Bonnici v Bonnici

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUTIY DIVISION

1014 of 2002 PATRICIA MARY BONNICI v MARTIN JOHN BONNICI JUDGMENT 1 MASTER: This is an application under the Property (Relationships) Act 1984 (the Act) in which the parties seek adjustment in respect of their property pursuant to s 20 of the Act. The parties commenced cohabitation in mid September 1985 and continued to live together, except for a brief period of separation from 21 May 1991 to 22 August 1991, until they separated on 12 April 2001. There is no dispute about the existence of the relationship and these proceedings concern the adjustment of the property interests of the parties. Their main asset at the conclusion of the relationship was a property at 10A Wiltshire Avenue, Cronulla. 2 Although there was a break in the period of the relationship for a short time it is appropriate to have regard to the parties' contribution to the relationship both before and after that period. See Jones v Grech [2001] NSWCA 208. 3 There are two children of the relationship, namely, Nathan Adrian Bonnici born on 11 May 1986, currently 17 years of age and Justine Lyndall Bonnici born 1 March 1989, currently 14 years of age. 4 Immediately prior to separation on 12 April 2001 the parties and their children lived at the property at Wiltshire Avenue, Cronulla which was a three bedroom townhouse. On separation the plaintiff and Justine moved to reside in rental accommodation at Flat 15, 29 Tulembah Road, Cronulla while the defendant and Nathan remained at Wiltshire Avenue for a short period of time before moving to another property. Chronology of events during the relationship 5 The defendant was born on 17 August 1953 and is now 50 years of age. The plaintiff was born on 23 May 1955 and is now 49 years of age. The defendant's mother who owned the home in which the parties lived in a granny flat at the commencement of their co-habitation was born on 14 January 1925. In September 1985 the parties commenced to live together in the two-bedroom granny flat at the defendant's mother's residence at 70 Orchard Road, Bass Hill. The building was described in the evidence as a granny flat but in fact it was a freestanding building. At the commencement of the relationship the defendant was completing a TAFE course to become a licensed builder. He already had skills in bricklaying and carpentry and was at college for some three years getting his qualifications which he eventually obtained in February 1986. 6 At the commencement of the relationship Woolworths Limited employed the plaintiff as an administrative clerk. She continued that employment until she stopped working in April 1986 as a result of the approaching birth of her son, Nathan. She went back to work in mid 1987 on a part-time basis until February 1989 when she stopped work immediately before the birth of her daughter, Justine. Thereafter she did not return to work as she was looking after the children until 1994. 7 In May 1989 the State Bank made the first advance to the defendant in respect of a project in which he was engaged for the Housing Commission at Kingswood. The project was the construction of seventeen units and he obtained a facility of $165,000 by way of overdraft which was secured on his mother's property at Orchard Road. The bank also gave a guarantee in favour of the Department of Housing for $68,150. 8 The construction of the project at Kingswood was subject to a number of delays and difficulties. In October 1989 the facilities were extended to 30 June 1990 due to delays in the project. 9 In February 1990 the plaintiff commenced the project at 10 Wiltshire Avenue, Cronulla. He had intended to purchase the site and develop it but he was introduced to a purchaser, a Mr and Mrs Stevens, who joined in the project. As a result both bought it and the defendant constructed two townhouses on the site and subsequently sub-divided them. After adjustments each partner took one of the townhouses. 10 In April 1990 the plaintiff's mother died. As a result of her death the plaintiff ultimately received a distribution of $39,117.88 in November 1990. Prior to that time, in August 1990, she had purchased a 1990 Mazda 626 for $26,000 from her savings and moneys repaid to her by her sister. 11 It is not clear when the project at Kingswood was completed but it was some time in 1991. It seems clear that the defendant was experiencing financial difficulties from at least July 1991. As I have mentioned there was a separation between the parties between May and October 1991. 12 In June 1991 the overdraft facilities were increased by $35,000 to allow the defendant to complete the project at Wiltshire Avenue. The facilities were also extended to 30 June 1991 to enable completion of that project. 