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[2017] VSCA 352
Court of Appeal (Vic)
2017-11-30
Mr J, Tate JA
Original judgment source is linked above.
ESTOPPEL - Proprietary estoppel - Constructive trust - Representation by landowner that if the respondents moved into adjoining property and cared for him and his wife, he would leave them that property upon his death - Detrimental reliance - Merely a life interest in property granted under deceased's Will - Delay of more than 15 years in bringing claim - Limitation of actions - Whether judge erred in finding this was a proceeding to recover trust property and thus no limitation period applied - Whether a constructive trust arises at the time of the court's declaration, or when conduct giving rise to a trust occurs - Whether judge obliged to consider a lesser equitable remedy than imposition of a constructive trust - Whether third parties in need of protection - Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, Commonwealth v Verwayen (1990) 170 CLR 394, Giumelli v Giumelli (1999) 196 CLR 101, Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505, Donis v Donis [2007] VSCA 89; (2007) 19 VR 577 applied - Nolan v Nolan [2004] VSCA 109 distinguished - Paragon Finance plc v D B Thakerar & Co (a firm) [1998] EWCA Civ 1249; [1999] 1 All ER 400, Secretary, Department of Social Security v Agnew [2000] FCA 59; (2000) 96 FCR 357, Williams v Central Bank of Nigeria [2014] UKSC 10; [2014] AC 1189, Varma v Varma (2010) 6 ASTLR 152 discussed - Leave to appeal granted - Appeal dismissed - Limitation of Actions Act 1958 ss 8, 11, 21, 22 - Trustee Act 1958 s 3.
Arrangement for the Grahams to live next door and care for the Turners
(1) Does s 21(1)(b) apply? When does a proprietary estoppel constructive trust come into existence?
(3) Was the judge obliged to consider a lesser equitable remedy?
(4) Did the judge make inconsistent findings?
Conclusion on the application for leave to appeal
1 In this proceeding, a judge of the County Court determined[1] that a landowner had represented that he would leave in his Will 'an absolute interest'[2] in that land to persons who had cared for him. The owner died leaving a Will that did not give those persons title to the land but only occupancy rights for life. The judge held that there was detrimental reliance on the representation which was reasonable, and that it was unconscionable for the owner to fail to leave the property in his Will, as he promised. Being satisfied that the requirements for proprietary estoppel had been made out, the judge declared that the land was held on constructive trust for the carers and that no period of limitation applied to the proceeding. He ordered that steps be taken to transfer the title to the carers.
2 Under s 21(1)(b) of the Limitation of Actions Act 1958 ('the Act') no period of limitation applies to a proceeding 'to recover ... trust property' from 'the trustee'.[3] The question arises whether the judge was correct in concluding that the application for a declaration of constructive trust, based on the principles of proprietary estoppel, is a proceeding 'to recover ... trust property'.
3 Relevant to that question is the issue of when such a constructive trust arises. If it does not arise until the court makes the relevant declaration, then the property would not have been trust property at the time the proceeding commenced and the proceeding will be statute-barred, if the relevant period has expired (as are the circumstances here). If the constructive trust arises when the conduct giving rise to the trust occurs, that is, at the time when the detrimental reliance renders it unconscionable to depart from a representation, then the trust will pre-date the proceeding. The proceeding will be for the recovery of 'trust property' for which there is no limitation period.
4 When a claim asserting proprietary estoppel is made out, the court, instead of ordering relief that is equal to the value of the promise made, may grant a lesser remedy. This proceeding also raises the question of whether a court, before making a declaration that property is held on a constructive trust, is obliged to consider whether a lesser remedy would be the just measure of relief.
5 For the reasons set out below, I would grant leave to appeal but dismiss the appeal.[4]
6 In my view, a constructive trust based upon the principles of proprietary estoppel arises independently of any declaration of a court; it is 'treated as coming into existence at the time of the conduct which gives rise to the trust'.[5] Applying that principle to the circumstances of this case, the relevant property was impressed with a constructive trust from the time when there was reliance upon the promise which rendered it unconscionable for the owner of the land to resile from that promise. I consider that the judge was correct in concluding that the constructive trust arose before the proceedings commenced and thus that the proceeding attracted the protection of s 21(1)(b) because it was a proceeding for the recovery of trust property to which no period of limitation applies.
7 I also consider that the circumstances here did not require the Court to investigate whether a lesser form of relief would satisfy the equity raised; the loss was not 'a relatively small, readily quantifiable monetary outlay'[6] and nor would satisfying the assumed state of affairs be 'inequitably harsh'[7] to any relevant pre-existing third parties so as to justify consideration of some other remedy. Rather, the circumstances reflected that the detriment suffered was 'of a kind and extent that involve[d] life-changing decisions ... of a profoundly personal nature ... beyond the measure of money'.[8] Satisfying the equity raised should reflect 'the value of the promise'.[9]
Arrangement for the Grahams to live next door and care for the Turners
8 Mr Colin Wilbur Turner ('Mr Turner') was a member of the North Suburban Club ('the Club') in Moonee Ponds, a licensed social venue. In 1973 he became good friends with another member of the Club, Mr Ian Graham ('Mr Graham'), largely through socialising at the Club. In 1973 Mr Turner was aged about 64 and was married to Margaret Turner, then aged about 58. The Turners had no children. Mr Graham was aged about 31 and he was married to Beth Graham, aged about 28. Mr Graham was a Vietnam veteran and was working as a sales representative, being a fitter and turner by trade. The Grahams had no children together. Mr Graham had children from an earlier relationship. The Grahams are the respondents to the appeal.
9 In 1974 Mr Turner was unwell. He was walking with the assistance of two sticks having been involved in a transport accident in 1972 when, as a pedestrian, he was struck by a car. He suffered significant orthopaedic injuries. Mrs Turner suffered from asthma and emphysema and was not in good health.
10 Mr Turner owned two semi-detached maisonettes, No 73 and No 75 Ormond Rd. He and Mrs Turner lived at No 75. He had rented out No 73 ('the property') for some time.
11 In 1973 the Grahams were living in a one-bedroom flat in Essendon paying $120 a week in rent.
12 In late 1973 or early 1974, Mr Turner proposed to Mr Graham that he and Mrs Graham move next door and reside at the property, living there rent-free in exchange for looking after Mr and Mrs Turner. At trial, Mr Graham gave evidence that Mr Turner promised that on Mr Turner's death, the property would be left to the Grahams. No written agreement in respect of the arrangement was ever prepared or executed.
13 When the proposal was made, Mrs Turner had not met Mrs Graham. The Grahams were invited to the Turners' so that all parties could meet each other and the Grahams could inspect the property. In discussions that followed, Mr Graham insisted on paying rent and it was agreed that the Grahams would pay $80 per week in rent towards municipal rates and the cost of routine maintenance. This was a low rent for the area and the accommodation at the property was much larger and of better quality than the flat the Grahams had been renting.
14 The Grahams moved into the property sometime in 1974 and they have been living there ever since.
15 The Grahams looked after both Mr and Mrs Turner, who continued to reside in No 75, until Mrs Turner died in November 1980 and Mr Turner died on 14 November 1997.[10]
16 Mr Turner's last Will is dated 9 March 1994 ('the Will'). In the Will Mr Turner appointed Mr Graham as one of three executors and trustees of the Will, the other two being Mr Ian McNab and Mr Alistair McNab ('the McNabs'), solicitors and partners of a law firm ('the firm'). The McNabs were granted probate in the Will on 28 January 1998.[11] The McNabs are the applicants in this proceeding.
17 Under the Will, Mr Turner did not leave the property to the Grahams for their own benefit and use absolutely. Rather, he left the Grahams a life interest in the property, on conditions, in particular, that they not both be absent from the property for any period exceeding three months. Subject to that life interest, and upon separate titles being obtained for the property and No 75, the terms of the Will provided that the property be transferred to the Freemasons Hospital, East Melbourne. (The Epworth Hospital is the successor in title to the Freemasons Hospital, which was named in the Will.)
18 More specifically, under paragraph 3 of the Will Mr Turner left the property and No 75 to the trustees on trust:
(a) To take all necessary steps to subdivide [the property and No 75] and obtain separate Titles for those parts thereof known as 73 and 75 Ormond Road, Moonee Ponds.
(b) Upon issue of a new separate Title in respect of ... 75 Ormond Road, Moonee Ponds to transfer the said property known as 75 Ormond Road, Moonee Ponds to my sister GLENYS MADGE SIMMONS ... for her own use and benefit absolutely.
(c) To permit the said IAN GRAHAM and his Wife ELIZABETH GRAHAM to reside rent free in ... 73 Ormond Road, Moonee Ponds during their joint lives and the lives of the survivor of them and while they continue to pay all rates, insurance premiums and all reasonable maintenance charges in respect of the said property or until both of them remain away from the ... property for a period of 3 months or advise my Trustees in writing that they no longer wish to reside in the ... property.
(d) Subject to sub-paragraph (c) hereof to transfer the ... property known as 73 Ormond Road, Moonee Ponds to the Freemasons Hospital of 166 Clarendon Street, East Melbourne or as the Board of the said hospital shall direct.
(e) I DIRECT that all costs of and incidental to survey, subdivision and legal costs for the obtaining of new Titles in respect of the said properties at 73 and 75 Ormond Road, Moonee Ponds shall be paid from the residue of my Estate.[12]
19 The residue of Mr Turner's estate was left to his sister, Glenys Simmons.
20 Mr Graham learned of the terms of the Will on the day of Mr Turner's funeral service on 19 November 1997 from Mr Finlay McNab, the father of the McNabs and a partner in the firm. Finlay McNab had prepared the Will. Mr Graham, upon appreciating that the property had not been left to him and his wife, as he had understood it would be, told Finlay McNab that Mr Turner had promised to leave the property to him and his wife if they looked after the Turners. He gave evidence that he told Finlay McNab that he wished to challenge the Will but that Finlay McNab said that he had no hope of success and that if he made such a claim, Finlay McNab would defend it.
21 Finlay McNab died in 2004 and his files in relation to the Will, the application for probate and the administration of Mr Turner's estate, have not been retained by the firm.
22 The Grahams took no steps to challenge the Will or seek other relief at that time. Mr Graham gave evidence that he relied upon Finlay McNab's assessment of his chances of success of challenging the Will as hopeless and viewed Finlay McNab as a 'no nonsense, straight talking bloke who knew his job'.[13] It did not occur to him at that time to seek independent legal advice.
23 As mentioned above, the Grahams have continued to reside at the property. It was not submitted that the Grahams have ever been absent from the property for more than three months. They have paid all rates, insurance premiums, and reasonable maintenance charges in respect of the property.
24 The property has been subdivided from No 75 and No 75 has been sold.
25 Mr Graham ceased working due to ill health in 1999 and was granted a pension in 2001 on the ground of being totally and permanently incapacitated. In 2002 Mrs Graham ceased work to care for Mr Graham and obtained a carer's pension. Later in 2002 Mr Graham was diagnosed with gastric cancer.
26 In 2013 Mr Graham became concerned about the position of Mrs Graham in the event that he died. He did not realise that, under the Will, Mrs Graham would be able to continue to reside at the property after his death. The Grahams saw a newspaper advertisement in which a solicitor advertised that he could act in respect of disputes under a Will on a 'no win - no fee' basis. They sought legal advice.
27 The Grahams unsuccessfully brought proceedings in the Supreme Court in October 2013 for their maintenance under pt IV of the Administration and Probate Act 1958. This was dismissed in May 2014 on the basis that the Grahams had no standing to claim under pt IV. They also unsuccessfully applied to the Victorian Civil and Administrative Tribunal in August 2014 under the Property Law Act 1958. In March 2015 this was struck out for lack of jurisdiction.
28 On 28 September 2015, the Grahams commenced this proceeding in the County Court against the McNabs seeking a declaration that the McNabs hold the property on trust for them and, in the alternative, damages. The judge granted the declaration sought. He held that the doctrine of proprietary estoppel applied and that the McNabs were estopped from denying that the Grahams had legal title to the property. He considered that the Act did not bar the Grahams' claim.
29 Section 21 of the Act provides that there is no limitation period with respect to the recovery of trust property from the trustee:
21 Limitation of actions in respect of trust property
(1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action -
(a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or
(b) to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use.
(2) Subject as aforesaid, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued:
Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property until the interest fell into possession.
(3) No beneficiary as against whom there would be a good defence under this Act shall derive any greater or other benefit from a judgment or order obtained by any other beneficiary than he could have obtained if he had brought the action and this Act had been pleaded in defence.
30 The terms 'trust' and 'trustee' are defined in s 3(1) of the Act as having 'the same meaning respectively as in the Trustee Act 1958'. According to the Trustee Act:
[T]he expressions trust and trustee extend to implied and constructive trusts and to cases where the trustee has a beneficial interest in the trust property, and to the duties incident to the office of a personal representative ...[14]
31 Generally, an action to recover land must be brought within a 15-year limitation period. Section 8 of the Act provides:
8 Action to recover land
No action shall be brought by any person to recover any land after the expiration of fifteen years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person:
Provided that if the right of action first accrued to the Crown the action may be brought at any time before the expiration of fifteen years from the date on which the right of action accrued to some person other than the Crown.
