Clinch v Brown

[2024] NSWSC 1239

Supreme Court of NSW|2024-07-23|Before: Kunc J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2024-07-23

Before

Kunc J

Catchwords

[1989] HCA 63 CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98
[2005] HCA 53 Fabre v Arenales (1992) 27 NSWLR 437 Golden Mile Property Investments (in liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237

Source

Original judgment source is linked above.

Catchwords

[1989] HCA 63 CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98[2005] HCA 53 Fabre v Arenales (1992) 27 NSWLR 437 Golden Mile Property Investments (in liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237

Judgment (8 paragraphs)

[1]

Summary

The late Donald and Shirley Clinch had an arrangement in relation to what became their matrimonial home, a property located in Emerald Beach, New South Wales. The issue in these proceedings is what was that arrangement? Without disrespect, I shall refer to the various members of the Clinch family and other protagonists by their given names.
Donald was (and remains) the registered proprietor of the property. It was the Clinch family home. On 22 September 1976, Donald and Shirley executed a memorandum of transfer (duly stamped and in registrable form) in relation to the property between himself as transferor and Shirley as transferee. The transfer recorded consideration of $14,500. The present dispute arises from the fact that the transfer was never registered, but continued to be held by Donald and Shirley's solicitor, Mr Peter Sames.
Shirley died on 23 April 2018. The plaintiff is Ms Stephanie Clinch who is Shirley's daughter and only surviving child. In these proceedings Stephanie contends that, in equity, the property is an asset of Shirley's estate and should be transferred to her (Stephanie) because the property was left to her by Shirley subject only to a life estate in favour of Donald.
The first and second defendants are the executors of Shirley's estate and have no personal interest in estate or the proceedings. They have entered a submitting appearance. There was no dispute that, the executors having declined to bring these proceedings, Stephanie could do so as a beneficiary of Shirley's estate.

[2]

