Proietti v Proietti

Supreme Court of NSW|2022-06-11|Before: Kunc J

Summary

The parties to these proceedings are two brothers who inherited the family home at Marsfield (the Property) from their late mother. Without intending any disrespect, I will refer to them by their given names.
The defendant (Philip) is fifty-two years of age. He has resided in the Property for more than thirty years, being the vast majority of his adult life, and during that time provided care to his elderly parents preceding their deaths. The plaintiff (Peter) has mostly lived independently and has not resided at the Property for many years.
Peter and Philip now hold the Property as tenants in common. They are in dispute about when and, if so, on what terms, the Property should be sold. Peter has brought these proceedings for orders under s 66G of the Conveyancing Act 1919 (NSW). Philip opposed any such orders being made.
As is well known, orders under s66G will generally be made unless the defendant can demonstrate some extant legal or equitable right that is inconsistent with that relief being granted, or which cannot be accommodated by the terms on which any orders are made. For the reasons which follow, the Court finds that Philip has not made out any of the legal arguments he advanced in defence to Peter's application, being proprietary estoppel, promissory estoppel and contract. The Court will make orders for the appointment of trustees for sale of the Property, subject to hearing the parties about the form of those orders and including whether Philip can demonstrate that he has any possibility of raising funds within a reasonable time to bid at any auction.

The facts - a preliminary observation

Both Peter and Philip gave evidence by affidavit. While Philip was given the opportunity to do so, he did not object to any of Peter's affidavit evidence. On the other hand, the Court upheld a large number of objections made by Mr Paterson on behalf of Peter to Philip's affidavit. Philip cross-examined Peter. However, Mr Paterson elected not to cross-examine Philip on his affidavit.
By reason of the forensic decision he had taken, Mr Paterson entirely properly submitted that the Court should accept so much of Philip's affidavit that had been admitted into evidence. The Court will do so. Furthermore, other matters are incontrovertibly established by reason of the fact that many of the potentially relevant exchanges between the brothers took place by text messages. To these two sources of evidence may be added some limited concessions made in cross-examination by Peter. These three sources form the basis of the Court's findings of fact set out in the next section of these reasons as uncontroversial facts.
After recording the uncontroversial facts, I will set out the evidence, arguments and findings in relation to Philip's three factual submissions that were strenuously disputed by Peter: 1. That Peter both knew of the terms of their mother's will made in 2015 that purported to give Philip a four year right of residence in the Property from their mother's death and that she had removed that provision in her 2016 will; 2. That Peter had exercised undue influence or duress on their mother to persuade her to make that critical change between her 2015 and 2016 wills; 3. That at a meeting on 18 March 2021, Peter had represented to Philip, or they agreed, that there would be no sale of the Property until 2023.
Finally, it is convenient to note two procedural matters. First, the Court has proceeded only by reference to the affidavit evidence that was admitted together with what emerged in cross-examination. While no disrespect is intended to Philip, as is often the case with self-represented litigants who are not lawyers, much of what Philip said in the questions that he posed to his brother and in the course of his submissions to the Court may well have been material that could have been given in evidence. It was not. The Court accepts Mr Paterson's submission that the Court should not treat anything that fell from Philip by way of what may sometimes be referred to as "evidence from the Bar table" as evidence. The Court has not done so. To do otherwise would be to visit a serious procedural unfairness on Peter and put the Court to the task of attempting to discern what was evidence and what was submission.
Second, I indicated to the parties at the outset that but for the matters raised by Philip, this was a clear case for relief under s 66G. In those circumstances, and after some brief opening submissions by Mr Paterson, at the conclusion of the evidence the case proceeded on the basis that the Court first heard from Philip as to why he submitted no orders should be made, followed by Mr Paterson's submissions on behalf of Peter in response. I then gave Philip a brief right of reply.

The facts - Philip's affidavit evidence

It is convenient to begin by setting out those relevant parts of Philip's affidavit that were admitted into evidence. The Court finds in accordance with these: "6. Just after my father's death Mum told me she wanted to put in her will that the property be not sold for four years after her death. I said to her this would not be necessary as me and Peter got along, and we would not have these types of problems. But she insisted so I did not disagree anymore. I refer to Annexure A, and the pages comprising it marked A. A copy of the will dated March 2015 prepared by Darrell Freeman of Freemen (sic) & Co. It can be seen that any sale required my consent and I would be responsible for maintenance of the property not rent. I was not aware of the rental stipulation, but I did not pay rent ever to Mum or Dad. 7. In about March 2016 Mum informed me that she had changed her mind about the four year clause based on advice she received. … 11. At that particular time, Peter and I made a verbal agreement that I was to pay rent of $400 a week from the first week of July in the year of 2020. … We agreed to constantly update it, depending on changes in our own individual circumstances over time. Initially, the agreement was not to sell the home before late 2021 to early 2022. … 13. In the early part of 2021 I got together with Peter to discuss our latest plans to sell the house and where our lives were going. He told me that he was considering moving to Brisbane, but the concern was his children and how that would fit with them. So, 2023 was the date he was looking at. I concurred, with Covid, and the disruption caused by the development next door the timeline suited me as well."

