Butler v Wilson

Supreme Court of NSW|2011-02-25|Before: Tamberlin AJ

Judgment 1The plaintiff John Butler seeks an order that his sister Irene Wilson (the defendant) transfer to him an interest as tenant-in-common as to a 38 per cent share in a property at 37 Treelands Drive, Wyong ("the property"). 2Mr Butler's claim is made under a deed dated 19 November 1981 between the defendant, her husband Bruce Wilson (now deceased) and the parents of the parties, namely Leslie Butler, who died on 3 January 1990 and Valma Butler, who died on 20 September 2008 ("the Deed"). 3Under the will of Valma Butler, Probate of which was granted on 26 November 2008, the plaintiff is given the whole of the estate which he contends includes his mother's 38 per cent share entitlement as tenant-in-common to the property.

ISSUE 4The main issue is whether the plaintiff has the entitlement to an interest in the property as tenant-in-common with his sister under the Deed as a consequence of the will of his mother. Determination of this question raises other questions: (i) as to the effect and operation of the Deed and the circumstances in which it came into existence; (ii) as to estoppel by deed; (iii) the proper construction and duration of interests under the Deed; (iv) whether the Deed embodies all the arrangements between the parties; and (v) whether there was any collateral binding agreement relating to the ownership or disposition of the property on the death of Valma Butler.

FACTUAL BACKGROUND 5The father of the parties, Leslie Butler, was born on 27 July 1900 and his wife, Valma, on 23 November 1911. John Butler the plaintiff was born on 4 February 1937 and the defendant Irene Wilson on 19 November 1947. 6In August 1971 Irene married Bruce Wilson and between 1975 and 1979 three children were born of that marriage. Bruce Wilson died on 27 March 1996. 7On 6 July 1981 Leslie Butler provided an amount of $15,201.55 for the completion of the purchase of the property then known as Lot 33 Hue Hue Road, Wyong. The purchase of the property was completed on 14 July 1981 at a price of $27,500 and Irene and her husband Bruce granted a mortgage over the property to secure a loan of $30,000. This mortgage is dated 27 July 1981. 8It is common ground that the property was purchased with approximately equal amounts of money being paid by Bruce and Irene Wilson and the parents to cover the purchase price and related expenses. However, by agreement, the title was registered in the names of the defendant and her husband. 9On 10 July 1981 development consent was granted for the building of a dwelling on the subject property in which it was intended the parents and the Wilson family would live. 10On 19 November 1981 the Deed was made between Bruce Wilson, Irene Wilson, Leslie Butler and Valma Butler concerning the property and because of the central importance of this document to the proceeding I set out below the four sheets which comprise it. 11On 16 August 1982 the parents completed the sale of the property in which they had been living up to that time at 6 Coorabin Road, Gorokan and from the proceeds of this sale an amount of $34,316 was paid to the bank account held by the defendant and her husband. It is not disputed that the 38 per cent and 62 per cent share of sale proceeds reflected the contributions of the parties to the construction of the home. 12On 19 October 1987 Leslie Butler made a will leaving all his property to his wife Valma, and if she did not survive him, he gave all his interest in the property freed and discharged from all claims to Irene and Bruce Wilson. On the same date the mother, Valma Butler, made a will leaving all her property to her husband if he survived her, but if not, then to Irene and Bruce Wilson on the basis that the property was released from all claims in respect of moneys advanced by her during her lifetime in respect of the purchase and betterment of the property. 13On 3 January 1990 Leslie Butler died then aged 89. 14On 22 July 1992 Valma Butler made another will providing that Irene should receive the property released from all claims and demands including moneys outlaid by her mother or her late husband in respect of the property. However, this will was revoked on 8 April 2005 when she made her last will. She died on 20 September 2008 aged 96. Under the 2005 will Valma Butler left all her estate to the plaintiff. Probate of her last will was granted to John Butler, the plaintiff, on 26 November 2008. 15On 17 September 1992 Irene and Bruce Wilson granted a mortgage to the ANZ Bank to secure an advance of $94,000. 16On 26 April 2004 the ANZ Bank discharged the mortgage given to it by the defendant and her husband in 1992 and a new mortgage was granted to the ANZ Bank in the amount of $150,000 on 29 April 2004. 17On 14 May 2004 Irene Wilson was registered as the sole surviving joint tenant of the property. 18After the death of Valma Butler there was an exchange of correspondence between the solicitors for the parties foreshadowing family provision proceedings by Irene Wilson. These were not pursued. A demand by her for transfer of the property was rejected by the solicitors for John Butler on 16 February 2009 and the Summons in this matter was filed on his behalf on 21 August 2009. 19On 24 May 2010 a Defence and Cross-Claim were filed in which Irene Wilson seeks a declaration that the Deed is of no force or effect and other orders including claims of rescission; a claim under the Contracts Review Act 1980 (NSW) declaring the Deed void or alternatively a variation that it was only to have effect during the lifetimes of the parents. A further cross-claim is made for an equitable accounting in respect of improvements carried out by Irene and her husband to the property together with an order that a caveat on the property be withdrawn.