Facts and evidence

The Court finds the following facts. Except where indicated otherwise, they were either uncontroversial or not seriously contestable, including being evidenced by contemporary records. However, where reference is made to affidavit evidence of conversations or verbal instructions, it is to record the fact of the evidence rather than a finding that the conversation occurred or the verbal instructions were given.
Donald and Shirley married in 1966. Donald had two children from his previous marriage, Fiona and Peter. Donald and Shirley had one child together, Stephanie. The property was Shirley and Donald's matrimonial home, and Stephanie's childhood home. The house on the property was built by Donald himself, with Donald signing the building application as owner/builder on 27 April 1976. At all times up until the date of his death, Donald remained the sole registered proprietor of the property.
Donald was diagnosed with melanoma in 1973 or 1974.
In 1976 Donald was diagnosed with bowel cancer and underwent surgery.
Peter was called by Fiona in support of her case that any agreement for Donald to transfer the property to Shirley had always been conditional upon Donald predeceasing Shirley.
Both in his affidavit and during the course of cross-examination, Peter deposed that he recalled a discussion in 1973 or 1974 in which his father told him that he had "skin cancer". He said he also had a further telephone discussion with his father in 1976 in which his father told him that he (Donald) had bowel cancer. Peter's evidence was that he recalled a telephone conversation when Donald was in hospital in Brisbane after his surgery in which Donald had informed him that he had decided the property should go to Shirley if he did not survive his surgery because she was a "good wife".
It was put to Peter in cross-examination that his evidence was unreliable because in 1976 he was 15 years old and that he had nothing other than his memory in relation to the alleged conversations. Peter accepted that he only had his memory but adhered to his evidence, saying that because at the time he had been separated from Donald for a long time, he listened carefully when they did communicate. He also said that he had only "very recently" become aware of what was in Donald's will (see [69] below).
On 7 September 1976, Mr Sames wrote a letter to Donald only, addressed to "D J Clinch & Co, Real Estate Agents" with the subject line "re: Sale to Mrs Clinch" and in these terms: "Please find enclosed copy of the Notice of Valuation. We have forwarded the original to the Stamp Duties Office and have requested the appropriate refund. The prescribed valuation fee amounts to $57.50 which we have paid to the Department of the Valuer General and you might let us have your cheque in reimbursement at your convenience."
The enclosed Notice of Valuation was issued to Donald care of Mr Sames' office on 2 September 1976. It described Donald as the holder of the interest being valued, under the heading "improvements" listed "vacant land" and identified the "nature of interest" as "Owner of the fee simple of the land, with vacant possession". The date of the valuation was 28 June 1976 and the value of the interest was $14,500.
The Court infers from the two preceding paragraphs: 1. The valuation was sought on Donald's instructions (given that a fee had to be paid for which Mr Sames sought reimbursement); 2. Donald was Mr Sames' client. The letter and Notice say nothing about whether or not Mr Sames was also acting for Shirley. I consider this further in [32] below. 3. The parties accepted (see [31] below) that a contract in writing (which the Court finds must have purported to record the agreement) had been submitted to the Stamp Duties Office (SDO) to be stamped with ad valorem duty and the transfer marked with nominal duty. Provision of the Valuation to the SDO with a request for a refund suggests (and the Court finds) that it was in relation to the stamping of the agreement that a refund was sought, the value of the property for stamp duty purposes being established by the Valuation, given that the transaction was on its face not at arm's length. 4. Given the letter was addressed to Mr Clinch only and he was being informed about the stamp duty refund, Mr Clinch paid the stamp duty on the agreement. The parties accepted that as a transaction between husband and wife this was not a usual transaction (when compared to an arm's length conveyance) and Mr Clinch attending to the stamping of the contract and the marking of the transfer is an example of that: in an arm's length transaction it was the purchaser who would attend to stamping of the contract for sale and marking of the transfer before settlement. 5. No inference can be drawn about the form of the agreement (for example, whether it was the then NSW Law Society standard form of contract for the sale of land) or what special conditions (if any) it may have contained.
On 22 September 1976 the transfer, being in the familiar form required to be registrable under the Real Property Act, 1900 (NSW) was signed by Donald, as transferor, and Shirley, as transferee. Mr Sames witnessed both signatures. The transfer recorded that the transfer was "in consideration of … $14,500 (the receipt whereof is hereby acknowledged), paid to the transferor by Shirley Clinch…".
For the reasons set out in [104] below, I do not accept Stephanie's submission that by reason of the acknowledgment in the transfer the Court should find that the consideration of $14,500 was paid by Shirley to Donald.
The transfer bears a duty stamp assessed at $1, although the date on which it was stamped is not legible. The parties accepted, correctly in my respectful view, that $1 was nominal duty which established that the SDO must have been satisfied that the transfer was pursuant to a written agreement between the parties which had been stamped with ad valorem duty. While nothing turns on it, there can be no doubt that the practice of the time was that the Registrar General's office would not accept an unstamped transfer for lodgement. Mr Sames has retained the transfer in his possession and it has never been registered. There was no dispute that at all material times Mr Sames has also held (and holds) the original certificate of title in his possession.
Based on the fact that Mr Sames witnessed both signatures and the letter set out in [33] below, the Court finds that Mr Sames was acting for both Donald and Shirley in relation to the transaction. I do not accept Stephanie's submissions insofar as they refer, for example, to the transfer being held by "Shirley's solicitor" insofar as that is intended to imply something legally significant, for example, that the transfer had been constructively delivered to Shirley by being left in the possession of Mr Sames.
The next document in evidence (1981 letter) is of essential importance (not least because of the paucity of documentary evidence generally) and also warrants being set out in full. On 11 November 1981, Mr Sames sent a letter addressed to both Donald and Shirley with the subject title of "Transfer of [the property] from D. Clinch to S. Clinch": Thank you for your letter of 6th November last. We see no apparent disadvantage in not proceeding towards registration of the Transfer at this stage provided of course there are no differences of opinion or conflict between yourselves in relation to the situation. A similar comment would apply in respect of the decease of either of you if problems develop between the Executors and the survivor of you. We think this situation unlikely of course. Our main reason in writing to you from time to time is so that it will be clear from our records that we have not failed to take any action that might have been expected of us. In our opinion at this point of time, there is a valid and binding Contract between yourselves which has not been cancelled by mutual agreement nor repudiated expressly or by implication by either of you and that the Contract has just not been completed. Prior to its completion of course, the Contract could in fact by mutual agreement be cancelled.
This letter is the critical piece of objective, contemporaneous evidence. It is considered at greater length at [117] to [123] below. However, for the purposes of the present narrative it is sufficient to record that, for the reasons set out in [117] to [123] below, the Court: 1. Does not accept Stephanie's submission that the last paragraph of the 1981 letter demonstrates that Shirley was in the position of a purchaser entitled to call for completion of the agreement and the delivery or release to her (or her solicitor) of the transfer to be registered: 2. Finds: 1. Mr Sames' clients were both Donald and Shirley; 2. The agreement (whatever it was) had not been completed (meaning payment (or forgiveness) of the consideration and Mr Sames giving effect to Shirley's rights under the agreement by being given and acting on instructions to register the transfer) at any time between 22 September 1976 and 11 November 1981; and 3. As at the date of the 1981 letter, there was an arrangement (I use this word advisedly - see [121] to [123] below) between Donald and Shirley that the transaction not be completed in the sense I have identified in the preceding sub-paragraph.
Fiona also called Ms Cheryl Midavaine in support of her case. She was not cross-examined. Ms Midavaine worked for Donald as a secretary from 1990 to 1997 at LJ Hooker Woolgoolga and said that she became close to Donald and Shirley. Ms Midavaine deposed in her affidavit that Donald had told her he thought he would die before Shirley and that he had organised his affairs so that Shirley was provided for if he predeceased her with "arrangements in place that if I die first my home will go to Shirley" (there being no dispute that "my home" referred to the property). Ms Midavaine also deposed that Donald had expressed his desire for all of his children to be provided for. She says that Donald informed her that anything in Shirley's name would go straight to Stephanie and anything in his name would be divided between his other children.
