Deputy Commissioner. The letter to the Deputy Commissioner supports the version of events that the Jervois shares were given to the deceased as part remuneration for her employment with XL or partly as a gift. In light of the letter to the Deputy Commissioner I consider that in all likelihood all of the shares were given to the deceased as part of her remuneration with XL.
The first defendant faces some difficulty in rebutting the allegations made by Mr Sykes concerning the agreement and its terms in that knowledge of these matters was confined to the plaintiff and the deceased. It is of assistance, therefore, to consider part of the course of correspondence between Mr Sykes and the deceased in order to ascertain whether or not that correspondence supports Mr Sykes' version of events. In a letter dated 25 January 1990 Mr Sykes wrote to the deceased concerning a variety of matters and generally complained about the way in which the deceased had disposed of money and assets he had provided to her. In the letter he said:
" … When I gave you 5,000 Jervois shares you sold part of these to buy your present house and block of vacant land. You did re-roof the house but, apart from those two actions, I cannot see anything much to help Mark, Janine and Louise."
In his evidence‑in‑chief in reference to the Jervois shares, Mr Sykes said:
" … The fact is those shares were a gift from me for 1,000 for a bonus for everybody, 4,000 and all the 5,000 were pledged to buying a house should we eventually need a bigger house because we were going to have three children or had two already and planned a third … ".
In a copy letter produced by Mr Sykes dated 14 December 1994 the deceased wrote to him concerning a number of matters including the Jervois shares. In the letter the deceased stated:
" … In respect to:-
(i) Jervois Sulphates (N.T.) Ltd Shares.
Business Associates of XL Petroleum Pty Ltd were granted shares in Jervois Sulphates (N.T.) Ltd as a bonus. In my capacity of accountant for "XL" I received 5,000 shares. As the shares were received as a consequence of employment, the receipt was declared for Income Tax purposes and, tax was paid on this benefit … ".
In the margin of the letter an entry appears to have been made by Mr Sykes (about which he was not cross-examined) where the remark is written adjacent to the above paragraph: "True – but nobody got as many as 5,000 and you 'repaid' me $600 some three or four or five years later for these shares. You paid $600".
Mr Cosgrave, who appeared for the first defendant, submitted that I should not find that an agreement was entered into as alleged by Mr Sykes. It was submitted that there was no documentation to support the agreement, that the Jervois shares were a gift to the deceased to dispose of as she wished and at the time those shares were sold the proceeds of sale constituted monies belonging to the deceased.
In order to be satisfied that there was an agreement as alleged by Mr Sykes it is not sufficient that I simply accept his oral recollection of events. It is necessary for me to consider his oral evidence, his written evidence as tendered, the correspondence between Mr Sykes and the deceased and the actions of the parties subsequent to 1974‑1975 when the agreement is alleged to have been made. In order to be satisfied that there was an agreement it is necessary for me to be so satisfied on the standard of the balance of probabilities. It is trite as a matter of law to say that for the purposes of finding that an agreement was entered into it is necessary for the plaintiff to satisfy me that on the evidence the agreement is more likely than not to have occurred (see Cross on Evidence (Aust ed.) paragraph 9010). The standard has been described as one where a plaintiff " … must satisfy the court that it is reasonably safe in all the circumstances of the case to act on the evidence before the court, bearing in mind the consequences which will follow" (see R. v. Kritz (1950) 1 KB 82, 90).
