Wesley v Alexander

[2004] NSWLC 1

Local Court of New South Wales

CITATION:	Wesley v Alexander [2004] NSWLC 1
JURISDICTION:	Civil
PARTIES:	John Dexter Wesley v David William Alexander
FILE NUMBER:	7423 of 2002
PLACE OF HEARING:	Downing Centre Local Court
DATE OF DECISION:	02/06/2004
MAGISTRATE:	Magsitrate B A Lulham
CATCHWORDS:	Intention of create legal relations - Testamentary Contract - Relevant presumptions
LEGISLATION CITED:	Limitation Act 1969 s 14
CASES CITED:	Balfour v Balfour (1919) 2KB 571 Jones v Padavatton (1969) 2 AII ER 617 Wells v Matthews (1914) 18 CLR 440 Merritt v Merritt (1970) 2 AII ER 761 Sharp v Anderson (1994) NSW Conv R 55721
REPRESENTATION:	Mr E White of Counsel Mr B Geraght Solicitor Mr G Grzeskiewicz of Counsel Mr W D Alexander & Co Solicitor
ORDERS:	1. Judgment for the plaintiff in the sum of $30,000.; 2. The defendant is to pay interest to the plaintiff on the sum of $30,000 to be calculated by the Registry from 1 April 2002.; 3. The defendant is to pay the plaitniff's costs and disbursements as agreed between the parties. In default of agreement within 28 days the costs are tobe assessed under the Legal Profession Act.; 4. The costs payable by the defendant will include the costs of the hearing before Magistrate Cloran.

1    The Wesley family ran the Boomerang Nursery, 311 Bobbin Head Road, North Turramurra since before World War II. The Nursery was run by George Wesley and his wife Mabel Vera Wesley. In the house which formed part of the nursery Mr and Mrs Wesley raised their five children;

Guy William John Wesley
David George Wesley
John Dexter Wesley
Carol Mary May Lombe (nee Wesley)
Mark Anthony Wesley

2    The father George Wesley died in October 1979. Mrs Mabel Wesley continued to run the nursery. Her younger sons John and Mark Wesley lived with her in the residence.

3    Unfortunately from time to time there was considerable bickering and ill feeling between the children. In 1970 Carol Lombe, the daughter, started working in the nursery five days a week. Following the death of Mr Wesley the nursery was operated by Mrs Wesley, more as hobby than a business and Carol Lombe worked one day a week. In 1993 Carol had a falling out with her brother Guy. She then stopped working and had only limited social contact with her mother.

4    There had obviously been problems within the family earlier and in about March 1988 Mrs Wesley had instructed her solicitor David William Alexander to prepare a partnership agreement for the running of the nursery between herself and her five children as six equal partners. The partnership agreement was never executed.

5    A violent windstorm in January of 1991 caused severe damage to the house, plants and out buildings at the Boomerang Nursery. An amount of $75,000 was received from the NRMA Insurance. It seems that Mrs Wesley was content for Guy Wesley to oversee the repairs to the house and nursery and the insurance claim. Guy Wesley maintained that because of difficulties with Ku-ring-gai Municipal Council and their requirements for the rebuilding of the buildings in the nursery, the amount required for the repairs was far in excess of $75,000.

6    A proposal was discussed whereby an amount of about $150,000 would be borrowed with the consent of all of the children and the nursery, not only restored, but improved to a standard of a competitive commercial nursery. That proposal did not proceed. The plaintiff claimed that he advanced to his mother an amount in excess of $30,000 to enable the repairs to be completed. He expected his advances to be repaid from the finance to be arranged through the family. When that did not occur he said he spoke to his mother who told him that she did not have the money to repay him but that she would make provision for payment of the amount out of her Estate. He said she subsequently told him she had done so. Mrs Wesley did make a Will dated 15 October 1992 which included the following clause 3.1;

‘I give to my son John Dexter Wesley of 311 Bobbin Head Road, North Turramurra, graphic artist upon him surviving me the sum of $30,000 representing the repayment to him of amounts advanced by him to me to the date of this my Will and aggregating the aforesaid sum in connection with the nursery business carried on by me under the style or name ‘Boomerang Nursery’ at the aforesaid premises at 311 Bobbin Head Road, North Turramurra, but if this trust fails then I direct that the same shall fall into and form part of my residuary Estate.’

7    John Wesley said that he accepted his mother’s word and was content to wait the finalisation of her Estate for repayment of the sum of $30,000.

8    Mrs Mabel Wesley made a codicil to her Will dated 2 July 1999. In that codicil she deleted Clause 3.1 of her Will, being the clause requiring the payment of $30,000 to be made to John Wesley. She otherwise confirmed her Will which meant then that her Estate was to be divided equally between her five children.