32 Section 11 provides that the Act shall apply to equitable interests in land in like manner as it does to legal estates. This is made expressly subject to s 21. Section 11 relevantly provides:
11 Provisions in case of settled land and land held on trust
(1) Subject to the provisions of subsection (1) of section twenty-one of this Act, the provisions of this Act shall apply to equitable interests in land, including interests in the proceeds of the sale of land held upon trust for sale, in like manner as they apply to legal estates; and accordingly a right of action to recover the land shall, for the purposes of this Act but not otherwise, be deemed to accrue to a person entitled in possession to such an equitable interest in the like manner and circumstances and on the same date as it would accrue if his interest were a legal estate in the land.
...
33 Under s 22 of the Act, generally an action to recover an interest in the personal estate of a deceased person cannot be brought after the expiration of 15 years:
22 Actions claiming personal estate of a deceased person
Subject to the provisions of subsection (1) of the last preceding section no action in respect of any claim to the personal estate of a deceased person or to any share or interest in such estate, whether under a will or on intestacy, shall be brought after the expiration of fifteen years from the date when the right to receive the share or interest accrued.
34 The operation of the Act and whether it bars the current proceeding depends on whether the judge was correct in finding that the circumstances here supported a declaration that the property was held on constructive trust for the Grahams and, if so, whether the provision for the recovery of trust property under s 21(1)(b) is applicable to constructive trusts arising in accordance with the principles of proprietary estoppel.
35 It was not in contest that if a 15-year limitation period applied, it would have expired by late 2012 and thus before the proceeding commenced on 28 September 2015.[15]
36 At trial, the Grahams claimed that they relied on Mr Turner's representation that if they moved into the property and cared for him and his wife, he would allow them to live rent-free in the property and leave them the property upon his death ('the representation'). They further claimed that, in reliance on the representation, they terminated the tenancy of their flat in Essendon, refrained from purchasing any other property as their family home, looked after Mrs Turner until her death in 1980, looked after Mr Turner until his death in 1997, and made a number of improvements to the property at their own cost. They claimed that this amounted to detrimental reliance upon the representation.
37 The McNabs denied that the representation was made and alleged it was far more likely that Mr Turner only ever agreed to the Grahams residing at the property at a favourable rental rate and on the basis that they would be permitted to live there for their respective lives. They denied that they held the property on trust for the Grahams. They claimed that the proceeding was statute barred.
38 The judge noted the McNabs had submitted that 'the claim brought by Mr and Mrs Graham is statute barred pursuant to s 5, s 8, s 21 and s 22 of the [Act]'.[16] Section 5 imposes a limitation period of six years on claims primarily in contract and tort. This appears to have been recognised as irrelevant. Section 8, as mentioned, applies to actions for the recovery of land. The judge made no further mention of s 8 and the focus appears to have turned to s 22 despite that section dealing with personal estate rather than real property.[17] (On the appeal the focus was also upon s 22 in the event that s 21(1)(b) did not protect the proceeding from being statute barred.)[18]
39 Mr Graham's evidence was that Mr Turner confirmed to him on many occasions over the years after he and Mrs Graham moved into the property that the property would be left to them when Mr Turner died. He said that Mr Turner informed the Grahams that they could renovate the property as they wished and they did not require his prior approval before carrying out any improvements or renovations, with the exception that he continue to use the garage at the property for his storage purposes. Mr Graham's evidence was that Mrs Turner was often present when these statements were made and herself made similar statements to the effect that the property would be left to the Grahams when Mr Turner died, it being assumed (correctly as it turned out) that Mrs Turner would predecease Mr Turner.
40 Mr Graham gave further evidence to the effect that one year after the Grahams moved into the property, they decided it was an ideal time to purchase a house as they were both working and Mr Graham was entitled to a war service loan. They approached Mr Turner and offered to purchase the property. Mr Turner advised them that the property was worth about $32,000 but that he was reluctant to sell it because he wished to retain control of both properties during his lifetime.[19] He declined to sell it to them but assured them it would be theirs after his death.
41 The judge recognised, given that the conversations relied upon occurred more than 40 years before, exact or unbiased accounts would be difficult to obtain. Nonetheless, he found the Grahams to be 'impressive witnesses' who, despite some discrepancies, 'gave their evidence honestly and as best they could recall the relevant happenings and conversations'.[20]
42 The Grahams also relied on the evidence of Lexie Baker, Mrs Graham's sister, who lives in Tasmania and who met Mr Turner when he travelled to Tasmania with the Grahams on holidays and stayed with her. She gave evidence that on one such occasion Mr Turner stated to her that he was 'leaving the house' to the Grahams. The Grahams and Mrs Baker's husband were also present at that conversation.
43 A friend of Mr Turner's, Magdalena Pilarinos, also gave evidence that Mr Turner told her on a number of occasions that he intended to leave the property to Mr Graham. She has no particular friendship with the Grahams.
44 Another sister of Mrs Graham's, Julia Bird, gave evidence that she recalled Mr Turner telling her that the Grahams were lucky people and that they would be looked after. A further sister of Mrs Graham's, Kaye Batchelor, gave evidence that Mr Turner said he regarded Mrs Graham as a daughter. Mrs Graham's brother, Anthony Parker, recalled Mr Turner saying that he would be 'looking after' the Grahams. The judge acknowledged that the evidence of Ms Bird, Ms Batchelor, and Mr Parker was of limited assistance as their evidence, while not inconsistent with that of the Grahams, was also consistent with Mr Turner only having an intention to leave the Grahams a life interest in the property.
45 The McNabs relied upon the evidence of Elva Johnson, a niece of Mrs Turner, to whom Mr Turner had said that he had the property tenanted and that the tenants could live there for their lifetimes but not if they left the property for three months. She said that her mother had told her that Mr Turner had made a Will (unidentified as to date) providing that the tenants were to pay minimal or no rent until their deaths and the property would then pass to the Freemasons Hospital. A nephew of Mrs Turner, Ian Johnson, gave evidence to the same effect. So too did Pamela Johnson, the wife of another nephew of Mrs Turner, who said of Mr Turner:
He was very fond of the Grahams as in people but he always said that the house was never to be theirs ...
...
The Freemasons Hospital was to be the beneficiary of that in the end.
46 The judge acknowledged that there were competing testimonies between the witnesses but concluded that 'each of the witnesses ... was telling the truth as best as their recollections enabled them to do so'.[21] The judge considered that 'it was likely that Mr Turner was telling his relatives one thing and the Grahams, Ms Baker and Ms Pilarinos something quite different'.[22]
47 The judge understood that for a promise to found equitable estoppel it must be 'clear and unambiguous', but he emphasised that such assessments must be approached 'practically and sensibly, as well as contextually'.[23]
48 The judge found that the Grahams had discharged their onus of establishing that the representation was made and they had relied upon it. He stated:
In the end, it comes down to whether I am satisfied that Mr and Mrs Graham were witnesses of truth in relation to the statements they said were made on numerous occasions by Mr Turner and whether they acted in reliance upon such statements. Whether the required standard of proof is the mere balance of probabilities or the Briginshaw standard (as was submitted by the [McNabs'] counsel), I am satisfied on either standard that the substance of the evidence of Mr and Mrs Graham is correct. I am comfortably satisfied that Mr Turner promised that if they came to live next door at No 73 and looked after him and his wife, then he, on his death, would leave the property at No 73 to them. I am satisfied that they moved to No 73 and looked after Mr and Mrs Turner in reliance upon this.[24]
49 He described the assurances made by Mr Turner as amounting to 'promises that he would confer on [the Grahams] an interest in No 73, namely an absolute interest by leaving the property to them in his Will'.[25]
50 He identified the detrimental reliance suffered by the Grahams between 1974 and 1997 as follows:
(a) The Grahams became, in effect, the carers of Mr Turner and, until her death in 1980, Mrs Turner;
(b) The Grahams would regularly check on Mr and Mrs Turner, usually on a daily basis;
(c) As Mrs Turner's asthma and emphysema worsened and became chronic, Mrs Graham would check on her every day and cook meals for both Mr and Mrs Turner. In addition, Mr and Mrs Graham performed a variety of household chores for them;
(d) In the period leading up to Mrs Turner's death, Mr and Mrs Graham purchased medication from a nearby pharmacy for them;
(e) On the death of Mrs Turner, Mrs Graham assisted in the organising of her funeral and in addition, organised the wake which was held at No 73;
(f) Following Mrs Turner's death and over the ensuing years, Mr Turner became far more dependent on Mr and Mrs Graham. He had apparent trouble coping with her death and his consumption of alcohol increased;
(g) Before going to work each day, Mr Graham went into No 75 and arranged Mr Turner's breakfast. Mrs Turner cooked his other meals;
(h) As Mr Turner's health declined, Mr Graham drove him to and from medical appointments and to and from various hospital admissions. During hospital stays, Mr Graham visited him each night. Mr Turner had no other visitors that were observed by Mr Graham or that he was told about by Mr Turner;
(i) As his health declined, Mr Turner suffered from urinary and bowel incontinence. In the period leading up to his death, he was required to be showered and dressed each morning by Mr Graham. Mr and Mrs Graham changed and washed his clothing and bed sheets when he soiled himself, which occurred frequently;
(j) On regular occasions, Mr Turner went to No 73 for his evening meal. At other times, Mr or Mrs Graham prepared his meal and took it over to No 75;
(k) On occasions, Mrs Graham would return home from work to find Mr Turner waiting outside No 73 in a disheveled state, speaking incoherently. She would take him into No 73 and look after him until Mr Graham arrived home. He would then be taken back to his house before or after having dinner, depending on the circumstances;
(l) On three occasions, Mrs and Mrs Graham took Mr Turner with them to visit Mrs Graham's family in Tasmania;
(m) Mr Graham performed a number of renovations to No 73, both to the interior and exterior of the home. He paid for materials and performed much of the work himself. Included in these activities were:
- knocking down the existing asbestos-ridden garage
- building a carport
- constructing concrete paths in the rear garden
- laying a brick barbecue area
- erecting a shed
- erecting a gazebo
- making a crushed rock driveway
- installing decking in the backyard
- paying a contractor to cut down rotting trees in the backyard
- erecting the back fence and side fence between No 73 and No 75
- erecting gates in the backyard
- painting the interior and exterior of the house on several occasions
- repairing cracks in the interior and exterior of the house
- tiling the kitchen, bathroom and backroom floors
- painting the tiles in the bathroom and kitchen
- painting the kitchen and bathroom cupboards and drawers
- installing light fittings
- installing an air-conditioner
- carpeting the spare room at the premises
- replacing various taps; and
- installing a canopy over the backdoor.[26]
51 The judge accepted that the improvements had been enjoyed by the Grahams during the course of their 42 years residing at the property and that some of them had been performed after the Grahams became aware of the terms of the Will. He also accepted that the Grahams' move from their Essendon flat to the property did not involve discernible detriment because the property was a larger and more comfortable residence.[27]
52 He noted that detriment is not based on the market value of either the services provided, or of the property.[28] He considered that the reliance placed by the Grahams upon the representation was reasonable[29] and that although the Grahams would have been unlikely to have foreseen the extent of care required, 'Mr Turner is likely to have entered into the arrangement and made the promises that he made to Mr and Mrs Graham on the basis that he was aware that his wife and he might well require considerable assistance in the future.'[30] He held that Mr Turner knew or intended that the Grahams would rely on his promises and would thereby move to the property and look after him and his wife and that the failure of Mr Turner to leave the property to the Grahams in the Will, in those circumstances, was unconscionable.[31] He said:
I am satisfied that:
(a) Mr Turner made to [the Grahams] promises that he would leave No 73 to them on his death by leaving the property to them in his Will;
(b) They acted in reliance on those promises by moving to No 73 in 1974 and looking after Mrs Turner until the date of her death, and Mr Turner until the date of his death;
(c) Mr and Mrs Graham acted reasonably in so relying on the promises made to them by Mr Turner;
(d) Mr Turner knew or intended that the [Grahams] would rely on his promises and would thereby move to No 73 and look after him and his wife;
(e) Mr and Mrs Graham have suffered detriment as a consequence of them rendering service to Mr and Mrs Turner and by the failure by Mr Turner to adhere to his promise.
It follows that I consider that such conduct on Mr Turner's part gave rise to a proprietary estoppel.[32]
53 Having satisfied himself that the proprietary estoppel was established, the judge arrived at a number of conclusions in relation to the existence of a trust which he expressed in different ways. He observed at [97] that:
In the circumstances, I am satisfied that Mr Turner held No 73 on a constructive trust for the Grahams and hence, upon his death and upon proof of his Will, the defendants [the McNabs] held that property on a constructive trust for them.