On the balance of probabilities I cannot be satisfied that an agreement was entered into between Mr Sykes and the deceased as alleged. There are significant facts that lead to such conclusion. Firstly, the fact that the 1977 will of Mr Sykes does not refer to or create a life interest in the Rupert Street property in favour of the deceased. Secondly, the fact of the references by Mr Sykes to the provision of the Jervois shares to the deceased as a gift in his oral and written evidence and in correspondence during the lifetime of the deceased. Thirdly, the fact that the correspondence between the deceased and Mr Sykes that does not make a reference in any way to the agreement. Fourthly, the reference in the contemporaneous letter of the deceased to the Deputy Commissioner of Taxation dated 31 December 1980 in which she refers to the fact that the shares were a gift to her in relation to her employment with XL. Fifthly, the sequence of events whereby the deceased signed the contract of the sale for the purchase of the Rupert Street property on 13 December 1980 and sold the Jervois shares at a fortuitous time seven days later on 20 December 1980, an event that was unrelated to Mr Sykes. Sixthly, there are inconsistencies in the evidence of Mr Sykes as to when it was agreed that he would be given a life interest in the Rupert Street property. Such inconsistency is apparent when the evidence of Mr Sykes (both in his written statement and in his oral evidence) as to the terms of the agreement are compared with his evidence that the deceased told him in 1981 that the Rupert Street property was registered in her name only but that she had agreed with him that he would have a life interest. Mr Sykes did not suggest at any point that the terms of the agreement allegedly made between 1974—1975 were varied in 1981. These six matters lead me to conclude that on the evidence before me I cannot be satisfied that there was an agreement as alleged.
Mr Sykes has alleged in the amended statement of claim that as a result of the agreement and the conduct of both himself and the deceased these matters give rise to a trust in his favour. Mr Sykes did not articulate in legal terms the nature of the trust and how he submitted it had been established. I approached the matter on the basis that Mr Sykes claims that there was a resulting trust or a constructive trust with respect to the Rupert Street property.
Turning, firstly, to any resulting trust, it is relevant to consider the principles stated by the High Court in Calverley v. Green (1984) 155 CLR 242. In that matter a defacto couple lived in a house owned by the man. Subsequently, the defacto couple purchased another house registered in joint names but the man paid the deposit from his own funds and the balance was raised on a mortgage for which the man made the repayments. Both the man and the woman were mortgagors. Some years later the defacto couple separated. The man brought a cross‑claim against the woman for a declaration that she held her interest in the property in trust for him and for an order that he transfer her interest to him. The majority of the High Court held that the fact that the woman was liable to the mortgagee constituted a contribution to the price paid for the property. The court held, further, that where two or more persons contribute to the purchase of property conveyed to them in their joint names, the equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions unless the contributions are equal. The court held, also, that the presumption of advancement does not apply to a defacto relationship.
On the evidence before me I cannot be satisfied upon the salient matters found necessary by the High Court to establish a resulting trust (see especially Calverley v. Green, supra, per Gibbs CJ at 246). There is insufficient evidence surrounding the circumstances of the provision of the purchase money for the Rupert Street property and as whether or not the monies were a gift by Mr Sykes to the deceased or part of the remuneration of the deceased for her professional duties to XL. Certainly, the latter is borne out by the letter of the deceased to Mr Sykes of 14 December 1994. Furthermore, the presumption of advancement does not apply in this case because Mr Sykes and the deceased were not married. Accordingly, there can be no presumption that the deceased intended to give Mr Sykes a beneficial interest in the Rupert Street property. In the circumstances, therefore, I cannot find that there was a resulting trust in favour of the plaintiff.
I turn now to consideration of whether or not the circumstances establish a constructive trust. It is necessary for me to consider as to whether or not there was an actual or inferred common intention between Mr Sykes and the deceased such as to give rise to a constructive trust in the Rupert Street property in favour of Mr Sykes. In the present matter there was no marriage, the property was registered only in the name of the deceased and there was no complaint about registration on the part of Mr Sykes. Indeed, on balance the evidence reveals that he was aware of and generally satisfied with such circumstance. Insofar as there may ever have been agreement between the deceased and Mr Sykes that the Rupert Street property would be owned jointly or as tenants in common Mr Sykes in effect acquiesced to the deceased registering the property solely in her name. In any event, on balance, I cannot be satisfied on the evidence as to whether there was a common intention between the parties sufficient to establish or create a constructive trust in terms of the principles expressed by the High Court particularly in Muschinski v. Dodds (1986) 160 CLR 583. Furthermore, it would be necessary for the plaintiff to establish detriment on his part. It may be that arising from the circumstances between the deceased and Mr Sykes it could be said that he has suffered inconvenience. In my view the evidence does not disclose sufficient detriment suffered by Mr Sykes such as to establish a constructive trust. There is no evidence of what he would have done if the common intention he asserts was not performed.
