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[2014] VSCA 88
General information, not legal advice.
Court of Appeal (Vic)
2014-05-08
In J, Maxwell P, Neave JA
Original judgment source is linked above.
[2013] VCC 139 (Judge Ginnane)
EQUITY - Proprietary estoppel - Contract of sale between family members - Transfer of half-interest in home by elderly parents - Whether contract was principal repository of parties' rights and obligations - Relevance of parties' pre-contractual understanding - Whether appellant induced to rely on terms of pre-contractual understanding - No detrimental reliance - Appellant bound by subsequent contract - Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 applied - Appeal dismissed.
1 This appeal concerns the ownership of a family home at 30 Bayview Street, Williamstown, originally purchased by Francis Dean Humphries and Aileen Elizabeth Humphries in 1959.
2 The Humphries had two sons and two daughters. Aileen Mary Humphries, their eldest daughter, married Stephen Sandri in 1980, and had three children. Elizabeth Ellen Humphries, their second daughter, married Paul Robert O'Driscoll in 1995.
3 In late 1999, the Humphries and the Sandris began discussing a proposal under which the Sandris would move into the Williamstown property with their three children on the basis that, at their own cost, they would renovate and live in the existing house on the property, build a 'granny flat' in which the Humphries would live and look after the Humphries in their old age. The details of the proposal varied over time between 1999 and March 2002 and its exact details, including the extent to which it ever crystallised and when that occurred, are disputed.
4 In June 2000, the Sandris (but not the Humphries) signed a one-page document that provided that the parties had agreed that the Sandris would purchase the property and give the Humphries a life tenancy. On 5 January 2001, Mahonys solicitors, who had been instructed by the Sandris, prepared a draft contract providing that the Humphries would sell the whole of the property to the Sandris for $400,000, including a deposit of $100,000. Another solicitor, Mr Boyle, was then retained by both the Sandris and the Humphries, and he provided them with a draft on 31 January 2001 on similar terms but with a deposit of $70,000. The trial judge found, on the basis of Mr Boyle's file notes, that in January 2002 the proposal was still to sell the whole of the property for $400,000, but that nothing had been executed. However, in early March 2002, Mr Boyle discussed the possibility of a joint tenancy with both Mr Sandri and the Humphries.
5 After further consultations with Mr Boyle, the Sandris and the Humphries executed a contract on 28 March 2002. The contract provided, amongst other things, for the sale of a 'one half interest' in the property to the Sandris for the sum of $240,000. It was accepted by both sides that, as a matter of law, 'a half interest', without anything else, refers to the property being owned by them as tenants in common.
6 The purchase price of $240,000 was to be paid by a deposit of $70,000 (recorded in the contract as having been paid by the Sandris) with the balance of $170,000 to be paid at 'any time following possession of the property provided that it shall not be later than the date being twelve (12) months after the death of the last surviving Vendor'. The effect of the contract was to sell a half interest in the property to the Sandris with the ownership of the property to be held as tenants in common.
7 Later that same day, the Humphries and the Sandris executed a transfer of land under which they became registered as joint proprietors of the property.
8 On 6 November 2002, Mrs Humphries died. On 18 September 2003, Mrs Sandri also died. Mr Sandri and his three children continued living at the property with Mr Humphries.
9 In November 2007, Mr Blott, a solicitor acting on the instructions of Mr Humphries, but without the knowledge of Mr Sandri, applied to have the registration of the interests in the property changed to a tenancy in common in equal shares between Mr Humphries and Mr Sandri. Mr Blott in his correspondence with the Registrar of Titles purported to act for both Mr Humphries and Mr Sandri. The change was accepted on the register.
10 In June 2009, Mr Humphries assigned to Mrs O'Driscoll any claim for debt owing to him under the contract.
11 On 29 September 2009, Mr Sandri commenced proceedings against Mr Humphries and Mrs O'Driscoll.
12 On 3 January 2010, Mr Humphries died. If he and Mr Sandri were joint tenants, his death should have resulted in Mr Sandri taking the entire interest in the Williamstown property by survivorship. Mr O'Driscoll was appointed Mr Humphries' personal representative.