THE EVIDENCE 20The plaintiff, John Butler, is a qualified solicitor who was a partner of a Manly law firm from about 1968. His evidence is as follows. 21In the first half of 1981 he acted for his sister and brother-in-law, Irene and Bruce Wilson, on the sale of their home in Wyong which was completed on 15 May 1981. He also acted for them on the purchase of the property. 22He says that given the time lapse since the Deed was executed he has little independent recollection but having regard to his usual practice believes that the Deed dated 19 November 1981 must have been made prior to the completion of the purchase of the property based on notes taken from the parties. 23At the time he drew the Deed the final form of the plan of the dwelling was not available and therefore he drew it so that once the plan for the dwelling was approved a copy could be suitably marked and attached to the Deed prior to signature. He was not a party to the calculation of the respective percentage shares referred to in the Deed or the dollar sums to be contributed. He says that the engrossed Deed made provision for insertion of the address of the defendant and her husband to be written in but that he inserted his parents' then address. He recalls that the Deed was signed in his father's study when both parents and the defendant and her husband were present. There was only one copy of the plan and it did not have the location of the proposed garage or any coloured markings on it but he personally marked the location of the proposed garage and added red and blue markings. 24He read through the Deed with all parties present and either the defendant or her husband advised him as to the address which should be inserted. 25When reading the first recital it was pointed out by either the defendant or her husband that the purchase of the property had been completed and he then amended the recital accordingly. All four parties to the Deed executed the Deed and signed the plan. He witnessed the signatures, installed the amendments to the first recital and inserted the date 19 November 1981 on the first page and on the top of the backsheet. He said he also signed the plan. Although the Deed was signed in duplicate, only one of the duplicates had the plan attached because there was only one copy of the plan available. 26After the Deed was signed, Leslie Butler examined it and put his name stamp on the backsheet and wrote on the plan "Sheet Part of Agreement" on the top left hand corner of the plan and "SHEET 4" on the top right hand corner of the plan and inserted the dates "19/11/81" next to his signature and that of his wife and again next to the signatures of the defendant and her husband on the plan. 27Leslie Butler then retained a copy of the Deed to which the plan was attached and the plaintiff does not recollect who retained the second copy which did not have the plan. Mr Butler says that he did not retain either copy of the Deed and did not give the matter any further thought until his mother changed her will on 8 April 2005. He contends that the Deed must have been signed at his parents' home at Gorokan and could not have been signed at the property because the house on the property was not finished and he had never visited the property until after the house on the property was finished and his parents moved in. He says that the Deed was signed on Irene's 34 th birthday in that year. 28He says that he had no personal knowledge of the contributions made by his mother and father or by the defendant and her husband. He was not aware that the defendant and her husband had executed a mortgage over the property. 29The plaintiff describes his sister as an intelligent and forthright woman and says that her husband Bruce was an engineer. She has received a tertiary education and graduated with a degree in speech pathology and works as a speech pathologist. 30The evidence of the defendant is that the Gorokan property of her parents was purchased on 28 August 1980 for approximately $57,000. At that time her father was aged 80. The parents and Irene were very close and in the period late 1980 or early 1981 the idea of living together was raised to the effect that a large block of land be bought and that the defendant, her husband and children and the parents could all live on the same block in separate accommodation. 31In around June 1981 the parents discussed possible arrangements regarding the acquisition of the property and the cost of building a house on it. There is in evidence a diary entry in her father's diary for 4 June 1981 which she says helps her recall that her father stated he and his wife would put the title in the names of the defendant and her husband since the property would ultimately be theirs and it would be sensible to do so immediately or it would cost Bruce Wilson money to transfer the title after the parents died. Bruce Wilson was not a party to this alleged conversation. 32On 6 July 1981 Leslie Butler drew a cheque for $15,201 and the cheque butt records "To: Cash, For: Ground at LA". The reference to "LA" was to the subject property. The defendant says that the land was purchased by contributions in equal shares by the four parties and a contract was signed by her and her husband with a builder to construct a house. A building application was made to the Council dated 10 July 1981 for construction of a dwelling with a value of $97,431. 33On 14 July 1981 the defendant and her husband completed the purchase and obtained a transfer. The plaintiff acted on the purchase and executed the transfer on their behalf. The property was purchased for $27,500. 34On 27 July 1981, the defendant and her husband gave a mortgage over the property to the Commonwealth Savings Bank in consideration of a loan of $30,000. 35The defendant says she recognises her signature on the second page of the Deed, but that none of the other handwriting is hers. She says that she did not sign the Deed on 19 November 1981 and she says that it was signed in her father's study sometime after her parents moved into the property. They did not move in until shortly after the completion of the sale of the Gorokan property on 16 August 1982. There is a survey report in evidence which states that prior to 14 December 1981 the property was only partly constructed. She then lists a number of improvements which she says she and her husband made on the property. 