I turn now to the aspect of constructive trust based upon unconscionable conduct. On the basis of the principles expressed by the High Court in Baumgartner and Baumgartner (1987) 164 CLR 137 and on the basis of the evidence before me I cannot be satisfied as occurred in Baumgartner that the property was financed in part through funds contributed by Mr Sykes such as that it would be unconscionable for him to be denied an interest in the Rupert Street property. On the basis of the evidence before me I cannot be satisfied that the Jervois shares were other than wholly or in part remuneration for the deceased as an employee of XL or wholly or in part a gift made by Mr Sykes to the deceased. Moreover, consideration of the facts in the present matter distinguish it from the facts in the Baumgartner case in that there was no pooling of incomes, the plaintiff and the deceased did not live together as a couple in the normal sense rather, he stayed at the Rupert Street property intermittently and eventually from mid-1986 onwards Mr Sykes never stayed at the property again. It follows, that I cannot be satisfied on the evidence that equitable considerations are such that it would be unconscionable for the estate of the deceased to deny an interest by way of a constructive trust in the Rupert Street property in favour of Mr Sykes.
Mr Sykes did not seek relief in the amended statement of claim by way of equitable estoppel. As he acts on his own behalf and as it might be said that the facts of his case bear some of the hallmarks of an equitable estoppel it is appropriate to consider such a claim. The relevant principles were conveniently stated by Brennan J in Walton Stores (Interstate) Limited v. Maher & Anor (1987) 164 CLR 387 at 423-424:
"The unconscionable conduct which it is the object of equity to prevent is the failure of a party, who has induced the adoption of the assumption or expectation and who knew or intended that it would be relied on, to fulfil the assumption or expectation or otherwise to avoid the detriment which that failure would occasion. The object of the equity is not to compel the party bound to fulfil the assumption or expectation; it is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting thereon.
If this object is kept steadily in mind, the concern that a general application of the principle of equitable estoppel would make non‑contractual promises enforceable as contractual promises can be allayed. A non-contractual promise can give rise to an equitable estoppel only when the promisor induces the promisee to assume or expect that the promise is intended to affect their legal relations and he knows or intends that the promisee will act or abstain from acting in reliance on the promise, and when the promisee does so act or abstain from acting and the promisee would suffer detriment by his action or inaction of the promisor were not to fulfil the promise. When these elements are present, equitable estoppel almost wears the appearance of contract, for the action or inaction of the promisee looks like consideration for the promise on which, as the promisor knew or intended, the promisee would act or abstain from acting."
In the present case, to make out an equitable estoppel it would be necessary for Mr Sykes to establish that on the balance of probabilities the deceased induced the adoption of the assumption or expectation by Mr Sykes that if he provided finance in accordance with their arrangement he would have a life interest in the Rupert Street property if the deceased pre-deceased him. As already stated, I cannot be satisfied that the deceased did induce such assumption or expectation in Mr Sykes as there are too many inconsistencies or uncertainties underlying the conduct of those parties. Whilst they had children, the shares may have been a partial payment to the deceased as an employee of XL. They may, too, have been a gift by Mr Sykes to her to be applied for her own purposes and/or for the children. The course of correspondence between the deceased and Mr Sykes does not reflect or support the inducement of the necessary assumption or expectation on the part of Mr Sykes. Furthermore, the respective wills of Mr Sykes and the deceased do not support or reflect the type of necessary inducement to establish equitable estoppel. Furthermore, it would be necessary for Mr Sykes to establish that the deceased knew or intended that the inducement of the adoption of the expectation of a life interest in the Rupert Street property was a matter of which the deceased had knowledge or intended that it would be relied on. As stated by Brennan J in Walton Stores, at 423:
"It is essential to the existence of an equity created by estoppel that the party who induces the adoption of the assumption or expectation knows or intends that the party who adopts it will act or abstain from acting in reliance on the assumption or expectation".