The facts - generally

Subject to the qualified observation below concerning the purported will of March 2015, the Court finds these further facts.
Peter and Philip's father died on 21 February 2015.
Attached to paragraph 6 of Philip's affidavit was an unsigned copy of a will of Philip and Peter's mother, Mrs Miranda Proietti, which had a typed execution date of March 2015 (the 2015 Will). Philip was adamant that the Court should find that the 2015 Will had in fact been executed by his mother. For Peter's part, Mr Paterson said that his client did not know one way or the other whether Mrs Proietti had ever executed the 2015 Will. Neither party called the solicitor who apparently prepared the 2015 Will and who undoubtedly prepared and was an attesting witness to the will which Mrs Proietti did make one year later.
Strictly speaking, I am not actually persuaded on the balance of probabilities by such of Philip's affidavit evidence that was admitted or any other evidence before the Court that the 2015 Will was ever executed. I decline to make the finding sought by Philip in that regard. However, because whether or not the 2015 Will was ever executed is not decisive to the outcome of these proceedings, I will assume in Philip's favour for the purposes of what follows that the 2015 Will was in fact executed.
The 2015 Will included: "THIS IS THE LAST WILL AND TESTAMENT of me MIRANDA PROIETTI of XXXX, Marsfield in the State of New South Wales, Table Hand. 1. I HEREBY REVOKE all former Wills and testamentary dispositions made by me AND DECLARE this to be my last Will and testament. 2. IF my sons PHILIP JOSEPH PROIETTI and PETER ROBERT PROIETTI both survive me by the period of one (1) calendar month then the provision of Schedule One of this Will shall apply. … SCHEDULE ONE 1. I APPOINT as my Executor and Trustee my said sons PHILIP JOSEPH PROIETTI of XXXX, Marsfield in the State of New South Wales and PETER ROBERT PROIETTI of XXXX, Mt Annan in the State of New South Wales, (hereinafter referred to as "my Trustee"). 2. I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal of whatsoever kind or nature and wheresoever situate to my Trustee UPON TRUST to be divided equally between my sons. 3. I GIVE the following directions to my Trustee concerning my principal residence at XXXX, Marsfield (residence): (a) my son PHILIP JOSEPH PROIETTI may live in the residence for a period of up to four (4) years from the date of my death provided: (i) he pays the rates, taxes and other outgoings for the residence; (ii) he keeps the residence insured against loss and damage from fire, storm and tempests in any amount, and with an insurance office, approved by my Trustee; and (iii) he maintains the residence in a state similar to that in which it is at my death. (b) the residence is not to be sold within the four (4) year period without PHILIP JOSPEH PROIETTI's consent except where: (i) my said son has, in my Trustee's opinion, ceased to live in the residence permanently; or (ii) my said son has, in my Trustee's opinion, ceased to comply with the conditions in clause 3(a)(i). (ii) or (iii), or (iii) my said son dies."
I will refer to clause 3 of Schedule 1 of the 2015 Will as "Philip's right to reside".
Mrs Miranda Proietti made her last will on 17 March 2016 (the 2016 Will). It included: "THIS IS THE LAST WILL AND TESTAMENT of me MIRANDA PROIETTI of XXXX, Marsfield in the State of New South Wales, Table Hand. 1. I HEREBY REVOKE all former Wills and testamentary dispositions made by me AND DECLARE this to be my last Will and testament. 2. I APPOINT as my Executor and Trustee my sons PHILIP JOSEPH PROIETTI of XXXX, Marsfleld in the State of New South Wales and PETER ROBERT PROIETTI of XXXX, Mt Annan in the State of New South Wales, (hereinafter referred to as "my Trustee"). 3. I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal of whatsoever kind or nature and wheresoever situate to my Trustee UPON TRUST to be divided equally between my sons who survive me."
The 2016 Will did not contain the equivalent of Philip's right to reside.
Mrs Miranda Proietti died on 28 November 2019 after a short but devastating illness.
Approximately a year or two before their mother passed away, she had a conversation with Peter about her will. During cross-examination, Peter described the conversation in these terms (Tcpt, 10 June 2022, p 28(25-30)): "PETER PROIETTI: Yes, she said, like I stated previously, that the solicitor's phone number was on the 'fridge upstairs, to call [her solicitor] when the time came. That we would, it was really brief, it was really brief, we were on the way, on the way out of mum and dad's home at the time and she said that, you know, we were equal beneficiaries on the will and that if a problem arises just give him [Philip] 12 months and that was the end of the conversation. I said "yes mum" and that was it."
There was no dispute that Peter and Philip had agreed that Philip could continue to occupy the Property, which would not be sold before late 2021 or early 2022, and that he paid Peter $400 weekly in rent from 1 July 2020 (the Occupation Agreement).
The Court is satisfied that the Occupation Agreement was in place by 23 February 2020 because on that date Peter sent Philip a text which included a screen shot of a five bedroom house in Marsfield that was being offered for rent for $1,230 (I infer fortnightly) together with this comment: "Peter: Hi Philip just thought I'd send you this to give you an idea with what the market rent for a five bedroom house is in marsfield. This house sold for 1.995 million in December. Philip: We have an agreement for $400 a week from 1st of July and that's all good. But after February next year we'll probably have to discuss the rent again."
Probate of the 2016 Will in common form was granted to Peter and Philip on 12 March 2020. The Property, which is unencumbered, was the main asset of the estate and was estimated for probate purposes to have a value of $2,400,000. Peter and Philip were subsequently registered as proprietors of the Property as tenants in common as to one half each.
On 12 April 2020, Peter and Philip had a disagreement concerning letters of administration that produced these text messages, which are reproduced as they were sent: "Peter: These are the deposits for half of Darryl's bill [the estate's solicitor] so there's no dispute You have to start treating me with more respect. I won't be dictated too (sic) and if this can't happen there's no point discussing the house anymore because there will only be one option. Philip: Yes I know you have paid me. And there is no dispute. But the fact that you felt the need to do so proves that from this point onwards all payments must come through mums account. Please do not make threats to me. I have no idea what you are talking about. Peter: If we can't discuss and work through these minor issues now what chance have we got when we actually have to make decisions in regards to the house. Philip: I don't understand what the problem is Peter: You are trying to dictate and control everything And your phone call on Easter Sunday is a massive problem for me. Philip: Why you got your way Peter: You are trying to manipulate the situation Philip: How Peter: C'mon stop playing dumb Philip: I think there is something wrong with you. What I requested was justified. Peter: You're not even paying rent at the moment so how's