36In about August 1982 there was a suggestion of having a written agreement. There was no-one else present at the conversation but she says that her father said he was concerned and he wanted something in writing to ensure that he and her mother could not be put out of the house and he raised those concerns on his own behalf and on behalf of her mother. He is alleged to have said at that time words to the effect that: "We need to put something in writing to protect our interests in the property. If you were to die and Bruce remarried, what's to stop his wife taking a dislike to Mum and putting her out of the house? We need something in writing to make sure that can't happen." 37The defendant says that she understood her father to want protection for his wife and himself and that any writing would be limited to providing they had a secure right to live in the property. 38The defendant recalls that the Deed was executed in the latter half of 1982 and that the plaintiff, who was divorced at the time, was visiting. She says she was asked to sign the document under the signature of her husband which was already on the document but she does not recall whether she read it or not. She says that her father said "This is the agreement we talked about drawing up to protect Mum". She says she did not provide any instructions to her brother John to prepare the document and had not seen the document before. Although she had not received legal advice, she was content to sign the document on her father's assurance based on the earlier conversation. She was in the study for only a short time. 39The defendant recalls that at the time the Deed was signed the house had already been built. At that time she did not understand the meaning of a trust or how a trust worked. She did not understand the meaning of "joint tenants" or "tenants-in-common" until these proceedings were commenced. She initially claimed that she did not sign the document with the belief that she was entering into legal relations but this claim was later abandoned after cross-examination. She understood the document to be an agreement between family members to protect her father and mother, but mainly the mother, so that she could live in the property for so long as she wanted. 40She says that her parents paid $34,316 from the proceeds of sale of the Gorokan property which was used to establish the grounds and improvements on the property. 41In about September 1982 a swimming pool was constructed at a cost of $8,000 with $2,000 having been contributed by the parents together with a further $500 for landscaping. Leslie Butler had further noted on his cheque butt that an amount of $2,000 had been paid for the pool and $500 for pool the fence and awning timber. It appears that he was assiduous to note any significant expense and he appears to have kept records diligently on his cheque butts. 42The following year in 1983 there was a tennis court constructed on the property at a cost of about $8,000. Leslie Butler noted a payment in his cheque book for bitumen in an amount of $3,675. 43The defendant referred to a number of improvements and expenditures made by her husband and herself on the property up to the present time. It is not disputed by the plaintiff that substantial expenditures were made by the defendant and her husband. It is not necessary for me to determine the precise amount of expenditure on the property by either of the parents or the defendant and her husband for the purpose of the issues before me. These matters can, if necessary, be considered on an account or an inquiry. 44The defendant also says that the improvements were made by her in the belief and understanding that the property would belong absolutely to her husband and herself on the death of the survivor of her parents.

SUBMISSIONS 45The plaintiff says that the effect of the Deed is that the property was held by the defendant and her husband as joint tenants as to a 62 per cent share. On her husband's death, the defendant became entitled to the 62 per cent share as tenant-in-common with the parents who, as between them, held as joint tenants a 38 per cent share. 46On the death of Leslie Butler in 1990, his wife Valma Butler, as joint tenant, became entitled to the entire 38/100 th interest and on her death and pursuant to her 2005 will the plaintiff then became entitled to that share and this is the basis of his claim. 47The plaintiff submits that his claim is supported by the contributions of the parents to the purchase price of the property and the construction of the dwelling consisting of the $15,000 advanced on the purchase of the property which was roughly equal to the contribution of the defendant and her husband together with the $34,000 and other payments made in relation to the dwelling to be erected on the property which was carried out in 1981 and 1982 which moneys came from the sale of the Gorokan property of the parents. 48In support of this primary submission and in response to the case advanced by the defendant, the plaintiff relies on an estoppel by deed and submits that the defendant is estopped by the recitals and the operative provisions of the Deed from denying that the property is held on trust by her as to a 38 per cent interest for him. He says that the Deed cannot be rescinded. 49The plaintiff denies that any representations were made by the parents which can operate independently of the Deed to support a conclusion that the defendant and her husband were to have the entire property on the death of the parents or that the Deed was only to operate until the death of the survivor of the parents. 50Furthermore, the plaintiff says that even if any representations were made the mother was not bound by them because she was not shown to have been a party to any of the oral representations on the evidence, even if the defendant's evidence is accepted. 51The plaintiff also says that the Deed embodied the entire arrangement between the parties and that there is no collateral arrangement to limit or modify its provisions in any way. 52In response to the defendant's cross-claim under the Contracts Review Act , the plaintiff says that the evidence cannot support a conclusion that there was any unfairness or inequality of bargaining position. Nor has any basis been laid for review of the Deed which could prevent the Court from giving effect to the express terms of the Deed. The defendant and her husband had an opportunity to obtain legal advice and her evidence after cross-examination was that she believed that she was entering into a binding legal arrangement at the time she entered into the Deed. She acknowledged that the agreement reflected the agreement between parties at the time it was made. In particular, she accepted that the Deed was intended to give effective enforceable legal protection to her parents to ensure that they would not be forced to leave the premises having regard to the fact that they had contributed substantial moneys to the purchase of the land and erection of the dwelling on the property. 