Douglas Smith v Ceciline Smith

3589/02 DOUGLAS SMITH v CECILINE SMITH JUDGMENT 1 HIS HONOUR: The plaintiff sues his mother, seeking the specific performance of an oral contract for the transfer to him of certain land. In the alternative, he sues upon a proprietary estoppel, claiming in substance the same practical result, namely that the land be transferred to him upon her death. 2 There are many facts that are in dispute, but some things are common ground. The defendant is about 82 years old. She was married twice. There were five children by her first marriage: Marie, born in 1941, Ceciline, born in 1943, Edith (now Mrs. de Groot), born in 1945, Malcolm, born in 1947, and the plaintiff, born in 1951. The defendant's first marriage ended (it seems) in divorce, and in 1975 she re-married. Her second husband, Toby Marlin, died in 1982. There were no children of that marriage. Later, she formed a relationship with Arthur Barn. The question was not explored in evidence, but it might be that she and he have lived together in a de facto relationship for about the last 20 years. She said without challenge that she has been known since 1975 as Mrs. Marlin. When the proceedings were commenced, the plaintiff's claim concerned the extension of a caveat that had been lodged upon the title to the land in question, and the defendant was registered as the proprietor of that land, under the name Smith. Nothing turns now upon these changes in name. 3 On the evidence, the defendant was not well treated by her first husband. She separated from him, apparently no later than the early 1960's, and in 1962 she moved from the Macksville District to Riverstone, in order to take up a position as a cleaner. She worked in that capacity, as well as in the capacity of a mail contractor, in the Riverstone District, for about the next 20 years. Her first husband apparently paid her some money by way of periodic maintenance, although it might be that the sums paid were insufficient for her needs. It also seems that the defendant has not been on speaking terms with her daughters Marie and Ceciline for many years, and they play no part in the disputes the subject of this litigation. 4 At some stage the defendant acquired the title to the property the subject of the litigation, known as 50 Castlereagh Street, Riverstone. She was then living apart from her first husband, and was unable to borrow the necessary money to buy the property, according to the practices of financiers at that time. However, with the aid of an aunt, she did acquire the property, paying off the purchase price and/or a mortgage debt over a period of years, and apparently without paying any sum of money by way of conventional "deposit". It is clear that during this period she worked hard, that she was helped by each of Edith, Malcolm and the plaintiff, and that during this period she was on friendly terms with those three of her children. 5 Malcolm served in the Navy, for a period the extent of which is not established. The plaintiff served in the Army from 1974 to 1980. Before enlisting, and for a time after leaving the Army, he was hard working, and had reasonably significant savings. There is no reason to think that either Edith or Malcolm was otherwise than hard working. 6 The plaintiff said, and I accept that, whilst he was in the Army, he made an allotment of part of his pay in favour of the defendant, and that he gave her an authority to operate upon a bank account held in his name. It might be that Malcolm acted in the same way. In any event, the plaintiff said, and I accept that the defendant acted in such a way as to cause a number of parcels of land to be acquired, three of them in Tasmania, purchased respectively in the names of the defendant, Malcolm and the plaintiff, as well as another parcel of land at Killarney Vale, purchased in the names of Malcolm and the plaintiff. The land purchased in the name of the plaintiff, and in the names of Malcolm and the plaintiff together, was purchased using money from the plaintiff's bank account. Presumably, the same is true of the land purchased in Malcolm's name, and part of the purchase price of the land purchased in the names of Malcolm and the plaintiff. 7 The plaintiff was married on 11 October 1980. Shortly afterwards, he and his wife Meryl commenced living in rented premises in Oliver Street, Riverstone. The rent, described as a commercial rent, was $80 per week. The evidence that this amount of rent was a commercial rate is weak, but the rent was paid to a stranger to the litigation, and was apparently fixed by arm's length arrangements, and there is no evidence to the contrary. Later, the plaintiff and Meryl had two sons, one of whom suffers from some significant disability, with the consequence that Meryl is paid a carer's allowance in respect of that child. 8 Malcolm became the owner of the land known as 53 Castlereagh Street, Riverstone, situated almost opposite No. 50. It appears that he has never married. 