Sayers v Sayers

Ownership and Mortgages of the Property

1. The Property consists of several parcels of land, which are lots in various deposited plans. They may conveniently be referred to as lots 1, 28, 29, 30 and 138. Bill had acquired the parcels of land comprising the Property at different times from 1973 to 1979.
2. By 1979, Bill and Cec had become the owners of all several lots as tenants-in-common in equal shares. From that time, Bill and Cec conducted a cattle raising business on the Property in partnership. It is not entirely clear when the partnership ceased. That has some bearing on the questions raised in the proceedings, as will appear below.
3. In November 1986, Bill and Cec granted a mortgage over the whole of the Property to Westpac Banking Corporation (Westpac) to secure a loan of the sum of $85,000 to Cec and Inesita. In November 1987, Bill and Cec granted a further mortgage over the Property to Westpac to secure a loan to Bill and Cec jointly of the sum of $65,000. As at April 1989, the amount secured by the second mortgage had increased to $123,000. The particulars of the increase are unclear. In November 1989, Bill and Cec granted a third mortgage to Westpac to secure their joint indebtedness. By August 1990, the amount secured by the third mortgage had increased to $136,000. It is not clear whether that sum of $136,000 included the sum of $85,000 originally advanced by Westpac to Cec and Inesita in November 1986.
4. Messrs Cross and McInnes, chartered accountants, prepared accounts for Cec as at 30 June 1992. Cross and McInnes stated that they prepared the accounts from the books and records of Cec and other information provided to them at the request, and exclusively for the use and benefit, of Cec. They stated that the accounts were a special purpose financial report in order to assist in the preparation of Cec's income tax return. The accounts referred to Cec as "the sole trader" and were not audited.
5. The accounts show contract income of Cec for the year ended 30 June 1992 of $49,585. The total income for the previous year ended 30 June 1991 was $263,960, being contract income, profit on sale of property, plant and equipment, and rebates received. The accounts showed a net loss for the year ended 30 June 1992 of $23,558 and for the year ended 30 June 1991 of $11,850. No income was shown from cattle raising or from any interest in a partnership, suggesting that Cec's partnership with Bill had ceased before 1 July 1990.
6. Cec's balance sheet as at 30 June 1992 showed total assets of $311,696 as against $344,038 as at 30 June 1991. None of the assets appear to relate to a cattle raising business. The substantial asset consisted of "Land and Buildings Land (at Cost)", which was recorded as $254,390, as at 30 June 1991 and 30 June 1992. The balance sheet showed total liabilities of $196,185 and net assets of $115,511 as at 30 June 1992 and total liabilities of $188,126 and net assets of $155,912 as at 30 June 1991. The creditors as at 30 June 1992 included the following: Westpac Earthmoving account $21,815 Westpac Loan $72,038 Bill Sayers $25,397. No other particulars of the indebtedness to Westpac are included in the balance sheet. The balance of the Westpac loan as at 30 June 1991 was shown at $63,417. It is not clear whether that represents the amount borrowed in November 1986.
7. In August 1994, Westpac served a demand on Bill and Cec requiring payment of the sum of $174,696.78 said to be secured by the mortgages given in 1987 and 1989. It is unclear whether any amount was repaid to Westpac at that stage. In any event, in May 1997, the three mortgages to Westpac were all discharged. It is not clear what amounts originally borrowed were still outstanding at that time. At the time of discharge of the three mortgages, Bill and Cec granted a mortgage over the Property to Interstate Mortgage & Investments Pty Ltd (Interstate) to secure a loan to Bill and Cec of $130,000. That mortgage was registered in May 1997. It appears that the loan was applied in repaying the amounts secured by the mortgages to Westpac.
8. In December 2000, Bill and Cec granted a mortgage over the Property to Wesfarmers Dalgety Ltd, Dalgety Ltd and Primary Industry Bank of Australia Ltd (together Wesfarmers) to secure a loan from Wesfarmers to Cec. The amount secured by the mortgage appears to have been the sum of $160,000. That amount consisted of a term loan of $135,000 and a seasonal loan of $25,000. The indebtedness to Interstate was repaid from the proceeds of the advances made by Wesfarmers and the mortgage to Interstate was discharged.
9. Cross and Miller, the successors of Cross and McInnes, prepared financial statements for Bill for the year ended 30 June 2003. Those accounts disclose that Bill was engaged in a cattle business. The accounts contained a livestock account and disclosed income from livestock trading and timber sales, as well as other income, with a net primary production loss of $4,197, as against a net primary production loss of $7,466 in respect of the year ended 30 June 2002. The only liability disclosed is a liability to Southern Cross Credit Union. Significantly, there is no liability to Wesfarmers disclosed in the accounts. Further, there is no expense for interest payable to Wesfarmers although there is an expense for interest payable to Southern Cross Credit Union.