13 In his statement of claim, Mr Sandri sought a declaration that the property was held by the estate of Mr Humphries on constructive trust for him and a declaration that Mrs O'Driscoll was estopped from enforcing the terms of the contract. Mrs O'Driscoll counterclaimed for the moneys said to be owing under the contract, comprising the deposit of $70,000 and the balance of $170,000, together with interest. Mr O'Driscoll, on behalf of the estate of Mr Humphries, alleged that the arrangement reached on or before March 2002 was a failed joint venture, with the result that Mr Sandri held his half share of the property on constructive trust for Mr O'Driscoll, subject to an equitable charge or lien in Mr Sandri's favour in an amount to be agreed or determined by the Court.
14 The trial was heard by Judge Ginnane in the County Court over 10 days in May 2012. On 1 March 2013, his Honour delivered judgment in favour of the O'Driscolls.[1] On 2 May 2013, his Honour ordered that the property be sold by public auction and made further consequential orders. That order was stayed by this Court on 8 October 2013 pending the hearing and determination of this appeal.[2]
17 It then listed 15 separate acts of alleged reliance by the Sandris, including that they sold their Altona property; engaged and paid designers and a construction company to build the new home; applied and paid for the necessary building permits; arranged and provided accommodation for the Humphries from the time they vacated their original home until completion of the construction of the new house; instructed and paid the named solicitors; paid off a mortgage on the property; paid the rates and expenses; paid for various items associated with living expenditure; and assisted and, when necessary, cared for the Humphries in their later years.
18 In respect of the proprietary estoppel claim that is the subject of this appeal, his Honour answered the questions asked by the parties as follows:
(a) did the Sandris and the Humphries enter into an agreement or reach an understanding in the terms pleaded in paragraph 2 of the statement of claim?
Answer: No.
(b) if yes to (a), has Mr Sandri established a proprietary estoppel entitling him to the whole of the property?
Answer: Not applicable.
(c) does the contract of sale of 28 March 2002 made between the Humphries and the Sandris bind them? If so, what effect does it have?
Answer: The contract binds the parties and, in the case of the Humphries, their personal representatives. The contract sets out the parties' rights and obligations in respect of a sale of a half interest in the property by the Humphries to the Sandris.
19 The trial judge's conclusions in respect of the claim in estoppel were set out in paragraphs 268-303 of his Honour's reasons for judgment. These paragraphs should be read as a whole, and should be read in the context of the entire judgment, if his Honour's ultimate conclusions are to be properly understood.
20 In reaching his conclusions, his Honour took into account that, of the four parties to the alleged agreement, only Mr Sandri was alive and able to give oral evidence. In his Honour's view, the absence of this evidence, in particular that of Mrs Humphries and Mrs Sandri, is significant when the Court is required to make findings about the evidence of the agreement or understanding that was reached.[3] The absence of those key witnesses, his Honour said, required close consideration to be given to the evidence about the alleged understanding between the Humphries and the Sandris.
21 With respect, what his Honour said was plainly correct. Because of the consequences of any findings that may be made, and the inability to hear evidence from participants who are deceased, it was necessary for his Honour to evaluate the evidence with great care, in accordance with the principles set out in Briginshaw v Briginshaw,[4] and codified in s 140(2) of the Evidence Act 2008 (Vic).[5] These principles apply both to findings of fact proved by direct evidence, and to findings of facts reached through a process of inferential reasoning.[6] That was particularly important in the circumstances of this case because Mr Sandri's evidence was - to a significant degree - dependent upon what his wife had told him about the arrangement she had reached with her parents.
