Evans v Evans

2007/256721 Peter John Evans & anor v Robert Charles Evans JUDGMENT (ex tempore) 1 HIS HONOUR: This is an unfortunate and unhappy dispute between, on the one hand the first plaintiff, Peter John Evans, now 52 years of age and his wife, the second plaintiff, Sophie Anastasia Evans, and on the other, the defendant, Robert Charles Evans, now 75 years of age, who, when Peter was about 6, fostered him and his brother Phillip - they having become wards of the State following their mother's death - and subsequently, when Peter was about 14, adopted them. Without intending the slightest disrespect, because the parties share a common surname, I shall refer to them from time to time by their first names. 2 Peter claims to be beneficially entitled to two properties - at X Walmer Street, Ramsgate and the other at X Colson Crescent, Monterey of which Robert is the registered proprietor. Peter's case is that he acquired a beneficial as well as a legal interest in Walmer Street when, in 1983, Robert purchased it in Peter's name, and that a subsequent transfer by Peter to Robert in 2002 is voidable in equity for mistake, unconscionable dealing or undue influence. As to Colson Crescent, Peter and Sophie's case is that they are beneficially entitled to the property as a result of an equitable estoppel arising from an expectation that it was or would be theirs beneficially, upon which they claim to have acted to their detriment in various ways to the knowledge and with the encouragement of Robert, with the result that it would be unconscionable for him now to deny that they are beneficially entitled. Alternatively, they say that Robert is bound by a conventional estoppel, arising from a common assumption said to have been shared by him with Peter and Sophie, that they were beneficially entitled to Colson Crescent. The credit of the witnesses 3 An important aspect of the case in relation to Colson Crescent is what was said by Robert to Peter and Sophie at the time of the acquisition of the property in 1990. Peter and Sophie say that Robert said to them words to the effect, "I've bought a house for you", and "This is your house". Peter says that Robert also said to him words to the effect, I've only a couple of years to live and Colson Crescent will be yours in a couple of years". Robert on the other hand, says that he said something to the effect, "I bought a house you can live in until you get settled". In due course, I shall have to resolve these competing versions, or at least ascertain what each of the parties intended or understood by what was said. It is appropriate at this stage, however, to deal with submissions made more generally as to the credit of Robert. 4 The plaintiffs submitted that Robert's evidence was extremely unpersuasive, so that I should prefer Peter and Sophie's evidence, in particular in respect of the acquisition of Colson Crescent. That submission is elaborated in paragraphs 110 and 111 of the plaintiffs' comprehensive and helpful written submissions. In paragraph 110, it is submitted that Robert's evidence was "extremely unpersuasive", that "he had no real recollection of any material event", that he could not "recall any detail without reference to his affidavits", that when giving answers to questions without reference to his affidavits or on topics not referred to in his affidavits his answers were frequently "inherently implausible", and that his position on various topics shifted. 5 I have to say that this does not accord at all with my impression of Robert Evans' evidence. My impression is that his recollection of most of the material events was quite good - although he frankly conceded uncertainty, or that he was guessing, in one or two respects relating to events long ago which it is quite understandable that he would not recall in detail now. It was certainly not my impression that he could not recall detail without reference to his affidavits. Occasionally he consulted his affidavits, but it seemed to me that that occurred infrequently. 6 The plaintiffs' submissions then descend to some considerable detail in identifying what are said to be examples of implausible or unpersuasive evidence. If a court is to conclude that a witness is not credible because his or her answers are implausible, it is usually necessary that there be more than simply an allegation of implausibility. It is quite true that where a witness's evidence over a range of matters consistently appears objectively implausible, that may support a conclusion that the witness should not be accepted. However, one implausible answer does not make a case adverse to credit, because improbable things sometimes happen. 7 In paragraph 11, it is first said that Robert Evans' response, that girls employed in the office answered the phones notwithstanding that Peter was a partner in the Evans Enterprises business and was working at the depot, while Robert was working full-time in another job, is "extremely unpersuasive." The evidence does not permit corroboration or disproof of the answer, but, on what is known, it seems to me no more likely to be untrue than it is to be true: it is, at least, equally conceivable that Peter was out driving most of the time, that Robert was indeed at work in his job at the hospital, and that girls in the office answered the phones. 