Mr Sames prepared a will for Shirley which she made on 15 August 2003. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS. The Court treats as a matter of common knowledge (see Evidence Act 1995 (NSW), s 144 and still informally referred to as judicial notice) the solicitor's practice of identifying the author of a document by their initials. Clause 3 of that will provided for Donald's right to reside: I GIVE DEVISE AND BEQUEATH my real estate residence property being [the property] to my trustees upon trust and I PROVIDE that my husband DONALD JOHN CLINCH (provided he survives me) shall during his lifetime (or for so long as he wishes and is able to so do) have full right of sole residence in that property, he however being responsible for rates and taxes and to keep the property insured and in a proper state of repair and maintenance consistent with that at the time of my decease. Upon my said husband's decease or upon him no longer residing therein then the same is to be transferred to my daughter STEPHANIE CLINCH and I give devise and bequeath this property to her absolutely subject to my husbands prior right as herein contained with the same provisos as is contained in clauses 6(c) and 6(b) hereof.
I accept Mr Bilinsky's submission that by reference to Donald's right to reside, Shirley must have thought the property was hers to deal with in that will. The Court has no evidence that enables any reconciliation between such a belief and Mr Sames being involved (as appears to have been accepted by both parties) in drafting that will. However, this does not really go anywhere, because the same conclusion must be drawn about Donald's state of mind in relation to his will (see [40]-[41] below). In other words, and with no disrespect intended, what Donald and Shirley subjectively thought about who "owned" the property does not assist the resolution of these proceedings.
The next piece of evidence was a document dated 21 February 2005 which the parties accepted came from Mr Sames' file and was in Donald's handwriting (2005 instruction): Lee Sames Egan Re transfer of [the property] to Shirley Clinch You are instructed to register this Transfer dated 22 September 1976 in the event I predecease my wife, Shirley. (sgd) D Clinch 21/2/2005
From its presence on Mr Clinch's file and its terms, I find that the 2005 instruction was given to Mr Sames on or about 21 February 2005. I consider the effect of the 2005 instruction in [125] below.
Mr Sames prepared a will for Donald which he made on 25 August 2006. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor's practice of identifying the author of a document by their initials. That will did not contain a specific devise of the property, but included the debt forgiveness: 8. Provided that my wife Shirley Clinch survives me and lives for the period of twenty-eight (28) days from the date of my death the following applies: (a) I GIVE DEVISE AND BEQUEATH unto my wife SHIRLEY CLINCH for her own use and benefit absolutely all my right title and interest in the land and all improvements erected thereon being land XXX situate XXX Street, Woolgoolga and my property known as XXX Street, Cammeray being the land comprised in Certificate of Volume XXXX Folio X and free from liability for payment of any State Death Duty or Federal Estate Duty or any other death, Probate or succession duties payable. (b) I RELEASE my wife SHIRLEY CLINCH from any debt or moneys payable to me or to my Estate in connection with my sale to SHIRLEY CLINCH of [the property] and I FURTHER FORGIVE AND RELEASE SHIRLEY CLINCH from payment to me of any debt or moneys that may be due to me or to my Estate from the construction of the dwelling house on the [the property] and I make these releases free from the liability for payment of any State Death Duty or Federal Estate Duty and any other death, Probate or succession duties payable.
The debt forgiveness is consistent with Fiona's case theory that the agreement was subject to Donald predeceasing Shirley: the transfer would be registered because the obligation to pay the consideration would have been forgiven, there being no dispute that the transfer could have been registered after Donald's death. However, the parties also accepted that the assumptions as to ownership of the property which informed Donald's right to reside in Shirley's will and the debt forgiveness in Donald's will could not be legally reconciled.
Mr Sames prepared a will for Shirley which she made on 29 February 2008. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor's practice of identifying the author of a document by their initials. This will repeated Donald's right to reside.
Mr Sames prepared a will for Donald which he also made on 29 February 2008. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor's practice of identifying the author of a document by their initials. This will repeated the debt forgiveness.
Each of the wills referred to in the preceding two paragraphs was witnessed by the same two persons who described their occupation as clerk and I infer worked in Mr Sames' firm. The two wills are not on their face mirror or mutual wills. Nevertheless, I find it inconceivable that a married couple would not have attended their solicitor's office to sign wills at the same time, although the evidence does not permit any inference to the effect that they were in the same room when each signed their will or that they knew the content of each other's wills. The copies of the two wills in evidence have each been ruled through on their first and last pages with the word "revoked" written over those pages in hand.
Mr Sames prepared a will for Shirley which she made on 13 October 2015. This is the will which has been admitted to probate. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor's practice of identifying the author of a document by their initials. Again, this will repeated Donald's right to reside.
Mr Sames prepared a will for Donald which he also made on 13 October 2015. The evidence that Mr Sames prepared the will is that it bears a reference commencing with his initials PS, the Court taking judicial notice of the common solicitor's practice of identifying the author of a document by their initials. Again, this will repeated the debt forgiveness.
As with the 2008 wills, each of the wills referred to in the preceding two paragraphs were witnessed by the same two persons who described their occupation as clerk and I infer worked in Mr Sames' firm. The two wills are not on their face mirror or mutual wills. Nevertheless, I again find it inconceivable that a married couple would not have attended their solicitor's office to sign wills at the same time, although the evidence does not permit any inference to the effect that they were in the same room when each signed their will or that they knew the content of each other's wills.
On 15 January 2016, a Land Tax Assessment Notice was issued to Donald, which recorded that he had 100% ownership of the property and that it was exempt from land tax as his principal place of residence.
On 21 January 2016, a Land Tax Assessment Notice was issued to Shirley. This notice recorded that Shirley had interests in two properties but made no reference to the property. The notice recorded Shirley's interests as follows: 1. 100% ownership of XXX Road, Woolgoolga; and 2. 90% ownership of 58 XXX Street, Woolgoolga
Shirley died on 23 April 2018.
Mr Sames was one of the executors named in Shirley's October 2015 will. On 4 May 2018, Mr Sames sent a letter to the executor defendants, among other things renouncing his executorship. This letter included a summary of Shirley's assets which did not mention the property: …We understand that the assets of the deceased include the following: a. The property at XXX Road, Woolgoolga. […] b. The deceased's 90% interest in the real estate asset known as Surfside Plaza. […] c. The deceased's equity and interest in the leasing partnership business of Surfside Plaza. […] d. Bank account with the Commonwealth Bank of Australia. […]
On 21 May 2018, Donald sent this email to Mr Sames: Estate Shirley Clinch.. Upgrade on valuation of house in Newmans Road, Woolgoolga. Barry Mawby has made appointment for Wednesday 30th May at 9 a.m... Should have valuation by end of that week. $450 plus GST. Will fix. Thanks. Nobody seems to want to value Shirley's share of furniture and her other possessions at [the property]. Am working on that Don.
Ms Denise Kelly was called in Fiona's case. She was cross-examined. Ms Kelly is an accountant who had been involved in providing accounting services to Donald since 1997.
Ms Kelly informed the Court that she was involved in completing Shirley's tax returns and provided her with accounting services after Mr Clinch transferred 90% of his successful property development in the Surfside Plaza at Woolgoolga into Shirley's name as a tax saving measure. Ms Kelly deposed that Shirley never provided her instructions in relation to the Surfside Plaza or in relation to any other business or financial matter. All such instructions came to her from Donald. Ms Kelly also deposed that on a number of occasions Donald told her that he had built the house on the property himself and that he had "arranged for [the property] to go to Shirley if I die before her". She also deposed that in her "regular meetings with Mr Clinch and annual meetings with Mrs Clinch (at which Mr Clinch was also present)", neither of them ever suggested that the property was Shirley's and not Donald's.
On 23 May 2018, Mr Sames sent an email to Ms Kelly with the subject heading 'Estate of the Late Shirley Clinch': Thanks for discussion yesterday. Please see attached copy of the Will of Shirley Clinch dated 13 October 2015. Regarding Clause 3 the residence has not been transferred to late Shirley. The Transfert(sic) was contingent on Donald predeceasing late Shirley. Confirming please proceed with TFN for the estate.