10. In October 2006, Cec and Inesita applied to Statewide for a loan of $400,000. On 26 October 2006, they received an offer from Statewide of a loan of $400,000 to be secured by mortgage from Bill and Cec over the Property (the Statewide Offer). The Statewide Offer stated that the term of the proposed loan would be the expiration of 30 days written notice given by Statewide.
11. In February 2007, demand was made by Wesfarmers for repayment of the loan secured by the mortgage of the Property. The demand required payment of the sum of $374,856.54. The demand stated that default had been made in relation to the term loan for $125,000 due on 30 September 2015 and the seasonal loan for $25,000 that fell due on 30 September 2001. The balance outstanding in relation to the seasonal loan as at February 2007 was $274,434.25.
12. On 16 February 2007, Bill's solicitors wrote to Cec's solicitors in relation to the Statewide Offer, saying that it was not acceptable to Bill because the loan was repayable at the expiration of 30 days' notice, which, the solicitors said, gave the borrowers no certainty that the loan might not be required to be repaid at any time. The letter also referred to the demand from Wesfarmers, saying that Bill could not understand how a figure of $374,856.54 was calculated when the loans were for approximately $150,000.
13. On 16 February 2007, Bill's solicitors also wrote to Wesfarmers's solicitors in relation to the demand, saying as follows: "As you are aware, our client is not the borrower under the relevant facility. Please provide us as a matter of urgency as to the particulars of the amount outstanding." The letter said that Bill could not understand where a figure in the order $374,856.54 was arrived at, having understood that the loans secured were for a total of approximately $150,000.
14. By letter dated 21 February 2007, Cec's solicitors responded to Bill's Solicitor's letter of 16 February 2007. Cec's solicitors asserted that the wording of the letter of offer was no worse than is standard in such transactions and said that the purpose of the loans was to pay out Wesfarmers and that the reason the debt had increased was because there had been additional borrowings, the amount of the new loan being a reflection of existing indebtedness. That was followed by letter of 26 February 2007 saying that, unless the matter proceeded that week, the loan offer would expire, in which case refinancing would not be possible and Wesfarmers may well proceed on the demand that had previously been given.
15. It is tolerably clear that, at that stage, Cec, or both Cec and Inesita, owed the whole of the amount secured by the mortgage to Wesfarmers. That is to say, Bill owed no part of the amount that was then secured by the mortgage to Wesfarmers.
16. Thus, it is apparent that, while advances may have been made by Westpac to Bill and Cec, probably in connection with the cattle raising partnership, those amounts had been repaid in full, probably by the time when the partnership ceased to trade, which, for the reasons indicated above, was probably no later than 30 June 1990. That conclusion is supported by a letter written by Cross and Miller on 28 July 2008, saying that a decision had been made to terminate the partnership not long after 1986, possibly 30 June 1988. The letter said that Bill had continued to operate the cattle raising business in his own name and Cec had continued to operate the earthmoving business in his own name.
17. On 5 March 2007, Bill's solicitors wrote to Cec's solicitors enclosing documents signed by Bill relating to the proposed loan by Statewide. The letter said that the documents were returned on the basis that it would be made clear to Statewide that no further funds were to be advanced to the borrowers without Bill's written consent. The letter also said that the documents were provided on the basis that the amount of the loan was to be used for "your client's purposes" and, accordingly, upon any sale or transfer of any interest in the Property, the current debt was to be attributable to "your client's interest in the Property". Cec's solicitors acknowledged that letter on 6 March 2007, saying that they would take instructions regarding the terms on which the documents were returned. There was no evidence of any subsequent rebuttal of those terms.
18. On 26 March 2007, the mortgage to Wesfarmers was discharged and the indebtedness to Wesfarmers satisfied by the proceeds of a loan made by Statewide to Cec and Inesita as borrowers. The principal sum was $400,000 with an interest rate of 11.2%, reducing to 8.2% for payment on time. The loan was secured by a mortgage by Cec and Bill of the Property to Statewide, showing Cec and Inesita as borrowers and Bill as guarantor.