Furthermore, it would be necessary for Mr Sykes to prove that he acted to his detriment as a result of the inducement by the deceased. It is not sufficient for Mr Sykes to prove detriment per se, it is necessary for him to prove detriment arising from the inducement of the deceased. For the reasons already expressed I cannot be so satisfied. In addition, I cannot be satisfied that there was in fact any detriment on the part of Mr Sykes. It may be that the shares were part of the remuneration of the deceased for her employment with XL and part or wholly a gift from Mr Sykes. I cannot be satisfied that the conduct of Mr Sykes during the course of his relationship and dealings with the deceased from the date of their first meeting, in about 1991, until the death of the deceased in 1996 establishes that Mr Sykes acted upon an expectation of a life interest induced by the deceased. Such expectation is not borne out by the correspondence between the deceased and Mr Sykes, it is not borne out by the terms of Mr Sykes' own will and it is not borne out by the fact that the shares were given to the deceased and tax paid on those shares and which transaction was referred to by Mr Sykes in his correspondence with the deceased during her life time.
The High Court cited with approval in Giumelli v. Giumelli (1999) 73 ALJR 547 at 554 the observations of McPherson J in Riches v. Hogben (1985) 2 QdR 292:
"A consequence of applying the principle may be to complete an otherwise imperfect gift, as inn Dillwyn v Llewelyn, or to give effect to an agreement that, for want of uncertainty or consideration or of some other essential element, falls short of constituting an enforceable contract. Many of the reported cases are concerned with imperfect gifts; but there is of course a sense in which all agreements made or promises given without consideration are imperfect gifts of the benefits they purport to confer. What distinguishes the equitable principle from the enforcement of contractual obligations is, in the first place, that there is no legally binding promise. If there is such a promise, then the plaintiff must resort to the law of contract in order to enforce it, it being the function of equity to supplement the law not to replace it. The second distinguishing feature is that what attracts the principle is not the promise itself but the expectation which it creates. In that respect it represents the precise converse of what was said by Jessel MR in Ungley v Ungley to be the basis for enforcing the contract in that case. Finally, the equitable principle has no application where the transaction remains wholly executory on the plaintiff's part. It is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise. That is why in Dillwyn v Llewelyn, where the son built on land promises but not effectively conveyed to him by a memorandum signed by his father, Lord Westbury LC said that the only inquiry was 'whether the son's expenditure, on the faith of the memorandum, supplied a valuable consideration, and created a binding obligation'."
For the reasons already stated, particularly in light of the revelations disclosed by the correspondence between Mr Sykes and the deceased, I cannot be satisfied that there was an agreement between the deceased and Mr Sykes, imperfect or otherwise, or that an expectation was created by the deceased or that the conduct of Mr Sykes post 1974‑1975 establishes that he acted upon the relevant expectation. Accordingly, it follows that any relief based upon equitable estoppel could not be made out.