9 In 1982, the defendant vacated No. 50, and moved in to live with Malcolm at No. 53. I gather that, until that move, she had lived for some time at No. 50 alone. At about the time that she moved, she allowed the plaintiff and Meryl to move into No. 50, and they (and their children) have lived there ever since. In 1984 the property was badly damaged in a storm. The property had been insured by the defendant and the insurer met a claim that the defendant made in respect of the storm damage. The sum paid by the insurer apparently represented the amount quoted by a builder in respect of the cost of repairs, including an allowance for carrying out certain painting work. One of the disputed facts in the case concerns the painting work. It is common ground that the defendant did not retain the builder who had given the quote that the insurer accepted to do the painting work. Rather, it was done by some person or persons within the extended Smith family. 10 In 1982, sometime after the defendant moved from No. 50 to No. 53, Malcolm sold No. 53 and moved to another property which he purchased, at Londonderry, and the defendant and Mr. Barn moved to that property to live with Malcolm. The detail about this is not established, but in general terms the three of them lived in that property from about 1982 to about 1996. Malcolm then sold the Londonderry property, and purchased another property at Nabiac, and the three of them lived there until about 2001. During that year Malcolm suffered a cerebral haemorrhage. 11 That haemorrhage and its consequences had significant impacts upon his lifestyle, and the lifestyle of the defendant and of Mr. Barn. Somehow, the defendant arranged for the sale of Malcolm's property at Nabiac, and the acquisition of another property at Prenzlau, in Queensland. Malcolm is now quite disabled, and the defendant receives a carer's allowance, in respect of her care of him. It might be that the defendant's perception of her needs and/or Malcolm's needs led to her speaking of selling the property the subject of this litigation. I make no finding as to this, but observe that each of the parties appears to deserve both sympathy and respect for their circumstances. 12 After the plaintiff left the Army in 1980, he worked as a security officer. In about November 1982 he was convicted on a drink/driving charge, lost his driver's licence, and lost his job. He remained unemployed until 1989. He then worked again as a security guard for some months, and then as a labourer for about 4 years, before suffering some work injury in about April 1993. He made a claim for worker's compensation benefits. Later, he was paid two lump sums, and it seems that the effect of one or both of these payments was to extinguish his worker's compensation rights. The first, in 1996, was for about $32,000 and the second, in about 1998, was for about $71,000. He has not worked since 1993, and is now in receipt of Social Security benefits, supplemented by the carer's allowance paid to his wife. 13 The defendant and Mr. Barn are also dependent on Social Security benefits, supplemented by a carer's allowance paid to the defendant, in respect of the care of Malcolm. To say the least of it, the parties cannot afford this litigation. 14 Almost every other circumstance is in dispute. 15 The plaintiff puts his case in two ways. First, he says that there was a contract, made orally between himself and the defendant in about March 1982, to the effect that he would occupy the property at No. 50, paying the defendant the sum of $80 per week initially, payable fortnightly in arrears, or such other sum as the parties might thereafter agree upon, until the defendant's death, and that upon her death the property would be his. On his case, it was a term of the agreement that he would generally pay for or effect the maintenance of the property, and that he would pay for the electricity and telephone accounts in respect of the property. On his case, the sum of $80 per week was increased to $96 per week in about 1986, and to $150 per week in 1990. In addition, there was an agreement made in 1988 that the plaintiff would pay half of the annual Council rates; and a further agreement made in early 2002 that the plaintiff would pay the Water Rates in respect of the property, subject to the plaintiff deducting from the weekly amounts otherwise payable by him $60 in respect of each Water Rates account paid. Each of these agreements was made orally. 16 As the plaintiff concedes, the original agreement, and each agreement varying the original agreement, was made orally, and each of these agreements is prima facie unenforceable. However, the plaintiff says that there has been part-performance of the original agreement, as varied, and he seeks specific performance. Alternatively, he asserts the existence of a proprietary estoppel. He says that, relying upon the representation made to him in about March 1982 that the property would be his upon her death, he complied with all terms then and thereafter agreed upon, occupied the property, and paid the sums agreed upon; and he says that he has suffered a detriment, so that it would be unconscientious for the defendant to be permitted to depart from her representation. The essence of the case in estoppel is that the plaintiff has lost the opportunity to acquire, as owner, either another property in which he and his family might live. 17 On the defendant's case, she was at all times the lessor to the plaintiff of the property in question, pursuant to a conventional (if oral) agreement for lease; she has never said anything to the plaintiff to the effect that the property would be his on her death; and generally she disputed virtually every individual ingredient in the plaintiff's case, and virtually all of the adjectival circumstances upon which the plaintiff relied. 