22 Before setting out his conclusions, the trial judge observed that he was required to decide the rights of the parties by reference to the issues raised by the pleadings. As set out above, the statement of claim alleged that a specific arrangement or understanding had been reached in 1999. It was not alleged that the parties to the 28 March 2002 contract had subsequently entered into an arrangement that varied the terms of that contract, on the basis of which Mr Sandri had acted to his detriment.
23 His Honour concluded that the parties had not entered into a concluded agreement prior to signing the final version of the contract and that as a result Mr Sandri had not proved the pleaded agreement or understanding upon which he relied to establish proprietary estoppel. His Honour said that:
But the agreement or understanding on which the proprietary estoppel which Mr Sandri relies is based, is not supported by the position that the parties appear to have reached when they signed the contract.
[T]he plaintiff has not established that the agreement or understanding as detailed in the statement of claim and which involved the 10 elements set out above was reached in 1999, or at a later time. Until the signing of the contract there were unfinalised discussions about selling all the house to the Sandris.
In the nature of family relationships, these discussions meandered and drifted for a time. ... The contract, when viewed objectively, set out the arrangement for the transfer of an interest in the property to the Sandris. It was prepared against the background of the family discussions that occurred.[7]
24 After careful scrutiny of the evidence, his Honour considered that, on the balance of probabilities, the better explanation was that the parties had intended to be legally bound when they made their contract and that it was the contract, rather than the earlier discussions, that was intended to govern the rights and responsibilities of the parties. Although the initial transfer of land had registered the Humphries and the Sandris as joint tenants, the Humphries were entitled to sever the joint tenancy unless Mr Sandri established a proprietary estoppel preventing that severance.
25 His Honour held that, because Mr Sandri had not established the pleaded agreement or understanding, he could not have acted on anything other than the contract. His Honour also held that:
[Mr Sandri] has not established that the Humphries gave the assurance or created the expectation on which he relies.
...
The evidence does not establish that the Sandris acted on any agreement or understanding other than was contained in the contract.[8]
26 Finally, his Honour was satisfied that Mr Sandri could not establish all of the actions he alleged had been done by the Sandris in reliance on the alleged understanding or agreement, and was not satisfied that Mr Sandri had 'acted to his detriment in the relevant sense'.
27 His Honour also found that Mrs O'Driscoll had established an entitlement to the payment of the balance of the purchase moneys of $170,000 owing under the contract.
28 In the notice of appeal filed 14 May 2013, Mr Sandri appealed the judgment and orders of the trial judge on seven grounds. The seventh ground related to the monies owing under the contract and was not pressed at the hearing of the appeal.
29 The first and second grounds concerned his Honour's findings that there was no agreement or understanding entered into between the parties as and from 1999 as alleged:
30 The third to sixth grounds concerned his Honour's findings that the elements of a claim in proprietary estoppel were not made out:
(a) denying the existence of the arrangement or understanding as alleged by [Mr Sandri]; and
(b) severing the joint proprietorship in the property with [Mr Sandri] as he did by application to the Registrar of Titles on 7 November 2007.
6. By reason of the matters in grounds 1 to 5 above, his Honour erred in:
(a) finding that the evidence did not establish that [the Sandris] acted on any agreement or understanding other than that contained in the contract; and
(b) failing to find that the evidence established the agreement or understanding alleged by [Mr Sandri].
31 Before this Court, the parties agreed that his Honour correctly stated the applicable principles of proprietary estoppel when he said:
Turning from these general findings and observations, it is necessary to make findings, on the evidence, about the matters that Mr Sandri has to prove to establish a proprietary estoppel. They are:
(a) he and his wife were induced by the Humphries' conduct to assume, or have an expectation, that they would acquire an interest in their land, including by reaching an agreement or understanding to that effect;
(b) that they did rely, or act in reliance on that assumption or expectation;
(c) that he has suffered detriment as a result of that reliance.