13 The financial difficulties having become apparent to the defendant he told his mother that it was likely that the bank might foreclose on her property. This led to an arrangement whereby the defendant constructed the granny flat (which is also detached from the main building) on his sister's property at Meakins Road. 14 In April 1992 the parties and their children moved into 10A Wiltshire Avenue, Cronulla and the defendant's mother moved to the granny flat which had been completed at Meakins Road. The last debit to the overdraft account of the defendant with the State Bank, when the bank called on the guarantee, was made in August 1992. 15 The bank sold the defendant's mother's property at auction on 12 December 1992 for $250,000. At that state the amount owing was in excess of $269,865. Settlement of the sale occurred on 5 February 1993. At that stage there was a debit balance of some $50,337. This increased with the defendant apparently at some stage making a settlement with the bank whereby he paid them some sum slightly in excess of $20,000. 16 In or about 1992 the defendant had a discussion with his mother about the likely foreclosure by the bank over her property. She accused him of using the loan to pay for the Cronulla property. In response the defendant said that he told his mother that he would repay the money for the house and build a granny flat at his sister Teresa's place for his mother to live. His mother anticipated that the interest on the funds due to her would support her activities at the local club. Shortly before the sale of the house arrangements were made with the defendant's sister Theresa and the defendant built the granny flat on her property. His mother then moved into the granny flat. 17 In 1993 or 1994 the defendant said he had another discussion with his mother when she expressed concerns about her gambling habits and losing money at the club and on the horses. His mother suggested to him that the defendant should leave the money in Cronulla to his sisters in equal shares. To this the defendant agreed. He says he occasionally paid his mother other sums but that these were by way of gift. At the commencement of the hearing the deceased's mother was suffering from dementia and was unable to give evidence and accordingly the only evidence of these matters is that of the defendant. It is to be noted that these promises made by the defendant were not conveyed by him either to his sisters or to the plaintiff in these proceedings, his de facto partner. 18 Between 1994 and 1997 the plaintiff was employed by Brambles. She was then employed between two and four days a week. From 1998 to the end of cohabitation she continued that employment with that company and later Chubb Securities for 30 hours a week. 19 Prior to separation in April 2001 the defendant gave the plaintiff $6,240 to cover rent for six months for her and Justine and the parties moved, as I have earlier recounted. In September 2001 the defendant and Nathan moved to a property at 450 Princes Highway, Blakehurst. These premises were ones which had been constructed by the defendant as one of his property ventures with a partner, a Mr Khoo. 20 Having moved out the defendant rented 10A Wiltshire Avenue to Mr Kevin Solari his solicitor in these proceedings. 21 In June 2002 the defendant started living with Mrs Penelope Russell and her son at 450 Princes Highway, Blakehurst. They had commenced their relationship some six months or so beforehand although they had known each other many years earlier. 22 In December 2002 Mrs Russell and the defendant purchased the property at 450 Princes Highway, Blakehurst from Mr Khoo. The purchase price was $1,270,000. Mrs Russell provided one half of the purchase price, the whole of the stamp duty and legal expenses. The other half of the purchase price was left outstanding as a mortgage back and the arrangement between Mrs Russell and the defendant was that he would repay that loan. Plaintiff's assets at the commencement of cohabitation 23 At the commencement of cohabitation the plaintiff had a 1976 VW motor vehicle worth $3,300. She had some furniture, furnishings and personal effects and cash of $2,985.31. She had an interest in the Woolworth's Staff Superannuation Scheme worth $7,142. The defendant's assets at the commencement of cohabitation 24 The defendant says that he had cash on hand in an amount of between $7,000 and $10,000, a utility worth $5,000, furniture, personal effects estimated at $3,000, tools of trade worth $3,000 and trade debtors totalling about $20,000. Plaintiff's assets at conclusion of the relationship 25 At the conclusion of the relationship the plaintiff had the following assets: Assets Estimated Value 1990 Mazda 626 motor vehicle $4,200.00 Commonwealth Bank account no.10171354 $8,716.00 Police Credit Union account no.61778 S3 $690.00 Police Credit Union account no. 61778 S1 $10,528.00 St George passbook account no. 014551090 $5,979.00 Brambles share options Nil Care Super (superannuation entitlement) $9,161.00 Furniture, furnishings and effects E$2,500.00 NRMA shares (615) (E$2.80) $1,722.00 Coin collection Not known

