Richardson v Lindsay

Judgment

1. MACFARLAN JA: By her statement of claim filed in the Equity Division on 26 March 2018 the appellant ("Faith") claimed from one of her daughters ("Fiona") and Fiona's husband ("John") the return of $220,000 that she had given conditionally to Fiona and John under a Deed of Family Arrangement ("the Deed") to assist them to purchase a property in Orange, New South Wales. By the Deed, Fiona and John undertook to care for Faith, allow her to live with them and to fund her transition to an aged person's unit or care facility when necessary. My use of the parties' first names is for convenience and is not intended to indicate any disrespect.
2. Subsequently, Fiona and John sold the Orange property and purchased another property, at Lewis Ponds, which is about 25 kilometres outside of Orange. In the proceedings, Faith alleged that this move occurred without her consent. The primary judge found however that Faith agreed to the move, and in fact was enthusiastic about it ([2018] NSWSC 1457 at [204]). As a result, his Honour concluded that Faith was estopped from complaining of the move and was not entitled to the return of her "conditional gift", nor to the higher amount of $345,000 to which she alleged her original contributions had grown by reason of their alleged investment in the Orange property.
3. In light of these findings, his Honour entered judgment for Fiona and John. Faith now appeals against that judgment.

THE FACTUAL CIRCUMSTANCES

1. Faith was born in 1934. She married at the age of 19 and had four daughters, Gloria, Vicki, Grace and Fiona. Fiona and John have three children: twins born in 1999 and a daughter born in 2009.
2. After her ex-husband died in 2010, Faith sold a property that she owned in South Grafton and commenced living with Fiona and John at a property that they were renting in Orange.
3. On or about 1 December 2011 Fiona and John completed the purchase of a property in Orange for $470,000, of which Faith contributed $220,000 pursuant to the Deed. That Deed is in the following terms: Deed of Family Arrangement Between: Lurline Faith Richardson of 125 Phillip Street, Orange NSW 2800 (hereafter called "Faith") And: John David Lindsay and Fiona Judy Lindsay of 125 Phillip Street, Orange NSW 2800 (hereafter called "the Carers") Recitals: A. Due to advancing age, Faith has sold her property in Grafton; B. The Carers have offered to have Faith live with them in Orange; C. In order to provide care and accommodation for Faith, the Carers need a bigger home; D. Faith has agreed to provide the sum of $220,000.00 to the Carers to assist them with purchasing a new home on terms and conditions as set out in this agreement. The Agreement: 1. Faith will advance to the Carers by way of conditional gift the sum of $220,000.00 to assist them in the purchase of 13 Bill Marshall Drive, Orange NSW 2800 for the sum of $470,000.00 or some other suitable accommodation for Faith, the Carers and their family. The Conditions of this gift are contained in this agreement; 2. In consideration of the advance, the Carers hereby undertake to care for and have Faith live with them and their children in the property for as long as reasonably practicable having regard to Faith's state of health, her wellbeing and medical needs; 3. Also in consideration of the advance but also because they desire to do so the Carers will care for Faith and provide their personal services to her on an "as needed" basis including but not limited to: - 3.1. Provision of meals, cleaning and personal laundry; 3.2. Maintenance and repairs of the house; 3.3. Assistance with grooming, bathing, dressing and personal affairs; 3.4. Purchasing with monies made available by Faith, or assisting her to purchase, food, clothing, toiletries and other personal items or necessaries of life as needed for the enjoyment of her life; 3.5. Monitoring Faith's physical and mental condition and nutritional needs on a regular basis in cooperation with health care providers; 3.6. Arranging to transport Faith to health care providers of Faith's choice and assisting her in carrying out their instructions and directions; 3.7. Arranging and facilitating social or community services for Faith; 3.8. Catering for activities such as outings and walks in keeping with Faith's lifestyle and health; 3.9. Respecting Faith's privacy where it is needed or required by her; and 3.10. Encouraging Faith's autonomy and independence and to stay active and involved in social and family interaction. 