54 On the appeal the McNabs submit that the observation in [97] amounted to a finding that Mr Turner held the property on trust for the Grahams during his lifetime; that is, that there was 'an inter vivos trust', as they characterised it. They submit that this was inconsistent with the judge's later finding that the constructive trust arose at the date of Mr Turner's death or when Mr Graham learned of the contents of the Will. This is discussed below.[33] That later finding was expressed at [101] in the context of the judge's discussion of the 15-year limitation period in s 22 of the Act and the exception created by s 21(1)(b):
The issue here is whether s 21 applies. If it does, there is no limitation period and the defence on this issue fails. If it does not apply, then I consider that s 22 does apply. If that were the case, I consider that the date when Mr and Mrs Graham's right to receive the claimed interest in No 73 accrued on either the date of Mr Turner's death or, at the latest, on the date on which the Grahams learned of the contents of his Will. It would follow that the claim could not be brought after the expiration of fifteen years from that date. The parties were in agreement that, if the fifteen-year expiration period applied, it had expired by late 2012.[34]
55 The judge accepted that the authorities distinguished 'between institutional constructive trusts and remedial constructive trusts.'[35] He remarked that:
The thrust of [the] authorities was that a remedial trust was not, in reality, a trust at all but merely a catchphrase to describe the remedial obligations which the law imposes.[36]
56 He went on to refer to the observations of Ormiston JA in Nolan v Nolan[37] with respect to institutional constructive trusts and applied those observations at [106]:
In Nolan v Nolan, Ormiston JA said:
A person becomes an institutional constructive trustee because there is evidence from which it may be inferred either that that person intended to hold property on behalf of others or that he or she should have had such an intention.
In the subject case, I have accepted the evidence that Mr Turner made the promises that he would leave No 73 on his death to the Grahams if they were to move to No 73 and look after him and his wife. I consider that that is evidence that he intended to hold the property on behalf of them or, at the very least, that he should have had such an intention.[38]
57 He emphatically rejected the view that the constructive trust that arose was a mere remedial constructive trust: 'I do not consider that this is a case involving a mere remedial trust.'[39]
58 He held that s 21(1)(b) of the Act applied to protect the proceeding from being statute barred:
I have formed the view that s 21(1)(b) applies here. That is, that this is an action to recover trust property from the [McNabs] (acting in their capacity as trustees). The trustees stand in the place of Mr Turner following his death. It follows that I am satisfied that no period of limitation applies to this proceeding.[40]
60 On 12 August 2016 the judge made a declaration, order 2 of his orders, that the McNabs hold the property on constructive trust for the Grahams:
The Court declares that [the McNabs] hold on constructive trust for [the Grahams] as joint tenants the land described in Certificate of Title Volume 10399 Folio 699 being the land situate at and known as 73 Ormond Road, Moonee Ponds in the State of Victoria, subject to any encumbrances noted thereon.
61 He also made an order directing the McNabs to execute all the documents necessary for a transfer of title of the property to the Grahams, as joint tenants:
[The McNabs] do all such things and execute all such documents as are necessary to transfer to [the Grahams] as joint tenants the land described in Certificate of Title Volume 10399 Folio 699 being the land situate at and known as 73 Ormond Road, Moonee Ponds in the State of Victoria, subject to any encumbrances noted thereon.
62 The McNabs now seek leave to appeal to have the 12 August 2016 declaration, and consequential orders, set aside.
63 The McNabs seek leave to appeal on four inter-related grounds:
64 In essence the grounds of appeal raise three issues: (1) Did the judge make inconsistent findings? (2) Does the exception in s 21(1)(b) of the Act for the recovery of trust property apply to a proceeding where the claim depends upon a constructive trust arising in accordance with the principles of proprietary estoppel? Relevantly, when does such a constructive trust arise? (3) Is a court, before making a declaration of constructive trust, obliged to consider whether the interest could be satisfied by a lesser form of relief?
65 It is convenient to consider first the general principles governing proprietary estoppel and then to deal with each issue. The substantive issues in the case are those identified as (2) and (3). I deal with the issue of the alleged inconsistency in the judge's findings last.
In Giumelli v Giumelli, it was said that the category of equitable estoppel that is usually traced back to the decisions in Dillwyn v Llewelyn and Ramsden v Dyson is now a 'well recognised variety of estoppel as understood in equity', which affords relief 'found in an assumption as to the future acquisition of ownership of property ... induced by representations upon which there had been detrimental reliance by the plaintiff'.[46]
67 In Sidhu the focus was upon the requirement to establish a proper evidentiary basis for detrimental reliance without the assistance of any presumption.[47] This was made clear in the joint reasons of French CJ, Kiefel, Bell and Keane JJ:
In point of principle, to speak of deploying a presumption of reliance in the context of equitable estoppel is to fail to recognise that it is the conduct of the representee induced by the representor which is the very foundation for equitable intervention. Reliance is a fact to be found; it is not to be imputed on the basis of evidence which falls short of proof of the fact. It is actual reliance by the promisee, and the state of affairs so created, which answers the concern that equitable estoppel not be allowed to outflank Jorden v Money by dispensing with the need for consideration if a promise is to be enforceable as a contract. It is not the breach of promise, but the promisor's responsibility for the detrimental reliance by the promisee, which makes it unconscionable for the promisor to resile from his or her promise. In Giumelli v Giumelli, Gleeson CJ, McHugh, Gummow and Callinan JJ approved the statement of McPherson J in Riches v Hogben that:
It is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise.[48]
68 In Sidhu, relevantly, the promisee moved to a cottage with her then husband on an unsubdivided part of rural land, known as Burra Station, owned by the promisor and his wife. After a sexual relationship began between the promisor and promisee, the promisor said that he wanted the promisee to have a home with him, he would subdivide the land and, as soon as that was done, he would make sure the cottage was put into her name. In practical terms, the subdivision also depended on the consent of the promisor's wife and the availability of adequate finance. The promisee's husband, upon becoming aware of the relationship, separated from the promisee and they were divorced. The promisee did not seek a property settlement in the divorce after the promisor said to her 'you have the [cottage] you do not need a settlement from him'.[49] On the faith of the promisor's assurances, she remained living with her young son in the cottage and paid rent at less than the market rate over eight and a half years. She performed unpaid maintenance and renovation work on the cottage and worked on the improvement and maintenance of Burra Station and an adjoining rural property owned by a company in which the promisor and his wife owned shares. She had part-time employment but did not seek to work full-time as a result of which she lost the opportunity to earn substantial wages as a natural resource catchment officer or a ranger. The cottage burned down and the promisee moved with her son to a relocatable cottage. The promisee offered to purchase the relocatable cottage but her offer was rejected. On the day of that rejection she left Burra Station and her relationship with the promisor ended. The subdivision never took place and the land on which the cottage had been built was never transferred.
69 The High Court held that the requirement for evidence of detrimental reliance was made out; the promisee had established that she was induced by the promisor's assurances to remain living at the cottage and perform unpaid work for the owners.[50]
70 The Court of Appeal had declined to make an order that the promisor take all necessary steps to cause the land on which the cottage was built to be transferred to the promisee on the basis of the adverse effect that such an order would have upon the interests of the promisor's wife as co-owner of that land. However, it held that the promisee was entitled to equitable compensation measured by the full value she would have received if the assurances had been fulfilled. An aspect of the challenge in the High Court was that, as the assurances were conditional upon the subdivision of the property and the consent of the promisor's wife, the Court of Appeal should have limited the relief granted to what was necessary to compensate the promisee for the loss she suffered by relying on the promises. The High Court squarely rejected that proposition. In doing so, the Court approved and applied observations of Nettle JA in Donis:
In Giumelli v Giumelli, Gleeson CJ, McHugh, Gummow and Callinan JJ held that, because the fundamental purpose of equitable estoppel is to protect the plaintiff from the detriment which would flow from the defendant's change of position if the defendant were to be permitted to resile from his or her promise, the relief granted may require the taking of active steps by the defendant including the performance of the promise and the performance of the expectation generated by the promise. That holding is supported by the leading decisions to which this category of equitable estoppel is usually traced.[[51]]
The requirements of good conscience may mean that in some cases the value of the promise may not be the just measure of relief. In The Commonwealth v Verwayen, Deane J noted that:
There could be circumstances in which the potential damage to an allegedly estopped party was disproportionately greater than any detriment which would be sustained by the other party to an extent that good conscience could not reasonably be seen as precluding a departure from the assumed state of affairs if adequate compensation were made or offered by the allegedly estopped party for any detriment sustained by the other party.
If the respondent had been induced to make a relatively small, readily quantifiable monetary outlay on the faith of the appellant's assurances, then it might not be unconscionable for the appellant to resile from his promises to the respondent on condition that he reimburse her for her outlay. But this case is one in which the observations of Nettle JA in Donis v Donis are apposite:
[H]ere the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature ... beyond the measure of money and such that the equity raised by the promisor's conduct can only be accounted for by substantial fulfilment of the assumption upon which the respondent's actions were based.
The appellant's argument, rightly, sought no support from the discussion in cases decided before Giumelli v Giumelli of the need to mould the remedy to reflect the 'minimum relief necessary to "do justice" between the parties'. There may be cases where '[i]t would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant assumption'; but, in the circumstances of the present case, as in Giumelli v Giumelli, justice between the parties will not be done by a remedy the value of which falls short of holding the appellant to his promises. While it is true to say that 'the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct', where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party's detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise.[52]
71 The Court concluded that the Court of Appeal was correct, in the circumstances of the case, to make an order recognising the entitlement of the promisee to equitable compensation measured by the full value she would have received if the assurances of the promisor had been fulfilled:
In the circumstances of the present case, no reason has been identified by the appellant to conclude that good conscience does not require that the appellant be held to his promises. In particular, it is no answer for the appellant to say that the performance of his promises was conditional on the completion of the subdivision and the consent of his wife to the transfer to the respondent. His assurances to the respondent were expressed categorically so as to leave no room for doubt that he would ensure that the subdivision would proceed and that the consent of the appellant's wife would be forthcoming.[53]
72 In the earlier case of Giumelli,[54] the Full Court of the Supreme Court of Western Australia had granted a declaration that Mr and Mrs Giumelli held land, the Dwellingup property, upon trust for one of their sons, Robert Giumelli, and were ordered to subdivide that property and convey to Robert a portion of it, being 'the promised lot'. Robert had left school and worked full-time without wages for a partnership between himself and his parents. The partnership at various times also included one or other of his two brothers. The Dwellingup property was not a partnership asset. Mr and Mrs Giumelli made various promises to Robert, including that they would subdivide the Dwellingup property to create the promised lot if he stayed on the property and did not accept an offer to work elsewhere. He did so and made a major contribution to the development of the Dwellingup property, as did other members of his family. Robert's contribution included establishing a new orchard. In addition to the proceeding for a declaration of constructive trust, Robert also brought a proceeding to wind up the partnership. The Full Court held that Robert had suffered detriment either in the loss of the property he had worked to improve, or the loss of the enjoyment of the improvements as a partner, the partnership being terminated before the new orchard became productive.
73 The High Court accepted that Robert had suffered detriment in reliance on his parents' promise but that, given all the circumstances, including the pending partnership action, the improvements to the promised lot by other family members, and the impact upon third parties, especially the continued residence on the promised lot of another brother, the form of relief ordered needed to be moderated to avoid injustice to others. The High Court held that instead of relief in the form of an acquisition of title, the appropriate relief was a monetary sum. In the course of arriving at this conclusion, the Court considered the relationship between estoppel and constructive trust. It emphasised the distinction between those constructive trusts where there is only a personal liability to account (for example, by those who dishonestly assist a breach of an express trust) and constructive trusts which are proprietary in nature; the latter are, as here, based upon an equity founded upon assumptions as to future ownership of property in respect of which there has been detrimental reliance:
[T]he term 'constructive trust' was used to identify the nature of the equitable remedy granted by the Full Court. Care is required in the use of the term 'constructive' in this context. Professor Scott has pointed out:
It is sometimes said that when there are sufficient grounds for imposing a constructive trust, the court 'constructs a trust'. The expression is, of course, absurd. The word 'constructive' is derived from the verb 'construe', not from the verb 'construct'... The court construes the circumstances in the sense that it explains or interprets them; it does not construct them.
The relief granted by the Full Court involved a trust that was 'constructive' in that way. The Full Court so interpreted the circumstances as obliging the appellants, in good conscience, not to retain their beneficial interest in the whole of the Dwellingup property and as requiring them to answer the respondent's equity by bringing about a subdivision of the promised lot and conveying the title to it.
...
A constructive trust of this nature is a remedial response to the claim to equitable intervention made out by the plaintiff. It obliges the holder of the legal title to surrender the property in question, thereby bringing about a determination of the rights and titles of the parties.