26 This is a total of $43,496. Defendant's assets at conclusion of the relationship 27 The defendant's assets at the conclusion of the relationship were as follows: Assets Estimated Value Cash on hand $33,000.00 Furniture, furnishings and effects $3,200.00 Tools of Trade $4,500.00 10A Wiltshire Avenue Cronulla $637,500.00 Mercedes motor vehicle (net equity) $12,500.00 Metro Design & Development Pty Limited Not known

28 This is a total of $690,700. The defendant also said he had the following liabilities at the time of separation: Council rates $2,000.00 Mastercard $200.00 Tax $24,923.00 Defendant's mother, two sisters $250,000.00 (alternatively two thirds) expressed as % of Wiltshire Ave, alternatively plus interest since 05.02.93 $277,123.00

29 There was some debate as to whether the tax liability was statute barred but this would not appear to be the case. See Deputy Commissioner of Taxation v Moorebank Pty ltd (1987-1988) 165 CLR 56. The obligation to the defendant's mother or sisters is a matter in issue in the proceedings. The current assets and liabilities of the parties 30 The current assets of the parties, subject to some comments which I will make, appear to be the following: Assets Owner Estimated Value 1990 Mazda 626 motor vehicle Plaintiff $4,200.00 Commonwealth Bank account no.10171354 Plaintiff $3,249.00 Police Credit Union account no.61778 S3 Plaintiff $960.00 Police Credit Union account no. 61778 S1 Plaintiff $1,234.00 St George passbook account no. 014551090 Plaintiff $3,425.00 Brambles share options Plaintiff Nil Care Super (superannuation entitlement) Plaintiff $9,161.00 + 2 years contributions Furniture, furnishings and effects Plaintiff $2,500.00 NRMA shares (615) (E$2.80) Plaintiff $1,722.00 Money in bank Defendant $7,000.00 Furniture, furnishings and effects Defendant $17,000.00 Tools of Trade Defendant $4,500.00 10A Wiltshire Avenue Cronulla Defendant $865,000.00 450 Princes Highway (1/2 share) Defendant $750,000.00 Mercedes motor vehicle (net equity) Defendant $13,507.50 Utility motor vehicle Defendant $18,000.00 Burraneer project ($25,289.04 loss) Defendant Nil Unpaid rent Defendant $15,783.00 Metro Design & Development Pty Limited (contingent $26,000.00) Defendant Not known $1,717,241.50

31 The plaintiff's assets amount to $26,451 and the defendant's share of the assets is thus $1,690,790. 32 The plaintiff does not appear to have any liabilities but the defendant's current liabilities appear to be as follows: Liabilities Vendor finance - 450 Princes Highway $635,000.00 Legal fees (excluding these proceedings and Burraneer project) $30,925.00 Tax $22,000.00 Hire purchase on utility $26,246.50 Defendant's mother, two sisters $250,000.00 (alternatively two thirds) expressed as % of Wilshire Ave, alternatively plus interest since 05.02.93 Penelope Russell $5,000 Home loan Services Pty Ltd $107,532.50

33 This is a total (excluding the mother's interest ) of $826704. 34 Once again the amount due by the defendant to his mother or two sisters is the subject of debate as is the current value of the property at 450 Princes Highway. This debate arises because of various statements made by the defendant to financiers about its value and his financial situation. 35 The loan from Home Loan Services Pty Ltd was taken out by the defendant and secured over the property at Wiltshire Ave Cronulla. This was in breach of orders made by the court earlier in these proceedings. It was for the purpose of the defendant obtaining finance to engage in a project at Burraneer and to pay out the plaintiff in these proceedings. 36 In the application for finance which he made in respect of that loan the estimated value of the property at 450 Princes Highway Blakehurst is $2,500,000. In his affidavit evidence he stated that he grossly exaggerated the value so that the valuer when assessing the loan would give some discount to be conservative. As he says, he exaggerated the value to minimise the valuers write down and thus maximise the loan potential in respect of his application. 37 Given the very clear evidence of the defendant and the other circumstances surrounding the way that loan application was completed it seems to me that no reliance could be placed upon this estimate in order to come to a true value of the Blakehurst property. Accordingly the only evidence that is available is the evidence of the purchase price paid in the December 2002 namely $1,270,000. There is a concession by the defendant in his last affidavit in which he dealt with his assets that he believes the property would have a value in July 2003 of $1,500,000. In the circumstances I propose to accept that value for the purposes of determining the parties present assets. 