53The defendant submits that she was not involved in giving instructions to her brother to prepare the Deed and she says that it was executed sometime after the parents moved into the property in August 1982 after the sale of the Gorokan property. She also says that her father made representations to her about the Deed and the intentions of his wife and himself at the time of execution of the Deed although his wife was not present. The defendant says that she and her husband signed the Deed and that she had not seen a copy of it or a draft prior to its production to her at the time she signed it. 54She says that her parents executed wills in October 1987 in which they stated that they left their estates to one another but otherwise gave their interest to her and her husband. 55She says this is consistent with the representations made to her by her father to the effect that she would have the entire property on the death of the survivor and that this is consistent with the Deed only having effect until the death of the survivor of the parents. 56The defendant submits that she is entitled to rescind the Deed because she was induced to enter into it by her father's misrepresentations made on his own behalf and on behalf of his wife as to the contents of the document. 57Alternatively, she says that there was a collateral agreement or a qualification to the Deed or an estoppel based on the premise that the agreement was only to have effect during the lifetimes of the defendant's parents and that as they are both now dead the agreement has no further operation. 58As a further alternative, the defendant submits that her brother is estopped from denying that the property is hers absolutely because she and her husband adopted an assumption induced by her parents that the property was theirs absolutely subject to allowing them to live in the house for the rest of their lives. She says that in reliance on that assumption, she and her husband acted to their detriment by carrying out improvements to the property and maintaining it, undertaking obligations to the Bank and allowing her parents to live at the property for the rest of their lives. 59By way of further alternative, the defendant says that she is entitled to succeed on her claim for relief under the Contracts Review Act and that the Deed should be declared void or alternatively varied by including a term that the Deed only had effect during the lifetimes of the parents.

LEGAL PRINCIPLES 60The general principles in relation to estoppel are set out in the judgment of Brereton J in O'Neill v Williams [2006] NSWSC 707 at [40] as follows: "... But, at least generally speaking, the matters that a plaintiff must establish to found such an equitable estoppel may be characterised as including certain conduct of the plaintiff, certain conduct of the defendant, and certain qualities of the subject matter, which, for present purposes, may sufficiently be summarised as follows. First , as to the conduct of the plaintiff, that the plaintiff acted, or abstained from acting, in reliance upon an assumption or expectation that a particular legal relationship existed, or would exist, between the plaintiff and the defendant, or that the plaintiff had or would acquire some interest in the defendant's property. Secondly , as to the conduct of the defendant, that the defendant induced the plaintiff to adopt the assumption or expectation and encouraged the reliant activity of the plaintiff, or at least failed to deny the assumption or expectation with knowledge that the plaintiff was relying on it to the plaintiff's potential detriment and that the expectation could be fulfilled only by transfer of the defendant's property, a diminution of the defendant's rights or an increase in the defendant's obligations. Thirdly , as to the subject matter, that the assumption or expectation in respect of it was one that the defendant could lawfully satisfy. ..." 61Dependent on the circumstances there may be an estoppel arising from an indication of testamentary intent. Such circumstances were considered by the Court in Gillett v Holt [2000] EWCA 45; [2001] Ch 210 at 227-228 where Lord Justice Walker said: "... the inherent revocability of testamentary dispositions (even if well understood by the parties ...) is irrelevant to a promise or assurance that 'all this will be yours'. ... Even when the promise or assurance is in terms linked to the making of a will ... the circumstances may make clear that the assurance is more than a mere statement of present (revocable) intention, and is tantamount to a promise ." (Emphasis added.) 62In that case the circumstances were somewhat special in that the plaintiff had spent all his working life as a farm manager and as a friend of the first defendant who was a landowner of substantial means. There had been repeated promises and assurances over many years, usually on special family occasions, that the plaintiff would succeed to his farming business including the farmhouse in which the plaintiff and his family had lived for over 25 years. Relations subsequently deteriorated and the plaintiff was dismissed and the first defendant made dispositions to the second defendant in whose favour he also altered his will making no provision for the plaintiff. The plaintiff sought and obtained equitable relief based on proprietary estoppel and was successful in the Court of Appeal. The Court considered that assurances were given which were intended to be relied and in fact were relied on and it was the representee's detrimental reliance on the promise which made it irrevocable. The case depended on the making of repeated assurances and promises and turned very much on the particular context and facts and on the conclusion that the assurances given were plainly intended to be relied on and were in fact relied on. As his Lordship noted at 228: "... in this case Mr Holt's assurances were repeated over a long period , usually before the assembled company on special family occasions, and some of them (such as 'it was all going to be ours anyway ' on the occasion of The Beeches incident) were completely unambiguous ." (Emphasis added.) 