4. In conjunction with this agreement, Faith has appointed the Carers as her joint and several attorneys by way of Enduring Power of Attorney dated 4 October 2011. 5. Faith has also appointed Fiona to be her guardian pursuant to Deed of Enduring Guardianship dated 4 October 2011; 6. Faith is currently in good health and it is her intention, although living with the Carers, to remain responsible for her own financial and medical affairs for as long as is possible; 7. The Enduring Power of Attorney and Deed of Enduring Guardianship referred to above is given with the intention that should Faith's health or mental condition deteriorate to the point where she cannot manage her own financial or medical affairs, the Carers will be able to do so for her; 8. If for reasons stated above, Faith is at some stage unable to continue to live with the Carers, then in consideration of the advance made for the purchase of the property, the Carers hereby undertake that they will provide whatever financial assistance is necessary to adequately accommodate Faith in an aged person's unit or care facility including, if necessary, the provision of an accommodation bond to secure such accommodation and including, if required, to supplement her pension with weekly payments for accommodation charges and/or care nursing facilities; 9. The Carers acknowledge that this is an ongoing obligation for Faith's lifetime and all parties intend to create a legally enforceable agreement between them; 10. Faith certifies by her signature to this agreement that she has received independent legal advice in relation to this Deed before signing it.
4. On John's evidence, which was accepted by the primary judge, Fiona and John subsequently told Faith that they wanted to sell the house in Orange and purchase a property not more than 20 to 25 kilometres out of town. At about the end of 2014 they looked at the Lewis Ponds property. They took Faith to see it on three occasions. She did not express an objection to moving there.
5. John also said in evidence that in late 2014, at a meeting at which Faith was present, he agreed with the vendors of the Lewis Ponds property that he and Fiona would purchase it, and that he shook hands with one of the vendors on the bargain. He said that Faith did not make any objection to the purchase of the property either before or at this meeting.
6. John then said that the day before putting the Orange property on the market for sale, he had a conversation with Faith to the following effect: "Me: Fay [referring to Faith], do you want your money back? If you do we can stop the sale, cancel the purchase and look to refinance so we can give it back. Fay: It was always our plan to move to a property. Me: Yes it was, is it still yours? Fay: Yes. Me: Are you absolutely sure because we won't be able to give the money back if we sell here and buy at Lewis Ponds? Fay: Yes, I'm sure." (affidavit at [39])
7. In the following paragraph of his affidavit, John added: "I had this conversation because Fiona and I were taking on a large new loan and as the main breadwinner I wanted to be absolutely certain that there were going to be no complications in the future."
8. On 13 March 2015 the sale of the Orange property for $515,000 and the purchase of the Lewis Ponds property for $640,000 were both completed. Fiona, John, their children and Faith then moved into the latter.
9. On about 8 June 2015, Faith moved out of the Lewis Ponds property, departing with her daughters Vicki and Gloria. In evidence, Faith described the Lewis Ponds property as being 24 kilometres east of Orange on a "narrow, steep and windy road". She said that it was "isolated" with "no shops …hospitals or other medical facilities" and "no public transport available".
10. Faith has not since returned to live with Fiona and John and, through a number of communications from her solicitors, has demanded the return of her "conditional gift" on the basis that Fiona and John had, without her consent, moved to accommodation that was not suitable for her needs.