that justified? Philip: Because we are family. It was a simple request because of corona virus. That is why so many people are being relieved of there (sic) expenses now. You coming at me like a regular landlord Peter: Ohh we are family now but you still feel the need to have everything come out of an account just in case I don't pay you? Philip: You are an idiot. I am protecting you. If you pay me how do you know that I pay the bill. That's why legally and to cause less argument like we having now it just comes one account that belongs to both of us Not because I do not trust you or vice versa Peter: But we are family remember why would I need protection from you or vice versa? If I give you money for a bill I would just assume that's it's paid. Same for the rent an agreement between us. I just don't think we are on the same page here and I can't see this working moving forward Philip: No worries. I am fed up with this. We pay all bills through the deceased account as legally required. We sell the home in a reasonable period of time as agreed. And make sure we get a decent price. Or otherwise I buy out. Peter: Dictating again? Philip: You are the one dictating. You being completely unreasonable and plain silly Peter: What have I dictated to you? No answer so I'll assume nothing. Philip: You said you can't see how this going to work going forward. So I assume you mean you want to end everything. Peter: The way I'm feeling right now Yes I don't think I'm dictating. I'm not telling you what to do. I'm just expressing the way I feel. I am not trying to cause problems I am trying to understand your situation but you make it hard when you continually tell me what to do and this is how it's going to be done. Hopefully this blows over and we can sort this out Philip: I am not telling you what to do. At no stage has that been my intention. I am simply telling you what I think needs to be done. If you disagree with me I respect that and I have been prepared to bend your way. However you are carrying now (sic) is a real concern. Especially with the deceased account because the whole point of having one is to avoid the types of problems we are having at the moment. I am not making the rules this is how it is done. I hope we can sort this out as being a misunderstanding. Otherwise I would like it sorted in the same spirit we agreed from the beginning. I am really sorry that you have obviously misinterpreted my intentions. I always wanted to do the right thing for us both."
Philip placed great emphasis on the last of those text messages during the proceedings, especially the reference to the "same spirit we agreed from the beginning". In his view, this formed part of the evidence that his brother was resiling from earlier promises and acting in a manner that was inconsistent with those promises. However, both sides accepted that the Occupation Agreement was in place at that time. Of greater significance in my respectful view is Peter's statement "If we can't discuss and work through these minor issues now what chance have we got when we actually have to make decision in regards to the house". This supports Peter's evidence (which the Court accepts) that when the Property was ultimately to be sold after late 2021 or early 2022 was (at least as at 12 April 2020) still unresolved between them.
The dispute evidenced by those text messages appears to have been successfully overcome and Peter commenced paying rent on 1 July 2020 in accordance with the Occupation Agreement. He continued to do so up to and including 28 July 2021.
By July 2021 Philip was in arrears, as appears from this text exchange on 28 July 2021: "Peter: Hi Philip, now that lockdown has been extended I won't be able to come over for at least another four weeks. I was thinking with the rent that we should transfer it to Andre's account and then he could give it to me so it doesn't look sus. Also any bills you could email them and then I transfer back into your account. Anyway let me know what you want to do. Philip: Hi Peter. How much do I owe you. Peter: 7 weeks Which would take you to 28th July $2800 Philip: Ok. Maybe better I pay you two odd amounts over two weeks. Rather than paying Andrew. What do you think? Peter: Yeah should be fine, that way it looks random and not regular deposits Are there any bills? Philip: I don't think so. I pay an amount to you tonight. Peter: Okay thanks"
There was no dispute that Philip brought his rental obligations up to date to 28 July 2021.
On 24 September 2021, Peter and Philip had a serious argument. These text messages ensued between 24 and 30 September 2021: "Friday 24 September 2021 19:15 Peter: After what happened today it is clear that we have to go out (sic) separate ways. I would like to resolve this in a way that is the least costly for the two of us. So in saying that I am prepared to give you the time you need within reason to come up with the funds to buy us out. I now know that you have no intentions of leaving that house so I think this would be the best way forward. Let me what you want to do. Saturday 25 September 2021 08.21 Peter: Also you still owe us 8 weeks rent which takes you up to the 22nd of September. When will you be depositing this into our account? Wednesday 29 September 2021 18.35 Peter: You now owe nine weeks rent. Philip: Hi Peter I need about 12 months to get my income to about the level required to organise a loan to buy you out. The rent I currently owe you can be paid via the tax refund we have just received that it is sitting on the CDIA account. However from here on end O (sic) will not pay any more as I have no legal obligation to do so. Peter: How do I get that money when we need two signatures to access it? Philip: You can go down to your local bank and see if a signature there will get it done Peter: We can meet at Macquarie centre tomorrow and both sign so it's done with and you get your share out as well Philip Ok. But you must agree to pay the next ATO bill which is your super money. That bill is likely to be about $9000. Peter: So if that's the case then all of the money in the CDIIA account is mine and then I pay the $9000 tax bill when it comes. Philip: There is also a Ryde rates payment to be made and the water bill. And we are almost square. Peter: Bring it down to the bank tomorrow and we'll work it out Philip: Oright. What time? Peter: We'll meet at the comm bank Macquarie centre at 12pm Philip: Ok Thursday 30 September 2021 12.19 Peter: I'm waiting outside the bank Where are you? Thursday 30 September 2021 20:19 Peter: After our discussion today you have advised me you have no intention of paying your rent in arrears as well as any future rent payments. I am now requesting a key to be made available to me so I can access the property as a joint owner. Please advise a time that is convenient so I can come over and collect the key Philip: You will have to make your own key. Any time in the afternoon will be fine. Peter: Okay good. I'll be organising some time next week an agent to come through and value the property to see what's (sic) needs to be done to get the property ready for sale. Philip: I will not agree to that. As I have no intention to sell."
There were then various exchanges between the parties and their solicitors which were unable to resolve matters between the brothers. Peter commenced these proceedings by summons filed on 17 January 2022.