38 The matter is not of great moment as in this case I do not think that it is appropriate to consider the parties present pool of assets in a global way. In Norbis v Norbis (1986) 161 CLR 513 at 523 Mason and Deane JJ said the following:- "Although it is natural to assess financial contributions under s79 (4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as homemaker and parent either by reference to the whole of the parties' property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an "asset-by-asset" basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient. It follows that the Full Court is quite entitled to prescribe that approach as a guideline in order to promote uniformity of approach within the Court. In saying this we are not to be understood as denying the legitimacy of the trial judge's ascertainment in the first instance of the financial contributions of the parties by reference to particular assets. It is difficult to conceive how the trial judge in many cases could otherwise take account of such contributions as he is required to by s.79 (4)(a) of the Act . In this respect we agree with the comment of Nygh J. in G and G that, although mathematical precision is certainly not required, there is ordinarily a need to know the circumstances in which assets were acquired and the general extent of each party's contribution to them." 39 The property at Blakehurst was acquired after separation and was only acquired by the defendant as a result of his present partner's assistance. It was not the use of former joint assets which allowed it to be acquired. Apart from cars and other minor items the only property with which I am concerned is the property at Wiltshire Aenue, Cronulla and that is the subject of valuation evidence and agreed values between the parties. The financial contributions by the parties 40 It is apparent from the account that I have given earlier in this judgment of the defendant's building activities that they were not successful. The evidence also contains other instances of failed projects not always, of course, as a result of the defendant's actions. It is useful in considering the financial contributions to look at the income brought into the relationship by each party. 41 So far as the plaintiff is concerned her income is not a matter of great dispute as she was working for the periods when she was not looking after children. The total income based upon assessments and group certificates for the year ended 30 June 1986 until the year ended 30 June 2001 came to $172,493. She also brought into the relationship funds from her mother's estate of $39,117.80. There is no doubt that these funds were used by her for the purposes of the relationship although it should be noted that $26,000 was paid by her for her Mazda 626 in 1990 and these funds would have come from her savings and her income. 42 It was far harder to determine the position of the defendant. This was because the defendant did not keep accounts in relation to the building projects that he had undertaken and in particular the Kingswood project which ended up with his mother's property being sold for $250,000 all of which went to the state bank. Given the description of the difficulties which he had with that project which involved union bans, delays and disputes with the Housing Commission it is highly unlikely that the defendant made any profit during the period of that project. In effect the parties were probably supported by funds from the project and the overdraft which was utilised for the purpose of the project. 43 The evidence discloses that in the years ended June 91 and 92 the defendant received social security in amount of $10,212.33. For the years ended 30 June 1994 to 30 June 1998 there was a total income, including eligible termination payments, of $75,027. The defendant's profit and loss statements produced at the last-minute for the years ended 30 June 1999, 2000 and 2001 showed business income of $48,154. These amounts total $133,393.33. It should be noted that they do not include income for the period between 1985 and 1989 when the unfortunate Kingsgrove project commenced. There is, however, no evidence of what his income was in this period. 44 The confusion in the parties' financial affairs arises because during the period of the Kingsgrove project when the defendant was encountering difficulties with his bank he would make payments into the plaintiff's account from people who owed him money and she would make payments to various contractors and tradesmen. The evidence on the balance outstanding is somewhat confused and probably a better appreciation of the parties' contributions arises from looking at the funds they had available by way of income. Apart from the purchase by the plaintiff of the car it is not a case where one party has expended funds on areas outside the relationship. 