8 Next, it is suggested that having initially stated that Peter was a partner in Evans Enterprises, Robert then could not recall whether or not he was a partner. When this is seen in context, I think that Robert was not initially drawing a distinction between Evans Enterprises and its successor, Dallas Oil Pty Limited; nor between the status of partner on the one hand and that of director in the other. It was when those distinctions were brought to his attention that he became unsure whether Peter had been a partner in the earlier partnership, as distinct from a director in the successor proprietary company. 9 Then it is said that both Peter and his brother Phillip had business cards while they worked at Evans Enterprises, and that Robert's evidence that he did not cause them to be printed or even know of their existence until the hearing was implausible. I accept that there is a degree of implausibility about this, but that is not to say that it could not be true. It is something which, if coupled with other matters, might raise doubts as to Robert's credibility, but so far it stands on its own. 10 Then it is said that Robert had no recollection of what Peter was paid when he worked for Evans Enterprises. To my mind, it is quite unsurprising that he would not now recall in any detail what someone was paid more than 20 years ago now. 11 Next, it is said that Robert's evidence as to whether his business was doing well by 1983 is implausible. I do not see why this evidence - that although it was making some money, it was not doing as well as he hoped - should be regarded as implausible, particularly in light of its sale to Caltex only a couple of years later. 12 Then, it is said that Robert's attempted explanation that in 1983, when the Walmer Street property was purchased, he had forgotten that in 1982 Peter had acknowledged personal liability for the debts of Evans Enterprises, was highly improbable. The instruments by which that acknowledgment occurred are not straightforward. In effect, they are third party mortgages to Caltex by Robert and his wife, Doreen, securing on the property of Robert and Doreen debts in respect of which the partnership was the debtor. Peter signed those documents as a debtor (as distinct from a mortgagor) and the documents contained an acknowledgment by the debtors of liability. Nonetheless, it seems to me entirely conceivable that someone in Robert's position as mortgagor, having executed those documents, might not appreciate at the time, let alone a year later, that Peter had made himself personally liable for those debts. Moreover, by the time the Walmer Street property was purchased, the business had been restructured and was conducted by Dallas Oil Pty Limited rather than Evans Enterprises, so that while Peter might have been a joint debtor in respect of debts incurred before that time, he would not have been in respect of debts incurred under the new structure. 13 Then, it is suggested that Robert could not say where the conversation he alleged occurred between himself and Peter regarding the purchase of the Walmer Street property in August 1983 took place, vacillating between its having been at home at the evening meal, or at the depot at Caringbah. This is one of those matters, more than 20 years old, which it is not surprising that he might not recall in full detail. 14 It is then said that Robert's account of Mr Coleman's presence at his home in July 2001, when various papers regarding the sale of the Walmer Street property were signed, was implausible. Reference was made, in respect of that and the subsequent attestation by Mr Coleman of the transfer in 2002, to a number of what were said to be significant discrepancies. At the same time, somewhat ironically, reference was made to consistencies in their evidence as being similarly detrimental to the credit of each of Robert and of Mr Coleman (presumably on the basis that it bespoke collaboration). To my mind, the overall consistency of their evidence, and the failure of cross-examination significantly to detract from Mr Coleman's evidence, results in Mr Coleman providing substantial corroboration for Robert Evans' account. It is entirely unsurprising, given the way in which the human memory operates, that there should be, seven or eight years after the event, some differences in their recollection. The extent to which the detail of their respective recollections is consistent, is, to my mind, far more impressive. Although it is said that Robert Evans' evidence as to whether he had discussed his evidence with Mr Coleman "shifted and was extremely unpersuasive", the concession that he had "discussed his evidence" with Mr Coleman, really tells very little: further questioning resulted in Robert explaining that they had not discussed the content of Mr Coleman's affidavit, but rather, the misfortune and distress that had been occasioned by the surrounding events. 15 It is said that Robert's evidence that Mr Mitchelmore had filled in the price and contract date of 28 August 2002 on the 2002 contract, was inherently implausible. So far as the price is concerned, it may be that Mr Mitchelmore did not complete it, but the position remains uncertain. However, so far as the contract date is concerned, Mr Mitchelmore confirmed that it was in his handwriting, which illustrates the danger in too readily inferred incredibility from implausibility. 