The term 'constructive trust' is used in various senses when identifying a remedy provided by a court of equity. The trust institution usually involves both the holding of property by the trustee and a personal liability to account in a suit for breach of trust for the discharge of the trustee's duties. However, some constructive trusts create or recognise no proprietary interest. Rather there is the imposition of a personal liability to account in the same manner as that of an express trustee. An example of a constructive trust in this sense is the imposition of personal liability upon one 'who dishonestly procures or assists in a breach of trust or fiduciary obligation' by a trustee or other fiduciary.[[55]]
In the present case, the constructive trust is proprietary in nature. It attaches to the Dwellingup property. ...
[T]he equity which founded the relief obtained was found in an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff. This is a well recognised variety of estoppel as understood in equity and may found relief which requires the taking of active steps by the defendant.[56]
74 In a passage relied on by the McNabs on the appeal, the Court went on to make observations about the need to determine how the equity raised is to be satisfied, relative to all the circumstances of the case, and whether relief ought be granted short of the imposition of a trust:
The present case fell within the category identified by the Privy Council in Plimmer v Mayor, &c, of Wellington where 'the Court must look at the circumstances in each case to decide in what way the equity can be satisfied'. Before a constructive trust is imposed, the court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust.[57]
75 The Court rejected the proposition proffered by the Giumelli parents, in reliance upon Verwayen, that the width of the relief granted by the Full Court was an error because it 'went beyond any "reversal" of the detriment'[58] occasioned by Robert's reliance on his parents' promise and it was not open to the Full Court to do so. The Court said:
[I]n our view and consistently with the course of Australian authority since Verwayen, that decision is not authority for any such curtailment of the relief available in this case. Rather, there is much support in the judgments for a broader view of the present matter.[59]
76 The Court noted the remarks of Deane J in Verwayen that '[p]rima facie, the operation of an estoppel by conduct is to preclude departure from the assumed state of affairs'.[60] Deane J went on to say that:
It is only where relief framed on the basis of that assumed state of affairs would be inequitably harsh, that some lesser form of relief should be awarded.[61]
77 As mentioned, in Giumelli the Court concluded that the order for the parents to convey the promised lot to Robert was inappropriate, especially given the impact upon third parties, and that instead the appropriate relief would lie in 'the fixing of a money sum to represent the value of the equitable claim of [Robert] to the promised lot':[62]
Before making an order designed to bring about a conveyance of the promised lot to [Robert], the Full Court was obliged to consider all the circumstances of the case. These circumstances included the still pending partnership action, the improvements to the promised lot by family members other than Robert, both before and after his residency there, the breakdown in family relationships and the continued residence on the promised lot of [Robert's brother] Steven and his family. ... Steven is a party to the partnership action but not to the present action.
When these matters are taken into account, it is apparent that the order made by the Full Court reflected what in Verwayen was described as the prima facie entitlement of Robert. However, qualification was necessary both to avoid injustice to others, particularly Steven and his family, and to avoid relief which went beyond what was required for conscientious conduct by Mr and Mrs Giumelli. The result points inexorably to relief expressed not in terms of acquisition of title to land but in a money sum.[63]
(1) Does s 21(1)(b) apply? When does a proprietary estoppel constructive trust come into existence?
78 In summary, on the appeal the McNabs submit that the only constructive trust which could arise in the circumstances of this case is one which the Court itself imposed after it had concluded that Mr Turner's conduct established a proprietary estoppel which invited the intervention of equity; this must have been after the commencement of the proceeding. Such a trust, they submit, was necessarily remedial in character[64] and could only arise by order of the Court; as it was put, the constructive trust 'springs up' or comes into existence at that time. The McNabs claim that s 21(1)(b) has no application. They contend that the judge was wrong in failing to recognise this.
79 By contrast, the Grahams submit, in summary, as they argued before the judge, that the constructive trust that arose was of an institutional character and not strictly remedial, with the consequence that s 21(1)(b) applies. On the appeal, the Grahams submit that there is no rigid distinction between constructive trusts of different characterisation but, in so far as those labels have any utility and are applicable, the trust that arose was an institutional constructive trust and this is what the judge correctly found.
80 In Nolan Ormiston JA embraced the 'significant difference'[65] drawn by Millett LJ in Paragon Finance plc v D B Thakerar & Co (a firm)[66] between 'the institutional class of constructive trusts and that of remedial "constructive trusts"'[67] (although those terms were not used by Millett LJ), and held that a remedial constructive trustee does not fall within the meaning of 'trustee' in s 21(1)(b).[68] Ormiston JA said:
The first arise (at least in most cases) by reason of a lawful transaction which precedes any alleged breach, but the latter, if properly so described, come into existence only by reason of some act of fraud or other unlawful dealing. Although the first category are properly described as 'constructive trusts', the latter have been misdescribed as such and, at the highest, those who have been subjected to remedial relief should be called 'constructive trustees' only for convenience' sake to identify the kind of equitable relief against them. As Millett LJ expressed it:
In such a case he is traditionally though I think unfortunately, described as a constructive trustee and said to be 'liable to account as constructive trustee'. Such a person is not in fact a trustee at all, even though he may be liable to account as if he were. He never assumes the position of a trustee, and if he receives the trust property at all it is adversely to the plaintiff by an unlawful transaction which is impugned by the plaintiff. In such a case the expressions 'constructive trust' and 'constructive trustee' are misleading, for there is no trust and usually no possibility of a proprietary remedy; they are 'nothing more than a formula for equitable relief': Selangor ... at 1582 ...
As his Lordship later said, in describing the distinction drawn in Taylor v Davies:
That was the distinction between an institutional trust and a remedial formula - between a trust and a catch-phrase.
...
[T]he words of s 21(1)(b) look to a claim by a 'beneficiary under a trust', ie a pre-existing trust, and to the recovery of 'trust property', ie that which is already subjected to a trust, from a person who is already a trustee.
...
[A] 'remedial constructive trustee' is not to be comprehended by the word 'trustee' for the purposes of the section.[69]
81 Ormiston JA observed that the creation of an institutional constructive trust requires conduct or circumstances evidencing an intention to hold property on trust:
To create an institutional constructive trust there must be some act which either directly displays such an intention in the supposed trustee or some acts or circumstances from which it may be inferred that he had an intention to act as a trustee or fiduciary or in some other role which imported an obligation to hold property as if he were a trustee.[70]
82 He held that an institutional constructive trust arises when a person intends, or should intend, to hold property on trust and that this type of constructive trust is distinct from a mere remedial constructive trust:
[B]ecause there is evidence from which it may be inferred either that that person intended to hold property on behalf of others or that he or she should have had such an intention. If, however, the person intends to act adversely to other persons having a right in the property, then it could not be said that that person then acts as trustee, whatever other remedies might be had against that person, which might comprehend the declaration of a remedial constructive trust at the appropriate time.[71]
83 The Grahams submit that the language used by the judge here, namely, that Mr Turner 'intended to hold the property on behalf of [the Grahams] or, at the very least, that he should have had such an intention'[72] clearly reflects the language used by Ormiston JA as the basis for an inference of an institutional constructive trust.[73] His Honour's remark is made directly after he refers to Nolan and, fairly construed, reflects the judge's conclusion: 'I do not consider that this is a case involving a mere remedial trust'.[74] Importantly, what he rejected was the submission of the McNabs that the constructive trust did not arise until it emerged from an order made by the Court.
84 The McNabs' submission is that the judge failed to appreciate that:
(1) if a constructive trust is to be imposed by a court, there is no legitimate reason to 'backdate' its inception to a point in time anterior to the commencement of proceedings and, indeed, good reasons why a court should not do so; and
(2) even if a constructive trust were here to be imposed by the Court from a time prior to the making of the order imposing the trust, it would not overcome the fact that, at the commencement of the action, the property was not 'trust property' within the meaning of s 21(1)(b) of the Act, and the proceeding was not a proceeding to 'recover ... trust property'.
85 They submit that the circumstances here are illustrative of the second type of constructive trust identified by Ormiston JA, and not the first.[75] They seek to support these submissions by relying upon the observations made by Lord Sumption JSC in a case dealing with fraudulent breach of trust, Williams v Central Bank of Nigeria.[76] In Williams the United Kingdom Supreme Court held that a claim against a bank alleging that it was party to a fraudulent breach of trust by a trustee was statute barred and that s 21(1)(a) of the Limitation Act 1980 (UK) c 58 ('the UK Limitations Act') in identical terms to s 21(1)(a) of the Act, did not apply to save the proceeding; the claim against the bank was time-barred. The Court held that the word 'trustee' did not include a party who was liable to account in equity, on the basis of Barnes v Addy,[77] simply because he was a dishonest assister in a breach of trust and/or a knowing recipient of trust assets. More relevantly, it held that the words 'trust' and 'trustee' in s 21(1)(a) bore their orthodox meaning; a 'trust' did not include a constructive trust of the kind alleged against the bank and a 'trustee' did not include a party who was liable to account in equity because he was a dishonest assister in a breach of trust and/or a knowing recipient of trust assets.
86 Lord Sumption JSC distinguished between two categories of constructive trustee: those who have lawfully and voluntarily assumed fiduciary obligations in relation to trust property but without having been formally appointed, who may be 'trustees de son tort' or de facto trustees; and those persons who 'never assumed and never intended to assume the status of a trustee ..., but have exposed themselves to equitable remedies by virtue of their participation in the unlawful misapplication of trust assets'.[78] The latter persons are not in truth trustees at all:
Either they have dishonestly assisted in a misapplication of the funds by the trustee, or they have received trust assets knowing that the transfer to them was a breach of trust. In either case, they may be required by equity to account as if they were trustees or fiduciaries, although they are not. These can conveniently be called cases of ancillary liability. The intervention of equity in such cases does not reflect any pre-existing obligation but comes about solely because of the misapplication of the assets.[79]
88 Having distinguished between the two categories, Lord Sumption JSC considered the relevance of the distinction to limitations. He observed that, historically, statutory limitation periods were not applied, even by way of analogy, to proceedings brought by beneficiaries to recover trust assets against a trustee in breach of trust:
The practice of equity was to apply statutory limitation periods by analogy to equitable claims, in addition to its own doctrines of laches and acquiescence. But by way of exception statutory limitation periods were not applied, even by analogy, to claims by a beneficiary against a trustee for breach of trust. Trustees were accountable to their beneficiaries without limitation of time.
It is important to understand why equity adopted this rule, for its rationale will not necessarily apply to every kind of constructive trust. The reason was that the trust assets were lawfully vested in the trustee. Because of his fiduciary position, his possession of them was the beneficiary's possession and was entirely consistent with the beneficiary's interest. If the trustee misapplied the assets, equity would ignore the misapplication and simply hold him to account for the assets as if he had acted in accordance with his trust. There was nothing to make time start running against the beneficiary.[82]
89 However, the same reasoning did not apply to a person who is 'not an express or a de facto trustee but is "constituted a trustee by a decree of a court of equity"'.[83] He went on to quote from Grant MR in Beckford v Wade:
It is certainly true, that no time bars a direct trust, as between cestui que trust and trustee: but, if it is meant to be asserted, that a court of equity allows a man to make out a case of constructive trust at any distance of time, after the facts and circumstances happened, out of which it arises, I am not aware, that there is any ground for a doctrine, so fatal to the security of property as that would be ....[84]
90 Lord Sumption JSC adopted the remarks made by Millett LJ in Paragon:
As Millett LJ observed when making this point in the Paragon case, constructive trustees required to account in the exercise of equity's remedial jurisdiction,
have no trust powers or duties; they cannot invest, sell or deal with the trust property; they cannot retire or appoint new trustees; they have no trust property in their possession or under their control, since they become accountable as constructive trustees only by parting with the trust property. They are in reality neither trustees nor fiduciaries, but merely wrongdoers.
All of these considerations apply equally to section 21 of the Limitations Act 1980 ....[85]
91 Lord Neuberger PSC adopted a similar approach in insisting that s 21(1) of the UK Limitations Act is only concerned with true or 'classic trusts' and that a dishonest assister or knowing recipient would fall outside of the definition because he or she has never assumed the obligations of a trustee or had a lawful relationship to the trust property:
If one casts one's eyes more widely, the provisions of the 1925 Act [the Trustee Act 1925 (UK)] appear to me to reinforce the notion that knowing recipients or dishonest assisters were not intended to be covered by the definition [of 'trustee']. The Act is concerned with classic trusts, or as Millett LJ put it in the Paragon case, with 'the powers and duties of trustees properly so called', rather than 'persons whose trusteeship is merely a formula for giving restitutionary relief'. It appears to me that a dishonest assister cannot be within the statutory definition as he does not have trust property without also being a knowing recipient, and, as for a knowing recipient, he 'never assumes the position of a trustee' because his receipt of trust property 'is adversely to the [claimant]', to quote Millett LJ again.[86]
92 Lord Neuberger PSC went on to expand upon the justice of the result that the proceeding against the bank was statute-barred, relevantly because the bank had no pre-existing fiduciary relationship to the claimant:
So far as raising a limitation defence is concerned, this conclusion places dishonest assisters and knowing recipients (i) in the same position as those who are liable in common law for improper or dishonest conduct, and (ii) in a better position than defaulting trustees. The first result seems appropriate: as Millett LJ said in the Paragon case ..., 'there is no case for distinguishing between an action for fraud at common law and its counterpart in equity'. As for the second result, it is plainly justifiable, as defaulting trustees have pre-existing fiduciary duties to claimants which dishonest assisters and knowing recipients do not.[87]
93 The McNabs submit that just as s 21(1) of the UK Limitations Act is concerned only with the administration of 'true trusts', including those where a person becomes a constructive trustee by voluntarily assuming fiduciary obligations with respect to trust property, and not with 'constructive trusts imposed by equity on strangers to the trust in the exercise of its remedial jurisdiction',[88] so too the comparable provisions in Australia do not extend to those constructive trusts that arise remedially.