9    Mrs Wesley died on 5 January 2002 and probate of her Will was granted to her solicitor the Executor named in the Will, David William Alexander, on 14 March 2002.

10    John Wesley said that he was not aware that his mother had altered her Will to revoke the clause providing for payment to him of the $30,000. He only became aware following her death.

11    John Wesley sued the Executor, David William Alexander, the Executor of the Will of Mabel Vera Wesley to recover the sum of $30,000 which he claimed his mother had agreed to leave him in her Will in repayment of the amounts which he had advanced to her, or paid on her behalf.

12    The hearing was a sad one. There was clearly a lot of resentment and ill will between the five children. In these proceedings Guy Wesley supported his brother John’s claim for the $30,000. Statements contesting his claim were filed by Janette Ann Wesley the wife of David Wesley and by Carol Mary May Lombe, the daughter of Mrs Wesley. Mark Anthony Wesley did not put on any evidence.

THE PLEADINGS

13    The Statement of Liquidated Claim issued by the plaintiff on 27 June 2002 pleaded an agreement between Mrs Wesley and the plaintiff whereby Mrs Wesley promised and agreed that she would make provision in her Will to discharge the debt owed to her son in the sum of $30,000. The Statement of Claim pleaded that in pursuance of the agreement Mrs Wesley made her Will dated 15 October 1992 with the clause providing for payment of $30,000 to her son. The Statement of Claim further pleaded that the deceased bound herself not to revoke or vary that part of the Will relating to the repayment of the $30,000. The Statement of Claim pleaded the codicil dated 2 July 1999 whereby the clause making the payment to the plaintiff in the Will was deleted and sought payment from the Executor of the Will of the deceased in the sum of $30,000. The plaintiff alleged in effect, that there was an enforceable testamentary contract.

14 The Notice of Grounds of Defence denied that the deceased was indebted to the plaintiff for $30,000 and in relation to such debt, sought to rely upon s14 of the Limitation Act 1969. The Defence admitted the terms of the Will and the terms of the codicil but did not admit that the defendant was liable to pay any amount to the plaintiff.

15 The Defence relying on the Limitation Act was not pursued. Such defence may have been sustainable if the plaintiff was simply seeking to recover the debt or loan. However, the plaintiff relied on there being an enforceable testamentary contract and if that was proved then the breach alleged. being the revocation of the clause by the codicil, did not infringe the Limitation Act.

ISSUES

16    The pleadings did not indicate the principal basis upon which the defendant relied. Clearly factual matters were in issue, but the principal defence was that any arrangements made between Mrs Wesley and her son were normal family arrangements which the parties did not intend to have legal consequences. The defendant maintained it was not the intention of Mrs Wesley and her son to enter into legal relations such as would entitle John Wesley to sue his mother or the Executor of his mother’s Will.

17    The determination of this matter will depend on the answers to the following questions;

(i) Following the storm in January 1991 and prior to 15 October 1992 did John Wesley either advance or make payments on behalf of his mother of at least $30,000. Was she indebted to him for that amount?


(ii) Was it the intention of John Wesley and his mother to enter into legal relations regarding such debt, in that it was the intention of the parties that the debt was to be repaid?


(iii) Was there a testamentary contract intended to create formal legal relations between Mrs Wesley and the plaintiff whereby Mrs Wesley agreed to execute a Will making provision for the repayment of the advances of $30,000 in consideration for John Wesley agreeing to accept such proposal and to forbear doing or taking any other action to recover the debt.

18    Before discussing those questions I intend to set out the relevant legal principles and I intend to make some general observations regarding the credibility of certain witnesses.

19    The leading case on the question as to whether parties intend to enter into a binding legal contract as opposed to an ordinary domestic arrangement which could not be sued upon, is Balfour v Balfour [1919] 2 Kings Bench p571.

20    In that case, the parties who were married lived in Ceylon and had then moved to England for a short time. The husband was required to return to Ceylon for work but it was decided that the wife should stay in England for health reasons. At that stage there were no difficulties in the marriage. The husband agreed to pay his wife thirty Pounds per month. When he did not do so she sued. Aitkin, L.J. in a famous judgment held that the promise by the husband was not intended by either party to be attended by legal consequences, but was only an ordinary domestic arrangement which could not be sued upon. He stated;

‘In respect of these promises each house is a domain into which the King’s Writ does not seek to run and to which his officers do not seek to be admitted.’