16 Next, it was said that Robert's claim that Peter owed him money for the purchase of the Walmer Street property was implausible, given that the first time he mentioned any such assertion to Peter was in connection with the retransfer of the property some 18 years later. However, this represents an attempt to analyse in rather too close and legalistic detail, the substance of what happened in 2001. The reference to owing money was, in substance, a reference to "owing" the property which had been placed in Peter's name. It was really just another way of reflecting the assertion that Peter did not own the property beneficially. The so-called round-robin transaction entirely reflected that position as a matter of substance, if not as a matter of form. 17 Then, it is said that Robert's evidence as to when he first said to the plaintiffs that rent was payable "shifted and was extremely implausible". That the plaintiffs' position is that the word "rent" was not used until about 2003, when Robert increased the sum payable from $200 to $230 per week. The question was whether the word "rent" had been used at an earlier stage (and in particular, as Robert suggested in his affidavit evidence, at or about the time of purchase). In his oral evidence, Robert was asked (at T123.19): Q. Giving your best recollection now, do you say you discussed rent on that occasion as well? A. No, not on that occasion ... some later date. Q. How much later? A. Would have been a week or so. 18 This answer was a reference, as it seems to me, to the subject matter but not necessarily the word of rent. The question did not make clear whether it was being asked if he used the actual word "rent", as distinct from referring to the subject matter - namely, the $200 per week payment, to which I shall come. It is true that in his affidavit, Robert asserts that, after the plaintiffs had come to stay with him for a couple of weeks or so, he said, "I've recently bought a house in Colson Crescent which I'm renovating. If you want to, I'll allow you to live there for reduced rent until you sort yourselves out financially." But whether or not the actual word "rent" was used, seems to me something that neither party is likely to recall accurately twenty years later. 19 Although Robert asserts that the payments made by Peter and Sophie to him of $200 and subsequently $230 per week since 1990 were of rent, he did not disclose them as income in his income tax returns. He admitted so much before subsequently objecting to answering questions which would have revealed it, but quite apart from that, the tender of his income tax returns show that to be the case. The payments were made in cash. Although it is not to his credit that they were not disclosed as income, it is commonplace in family cases to discover that cash payments made by one member of a family to another which are in the nature of income are not disclosed as such to the Commissioner. While it tells somewhat against his credit that this was not disclosed, I do not see it as a matter which seriously undermines his credit on the essential issues. 20 Similarly, it was pointed out that he did not include the Walmer Street property in his land tax returns,. He explained this on the basis that Peter was, at the relevant time, the registered owner. While that may not legally be a sufficient explanation, it does explain why, from Robert's perspective, no reference to the Walmer Street property was made in his land tax returns. Consequently, his land tax returns did include the Colson Crescent property, which was in his name at all relevant times. 21 Then, it is suggested that Robert's presence in court during the entirety of the plaintiffs' case, including cross-examination of the plaintiffs' witnesses, is a matter of significance to be taken into account when assessing the plausibility of his evidence. However, it would be entirely curious if a defendant were not in court during the plaintiffs' case, including the cross-examination of the plaintiffs' witnesses, so as to hear the case against him and so as to be able to give instructions to his counsel in connection with the cross-examination. I do not see why having heard the case against him, detracts from his credibility. 22 Then, it is suggested that a Jones v Dunkel inference should be drawn adverse to Robert from his failure to call his wife Doreen to give evidence, despite her having been present at at least one of the critical conversations. Robert explained his decision not to call Doreen on the basis that, although separated, they still had a close relationship; that calling her to give evidence would be distressful to her; and that he believed her to be unwell. Those are human considerations, which might well reasonably explain a decision not to call a witness. Doreen is, after all, also the mother of Peter, and might as well have been called by Peter, although I accept, as Mr Stoljar SC for the plaintiffs points out, that the evidence tends to suggest that Doreen is in Robert's rather than in Peter's camp. However, the significance of this is much reduced nowadays, when a party may obtain leave to cross-examination a witness who proves unfavourable. I do not suggest that this removes the scope for a Jones v Dunkel inference, but weighing all the considerations in this case, including that Peter could have called Doreen, and ultimately that precise recollections of exactly what words were used in a conversation twenty years ago are unlikely in any event, I do not think that this is a case in which such an inference should be drawn. 