On the same piece of paper from Mr Sames' file on which the 2005 instruction appears, there is this further entry which the parties accepted was in Donald's handwriting (2018 instruction): 3/6/18 Lee Sames Egan Please do not register this transfer since my wife has predeceased me. (sgd) D Clinch 3/5/18
The date under Mr Clinch's signature is obviously an error. The 2018 instruction - which can have no legal effect on whatever were Shirley's rights in the property at the date of her death - was relied on by Fiona as further corroboration that the agreement between Donald and Shirley was for the transfer to be registered only if Donald predeceased Shirley.
On 22 June 2018, Donald sent a letter to Mr Sames not referring to the property and stating: Herewith the valuations for XXX Street, Woolgoolga, and XXX Road, Woolgoolga being properties in which Shirley Clinch had an interest.
On 29 June 2018, Donald sent a letter to Mr Sames titled, 'My Will' and which included: I have been through a copy of my current will, and marked out the adjustments I deem necessary, with the exception of what to do about [the Property] and the home thereon. Its current status of ownership is not known to me. We will need to discuss that to work out what to do. …. My thoughts are …. The ownership of the house at [the Property] and what to do with it, is the as-yet unresolved part to be included in the will, and we will need to talk about what to do.
Mr Sames prepared a will which Donald made on 4 July 2018. The proximity of that date to the letter in the preceding paragraph, and the "PS" document reference on the will satisfy me that it was Mr Sames who prepared the will. He was not an executor under the will, but was one of the witnesses. As might be expected, it did not include the debt forgiveness. While there were specific devises of some properties to Stephanie, the residue of the estate (including, on Fiona's case, the property) was divided equally between Donald's children, being Fiona, Stephanie and Peter.
On 30 July 2018, probate was granted in respect of Shirley's estate. The inventory of assets made no reference to the property.
On 8 October 2018, Ms Kelly sent an email to Mr Sames, copied to Donald, recording a meeting she had with Donald that day in which the possibility of a new will for Donald was discussed, including a specific devise of the property to Fiona and Peter. Ms Kelly deposed that at that meeting Donald was clear that the property was his asset.
On 4 June 2019, Donald sent a letter to Mr Sames: Dear Peter, I have been giving thought to the day-to-day care of Surfside Plaza immediately when I die. I attend to everything required to run it, from day-to-day inspections, cleaning, lawn mowing, paying accounts, the lot. When I am away, Fiona has always done it all, and she does it well. I am, sure she would step in, in a crises. But I am wanting to create circumstances where she would not be personally put to any expense, in fact would be pleased if she could be recompensed. I have not approached her yet. But I have come to the conclusion that I should make her a sole executor to my will, and provision made for her to be paid for any of the above work. I'm thinking of putting money aside in a special account for that purpose, before I die. I think it would be impracticable to have Annemieke Vimal and Alison Brown trying to manage it all. Could you please give it your consideration, and devise a format which will cover, first of all, Fiona as an executor, and secondly, as a paid manager for the shops. The provisions of my existing will should apply with Stephanie having the Cammeray residence and the rest of my estate being equally shared by my three children. I would consider any other advice you have to offer.
Donald made a further will on 4 October 2019. Again, on Fiona's case, the property fell into the residuary gift.
On 29 October 2020, Mr Sames sent an email to Ms Kelly, stating: Don owns Lots …. and XX (five lots) His home is on lot XX
Lot XX in both places is a reference to the property.
On 30 October 2020, Ms Kelly sent a letter to Donald, which summarised his assets as including the property.
On 2 November 2020, Donald sent Mr Sames a short family history "for consideration when putting together a new will for me".
Mr Sames prepared Donald's final will, which was made on 18 December 2020. The proximity of that date to the letter in the preceding paragraph, and the fact that Mr Sames prepared Don (and Shirley's) previous wills, satisfy me that it was Mr Sames who prepared the will. He was not an executor under the will, but was one of the witnesses. While there were specific devises of some properties to Stephanie, the residue of the estate (including, on Fiona's case, the property) was to be divided among various beneficiaries.
Ms Kelly's evidence included a detailed file note (which the Court accepts as accurate) that she had made of a two hour meeting at the property on 10 October 2022 which she attended with Donald, Stephanie and Mr Michael Scheib (Stephanie's solicitor). The note includes: "…Michael drew Don's attention to Shirley's Will and in particular that she wanted [the property] to go to Stephanie (but the property is in Don's name only). Don acknowledged that the property was in his name only… Michael was very critical of both Wills [Donald and Shirley's] and said PS [Mr Sames] had made an error in drafting Shirley's Will as he would have known that [the Property] was not hers to bequeath."
Ms Kelly said during cross-examination that this was the first time that she had made a file note and that she had made no file notes of the occasions she had met with Shirley.
Ms Kelly also gave evidence about a meeting on 20 October 2022 at Mr Sames' office attended by her, Fiona and Mr Sames at which Donald was shown the paper with the directions on it and Donald saying "This doesn't matter anymore; we didn't go ahead with it. It was only something I did in case I died before Shirley. It's nothing now, the property is still mine."
Similarly, Fiona gave evidence of a meeting on 24 February 2023, attended by her, Donald and Mr Sames when Donald was shown the paper again and said "That was way long ago and now irrelevant. I survived."
On 7 March 2023, Mr Sames sent an email to Revenue NSW, stating: We will be grateful for your advice/comment concerning the following. 1. Attached is copy stamped transfer dated 22nd September 1976 lodged by us for stamping. We note stamped $1.00 and OSR reference at bottom seems to be 40648N. 2. Is there any chance your office still holds copies of any documents lodged with the transfer such as a contract, valuation or Declaration for stamping. If so could we have copies of them. 3. If no such documents are available does the $1.00 stamping indicate a contract and valuation was lodged or could there have been lodged with the transfer a valuation and a declaration that no other consideration was involved.
On 8 March 2023, Mr Sames wrote to Stephanie's solicitor to inform him that he was ceasing to act for Shirley's estate and for Mr Clinch in his personal capacity: Dear Mr Scheib, We have today sent a letter to each of the three executors/trustees advising we cease to act for them. We have also sent a letter to Mr DJ Clinch and his attorney advising we cease to act for him as regards his [sic] personal interests and affairs.
On 13 March 2023, Revenue NSW responded to Mr Sames: Unfortunately, we don't have records dating back to 1976 and we wouldn't be able to tell what sort of documents were lodged for this transfer based on the stamp.
On 11 April 2023, Dr Vaibhav Tyagi provided a report in support of an application to NCAT to provide guardianship powers to Fiona over Donald due to his declining mental capacity. The report records that Donald had been diagnosed with vascular dementia in 2021 and that "there has been progressive decline in his memory for more than 2 years".
On 22 June 2023, Stephanie commenced these proceedings.
On 17 July 2023, Fiona's solicitor, Mr Vincent Butcher, met with Donald at the retirement home where Donald was living. Mr Butcher's affidavit records that "Mr Clinch presented very well" and that "based on my observations of Mr Clinch, it appeared to me that he had a good recollection of the 1976 Transfer, why he made it and the condition upon which he made it". Mr Butcher's contemporaneous file note of his meeting with Donald included: 4. I asked Mr Clinch why he signed the transfer in 1976. Mr Clinch was clear that he signed the transfer as he was having surgery to remove skin cancers and melanoma and may not survive. It was important for him that if he did not survive, the house would go to Shirley. Mr Clinch said he only signed the document for his own benefit, knowing that the house would go to Shirley if he died. 5. I asked Mr Clinch why he left the transfer unattended until Shirley passed. Again, Mr Clinch said he was always aware of the transfer, as was Shirley. It was there for their benefit in that if Mr Clinch died first, the property would go straight to Shirley. 6. Mr Clinch said the reason for this was that he remembers his father telling him, in the great depression, several things in life must be done. Mr Clinch said you had to treat people fairly and make sure you have a roof over your head for your family and children. Mr Clinch stated he had tried to live his life like this and when he found out he might be dying from melanoma cancer in 1976, he and Shirley elected to sign the transfer. Mr Clinch stated both he and Shirley did nothing to act upon the transfer as it was only to be acted on if he passed away first. 7. I asked Mr Clinch did he remember signing a handwritten note shortly after Shirley passed away in regard to the transfer. Mr Clinch thought about it for a moment; however, he clearly stated he did recall writing that note to Mr Sames to disregard the transfer as he had survived Shirley. Mr Clinch again reiterated to me that this was his house to dispose of, in his estate. 8. Mr Clinch lent back and laughed. He said, laughing to himself saying, "why would I give away my house that I built?"
Donald died on 13 October 2023.