19. As I have said, Bill died on 16 June 2008, and, on 19 June 2008, Toni and her daughter met with Toni's solicitor to discuss Bill's estate. A file note of the meeting made by the solicitor recorded that Cec had told a Mr Bruce Murray that he owned the whole of the Property but that Bill could stay as long as he wanted but the Property belonged to Cec. The note also recorded that Cec had told Toni on her wedding day that he would "kick her off the property when Bill dies".
20. On 1 July 2008, Cec's solicitors wrote to Toni, saying that Cec and Bill were tenants-in-common in equal shares in relation to the Property and that it would be necessary for Toni to apply for letters of administration in relation to Bill's estate so that "his interest in the above lands" could be transferred "to the beneficiary or beneficiaries of his Estate as appointed by the court". The letter also asserted that Cec was the co-owner with Bill of stock and plant as listed on an inventory enclosed with the letter. The letter said that, because Cec was a co-owner of the land, stock and plant, it was important that anything that was to be done on the land or with the stock and plant be done with his knowledge and consent and requested that Cec be kept fully informed of what Toni wished to do, if anything, in relation to the farming or grazing activities on the Property and "any clearing, any structural improvements and the like".
21. The letter of 1 July 2008 also referred to the loan to "Statewide standing in the name of" Bill and Cec, which was incurring interest and was secured by a mortgage over the Property. The letter said that half of the repayments fell to be paid by the estate in respect of the loan but it may be that the estate could not meet the commitment because of a lack of finances. The letter requested advice as to whether the estate would be in a position to meet part or all of that part the interest payments. The letter said that Cec may be in a position to assist the estate by meeting the interest payments due under the loan as and when they fall due, on the basis that half of the payments that he would be paying on behalf the estate would be repaid to him once the estate was finalised or on the sale of the Property.
22. Two aspects of the letter of 1 July 2008 are significant in relation to the claims made in the proceedings on behalf of Cec and the Sons and in relation to the claim made by Toni in the cross-claim. First, there is no hint in the letter of the alleged agreement between Cec and Bill in 1993 that the estate would be left to the Sons. Secondly, the reference to the repayment of the secured loan is inconsistent with the alleged agreement that Cec would pay all of the amounts secured by a mortgage of the Property.
23. On 4 July 2008, Toni's solicitors responded to the letter of 1 July 2008, expressing surprise at the claim that Cec had an entitlement to stock, plant and equipment. Toni's solicitors said that the stock was jointly owned by Toni and Bill, and therefore did not form part of the estate. The letter also said that the solicitors were unaware of the existence of any partnership agreement to support Cec's allegations and requested a copy if such a document existed. The letter pointed out that the mere fact that the Property was owned as tenants-in-common did not give Cec any entitlement to the personal property of Bill and Toni.
24. The letter of 4 July 2008 then addressed the claims made in relation to the debt owed to Statewide and pointed out that Cec and Inesita were the borrowers in relation to the debt and that Bill was a guarantor only. The letter asserted that Cec and Inesita were responsible for the repayment of the loan, as had been the case both prior to and since the refinancing. The letter asserted that the monies borrowed had been used by Cec and Inesita in relation to their activities and were merely secured against the Property.
25. Cec's solicitors responded on 23 July 2008, refuting the assertion that Cec had no entitlement to stock. The letter claimed that Cec was a joint owner with Bill of all cattle branded under a brand that had been registered in January 1999 in the joint names of Cec and Bill. The letter also stated that there was no written partnership agreement in existence but that Bill and Cec had a "verbal agreement" that they would own the Property together and conduct a farming and grazing enterprise on the land in partnership. The letter then confirmed that Cec and Inesita were the borrowers in relation to the loan from Statewide and that Bill was a guarantor only. The letter asserted that the only reason for that arrangement was that Bill had no income and was not considered to be an acceptable borrower by Statewide. The letter asserted that the money borrowed was never utilised for the benefit of Inesita and that all of the money "went into" the Property by way of refinancing the debt to Wesfarmers. It is highly significant that no mention was made in that letter of the alleged agreement in 1993 whereby Cec was to pay all amounts secured by the Westpac mortgages in consideration of Bill leaving his estate to the Sons.
26. The inconsistent stance taken by Cec was confirmed by a letter from his solicitors to Toni's solicitors on 11 August 2008, in which it was asserted that the estate was indebted to Cec in respect of:

• 50% of the sale proceeds of cattle;
• 50% of the interest paid by Cec on the borrowings secured over the Property; and
• 50% of the plant and equipment on the Property owned by Cec and Bill.

1. Toni's solicitors responded on 18 August 2008, saying that the assertion as to the partnership was incorrect and that the partnership operated until 1988, when it was dissolved. The letter said that Cec's only interest in Bill's estate was his interest in the Property but that borrowings on the Property were for Cec and Inesita. The letter enclosed a copy of the 28 July 2008 letter from of Cross and Miller.
2. On 21 August 2008, Cec's solicitors wrote to Toni's solicitors acknowledging that the partnership between Cec and Bill had ceased in or about 1993 or 1994 but that the cessation of the partnership did not change the fact that Cec and Bill jointly owned the Property, the stock and the plant and equipment. The letter asserted that Cec never transferred his interest to Bill and that Cec and Bill had a clearing sale in either 1994 or 1995. The letter said that the bulk of the trucking and earthmoving equipment that had been used by Cec and Bill in their partnership was sold at that clearing sale and the proceeds were paid to Westpac to reduce the indebtedness that both Cec and Bill had to Westpac. The letter confirmed that Cec did not assert that there was a partnership in existence as at the date of Bill's death. Again it is significant that, while the letter of 21 August 2008 reiterates the claim made in the letter of 18 August 2008, it makes no mention of the alleged agreement of 1993.
3. On 11 September 2008, Toni's solicitors wrote to Cec's solicitors maintaining her instructions that the partnership was dissolved in 1988 and that the majority of the assets claimed by Cec as partnership assets were not jointly owned by Cec. The letter also asserted that the clearing sale in 1994 or 1995 was to reduce Cec's indebtedness as a result of his borrowings, which were secured against the Property. The letter asserted that the clearing sale had been the result of threatened legal action by Westpac. Finally, the letter said that Toni did not wish to retain her interest in the Property and that, if Cec wished to purchase her interest, a valuation would be obtained. The letter ended by saying that the question of Cec's borrowings would need to be resolved prior to any sale, either to Cec or to a third party if he did not wish to buy Toni's interest.
4. As I have said, letters of administration were granted to Toni on 8 December 2008. By notice of 8 January 2009, in the Northern Star newspaper, Toni called for particulars of any claim against Bill's estate. On 9 January 2009, Cec's solicitors wrote to Toni's solicitors, referring to the letter on 11 August 2008 providing details of Cec's claims against the estate. The letter said that Cec had instructed them to initiate proceedings. That letter was followed by a letter of 15 January 2009, requesting a copy of the letters of administration and inventory of property. A copy of the letters of administration and inventory was provided on 2 February 2009.
5. Bill's moiety in the Property was transferred to Toni in May 2009 as a consequence of a transmission application lodged on her behalf. Toni apparently vacated the Property at about that time and, from approximately July 2009, Cec or members of his family took up sole occupation of the Property. They have occupied the Property since that time.

These Proceedings

1. On 17 July 2015, Cec commenced these proceedings by filing a summons seeking the appointment of trustees for sale under s 66G of the Conveyancing Act. That again is inconsistent with the existence of the alleged agreement whereby the Sons were to become entitled to the whole of Bill's estate, which included his half interest in the Property. Toni did not appear in the proceedings and, on 11 September 2015, Darke J made orders for the appointment of trustees for sale of the Property. On 25 February 2016, the Property was sold at public auction to Cec and Inesita, who were the highest bidders. The price was $680,000 and settlement of the sale took place on 8 July 2016.
2. On 21 July 2016, the trustees for sale paid the sum of $204,254.30 into court representing the net proceeds of the sale, after repayment of the amount secured by the mortgage of the Property of $400,305.14. Other expenses for the mortgagee's legal fees, real estate agent's commission and remuneration of the trustees for sale were also deducted from the proceeds.
3. On 27 July 2016, Cec's third firm of solicitors wrote to Toni's solicitors enclosing proposed orders for the disposition of the funds paid into court. The proposal was that the proceeds be applied as follows:

• $8,848.78 to Cec for payments made for Council rates on the Property nine;
• $55,096.90 to Cec for payments made by him for improvements to the Property;
• $183,408.90 to Cec for interest paid by Cec on behalf of Bill in respect of the monies secured on the Property for the period 1 February 2012 to 16 February 2015. No particulars of those amounts were provided.