23 Accordingly, I do not consider that the attack on Mr Robert Evans' credit was sustained. 24 It was also submitted that the court should be all the readier to accept the plaintiffs' version, because Sophie was cross-examined only for a short time, during which she gave clear and unwavering answers. I completely agree that Sophie gave her evidence in an impressive and entirely credible manner. The question is not so much whether she should be believed, but what was the effect of her evidence. In particular, she did not corroborate Peter's evidence that at the initial conversation at Colson Crescent, Robert had said something to the effect, "I've only got a couple of years to live. In a couple of years, the house will be yours." Indeed, she said that that had never been said in her presence, but apparently on some other occasion to Peter; the evidence did not explain when Peter had told her of that conversation, and, in particular, whether it was approximately contemporaneous, or only very recently. 25 Importantly, Sophie also answered that when Peter and she had cancelled a preliminary deposit paid on another property, a matter which was heavily relied on as going to reliance, she was not sure whether Robert was giving them the property free, as nothing had been said on that topic at that time, and she made no assumption either way at that point. In the light of the answers she gave in cross-examination, her evidence does not compel acceptance that statements to the effect deposed to by Peter were made as and when he said they were. That is not to say that I conclude that they were not; we shall come to that in due course. Walmer Street 26 The Walmer Street, Ramsgate property was purchased with funds provided by Robert, in Peter's name, in August 1983. Robert provided the whole of the purchase price. After its acquisition, Robert paid all the outgoings associated with the property. Peter re-transferred it to Robert in 2002. Peter's case is that, although the purchase moneys were provided by Robert, the property was originally beneficially his, pursuant to the doctrine of advancement, and that the 2002 re-transfer is voidable for mistake, undue influence or unconscionability. 27 As to the presumption of advancement, the High Court of Australia in Martin v Martin (1959) 110 CLR 297 said (at 303): In the end, Martin's case depends upon the correctness in the foregoing circumstances of the view taken by Abbott J, that Martin did not intend that his wife should have the beneficial ownership of the land. It was, of course, for Martin to make out positively that his wife did not take the land beneficially but as a trustee for him. As she was his wife, the fact that he found the purchase money for the land raised no presumption in his favour of a resulting trust as it would or might have done had she been a stranger. The presumption is, in her case, that the beneficial ownership went with the legal title. It is called a presumption of advancement, but it is rather the absence of any reason for assuming that a trust arose, or in other words, that the equitable right is not at home with the legal title.

In addition, he says that he was instructed by Robert, Can you please prepare a contract for sale which retransfers the Walmer Street property back from Peter to my company, Basmost, which can act as a form of insurance for my own personal position. 32 In my view, there is overwhelming evidence which plainly and firmly rebuts any presumption of advancement. The property was acquired in Peter's name without any intention that Peter take beneficially, Robert's intention plainly being that there would be a resulting trust in Robert's favour. 33 In their reply, the plaintiffs pleaded that Robert was estopped from denying that the beneficial interest in the Walmer Street property resided with Peter. This estoppel is said to be founded on an assumption or common understanding that the property was Peter's beneficially. The existence of any such assumption or common understanding on Peter's part is inconsistent with his non-payment of outgoings, the installation of Robert's mistress in the property; the reconveyance of the property to Robert for what, in practical terms, was no consideration; the subsequent demolition and reconstruction of the property; and the absence of any apparent interest on the part of Peter in the property. Moreover, Peter accepted (at T19) that it was not within his power to put Robert's mistress out of the property, and also (at T38) that his father never asked him to work for $200 per week in return for buying him a house; rather, Robert had said that if Peter worked for $200 a week, the rest of the money would be re-invested in the business. 