[3]

Mr Sames

There can be no doubt that the only living person who may now be able to give direct evidence relevant to these proceedings is Mr Sames. However, neither party called him to give evidence.
Mr Bilinsky tendered a chain of emails between his instructing solicitor and Mr Sames, the tenor of which makes it clear that Mr Sames was ultimately unwilling to assist the parties.
On 1 March 2023, Mr Sames sent an email to Mr Scheib, Stephanie's Solicitor, stating: Dear Mr Scheib, We refer to previous correspondence and acknowledge receipt of your email 5.32 PM Friday 24/2/23. We confirm we are investigating/considering the issue and calling in old records from archives etc. in the meantime we advise/confirm the following: We emailed last Friday the 24/2/23 a copy of your letter to us of Thursday 23rd February 2023 to each of the three executors/Trustees of the estate and the attorney of Mr Clinch. We hold the CT to the subject property. We hold the original subject Transfer (reserving whether it could/should be registered). We are investigating whether there was an associated contract ever prepared/stamped along with the subject Transfer and what we may hold in old records/archives. Obviously we will further respond as soon as practicable.
On 6 March 2023, Mr Scheib responded to Mr Sames' 1 March 2023 email. Dear Mr Sames, Thank you for your email of 1 March. It seems from your email that you accept that the issue of bringing [the property] into the deceased's estate is one for the executors. You may or may not feel that there exists a conflict in continuing to act for the executors and for Mr Clinch in his personal capacity. At the moment, I do not see a problem in you continuing to do so. That said, I would like to know Mr Clinch's position with respect to bringing the property into the estate. I would be grateful if you could seek and inform me of Mr Clinch's instructions on that issue as soon as possible. I have today written to Mr Wood asking him to inform me of his client's position on the same issue. I attach a copy of my email to him. In your last email you said that you were 'investigating/considering the issue'. I wonder whether you have formed a view on the issue? If you have, I would like to know it.
As I have recorded in [75] above, Mr Sames ceased to act on 8 March 2023. The next day Mr Scheib sent the following email: Dear Mr Sames Thank you for your email of 8 March. I was a little surprised at your abrupt departure from the scene. I was even more surprised that you departed without saying a word about: 1. Why the transfer of [the property] from Don to Shirely was not registered on or very shortly after 22 September 1976; 2. Why you acted on Don's written instructions of 21 February 2005; 3. Why you prepared Shirley's will in October 2015 which included the gift of [the property] to Stephanie subject to Don's right to reside in it during his lifetime, knowing that the transfer had not been registered and that you were holding it in accordance with Don's instructions. 4. Why you did not, it seems, inform Shirley when she provided you with instructions to prepare her will that she was not the registered proprietor of [the property], that you were in possession of the transfer from Don to her and were holding it in accordance with Don's instructions; 5. Why you did not, it seems, inform Ms Brown and Ms du Montiel [the defendant executors] that you were in possession of a transfer of [the property] from Don to Shirley and were holding it in accordance with Don's instructions; and 6. Why you acted on Don's written instructions of 3 May 2018.
Mr Scheib's questions were undoubtedly pertinent. However, they did assume that what had happened had been done on Don's instructions alone. As I explain in [117] below, I cannot accept that was the case up to and including the date of the 1981 letter.
On 15 March 2023 at 12:45pm, Mr Sames responded to Mr Scheib's email sent on 9 March 2023: Dear Mr Scheib, As a matter of courtesy we acknowledge receipt of your email of 3:43pm of 9 March 2023.
Seven minutes later, on 15 March 2023 at 12:52pm, Mr Scheib responded to Mr Sames': Dear Mr Sames, Thank you for extending to me the courtesy of acknowledging my email of 9 March. Do I take it that you do not intend responding to the questions asked of you in my email? If that is your position, I do not understand it. You could at least inform me whether you have located a file relating to Mr Clinch's sale of [the property] to the deceased.
There is no evidence of further correspondence between Mr Sames and Mr Scheib.
Mr Bilinsky submitted that the emails set out at [85] to [88] above, combined with the fact that it was only Fiona that had Mr Sames' file in relation to Donald and tendered evidence from that file, demonstrates that the Court should, applying Jones v Dunkel, infer that Mr Sames' evidence would not have assisted Fiona's case. In addressing objections to evidence, Mr Fernon SC foreshadowed a similar submission against Stephanie.
The Court can only treat the absence of Mr Sames as a neutral factor, for these reasons: 1. A Jones v Dunkel inference may be drawn if the witness is one who it might be expected one party might call rather than the other. In this case, Mr Sames having acted for both Donald and Shirley, either party might be expected to have called him. 2. There is no evidence that Stephanie or her lawyers sought access to Mr Sames' file by compulsion of law (for example by issuing a subpoena to Mr Sames) and were denied access. For his part, Mr Fernon SC informed the Court: "We do not have the complete file" (Tcpt, 22 July 2024, p.53(15)-(16). 3. Even if the witness might be expected to have been called by the party concerned because they could give evidence on the matter in issue, the inference will not be drawn if there is a reasonable explanation for the failure to call the witness. The Court infers from the last exchange of emails between Mr Scheib and Mr Sames (see [83] to [88] above) that Mr Sames did not wish to be further involved and would have required to give his evidence under subpoena. It is a reasonable explanation that neither side wanted to call Mr Sames "blind": Fabre v Arenales (1992) 27 NSWLR 437 at 450 (per Mahoney JA; Priestley and Sheller JJA agreeing). 4. The nature of the forensic decision making was clear to the Court. In describing it thus, no criticism is intended of anyone because it involved a common litigation calculus. Either side could have called Mr Sames. Mr Sames, for his own reasons, but which may well have included concern about professional liability, had ceased to act and was not going to assist either party. Neither party was prepared to call him because, notwithstanding whatever was available to them from his file, neither could be certain who would be assisted by his evidence in the absence of having been able to speak to him in advance.