In Walton Stores (Interstate) Ltd v Maher, Mason CJ and Wilson J stated:
[A] person whose conduct creates or lends force to an assumption by another that he will obtain an interest in the first person's land and on the basis of that expectation the other person alters his position or acts to his detriment, may bring into existence an equity in favour of that other person, the nature and extent of the equity depending on the circumstances.
Proprietary estoppel provides a remedy in order to prevent unconscionable conduct by a party who, having made a promise to another who acts upon it to his detriment, seeks to resile from the promise: see Giumelli v Giumelli.[9]
32 The first and second grounds of appeal contend that the trial judge erred in finding that the contract of sale was 'the sole alternatively the principal repository' of the parties' rights and obligations and that no final agreement or understanding was entered into between the parties as and from 1999. Senior counsel for Mr Sandri submitted that, although his Honour did not expressly find that the contract was the sole or paramount repository of the parties' rights and obligations, such a finding is apparent from his Honour's reasons.
(a) the contract represented the outcome of months of discussions;
(b) the actions of the parties in entering into the contract lead to the objective conclusion that no arrangement was entered into prior to that;
(c) although many family arrangements are not intended to be legally enforceable, the contract was;
(d) the contract is in its terms inconsistent with the alleged agreement;
(e) the contract is evidence that the parties considered their legal rights and obligations carefully; and
(f) the evidence does not establish that the Sandris acted on any agreement other than what was contained in the contract.
34 On Mr Sandri's behalf, it was argued that the contract was merely one part of the evidence in assessing what the parties had agreed or assumed, and his Honour had placed too much weight on the contract. The following were said to be deficiencies in his Honour's analysis:
(a) despite observing that the contract made no reference to the construction of a new house and did not have building plans attached to it, his Honour gave no explanation why these factors did not point to the existence of some further or other agreement between the parties;
(b) his Honour failed to observe or comment upon the fact that the building contract entered into by the Sandris was to build a new house, whereas the contract between the parties referred to the erection of an 'additional 2 bedroom self-contained unit' and provided for a life tenancy of that unit;
(c) despite observing that the contract price was informed at least in part by consideration of the Humphries' Centrelink position, his Honour found that this did not alter the legal effect of their action. His Honour failed to appreciate that, as the contract was drawn with Centrelink issues in mind, it was not intended to contain the whole of the agreement;
(d) despite observing that the joint tenancy provided for in the transfer provides some support for Mr Sandri's position, his Honour said 'but its inconsistency with the contract makes its effect equivocal' whereas, it was submitted, its inconsistency was not equivocal;
(e) his Honour failed to have regard to the evidence of the solicitor, Mr Boyle, to the effect that he had recommended 'a joint tenancy with will provisions', and 'a joint proprietorship to protect the Sandris' children if [the Sandris] predeceased the Humphries' and that on 6 March Mr Boyle had 'met with the Humphries and discussed a proposal for a joint tenancy of the property and enduring powers of attorney and wills to protect the Sandri children'. Mr Boyle's evidence, coupled with the fact that the transfer created a joint tenancy, offered strong objective support for the existence of some sort of side agreement or understanding of the kind contended for by Mr Sandri. It was submitted that, despite setting out Mr Boyle's involvement and relevant evidence at some length, his Honour made no reference to the relevant evidence of Mr Boyle in the section where he explained his rejection of the proprietary estoppel claim;
(f) his Honour reasoned from the finding that 'the contract ... represented the outcome of months of discussion between the parties, with the assistance of their solicitors' that there was no other agreement or understanding between the parties. It was submitted that this was erroneous given that the contract did not purport to deal with all matters between the parties and the contract thus left ample room for an additional agreement or understanding about other matters as alleged by Mr Sandri;
(g) his Honour without explanation treated the disconformity between the provision for a $70,000 deposit in the contract, and the parties' treatment of other payments as satisfying the requirement to pay that deposit, as indicating that in entering into the contract the parties 'considered carefully the rights and obligations that existed between them'. As a matter of logic this disconformity suggested the opposite.