21    Balfour was followed in Jones v Padavatton [1969] 2 All ER, p617. That case involved a claim between a mother and daughter. The mother had agreed to pay maintenance to her daughter to enable her to live and study law in London. Subsequently the mother agreed to buy a house and to allow the daughter to live in it whilst she was studying. Some four years later the mother sought possession of the house. The daughter claimed an interest in the house on the basis that she had not completed her law examinations. The Court found that the arrangement between the mother and daughter was throughout a family arrangement depending on the good faith of the parties in keeping the promises made and was not intended to be a rigid binding agreement. The daughter’s claim thus failed. Salmon L.J. stated as follows;

‘Did the parties intend the arrangement to be legally binding? This question has to be solved by applying what is sometimes (although perhaps unfortunately) called an objective test. The Court has to consider what the parties said and wrote in light of all the surrounding circumstances and then decide whether the true inference is that the ordinary man and woman, speaking or writing thus, in such circumstances would have intended to create a legally binding agreement.


Counsel for the mother has said, quite rightly, that as a rule when arrangements are made between close relations, for example, between husband and wife, parent and child, or uncle and nephew in relation to an allowance there is a presumption against an intention of creating any legal relationship. This is not a presumption of law but of fact.’

22    Clearly each case depends on its particular facts. It is most significant that the comments made by Salmon J in Jones were directed to cases between relatives relating to payment of allowances. That each case depends on its own fact is highlighted by the decision of Wells v Matthews [1914] 18 CLR at p440 to which I was referred by Mr Gray for the defendant. In that case the father owned a large property. As was apparently the case in Victoria, members of his family had taken up selections or parcels of land around the father’s property. The father decided to sell the whole of the property including the portions owned by his children. His daughter, alleged there was an agreement that in consideration of her allowing her father to sell the land in her name with her father’s land, he promised to leave her a share in his estate equal to the share which he had left certain others of his children. When the father failed to do so the daughter sued the father relying on the oral contract. Isaacs J found that the evidence on behalf of the daughter was capable of either construction; what the testator said was a declaration of intention which he was competent to change, or it was a promise irrevocably make for valuable consideration. The High Court agreed that it was open for the trial Judge to come to the finding that the conversation did not amount to a contract for valuable consideration and disallowed the daughter’s appeal.

23    I was referred to Merrit v Merritt [1970] 2 All ER p761. That was an interesting case. The husband agreed that if the wife paid amounts due on the house to the Building Society, he would transfer the house to her. The parties were married when they made such agreement. However it was at a time when Lord Denning MR found that the husband had formed an attachment for another woman and had left the house to go to live with her.

24    Lord Denning rejected the proposition that the agreement was a family arrangement such as was considered by the Court in Balfour v Balfour and in Jones v Padavatton so that the wife could not sue on it. He said that in those cases the parties were living in amity and in such cases their domestic arrangements are ordinarily not intended to create legal relations. He stated;

‘ It is altogether different when the parties are not living in amity but are separated or about to separate. They then bargain keenly. They do not rely on honourable understandings. They want everything cut and dried. It may safely be presumed that they intend to create legal relations.’

25    The above cases referred to me by Mr Gray all deal with the presumption that agreements between members of a family are usually domestic arrangements not intended to create legal relations. Mr White for the plaintiff referred me to decisions of Cavasinni v Cavasinni 201 NSW SC 223 a decision of Young J. The facts of that matter were quite complicated and I did not find the case particularly helpful as it seemed to me to be a case decided on its particular facts.

26    Mr White also referred me to the decision of Santow J in Sharp v Anderson New South Wales Supreme Court NSW CONV. R(1994) 55721 which I found most instructive and helpful. In that case the defendant Anderson, the son of the plaintiff, advanced the sum of $12,000 to enable his mother and step father to purchase a house for $41,000. There was no way such persons could have purchased the house without the assistance of the defendant. He himself did not then own a house and after contributing the funds for the purchase of his mother and step father’s house, it was necessary for him to start saving to obtain a deposit for himself. The mother and step father paid the mortgage payments on the house but they were considerably less than the rent they had previously paid for a far less attractive house. The defendant claimed that he made the advance to his mother and step father following a conversation had with the step father, at which his mother was present, wherein he said that he was prepared to contribute the $12,000 to assist them on the understanding that when they died the house came to him. He said the step father agreed unreservedly to that proposition and his mother made no comment which he took to be consent.

27    Santow J posed for himself the following question;

Was there a testamentary contract intended to create formal legal relations between the defendant and the plaintiff as the survivor, whereby the survivor was obliged to execute a will devising the entirety of her interest in the property to the defendant in consideration for the financial assistance of the defendant towards that purchase.’

28    It will be readily seen that the question posed by His Honour in that case was very similar to the question which I have indicated I will have to determine in this case. I should add that His Honour also posed further questions in Sharp’s case but I do not have to consider those questions as they went to the need or otherwise, for the agreement to be evidenced in writing as the agreement was concerned with real estate.