The pleadings

1. By her Further Amended Statement of Claim, Faith claimed the benefit of a charge over the Lewis Ponds property to secure her contributions to the purchase totalling $220,000 together with their alleged increased value by reason of their investment in the Orange property. Alternatively, she claimed damages for breach of the Deed by reason of Fiona and John's move to a property that was unsuitable for her needs.
2. By their defence, Fiona and John denied breaching the Deed and in the alternative alleged that Faith was estopped as follows from seeking the relief she claimed: "[16] The Defendants … state: (a) The Defendants discussed the sale of the Orange Property and the purchase of the Lewis Ponds Property with the Plaintiff in late 2014 and early 2015; (b) The Defendants asked the Plaintiff if she wanted to move to the Lewis Ponds Property and, if she did not, whether she wanted the Defendants to pay her $220,000; (c) The [Plaintiff] stated that she did want to move to the Lewis Ponds Property and that she did not require the Defendants to pay her $220,000; (d) In reliance on 16.a to 16c above, the Defendants purchased the Lewis Ponds Property. (e) it would cause detriment to the Defendants for the Plaintiff to resile from her statement that she did not require the Defendants to pay her $220,000. … [33] Further, the Plaintiff is estopped from seeking the relief claimed, by: … (c) Promissory estoppel, on the basis set out in paragraph 16 above that the Plaintiff did not require the Defendants to pay $220,000 to the Plaintiff."

THE JUDGMENT AT FIRST INSTANCE

1. The primary judge found it unnecessary to determine whether, but for what occurred at or about the time Fiona and John decided to move from Orange to Lewis Ponds, Faith would have been entitled to a charge in respect of the property and whether Fiona and John would have breached the Deed in making that move. His Honour considered it unnecessary because he found that, by reason of the events that occurred at the time of the move, Faith was estopped from making either of her claims.
2. Nevertheless, his Honour expressed preliminary views on those issues. First, his Honour rejected Faith's argument that the decision of McLelland J in Morris v Morris (1982) 1 NSWLR 61 supported her claimed entitlement to a charge (at [176]).
3. Secondly, his Honour took the view that the Deed contemplated that Fiona and John would provide a home for Faith in Orange and that Lewis Ponds was outside Orange, with the consequence that, but for Faith's consent, their move to Lewis Ponds would have constituted a breach of the Deed. His Honour considered that for accommodation to be "suitable" within the meaning of cl 1 of the Deed (see [6] above), it had to be suitable to all the parties involved (at [172]). Although his Honour said that no party would have a power of veto on the choice of new accommodation, this appears to have been a slip. His Honour's conclusion that all parties had to concur on a new property's suitability meant that each effectively had a right of veto concerning a move to a new property.
4. His Honour then turned to what he described as "the key question" in the estoppel case of whether Faith agreed to the move from Orange to the Lewis Ponds property (at [184]). His Honour referred at some length to the considerable evidence that was before him on this question. As well as her own evidence, Faith relied on the evidence of two other witnesses. In addition to their own evidence, Fiona and John relied on the evidence of four other witnesses, one of whom was cross-examined. In light of the limited nature of Faith's appeal challenges to his Honour's judgment, it is unnecessary to refer further to this evidence. It suffices to say that his Honour found that Faith was enthusiastic about, and indeed encouraged Fiona and John to make the move. His Honour found that, by this conduct, Faith represented that she would not rely upon certain pre-Deed representations that she alleged that Fiona and John had made (which are not relevant on this appeal), nor on the requirement of the Deed that Fiona and John live in Orange.
5. His Honour further found that Faith's representation constituted a significant motivating factor in Fiona and John's decision to move and that they suffered detriment through their reliance on that representation in purchasing the Lewis Ponds property and assuming an increased mortgage liability to finance the purchase.
6. By reason of these circumstances, his Honour found that it would be unconscionable for Faith to resile from the expectation that she created in Fiona and John that she consented to the move, that she was therefore estopped from objecting to the move and that judgment should be entered for Fiona and John.

Grounds 1 and 2 - whether the primary judge erred in concluding that it was unnecessary to determine whether, but for her representation, Faith would have had an equitable charge and Fiona and John would have breached the Deed.