35 His Honour noted that, although this case concerned an agreement or understanding between family members, it also involved protracted discussions assisted by solicitors. The first draft of the contract, prepared by Mahonys, was seen by the parties as early as January 2001. Over the course of the next year, a number of other drafts were prepared when both parties consulted Mr Boyle. The price to be paid varied considerably, from as much as $400,000 down to the final figure of $240,000. Although there was initially a proposal to renovate the house and build a self-contained unit for the Humphries, this proposal changed after the council refused planning permission to build a unit. Subsequently there was a proposal to remove the existing building and construct an entirely new house, which would include separate accommodation for the Humphries. The sale of the whole of the property with a life tenancy to the Humphries became, by March 2002, a sale of 'a half interest'. In negotiating their agreement, the Humphries and the Sandris considered the effect of the transaction on the Humphries' entitlement to a pension and the stamp duty to be paid. They also considered how the transaction would affect their wills, and how the interests of the Sandri children, who were also the grandchildren of the Humphries, could be protected.
36 It was in light of this history that the parties entered into the contract in March 2002. Mr Sandri now seeks to argue that he and his wife assumed when entering into the contract that their entitlement to the property would be governed by something other than that contract.
37 We do not accept the submission that his Honour found the contract to be the sole or paramount repository of all of the rights and obligations between the parties. Rather, his Honour found the contract to be the paramount repository of rights as they were relevant to determine the issue in dispute, namely, the nature of the property interest each of the parties would hold.
38 Insofar as Mr Sandri contends that an arrangement or understanding external to the contract must have been reached by the parties, his Honour accepted that the parties had reached informal arrangements separate to the contract. His Honour also accepted that these arrangements were ongoing until they signed the contract. These included the construction contract and the evidence of the payment of at least some moneys by the Sandris to the Humphries. However, his Honour made it clear that Mr Sandri failed to prove that the pleaded arrangement was entered into in 1999 or early 2000. Absent such proof, the provisions of the contract signed in 2002 relating to the parties' respective shares in the property were enforceable.
39 The parties' registration as joint tenants does not alter that analysis. They are bound by the terms of the contract that they executed, which provided for the sale of a half interest. Their intention, as conveyed by the words that they used, was that they would hold as tenants in common (in equity, under the in personam exception to indefeasibility of title).[10] That was the intention that Mr Humphries sought to give effect to when, in 2005, he instructed Mr Blott to sever the joint tenancy.
40 Courts have been and remain reluctant to displace the terms of a contract entered into between competent, legally advised parties by relying on what has been said in pre-contractual negotiations. In Austotel Pty Ltd v Franklins Selfserve Pty Ltd,[11] Franklins proposed to lease a supermarket from Austotel. After extended negotiations, the parties failed to reach an agreement that the Court considered to be binding. On the issue of whether relief by way of estoppel was available, Kirby P noted:
We are not dealing here with ordinary individuals invoking the protection of equity from the unconscionable operation of a rigid rule of the common law. Nor are we dealing with parties which were unequal in bargaining power. Nor were the parties lacking in advice either of a legal character or of technical expertise. The Court has before it two groupings of substantial commercial enterprises, well-resourced and advised, dealing in a commercial transaction having a great value. As has been found, they did not reach the point of formulating their agreement in terms which would be enforced by the law of contract. This is not, of itself, a reason for denying them the beneficial application of the principles developed by equity. But it is a reason for scrutinising carefully the circumstances which are said to give rise to the conclusion that an insistence by the appellants on their legal rights would be so unconscionable that the Court will provide relief from it.[12]
41 In this case, the parties are not substantial commercial enterprises; they are ordinary people. But they are ordinary people who understood the importance of documenting their agreement in a legal form, and spent some years attempting to do so. It is of particular significance that it was the Sandris who, in early 2001, took the first steps to have a written contract drawn up. Both sides were legally advised, and they ultimately reached the point of formulating their agreement in terms that would be enforced by the law of contract.