94 Applying this reasoning to the circumstances of the case, the McNabs submit that there are five reasons that demonstrate that the judge erred in concluding that no limitation period applied on the basis that the Grahams' claim was an action to recover trust property:[89]
(1) Mr Turner was not a trustee when he died; he never assumed the responsibilities of a trustee, expressly or in a de facto way. It was not open to the judge to hold that Mr Turner intended to hold the property on behalf of the Grahams because, as he found, Mr Turner expressly disclaimed any arrangement whereby he would cede any interest in the property before his death.[90] The representation was that the property would be the Grahams after his death; until then, the legal and beneficial interest in the property remained unequivocally with him.
(2) The judge appeared to assume that a constructive trust arose automatically by reason of Mr Turner's conduct rather than being imposed by the Court; the McNabs submit that the authorities upon which they rely, including Williams, and Giumelli, demonstrate that the judge made a foundational error about the time at which the trust arose and this vitiated his conclusion that s 21(1)(b) was engaged;
(3) The imposition of a retrospective constructive trust, 'backdated' to a time before the commencement of the proceeding, was not required by equity; the equity created by Mr Turner's conduct would 'unarguably' have been satisfied by the imposition of a trust from the date the order was made because the Grahams continued to live at the property and, as that occupancy was now rent-free, their occupancy was enjoyed on more favourable terms than during Mr Turner's life. The only basis for imposing a retrospective constructive trust would be to try to defeat the effect of the Act and equity would not support such a contrivance;
(4) The ex post imposition of a constructive trust by way of a remedy does not change the fact that, at the time the proceeding commenced, the Grahams were not 'beneficiaries under a trust' and were not seeking to 'recover' existing 'trust property'; rather, they were seeking to have a trust imposed on the property for the first time;
(5) In any event, even if a retrospectively imposed trust were deemed to have existed at the commencement of the proceeding, the character of the trust is, for the reasons they had already advanced, purely remedial, and therefore not a 'trust' to which s 21(1)(b) of the Act applies.
95 In my view, the McNabs' reliance on Williams is misplaced. An immediate and obvious difference between the circumstances of Williams and those here is that Williams was concerned with a stranger to an express trust who is party to a fraudulent breach of that trust and not with an interest acquired in accordance with the principles of proprietary estoppel. The critical distinction the Court drew in Williams is between those who have voluntarily assumed the responsibilities of a trustee, either expressly or in a de facto way, who fall within the orthodox meaning of a 'trustee', and those who are liable to account in equity as a 'constructive trustee' because they are a dishonest assister in a breach of trust or a knowing recipient of trust assets. A proceeding brought against the latter, but not the former, is subject to a limitation period.
96 The circumstances in Williams are a world away from the circumstances which give rise to an interest under the principles of proprietary estoppel. Importantly, as the Grahams emphasise, the distinction drawn in Williams, and in Paragon, is between a 'constructive trust' used as a label for a personal remedy against someone, a wrongdoer, who has never had proprietary rights to the relevant assets, and proprietary constructive trusts. As is apparent from the extracts in Williams quoted above, when a proceeding is sought to be brought against someone described as a 'constructive trustee' because they are a dishonest assister or knowing recipient of property obtained in a fraudulent breach of an express trust, that so-called 'constructive trustee' has never had lawful possession or control of trust property.[91] They are not a true trustee, they are only liable to account 'as if' they were a trustee.[92] True trusts are concerned with property and property interests. A dishonest assister or knowing recipient cannot 'invest, sell, or deal with the trust property'.[93] One might add, they cannot lawfully promise to transfer title and their liability does not arise by reason of a promise to transfer title to property to which they have a legal right. Their liability is only liability as an accessory to a breach.[94] It is their 'participation in the unlawful misapplication of trust assets' that exposes them to equitable remedies.[95] Their liability to account is a personal fault-based liability;[96] 'what has long been recognised as the essential characteristic of the Barnes v Addy liabilities ... [is that] they expose the persons to whom they apply to personal, to in personam, liabilities'.[97] As Millett LJ stated in Paragon: 'in cases like the present a plaintiff is necessarily confined to a personal remedy.'[98]
97 The circumstances that establish proprietary estoppel are different; they depend upon the legal owner of an interest in property making a promise, or assurance, of a proprietary interest upon which the promisee relies to his or her detriment. What lies at the heart of the estoppel is the encouragement of an acquisition of an interest in property.[99] This critical difference renders the judgment in Williams distinguishable. It is a difference recognised by the High Court in Giumelli.[100]
98 The proposition that proprietary estoppel created an interest in land, and did not merely give rise to a personal right to sue was recognised as early as 1901 in Hamilton v Geraghty.[101] There the Court applied Ramsden v Dyson in circumstances where one James Connor built on the defendant's land using a firm of builders, Johnston & Fox. The defendant knew of the mistake but abstained from correcting the error and left Connor to persevere. After Connor was sued by the administrator of Johnston & Fox, Hamilton, for the cost of the building, Hamilton in execution of the judgment obtained an assignment of all the right, title and interest of Connor (if any) in the land. Connor sued for a declaration that the land was chargeable with payment to Hamilton of the amount of the expenditure. The Court reversed the Chief Judge in Equity and overruled the demurrer with the Chief Justice observing:
It appears to me that Connor, under the circumstances above mentioned, became in equity the owner of the land in question. If the defendant, relying upon her documentary title, brought an action of ejectment in a Court of law, it is possible that to such an action in such a Court Connor would have had no defence, and his proper course would then have been to have applied to the Court of Equity, first, for an injunction to restrain the action at law, and secondly, for a declaration that the land in point of fact under the circumstances of the case belonged to him. In such proceedings I am of opinion that Connor would have been entitled to the declaration asked for.[102]
99 Owen J similarly observed with respect to the interest created by a Ramsden v Dyson estoppel:
His Honour The Chief Judge in Equity seems to have based his decision on the ground that the right vested in Connor was a bare right to sue ...
I think his Honour puts it on too low a ground.[103]
100 He then referred to the judgment of Lord Kingsdown in Ramsden v Dyson, including his Lordship's references to Lord Thurlow, Lord Alvanley, Lord Redesdale, and Lord Eldon, and said:
So apparently all those eminent Judges thought that either by contract, or by facts amounting to estoppel, an estate or interest in the land would in such cases be created in the person who, upon the faith of such promise or expectation, with the knowledge of the owner, had laid out money upon the land.
It appears to me, therefore, that this is not a personal right to sue ... but an interest in the land itself created either by contract or by estoppel'.[104]
101 The critical difference between a personal liability and a proprietary interest also reveals, in my view, that the proceeding brought here by the Grahams does not fall into the second category of constructive trusteeship recognised by Millett LJ in Paragon.[105] As mentioned, this category was described by Ormiston JA in Nolan[106] as one in which 'there is no trust and usually no possibility of a proprietary remedy ... [where there is] "nothing more than a formula for equitable relief"';[107] that is, where the constructive trust recognised is a mere 'catch-phrase'.[108] I reject the view that the constructive trust declared by the judge here has the character of a purely remedial constructive trust criticised in Nolan. This is because the judge found that there was a proper foundation for proprietary estoppel in the circumstances of the case; the relief granted was not an exercise of equity's remedial jurisdiction in respect of an ancillary liability. The interest of the Grahams created by the estoppel is 'an interest in the land itself';[109] in the circumstances, the constructive trust protected that interest.
102 Furthermore, I reject the view that the constructive trust declared had no independent existence apart from the order of the Court and that it came into existence when it was imposed by the Court after the commencement of the proceeding. There is considerable authority for the proposition that, where detrimental reliance upon a promise gives rise to a constructive trust, in the context of an estoppel, the constructive trust comes into existence before a court makes any order. It comes into existence at the time of the conduct which gives rise to the trust. As Ward J said in Varma:[110]
As a matter of general principle, it seems to be the accepted position under Australian and English law that a constructive trust will be treated as coming into existence at the time of the conduct which gives rise to the trust.[111]
103 In Varma Mrs Parveen Varma sought to enforce a promise she said was made to her by her father-in-law, Sid Varma, that as from his death, the family company would belong to her. The promise was alleged to have been made at the time of the incorporation of the company and subsequently over the years. Parveen had been a director and an employee of the company for most of the years since its incorporation. After Sid Varma's death, Parveen brought a proceeding seeking the transfer to her of the whole of the shares in the company. However, Sid Varma had transferred two-thirds of those shares to other members of the extended family before his death. Ward J held that the alleged promise or representation to Parveen was not made out and, that finding being fatal to the claim, the proceedings were dismissed. Had the promise been established, one of the issues raised was whether Parveen reasonably relied on the promise to her detriment, in circumstances where it would be unconscionable in equity for Sid during his lifetime to have resiled therefrom, and unconscionable in equity for the executors of his estate to do so. Another issue was, if the claim based on promissory estoppel was made out, did it have the consequence that Sid held the shares on constructive trust for Parveen, and if so, at what time did a constructive trust arise? Despite the finding that the promise was not established, her Honour considered the other issues in detail. With respect to the alleged promissory estoppel, she summarised her answers as including a finding that detrimental reliance had been made out and it would have been unconscionable for Sid when he was alive to have resiled from his promise:
Had I been satisfied that Sid made the promises or representations alleged, then I would have found that Parveen had established a claim for equitable relief based on the doctrine of promissory estoppel, in that I would have been satisfied that she did reasonably rely on the promises to her detriment (in relinquishing her partnership interest in UV Enterprises and in providing or mortgaging her home to enable the provision of trade loans to the company) in circumstances where it would have been unconscionable in equity for Sid during his lifetime to resile therefrom (and would now be unconscionable in equity for his executors to do so).[112]
104 She also found that had promissory estoppel been established, the shares in the company would have been impressed with a constructive trust in favour of Parveen from the date of incorporation of the company:
[H]ad I upheld Parveen's claim based on promissory estoppel, I would have held that as from the time of incorporation of the company the shares were impressed with a constructive trust in Parveen's favour.[113]
105 She considered that there was no inhibition 'such as third parties in need of protection, to defer the inception of the trust'[114] and that, therefore, it would have been appropriate for the Court to make an order declaring a constructive trust from the date of the reliance which rendered it unconscionable for Sid to depart from the promise:
Here, had I found that Parveen had established a claim in promissory estoppel I would have been of the view that there was not an appropriate or available remedy 'to quell the controversy' ... short of the imposition of a constructive trust and that it was appropriate to impose that constructive trust at the time of the reliance by Parveen which rendered it unconscionable for Sid to resile from the promise.[115]
106 As the constructive trust would have arisen prior to Sid's inter vivos transfer of shares to other members of the extended family, the transferee's interests would have been defeated because they were volunteers.[116]
107 As the reasoning of Ward J makes clear, equity recognises the constructive trust as having come into existence from the time of the conduct which gives rise to the trust. The relevant time is the time at which there is reliance on a promise giving rise to the estoppel, that is, the time of the reliance which would render departure from the fulfilment of the promise unconscionable.[117]
108 This approach also resolves the apparent paradox that it is a matter for the court whether to make an order declaring a constructive trust or grant a lesser form of relief where there are relevant third parties who may be prejudiced by such an order, for example, by giving rise to an unfair priority to the beneficiaries of a constructive trust against general creditors.[118] This may give a sense that the court is 'creating' the trust and that it has no existence independently of the order, as the McNabs assert. But the apparent paradox is no more than that associated with the maxim nunc pro tunc, that is, that equity regards as done that which ought to be done. While it is for a court to determine whether to declare a constructive trust, the date the trust comes into existence is the date from which the equitable interest, the interest in land, arises. That date is, as mentioned, when the conduct occurs that gives rise to the trust; the date when the detrimental reliance renders it unconscionable to depart from the promise.