29    I propose to set out the following extracts from the judgment of Santow from pages 6,7 and 8 of his judgment because although they are quite lengthy, they are directly on point as to the legal principles which I have to apply. Judge Santow found as follows;

‘It is well settled that a testamentary promise is enforceable or not according to ordinary contractual principles. The contract here alleged is in relation to a particular property consisting of land. Thus it will need to be supported by valuable consideration and be part of a bargain which is certain in its terms and complies with the requirements in the Statue of Frauds (as rendered applicable by s23C and s54A of the Conveyancing Act 1919 (NSW). See Maddison v Alderson (supra) and Horton v Jones (1935) 53 CLR 475. If the Defendant is successful in his contention, as promisee he receives under the contract a right to an effectual transfer of the relevant asset under the promisor’s will. This has been held to effectively place the promisee in the position of a creditor, see, for example, Dillon v Public Trustee (NZ) [1939] NZLR 550 and Schaefer v Schuhmann [1972] A.C. 572, discussed later in this judgment under question 2.


The courts have shown a natural scepticism about whether statements of future testamentary beneficence made within a family are intended to have contractual significance: “Common experience is that statements about possible future testamentary dispositions are not unusual, which may be why courts (and society as a whole) tend to discount them; see, for example, Re Fickus [1900] 1 Ch. 331” per McPherson JA in Eric Gordon Willets v Thomas Henry Marks and Skram Investments Pty Ltd (Queensland Court of Appeal No. 115/93, 14 February 1994, unreported), noted in (1994) 68 ALJ 462.


Consistent with a sceptical attitude about such arrangements, there has traditionally been a rebuttable presumption that between parent and child there is no intention to create legal relations. Rather there are “family ties of mutual trust and affection”; Jones v Padavatton [1969] 2 All ER 616 at 621. This means that the party claiming that a contract is on foot generally bears the onus of proof. However, in recent years, that scepticism has been replaced by an approach in which the courts retain a critical scrutiny but have not been inhibited in recognising that such informal family arrangements may nonetheless be enforceable, particularly where they involve the promisee undertaking onerous obligations or giving up existing advantages in reliance on an allegedly binding promise. See generally the discussion in J Carter and D Harland (1991 Contract Law in Australia at 145; also Horton v Jones (Supra), Wakeling v Ripley (1951) 51 SR(NSW) 183, Palmer v Bank of New South Wales (1975) 133 CLR 150, Schaefer v Schuhmann (supra) and Riches v Hogben (supra)’.

30    His Honour then stated that in determining whether or not the parties intended to enter into legal relations the Courts had looked at both actual and imputed intentions. He then set out the factors which Courts have found pertinent in ascertaining that intention as follows;

(i) To how many people the statement was made. In Palmer v Nowell (Brownie J, NSWSC, 22 July 1993, unreported), (affirmed in Nowell v Palmer (1993) 32 NSWLR 574), the deceased made a statement to numerous people saying he was leaving his money to X due to the operation of mutual wills.


(ii) Whether there is a statement in writing. In Wakeling v Ripley (supra) the court held that the fact that the testator sent a copy of his will with a provision stating he would leave his house to Y was proof of intention to enter into formal legal relations. In Schaefer v Schuhmann there was a codicil in writing which the promisor asked to be read to him by the promisee and this was held to be binding.


(iii) The substantial consideration offered for the promise. In Wakeling v Ripley the plaintiffs left England and a secure academic position to move to Australia on the promise that when the testator died they would be left his house. This can also be construed as evincing an intention to be legally bound by the post-promise conduct of the parties. See also Riches v Hogben .


(iv) The number of times the statement was made. Nowell v Palmer (supra), Wakeling v Ripley .


(v) The language use by the parties. Riches v Hogben and Parker v Clark [1960] 1WLR 286. The words used will be given a narrow construction such as to favour the Defendant ( Bannister v Bannister (supra)).


(vi) The context, formal or informal, in which the promise was made. For example a promise made during a football pep talk before a game is not binding; Shearer v Manly-Warringah Rugby League Football Club (Young J, SCNSW, 7 November 1989, unreported). Lord Denning in Merrin v Merritt (supra) at 1213: “Would reasonable people regard the agreement as intended to be binding?”


(vii) The nature of the relationship between the parties. In Popiw v Popiw [1959] VR 197 at 198 Hudson J held that the fact that the parties’ relationship had broken down and that it was a normal matrimonial relationship added weight to the promise that there was an intention to create legal relations.


(viii) The certainty of the terms. In Eng v Evans 83 Alta L.R. (2d) 107 at 109,111 Fraser J held that the fact there was no discussion of length of time of an arrangement, nor price nor ownership of a set of tickets for a hockey game and the fact that as the agreement was merely among friends pointed to the agreement having no legal consequence. A detailed agreement would suggest that there was some intention for it to be a binding agreement must be concerned with every contingency but rather it must have a reasonable degree of particularity ( Wakeling v Ripley ).