Philip's defence

There was no dispute about the applicable legal principles in relation to s 66G. These were conveniently summarised by White J in Foundas v Arambatzis [2020] NSWCA 47 (Bell P and Basten JA agreeing) which I gratefully adopt: "62. The primary judge observed that the grounds upon which a court may decline to make an order under s 66G are limited (citing Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 at [36] and Tory v Tory [2007] NSWSC 1078 at [42]). 63. Although an order under s 66G is discretionary, such an order is almost as of right, unless on settled principles it would be inequitable to make the order. An order may be refused if the appointment of trustees for sale would be inconsistent with a proprietary right, or the applicant for the order is acting in breach of contract or fiduciary duty, or is estopped from seeking or obtaining the order (Re McNamara and the Conveyancing Act (1961) 78 WN (NSW) 1068 at 1068; Ngatoa v Ford (1990) 19 NSWLR 72 at 77; Williams v Legg (1993) 29 NSWLR 687 at 693; Hogan v Baseden (1997) 8 BPR 15,723 at 15,726-15,727; Tory v Tory at [42]). Hardship or general unfairness is not a sufficient ground for declining relief under s 66G (Hogan v Baseden (1997) 8 BPR 15,723 at 723; Ferella v Official Trustee in Bankruptcy at [36]-[40])."
Philip raised three matters as an answer to what the Court otherwise considered to be a clear case for the making of an order under s 66G: 1. Proprietary estoppel; 2. Promissory estoppel; 3. Contract.
Before setting out in detail how Philip put each of these claims it is convenient to deal with some contested factual matters that on any view are essential to those arguments. Those matters are that: 1. Peter both knew of the terms of the 2015 Will including Philip's right to reside and that their mother had removed that provision in the 2016 Will; 2. That Peter had exercised undue influence or duress on their mother to persuade her to make that critical change between the 2015 Will and the 2016 Will; 3. That at a meeting on 18 March 2021, Peter had represented to Philip, or they had agreed, that there would be no sale of the Property until 2023.