1. The primary judge concluded, in light of his decision to uphold the estoppel pleaded by Fiona and John, that it was unnecessary for him to determine whether, but for that estoppel, Faith would have been entitled to an equitable charge and whether Fiona and John would have breached the Deed. In light of that decision, he was correct to consider that those questions were academic. Nevertheless, as was appropriate, his Honour did express views on these issues to assist this Court in the event that it found he erred on the estoppel defence. As I have indicated above at [17] and [18], he was against Faith's charge argument but favoured her on the breach issue.
2. As the question of whether Faith would have had a charge but for her representation was argued on appeal, I should add, even though it is not dispositive of the appeal, that I agree with his Honour's conclusion on that question. The relations between the parties were, at least primarily, governed by the Deed. The Deed did not either expressly or impliedly confer any proprietary interest, whether by way of charge or otherwise, on Faith. Instead, it clearly identified other consideration moving from Fiona and John to Faith in return for her "conditional gift" of $220,000. There is no basis for implying that the parties intended that Faith would obtain a charge over the property when there is no indication in the Deed of that intention. As a result, as in Morris v Morris, there was no equitable interest of the claimant (here, Faith) in the property from the outset of their relevant dealings.
3. As McLelland J pointed out in Morris v Morris, an equity may however arise where it "would be unconscionable and inequitable" for a party to retain the benefit of expenditure by another party (at 64). In these circumstances, justice may require that the equity be satisfied by imposing an equitable charge (ibid). In the present case, the primary judge's factual findings however indicate that there was no relevant unconscionable retention of property or other such conduct on the part of Fiona and John. As the primary judge held, Faith's claim that she is entitled to a charge must therefore fail.
4. On the issue of breach, I also agree with the primary judge's preliminary view. In my opinion, and in that of the primary judge, the better construction of the Deed is that Fiona and John promised Faith that they would care for her in accommodation in Orange (see particularly recital B stating that Fiona and John "have offered Faith [to] live with them in Orange"). As a result, if Faith had not consented to the move from Orange to Lewis Ponds, Fiona and John would have been in breach of the Deed by making that move.

Ground 3 - whether the primary judge erred in finding that Faith was estopped.

The pleading point

1. Faith's Amended Notice of Appeal asserts that Fiona and John's case was "expressly limited to a representation that the appellant did not require the respondents to pay $220,000 to her".
2. In my view, Fiona and John's defence to the Further Amended Statement of Claim however gave Faith clear notice that they relied not only upon her statement that she did not require them to pay her $220,000 but also her statement that she did want to move to the Lewis Ponds property as founding the estoppel for which they contended.
3. Paragraph [33(c)] of the defence (see [15] above) refers back to [16] which, at [16(c)], referred to two aspects of Faith's representation: first, that Faith did want to move to the Lewis Ponds property; and secondly, that Faith did not require Fiona and John to pay her $220,000. Paragraph [33(c)] did not expressly refer to the first aspect of the representation. This is not significant however because the second aspect, to which it did expressly refer, was clearly indicated by paragraph [16(b)] and [16(c)] to be the logical consequence of, and bound up with, her wanting to move to the Lewis Ponds property.
4. In these circumstances, Faith's pleading argument should be rejected.

The making of the representation

1. Faith's Notice of Appeal contends that "the trial judge ought to have found that [Faith] did not make a representation that she did not require [Fiona and John] to pay $220,000 to her." Her written submissions in chief do not contain any argument in support of this proposition, but her written submissions in reply do. The latter are confined to the finding that she said she would not require her $220,000 back. They do not deal with the question of whether her conduct more generally in relation to the proposed move manifested her consent to and encouragement of it. A challenge by Faith to the broader finding would inevitably have failed because his Honour's finding was credit-based and no reason why the principles stated in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 for challenges to such findings would not defeat that challenge has been identified.
2. Moreover, Faith's more specific challenge to the evidence that she said that she would not ask for her $220,000 back must fail as John gave evidence that she said this and no basis for rejecting his Honour's acceptance of John's evidence has been identified. In particular, Faith faces the insurmountable hurdle that John was not cross-examined on his evidence of this aspect of the conversation. This precludes such a challenge.

Whether the representation was "sufficiently clear and unambiguous as to found an estoppel"

1. The representation alleged and found was in my opinion clear and unambiguous: Faith represented that she consented to the move and did not require repayment of her $220,000 "conditional gift". Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 illustrates that informality of promises or representations made in a family context are no barrier to their enforcement in equity.