31    I propose to apply those principles to the circumstances in this case but before doing so I want to make some general comments in relation to the credibility of two of the witnesses.

JOHN WESLEY

32    I found the plaintiff to be an unsatisfactory witness. He was not frank or forthcoming and was most reluctant to make any concessions. I gained the impression that he considered (whether rightly or wrongly), that he had been very poorly treated by Mr Alexander the Executor of the Will and was bitter towards Mr Alexander. I gained that impression from his evidence and also from the letters which he wrote to Mr Alexander dated 24 January 2002 and 30 January 2002. It appeared to me that he allowed that bitterness and the bitterness between he and some members of his family to affect his evidence. A good example of the attitude to which I am referring was when in cross examination he was handed two documents which were subsequently tendered as Exhibit 14 and was asked by Mr Gray words to the effect;

“ Would you look at these documents and would you agree that they appear to be quotations from Beer Constructions Pty Limited ?”

33    John Wesley looked at the documents and then made a reply to the effect;

“ I cannot say what the documents are .”

34    The documents bore the heading of Beer Constructions Pty Limited and included the word ‘quotation’ and set out certain work to be done and a price. In my view it would be absolutely obvious to any person, looking at the document, that they appeared to be a quotation from the builders. I found it extraordinary for John Wesley not to agree with the proposition, especially as nothing significant turned on the documents.

35    Mr John Wesley in cross examination said that his position was that he had paid board, not rent, to his mother. He was referred to paragraph 3 of his statement in reply dated 9 July 2003 in which he stated;

‘I resided rent free at the request of my mother.’

36    It was put to him that he was offended by comments made about him by Mr Alexander. He said that he wasn’t. It was put to him that he was offended by comments by Alexander that he had lived rent free with his mother. Mr John Wesley said he was not offended but that the statements were incorrect. He was shown copies of his letters to Mr Alexander dated 24 and 30 January 2003. The letter of 30 January 2003 commenced with Mr Wesley saying, contrary to his evidence, that he did take offence at the comments made by Mr Alexander.

37    I came to the view that because of the manner in which Mr John Wesley gave his evidence and some replies in cross examination which raised doubts about his credibility, that I would have to consider carefully his oral evidence in association with any contemporary documents or objective evidence which might support or detract from his oral evidence.

GUY WESLEY

38    I was impressed with the evidence of Guy Wesley. It is sad that he suffers from Parkinson’s disease, but while it affected his speech he was very mentally alert. I note he is a retired real estate valuer and I was impressed with his general knowledge as to matters relating to the insurance claim, application to the Council and application for finance. I found him to be an honest witness. It is true that he denied that his mother paid the storage for his furniture in 1992. The cheque book presented indicated that cheques were drawn on 6 April 1992 and 11 May 1992 each for $220.00. Clearly he was mistaken, which in my view was understandable bearing in mind the payments occurred more than ten years ago. I was generally impressed with the manner in which he appeared to organise payment of the accounts. I had no difficulty in accepting the evidence of Guy Wesley.

39    I now propose to examine the evidence and to answer the questions which I previously posed.

(i) Following the storm in January 1991 and prior to 15 October 1992 did John Wesley either advance or make payments on behalf of his mother of at least $30,000. Was she indebted to him for that amount?

40    I have no doubt that the plaintiff John Wesley either advanced funds to his mother or paid accounts on her behalf in the period following the damage to the house and nursery by wind in an amount in excess of $30,000. The evidence that he did so was overwhelming. Attached to John Wesley’s statement dated 27 March 2003 were accounts which satisfied me that he paid accounts totalling $22,494.35 on behalf of his mother and paid an additional $12,900.00 into her account for the payment of accounts, making a total of $35,394.00.

41    That John Wesley paid an amount of at least $35,000 was supported by his brother Guy Wesley. I accept his evidence that his mother Mabel asked him to handle the insurance damage claim and the carrying out of the repairs to the house and nursery. I do not propose to go through all of the accounts, but for example I am satisfied that Guy Wesley left a note for John Wesley seeking a payment of about $9,900 to cover concreting expenses. I am satisfied that John Wesley advanced that sum by payment into his mother’s account as evidenced by the accounts and that payments of about that amount were made for concrete and to concreters. Guy Wesley’s note was tendered in evidence. The cheque butts evidencing the payments were produced. Guy Wesley’s evidence that the amounts were advanced by John Wesley was not really challenged in cross examination.

42    Moreover I am satisfied that each of the members of the Wesley family were aware that John had advanced funds towards the development costs. Guy Wesley wrote to each member of the family on 19 October 1992 setting out proposals in relation to the running of the nursery. The letter advised;

‘Meanwhile next week nursery will have a fully operational watering system and purchases of stock is proceeding to enable servicing of John’s loans to date on development costs .’