18 There were five witnesses who gave evidence concerning the supposed contract, its variations, its performance, and the supposed estoppel: the plaintiff, his wife Meryl, the defendant, Mr. Barn and Mrs. de Groot. It is really no matter for surprise that their accounts of the events of a period in excess of 20 years differ, and that they often expressed themselves in quite vague terms. There are few people who are able to speak accurately and reliably about the events of so long ago, without recourse to contemporary records, and these people are not the type of people who keep contemporary records. Whilst there are some records in evidence, they are rather fragmentary. 19 I do not regard the plaintiff as a satisfactory or reliable witness: he presented as belligerent and argumentative, and his evidence was not entirely consistent. However, my impression is that he told the truth as he perceived it. After his marriage, he seems to have left the management of his financial affairs to his wife, including negotiations with the defendant concerning the amendments to the original 1982 agreement that he participated in, and it is plain that, generally speaking, his wife handled the financial affairs of the immediate family. 20 The defendant impressed me as an even more unsatisfactory and unreliable witness. She was also inclined to be belligerent and argumentative. She gave evidence on two different days. On the first of these days, she seemed to be reasonably competent and alert, and to have relatively little difficulty understanding and answering questions, but on the second day, she seemed to adopt the role of a very old person, unable to remember anything significant. However, she ruined the effect by twice snapping at cross-examining counsel, as if labouring under no difficulty at all, other than in the role she had apparently assumed. So far as I could tell, when it suited her, she said that she remembered things, but when she thought it was inappropriate to remember things, she said she could not remember them. 21 With less emphasis, I also thought that Mr. Barn was an unreliable witness. I do not doubt his good will towards and his affection for the defendant, but these matters seemed to carry with them an adoption in his mind of the defendant's case. He said that, in the course of the preparation of the case for trial, he had read over to the plaintiff various documents. I see nothing sinister in this, but I do think that it served to focus his sympathy upon the defendant's case, adversely to the plaintiff's case, and to have coloured his evidence, probably unconsciously. 22 The evidence of Mrs. de Groot touched only marginally upon the significant disputes in the case, but her antipathy towards the plaintiff was marked. 23 On the other hand, I accept the plaintiff's wife, Meryl Smith, as a reliable witness. I will mention later some of the details of the evidence given by her and by the plaintiff that I find troublesome, but in general terms I think that she was both truthful and reliable. I consider that whilst some of the detail of her evidence might not ultimately be acceptable, the general thrust of her evidence is acceptable, and her evidence is the most reliable oral evidence given at the trial. Given these views, I doubt that there is any advantage to anyone in my now examining the minutiae of the disputed facts. 24 If the evidence of the plaintiff and of the defendant about the original supposed agreement of March 1982 stood alone, I am not sure that I would have been persuaded to accept the evidence of one party to the other, but I do accept the general evidence of Meryl Smith, with the consequence that there is persuasive corroboration for the evidence of the plaintiff about the original agreement. Generally, I prefer the evidence of Meryl Smith to the evidence of either the defendant or Mr. Barn, whenever there is a disputed question. That is, I accept that from about 1982 onwards, she made payments to the defendant on a periodic basis, that the defendant called "rent", although I do not accept that this word should be used as a lawyer would use it. The amounts payable were, I find, varied from time to time, as Meryl Smith described the discussions she had with the defendant. 25 I see considerable force in the submissions put on behalf of the defendant that, in 1982, when she was 60 years old, it is objectively unlikely that she would have offered to dispose of her sole, or at least her only major asset in the way that the plaintiff contends for, to the plaintiff as only one of her five children, thereby depriving herself of her only significant future source of funds, if she had not found it congenial or convenient to continue to live with Malcolm, but my impression is that that is just what she did. She may have acted impetuously, or without thinking the matter through properly, and perhaps she did not consider, or did not consider properly her other possible future needs, or the calls of her other children upon her future estate. 