34 It may be that Robert made statements that might have encouraged Peter to entertain an expectation that he would acquire an interest in and benefit from the business in due course, but, if that be so, it is not within the scope of this case; no claim is made in respect of the business (which in any event has since been sold). What is clear, on Peter's evidence in cross-examination, is that he did not hold an assumption, or at least a reasonable one, that he was beneficially entitled to the Walmer Street property. As I have concluded that Peter was not beneficially entitled to the Walmer Street property before 2002, it is unnecessary to consider whether the 2002 conveyance of the legal title to Robert would otherwise have been voidable in equity on any of the grounds advanced. The equitable entitlement was always Robert's. 35 For those reasons, the plaintiffs' claims in respect of the Walmer Street property fail. Colson Crescent 36 The plaintiffs' case in respect of the Colson Crescent property is put chiefly on the grounds of equitable proprietary estoppel. Equity comes to the relief of a plaintiff who has acted to his or her detriment on the basis of a fundamental assumption, in the adoption of which the defendant has played such a part that it would be unfair or unjust if he or she were left free to ignore it on the footing that it would be unconscionable for the defendant to deny the assumption [Grundt v Great Boulder Gold Mines Limited (1937) 59 CLR 641, 675; Thompson v Palmer (1933) 49 CLR 507, 547; Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387, 404 (Mason CJ and Wilson J)]. It is essential to an equitable estoppel that the defendant knows or intends that the party who adopts the assumption will act or abstain from acting in reliance on it [Crabb v Arun District Council [1976] Ch 179, 188; Waltons v Maher, 423 (Brennan J)]. Such knowledge or intention is easily inferred where the adoption, assumption or expectation is induced by the making of a promise or representation, but may also be found where a defendant encourages a plaintiff to adhere to an assumption or expectation already formed, or acquiesces in an assumption or expectation when, in conscience, objection ought to be stated [Waltons v Maher, 423 (Brennan J)]. The unconscionability which attracts the intervention of equity is the defendant's failure, having induced or acquiesced in the adoption of the assumption or expectation, to fulfil it, or otherwise to avoid the detriment which that failure would occasion [Waltons v Maher, 423 (Brennan J)]. 37 While numerous judicial and academic attempts have been made over the years to catalogue the elements of an estoppel of this type (see, for example, Fry J's five probanda in Willmott v Barber (1880) 15 ChD 96; Brennan J's six proofs in Waltons v Maher; Priestley JA's seven propositions in Silovi Pty Limited v Barbaro (1988) 13 NSWLR 466, as modified in Austotel Pty Limited v Franklins Selfserve Pty Limited (1989) 16 NSWLR 582; and Meagher, Gummow and Lehane's six common factors in Equity Doctrines and Remedies, 4th Edition (2002), [17-105]), it suffices for present purposes to observe that, at least generally speaking, the matters that a plaintiff must establish to found such an equitable estoppel may be characterised as comprising certain conduct of the plaintiff, certain conduct of the defendant, and certain qualities of the subject matter, which for present purposes, may be sufficiently summarised as follows. 38 First, as to the conduct of the plaintiff, that the plaintiff acted, or abstained from acting, in reliance upon an assumption or expectation that a particular legal relationship existed or would exist between the plaintiff and the defendant or that the plaintiff had or would acquire some interest in the defendant's property. Secondly, as to the conduct of the defendant, that the defendant induced the plaintiff to adopt the assumption or expectation and encouraged the reliant activity of the plaintiff, or at least failed to deny the assumption or expectation with knowledge that the plaintiff was relying on it to the plaintiff's potential detriment, and that the expectation could be fulfilled only by transfer of the defendant's property, a diminution of the defendant's rights or an increase in the defendant's obligations. Thirdly, as to the subject matter, that the assumption or expectation in respect of it was one that the defendant could lawfully satisfy. Ordinarily the relevant conduct of the plaintiff (assumption or expectation) and that of the defendant (encouragement or acquiescence) will be factually interrelated and interwoven [see generally Waltons v Maher, 428-429 (Brennan J); Meagher, Gummow & Lehane, [17-105]; O'Neill v Williams [2006] NSWSC 707, [40]]. 39 One form that this equity sometimes takes is to convert a revocable licence to occupy premises into an irrevocable or permanent one. Thus in Vinden v Vinden [1982] 1 NSWLR 618, Needham J considered circumstances in which a licence to occupy property, which was expressed to be subject to the licensee making contributions to mortgage payments and rates would become irrevocable by the licensee (in Vinden, the defendant, whom the plaintiff owner was endeavouring to eject), acting to his detriment upon the expectation that he would be permitted to remain in the property indefinitely. His Honour referred to Plimmer v Mayor of Wellington (1884) 9 App Cas 699, in which a revocable licence to occupy a jetty was held by the Privy Council to have become irrevocable by reason of the licensee incurring expenditure on improvements in the expectation, encouraged by the licensor, of being permitted to remain indefinitely. Plimmer and Vinden both illustrate that an owner of land may become bound by an equitable obligation to permit an occupier to remain permanently, if the occupier, to the knowledge of the owner, acts to his or her detriment in reliance upon an expectation of being permitted to remain indefinitely, and that in such circumstances the occupier requires a correlative equitable right to remain. 