Reliance

1. Faith's only point in support of her challenge to the primary judge's finding of reliance was that Fiona and John "considered themselves honour bound to purchase the Lewis Ponds Property before any conversation with Faith" by reason of their "hand shake" agreement with the vendors. She does not however suggest that that agreement was legally binding. As it related to the sale of land, it was indeed at most binding "in honour" only.
2. Moreover, John gave evidence that he said to Faith that, if she wished, he and Fiona would "cancel the purchase and look to refinance so we can give [the money] back". Although it was suggested to him in cross-examination that he would have had difficulty achieving that refinancing, it was not suggested that he would have regarded the handshake agreement as precluding him seeking "to cancel" the purchase. When taken with the evidence in the next paragraph in his affidavit, it is clear that the effect of his evidence was that he and Fiona would not have proceeded with the purchase if Faith had objected. That next paragraph (see [10] above) indicated that John wanted to be sure that Faith agreed to the move before proceeding with it.
3. In any event, Faith did not identify any matters that would cause this Court to overturn the primary judge's general acceptance of John's evidence. Certainly, his evidence of the subject conversation makes sense bearing in mind the other circumstances which his Honour found proved.
4. For these reasons, Faith's challenge to the primary judge's reliance finding should be rejected.

Whether detriment was proved

1. The primary judge found that Fiona and John suffered detriment because, in reliance on Faith's representation, "they purchased the Lewis Ponds Property and entered into a larger mortgage to finance the purchase of the property" (at [202]). Faith contended that this did not constitute material detriment because the Lewis Ponds property was a more valuable property than the Orange property and was one in which Fiona and John wanted to live. As I pointed out however in Miller Heiman Pty Ltd v Sales Principles Pty Ltd (2017) 94 NSWLR 500; [2017] NSWCA 106 (McColl JA and Sackville AJA agreeing), at [65]-[71], it is, in general, unnecessary and inappropriate to examine the detriment alleged to have been suffered in this manner. There is no reason in the present case not to regard as sufficient detriment a substantial change in financial position and accommodation which would not have occurred if the relevant representation had not been made. As I said in Miller Heiman at [71], to engage in a broader enquiry "would be impractical as it would not only be time consuming and expensive but without obvious boundaries". By way of example, such a broader enquiry in the present case would have involved, at least, conclusions by the Court as to the value of the Orange and Lewis Ponds properties and an assessment of their relative attractiveness to Fiona and John. As well, it cannot be ignored that if Fiona and John had proceeded with the purchase of the Lewis Ponds property without Faith's consent, they would have exposed themselves to a claim (such as has been made) by Faith for return of her contributions and for an interest by way of charge in the new property.
2. In these circumstances, Faith's challenge to the primary judge's finding of detriment should be rejected.

Ground 4 - whether holding Faith bound by an estoppel causes loss to her which is disproportionate to any detriment suffered by Fiona and John.