43    The letter set out a proposal to borrow an amount of money to enable certain things to be done, including;

‘(b) That existing loans by John Wesley be also secured as in (a) with priority in terms of repayment to be arranged with him.’



It would seem such letter was the catalyst for Mrs Wesley’s attendance upon Mr Alexander and his reply to Mr Guy Wesley dated 21 October 1992.

44    John Wesley said in evidence that he made the advances on the basis that the same would be paid out of the proposed refinancing of the nursery.

45    I was surprised at the evidence of the defendant David William Alexander and the view he came to as to lack of proof of the debt. Everyone said that Mrs Wesley was an honest woman. Yet some of the statements Mr Alexander attributed to her as instructions to him, are not in accordance with the evidence. For example;

1. The plaintiff was working at the nursery – There was no evidence that John Wesley was working at the nursery at that time.
2. She had never received any money from John Wesley – The evidence was to the contrary, particularly in relation to the payment into her account of $9,900 by her son John.
3. She did not tell the plaintiff she was leaving him a legacy – I am sure Mrs Wesley did not use the word ‘legacy’. I am satisfied she intended to pay the debt she owed to her son. I am satisfied she did tell her son of her intention to pay the debt by provision in her Will.

46    Mr David Alexander said that there was no documentation to substantiate the payments made by the plaintiff. That may have been the case when he saw Mrs Wesley regarding her Will. However when he saw her several days later in relation to the development advice, I am satisfied that he had a copy of the letter written by Guy Wesley. I do not accept that Mr Alexander could have written the letter dated 21 October 1992 without reading the letter from Guy Wesley dated 19 October 1992. That letter, as previously indicated, clearly referred to the need for the family to repay the loans advanced by John Wesley.

47    I was surprised by the statement made by Mr Alexander as follows;

‘ If I considered the development not to be viable, then the deceased wanted my help to stand up to her sons Guy and the plaintiff .’

If the deceased did say that, I find it most strange that the letter written by Mr Alexander was addressed only to Mr Guy Wesley and not also to John Wesley. I also find it strange that Mrs Wesley would have made that statement in relation to her sons Guy and John a few days after making a Will where of her five children, she appointed those children as the alternative Executors of her Will.

48    I also find it unusual and difficult to understand how Mr Alexander, as Executor of the Will of the deceased, could maintain in this action that Mrs Wesley and her son John did not intend to enter into legal relations regarding the repayment of the sum of $30,000 and yet as Executor, form the view that the deceased and her son did enter into legal relations in relation to the deceased charging her son $100 a week for board and occupation fees for six years. The evidence of every witness other than Mr Alexander Senior and Junior, was that Mrs Wesley had said on numerous occasions words to the effect that she did not want John or Mark to pay rent or board. She appreciated their company and it was security for her. Guy said she told him she did not want him or any of her sons to pay board or rent. Janette Wesley frankly admitted that she had a morbid interest in the fact that John Wesley did not pay rent. She raised it with Mrs Wesley frequently and on every occasion Mrs Wesley said words to the effect that she did not want any of the children to pay rent.

49    The clause drafted by Mr David William Alexander was unusually worded but nevertheless the payment of $30,00 to John Wesley was expressed to be “Repayment to him of amounts advanced by him to me.”

50    I have no doubt that Mrs Wesley was legally indebted to her son for an amount of at least $30,000.

(ii) Was it the intention of John Wesley and his mother to enter into legal relations regarding the debt, in that it was the intention of the parties that the debt was to be repaid?

51    The answer to this question is intertwined with the answer to question (i). I have no doubt that John Wesley, when he advanced the sum to his mother, did so on the basis that they were loans and were to be repaid. John Wesley expected the amounts to be repaid from the refinancing of the property. I am satisfied John Wesley and his mother did intend to enter into legal relations. Bearing in mind the friction within the family I find it inconceivable that John Wesley would have advanced monies for the development of the nursery, which in the normal course one would have expected to benefit all of the brothers and sister on the basis that he would not expect the monies to be repaid. Certainly Guy Wesley who was in charge of the repairs regarded the advances by John Wesley as loans and it was clear from his letter to his siblings that he was anxious that the property be refinanced to enable the loans made by John Wesley to be paid. Moreover it is clear on the evidence that in relation to some at least of the advanced funds John Wesley was using borrowed funds on which he was paying interest. The advancement of the funds was an onerous task for John Wesley.

52    Mrs Wesley and John Wesley intended the loans to be repaid.

(iii) Was there a testamentary contract intended to create formal legal relations between Mrs Wesley and the plaintiff whereby Mrs Wesley agreed to execute a Will making provision for the repayment of the advances of $30,000 in consideration for John Wesley agreeing to accept such proposal and to forebear doing or taking any other action to recover the debt.