40 In some cases, an equity that arises by estoppel in this way may be conditional upon the performance by the plaintiff of certain obligations, as Vinden also shows. Where there are conditions attached to the expectation - such as contributioning to outgoings - the equity is subject to performance of those conditions by the licensee. As Needham J said (at 625B) (emphasis added): In my opinion, while the defendant continued or remained willing to meet those obligations , his licence was irrevocable, or, to put it another way, an equity arose which could be satisfied only by holding the plaintiff estopped from denying that the licence was irrevocable. 41 That a plaintiff will not be able to enforce an equitable interest by way of proprietary estoppel so long as he or she is in default of a condition attached to the enjoyment of the equity appears also from Wood v Browne [1984] 2 QdR 593 and Beaton v McDivitt (1985) 13 NSWLR 134, 157C-D; see also Young, Croft & Smith, On Equity, [12.310], and O'Neill v Williams, [42] - [43]. The plaintiff can be relieved from the performance of such conditions by conduct of the defendant - for example, by the defendant making it impossible for the plaintiff to meet the condition and also by release, agreement or even acquiescence [O'Neill v Williams, [44] - [45]]. Vinden illustrates this, as the plaintiff (legal owner) made it impossible for the defendant (occupier) to pay the mortgage, by paying it out himself, and to pay the rates, by having the notice redirected. 42 The first question then, in this part of the case, is whether the plaintiffs have established that they entertained the expectation or assumption that the property was or would be beneficially their own. Closely associated with this is whether that expectation was, in the circumstances, a reasonable one. The words on which the plaintiffs primarily rely are those said to have been uttered by Robert when the plaintiffs were first introduced to the Colson Crescent property in 1990, namely, "I've bought you a house. This is your house", and, according to Peter, apparently at the same time, "I've only got a couple of years to live. In a couple of years the house will be yours." 43 Robert's version is that he said to Peter and Sophie something to the effect, "I bought a house. You can live in it until you get settled." 44 The statements, "I've bought you a house" and "This is your house" admit of many meanings. "Your house" does not necessarily convey a house to which you are beneficially entitled. It may mean a place in which you live temporarily or permanently as a licensee, a lessee or a life tenant. There are many possibilities. I accept, as Mr Stoljar submitted, that the Court looks primarily to whether the expectation is one that is actually held by the plaintiff, and is reasonably capable of being borne or engendered by the words used. That has to be judged not in isolation, but in all the contextual circumstances. Here, in addition to the oral statements relied on, there is a document prepared by Robert shortly after the conversation in question and before Peter and Sophie moved into the property. That document, which is in Robert's handwriting, specified certain work to be carried out on the property, under the heading "We will fix": Paint rear 2 rooms complete (Peter) Replace all old electric switch switches (Peter) Relace all missing skirting boards & timbers Replace light fitting on No 2 Bedroom (Peter) Complete outside shower, toilet & laundry & paint including cementing ledge to stop water. (Peter) Replace rear door and door lock (Peter) Replace front door lock & Door (Peter) To renovate bath room, & tiles at medium price range to be advised Recarpet all rooms & carpet at medium price range to be advised (Dad) Linoleum in kitchen & lino at medium price range to be advised (new kitchen - Peter) You have: The choice of tiles, carpet & lino and pay the difference between medium price & your choice - if any. You pay $200 per week + council, water & insurance + CPI after 4 years 45 It is of considerable significance in my mind that this document includes a statement, first, that "We will fix certain things"; secondly, that "You have the choice of various things, but must pay the difference between median price and your choice," and thirdly, "You pay $200 per week plus council, water and insurance plus CPI after 4 years." Peter and Sophie, having moved into the property, indeed did pay $200 per week thereafter. There was some tension between the parties when in 2003, Robert increased the payment to $230 - he says, having mistakenly mentioned that sum when he intended it to be $210 - but ultimately, Peter and Sophie paid the larger amount until 2007, when Robert asked them to sign a form of lease, whereupon they declined to do so and ceased making the payments in question. They also paid the council and water rates for some years, until Robert had them redirected to him and he paid them himself; Robert