Peter's knowledge of the 2015 Will and the 2016 Will

Peter denied that he had any knowledge of either will until after Mrs Proietti's death. In his affidavit sworn 11 April 2022 Peter's evidence was: "4 I played no role in the preparation of my mother's will. I never attended the solicitor's office when she made or discussed the will. The only time my mother discussed her will with me was around 2 years before she passed. She told me the will was already prepared and her solicitor Darryl Freeman would be the executor and his number was on the fridge upstairs at her home and that he should be contacted when the time comes. She said to me that Philip and I would be equal beneficiaries. 5 The first time I spoke to Darryl Freeman was a few days after my mother passing. I rang him from my mother's home where Philip was also present. I informed him that my mother had passed away. We then arranged a meeting at the home in the following days to discuss the will and probate. He asked us if we intended on selling the home straight away and Philip and I agreed that it would be better to transfer the property into our own names first before selling in the near future. 6 When Darryl Freeman came to the house and met Philip and I he said words to the effect of, "There might have been an earlier will, however I am not sure." Philip did not respond to this. 7 I assumed that Darryl Freeman was wrong because my mother had not mentioned an earlier will to me. 8 The first lime I found out about the earlier will was on 30 September 2021 when Philip and I met up at Macquarie Centre to discuss the sale of the home and the outstanding rent he owed me after an argument at the home we had had about a week earlier. His demeanour that day was very aggressive and abusive. 9 Philip said to me the following, or words to the effect thereof; "my mother had made an earlier will which let me occupy the property for 4 years." 10 I just assumed this was something he was making up in desperation in the hope that it would persuade me to change my mind about pursuing a court order."
Peter's evidence under cross-examination remained that he never knew about the 2015 Will. He also explained that he did not make any specific enquiries about a will with his mother (Tcpt, 10 June 2022, p 9(22-44)): "PHILIP: What did mum say about the will? I mean you said in your affidavit that she told you the phone number. Did it go beyond that, is that the only thing she ever said to you in regards to the will, any will at all? PETER: Yes. So she said maybe, it was maybe a year, I can't remember exactly, it might have been a year or two before she passed away, she said that basically when the time comes the phone number of her solicitor is sitting on the refrigerator upstairs in the kitchen and when the time comes, he is the executor of the will and to call him. That was the only discussion we had about the will. PHILIP: So you didn't feel the need to make - you didn't see it as unusual that she made no mention of it before that, that was, no reason for you to enquire? PETER: No, I had no reason to concern myself with the will at all, no. PHILIP: So don't you think that is pretty much in contrast to your current position? PETER: Well, no. Well, she was alive, you know, and she had no - Mum was very, as you know, was a very healthy person and she passed away quite suddenly so there was never any, there was no need to be thinking that far forward because as far as I was concerned Mum was going to live for a long time and you know, whatever she did with her will was her business, you know, it is not my concern. PHILIP: But it is certainly your concern - PETER: It is my concern now because she has passed away."
The most that Peter's mother had alluded to him was to tell him that the brothers were "equal beneficiaries on the Will and that if a problem arises just give [Philip] 12 months" (Tcpt, 10 June 2022, p 28(28-9)). Peter understood that to mean that he should wait twelve months after their mother's death before selling the Property.
As will become apparent below, Philip's case was based upon what he said was Peter's silence in relation to the wills and, in particular, in relation to Philip's right to reside and its removal from the 2016 Will. Philip submitted that the Court should find that Peter must have known about those matters for these reasons: 1. There was "a great deal of circumstantial evidence" arising out of the text messages between Peter and Philip in 2020 and 2021. On Peter's case, the content of the text messages indicated that Philip was "thinking about the legal situation and therefore it's evidence that he likely does have knowledge of it" (Tcpt, 10 June 2022, p 42(7-8)). Although it was by no means clear, this submission appeared to be based upon Philip alluding to the possibility of selling the Property in April 2020 in a text message that stated: "I won't be dictated too (sic) and if this can't happen there's no point discussing the house anymore because there will only be one option" (see paragraph [25] above). 2. It was simply not believable that their late mother had never told Peter about the clause permitting Philip to reside at the Property. This was because it was, in his view, a significant clause that affected both brothers. Their mother had told Philip about it so why wouldn't she have told Peter? It was "a natural assumption" that Peter would have known about the clause (Tcpt, 10 June 2022, p 56(21)). 3. Peter lacked credibility on the basis that he claimed the brothers were engaged in an ongoing dispute about the sale of the home, but the text messages did not evidence any dispute until September 2021 when they had met at Macquarie Centre. To the extent there was any friction between them, this was only a "minor disagreement" in April 2020 related to how they should pay bills (Tcpt, 10 June 2022, p 41(42)). 4. It was "unusual" that the will had been changed after twelve months. It was not entirely clear why this was to be considered strange except that Philip submitted that it was "not normal" to change a will after a year without any apparent trigger (Tcpt, 10 June 2022, p 59(27)). There was, in his mind, no reasonable explanation for it to have occurred other than by Peter's influence. 5. There were only two people who could have caused Philip's mother to change the will, and that was Peter or her solicitor, Darryl Freeman. As Philip did not believe that the solicitor was responsible, it could only have been Peter. The solicitor was not called to give evidence on any matter.
Mr Paterson submitted for Peter: 1. There was no evidence that he had any knowledge or involvement with the 2015 Will or 2016 Will prior to their mother's death. 2. It was open to infer that Philip had been told about the wills but not Peter simply because Philip lived at the Property with their mother while Peter lived elsewhere. Philip also worked seven days a week and only occasionally found time to visit his mother. 3. Philip's contention that there were only two people who could have been responsible for the change in the will was simply incorrect because it did not take into account the most obvious person who could have been responsible: their mother.
The Court finds that Peter never knew about the 2015 Will. His evidence was consistent on this point. Further, the explanation that he never enquired because his mother was in good health, and he believed it to be none of his concern so long as she was alive, is plausible and accepted by the Court.
In contrast, Philip's reasons to suggest the opposite were not persuasive. Philip's inference that Peter knew because he was "thinking about the legal situation" was too long a bow to draw. Similarly, his argument that Peter lacked credibility because he referred to their quarrel in April 2020 as a dispute, whereas Peter called it a minor disagreement, was unconvincing. While an assumption could be drawn that what their mother told Philip she may have told Peter there was no evidence to elevate this beyond speculation.
The text messages between them made no mention of any will. This electronic silence between the brothers on this issue is relevant in one of two ways. Primarily, it is neutral and proves nothing. However, if that be wrong, it is more consistent with a conclusion that Peter genuinely knew nothing of the contents of the 2015 Will. Neither conclusion assists Philip's case. Even if Peter knew about the 2015 Will, it did not follow that he knew about or had any involvement in its alteration. That could have been done by their mother of her own volition.

Alleged undue influence or duress

The Court accepts Mr Paterson's submission that there is no evidence whatsoever to support such a serious finding against Peter. That is sufficient to dispose of the argument. The Court's finding in paragraph [40] above that Peter did not know of the 2015 Will before their mother's death fortifies this conclusion.