53    John Wesley said he discussed the repayment of the advances with his mother. He said that such conversation arose out of the letter dated 21 October 1992 which Guy wrote to John Wesley and other members of the family. I am satisfied that John Wesley was mistaken in relation to that aspect of his evidence. I am satisfied that around that time in October there was a lot of discussion regarding payments of accounts and the amounts advanced by John Wesley, because in relation to those matters Mrs Wesley sought assistance from her solicitor David Alexander.

54    I am satisfied that the conversation referred to by John Wesley took place some time shortly prior to 15 October 1992. John Wesley said his mother said to him;

“I will make a provision in the Will to cover the funds. That’s the only way that I can be sure you will be paid.”

55    John Wesley said he replied to the effect “That will be alright. I am appreciative of the fact that you will do that.”

John Wesley did not refer in chief to any further conversation in relation to the debt. In cross examination he said his mother did tell him that she had made the provision for him. He said the conversation took place one Saturday morning during a discussion between himself and his mother regarding finance. He said she said to him;

“John, I’ve seen the solicitor. I have made arrangements for the money to be paid out of the Will.”

56    John Wesley said that he accepted what his mother said. He did not see a copy of the Will. He was not aware his mother had made the codicil to her Will and did not become aware of the codicil until after her death.

57    I am satisfied that the conversations as alleged by John Wesley did take place. One matter which concerned me was nowhere in the alleged conversation was the sum of $30,000 mentioned and one wonders how Mrs Wesley knew to include that amount in her Will. John Wesley was not cross examined in relation to that aspect of the matter and I am satisfied that there must have been some additional conversation, not deposed to, wherein the sum was mentioned.

58    The fact was that Mrs Wesley saw her solicitor and on 15 October 1992 made a Will which included Clause 3 referring to the payment of $30,000 to John Wesley. Mr Alexander said in his statement (paragraph 19) that he had a distinct recollection of Mrs Wesley saying to him that she had a dread of owing money. That evidence was supported by other witnesses, including John Wesley, Guy Wesley and also in the statement of the daughter Carol Lombe. I accept that was the position and in doing so it seems to me incredible that if Mrs Wesley was so concerned to pay her debts, that she would not have discussed with John Wesley her intention to make provision for the payment of the debt to him out of her Estate. Moreover, having done so, one would have expected her to do what John Wesley said she did, namely to tell him that she had been to the solicitor and made the provision in her Will. All of the objective evidence supports the evidence of John Wesley.

59    I accept the evidence of John Wesley as to the conversations which he had with his mother prior to and after she made her Will on 15 October 1992.

60    The evidence indicated that as at 15 October 1992 John Wesley had advanced or paid accounts an amount in excess of $30,000. He paid further sums after that date to make the total payments for advances approximately $35,000.

61    I am satisfied that in relation to the agreement with his mother the valuable consideration was given by John Wesley. His acceptance of his mother’s proposal amounted to a forbearance to sue. John Wesley was entitled to sue to recover the advances. His mother was clearly anxious to avoid friction within the family. In accepting the proposal of his mother, John Wesley agreed not to take any other action to recover the debt. I find that to be valuable consideration. Mr Gray for the defendant submitted that there was no evidence that the plaintiff agreed not to sue. I am satisfied that the plaintiff's intentions in that regard can be implied from his actions. In fact he did not seek to sue to recover the money. Moreover in cross examination Mr Gray specifically put to John Wesley that until his letter to the solicitor in January 2002 he had no intention of suing anyone to recover his money. John Wesley replied that he had no need to sue anybody as he was content to rely on the indication by his mother that she had made provision for the payment of the debt in her Will.

62    I am satisfied the parties entered into a testamentary contract whereby Mrs Wesley agreed to make provision for the payment of the debt in her Will. The only outstanding question is whether the contract was entered into with the intention to create formal legal relations.

INTENTION TO CREATE LEGAL RELATIONS

63    Mr Gray for the defendant addressed me carefully and skilfully in relation to this point. He drew attention to the cases I have referred to and emphasised the substantial onus which those cases indicate lie on the plaintiff to prove the terms of the agreement in circumstances where his mother was deceased and the onus on him to prove the intention of the parties to enter into legal relations. He relied heavily on the cases of Balfour v Balfour, Johns v Padavatton and Wells v Matthews. He emphasised that such cases established that there was a presumption that in entering into agreement husbands with their wives and mothers with their children do not intend to enter into legal relations.

64    I have considered those submissions carefully and I have previously discussed the principles arising from the cases to which Mr Gray referred.