[4]

Consideration and completion

It is convenient to consider these two topics together. The parties disagreed whether the Court could find, relying on the acknowledgement in the transfer, that the consideration of $14,500 had been paid.
Fiona challenged whether the consideration referred to in the transfer had actually been paid. Without consideration being paid, then Mr Fernon SC submitted that the arrangement between Donald and Shirley could only be characterised as a gift of the property to Shirley. As the gift was never perfected by Shirley becoming the registered proprietor of the property, the gift would fail with Shirley's death.
Mr Fernon SC argued that the debt forgiveness in Donald's wills prior to Shirley's death purporting to release her from paying any debt in relation to the sale or construction of the property indicates that Shirley did not pay the consideration to Donald. It was contended that the "release" could only refer to the consideration for the property.
Mr Fernon SC also submitted that the Court can take judicial notice that in NSW, conveyancing practice in the 1970s was that the purchase price was paid at the time of settlement of the conveyance and the transfer prescribed and required to effect registration was a document that was prepared and signed prior to settlement. Each side produced conveyancing texts of the relevant time which demonstrated that: 1. the vendor's signed transfer was prepared and signed before settlement; and 2. the purchase price was paid at settlement.
This process necessarily involved the vendor executing a transfer that formally acknowledged a receipt of the purchase price before the purchase price had in fact been paid. As part of the settlement process, the transfer was handed to the solicitor for the vendor to hold in escrow, pending receipt of the purchase price. If other conditions, other than payment of the purchase price, existed before settlement could occur, the transfer was held by the solicitor in escrow, pending compliance with those conditions also.
Mr Fernon SC also sought to rely on Penhall (as Executor of the Estate of the late Sukkar) v Abu Tony Pty Ltd (atf Abu Tony Discretionary Trust) [2023] NSWSC 434 at [74]-[76] (Robb J) as authority demonstrating that in the absence of evidence of a settlement ever occurring, acknowledgment of receipt of the purchase price is not proof of that receipt: [74] The first legal issue that must be addressed is Abu.Tony's submission that SC 59 and the Acknowledgement do not provide conclusive proof that Mr Taouk was indebted to Mr Sukkar, as stated in the documents. [75] In support of this submission, Abu.Tony relied upon the well-established principle that acknowledgements of the receipt of money in a conveyance or transfer or a mortgage, or similar instrument, do not conclusively prove the receipt. At most, the acknowledgement will be evidence of the receipt, with the weight of such evidence depending upon the circumstances. As the High Court (Dixon, Fullagar and Kitto JJ) said in Petersen v Moloney (1951) 84 CLR 91; [1951] HCA 57 at 100: "The acknowledgement of payment in the transfer does not create an estoppel against the plaintiff (Burchell v Thompson (1920) 2 KB 80 at 86, per Lush J), but it is evidence against her, though in the circumstances not strong evidence…". This statement of principle was accepted by Kiefel and Gordon JJ (both in dissent) in Fischer v Nemeske (2016) 257 CLR 615; [2016] HCA 11 at [87] and [193] respectively. The Court of Appeal accepted the principle in its application to an acknowledgement of receipt of an advance in a mortgage in Ippin Textiles Pty Ltd v Winau Aust Pty Ltd [2021] NSWCA 9; (2021) 20 BPR 41,125 at [34]-[41] (Macfarlan JA, Leeming and Brereton JJA agreeing). [76] The further acceptance of the principle by the Appeal Division of the Supreme Court of Victoria in Pascon Pty Ltd v San Marco in Lamis Cooperative Social Club Ltd [1991] 2 VR 227 (Kaye, McGarvie and Brooking JJ) is illuminating insofar as it provides an elaboration of the operation of the principle. As Brooking J (who delivered the leading judgment) explained at 230: "Acknowledgements of payment in a conveyance or transfer are not, to use the language of Bowen LJ in Clarke v Ramuz [1891] 2 QB 456, at p 461, provisions of a kind which the parties could have intended should extinguish the obligation to pay the price." Consequently, the obligation on the purchaser to pay the price does not usually merge in completion of the contract. Therefore: "the fact that the conveyance or transfer contains a receipt by the vendor for the purchase price when that price has in fact not been paid will not prevent the vendor from asserting his lien or from recovering the price…" His Honour, at 232, accepted the principle stated in Petersen v Moloney, and then observed in relation to any argument that the vendor may be estopped from denying receipt of the price: "This impudent defence was abandoned below, and rightly so. The purchaser was in no way misled…". That observation recognised the reality that a purchaser who has not paid the purchase price will not usually be able to say that the existence of the acknowledgement of receipt in the transfer caused it to believe that it had paid the price.
In response, Mr Bilinsky submitted that reliance on historical standard conveyancing practices was irrelevant because this conveyance was not an ordinary conveyance. The extraordinary aspect was Mr Sames acting as the solicitor for both sides of the purchase. The conveyancing process was different to the extent that Mr Sames did not have to have to consult with a different solicitor acting for Shirley as purchaser, there was no need to fix a future settlement date for payment after the time the transfer was signed, no searches needed to be conducted, none of the usual financial adjustment relating to usual rate payments needed to be made, no mortgage was required to be discharged and nor was there an incoming mortgagee arranging the payment.
On this basis Mr Bilinsky submitted that the signing of the transfer therefore effectuated the completion of the contract and that signing provided Shirley with the immediate ability to have the transfer registered. Execution of the transfer was submitted to constitute completion of the contract. Mr Bilinsky invited the Court to take judicial notice that the transfer had to have been executed by Shirley before it could be stamped by the SDO, accompanied by the contract and prior to settlement.
Mr Bilinsky submitted that whilst the actual conveyance may not have been "completed" (because the transfer was never registered), the contract for the sale of the property was. Mr Bilinsky referred to the 1981 letter where Mr Sames says the contract was "binding" to support the proposition that the contract was completed.
Mr Bilinsky also relied on Penhall at [76] as support for the proposition that if a vendor does not receive the purchase price as provided by the contract, the acknowledgement given by the vendor will not prevent recovery of that purchase price. In such a case, while the purchaser will continue to owe the money, this would not preclude him or her from relying upon the registrable transfer so as to obtain registration of it and acquire the legal title.
Any attempt to suggest that Donald's acknowledgment of receipt of payment on the transfer was not an accurate statement of events was submitted to be an 'artificial' interpretation of the acknowledgment. Mr Bilinsky also contended that the evidence before the Court, viewed objectively, indicated that consideration had been paid. This evidence included that Donald had provided to Shirley's solicitor a signed transfer (being an act which occurs upon receipt of payment at settlement); the absence of evidence at the time of the execution of the transfer to indicate that Shirley owed Donald any money in connection with the Sale; that Mr Sames in the 1981 letter does not refer to any outstanding payment under the contract; and that Shirley was told in the 1981 letter that there was no impediment to her registering the transfer.
Mr Bilinsky submitted that even if an assumption was made that the payment of the purchase price would have to have occurred at a point after the date of the transfer, an inference is comfortably available that the payment to Donald did occur on the basis that the evidence suggests that neither Mr Sames nor Donald ever suggested that Shirey had not completed the contract because she had not paid the purchase price and this precluded her from registering the transfer.
The view to which the Court has ultimately come means that it is not determinative whether or not the consideration was in fact paid. However, the Court finds for the following reasons that it was not: 1. It may be accepted that the acknowledgment of receipt of consideration in the transfer is some evidence, its weight depending on the circumstances. 2. In the present case, the applicable conveyancing practice is one of the relevant circumstances, namely that, in a standard residential conveyancing transaction, the consideration was paid on settlement. That is the effect of the parties' evidence from texts of the time. It is also something so notorious that the Court treats it as a matter of common knowledge (see Evidence Act 1995 (NSW) s 144) (still informally referred to as judicial notice). 3. The meaning of "completion" of a contract for sale of land is (and was) "the final settlement of the business, including the complete conveyance of the property, and the giving of possession and the payment of purchase money" (R M Stonham, The Law of Vendor and Purchaser (1964, the Law Book Co of Australasia) at p 825). 4. I have no doubt that is the sense in which Mr Sames was using "completion" in the third paragraph of the 1981 letter. While there may not have been an exchange of counterparts (given this was a transaction between husband and wife) a valid and binding contract would have arisen upon their execution of the agreement, being the document on which ad valorem stamp duty had been paid. 5. To the extent this was a transaction between husband and wife and therefore not an "ordinary" conveyance, I accept that it is less likely that actual consideration would have been required to be paid as a precondition to release of the transfer for registration. However, in my view this is more consistent with Fiona's case: the evidence of the debt forgiveness demonstrates that completion was not to occur unless Donald predeceased Shirley, in which case the obligation to pay the consideration would be forgiven and the transfer could proceed to registration.