63The relevant principles were also outlined in detail by Handley AJA in Delaforce v Simpson-Cook [2010] NSWCA 84 at [21]; [42]-[44]. At [42] his Honour observed: "The detriment that makes an estoppel enforceable is that which the party asserting the estoppel would suffer, as a result of his or her original change of position, if the assumption which induced it was repudiated by the party estopped." 64The substance of the arrangements in Delaforce was that the deceased should have the use of the subject property in his lifetime and when he no longer had any need for it it was to pass to the plaintiff. In the same case Allsop P at [3] noted that equity would look at all relevant circumstances that touch on the unconscionability of resiling from the encouragement or representation previously made "including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character". His Honour emphasised that equity always had a place in keeping parties to representations or promises. 65A general requirement of a representation is that it must be clear and unequivocal but it need not be express or clear in its entirety and much will depend on the context in which the representation is made. The Court will have regard to the reasonableness of the interpretation placed on the representation by the representee. If the interpretation adopted by the representee is absurd for example, the Court will not treat it as a misleading representation. 66In considering whether an estoppel arises it is necessary to look at the whole of the conduct of the parties and the statements made and not simply to focus on selected aspects which, when seen in the overall circumstances may lead to a different conclusion. 67It is significant that the agreement is embodied in a deed, which is the most formal of legal documents, and that there is a recital stating that the parties wanted to reduce "the terms of their agreement" to writing. There is nothing inherently difficult to understand in the document. It is short and it is clear that there is no express limitation on the duration of the interests created or the time within which a sale would be made.

FINDINGS AND REASONING 68I am satisfied that the Deed was executed on 19 November 1981 at the then residence of the parents. 69In reaching this conclusion I have had primary regard to the language and form of the Deed and the plan annexed. 70It is evident from the alterations to the Deed in the handwriting of John Butler that the document executed was drawn up sometime prior to the date which it bears. Accordingly, the reference to the purchase of the property was modified to record that the parties "have purchased property" and the words "are desirous of purchasing" were struck out. In addition, the insertion of the word "desire" in relation to the erection of a house indicates that the house at the time the Deed was drawn up had not been erected. 71The writing and signatures on the plan in evidence are also important. The plan is signed by the four parties to the Deed and the dates are inserted in relation to each set of signatures by Leslie Butler and witnessed by John Butler on documents dated 19 November 1981. 72The plan contains a note in the handwriting of Leslie Butler, namely "SHEET 4" and another note reading "Sheet part of agreement" in his handwriting. On the back of the third page which is the backsheet of the Deed, there is the stamp "LAJ Butler" and the date 19 November 1981. The plan in fact is the fourth sheet or page of the four-page Deed, the backsheet and plan and the original signatures appear to be in the same coloured ink on the plan and the second page of the original Deed in evidence. 73There are small discrepancies in that on the plan the signature of Valma Butler uses the initial "VJ" whereas in the Deed the signature is "Valma J" and the signature of Bruce Wilson on the plan is "B Wilson" whereas in the Deed it is "Bruce Wilson". However, I do not think these two discrepancies are sufficient to lend support to the submission that the Deed was signed at a later date than 19 November 1981. 74The fact that the Deed refers to the parents living at Gorokan at the time and the house on the property not having been constructed also supports the conclusion that the document was executed on the date it bears. No reasonable explanation has been given as to why the plan need have been executed on 19 November if the Deed was not signed at that time. 75In clause 6 of the Deed there is reference to the parents repaying money borrowed from the proceeds of sale of the Gorokan property (when it is eventually sold). As at 19 November 1981 that property had not been sold but it had been sold before the parents moved into the subject property. This circumstance is inconsistent with the assertion by the defendant that the document was executed at the property after August 1982 because the Gorokan property had been sold. In her affidavit she says that date of transfer of the parents' property was 16 August 1982 and that shortly thereafter they moved into the property when her father was 82. 76Accordingly, I find that the document was signed on the date on which it bears and at the premises of the parents at Gorokan. The suggestion that the Deed was somehow open to challenge having regard to its date and place of execution as alleged by the defendant has not been established. 77I am satisfied that the evidence does not show that any misrepresentations were made in relation to the execution of the Deed. I am satisfied that the defendant and her husband understood the purpose of the Deed and also that it had binding legal effect. They were both well educated persons who should be taken in the circumstances to have understood the purpose of the document. If they had wanted to obtain legal advice, the evidence is that it was open for them to do so or to have asked the plaintiff, with whom at the time they were on close and friendly terms to have explained it to them. There is no suggestion he would have misled them or that he had any reason to do so. They had previously purchased properties and entered into binding legal transactions in relation to real estate and I am not persuaded that there was any inability or disadvantage in obtaining any assistance they considered necessary. Furthermore, I am satisfied that no undue pressure or influence was brought to bear on either the defendant or her husband in executing the Deed by either of the parents. There was some suggestion in the evidence by Irene that she was content to sign the document on her father's assurance that it was in accordance with a previous conversation and that she trusted him and always deferred to his wishes but I do not consider that this outweighs the above considerations.