I turn to the question of mutual wills. In order to establish a claim that the deceased entered into an agreement with Mr Sykes that they each execute mutual wills and which agreement was breached by the deceased it is necessary for me to be satisfied on the balance of probabilities that there was a sufficiently defined agreement disclosing a common intention that the deceased would give a life interest to Mr Sykes. As already stated I cannot be satisfied on the balance of probabilities that there was any such agreement. Even if there was such an agreement Mr Sykes did not perform his obligations thereunder in that he did not make a will in which he provided for a life interest in the Rupert Street property. In this respect, there is an inherent flaw both in fact and in law with respect to the claim made by Mr Sykes based upon the agreement. Further, on the basis of the evidence before me I cannot be satisfied one way or the other whether there was sufficient part performance to take the agreement outside the requirements of s.126 of the Instruments Act. Finally, in Thwaites v. Ryan (1984) VR 65, the Full Court held that in considering the sufficiency of acts of part performance it is wrong to postulate first the contract pleaded and then to enquire as to whether the acts alleged were a part performance of it or of a contract of its general nature. The Full Court held that as part of the enquiry it is necessary first to find such a performance as must imply a contract and then look at the general nature of the contract which, on the balance of probabilities must have existed and then compare that result with the general nature of the contract alleged. In my view in this matter the plaintiff fails on all grounds. I cannot be satisfied on the basis of performance that a contract can be implied and as already stated I cannot be satisfied on a balance of probabilities that a contract or agreement must have existed. It follows that the plaintiff cannot be said to have made out a mutual will claim. Finally, I would observe that in Re Goodchild, deceased (1997) 1 WLR 1216 the English Court of Appeal held that for the doctrine of mutual wills to apply a clear agreement at law between the two testators had to be established that the will should be mutually binding. In the present matter I cannot be satisfied that there was a clear agreement between the deceased and Mr Sykes.
The alleged loan of $46,000
The plaintiff claims that he lent the sum of $46,000 to the deceased during her lifetime. Mr Sykes gave evidence that he lent the sum to the deceased in order to buy an investment property which he thought was in Williamstown, Victoria, but now believes that the property purchased was the Wynyard property. The evidence of Mr Sykes was that the $46,000 loan was to be paid in instalments. About half that amount was paid over a period of about three weeks up to an amount totalling approximately $23,000. The balance of $23,000 was said by Mr Sykes to have been handed over in cash to the deceased on the front lawn near a tree at the Rupert Street property. In the evidence before me there was no evidence that at any time during her lifetime the deceased identified the property that was to have been the subject of the purchase by the deceased from the monies said to have been lent to her by Mr Sykes. Furthermore, at no time did Mr Sykes ask for details as to the "investment property". Mr Sykes acknowledged as much in his evidence. As matters transpired he assumed that the alleged loan of $46,000 was used to purchase the Wynyard property. It was submitted by Mr Cosgrave on behalf of the first defendant that there is no reliable evidence that the loan was made. He emphasised that the alleged loan was said to have been made after 1986 when relations between the plaintiff and the deceased were not amicable and, in particular, after the discovery by Mr Sykes of the involvement of the deceased with another man. Furthermore, it was submitted that there was no written acknowledgment in any way of the loan, such as a loan agreement, receipt or reference to the loan in correspondence. More significantly, the first defendant emphasised that there was no complaint by Mr Sykes about the $46,000 loan. In addition, after the separation of the deceased and Mr Sykes in mid 1986 there was continued correspondence between them much or most of which has been tendered by Mr Sykes as part of his evidence. I cannot find any reference in the course of correspondence to the alleged loan for $46,000. By contrast, the initial reference to the loan appears in a letter from the plaintiff to the first defendant and its solicitors dated 6 September 1996. In that letter written by Mr Sykes approximately eight months after the death of the deceased he claimed " … Re payment of a loan I made to her in cash of $46,000 in or about September 1989". It was submitted on behalf of the first defendant that this letter represented the first mention by Mr Sykes of the loan.
On the same basis on which I approached the question of the agreement I must be satisfied on the balance of probabilities that a loan in the sum of $46,000 was made by Mr Sykes to the deceased. I have considered the evidence of Mr Sykes and I cannot be satisfied on the balance of probabilities that a loan was made by him to the deceased as he alleges. I so find on the grounds that the circumstances under which the monies were provided by him to the deceased are vague and imprecise, in particular, the property to which the monies were to be applied is unidentified and the assertion that the property was the Wynyard property constitutes no more than guesswork on the part of Mr Sykes. On balance I am of the view that there is no reliable evidence that the loan was made by Mr Sykes to the deceased as alleged. In this respect the fact that there was no written acknowledgment of the loan and that Mr Sykes made no complaint or demand about monies allegedly owed by the deceased to him until 6 September 1996 supports my conclusion that I cannot be satisfied on the balance of probabilities that the loan was made. Accordingly, I find that the alleged loan is not made out.