1. On 1 August 2016, Toni applied for leave to file a cross summons in seeking a declaration that Cec and Inesita reimbursed Toni for the amount paid out of the proceeds of sale to repay the loan from Statewide. Leave was required because the time for filing cross claims had expired. Cec initially refused to consent to the grant of leave. It was asserted that the Property had been "bequeathed to" Cec. That, of course, was inconsistent with the alleged agreement of 1993.
2. Consent was ultimately given in September 2016 and Toni's cross-summons and cross-claim were filed on 5 October 2016. On 14 October 2016, an amended summons was filed in which Cec and the Sons were plaintiffs. A statement of claim was filed on 7 November 2016. For the first time, an allegation was made of an agreement in 1993 or an estoppel as an alternative based upon alleged discussions in 1993.
3. The claims made by Cec and the Sons in their statement of claim of 7 November 2016 may be restated as follows:

• Cec and Bill were the registered proprietors as tenants-in-common in equal shares of the Property;
• in 1993 Bill entered into an agreement with Cec (the Agreement) whereby, in consideration of Bill agreeing to leave his estate to the Sons, Cec agreed to continue to pay most of the mortgage instalments on the Property and to do most of the work on the Property;
• pursuant to the Agreement, Bill executed a will on 24 May 1993 (the Will);
• in reliance upon the Agreement, Cec continued to pay mortgage instalments on the Property and to work on the Property;
• in further reliance upon the Agreement, Cec paid an amount of approximately $55,096 for improvements to the Property and an amount of approximately $8,848.78 for council rates on the Property;
• at the date of the Agreement, the Property was mortgaged to Westpac to secure an overdraft in the name of the partnership between Cec and Bill, the proceeds of which were used in connection with the Property;
• Cec paid approximately 75% of the instalments payable to Westpac;
• in 1997, the indebtedness to Westpac was repaid from advances made by Interstate on the security of a mortgage to Interstate;
• Cec paid the instalments under the mortgage to Interstate;
• in 2001, the indebtedness to Interstate was repaid from the proceeds of loans made by Wesfarmers secured by mortgage on the Property;
• the advances by Wesfarmers were applied to discharge the indebtedness to Interstate together with an advance of $12,500 used by Cec for his own business as a sharefarmer;
• Cec paid the instalments on the facilities granted by Wesfarmers;
• on 23 April 2007, the indebtedness to Wesfarmers was repaid from the proceeds of a loan by Statewide secured by mortgage of the Property;
• the mortgage to Statewide secured advances to Cec and Inesita;
• Cec paid the instalments under the facility secured by the mortgage to Statewide;
• Cec paid all of the instalments secured by mortgage of the Property after May 1997 including an amount of $183,458.90 during the period 1 February 2012 to 16 February 2015;
• Bill died intestate in 2008 and letters of administration were granted to Toni on 8 December 2008;
• the Property has been sold by trustees for sale and the remaining proceeds after repayment of the amount secured by mortgage of the Property have been paid into Court;
• in breach of the Agreement, Bill died without leaving a valid will that devised his estate to the Sons;
• in the premises, Toni, as legal personal representative of Bill, holds Bill's estate upon constructive trust for the Sons to give effect to the Agreement;
• the Sons are entitled to receive the whole of the estate of Bill on the ground of promissory estoppel;
• in the alternative, the Sons are entitled to equitable compensation from Toni for breach of the Agreement;

1. Toni's defence puts in issue the making of the alleged agreement in 1993. It also relies on s 54A of the Conveyancing Act on the basis that the alleged Agreement is wholly oral and not in writing. The defence also raises s 14(1) and s 48 of Limitation Act 1969 (NSW).
2. By her cross-claim, Toni claimed the following relief:

• an order that Toni has a right of contribution or recoupment against Cec and Inesita for the sum of $200,413.67 paid by the trustees for sale out of the proceeds of sale of her one-half share in the Property for repayment of the amounts owed by Cec and Inesita to Statewide;
• further, or in the alternative, an order that Cec and Inesita are liable to account to, indemnify or reimburse Toni for that sum;
• in the alternative, an order that Cec and Inesita pay Toni equitable compensation in that sum;
• a declaration that Toni is entitled to have distributed to her a one-half share of the net proceeds of the sale of the Property paid into Court, being the sum of $102,187.15 plus any interest earned; and
• a declaration that any net proceeds of sale of the Property to which Cec would otherwise be beneficially entitled be charged in favour of Toni to secure payment of any amount ordered to be paid as indicated above. In the alternative, Toni claimed a family provision order under the Succession Act 2006 (NSW).