The alleged 18 March 2021 representation or agreement

Philip attested that sometime in early 2021, Peter had represented to Philip, or they had agreed, that there would be no sale of the Property until 2023. Philip's affidavit evidence on this point is reproduced at paragraph [11] above.
Peter's affidavit evidence accepted that there had been a conversation, but not that they had reached a final agreement about when to sell the Property. Peter stated in his affidavit: "17 Philip and I had a phone conversation in around Mid-March 2021 at around 7.30pm. I know it was this time because I was on my way home from work that day and the conversation was still going at least 30 minutes later when I had arrived home and continued as I sat in my car at the front of my house. In the conversation we initially discussed the insurance claim for damage caused to the property by the neighbours. Later we discussed the sale of the home. We exchanged words to the following effect: I said "I would like to sell the home because the market is good now and I want to invest in properties in Brisbane to earn more rental income" He said "I'm not ready to sell and I was thinking around the middle of 2022 to give me the opportunity to buy you out" I said "I can't wait that long but we'll discuss again later" He said "Okay no problem"
Under cross-examination, Peter stated that there was a "continuing conversation" about when to sell the Property (Tcpt, 10 June 2022, p 12(15)). He recalled that he specifically raised the fact that he wanted to sell the Property with Philip in March 2021 and Philip's response was that he "needed time to get money together" as he wanted to buy Peter's share (Tcpt, 10 June 2022, p 13(46-7)).
Philip alleged that Peter had told him he intended to move to Brisbane in 2023, hence the agreement not to sell until that time. Peter conceded that there was some future plan to relocate his family to Brisbane but denied there was ever a clear timeline for doing so.
Philip submitted that the Court should accept the agreement existed and was binding because: 1. Philip was paying rent in exchange for the security that the Property would not be sold until 2023. Without the agreement, Philip would have been paying rent "for no reason" which he would not do (Tcpt, 10 June 2022, p 66(30)). It was put to Philip that he was paying rent due to the fact that Peter owned a half share in the Property, but he rejected this on the basis that his parents had never required him to pay rent. 2. Peter was "obviously lying" (Tcpt, 10 June 2022, p 67(18)). I immediately record that there was no direct evidence adduced which supported this proposition.
Philip ultimately accepted that the text messages between him and Peter did not evidence any agreed date between them for the sale of the property (Tcpt, 10 June 2022, p 44(30)). Nevertheless, he maintained that the Court should find that such an agreement existed.
Mr Paterson submitted on Peter's behalf: 1. There was no evidence to support the existence of the purported agreement. The Court could not infer that any intention on Peter's behalf to move to Brisbane gave rise to an agreement between them not to sell the Property. 2. The word "agreement" appeared to have been "used very loosely" by Philip and could not establish anything that was intended to be binding between them (Tcpt, 10 June 2022, p 85(35)). The fact that rent was being paid did not establish this, especially given the text message from Philip where he stated that he had no legal obligation to pay rent (see paragraph [30]).
The Court is not satisfied that any agreement was reached in a conversation between Philip and Peter in March 2021. The text messages are once again silent about any such arrangement and are of no assistance to Philip's case. There is nothing in them to indicate such a conversation ever occurred. Again, to the extent the text messages might evidence anything at all, the silence is more consistent with Peter's evidence that there were ongoing discussions but no agreement reached about when to sell the Property at the end of the Occupation Agreement. Whatever conversations may have taken place between the brothers appear to have gone nowhere until matters were brought to a head in September 2021.
Apart from what may be made of the text messages, the Court is left in the position of having only the word of each brother against the other. In such a case, where no independent evidence can be relied upon to distinguish one version of events from another, the question becomes one of onus. It is Philip who bears the onus as the party asserting the estoppel: Sidhu v Van Dyke (2014) 251 CLR 505 at 523 (French CJ, Kiefel, Bell and Keane JJ) and 531 (Gageler J); [2014] HCA 19. He has failed to discharge that onus such that the Court cannot be actually satisfied on the balance of probabilities that there was any agreement to the effect that Peter asserts.

Equitable estoppels - the law

Peter raised two kinds of estoppel in defence to the s 66G orders: promissory and proprietary estoppel. Both are a species of equitable estoppel: Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 at 472 (Priestly JA). The equitable estoppels serve a common purpose, however, there is no unified doctrine and different contexts may require different approaches: Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1 at 43 (Keane J); [2016] HCA 26. The "principal practical difference" between promissory and proprietary estoppel was described by Keane J as arising "from the circumstances in which each is deployed: the former operates in relation to contracts, whereas the latter is concerned with the recognition of interests in property by way of relief against unconscionable conduct" (at 45).
Brennan J summarised the essential elements to establish an equitable estoppel in Waltons Stores (Interstate) Ltd v Maher and Anor (1988) 164 CLR 387 at 542; [1988] HCA 7 (Waltons Stores): "In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed or expected that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs."
Meagher JA (Leeming and Payne JJA agreeing) considered the relationship of silence to equitable estoppels in the form of a proprietary estoppel in Q (A Pseudonym) v E Co (A Pseudonym) [2020] NSWCA 220: "[15] [The appellant's] argument in support of this ground emphasises the distinction between proprietary estoppel by encouragement and proprietary estoppel by acquiescence, the latter understood in the sense of "standing by". The former, as formulated in Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 at [6], is founded in an assumption as to the future acquisition of ownership of property which has been induced by a representation or promise upon which there has been detrimental reliance by the plaintiff. As Mr Handley observes in Estoppel by Conduct and Election (2nd ed, Thomson Reuters, 2016) at [3-001], a representation or promise "may be implied wholly or partly from conduct or inferred from silence or inaction". Whether any, and if so what, representation has been made is to be judged "objectively according to the impact that whatever is said [or done] may be expected to have on a reasonable representee in the position and with the known characteristics of the actual representee" per Mance LJ in MCI [2004] 2 All ER (Comm) 833 at 844. See also Thorner v Major [2009] 1 WLR 776; [2009] UKHL 18 at [24]-[27] (Lord Rodger) and at [80], [84]-[86] (Lord Neuberger). In this Court, see Galaxidis v Galaxidis [2004] NSWCA 111 at [93]; Sullivan v Sullivan [2006] NSWCA 312 at [85]; and Evans v Evans [2011] NSWCA 92 at [124]. [16] Proprietary estoppel by acquiescence, on the other hand, describes a much narrower principle, and arises "where a person improves land in the mistake assumption that it is his own, the true owner being aware of the mistake and deliberately doing nothing to undeceive the other" per Jordan CJ in NSW Trotting Club Ltd v Council of Municipality of Glebe (1937) 37 SR (NSW) 288 at 308. In such circumstances equity regards it as "fraudulent" for the true owner to set up his existing rights as against the person who has made a mistake as to his legal rights and acted to his detriment on the basis of that mistaken belief: Wilmott v Barber (1880) 15 Ch D 96 at 105-106 (Fry J). See generally Estoppel by Conduct and Election at [11-002], [11-008]. As the author observes, "Estoppels by standing are rare". The "conduct of the owner which attracts the estoppel is his silence, but it differs from other estoppels by silence because there may be no pre-existing relationship or duty, and no dealings direct or indirect" (at [11-011]). The "improver acts on his mistaken belief and not on any representation by the land owner" (at [11-012]). [17] Mr Handley's reference to "other estoppels by silence" recalls the statement of Lord Eldon LC in Dann v Spurier (1802) 7 Ves Jun 231 at 235-236; 32 ER 94 at 95 that a court of equity "will not permit a man knowingly, though but passively, to encourage another to lay out money under an erroneous opinion of title; and the circumstance of looking on is in many cases as strong as using terms of encouragement (emphasis added). In Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 at [109] this statement was taken to support the undoubtedly correct view that silence or inaction, in the context of other conduct, may constitute an "element of assurance" in support of a claim to a proprietary estoppel by encouragement."