[5]

What kind of equity must Shirley have had at the date of her death to entitle her estate to the declaration?

The declaration requires the Court to reach a state of actual satisfaction on the balance of probabilities that the agreement between Donald and Shirley was such that, at her death, she held the whole of the equitable estate or interest in the property. However, as the Full Court of the Supreme Court of Queensland held in Road Australia Pty Ltd v Commissioner of Stamp Duties [2001] 1 Qd R 327; [1999] QCA 328, it is not the law that the entire beneficial estate passes to the purchaser on the making of the contract for sale of land. To be entitled to the declaration, it would be necessary for the vendor to be in the position of a bare trustee, from whom the purchaser could, in accordance with Saunders v Vautier (1841) Cr & Ph 240; 49 ER 282, demand an immediate conveyance of the legal estate, in the Torrens context being to demand delivery up of the certificate of title and a transfer in registrable form: Road at [19]. This would be done by seeking specific performance. The qualifications to Saunders v Vautier by the High Court in CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98; [2005] HCA 53 at [50]-[51] concerning the trustee's rights of indemnity or exoneration are not relevant in the present case.
The shifting nature of a purchaser's beneficial ownership of, and equitable rights in, a property subject to a contract for the sale of land have been conveniently summarised by Emmett JA (with whom Macfarlan and Gleeson JJA agreed) in Golden Mile Property Investments (in liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237; [2015] NSWCA 100 at [103]-[105] which I respectfully adopt and apply: [103] Once a contract for sale of land has been entered into, beneficial ownership is, in a sense, split between the seller and buyer on the provisional assumption that specific performance is available and that the contract will in due course be completed, if necessary by a court ordering specific performance. As the contract proceeds to completion, the equitable interests can be viewed as passing to the buyer in stages, as title is made and accepted and as the purchase price is paid in full. In order to consider whether specific performance, or any other equitable remedy, would be ordered at a time prior to completion of such a contract, it is necessary to understand the respective rights of the vendor and the purchaser. [104] The purchaser's interest comprises four separate rights or "equities". First, the purchaser has an interest in the land that is enforceable against third parties and that can take priority over holders of competing interests. Second, the purchaser has an equitable right that the vendor exercise due care to preserve and maintain the land pending completion. Third, the purchaser has an equitable right to the rents and profits received by the vendor between the agreed date for completion and the actual date of completion (but the vendor has that right during the period between the date of contract and the agreed date for completion). Fourth, the purchaser has an equitable lien for repayment of the purchase price in the event of non-conveyance by the vendor. Of those four rights, the first and last are in rem rights over the land the subject of the contract. The vendor also has four such rights: to receive rents before completion, to retain damages recoverable against others for wrongs to the vendor's land before completion, to receive the purchase money on completion, and, in default, to enforce a lien for the purchase money. [105] Importantly, whether or not these "equities" arise, and the extent to which they may be enforced, depends on the time at which the enquiry is made, that is, for example, immediately after formation of the contract, or at a later point when the purchaser is ready, willing and able to tender the purchase price, or at a point after payment of the purchase price. Before completion, the purchaser has an equitable interest in the land that reflects the extent to which equitable remedies are available to protect the purchaser's contractual rights. The fact that the point may not yet have arrived that the purchaser can obtain a decree of specific performance does not mean that the purchaser is not entitled to other equitable remedies: the purchaser could, for example, obtain negative injunctions to enforce any of the four "equities" referred to above.
As I next turn to explain, the fundamental difficulty for Stephanie is that she cannot point to the terms of an agreement between Donald and Shirley (irrespective of the payment of consideration) that would have entitled Shirley at the date of her death to an order that Mr Sames release the transfer and certificate of title (the latter not having become obsolete until 11 October 2021) to enable registration. This is because the evidence does not permit the Court to find that Donald and Shirley ever agreed that the transaction between them should ever proceed to the point of registration of the transfer.