45 The funds the parties had were used by them to purchase items for the household. When they were living at the defendant's mother's home the defendant would meet rates obligations in respect of that property. The defendant paid the statutory charges for the property at Cronulla and met other accounts for telephone and electricity. The plaintiff conceded that when these were taken into account the balance overall would be in favour of the defendant in respect of household payments. However given my comments about what gives the best indication of contributions this is not of great significance. Non-financial contributions 46 There are a number of contributions by the defendant that have to be taken into account. The first was his building of the granny flat at the back of his mother's property in anticipation of the commencement of the relationship. No accurate costing appears in the evidence but it is clear that there was actual work on the defendant's part in the doing of this work that had to be repeated after it burnt down due to an electrical fault. It is also clear that the flat was occupied from 1985 to 1992 rent-free. It was the defendant's mother who made this contribution and accordingly the defendant should be credited with the amount although the evidence does not indicate the amount of such benefits in monetary terms. 47 Another area of contribution was of course the construction of the property at Cronulla. The defendant did not keep records of the total cost of this property although the value of the property at the time of completion appears to be $300,000. Increases thereafter are the result of inflation. Notwithstanding this it would be unreal not to give some credit for the effort put into it by the defendant. There were various small items paid for by the plaintiff and she did help on the site occasionally. The overwhelming contribution would be by the defendant in terms of his effort in carrying out the development. 48 There are of course the homemaking and parenting contributions by each of the parties. It seems clear that the plaintiff did the greater amount of the homemaking although the defendant did assist in some tasks. He conceded that the plaintiff's contributions were greater in this area. So far as parenting is concerned when the plaintiff stayed home to look after children she obviously contributed more towards the parenting. The defendant, however, did assist and on two occasions took the children away for holidays to Queensland. In order to appreciate the extent of the-time at-home the plaintiff's work periods were as follows:

(a) September 1985 to April 1986 full time clerk with Woolworths. (Seven months). (b) Mid 1987 to February 1989 part time clerk with Woolworths, two days per week. (Nineteen months) (c) 1994 to 1997 part time teller with Brambles, two to four days per week. (Three-four years) (d) 1998 to separation teller with Brambles (later Chubb Security) 30 hours per week. (Three years)

49 The plaintiff was thus looking after the children on a full time basis for approximately fourteen months in 1986-1987 and from February 1989 until 1994. 50 There was in this last period a short time when the parties were separated and, taking this into account, it is still clear that there were substantial parenting contributions on the plaintiff's part which have to be taken into account in a substantial and not a token way. 51 Other matters which have to be taken into account are that the defendant has already paid the plaintiff $6,240 towards rent following separation plus a further $500 towards the acquisition of furniture. The defendant has had the use of the premises since separation and he has taken advantage of that to lease the premises to his solicitor. The property was rented at $500 per week from 18 February 2002. Until the end of November 2003 this is a sum of about $46,000. Although there is an arrangement that sets the rent off against other amounts owed by the defendant to Mr Solari those amounts are post separation and should not be taken into account. 52 Leaving aside the problem in respect of the defendant's mother's property this is a case where, as submitted by the plaintiff, I would have thought taking account of all of the various contributions that one would tend to look to a division of property, leaving aside the post separation matter of the defendant's use of the property to borrow funds for his later building projects which gave to the plaintiff one half of the property. The arrangements with the defendant's mother 53 It is perfectly plain that both parties received a substantial benefit resulting from the sale by the bank of the defendant's mother's property. If this had not occurred they would have had to sell Cronulla and there would probably be little available to them at this stage. It is also clear that the defendant's mother could have recovered the amount from the defendant. I have earlier referred to the fact that there is no independent corroboration of the defendant's evidence of the discussions with his mother. 54 However, given the circumstances and in particular the fact that the defendant did build a granny flat on his sister's property with her agreement it is likely that the relevant matters would have been discussed by the defendant and his mother. Indeed, if there had been no such discussion it is quite unlikely that this course of events would have occurred. 