The opal collection
Mr Sykes claims that he gave a collection of opals to the deceased on the condition that she use the opals to pay for the education of the children. Mr Sykes stated that there was a further condition attached to the gift of the opals, namely, that if the opals were not sold the plaintiff was entitled to recover them back on demand and if not so demanded then on the death of Mr Sykes the children would be entitled to the opals in equal shares. For probate purposes the estate of the deceased was listed as including an opal collection valued at $52,000. Mr Sykes has assumed that the opals referred to in the grant of probate are opals that he gave to the deceased. His evidence was that the opals were given to the deceased some time after 1986 when the business of XL was not performing as well and the children had been withdrawn from the Williamstown and Westbourne Grammar School due to difficulties in paying school fees. The first defendant denies any liability to return the opals to Mr Sykes on a number of grounds. Firstly, the court cannot be satisfied that the opals were in fact given to the deceased due to the very broad and vague circumstances described by Mr Sykes. Secondly, the court should not accept that the opals were given by Mr Sykes in light of the fact that relations between Mr Sykes and the deceased were not good in 1986. Thirdly, it is said that there is no written record of any arrangement with respect to the opals and given their value it would be reasonable to have expected some acknowledgment, receipt or reference to the opals in correspondence during the period from 1986 until the death of the deceased in 1996. Fourthly, it is emphasised on behalf of the first defendant that in initial letters of demand sent by Mr Sykes to the first defendants and its solicitors on 24 September 1995 and 6 September 1996 there is no reference to a claim for opals. Fifthly, it is further submitted that in a letter of 6 September 1996 Mr Sykes referred to the discovery that same day of the details of the probate with respect to the estate of the deceased. It was submitted on behalf of the first defendant that if there was a genuine claim for the opals it would be reasonable to have expected Mr Sykes to have referred to that matter in his letter of 6 September 1996. Sixthly, it is submitted on behalf of the first defendant that if the court was to find that the opals were given by Mr Sykes to the deceased they were so given on trust for the purpose of the education of the children and in the event of his death such opals would be distributed equally between the children. Such is borne out by the correspondence. On 25 January 1990 and in a letter dated 20 October 1993 Mr Sykes made clear reference to opals being given to the deceased and for the benefit of the children. It is submitted on behalf of the first defendant that the opals ought not be returned as they were given to the deceased for the purposes of the children's education and such purposes are not yet exhausted. Finally, it is submitted that there is no evidence that the opals held by the first defendant are necessarily the opals of the plaintiff. There was no evidence, for example, that the opals had been inspected and identified by Mr Sykes.
I accept these submissions on behalf of the first defendant. It follows that for the purposes of considering the claim of Mr Sykes I cannot be satisfied on the balance of probabilities that the claim to the opals is made out. There is insufficient evidence for me to determine one way or the other whether Mr Sykes gave opals to the deceased and as to which opals are now in the custody of the first defendant. Secondly, I cannot on the evidence be satisfied that in any event if opals were given they are not otherwise held on trust by the first defendant for the education of the children of the deceased and Mr Sykes. In view of the prevailing uncertainty and doubt I cannot be satisfied on the balance of probabilities with respect to the opals claim. It follows that the plaintiff fails in this regard.
The claim for reinstatement and maintenance of the Rupert Street property
It follows from my consideration of the claim against the Rupert Street property that there is no entitlement of Mr Sykes to occupy that property. It follows, further, that there is no entitlement to the reinstatement and maintenance of that property in any event.
As the plaintiff has failed to make out each of the claims brought by him against the estate of the deceased his claim should be dismissed.
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