says that he did this at their request. In any event, whether with their agreement, at their request, or whether unilaterally by him, it was the type of action by a defendant which relieved the plaintiffs from the need to comply with that particular obligation as a condition of any equity that they otherwise might have. 46 But a number of observations must otherwise be made about this document. First of all, on any view, it is entirely inconsistent with the plaintiffs having an absolute beneficial interest. They were to pay an amount for the right to live in the property, and they were to pay that amount on a periodical basis. The plaintiffs' evidence, at least in their affidavits, seemed to be that they assumed that Robert had made them an interest-free loan equivalent to the purchase price of the property, and that the property would be theirs when they had repaid to him the purchase price. This assumption, when one looks closely at the evidence, seems largely to have arisen from the circumstance that the plaintiffs learnt (not from Robert) that he had made an interest-free loan to his sister-in-law, to assist her in a matrimonial property settlement; but there is no suggestion that Robert said anything to either plaintiff about an interest-free loan. 47 Moreover, as both plaintiffs conceded in cross-examination, the reference in the document to a CPI adjustment makes little if any sense in the context of an arrangement to repay the purchase price of the property. In the whole of the evidence, there is not the slightest suggestion that any reference was ever made in any conversation to a loan, to the purchase price, to the amount of a loan, to the amount of the purchase price, to the amount to be repaid, to whether there would be any interest, to the term of any loan, or to when and in what circumstances any loan would be deemed repaid. 48 There are three possible analyses of the requirement to pay $200 per week, rates, insurance and so on: one is that it was an occupation fee, for a licence to reside in the property; the second is that it was rent, for a lease of the property; and the third - which the plaintiffs' evidence favours - is that it was repayment by instalments of a loan of the purchase price of the property. The difficulty with the last characterisation is, first, as I have said, there was never any reference to loan, purchase price or repayments; secondly, that the concept of $200 per week, rates, insurance and CPI adjustment savours much more of an occupation fee or rent than it does of repayment of a loan or payment by instalments of a purchase price; thirdly, that if the property were beneficially the plaintiffs', insurance would be no concern of the defendant; and fourthly, as the plaintiffs conceded, that the reference to a CPI would, in that context, be practically meaningless. 49 As to the statement attributed to the defendant that he only had a couple of years to live, and in a couple of years "The house will be yours", this too faces a number of difficulties. First, it is inconsistent with the other attributed statement, "This is your house," if the word "your" is, in both cases, intended to refer to beneficial ownership: either there was a vesting of beneficial ownership upon acquisition, or there was to be a vesting of beneficial ownership "in a couple of years" when, on their version, Robert thought his demise might be imminent. Those two statements are inconsistent, and this detracts from the probability that Robert made either of them. More significantly, it is very improbable that a man then only in his fifties would say, "I've only got a couple of years to live", unless he had been diagnosed with some serious and potentially terminal illness. Robert, indeed, was diagnosed with cancer, but not for some years after that date, when it was promptly and apparently successfully treated. It is conceivable that a couple of years after the plaintiffs moved in to the property, and when he was ill, Robert might have said something to Peter to that effect, but it is not proved that he did so. I am quite satisfied that he did not say so at or about the time that the plaintiffs moved in, as Peter asserts. 50 As I said at the outset, ultimately this case is concerned with what the plaintiffs understood from what Robert said, and whether that understanding was reasonable. It is conceivable that even at the outset, the plaintiffs understood what Robert said as being a promise of a beneficial conveyance of the home. The question is whether that was a reasonable assumption. In my view, in light of the document to which I have referred, it was plainly not a reasonable assumption, in the context of the whole of the surrounding circumstances. Put shortly, while it is not necessary for me to disbelieve the plaintiffs' assertion that they entertained that assumption even from the outset, it simply was not a reasonable assumption in circumstances where the defendant had stipulated that they must pay $200 per week, council rates, water and insurance, with a CPI adjustment after 4 years. 