Philip's proprietary estoppel

It was obvious that, to his credit, Philip had done a great deal of research on the law in relation to proprietary and promissory estoppel. However, with respect, it was not always easy to follow exactly how he put either argument, given that there were no pleadings. What the Court did have was Philip's brief written outline of submissions and then the way he sought to develop his argument as it appears from the transcript of the hearing.
Doing the best I can by reference to those sources, I understood Philip's case in proprietary estoppel to be put as follows: 1. Peter had a duty to tell Philip what was in the wills (it was not apparent if this was the 2015 Will or the 2016 Will or both) and also a duty to tell Philip when the 2015 Will was changed. 2. Peter's silence had created an assumption by Philip that Peter would not behave "aggressively" with respect to the sale of the Property. This was taken to mean that Peter would not oppose Philip's desire to remain at the Property. As stated by Philip during the course of argument (Tcpt, 10 June 2022, p 92(30-33): "It is quite clear that [Peter] pretended to be on my side neutral, but in reality he is aggressive. That's the whole point." 1. The failure by Peter to tell Philip caused the latter a detriment because: first, it deprived him of the opportunity to persuade his mother to retain the clause that purported to give him a right to reside; and second, it deprived him of the opportunity to challenge the grant of probate of the 2016 Will.
Philip contended that he had made out all the necessary elements for the proprietary estoppel which he alleged both as a matter of fact and law. He placed particular reliance upon this observation of Brennan J in Waltons Stores at 542: "A person who knows or intends that the other should conduct his affairs on such an assumption or expectation has two options: to warn the other that he denies the correctness of the assumption or expectation when he knows that the other may suffer detriment by so conducting his affairs should the assumption or expectation go unfulfilled, or to act so as to avoid any detriment which the other may suffer in reliance on the assumption or expectation. It is unconscionable to refrain from making the denial and then to leave the other to bear whatever detriment is occasioned by non-fulfilment of the assumption or expectation."
Mr Paterson submitted on behalf of Peter that: 1. Philip had no proprietary right in the nature of Philip's right to reside because the clause relating to Philip's right to reside that had allegedly been included in the 2015 Will was removed under the 2016 Will. It was the latter that was in force at the time of their mother's death. Assuming it had been executed, the 2015 Will gave no right prior to their mother's death. 2. There was no duty on Peter to speak about the change in the wills because he never knew the change had occurred. In contrast, by his own evidence, Philip was aware of the change as at March 2016, well before his mother's death 3. Philip was never deprived of any opportunity to persuade his mother to reinstate the 2015 Will because she had told him about the fact that it had been changed.

Proprietary estoppel - consideration

The Court's factual findings at paragraph [40] mean that Philip's case does not succeed on any permutation. The Court is satisfied that Peter never knew of the alleged clause in the 2015 Will nor its change in the 2016 Will. It follows that no duty could arise requiring Peter to inform Philip of the change in circumstances.
Even assuming in Philip's favour that Peter knew, no facts have been proven that would have given rise to a duty in Peter to say anything to Philip. To adopt the language of Brennan J in Waltons Stores quoted in paragraph [58] above, there is no evidence that Peter knew or intended that Philip should conduct his affairs on any assumption or expectation of the kind alleged by Philip. Furthermore, Philip had already been informed of the change by his mother, so Peter's alleged silence would not have caused him any detriment.
Philip had ample opportunity to raise the issue with his mother and to persuade her to reinsert the clause containing his right to reside. He failed to take that opportunity. Philip has not demonstrated any basis on which equity would hold Peter responsible for that failure or his failure to challenge the grant of probate. He also had ample opportunity to challenge probate which he did not do, even when he claims to have been made aware of the circumstances by which he could have challenged probate after it was already granted (being allegations of undue influence over their mother by Peter), the present grant not being in solemn form.
To the extent it may be relevant, even if Philip had such an opportunity to discuss the issue with his mother, there is nothing to suggest that his mother would have acquiesced. That is because the Court accepts Mr Paterson's submission that it is entirely possible that she removed the clause of her own volition and for her own reasons. As the Court has already found, there is no evidence to suggest that Peter exercised any undue influence over their mother.