1. Cec's evidence-in-chief was given by affidavit and, in particular, an affidavit sworn on 25 August 2016, which was read without objection. After referring to an amount of $300,000 drawn down under a facility with Westpac to pay out overdraft facilities of the partnership cheque account and a mortgage to secure advances to Cec and Bill used for the partnership, Cec said as follows: "19. I paid 75% of the instalments on the Westpac mortgages, and Bill paid about 25% of the instalments. 20. Bill was suffering from diabetes and kidney disease, and he said to me words to the effect: Bill: "I don't have the money to pay any more." 21. In 1993 Bill was suffering from ill health, and I had a conversation with him in words to the following effect: Bill: "You've been paying most mortgage instalments and doing most of the partnership work. If you'll continue doing this in the future, I will leave my interest in the Property to you." Me: "I don't want you to leave the Property to me. Leave it to my sons." 22. Later in 1993, he said to me words to effect: Bill: "I've made a will leaving my estate to your sons". 23. In reliance upon Bill's promise to leave his estate to my sons, I continued to pay most of the mortgage instalments on the Property and to do most of the partnership work in the Property. Bill never recanted on that promise." That is the basis for the claims made by Cec and the Sons in their statement of claim filed in November 2016.

The decision of the primary judge

1. On 30 April 2018, the primary judge made orders and gave directions relevantly as follows:

• The amended summons be dismissed;
• Order Cec and the Sons to pay Toni's costs of the amended summons on the ordinary basis;
• Declare that Toni is entitled to one-half of the net proceeds of sale of the Property paid into Court, being the sum of $102,127.15 plus any accrued interest;
• Declare that Cec and Inesita are liable to indemnify Toni in an amount of $200,413.67 on account of the payment to Statewide by the trustees for sale of that part of the sale proceeds to which Toni was entitled;
• Declare that Toni is entitled to an equitable charge over the proceeds of sale of the Property remaining in Court, after the sum of $102,127.15 is paid out to her, to secure the payment by Cec and Inesita to Toni of the amount of $200,413.67; and
• Order that Cec and Inesita pay Toni's costs of the cross-summons on the ordinary basis.