42 It is clear that the law of estoppel provides protection for parties where legal rights are unconscionably relied upon, such as when estoppel by convention is made out. But the execution of a formal agreement will ordinarily bar any attempt to turn pre-contractual negotiations into equitable obligations.
43 In this case, Mr Sandri would have had to establish that the alleged 1999 agreement survived, and should be treated in equity as contradicting and overriding the written contract executed more than two years later. But the very foundation of that claim failed, because Mr Sandri did not prove that any earlier agreement had been made.
44 In his vive voce evidence, Mr Sandri said that, in discussions in 1999, the parties agreed the transfer would be for a joint tenancy and he understood what this meant. This was flatly contradicted by the documentary record, however. As his Honour found, from the time of the first draft of the contract in January 2001, until late in February 2002, the proposal under discussion was for a transfer of the whole of the property to the Sandris. There was no mention of joint tenancy until Mr Boyle raised the idea in late February 2002.
45 Mr Boyle gave evidence that the parties at that point negotiated for a joint tenancy with provisions to be made in their respective wills in favour of the Sandris' children to protect them in the unlikely event that the Sandris predeceased the Humphreys. Ultimately he recorded, on their instructions, that the transfer would be for a half interest. His Honour concluded that, given those negotiations, the lack of evidence from the other parties to the contract and the terms of the contract itself, Mr Sandri could not establish, on balance, that in 1999 he understood he would become a joint proprietor.
46 There was no error in that conclusion. Had the Humphries agreed in 1999 that the Sandris would have a joint tenancy, as Mr Sandri pleaded in his claim and asserted in his evidence, there would have been no occasion for the extended negotiations that took place in the period between January 2001 and March 2002 over the extent of the interest to be transferred; nor would they have entered into a contract under which the Sandris received only a half share of the property.
47 On this point, senior counsel for Mr Sandri argued that the contract should have been disregarded because it was a 'nonsense'. It was, he submitted, errant and anomalous, in that it did not reflect the arrangement that was otherwise agreed between the Humphries and the Sandris. Counsel accepted that, ordinarily, a written agreement made after years of inconclusive negotiations should be viewed as embodying what the parties were prepared to agree to. In this case, however, the contract 'so obviously did not reflect the true state of affairs' that the usual inference could not be drawn.
48 The difficulty with this submission is that it simply does not reflect what Mr Sandri did, or said, at the time of the contract or subsequently. Nor is it consistent with the evidence he gave. At no time did Mr Sandri object that the contract was inaccurate or incomplete or at odds with 'the true state of affairs'. On the contrary, he consistently referred to it as embodying the agreement which created the relevant rights and obligations. That was how he characterised it in January 2009, both in his statement to police and in his complaint to the Legal Services Commissioner.
49 His evidence at the trial was to similar effect. Under cross-examination, he said that the property 'deal' between the parties had been 'finalised in March 2002'. Asked about the 1999 agreement which he alleged had been made, he said:
In 1999, we didn't have an agreement written down per se like a contract. It was put in place in March 2002. ... There were various items discussed all the way through until the finalisation of the - put in place in the contract.
50 Mr Sandri was extensively cross-examined about the non-payment of the sum of $170,000, being the balance of the purchase price due under the March 2002 contract. Far from suggesting that the agreement was a 'nonsense' and could be disregarded, Mr Sandri consistently acknowledged that he was contractually bound to make the payment. His defence to the claim for payment was that, by a 'supplementary arrangement', he had made a series of payment to Mr Humphries or for his benefit that - in aggregate - had paid off the debt. The judge rejected this contention, holding that no such arrangement had been pleaded or proved. That finding was not challenged on the appeal.
51 His Honour's conclusions were plainly correct. These grounds must be rejected.
52 The third to sixth grounds are, in essence, that by failing to find an assumption, reliance, detriment, and unconscionability, his Honour erred in failing to find an estoppel.