1. In her written submissions, Faith contended that "the enforcement of an estoppel has an exceedingly harsh impact on [her] and delivers a windfall benefit to Fiona and John". She referred to her loss of "the whole of her life savings" and of "the valuable benefit of being provided for the rest of her life with accommodation, and with valuable caring services". On the other hand, so she submitted, Fiona and John retain "Faith's contribution of $220,000 plus the benefit of the increase in value of the Orange and Lewis Pond Properties" and also "the additional benefit of not having to meet any of their extensive obligations under the Deed". She relied in this context on the following dictum of Deane J in Commonwealth v Verwayen (1990) 170 CLR 394 at 441; [1990] HCA 39: "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."
2. Faith's argument is however premised on a misunderstanding. There is nothing before this Court to indicate that what has occurred between the parties, at least thus far, has put an end to the Deed, and in particular has relieved Fiona and John of the substantial obligations they undertook in the Deed. In particular, by cl 2 they undertook to care for Faith and have her live with them and their children as long as was reasonably practicable. By cl 3 they also undertook to provide a variety of personal services to Faith, and by cl 8 they undertook to: "provide whatever financial assistance is necessary to adequately accommodate Faith in an aged person's unit or care facility including, if necessary, the provision of an accommodation bond to secure such accommodation and including, if required, to supplement her pension with weekly payments for accommodation, charges and/or care nursing facilities".
3. These commitments are potentially of considerable financial value to Faith. No doubt, it would be expensive to obtain commercially the care Fiona and John undertook by cls 2 and 3 to provide. Moreover, the commitment they made in cl 8 is a potentially onerous financial obligation, which might ultimately cost Fiona and John more in the future than Faith's contributions of $220,000 and any alleged accretion to those contributions by reason of increases in the values of the properties.
4. On the material before the Court it does not appear that Faith's move out of the Lewis Ponds property in June 2015 was a repudiation by her of the Deed. As this point was not directly in issue, I do not however express any final view on it. Certainly, by moving out of the Lewis Ponds property Faith relieved Fiona and John, for the period of her absence, of their obligation to allow her to live with them and to care for her. Whilst disharmony within the family may cause Faith not to return, it would, as a matter of law, be open to her to return to the Lewis Ponds property and to expect Fiona and John to perform their care obligations. Moreover, there is nothing to suggest that Fiona and John's obligations under cl 8 as to aged care accommodation do not continue in existence. Indeed Fiona and John's solicitors expressly stated in their letter to Faith's solicitors of 12 October 2015 that their clients "stand by" their commitment to provide Faith with financial assistance in relation to aged care accommodation.
5. For these reasons, the evidence does not indicate that the harm that Faith suffers by being held to her representation is disproportionately, or in fact at all, greater than the detriment suffered by Fiona and John in relying on the representation.

CONCLUSION AND ORDERS

1. As each of Faith's grounds of appeal should be rejected, her appeal should be dismissed with costs.
2. GLEESON JA: I agree with Macfarlan JA.
3. WHITE JA: I have had the advantage of reading in draft the reasons for judgment of Macfarlan JA. I agree with his Honour's reasons and proposed orders.
4. A principal issue was whether the respondents breached the Deed by leaving the Orange property which they had purchased with the assistance of the contribution made by Faith, and if so, whether Faith was estopped from complaining of that breach.
5. Although the primary judge dealt with the case on the basis of estoppel, the first question was whether, by their move from the Orange property to the Lewis Ponds property, Fiona and John breached the terms of the Deed.
6. The Deed required Fiona and John to purchase the property in Bill Marshall Drive, Orange, or some other suitable accommodation, for Faith, and for them and their family. The obligation to acquire such a suitable property was fulfilled on the acquisition of the property in Bill Marshall Drive, Orange. Faith could have insisted on living in the accommodation acquired. But once the accommodation was acquired, Fiona and John had performed that part of the agreement. If, as the primary judge found, Faith agreed to the move from Orange to Lewis Ponds, no question of breach of the agreement should have arisen. I agree with Macfarlan JA (at [25]) that if Faith had not consented to the move from Orange to Lewis Ponds, Fiona and John would have been in breach of the Deed by making that move. By the same token, when Faith did agree to the move, Fiona and John were not in breach of the Deed by making the move.
7. The better view is that Fiona and John's obligation to provide accommodation in Bill Marshall Drive, Orange, or other suitable accommodation, was performed when that accommodation was secured. Alternatively, if, as Faith contended, there was a continuing obligation on the part of Fiona and John to provide her with accommodation in Orange, she agreed to a variation of that obligation.
8. The proceeding was decided on the basis that Faith was estopped from asserting that Fiona and John had breached their obligations to her. For the reasons given by Macfarlan JA, on the assumption upon which the appeal was argued, I agree that the primary judge was correct in deciding that Faith was so estopped.
9. Nonetheless, as a matter of principle, the question of estoppel only arose if Faith had established a breach of the Deed. On the primary judge's findings that were supported by the evidence, there was no such breach.
10. For these reasons in addition to the reasons of Macfarlan JA, I would also dismiss the appeal.

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