26 There are a number of disputed circumstances, about which I need to say something, other than these generalities. 27 The first concerns the circumstances in which the plaintiff left the rented premises in Oliver Street, Riverstone and moved to 50 Castlereagh Street. On the plaintiff's case, he moved out of the Oliver Street premises, which were somewhat superior, to avoid paying "dead money" in rent at Oliver Street, he relying on the defendant's representation that 50 Castlereagh Street would be his upon her death. In the meantime, he was to pay her $80 per week, this being the amount that he was paying for rent at Oliver Street. The defendant disputes a number of aspects of this part of the plaintiff's case. I do not think that the evidence shows that she actually knew anything of the detail of the Oliver Street premises, so that she is not able to offer any objective comparison between the two properties. Independently, I am persuaded that the defendant did say words to the plaintiff, generally as he described them (and as his wife in substance corroborates), including a reference to the undesirability of continuing to pay "dead money" for rent. I doubt that anyone can be expected to remember with any real precision what was actually said so long ago, and, vague and legally imprecise as the plaintiff's account is, I find that the words that the defendant used served to motivate the plaintiff to move into 50 Castlereagh Street, together with his wife. The evidence does not suggest that he moved into those premises in order to assist the defendant in any way. She wanted to move out, to live with Malcolm, and it seems likely that at the time it was to her financial advantage that someone should move in to No. 50 and pay her a periodic sum of money in respect of the occupation of those premises. However, this question was not explored in evidence. 28 Next, there is a debate as to how much money was paid each week, in the period commencing in 1982, and whether the defendant gave to the plaintiff (or his wife) any receipt for that money. On the plaintiff's case, $80 per week was paid, initially, but on the defendant's case it was only $74 per week. The defendant produced a docket book, which she called a receipt book, exhibit 11. It purports to record payments of $148 per fortnight. If it stood by itself, I would accept it as accurate, but there is other evidence to consider. The cross-examination of the defendant was quite restrained - I do not doubt for perfectly proper reasons - but exhibit 11 has to be considered in its context, including what the defendant said, what Meryl Smith said, and by looking at exhibits 4 to 8 inclusive. To pause to give these various exhibits adequate consideration is to be troubled about their authenticity. However, these matters were not explored in cross-examination of the defendant, and I put aside as irrelevant my doubts about some aspects of their authenticity. 29 However, doing that, I am left with the stark contrast between the evidence in the plaintiff's case, including particularly that of Meryl Smith, and the evidence in the defendant's case, and I am satisfied, notwithstanding the documents mentioned, that I should accept the evidence of Meryl Smith. That is, notwithstanding the entries in the docket book showing debts or payments of $148 per fortnight, I find that the plaintiff (or his wife) paid the defendant the sum of $160 per fortnight initially. I prefer the evidence of Meryl Smith to other evidence in the case, to the effect that only one receipt was ever actually delivered, and that this has been lost. I find also that the plaintiff, acting through his wife, made the payments that had been agreed upon, as varied from time to time, generally in a timely manner. Whilst there were arguments on occasions about the payment of money, these arguments related to Water Rates, rather than the periodic payments mentioned above. 30 Another topic of controversy concerns the repairs effected after the storm damage of 1984. The defendant obtained a quotation from a builder, which quotation included various allowances for painting work. After the insurer had paid the defendant the amount mentioned in the quotation, the painting work contemplated was carried out by some person or persons within the extended Smith family. There is a dispute who did the work, and how much of it, and there are disputes about costs incurred in purchasing paint. All this is part of a wider dispute concerning maintenance and repair work carried out generally in respect of the property, over a period of years. The evidence about this is irreconcilable. Whilst I think that the evidence of the plaintiff and of Meryl Smith, as to the detail of the costs incurred by them in buying materials, should be treated with a degree of scepticism, I accept the general thrust of what they say. To put it generally, I accept that the plaintiff did set out to keep the property in a state of generally good repair, according to his standards, which are not the standards of everyone. I prefer his evidence and with more force the evidence of his wife to the evidence of the defendant and of Mr. Barn about these matters. Beyond this, the details of the facts debated seem more important in relation to the assessment of the credit of the witnesses than to the resolution of any legally significant issue in the case. 31 The defendant also relied upon the evidence of Mr. Barn, to the effect that the plaintiff had failed to accept various offers made to him by the defendant, for him to buy the property from her. Up to a point, this evidence is persuasive, because there is little or no denial of what Mr. Barn said, but it does not really answer the plaintiff's claim in estoppel: she made a representation to the plaintiff, he relied upon that representation, to his detriment, and she now seeks to depart from that representation. It does not matter that she made other offers to him, which he declined to accept. 