[6]

Discussion

It is trite law that in disputes relating to interests and ownership of land, s 41(1) of the Real Property Act (RPA) requires the Court's starting point to be to identify the registered proprietor of the land in issue: 41 Dealings not effectual until recorded in Register (1) No dealing, until registered in the manner provided by this Act, shall be effectual to pass any estate or interest in any land under the provisions of this Act, or to render such land liable as security for the payment of money, but upon the registration of any dealing in the manner provided by this Act, the estate or interest specified in such dealing shall pass, or as the case may be the land shall become liable as security in manner and subject to the covenants, conditions, and contingencies set forth and specified in such dealing, or by this Act declared to be implied in instruments of a like nature.
In this case, it is undisputed that since 1976 Donald has been the registered proprietor of the proprietor and, prima facie, Donald at his death was entitled to the full legal and beneficial interest in the property. The Court accepts the submission that subject to determining any equitable interest Shirley may have in the property, s 42 of the RPA makes Donald's registered interest paramount as none of the exceptions to the paramountcy rule outlined in that section are applicable.
Fiona accepted that s 41(1) RPA does not prevent equitable interests from being recognised. However, as the High Court noted in Chan v Cresdon Pty Limited (1989) 168 CLR 242, at 257; [1989] HCA 63, equitable interests can only be established if there is evidence of an antecedent agreement which founds the equitable interest: The point made in this passage is that, though the unregistered instrument is itself ineffective to create a legal or equitable estate or interest in the land, before registration, the section does not avoid contracts or render them inoperative. So an antecedent agreement will be effective, in accordance with the principles of equity, to bring into existence an equitable estate or interest in the land. But it is that antecedent agreement, evidenced by the unregistered instrument, not the instrument itself, which creates the equitable estate or interest…
The High Court's statement that the antecedent agreement can only be 'evidenced by the unregistered instrument, not the instrument itself' was relied upon by Fiona to contend that the transfer itself is insufficient to establish the equitable interest. There must be evidence of either of the terms of a written agreement (I pass over oral agreements and part performance) which is given effect by the transfer to establish the equitable interest. It is only if the Court is sufficiently satisfied that there was a contract and of the terms of that contract, that the Court could recognise any purported equitable interest that Shirley had in the property.
As I have already noted (see [31] above), it was accepted by both parties that there must have been a written agreement between Donald and Shirley at least for Donald to transfer the property to Shirley for consideration of $14,500 and upon which ad valorem duty had been paid. This agreement was to be given effect by the transfer which had been marked by the SDO with nominal duty of $1. It is helpful to put this in its legislative context.
In September 1976, Stamp Duty was governed by the, now repealed, Stamp Duties Act 1920 (NSW). Section 41 outlined how agreements for the sale or conveyance of property would be stamped. As at 22 September 1976 that section of the Act provided 41 Agreements for sale or conveyance to be chargeable as conveyances (1) Every agreement for the sale or conveyance of any property in NSW shall be charged with the same ad valorem duty to be paid by the purchaser or person to whom the property is agreed to be conveyed as if it were a conveyance of the property agreed to be sold or conveyed and shall be stamped accordingly. (2) An agreement for the exchange of any property for any other property shall for the purposes of this Act be deemed to be an agreement for the sale of the property to be exchanged. (3) Where the agreement is constated or evidenced by two or more instruments it shall be sufficient if any one of such instruments is stamped with the duty aforesaid. (4)(a) Where duty has been duly paid in conformity with the foregoing provision, the conveyance made in conformity with the agreement or agreements shall not be chargeable with ad valorem duty, but shall be chargeable with a duty of one dollar, provided that where the ad valorem duty charged on such agreement (or in case there is more than one of such agreements on the agreement carrying the highest ad valorem duty) is less than one dollar, the said ad valorem duty or the said highest ad valorem duty as the case may be shall be chargeable in place of the said duty of one dollar. ….
Consistent with s 41(4), the stamping of the transfer with nominal duty of $1 reflects that the SDO was satisfied that ad valorem duty had already been paid on the agreement which had given rise to the transfer. The parties have therefore accepted, and the Court finds, that there must have been an antecedent written agreement between Donald and Shirley which had been lodged at the SDO and upon which ad valorem duty had been paid (and in respect of which some refund was sought on behalf of Mr Clinch - see 28(3) above).
However, as noted in Chan at [110] above, it is that antecedent agreement, not the instrument itself, which creates the equitable estate or interest that creates an equitable interest in land. The transfer demonstrates that there was a contract, but for the Court to make the declaration, the Court must be actually satisfied of the terms of the agreement said to give rise to Shirley having the entire beneficial ownership of the property at the date of her death.
That written agreement is not in evidence. In a straightforward case, it might be sufficient for a party in Stephanie's position to say that the Court should infer the terms of the agreement from the transfer, being an unconditional sale and purchase. However, if that were the case, the transfer should have been registered on or shortly after 22 September 1976. This did not happen, so the Court cannot be satisfied that such an inference is available.
The only contemporaneous document (at a distance of five years) that is in evidence is the 1981 letter. For this reason it is a, if not the, critical piece of evidence. I reproduce it again here for convenience of reference: Thank you for your letter of 6th November last. We see no apparent disadvantage in not proceeding towards registration of the Transfer at this stage provided of course there are no differences of opinion or conflict between yourselves in relation to the situation. A similar comment would apply in respect of the decease of either of you if problems develop between the Executors and the survivor of you. We think this situation unlikely of course. Our main reason in writing to you from time to time is so that it will be clear from our records that we have not failed to take any action that might have been expected of us. In our opinion at this point of time, there is a valid and binding Contract between yourselves which has not been cancelled by mutual agreement nor repudiated expressly or by implication by either of you and that the Contract has just not been completed. Prior to its completion of course, the Contract could in fact by mutual agreement be cancelled.
There are a number of things to be said about the 1981 letter: 1. The letter is addressed to both Donald and Shirley and is plainly giving them both legal advice. The letter, together with the facts that Donald and Shirley were husband and wife; Mr Sames witnessed both their signatures on the transfer; and, there is no evidence that Shirley was ever separately represented in relation to the transaction, are the facts from which the Court finds by inference that Mr Sames was acting for both Donald and Shirley in relation to the transaction; 2. The letter of 6 November 1981 from Donald and Shirley to Mr Sames referred to in the first paragraph was not in evidence. I accept Mr Fernon SC's submission that some caution must be applied in making findings based on the 1981 letter when the Court does not have the context in which it was written, most pertinently the question which it was answering. 3. Notwithstanding that caution, I am satisfied from the first sentence of the second paragraph ("We see no disadvantage..") and the fact that the transfer had not been registered, that the subject matter of Donald and Shirley's inquiry to Mr Sames was whether there was any disadvantage to either of them (given the letter was written to them both) in "not proceeding towards registration of the" transfer. 4. I am fortified in the preceding conclusion by the third paragraph ("Our main reason in writing to you from time to time…".) There is no evidence of that correspondence, but I infer from the third paragraph that for prudential reasons Mr Sames had written more than once to Donald and Shirley seeking instructions about the completion of the transaction, given that he was holding the transfer and the certificate of title. I infer from the terms of the entire letter that the "any action that might have been expected of us" is at least the registration of the transfer.
The transfer was never registered. The 1981 letter invites the question why this was so. Mr Bilinsky submitted that the terms of the 1981 letter could only make sense if the agreement between the parties was unconditional. This is because the letter assumes that they could proceed to registration of the transfer if they wanted to do so. Otherwise, one might ask rhetorically, why ask whether there is any disadvantage in not registering the transfer? I accept Mr Bilinsky's submission. While the fourth paragraph of the 1981 letter could correctly describe a contract the completion of which had not yet occurred due to the non-fulfillment of a condition, the second paragraph is not consistent with such an unfulfilled condition.
If, for example, the agreement was conditional on Donald predeceasing Shirley (whether by reason of the surgery or otherwise), then that condition had obviously not been fulfilled at the date of the letter. However, if that was the case, I would have expected Mr Sames to have referred to such a non-fulfilment in the letter because, on that hypothesis, the occasion for "proceeding towards registration of the transfer" would not yet have arisen at the date of the letter. The absence of such a reference, together with the fact that the tenor of the letter is that all that had to happen was completion (about which Mr Sames had written "from time to time"), are why I find that the stamped written agreement did not include a term that the transfer to Shirley was conditional upon her surviving Donald.
However, that is not the end of the matter. This is because it is also clear from the non-registration of the transfer at the time of the 1981 letter, and the terms of the letter itself, that (and the Court finds): 1. At some point, probably at the time the transfer was signed (or very shortly thereafter given that on the view I have taken of the agreement Mr Sames would otherwise have immediately set about registering the transfer), Mr Sames was instructed by his clients, Donald and Shirley, that the transaction was not to be completed at that time; and 2. Those instructions reflected an arrangement (the non-completion arrangement) to that effect between Donald and Shirley. It had to be a consensual arrangement between them because Mr Sames was acting for them both (and continued to do so at the time of the 1981 letter, which he could not have been doing if there was a disagreement between them) and the letter itself said "provided of course there are no differences of opinion or conflict between yourselves in relation to the situation". In its context, I am satisfied "the situation" means the consensual non-completion of the transaction.
I have used the term "arrangement" advisedly. That is because there is insufficient evidence for a precise legal characterisation of the arrangement or its terms to be identified. It could be waiver, forbearance, an estoppel of some kind or (not overlooking the need for writing) contract (for example, a variation of the initial agreement or a contract collateral to it). The difficulty for Stephanie is that to succeed, she must persuade the Court on the balance of probabilities that, at the date of her death, Shirley had the estate in the property claimed in the declaration. That turns on whether an order in the nature of specific performance would have been available to Shirley at the date of her death against Donald. The Court cannot be satisfied it would have been.
The Court cannot be so satisfied because it appears Donald could have answered such a claim by saying that he and Shirley had an arrangement that the transaction should not be completed. On the available evidence, the Court cannot conclude on the balance of probabilities that such an answer, however legally framed, could not succeed. Stephanie cannot point to any basis on which the Court could infer a term of the non-completion arrangement that would change that result other than, perhaps, as matter of common sense, "until we agree otherwise". If that were the case, there is no evidence of Donald and Shirley "agreeing otherwise" after November 1981.
In reaching this conclusion, I have not overlooked that this was not an arm's length transaction, but therein lies the difficulty for Stephanie's case. The Court is well familiar with the challenge of having to identify legal or equitable rights arising from longstanding family arrangements of varying degrees of formality (or informality). As at the date of the 1981 letter the non-completion arrangement must have been in place. Stephanie has not demonstrated that anything had changed by the date of Shirley's death.
Does the evidence of what occurred afterwards change this result? This requires consideration of the 2005 instruction.
It was put for Stephanie that the 2005 instruction was either or both of legally ineffective in the light of the agreement and transfer or represented Donald attempting to renege on the agreement behind Shirley's back, and therefore said nothing about Shirley's rights in the property. I do not agree for these reasons: 1. There is no evidence what Donald's motive might have been to renege on their arrangement. For example, there was no suggestion in the evidence that Donald might have had reason to believe at that time that Shirley was going to ask him to move from the property. There is no suggestion in the evidence that they were anything other than happily married until Shirley's death. 2. Mr Sames was acting for both Donald and Shirley in relation to the transaction. Had he become aware that there was a disagreement between them about the non-completion arrangement, he would have had to cease to act. This did not occur and he continued to undertake work for both of them, in particular preparing their wills over many years. 3. It is possible (I put it no higher) that given Donald had initiated the transaction (see [28] above) he had actual authority to instruct Mr Sames on behalf of both himself and Shirley in relation to the transaction. This is consistent with Ms Kelly's evidence referred to in [54] above. I make this observation with no disrespect to Shirley, but the experience of the law over many generations is that for entirely proper purposes wives were parties to transactions at the behest of their husbands especially where, as in this case, the transaction was for Shirley's benefit. 4. Whether or not Donald had that authority, if the 2005 instruction reflects an existing term of, or a consensual change in, the non-completion arrangement, then it is fatal to Stephanie's case. However, nor does it assist her case if the 2005 instruction is Donald's alone and therefore ineffective to change the arrangement, because it still leaves the evidence of the non-completion arrangement as it was in November 1981. All the Court can conclude is that there was an arrangement not to register the transfer. There is no evidence from which the Court can infer a term as to when the transfer might be registered (noting the possibility to which I have referred in [123] above).
I should also refer to one other possible analysis which is a variation on [126(3)] above. I have found that Mr Sames was acting for both Donald and Shirley. However, as I pointed out in [28] above, the transaction was initiated by Donald, with stamp duty paid by Donald, for Shirley's benefit. On this view Shirley was a passive recipient of Donald's largesse. As I have already noted, such circumstances are not unknown. If the true nature of the transaction were to be analysed as a conditional gift to Shirley on Donald's terms, with Mr Sames acting solely for Donald and acting only on Donald's instructions, then Stephanie's case would still fail.
Finally, when considering the onus which Stephanie has in these proceedings, I cannot reach the appropriate state of satisfaction when I add into the evidentiary balance, in addition to the matters set out in paragraphs [121] to [126] above, the various evidence I have set out which points to the transfer being conditional on Donald predeceasing Shirley. While it was not for Fiona to prove the terms of any agreement, none of that evidence is inherently incredible. Even discounting to some extent Donald's evidence recorded in [70] to [79] above for the possible impact of dementia, all of the evidence advanced in Fiona's case was either expressly that the transfer was not to occur unless Donald died before Shirley or at least consistent with that analysis.
Of particular importance in giving weight to the possibility that any transfer was conditional on Shirley surviving Donald is that it is completely consistent with the debt forgiveness in the various wills Mr Sames prepared for Donald. While it is inconsistent with Donald's right to reside in Shirley's wills, and making no express finding to this effect given Mr Sames was neither a party nor a witness, I have concluded on the evidence in these proceedings that a plausible explanation for the inconsistency is that Mr Sames erred in his understanding of Donald and Shirley's respective rights in the property.

Clinch v Brown

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