Estoppel 78In relation to the defence of estoppel there are two matters relied on. The first is that the defendant's mother and therefore her brother who claims through her mother, would have been estopped from denying that the Deed was only to have effect during the lifetimes of the parents. This argument is based on representations made to her by her father said to have been made on his own behalf and the mother's, which induced her to enter into the Deed. 79The first representation relied on was prior to execution of the Deed and arises from a conversation of 4 June 1981 with her father alone in relation to which she concedes she cannot remember the exact words. She says the "effect" of the statement by her father on that occasion thirty years ago was: "We will put the title in your names rather than in both our names. The property will ultimately be yours, so it would be sensible to do this now or it will cost you and Bruce money to transfer the title after we die." 80This alleged conversation is claimed to have taken place before the purchase of the property was completed and before the father made out a cash cheque for payment of half the purchase price on 6 July 1981. In any event, a statement in the terms alleged in the circumstances should be considered as only a statement of revocable intention and not a promise or representation intended to have legal effect. 81Having regard to the period of time which has elapsed, the lack of any documentary record or corroboration or of any other witness to this conversation, I am not persuaded that the words relied on or any similar words were said. In this case precise recollection of the actual words used is crucial and the unaided recollection of Irene Wilson is too general and unreliable to enable me to accept her recollection. Moreover, much is lost over two decades when attempting to recollect or reconstruct conversations. Moreover, even if made, the assertion that "the property will ultimately be yours" must be read in the light of the subsequent Deed of November 1981 which contained no provision dealing with duration. The statement relied on is not sufficiently clear or specific and appears to be a statement of a general informal expression of the intention of the father at that time. The evidence does not establish that he was speaking on behalf of his wife. It is ambiguous in the sense that it could reasonably be read as an indication of what he intended to do with his will at that time or as to what he intended to do if circumstances did not change. For example, looking forward from that point relationships between the parents and the daughter could possibly have deteriorated leading to a change of intention on the part of the father. 82The second representation relied on arises from an alleged conversation after the house had been built and after the defendant and her husband and children and the parents had moved to the property after 16 August 1982. For reasons already given, I am not persuaded that this was before the Deed was executed. 83Again the evidence relied on does not profess to be a precise recollection of the words used but was said to be a statement by the father, in the absence of, but on behalf of, the mother to the following effect: "We need to put something in writing to protect our interests in the property. If you were to die and Bruce remarried, what's to stop his wife taking a dislike to Mum and putting her out of the house? We need something in writing to make sure that can't happen." 84For reasons given above, I do not accept this alleged conversation could have taken place on the property in 1982 as I have found that the Deed was executed at least nine months before August 1982 on the date which it and the plan attached bear. The defendant was strongly convinced and insistent that the Deed was entered into in 1982 and to the extent that I have found she is incorrect in this recollection some doubt is cast on the accuracy of her recollections. Her claim to have a specific and precise recollection of the exact words used in conversations 30 years ago is open to doubt. Whilst I can understand that on a reconstruction of past events, one might form the view that it would be logical for the father to have given this rationale for having a written agreement, I do not accept that the statement was in fact made. Moreover, the important consideration is that there was a written deed to record the agreement and to make sure that the mother and father retained an interest in the property and the defendant was aware this was intended to have legal effect and it made no mention whatsoever of the parents' interest as tenants-in-common being transferred to the defendant and her husband. 85The third representation alleged is said to have been made at the time when the defendant signed the Deed, when she recollects that words were said to the effect that "This is the agreement we talked about drawing up to protect Mum". 86The defendant says that she was content to sign the document on her father's assurance that it was in accordance with the previous conversation. Again the mother was not present. There was no assertion that the father was speaking on behalf of the mother. Moreover, the statement says nothing about the property reverting to the defendant and her husband but simply refers back to the earlier ambiguous statement in June 1981. Again, I am not persuaded this representation was made. There were some further general equivocal statements said to have been made by the mother but again I do not consider the evidence is sufficiently clear to make a finding that they were in fact made. 87Having regard to the foregoing I am not satisfied that any of the representations were made. In addition to and independently of that finding, I am not persuaded that the alleged representations were sufficiently clear, unequivocal or unambiguous on which to base a finding of estoppel as a defence to enforcement of rights under the Deed. 88The defendant says that there is a significant detriment to her in the present case arising from the difference between the rights of co-owners at common law and in equity in relation to expenditure on the property. This argument is founded on the decision of White J in Maio v Sacco [2009] NSWSC 413 at [4]-[6]. At common law the co-owner of property is entitled to contribution from his other co-owner for moneys expended in improvements, repairs or maintenance irrespective of the extent to which the expenditure increases the value of the property. Such contribution could be recovered under the common money count but in the present case such contributions are said to be statute-barred. In a partition suit, on an equitable accounting, the contribution between co-owners cannot be recovered at the time the expenditure is incurred and the co-owner will be allowed the lesser of the amount of expenditure on improvements or repairs and the amount by which such expenditure has increased the value of the property. It is said that because the common law basis can be more favourable and easier to establish than the equitable one, there is detriment because the actual expenditure cannot be recovered but only the increase in value contributed to by the expenditure can be recovered. 