109 As is apparent from Hamilton v Geraghty,[119] and Giumelli,[120] discussed above,[121] the equitable interest in land created by an estoppel is not dependent upon a prior court order. It is not a matter of a court engaging in 'backdating' the trust arbitrarily, or, as the McNabs would have it, to defeat a limitations period;[122] it is a matter of the court declaring, as with all applications of the maxim nunc pro tunc, the appropriate date on which that which ought to have been done is to be regarded as having been done.[123] Once so declared, the effect of the maxim is that it was done at that time. There is no room for a further inquiry as to whether the constructive trust 'really existed' at a time before the order is made. Deane J in Muschinski v Dodds[124] explained this consequence as follows:
The old maxim that equity regards as done that which ought to be done is as applicable to enforce equitable obligations as it is to create them and, notwithstanding that the constructive trust is remedial in both origin and nature, there does not need to have been a curial declaration or order before equity will recognise the prior existence of a constructive trust ... Where an equity court would retrospectively impose a constructive trust by way of equitable remedy, its availability as such a remedy provides the basis for, and governs the content of, its existence inter partes independently of any formal order declaring or enforcing it.[125]
110 This passage from Deane J was applied by the Full Court of the Federal Court in Agnew.[126] There the parents of sons who had continued to work on a farm, and make improvements, after the father said 'it's yours now', were found to have held the farm on a constructive trust for the sons. The trust was taken to have come into existence when the conduct which gave rise to it occurred, that is, when the sons acted in reliance on the statement that the land was theirs. The trust was not viewed as a creature of a decree by the Court. Under the heading, 'When did the constructive trust come into existence?', the Full Court said:
We would adopt the view of A J Oakley that 'in the absence of any judicial order to the contrary, a constructive trust will take effect from the moment at which the conduct which has given rise to its imposition occurs': Oakley, Constructive Trusts (3rd ed, 1997), p 5. ... In the present case there is no reason, such as third parties in need of protection, to defer the inception of the trust, and accordingly it came into existence when the conduct which gave rise to its imposition occurred.
What is the relevant conduct in the present case? ... Mr Agnew's statement in 1980 did not itself bring any trust into existence. The trust arose when, in reliance on his statement that the land was theirs, the sons acted in the manner we have described [improving the land, doubling its capacity, turning stony land into arable land, extending the house and otherwise acting in reliance on the father's statement].[127]
111 This approach is also supported by Plimmer v Mayor, &c, of Wellington,[128] where the Court, on the basis of a Ramsden v Dyson estoppel, held in 1884 that John Plimmer had a perpetual right to occupy a jetty, that right being dated from 1856, the time when he incurred large expenditure for the extension of the jetty and erection of a warehouse in the face of acquiescence. His successor in title was therefore entitled to adequate compensation for that proprietary right when the jetty was later compulsorily acquired under legislation which came into force in 1880. Their Lordships said:
In their view, the licence given by the Government to John Plimmer, which was indefinite in point of duration but was revocable at will, became irrevocable by the transactions of 1856, because those transactions were sufficient to create in his mind a reasonable expectation that his occupation would not be disturbed; and because they and the subsequent dealings of the parties cannot be reasonably explained on any other supposition. Nothing was done to limit the use of the jetty in point of duration. The consequence is that Plimmer acquired an indefinite, that is practically a perpetual, right to the jetty for the purposes of the original licence, and if the ground was afterwards wanted for public purposes it could only be taken from him by the legislature.
...
Their Lordships have no difficulty in deciding that the equitable right acquired by John Plimmer is an interest in land carrying compensation under the Acts of 1880 and 1882.[129]
112 The capacity of a court to shape the relief it orders, in its discretion, does not support the view that a constructive trust arising in accordance with the principles of proprietary estoppel only comes into existence when the court makes its determination. As Ward J noted, by reference to Parsons v McBain:[130]
[A]ny 'discretion' attaching to the determination of the date from when the constructive trust is said to have arisen does not allow the court to weigh up various relevant factors but instead is referring to deciding whether the interests protected by the constructive trust should yield to other competing interests created as a result of postponing conduct or other factors, and ... such factors may mean that the court determines that some 'lesser' equity is required as the minimum necessary to do equity in the case.[131]
113 These considerations support the rejection of the submissions made by the McNabs, as canvassed above,[132] because they demonstrate that there is a legitimate reason to recognise the existence of the constructive trust at a point in time anterior to the commencement of the proceeding.
114 These considerations also support the rejection of the multiple propositions[133] that the McNabs relied on above:
(1) (a) The fact that Mr Turner never assumed the responsibilities of a trustee, expressly or in a de facto way, establishes only that there was no express trust and Mr Turner was not a trustee de son tort. It does not establish that Mr Turner was not a constructive trustee when he died given that he had made a promise to the Grahams that they reasonably relied on to their detriment and that, in accordance with the principles of proprietary estoppel, created an equitable interest in the property. To deny that Mr Turner was a trustee when he died is to deny the operation of the principles of proprietary estoppel.
(b) Furthermore, it was open to the judge to hold that Mr Turner intended to hold the property on behalf of the Grahams or should have so intended. The fact that Mr Turner expressly disclaimed any arrangement whereby he would cede any interest in the property before his death does not stand in the way of that proposition. This is because the degree of control Mr Turner sought to exercise over the property until his death was consistent with him retaining legal title to the property until deceased. This is compatible with the Grahams having a beneficial interest in the property before Mr Turner's death, by reason of their reasonable and detrimental reliance upon the representation, as explained by Ward J in Varma. The property was impressed with a constructive trust from the time of the conduct that gave rise to it; that is, from the time when the detrimental reliance rendered it unconscionable for Mr Turner to depart from the assumption created by the representation. On any account, this occurred before the commencement of the proceeding, either before Mr Turner's death or at the time of his death. In the circumstances it was not necessary for the judge to decide whether the Grahams had a beneficial interest in the property before Mr Turner's death;[134] all that was necessary for him to decide, and in my view he decided correctly, was that when the Grahams commenced the proceeding they had a beneficial interest in the property and were seeking to 'recover ... trust property' from the McNabs as trustees, standing in the shoes of Mr Turner.
(2) The judge did not make a foundational error about the time at which the trust arose. As explained above, although in some circumstances a court may grant a lesser relief than a declaration of a constructive trust, and thus the question of whether a constructive trust will be declared may not be resolved until the court makes a determination, when the declaration is made, the trust is treated as coming into existence at the time the conduct occurs that gives rise to it. This occurs in accordance with the equity maxim nunc pro tunc, which operates similarly to all other deeming provisions. Furthermore, as explained, the McNabs' reliance on Williams is misplaced. The reasoning of the judge is consistent with Giumelli. The conclusion that s 21(1)(b) was engaged is not vitiated.
(3) The equity created by Mr Turner's conduct would not have been satisfied by the imposition of a trust from the date the order was made because the Grahams continued to live at the property and, as that occupancy was now rent-free, their occupancy was enjoyed on more favourable terms than during Mr Turner's life. The representation was to the effect that the Grahams would inherit absolute title to the property on Mr Turner's death. The representation was first made when Mr Turner was 64 and Mr Graham was 31. At that time Mrs Turner was 58 and Mrs Graham was 28. The representation was repeated. The nature and degree of the detrimental reliance[135] was considerable, including the obligations the Grahams assumed with respect to daily checking, meal preparation, and household chores when Mrs Turner's asthma and emphysema worsened before her death. Moreover, the detrimental reliance was profoundly personal given that the Grahams also carried out the intimate physical care required for Mr Turner's welfare after he developed urinary and bowel incontinence. The Grahams cared for Mr Turner when he reacted to his wife's death by exhibiting an at times incoherent presentation and increasing his consumption of alcohol. The task is not to engage in an assessment of what is 'fair value' for devoted conduct; it is rather to emphasise that all of the care given by the Grahams was done on the faith of the representation. It cannot now be gainsaid by suggesting that a lifetime right of occupancy would satisfy the equity; or that the same detrimental reliance would have occurred had Mr Turner only promised a lifetime occupancy at the property. There is no finding to that effect and any suggestion is, in my view, pure speculation and unsupported by the primary facts.[136] Moreover, as Nettle JA said in Donis, proprietary estoppel is not a case of quid pro quo:
[T]he law of proprietary estoppel is not a manifestation of the concept of unjust enrichment as understood in the law relating to restitution. It is the product of a discrete equitable principle that the conduct of a promisor in engaging a promisee to change his or her position to the promisee's detriment binds the promisor to make good the promisee's expectation. The detrimental reliance which supports the estoppel is, therefore, not to be conceived of as consideration in any sense. It is not a case of quid pro quo and even less one which requires correspondence as between the financial value of whatever may move each way.[137]
(4) For the reasons described above, the judge's 'ex post' order declaring that the property is held on trust does have the consequence that at the time the proceeding was commenced the Grahams were, relevantly, 'beneficiaries under a trust' seeking to 'recover' existing 'trust property'.
(5) Furthermore, for the reasons discussed above, the character of the trust was not 'purely remedial'. Its existence and content as a remedy of a proprietary nature arose out of the conduct voluntarily engaged in by the parties; it is a 'trust' to which s 21(1)(b) of the Act applies. It is to be contrasted with circumstances where the court imposes liability on a wrongdoer who might loosely be labelled a 'constructive trustee', as in Williams, where the constructive trust is no more than a 'remedial formula'.[138]
115 One of the areas of dispute between the parties relates to a choice of terminology or labels. The McNabs submit that no institutional constructive trust was present because this relies on the presence of an intention to create a trust and this intention was absent. This is one of the grounds upon which they contend that the trust the judge recognised could be nothing more than a bare remedial constructive trust. They also observe that, in the area of proprietary estoppel, when a constructive trust is imposed it is imposed regardless of any actual or presumed intention.
116 By contrast, the Grahams submit that the constructive trust recognised by the judge is an institutional constructive trust. They further submit that, in any event, the terminology in this area is sometimes used inconsistently and the labels are ambiguous and confusing. What is important is to see behind the labels to determine if, in the circumstances of this case, a beneficial interest in property has arisen or merely a right to sue for an equitable remedy.[139]
117 A J Oakley, in his book, Constructive Trusts,[140] confronts some of these difficulties first by reaffirming that a constructive trust arises independently of actual intention:
Constructive trusts arise by operation of law. Unlike all other trusts, a constructive trust is imposed by the court as a result of the conduct of the trustee and therefore arises quite independently of any of the intention of any of the parties.[141]
118 He then explains in an accompanying footnote that this is compatible with there having been an express or implied intention because the constructive trust only needs to be imposed as a result of the constructive trustee having gone back on the original understanding:[142]
There are, of course, circumstances where constructive trusts are imposed to give effect to the express or implied intention of the parties. ... the implied intention of the parties is given effect to, eg, where a constructive trust is imposed when a person has improved property on the understanding that he would thereby obtain a beneficial interest in it. ... However, given that such constructive trusts only need to be imposed because the constructive trustee has gone back on what was originally envisaged, such cases in fact re-emphasise that constructive trusts arise independently of the intention of the parties.[143]
119 Oakley further observes that there is an overlap between common intention constructive trusts and trusts arising in accordance with the principles of proprietary estoppel:
[T]here is an increasing overlap between the 'common intention constructive trust' and the doctrine of equitable proprietary estoppel; indeed it has been suggested that the distinction between the two is now quite illusory and that it is 'time that the courts and counsel moved beyond pigeon-holing circumstances into common intention constructive trusts and equitable estoppels and concentrated upon the basic principle of unconscionability underlying both doctrines'. The principle of unconscionability certainly underlies 'common intention constructive trusts'; it is only appropriate to classify them as constructive trusts at all because of the fact that in cases of this type the holder of the legal title will almost inevitably have attempted to go back on an express agreement or common intention.[144]
120 This overlap, or analogy, between common intention constructive trusts and trusts arising in accordance with the principles of proprietary estoppel rests on the trust springing from the conduct of the parties, as urged by the Grahams here. The Full Court of the Federal Court observed in Agnew that there is a view that 'the common intention constructive trust is but a particular application of proprietary estoppel principles'[145] and that 'the two doctrines rest on the same foundation and have reached the same conclusions'[146] and concluded:
Whatever the differences between the two doctrines [common intention constructive trusts and proprietary estoppel] ... they share the aim of frustrating unconscionable conduct.[147]
121 It is noteworthy that neither in Sidhu nor in Giumelli does the High Court make any mention of an 'institutional constructive trust' or compare it to a 'remedial constructive trust'. No mention is made of a 'common intention constructive trust'. The distinction drawn by Ormiston JA in Nolan is not discussed nor applied. It may be that the distinction is not apposite, or not useful, in the context of proprietary estoppel. It is important to recognise that Nolan is not a case of proprietary estoppel; it is a case in conversion, which addressed the question of whether Sidney Nolan, after having given certain paintings to his first wife, converted those paintings after her death, a critical question being whether Sidney Nolan was an executor, or trustee de son tort. In that context, the relevant distinction was between a trustee de son tort and ancillary liability under Barnes v Addy, and Ormiston JA's comments must be understood in that context. In particular, Ormiston JA's remarks that a person who 'intends to act adversely to other persons having a right in the property' is not a trustee[148] should be interpreted as meaning that that person does not become a trustee de son tort because they are not acting consistently with what it is to be such a trustee (namely, voluntarily assuming fiduciary obligations). In my view, with great respect to his Honour, he should not be interpreted as referring to constructive trusts in general and, in particular, not referring to constructive trusts that arise in accordance with principles of proprietary estoppel.