55 There is no doubt that the benefit of the advances from the bank loan was to the plaintiff and the defendant as well as the children. They were funds, which were applied to an unsuccessful project that was part of their relationship. The real difficulty in this case is to decide whether or how this benefit should be taken into account in the orders for property settlement. This involves considerations of fairness between the two parties, the legal obligations on the defendant and to whom the benefit is to be provided. It will be recalled that the promise was ultimately by the defendant to make provision for his sisters as to two-thirds of what had been paid to the bank on the sale of his mother's house. 56 In the Marriage of Browne and Greene 25 Fam LR 482 at 495 the Full Court of the Family Court approved the following statement by Baker J in the Marriage of Kowaliw (1981) FLC 91-092: ""Marriage is for most couples an economic partnership. Married couples live together and work together with the ultimate object of purchasing a home, paying it off, acquiring other assets with the overall object of attaining a higher standard of living. The reported decisions in respect of applications for settlement of property under sec.79 of the Act are unanimous that both parties should share the economic fruits of a marriage, having regard to the provisions of sec. 79(4) and sec. 75(2), although not necessarily equally. Is not, however, the converse equally sustainable? In other words, should not financial losses incurred by parties to a marriage or either of them, whether incurred jointly or severally, be shared by them in the same manner as the financial gains? As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances: (a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or (b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimized their value. Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec. 75(2)(o) to applications for settlement of property instituted under the provisions of sec.79." 57 Reference was made in submissions to the fact that it has been pointed out in Evans v Marmont (1997) 42 NSWLR 70, Gleeson CJ and McClelland CJ in Equity at 79, that there is nothing in section 20 of the Act of the kind found in section 75 (2) (o) of the Family Law Act 1975 (Cth) which requires or entitles the court to take into account "any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account". Certainly it was convenient for Baker J to find a head of power to take losses into account under the section to which he referred. Section 20 is in the following terms: "20. Application for adjustment (1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to: (a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely: (i) a child of the parties, (ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties. " 58 It seems to me that a consideration of the contributions to the Wiltshire Avenue property must of itself include a consideration of the obligations undertaken by either of the parties in respect of the funds used to construct the property. A consideration of the unsuccessful Kingswood development also requires a consideration of obligations undertaken in respect of that development. The terms of section 20 of the Act are, however, I think sufficiently wide for the court to have regard to losses which parties may suffer in respect of their project. 59 It was suggested in submissions that the incurring of interest by the defendant was an example of recklessness within the principles referred to by Baker J. Having regard to the ultimate outcome and the fact that the parties were able to retain the Wiltshire Avenue, Cronulla, property I do not think that what occurred was recklessness on the part of the defendant. It seems to me that as a matter of principle if it is appropriate to take into account the obligations that the defendant might owe to his sisters then any such obligation would be one that should be shared by both parties. In these proceedings it would be inappropriate to make orders in favour of the sisters as they are not parties. All that can be done is to make an allowance in favour of the defendant for his future liability. 60 The mother's right of indemnity against the defendant would now be statute barred. In these circumstances the defendant submitted that he was bound by an estoppel arising between himself and his mother in respect of his promise and that his sisters could enforce that promise in equity. The submission suggested that there may have been an estoppel by convention or alternatively an equitable estoppel based upon the promises made by the defendant. It seems to me that estoppel by convention would not be appropriate as that relates to an agreed statement of facts the truth of which is assumed as the basis of a future transaction into which the parties were about to enter. 