53 In considering the related questions of inducement, reliance and detriment, his Honour held that:
The plaintiff has not established that the Humphries gave the assurance or created the expectation on which he relies.
...
In respect of the issue of reliance, Mr Sandri has not proved that he made the payments to Mr Humphries that he claims. His evidence on this issue is not entitled to much weight and involved at least some exaggeration and speculation. By way of example, he claimed that payments were made when Mr Humphries had not banked them e.g. his evidence concerning the two cheques totalling $6,000.
...
I find that the Sandris did pay for the construction of the house and made a number of payments in connection with the new house e.g. for garden supplies. But they obtained a half interest in the property which in 2011 was valued at $775,000.
The plaintiff has not acted to his detriment in a relevant sense. The payment of the construction costs and rates, insurance and utility bills has enabled him to live in the house for 10 years. He has sold his house, but now owns half a property of considerably greater value than his previous home. He is obliged, as I find below, to pay a further $170,000 in respect of his interest in the property.[13]
54 Having determined that his Honour correctly found that there was no assumption sufficient to found an estoppel, it is unnecessary to consider whether his Honour was correct in his other findings in relation to estoppel. However, if it matters, we consider that his Honour was correct in finding that Mr Sandri had failed to establish that the Humphries had encouraged or induced him to assume he would be entitled to a joint proprietorship in the property. Accordingly, no questions of detriment or reliance arise.
55 Where parties negotiate a contract, with legal advice, it must be presumed that they are aware their rights will be governed by that contract. Without evidence to establish that the Humphries induced the Sandris to believe that this was not the case, the provision that each of the parties was entitled to a half share in the property must take effect.
56 The Sandris were intimately involved in negotiating the contract for the purchase of an interest in the property and they signed that contract. In these circumstances Mr Sandri could not maintain that he was induced to assume that some other arrangement external to the contract would take effect in determining the rights of the parties to the property. It was not argued that the Sandris signed the contract without having read it or being aware of what it contained. In the absence of evidence that the Humphries had agreed or led Mr Sandri to believe the contract was some sort of sham designed purely for conveyancing purposes, there was no reasonable basis on which it could be argued that Mr Sandri and his wife were induced by Mr and Mrs Humphries to assume that they would acquire the whole of the property by survivorship.
57 Before his Honour, the validity of the contract was not challenged. Prima facie, it did contain the agreement between the parties as to how their respective interests in the property would be held. Unless Mr Sandri could establish that the Humphries led him to assume that it was merely a convenient legal device that bore no relationship to their actual agreement, he could not maintain that it was merely a part of the evidence and that it did not take effect according to its terms.
58 It follows that, even if the Sandris had assumed that they would receive a joint tenancy under the contract, the trial judge was correct in finding that the Humphries had not given the assurance or created the expectation on which Mr Sandri was said to rely, a finding that Mr Sandri has in any case not appealed. As inducement is a necessary element of establishing estoppel, it follows that the appeal must be dismissed.
59 For the above reasons, we order that the appeal be dismissed. Subject to anything the parties wish to say, we would order that Mr Sandri pay the O'Driscolls' costs of the appeal.
60 As the appeal has now been heard and determined, the stay of the orders of the trial judge made on 27 March and 2 May 2013 is no longer of any effect.
[1] Sandri v O'Driscoll [2013] VCC 139 ('Reasons').
[2] Sandri v O'Driscoll [2013] VSCA 281.
[5] See Qantas Airways Ltd v Gama [2008] FCAFC 69; (2008) 167 FCR 537, 576 [139].
[6] Karakatsanis v Racing Victoria Ltd [2013] VSC 434.
[9] Ibid [282]-[284] (citations omitted).
[10] It was not argued that merger applied so that the rights created by the contract merged in the rights created by the registered transfer.
Sandri
O'Driscoll & Anor [2014] VSCA 88
(2008) 167 FCR 537
(1989) 16 NSWLR 582
(1938) 60 CLR 336