32 Perhaps the strongest part of the defendant's case, factually, lies in the docket book, exhibit 11, considered together with exhibits 4 to 8, and the paucity of the cross-examination of the defendant concerning the authenticity of these records, buttressed by the doubts thrown up about the detail of the evidence of the plaintiff and his wife about the measure of the expense the plaintiff incurred in relation to painting. However, the strength of the plaintiff's case, which in my judgment overwhelms these matters, lies in my acceptance of the evidence of Meryl Smith, and my dissatisfaction and a discomfort with the evidence of the defendant. Some of the things she said, whilst in a sense unimportant, are very difficult to accept, for example her asserted inability to remember whether she had visited the plaintiff and his family at Christmas. 33 The defendant also relied upon the fact that the plaintiff had received two lump sums, or capital sums, in satisfaction of his worker's compensation claim, but had not used the money he received to make some offer, or some significant offer to the defendant to acquire the property in question. There are two points to this: a legal one and an emotional one. The legal one is however answered by the response that the plaintiff had no obligation at any particular time to accept the defendant's offers then made: he was entitled to rely upon the original representation, effectively continued as it was from time to time; and he did not have to change his position by reason of his having received the lump sums in question. They were, after all, compensation for his loss of earning capacity, and his money to spend as he thought best. 34 Nor does the emotional aspect seem persuasive in favour of the defendant. I entirely accept the criticism of the plaintiff's evidence about the money: it is difficult to imagine how a person such as the plaintiff, with his background, could have failed to recall at least in outline how it was that he spent the money he received. No doubt some of it was spent on a cruise - a family ambition? - (the defendant seems to have spent some of her money similarly, but, again, it was hers to spend), but if so, it is legally irrelevant. 35 Overall, I am left with the clear impression that the parties, acting consistently with their personal qualities, experience and background, entered into an oral arrangement, generally as the plaintiff's case puts it, first in 1982, but subsequently varied from time to time. However, I do not accept that this constituted a contract, as the law knows it. There never was an amount fixed as the sum, or the capital sum payable by the plaintiff to the defendant for the property, and if the arrangement is considered as a contract for the payment of a reasonable sum, the evidence does not permit the assessment of what amount constituted a reasonable sum, or a finding as to when that sum was to be paid. I do not accept that the arrangement amounted to a contract to the effect that the property would be transferred from the defendant to the plaintiff upon the defendant's death, on terms that he only paid the periodic sums agreed upon from time to time, and the out-of-pocket expenses agreed upon from time to time, during the period of her life-time. 36 Further, even if there was an oral contract, admittedly unenforceable because of a lack of writing, the claim for specific performance of the contract fails for want of that essential ingredient to a claim for specific performance, namely acts unequivocally referable only to that contract. The various acts relied upon are all referable to other possible contracts or arrangements, such as a lease or a licence agreement. In brief, there was a move to the property, an occupation of the property, the payment of the periodic sums (categorised by the defendant as rent), the payment of other outgoings in respect to the property, and the doing of work and the incurring of expense, generally by way of maintenance and upkeep of the property, but all these things are possibly referable to arrangements other than that for which the plaintiff contends. 37 In this context it does not seem irrelevant to note, as the defendant submits, the lack of the payment of anything resembling a traditional "deposit" or down-payment of a significant amount of money for the acquisition of the property. However, given the family history, the way in which the defendant acquired No. 50 and Malcolm No. 53 Castlereagh Street, without paying a traditional deposit or the like, I doubt that this is truly significant. 