122 By contrast, the relevant distinction that is applied in Giumelli is, as noted,[149] that between trustees of a constructive trust which is proprietary in nature, being founded upon an assumption as to future ownership of property being induced by representations upon which there has been detrimental reliance, and those who are loosely labelled 'constructive trustees' because they are wrongdoers.
123 In any event, it is necessary to keep in mind the observations of Deane J in Muschinski v Dodds that all trusts of equity are essentially remedial in origin and that, in a broad sense, the constructive trust is both an institution and a remedy, but 'any perceived dichotomy between the two notions tends to prove ephemeral upon closer examination'.[150] He said:
At times, disputing factions have tended to polarize the discussion by reference to competing rallying points of 'remedy' and 'institution'. The perceived dichotomy between these two catchwords has, however, largely been the consequence of lack of definition. In a broad sense, the constructive trust is both an institution and a remedy of the law of equity. ... The use or trust of equity, like equity itself, was essentially remedial in its origins.[151]
124 In my view, the attempts made here to polarize a distinction between institutional constructive trusts and remedial constructive trusts has not assisted the resolution of the dispute.
(3) Was the judge obliged to consider a lesser equitable remedy?
125 The McNabs accept that in principle a court may impose a constructive trust in order to satisfy an interest created by a representor's conduct, but they submit that the court ought not to do so without first deciding whether in all the circumstances (including the position of potentially affected third parties), there is an appropriate equitable remedy falling short of the imposition of a trust.
126 The McNabs rely upon the High Court's endorsement in Giumelli[152] of Plimmer[153] to submit that a court, before imposing a remedial constructive trust, should determine first whether there is an appropriate lesser equitable remedy which satisfies the equity created by a defendant's conduct. They submit that this is because, as was recognised in Walton Stores,[154] 'equitable estoppel has its basis in unconscionable conduct, rather than the making good of representations',[155] as
the object of the equity is not to compel the party bound to fulfil the assumption or expectation; it is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting thereon.[156]
127 The McNabs rely upon the manner in which the High Court in Sidhu identified the 'fundamental purpose of equitable estoppel'[157] as the 'protect[ion of] the plaintiff from the detriment which would flow from the defendant's change of position'[158] and submit that equity's focus in proprietary estoppel cases is on avoiding detriment, not making good on promises.
128 In particular, the McNabs submit that the judge ought to have first considered whether any of the following alternatives would satisfy the equity raised by Mr Turner's conduct:
(1) monetary compensation as sought in the alternative by the Grahams;
(2) awarding the Grahams an unqualified life interest;
(3) imposing a constructive trust from the date of judgment;
(4) a right of occupancy as provided for in the Will.
129 It is noteworthy that the fundamental purpose identified in Sidhu, relied upon by the McNabs, occurs at the commencement of a passage, extracted above,[159] where the Court goes on to endorse the observations of Nettle JA in Donis that where 'the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature ... beyond the measure of money'[160] by reason of resiling from a promise which has induced the conduct to the promisee's detriment, the relief which is necessary to satisfy the equity 'is usually that which reflects the value of the promise'.[161] In my view, considering the full passage in context does not support the McNabs' position.
130 The Court in Sidhu emphasised that the promisor had been correct not to rely, in the context of proprietary estoppel, on the 'minimum equity' principle canvassed in Verwayen because the relief, as mentioned, 'usually ... reflects the value of the promise'.[162] The usual position may be defeated if the plaintiff's detriment is of a relatively small, readily quantifiable monetary outlay, in which case reimbursement may suffice.[163] This qualification applies where there is 'such a small and impersonal degree of detriment as to be wholly compensable in cash'.[164] But these are not the circumstances here, where the detriment suffered was of a highly personal nature involving very close contact and constant and faithful care.[165] The representation caused life-changing decisions by the Grahams in taking on significant responsibilities to care for people to whom they otherwise had no moral obligation. In my view, there is nothing in the circumstances of the case that obliged the judge to consider whether this qualification applied.
131 The Court in Sidhu acknowledged a secondary qualification, namely, where an order that steps be taken to fulfil a promise would be 'wholly inequitable and unjust' because this would be disproportionate to the detriment that would be suffered if the promise went unfulfilled and compensation ordered.[166] Again, in my view, there is nothing in the circumstances of this case that renders it so out of the ordinary as to oblige the judge to consider whether this qualification applied, recalling that estoppel is not a case of quid pro quo.[167]
132 The McNabs submit, however, that there are innocent third-party interests at stake. They point to the interests of the Freemasons/Epworth Hospital, as the remainderman under the Will. They submit that the Freemasons/Epworth Hospital had already obtained an interest as residuary beneficiary under the Will before the proceeding commenced and that the imposition of a constructive trust over the property was in effect harshly inequitable to that interest.
133 In my view, this submission must be rejected. The interest of the Freemasons/Epworth Hospital arose because it was a beneficiary under the Will. It was a volunteer with no other claim[168] and equity does not assist a volunteer.[169] That being so, it could have no greater interest than that held by Mr Turner at the date of his death.[170] As discussed, the property was impressed with a constructive trust from the time when there was reliance upon the promise which rendered it unconscionable for Mr Turner to resile from the representation.[171] On any account, this occurred before the commencement of the proceeding, either before Mr Turner's death or at the time of his death. Any interest the Freemasons/Epworth Hospital gained under the Will is subject to the constructive trust over the property in favour of the Grahams. Given the status of the Freemasons/Epworth Hospital as a volunteer, there was no need for the judge to consider the effect of his determination upon the hospital before making the orders he did.
134 The McNabs further submit that, the Freemasons/Epworth Hospital's interest is an interest to be protected, even as a volunteer, given that more than 15 years have passed since Mr Turner's death. In my view, this submission should also be rejected because it is premised upon a limitation period of 15 years being applicable and I have concluded that no limitation period applies here.
(4) Did the judge make inconsistent findings?
135 The McNabs submit that the judge made several contradictory findings, namely, that he found, at [97] and [106] of the Reasons,[172] that Mr Turner held the property on a constructive trust for the Grahams which 'arose' prior to his death but also found, at [101],[173] that the constructive trust in favour of the Grahams arose upon Mr Turner's death or, at the latest, on the date on which the Grahams learned of the content of the Will. That is, the McNabs submit that the judge found that there was an inter vivos constructive trust but also, inconsistently, that no constructive trust arose until at least the time of Mr Turner's death. They submit further that the judge found, at [106], that the basis of the trust was that Mr Turner 'intended to hold the property on behalf of [the Grahams] or, at the very least, that he should have had such an intention',[174] when the other findings were not based upon Mr Turner's intention.
136 I do not consider that the findings are inconsistent. As the Grahams submit, and I agree, the McNabs have incorrectly summarised the conclusions of the judge. In particular, they have failed to appreciate that when the judge stated, at [101],[175] that the Grahams' right to receive title to the property accrued upon Mr Turner's death, or at the latest, upon learning of the contents of the Will, this was on the hypothesis that s 21(1)(b) did not apply, that is, that the strictures of s 22 applied.[176] In other words, the observation at [101] is made on the basis that the proceeding is not for the recovery of trust property but is, rather, an action claiming an interest in the personal estate of a deceased person. This is apparent from an analysis of [101]; the opening words of that paragraph make it plain that the remarks are based upon the hypothesis that s 21 does not apply but that s 22 does:
The issue here is whether s 21 applies. If it does, there is no limitation period and the defence on this issue fails. If it does not apply, then I consider s 22 does apply. If that were the case, ...
On that hypothesis the judge dates the interest as follows:
I consider that the date when Mr and Mrs Graham's right to receive the claimed interest in No 73 accrued on either the date of Mr Turner's death or,
at the latest, on the date upon which the Grahams learned of the contents of his Will.
He then goes on to draw out the implications of s 22 applying, namely that the 15-year limitation period applies and has expired:
It would follow that the claim could not be brought after the expiration of fifteen years from that date. The parties were in agreement that, if the fifteen-year expiration period applied, it had expired by late 2012.[177]
137 The remarks at [101] are thus the contemplation of a distinct alternative and, properly understood, do not contradict the other findings made.
Conclusion on the application for leave to appeal
138 I would grant leave to appeal on the basis that there were real prospects of success of the appeal; that is, the prospects of success were not fanciful.[178]
139 In my view, for the purposes of the Act, the meaning of 'constructive trust' under s 3 of the Trustee Act extends to a constructive trust that arises in accordance with the principles of proprietary estoppel. I consider that there is no error in the judge's determination that, at the time the proceeding was commenced, it was a proceeding 'to recover ... trust property' within the meaning of s 21(1)(b) of the Act and thus that no limitation period applied. I would dismiss the appeal.
140 I have had the advantage of reading, in draft, the reasons of Tate JA. For the reasons that she gives, I agree that the application for leave to appeal should be granted and the appeal dismissed.
[1] Graham v McNab [2016] VCC 1128 ('Reasons').
[4] For convenience, on most occasions in what follows I refer simply to 'the appeal'.
[5] Varma v Varma (2010) 6 ASTLR 152, 259 [507] (NSW Supreme Court (Equity)) (Ward J) ('Varma').
[6] Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505, 529 [84] ('Sidhu').
[7] Commonwealth v Verwayen (1990) 170 CLR 394, 443 (Deane J) ('Verwayen').
[8] Donis v Donis [2007] VSCA 89; (2007) 19 VR 577, 589 [34] (Nettle JA) ('Donis'). See Sidhu [2014] HCA 19; (2014) 251 CLR 505, 529-30 [84] approving the approach of Nettle JA in Donis [2007] VSCA 89; (2007) 19 VR 577, 588-9 [34].
[9] Sidhu [2014] HCA 19; (2014) 251 CLR 505, 530 [85].
[11] Leave was reserved to Mr Graham, as the other executor appointed in the Will, to come to the Court at any time, and prove the same.
[15] This is so whether the 15 years commenced from either the date of Mr Turner's death or, at the latest, the date upon which the Grahams learned of the contents of the Will.
[17] See, for example, Reasons [98]. The 'personal estate' of a deceased is not usually regarded as including real property: G E Dal Pont and K F Mackie, Law of Succession (LexisNexis Butterworths, 2013) 4 P9 (Terminology: definition of 'personal estate' and 'real estate'), 347-8 [11.68]-[11.70], Administration and Probate Act 1958 s 20.
[22] Ibid [75]. This Court has not been invited to interfere with these findings of fact on the basis that they are wrong by reason of incontrovertible facts or uncontested testimony, or they are glaringly improbable or contrary to compelling inferences: Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 331 ALR 550, 558-9 [43].
[24] Ibid [79] (citations omitted). The judge also said: '[The Grahams] moved to No 73 because of the promises made by Mr Turner that if they moved there and looked after him and his wife during their respective lifetimes, then he would leave the property to them on his death' (Reasons [53]). See also [54]-[55].
[34] Reasons [101] (emphasis in original).
[37] [2004] VSCA 109 ('Nolan'). See [80]-[82] below.
[38] Reasons [105]-[106] (citations omitted).
[40] Ibid [108]. The Grahams also submitted that s 21(1)(a) of the Act applied on the basis that the conduct of Finlay McNab, in advising Mr Graham that an attempt to challenge the Will would be hopeless, constituted a fraud or equitable fraud upon the Grahams. The judge rejected this submission and there is no challenge to that rejection on the appeal: Reasons [109].
[43] Leave was granted to the McNabs to amend their application for leave to appeal to include ground 4.
[45] (1999) 196 CLR 101 ('Giumelli').
[46] Sidhu [2014] HCA 19; (2014) 251 CLR 505, 511 [2] (French CJ, Kiefel, Bell and Keane JJ) (citations omitted).
[47] In particular, the Court rejected the approach of the New South Wales Court of Appeal that in some circumstances the onus of proof in relation to the issue of detrimental reliance shifts from the plaintiff to the party said to be estopped.
[48] Ibid 522-3 [58] (citations omitted). Gageler J agreed with the joint reasons and made some separate observations in relation to onus of proof.
[51] Reference was made to Dillwyn v Llewelyn [1862] EngR 908; (1862) 4 De GF & J 517, 45 ER 1285; Ramsden v Dyson (1866) LR 1 HL 129; Riches v Hogben [1985] 2 Qd R 292; and Verwayen (1990) 170 CLR 394. The circumstances of Dillwyn v Lewelyn amount to estoppel by encouragement, the type of estoppel applicable here.