89In my view in the circumstances of this case, if the rights of the parties were to be adjusted on the basis that there would be an equitable accounting, I do not think that there would be a relevant detriment if the defendant is given the benefit of any increase in value occasioned by the expenditure made by her on the property up to the time of sale. 90I accept that the defendant and her husband expended moneys on the property but I am not satisfied these moneys were expended on the basis that the agreement under the Deed was limited to providing her mother and father the right to live in the property while they were alive, in the absence of any provision to that effect in the Deed. The cheque butts in evidence indicate that the father kept a careful record of expenditure on the property and I am satisfied on the evidence that he was a careful and methodical man in his financial affairs who was keeping a close check on expenditure by his wife and himself in relation to any substantial improvements to or expenditure on the property with a view to ultimately making any adjustment to the financial positions of the parties if that became necessary. 91I am not persuaded that in making the alleged statement, the father was authorised or acting on behalf of his wife in relation to her interest in the property. 92If Leslie Butler had intended to limit the interest of himself and his wife to their lifetimes and not retain the property to be disposed of in accordance with his will or that of his wife it would have been a simple matter to express such a limitation in the Deed itself if this was considered to be significant, important and at the front of his mind. His actions in requiring the Deed and in dating it and noting the street numbers indicates that he was a cautious and thorough person and it is unlikely that he or his daughter would have omitted to make a specific provision to this effect. No such limitation was imposed. One might reasonably expect such a provision to be made expressly in the operative parts of the Deed itself or in the recitals to the Deed. There is no such indication. 93The more probable explanation is that the father and mother intended that their interest in the property should be disposed of by the survivor according to their wishes as at the time of disposition. That is to say by way of will or transfer at some appropriate future time. 94Accordingly, for the above reasons I reject the defence based on estoppel by representation. 95The second basis on which estoppel is alleged is that there was an estoppel by conduct. It is said that the defendant and her husband adopted an assumption known to the parents that the property was theirs absolutely subject to allowing the parents to live in the house for the rest of their lives, particularly the defendant's mother, and on the death of the survivor the property would go to the survivor of Bruce and Irene absolutely without any restriction, qualification or limitation. The defendant submits that the parents encouraged them to adopt the assumption by making representations and otherwise encouraging or permitting the defendant and her husband to become registered proprietors; encouraging or permitting the defendant and her husband to make improvements; and by statements from the defendant's mother from time to time referring to the property as the property of the defendant and her husband. In this latter part of the submission the defendant relies on the representations which I have previously found not to have been made. 96I note that the plaintiff accepts that in the event he is successful it will be necessary to have an account taken or an investigation made into expenditures on improvements on the property in order to apportion the value of the improvements to the property to arrive at a fair and equitable adjustment. 97The defendant relies on the fact that her parents observed the improvements, expenditure and work being carried out from time to time. 98A number of generalised informal statements are referred to in the affidavit of the defendant which purport to recall the terms of conversations of which there is no corroboration or objective record and which should be read in the context of her express statement that she cannot remember the conversations in precise terms. 99These statements date back to 1994 and contain statements having been made by the parents to the effect "At least you've got this house" in the context of discussing the financial security of the defendant and expressions such as "This is a nice place you have here" and "You're lucky to have such a lovely place". Again there is a statement said to have been made by her mother when she was 93 years of age when she was vague and forgetful to the effect of: "When are you going to sell the house? Isn't that why you are doing the kitchen?" To which there was a reply by the defendant: "I don't have any plans to sell. I want to enjoy the renovated kitchen myself, not just to sell the house at a later date and not get any use out of it." 100The defendant said that she did not complain about carrying out maintenance and paying for it because she believed the property to be hers. 101After taking into account the conduct relied on by the defendant and the statements alleged to have been made by the parents and also taking into account that there was substantial expenditure by herself and her husband I am not persuaded that there is any estoppel made out as a result of the parents' conduct. Collateral contract 102For the reasons given above, I am also not satisfied that any statements made by