51 The plaintiffs pointed to a number of matters said to be consistent with their holding the relevant expectation. The first was the cancellation of the preliminary deposit paid on another property in which they were interested. In my view, that is entirely equivocal. It does not show that they had an expectation of acquiring a beneficial interest in the Colson Crescent property. It is equally consistent with them preparing to occupy the Colson Crescent property on some other basis, such as a leasehold or licence basis. In any event, the evidence of Sophie was to the effect that nothing had been said about the basis upon which they would occupy the Colson Crescent property when the deposit was cancelled. 52 The next matter relied upon was the fact of the plaintiffs' lengthy occupation of the property. Again, that is entirely equivocal as to whether they occupied it on the assumption that they were beneficial owners, or on some other basis. A third matter put forward was that the plaintiffs changed the locks. That too is equivocal; a tenant or occupant might well change the locks if they are entitled to exclusive occupation, even in the absence of any beneficial or proprietary interest in the property. Another matter relied on was the payment of outgoings. That too is completely equivocal. It was a condition of their occupation that they pay the outgoings, as it is a condition of many leases and licences that the tenant or occupant do so. 53 The one matter which, in my view, does tend to show an expectation of something more than a mere lease from month to month is the substantial expenditure by the plaintiffs of money and labour on renovations and improvements to the property. The evidence of Peter, whose is the only relevant evidence on the topic, shows that over the years they have expended money and labour to the value of about $75,000 in maintaining and improving the property. On the other hand, the valuation evidence tends to show that the impact of their efforts has been to add perhaps $12,000 at best to the value of the property; much of what they did was of a depreciating nature. 54 Nonetheless, I accept that it is improbable that the plaintiffs would have undertaken those works had they not entertained an expectation of something more than a monthly tenancy. But I think that expectation arose, not immediately upon occupation of the property, but progressively over the years, with the passage of time as their occupation continued undisturbed and without any suggestion that it would be disturbed. They did not consult Robert about the works they undertook. They did not seek his permission for them, because they did not think that they needed to do so. But one consequence of that is that it can hardly be said that Robert encouraged those works, or that he stood by with knowledge that they were being done upon an expectation that the plaintiffs had anything more than the interest he originally intended to give them. There is nothing to implicate him in the adoption by the plaintiffs, subsequent to their initial occupation of the property, of any assumption that they had an entitlement to remain there in perpetuity, nor to implicate him in encouraging, or dishonestly standing by during, their expenditure. 55 In my view, there is nothing sufficiently to implicate the defendant in any relevant assumption adopted by the plaintiffs to make it unconscionable for him to insist on his strict legal rights in respect of the subject property. The same matters lead to the conclusion that there was no common assumption of the type that would be necessary to found a conventional estoppel. 56 That conclusion means that I do not need to consider the effect of the failure since 2007 of the plaintiffs to comply with what, on any view, was a condition of their occupation, namely, payment of the weekly fee. As I have set out above, even if they otherwise had an equitable entitlement to remain, they would not be entitled to enforce it so long as they remain in default in respect of that obligation, although it may be that that could be resolved if the arrears were brought up-to-date. The cross-claim 57 By his cross-claim, Robert sues for the arrears. On any view, there was an agreement that the plaintiffs would pay $200 per week (adjusted to CPI after 4 years) during their occupation. They have occupied the property. At law, there is a debt for the arrears from when payments ceased until the present. Accordingly, the cross-claimant is entitled to judgment for the sum of $230 per week from July 2007 to date. That is a period of 136 weeks, which produces a sum of $31,280. Conclusion 58 For the foregoing reasons, I order that the proceedings be dismissed. On the cross-claim, I give judgment that the cross-defendants pay the cross-claimant the sum of $31,280. Costs 59 Although there is something to be said for Mr Dowdy's submission that the plaintiffs' case was manifestly weak, particularly in respect of the Walmer Street property, overall I take into account that this was an unhappy and unfortunate family dispute. More particularly, I do not think that the plaintiffs' conduct in instituting, prosecuting and maintaining the proceedings has been sufficiently delinquent or unmeritorious to take it outside the scope of those cases in which a plaintiff sues and fails. I do not think that I should depart from the ordinary costs order. I order that the plaintiffs pay the defendant's costs, including of the cross-claim.

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Judgment (14 paragraphs)

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Cases Cited (8)