[52] Sidhu [2014] HCA 19; (2014) 251 CLR 505, 529-30 [82]-[85] (emphasis added) (citations omitted).
[55] The Court referred to Royal Brunei Airlines Sdn Bhd v Tan [1995] UKPC 4; [1995] 2 AC 378, 392 where the liability involved was accessorial liability for a 'dishonest assister', that is, liability on a person who has dishonestly been an accessory to or assisted in a disposition of property in breach of trust: Giumelli (1999) 196 CLR 101, 112 n 49.
[56] Ibid 111-12 [2]-[6] (emphasis added) (citations omitted).
[57] Ibid 113 [10] (citations omitted).
[60] Verwayen (1990) 170 CLR 394, 443 cited in Giumelli (1999) 196 CLR 101, 123 [42]
[62] Giumelli (1999) 196 CLR 101, 125 [51].
[63] Ibid 125 [49]-[50]. More recently, in Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 333 ALR 384, 418 [150] ('Crown'), Keane J referred to the exposition of proprietary estoppel in Giumelli, and made the following observation: 'In Giumelli, this Court explained the doctrinal basis of relief by way of proprietary estoppel as involving the recognition of a constructive trust of property whereby the legal title of the owner of property is subjected by order of the court to limitations necessary to meet the requirements of good conscience' (emphasis added) (citation omitted). This observation was also relied upon by the McNabs on the appeal. However, Keane J's observation was made in the context of discussing whether an expectation had reasonably arisen from the conduct of the other party; it was not made in the course of a discussion about whether a constructive trust arising by proprietary estoppel comes into existence at the time the court makes an order or before. Moreover, Keane J had earlier noted (at 417 [145]) that proprietary estoppel concerns 'the recognition of interests in property' (emphasis added). See n 123 below.
[64] It was also submitted that the Grahams' claim was 'unquestionably for a 'remedial' constructive trust'.
[65] [2004] VSCA 109 [61].
[66] [1998] EWCA Civ 1249; [1999] 1 All ER 400 ('Paragon').
[67] [2004] VSCA 109 [61].
[69] Nolan [2004] VSCA 109 [61], [63], [65] (emphasis added) (citations omitted).
[73] Ascertaining the intention of the parties is an objective inquiry; as Heydon and Crennan JJ said in Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, 286 [105], in the context of determining whether there was a trust between spouses: 'The authorities establish that in relation to trusts, as in relation to contracts, the search for "intention" is only a search for the intention as revealed in the words the parties used, amplified by facts known to both parties.' They went on (at 287 [107]) to quote from Lord Diplock in Gissing v Gissing [1970] UKHL 3; [1971] AC 886, 906, who said: '[T]he relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. On the other hand, he is not bound by any inference which the other party draws as to his intention unless that inference is one which can reasonably be drawn from his words or conduct'.
[76] [2014] UKSC 10; [2014] AC 1189 ('Williams').
[81] Ibid 1198 [10] quoting Selangor United Rubber Estates Ltd v Cradock [No 3] [1968] 1 WLR 1555, 1582 (Ungoed-Thomas J) ('Selangor'). Lord Hughes JSC agreed with Lord Sumption JSC and with Lord Neuberger PSC who delivered substantially similar reasons.
[82] Williams [2014] UKSC 10; [2014] AC 1189, 1199-200 [12]-[13]. See also 1211 [44]-[45] (Lord Neuberger PSC).
[83] Ibid 1200 [15] (Lord Sumption JSC quoting Hovenden v Lord Annesley (1806) 2 Sch & Lef 607, 634).
[84] Williams [2014] UKSC 10; [2014] AC 1189, 1200 [15] (Lord Sumption JSC) quoting Beckford v Wade [1805] EngR 116; (1805) 17 Ves 87, 97.
[85] Williams [2014] UKSC 10; [2014] AC 1189, 1206 [26] (Lord Sumption JSC) (emphasis added) (citation omitted).
[86] Ibid 1216-17 [70] (emphasis added) (citations omitted).
[88] Ibid 1206 [26] (Lord Sumption JSC).
[89] A sixth reason was proffered with respect to the judge's failure to consider a lesser remedy; this is considered under that issue below.
[96] This is confirmed by the fact that Lord Sumption JSC, in his discussion of the liability of someone who has dishonestly assisted a breach of trust or received trust assets knowing they were transferred in breach of trust, says: 'There may also, in some circumstances, be a proprietary claim': Williams [2014] UKSC 10; [2014] AC 1189, 1208 [31] (emphasis added). He goes on to say in the same passage: 'But all this is simply the measure of the remedy. It does not make him a trustee or bring him within the provisions of the Limitation Act 1980 relating to trustees'.
[97] Grimaldi v Chameleon Mining NL [No 2] [2012] FCAFC 6; (2012) 200 FCR 296, 359 [253], 415 [555] (Finn, Stone and Perram JJ). Moreover, in the case of a knowing recipient, the liability does not depend upon the third party accessory retaining the relevant property.
[98] Paragon [1998] EWCA Civ 1249; [1999] 1 All ER 400, 414.
[99] Donis [2007] VSCA 89; (2007) 19 VR 577, 582 [19].
[106] [2004] VSCA 109 [61]. See [82] above.
[107] Paragon [1998] EWCA Civ 1249; [1999] 1 All ER 400, 409 (Millett LJ) quoting Selangor [1968] 1 WLR 1555, 1582 (Ungoed-Thomas J). See [80] above.
[108] Nolan [2004] VSCA 109 [61] quoting Paragon [1998] EWCA Civ 1249; [1999] 1 All ER 400, 413. See [80] above.
[109] Hamilton v Geraghty (1901) 1 SR NSW 81, 89.
[111] Ibid 259 [507] (citations omitted). She went on to say: 'In such a case, the doctrine of priorities would apply and, where the equities are equal, the beneficiary of the constructive trust would be entitled to priority over the holder of a later equitable interest, a later legal interest (providing they are not a bona fide purchaser for value without notice) or an unsecured creditor of the constructive trustee': ibid. See also P W Young, C Croft and M L Smith, On Equity (Lawbook Co, 2009), 453 [6.850], In de Braekt v Powell [2007] WASCA 55; (2007) 33 WAR 389, 407 [26], Payne v Rowe [2012] NSWSC 685 [99] (Ball J).
[112] Ibid 163 [17(iv)]. See also 254-6 [481]-[494].
[114] Ibid 261 [515] (emphasis in original) quoting Secretary, Department of Social Security v Agnew [2000] FCA 59; (2000) 96 FCR 357, 365 [18] ('Agnew').
[115] Varma (2010) 6 ASTLR 152, 261 [518] (emphasis added).
[116] Ibid 163 [17(vi)]. Ward J also found that, if it were relevant, she would have held that the transferees also took the shares with notice of Parveen's interest or equitable claim to the shares within the third category of notice in Baden v Société Générale pour Favouriser le Developpement du Commerce et de L'Industrie en France SA [1993] 1 WLR 509.
[117] On the issue of reliance see Sidhu [2014] HCA 19; (2014) 251 CLR 505, 528-9 [80]-[81].
[118] See Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; (1998) 195 CLR 566, 585 [42], Stephenson Nominees Pty Ltd v Official Receiver (1987) 16 FCR 536, 555-6 (Gummow J (in dissent)).
[120] (1999) 196 CLR 101. See [73] above.
[121] See also Plimmer (1884) 9 App Cas 699 discussed at [111] below.
[126] [2000] FCA 59; (2000) 96 FCR 357, 365 [18]. See also Youssef v Victoria University of Technology [2005] VSC 223 [97] where Whelan J said: 'There has been controversy in relation to whether a constructive trust is an equitable interest arising upon the making of the remedial order, or an equitable interest arising upon the occurrence of the circumstances giving rise to the entitlement to the remedy. It seems to me that Deane J's analysis in Muschinski v Dodds supports an approach under which the interest arises upon the occurrence of the entitling circumstances whilst recognising the court's ability when moulding or adapting the remedy to allow for subsequent claims and events. This approach appears to me to be now established'.
[127] Agnew [2000] FCA 59; (2000) 96 FCR 357, 365 [18]-[19]. See also Re Sharpe [1980] 1 WLR 219, 225.
[128] (1884) 9 App Cas 699 (Privy Council) ('Plimmer').
[129] Plimmer (1884) 9 App Cas 699, 714-5.
[130] [2001] FCA 376; (2001) 109 FCR 120, 126 [15].
[131] Varma (2010) 6 ASTLR 152, 260 [510].
[136] The question of whether the judge should have granted a lesser form of relief is discussed below.
[137] [2007] VSCA 89; (2007) 19 VR 577, 594 [56] (citation omitted). See also Sidhu [2014] HCA 19; (2014) 251 CLR 505, 522-3 [58].
[138] See [80] above, Ormiston JA in Nolan [2004] VSCA 109 [61], referring to Millett LJ in Paragon [1998] EWCA Civ 1249; [1999] 1 All ER 400, 413 (5).
[139] See Feiglin v Ainsworth [2015] VSCA 326 [46]-[47].
[140] (London Sweet & Maxwell, 3rd ed, 1997).
[142] Indeed, in the foundational authority concerning estoppel by encouragement, Dillwyn v Llewelyn, the proprietary estoppel arose because good conscience meant that the 'intention to give the fee simple must be performed': [1862] EngR 908; (1862) 4 De GF & J 517, 523; [1862] EWHC J67; 45 ER 1284, 1287 (Lord Westbury LC).
[144] Ibid 76 citing Hayton & Marshall: Commentary and Cases on the Law of Trusts and Equitable Remedies, (Sweet & Maxwell, 10th ed, 1996) 373. See also Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, 416 (Brennan J) ('Walton Stores').
[145] Agnew [2000] FCA 59; (2000) 96 FCR 357, 363 [13] citing Austin v Keele (1987) 10 NSWLR 283, 290.
[146] Agnew [2000] FCA 59; (2000) 96 FCR 357, 363 [13] citing Grant v Edwards [1986] Ch 638, 656.
[147] Agnew [2000] FCA 59; (2000) 96 FCR 357, 363 [14].
[148] Nolan [2004] VSCA 109 [60]. See [80] above.
[150] [1985] HCA 78; (1985) 160 CLR 583, 614.
[152] (1999) 196 CLR 101, 113 [10]. See [74] above.
[153] (1884) 9 App Cas 699, 714.
[155] Ibid 405 (Mason CJ and Wilson J).
[157] Sidhu [2014] HCA 19; (2014) 251 CLR 505, 529 [82]. See [70] above.
[160] Sidhu [2014] HCA 19; (2014) 251 CLR 505, 530 [84] quoting Donis [2007] VSCA 89; (2007) 19 VR 577, 589 [34].
[161] Sidhu [2014] HCA 19; (2014) 251 CLR 505, 530 [85].
[162] Ibid. In Donis [2007] VSCA 89; (2007) 19 VR 577 Nettle JA described this in terms of a 'prima facie position': 582-3 [19]-[20]. See also Giumelli (1999) 196 CLR 101, 123-4 [42], Harrison v Harrison [2013] VSCA 170 [139]-[141], [159], Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483, 494 [63] (Handley AJA) ('Delaforce').
[163] Sidhu [2014] HCA 19; (2014) 251 CLR 505, 529 [84].
[164] Donis [2007] VSCA 89; (2007) 19 VR 577, 588 [34].
[166] Sidhu [2014] HCA 19; (2014) 251 CLR 505, 530 [85]. See Donis [2007] VSCA 89; (2007) 19 VR 577, 583 [20].
[167] See [114] above. See also Delaforce [2010] NSWCA 84; (2010) 78 NSWLR 483, 485-6 [3]-[4] (Allsop P).
[168] See Delaforce [2010] NSWCA 84; (2010) 78 NSWLR 483, 497 [93] (Handley AJA).
[169] Milroy v Lord [1862] EngR 951; (1862) 4 De G F & J 264; 45 ER 1185.
[170] In re Diplock [1948] 1 Ch 465, 539, Foskett v McKeown [2000] UKHL 29; [2001] 1 AC 102, 130, 132-3 (Lord Millett, with whom Lord Browne-Wilkinson and Lord Hoffmann agreed).
[178] Supreme Court Act 1986 s 14C, Kennedy v Shire of Campaspe [2015] VSCA 47 [12].
McNab
Graham [2017] VSCA 352
(1990) 170 CLR 394
(1999) 196 CLR 101
(2014) 251 CLR 505
(2007) 19 VR 577
(2012) 200 FCR 296
(1988) 164 CLR 387
(2010) 78 NSWLR 483
(2011) 243 CLR 253
(2007) 33 WAR 389
(1987) 16 FCR 536
(1985) 160 CLR 583
(2000) 96 FCR 357
(2016) 331 ALR 550
(2016) 333 ALR 384
(1998) 195 CLR 566
(2001) 109 FCR 120
(1987) 10 NSWLR 283