38 The plaintiff's claim for specific performance therefore fails. That leaves for consideration his claim based upon proprietary estoppel. I accept that the defendant made a representation to the plaintiff, as alleged, that the plaintiff relied upon that representation, and that there was some detriment that he suffered by reason of the representation, the reliance, and the defendant's departure from the representation, when she recently threatened to sell the property. However, I consider that that detriment is limited to his having lost the opportunity to acquire another property of his own, in years gone by. He has occupied the property, with his wife and children, and has paid money that might be equivalent to a commercial rent, or the amount that would be payable by a householder paying off a mortgage debt: the evidence does not permit an assessment about the arithmetic of this. 39 However, I think it is established that, but for the representation and the reliance, the likelihood is that the plaintiff would have acquired another property in which to live, owned rather than rented or licensed. The family history points that way, as does my impression of the plaintiff and, again more importantly, my impression of his wife. The plaintiff, the defendant and Malcolm all came from circumstances of significant disadvantage, worked hard, saved their money, and acquired (in the context) substantial assets. Furthermore, once the plaintiff married, it was his wife and not he who handled the immediate family's financial affairs, and she impressed me as being cool and resolute in this regard. 40 In terms of considering reliance and detriment, what might be called elements in the proprietary estoppel claim, it is not just the plaintiff, but the plaintiff's wife who must be considered. The plaintiff's reliance and the plaintiff's detriment have each to be considered in circumstances where he left these matters largely to her, and there is really no doubt that she proceeded to act as she thought best in the interests of herself, her husband and their children. 41 However, the measure of the relief to be granted is quite problematical. I think it is right to proceed on the basis that, for a period of years after 1982, the plaintiff could and would have proceeded generally towards the goal of acquiring as owner some property as the home for himself, his wife and his children, but that he did not do so, because of his reliance upon the defendant's representation. He had acquired assets that would have assisted in this regard: some land in Tasmania (the present value of which might be $11,000), and a half interest in some land at Killarney Vale (later sold, perhaps, by the defendant without her accounting to the plaintiff for his share in the proceeds, but, once again, she was not cross-examined about this - however, on the evidence, it is hard to see how one can say other than that the plaintiff did have a half interest in this property, which half interest might have been used by him to advantage had he set out to acquire another property as owner in the period shortly after 1982). Until his conviction on the drink/driving charge, mentioned above, his record was one of general improvement in his position. Thereafter, he languished. The evidence does not establish, or even suggest for consideration why this was so. 42 It does not seem right to conclude that there should be imposed a constructive trust in favour of the plaintiff, to the effect that the title to the property be transferred to him upon the defendant's death, subject to some set of conditions such as that the plaintiff pay some amount of money, weekly, fortnightly or otherwise periodically, until her death. The granting of a remedy to that effect would not be one that remedied the detriment caused by the defendant's departure from her representation. The parties argued the case on an "all or nothing" basis, but in my view it would be an injustice either to grant relief on an "all" basis or to refuse relief on a "nothing" basis. I therefore publish these reasons for judgment, and express the view that the plaintiff is entitled to some relief in respect of his claim in proprietary estoppel, but not otherwise. The measure of that relief to be granted is less than was contended for on the hearing. 43 I direct the parties to confer within the next 28 days with a view to agreeing if possible upon the measure of the relief to be granted. If they do not agree within that time, I direct the plaintiff to deliver to my Associate and to serve upon the defendant within 42 days from today written submissions directed to the question of the measure of the relief to be granted. I direct the defendant to deliver to my Associate and to serve upon the plaintiff within 56 days from today written submissions in response. I direct the plaintiff to deliver to my Associate and to serve upon the defendant written submissions in reply, within 70 days from today. 44 If it then seems desirable to list the matter for oral argument, I will arrange to notify the parties. However, it is very much to be hoped that the parties will be able to cease warring against each other. **********