the parents provide support for the existence of a collateral contract which modified or negated in any way the clear and express provisions of the Deed. Contracts Review Act 103I now turn to the case sought to be made under the Contracts Review Act . Having regard to the evidence, I am not persuaded that the necessary elements for establishing this defence have been made out. 104I am not persuaded that the Deed was unjust in the circumstances relating to it at the time it was made. 105I am not persuaded that there was any material inequality in the bargaining power between the parties to the Deed at the time it was made or at any time. The defendant was then aged 34 and her husband was of a similar age and was engaged in a professional occupation. She had entered into a number of important transactions relating to real estate and I am satisfied that they were both well able to understand the nature and effect of the provisions of the Deed although they may not have fully appreciated the precise legal significance of the terms used. It is at least clear that they knew they were entering into an arrangement which was designed to have legal effect (and not simply to be a general family arrangement based on an assumption of on-going good relationships) setting out a basis on which the proceeds of sale would be shared in the event of sale. It is obvious that there was in the mind of the parents a desire to which the daughter and her husband agreed to have binding security in relation to their residence on and use of the premises and in the event that the property was sold, the parents would be entitled to a 38 per cent share of the net proceeds. 106There was no negotiation at the time the contract was entered into. It was signed in a context of mutual trust between the parents and the defendant and her husband. There is no suggestion that her brother at that time was acting in any misleading way. I consider that it was practically reasonable and open for the defendant, if she had disagreed with the provisions of the agreement to seek alteration. 107There is nothing in any particular provision which has been pointed to which could be said to be unreasonable, difficult to comply with, or not reasonably necessary to protect the legitimate interests of the parties to the Deed. The protection which was given was an interest in the property proportionate to payments which was not limited in duration. I do not think it is necessary to imply into the Deed some restriction on the interest created by the Deed being limited to the lives of the parents. There is no suggestion that legal advice could not have been obtained if thought necessary by the defendant and her husband. No such advice was sought and no difficulty was raised by them in relation to the Deed. There is no suggestion that the plaintiff would not have given any fair and reasonable advice thought necessary had he been requested. There is no suggestion that the economic circumstances of the defendant and her husband forced them into the contract. The Deed is wholly in writing and in solemn form and both the Deed and the plan are carefully dated, executed and witnessed and the sheets are identified. It is cast in language which is intelligible as to its effect. 108I am not satisfied that there was an explanation as to the legal and practical effect of the document but I do not think there was any need for such an explanation in the circumstances having regard to what I have said above. 109There is no evidence of any undue influence, unfair pressure or unfair tactics exerted or used against the defendant in relation to the Deed. Given that the purpose of the Deed was directed to the protection of the interests of the father and mother who had expended at the time or were committed to expend an amount equal to the percentage share of the cost of the property, the provisions do not indicate any disproportionate result which could indicate undue pressure or tactics. 110The evidence does not establish any basis for an assertion that there was injustice resulting from circumstances not reasonably foreseeable at the time the contract was made and there is no suggestion that there is anything in the conduct of the plaintiff in relation to the performance of the contract since it was made which would be relevant. 111Accordingly, for the above reasons I consider that the relief sought under the Contracts Review Act should be refused.

CONCLUSION 112I consider that the plaintiff has made out his case for a declaration as to a 38 per cent interest in the property as tenant-in-common with the defendant. I find that this is an appropriate case in which an account should be taken or investigation made as to the proper allowance to be made in respect of improvements made to the property by the defendant and her late husband since purchase and as to the contributions made by the parents, unless the parties can otherwise agree. 113I stand over the question as to the making of an order for sale of the property and as to the position with respect to any outstanding loans on the property. I note that the ANZ Bank which has a mortgage on the property, is not a party to these proceedings and therefore I do not make any order which might affect the rights or liabilities of that Bank.

Orders 114The Court:

Declares that the plaintiff is entitled to a 38 per cent interest as tenant-in-common with the defendant in the property at 37 Treelands Drive, Wyong.
Orders that the defendant take all steps necessary to transfer to the plaintiff the interest referred to in declaration 1.
Declares that the cross-claimant is entitled to an equitable accounting for the value of the improvements carried out by her and her late husband Bruce Wilson to the property at 37 Treelands Drive, Wyong.
In the event that the parties cannot agree as to the value of the improvements referred to in declaration 3 above, orders that an account be taken.
Orders that the application for declarations and orders 1-6 of the cross-claim be dismissed. 6 Orders that the defendant pay the plaintiff's costs of the proceeding.
Orders that the defendant pay 50 per cent of the plaintiff's costs of the cross-claim.
Liberty to apply on two days' notice.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 April 2011

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Judgment (11 paragraphs)

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Cases Cited (3)