Philip's promissory estoppel

Philip submitted that: 1. A promissory estoppel arose due to the alleged verbal agreement not to sell the Property until 2023 that was made on 18 March 2021. 2. Philip acted in reliance on this by not taking steps to obtain finance to purchase the Property. 3. Philip suffered a detriment because he now had less time in which to obtain the necessary finance to purchase Peter's half share.
It was put to Philip that sometimes a promissory estoppel can be revoked by notice. In that case, Philip argued that he would need until the end of 2023 to raise sufficient finances to purchase the Property (Tcpt, 10 June 2022, p 70(45-6)).
Philip also asserted that Peter had no evidence to support the notion that they were engaged in ongoing discussions about when to sell the Property. If, as Peter claimed, the Property was meant to be sold in 2021 or 2022 there should have been some mention of it in their text messages when the time to sell arose (Tcpt, 10 June 2022, p 71(34-5)). The fact that there were no text messages to this effect supported his submission that they had already agreed on a time to sell which was in 2023.
It was pointed out to Philip (and accepted by him) that the text messages did evidence some kind of breakdown in their relationship sometime between 20-24 September 2021. According to Philip this breakdown was consistent with Peter seeking to renege on the agreement not to sell until 2023 by forcing a sale; it was not because there was any agreement to sell the Property at any earlier time (Tcpt, 10 June 2022, p 72).
Mr Paterson submitted for Peter: 1. No representation was made in the terms put by Philip. 2. Even if any such representation was made, there was no reliance established by Philip. He had resided in the Property prior to the alleged representation and he simply continued to reside there afterwards. Beyond that fact, there was no evidence to establish any reliance. 3. Likewise, there was no evidence to establish any detriment was suffered by Philip even if he had relied on any such representation.
Philip responded to Mr Paterson's submissions by stating that there was evidence and that it was circumstantial evidence. He reiterated that he had relied upon the representation and that he suffered a detriment because he had now been told he had approximately six months to accrue the necessary finance, which was something he could not do.
As a general proposition, Philip argued that Peter lacked credibility because "his statement has more holes in it than Swiss cheese" (Tcpt, 10 June 2022, p 92(44)). He expressed his concern that, given there was only one day scheduled for hearing, he was not "getting the chance" to put everything forward that might assist his case but there was nevertheless "enough evidence here for at least one of the estoppels" (Tcpt, 10 June 2022, p 94(1)). He declined the opportunity that I then gave him to make any application for whatever he thought would give him the chance he thought he was not getting.
Philip also speculated that the reason Mr Paterson did not cross-examine him was because "the less evidence that that comes out, the better they are to force the order" (Tcpt, 10 June 2022, p 93(26-7)).

Promissory estoppel - consideration

As with proprietary estoppel above, Philip's claim in promissory estoppel must fail by virtue of the Court's factual findings at paragraph [51]. The Court is not satisfied that any representation was made by Peter to Philip that Peter would not sell the Property until 2023. The silence on this topic in their text messages is consistent with the conclusion that there were ongoing discussions on the matter but no actual agreement had been reached. On any view, as I have already observed, the silence does not assist Philip. It follows that there was nothing that Philip could be said to have reasonably relied upon, or that a failure to take steps to obtain finance before now is as a result of that reliance.

Philip's claim in contract

It was not entirely clear to the Court how Philip put his claim in contract. He placed far greater emphasis on the alleged estoppels in the course of argument. However, it is apparent from what he did say that, in his view, there was some kind of agreement under which he would receive security of housing at the Property in exchange for the payment of rent to Peter. This was evident in the transcript where he asserted that he would not have paid rent "for no reason" (see paragraph [48(1)] above). At the same time, Philip asserted that he had no obligation to pay rent even though they were joint owners and he was simply doing so because (Tcpt, 10 June 2022, p 44(28-29)): "I don't want to get kicked out. I want us to get along. That was implicit in our agreement."
Philip alleged that Peter broke their contract in September 2021 when he resiled from the alleged agreement not to sell the Property before 2023. At that time, Philip had not paid any rent since 28 July 2021. This, according to Peter's evidence under cross-examination, was the reason why they had agreed to meet at the Macquarie Centre: Philip had agreed to pay the rent he owed. What eventuated, according to Peter's evidence, was that the brothers quarrelled and, as a result, Philip stated his intention to cease paying rent altogether.
The evidence does not support the existence of any exchange sufficient to establish a contract between Philip and Peter, even assuming that as a family arrangement between brothers an intention to be legally bound could be inferred. The agreement alleged by Philip was entirely uncertain. The evidence does not support a finding of consensus ad idem between the brothers on essential matters such as how long Philip could reside in the Property and on what terms such as payment of rent, insurance and outgoings. By Philip's own admission (see paragraph [73] above) the payment of rent was only something he considered "implicit".

Conclusion

The Court has concluded that none of Philip's arguments as to why orders should not be made under s 66G is successful. But for those arguments, this is an obvious case for the making of such orders. They will be made after the parties have been given an opportunity to address, to the extent they cannot agree, on the form of such orders and on the question of costs. Based on comments Philip made during the hearing, I expect he will wish to be heard on what opportunity, if any, he should be given to raise finance to purchase the Property. As to costs, subject to any special applications, costs should follow the event on the ordinary basis and those costs as agreed or assessed should be payable to Peter out of what would otherwise be Philip's share of the net proceeds of sale of the Property.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 June 2022

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