65    I am very comfortably satisfied that Mr John Wesley and his mother did intend to enter into legal relations when they entered into the agreement for provision for the repayment of the debt to be made in Mrs Wesley’s Will.

66    I discussed the principles to be found in the decision of Santow J in Sharp v Anderson in some detail and I set out shortly the facts in that matter. On those facts, Judge Santow was prepared to find that the testamentary promise by Mr Anderson’s mother and step father was enforceable based on the conversations which the son alleged and the surrounding circumstances. He did so, even though the testamentary promise was not subsequently evidenced in a Will. The plaintiff's case in this matter was immeasurably stronger because the testamentary promise made by Mrs Wesley was in fact carried out. Mrs Wesley made her Will on 15 October 1992 and provided for the payment of $30,000 to the plaintiff in repayment of the amounts which he had paid on her behalf. In this matter, unlike Sharp, Mrs Wesley kept her promise and made the provision in her Will.

67    I do not intend to repeat the eight factors which Judge Santow referred to in Sharp’s case as to matters to be considered when deciding if the parties intend to enter into legal relations. I intend however to go through them. In this case Mrs Wesley not only told John Wesley of her intention to repay the loans by provision in her Will, she did so as evidenced by Clause 3 of her Will. Clearly there was a statement in writing. It was not a statement drawn by Mrs Wesley herself. She went to see her solicitor. That was a very important indication that she intended to enter into legal relations when she promised her son that she would provide for the repayment of the debt in her Will. I have set out the basis for my finding that Mrs Wesley was legally indebted to her son for at least $30,000. For the reasons I have already given I am satisfied that her solicitor the defendant David Alexander got it wrong, either because he had insufficient information or he interpreted wrongly the information he had when he purported to draw the clause in the Will on the basis of Mrs Wesley owing a moral, rather than a legal duty, to repay the sum to the plaintiff.

68    The offer by Mrs Wesley to repay the amount by making provision in her Will and subsequently proceeding to do so was made in a situation where one of her five children was making a substantial contribution to the rebuilding of the nursery. Mrs Wesley was anxious not to have outstanding debts. The fact that Mrs Wesley went to see her solicitor and had him draw up the clause in the Will indicates that even though it was an arrangement between her and her son, she wished it to be done in a legal and binding manner. As I have already indicated, any uncertainty caused by the unusual manner in which the clause was drafted lay clearly at the feet of David Alexander and not with Mrs Wesley.

REVOCATION

69    One further submission requires discussion. Mr Gray submitted that the plaintiff was required to prove not only that Mrs Wesley agreed to make the provision in her Will but that Mrs Wesley agreed not to revoke her Will.

70    I do not accept such submission. I am satisfied the plaintiff has proved the enforceable testamentary contract whereby Mrs Wesley agreed to make provision in her Will for the repayment of the debt of $30,000 to her son and did so. The parties had thus entered into a legally binding contract. Mrs Wesley was free to alter her Will but if she deleted the clause she had contracted to make, then she would be in breach of the contract. That is what happened. I do not feel it necessary to canvas in detail the evidence of David John Alexander (Jnr) the solicitor who prepared and witnessed the codicil. He is the son of the Executor and is a solicitor who was then employed by his father. I found it strange that his evidence of what Mrs Wesley told him was not supported by other evidence. For example, he said Mrs Wesley said;

1. “I have discussed deleting the legacy with my son Guy.”



Guy Wesley denied any such conversation took place. I was impressed with his evidence on this point. I accept his evidence. I have grave doubts Mrs Wesley would have used the word “legacy”.

2. “The plaintiff does not know anything about the legacy in the Will.”



Clearly Mrs Wesley did not use the word ‘plaintiff’ and I again doubt if she used the word ‘legacy’. The statement attributed to her was contrary to the evidence given by John Wesley whose evidence on this point I accepted for the reasons I gave.

71    Mr Alexander (Jnr) regarded the relevant clause in the Will as a legacy even though the payment was expressed to be for repayment of amounts advanced to her by John Wesley. I found that strange. However, the wording of the clause was unusual. It was sad that Mrs Wesley was not given some advice to the effect that if the clause was in fact in payment of a legal debt, then its revocation would leave the Estate liable to pay the debt.

72    I find for the plaintiff.

73    I would propose to make the following orders;

(i) Judgment for the plaintiff in the sum of $30,000.


(ii) The defendant is to pay interest to the plaintiff on the sum of $30,000 to be calculated by the Registry from 1 April 2002.


(iii) The defendant is to pay the plaintiff's costs and disbursements as agreed between the parties. In default of agreement within 28 days the costs are to be assessed under the Legal Profession Act.


(iv) The costs payable by the defendant will include the costs of the hearing before Magistrate Cloran.

74    I will hear from the parties in relation to the proposed orders.