61 As stated in Equity Doctrines and Remedies, Meagher Gummow Lehanne, fourth edition p 550, the current state of authority in Australia as to equitable or promissory estoppel is encapsulated in the following passage from the judgment of Brennan J in Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 at 428-9. But in reading that passage it should be understood that, particularly in cases involving an assumption about a state of affairs, reasonable notice of an intended departure from the assumption may avoid any sufficient detriment: Commonwealth v Verwayen (1990) 170 CLR 394 at 442 per Deane J. The passage from the judgment of Brennan J in Walton's case states: "It is necessary for the plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second defendant, a defendant who has not actively induce the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs." 62 It seems to me that the relevant elements have been established in the present situation. In particular, there has obviously been reliance on the defendant's promises by his mother as she has taken no action to recover under her right of indemnity and that right is now statute barred. The detriment which the mother will suffer if the defendant does not honour the obligation will be in her inability to provide as she planned for her two daughters under her will. 63 The promises by the defendant were, of course, to his mother. However, as they are to the benefit of his sisters they are entitled to enforce them. See Trident General Insurance v McNeice Bros (1988) 165 CLR 107. As it is a promise by the defendant to leave a particular amount to each of his sisters, in other words, a specific legacy, they could enforce the promise after the death of the defendant. They will have standing to enforce that promise. See Ramage v Waclaw (1988) 12 NSWLR 84 Powell J in Eq at 91. 64 In considering whether the defendant is bound by the promises which he made to his mother and has an obligation the content of that obligation requires some examination. The actual words attributed to the defendant's mother were as follows: 'How about I leave the money in Cronulla and when I die you pay your sisters for their equal share out of that money that came from the house?" 65 It is apparent that the mother was talking of the money that came from the realisation by the bank of her house. It is also apparent that the mother did not want the money to go to her daughters until the death of her son. He was thus under the arrangement to have the benefit of the use of the money until his death. 66 The matters which flow from this and with which I am concerned, are, first, the fixed sum, namely, two-thirds of $250,000 and, second, that there was no provision to be made for the delay in that sum being made available to the daughters. It would not seem appropriate to regard the obligation as extending to any proportion of the Wiltshire Avenue property or to recover interest up to the date of the death of the defendant. 67 One of the sisters has already received some benefit in that she has sold her property on which the granny flat was built. However the final conversations that give rise to the defendant's obligations were after the granny flat had already been provided. This was done by the defendant at his cost which he estimated at $20,000 and was no doubt taken into account by his mother in terms of the promise which she extracted from him. 68 Another matter, which has to be considered, is the fact that the defendant's obligation is only to leave an amount by his will. If the allowance is given to him in the adjustment process at this stage he will have the benefit of cash immediately as a result of the sale of the property. This requires that there be some discount for the early provision of this amount in respect of a liability, which is a future liability. The sum to be discounted is $166,666 and this should take account of mortality. The parties would be able to provide the court with the appropriate discount amount for the purposes of calculating the final adjustment between them. 69 The adjustment which I have in mind is that: (a) the property 10A Wiltshire Ave Cronulla be sold and the net proceeds of sale be divided between the parties equally subject to the following: (i) the defendant is to bear out of his share of the net proceeds the amount due to home loan services Pty Ltd. (ii) the shares of the net proceeds are to be adjusted to give credit to the defendant for the discounted amount in respect of his obligations to provide in his will for his sisters. (b) the parties are to retain as their own property any items of personalty presently in their possession. 70 I direct the parties to bring in short minutes and argue any matters of costs. In the event there is any dispute as to the calculation of the discount amount the parties are to file the appropriate evidence and I will determine the matter. **********

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