1. The primary judge found that Cec was a witness of little credibility and did not accept what he said unless it coincided with objectively established mutually acceptable or clearly incontestable facts. His Honour found that Cec was prepared to deny the obvious in documents shown to him and gave responses that were designed to obfuscate the fact that he was not answering questions. His Honour considered that Cec's evidence was also at times vague and failed to illuminate why he had acted in the way that he did. For example, he did not explain satisfactorily why he did not confirm with Bill that Bill would honour the promises that Cec alleged that Bill had made to him, especially when, by March 2007, after his marriage to Toni, Bill was showing signs of abandoning what Cec says he believed were promises to him. His Honour considered that the credible explanation for Cec's inaction was that he knew that any promise that Bill may have made was either never intended to be binding or was no longer binding.
2. The primary judge was also cautious about the evidence given by Inesita who, his Honour considered, appeared strongly committed to securing the inheritance for the Sons. His Honour found that Inesita was always supportive of versions of events that would benefit the Sons but did not have any direct knowledge of promises made between Bill and Cec and could give little evidence of value about Cec's claims. His Honour did not place much weight on her evidence about loans, since she was not aware of the early dealings between Bill and Cec.
3. Ms Marion Perkins, sister of Cec and Bill, gave evidence on behalf of Cec and the Sons. The primary judge considered that she was a reasonably reliable witness and gave some support for the inference that Bill had made some kind of promise to Cec about the Sons' inheriting the Property one day. However, her account of her conversations with Bill related to events in the early 1990s and she accepted that she had a vague memory as to dates and made mistakes about placing events in time. His Honour considered that, even if Ms Perkins' recollection of the conversations with Bill and Cec about Cec and the Sons inheriting the Property were partly accurate, her evidence did not support a finding that the statements were ones upon which it was reasonable for Cec to act on many years later without further inquiry.
4. On the other hand, the primary judge found Toni to be a reliable and honest witness who freely conceded that she did not know much about the detail of the discussions between Bill and Cec. His Honour observed that Toni was careful not to speculate beyond what she actually knew and concluded that the challenge to her credibility in cross-examination failed.
5. The primary judge concluded that the claim based on contract or estoppel failed on several grounds. First, Cec did not establish that any promise was made by Bill as he alleged. Further, his Honour did not accept that it was reasonable for Cec to rely upon whatever Bill had said. His Honour observed that Cec was the principal witness as to the promise allegedly made in 1993 and Cec's evidence was not accepted and could not withstand scrutiny.
6. Further, the primary judge considered that, even if the evidence of Cec as to a conversation in 1993 were to be partially accepted, the conversation was not one by which the parties intended to enter into legal relations. His Honour concluded that there was no indication by either Cec or Bill that he indicated, intended or expected their arrangements to have legal force [1] .
7. In addition, the primary judge concluded that there was no detrimental reliance by Cec on any promise made by Bill. His Honour found that Cec did not in fact work in the partnership after 1993 because the partnership did not continue after that time. His Honour concluded that, even if the Court were to accept Cec's evidence that he paid 75% of the instalments of the monies secured by the mortgages to Westpac and that Bill paid about 25%, that ratio was probably roughly indicative, for the duration of the Westpac facilities and the Interstate facility, of what was required for Bill to extinguish such residual liability for external debts of the partnership as he may have had to Westpac or Interstate. His Honour did not accept that Cec took on any greater liability for making payments than that for which he was already genuinely responsible.
8. The primary judge observed that the essential ground of the alternative claim was that Bill was jointly liable with Cec and Inesita to Statewide in respect of the loan made by Statewide. His Honour found that, to the extent that the claim depended on the evidence of Cec, no reliance would be placed on the evidence. The claim therefore fell back on the contemporaneous documentary evidence. That evidence made clear that the loan by Wesfarmers was made to Cec only and the mortgage was provided by way of third party security. The Wesfarmers loan did not show that Bill was a borrower and his Honour did not accept any of the evidence given by Cec that funds advanced under the loan from Wesfarmers were used to fund the maintenance or improvement of the Property.
9. The primary judge found that Cec and Inesita used the funds advanced by Statewide to pay out the Wesfarmers' loan and that no funds advanced under the loan from Statewide were used to fund the purchase, maintenance or upgrade of the Property. No part of the loan by Statewide was advanced to Bill or to Toni. His Honour found that Cec and Inesita made all the interest payments on the loan by Statewide and that that was consistent with their assuming responsibility for the advance. His Honour concluded that Cec and Inesita were the borrowers under the loan from Statewide, since the loan documents were consistent with that conclusion. Other than Cec's testimony, nothing suggested that the loan from Statewide was for the benefit of Bill or Toni. His Honour found that Cec and Inesita were the borrowers under the loan from Statewide and were liable to pay all principal and interest. Accordingly, Cec had no basis at law to seek contribution from Toni either personally or as legal personal representative of Bill for interest payments made under the loan from Statewide.
10. The primary judge found that, in so far as the claim was for contribution from Bill's estate in respect of loan funds borrowed for the purpose of the partnership, rather than for the purchase, maintenance or upgrading of the Property, the claim was statute barred. The claim first accrued on Bill's death in June 2008 but proceedings in respect of it were not commenced until July 2016.
11. Further, the primary judge held that, to the extent that the claim against Toni was for equitable contribution, it should not succeed because of laches on the part of Cec. Cec made no claim for contribution of interest payments until July 2016. Between June 2008, when Bill died, and 31 August 2015, interest of $301,524.05 was paid by Cec and Inesita on the Statewide loan. Cec proffered no explanation for his delay in seeking contribution from Toni while interest was allowed to accumulate to that extent.
12. The primary judge also concluded that the claim by Cec for contribution for council rates and improvements had a number of difficulties. First, his Honour considered, it involved over claiming, in that Cec sought contribution from Toni for the full value of the improvements alleged to have been made and the full amount of the rates paid, in circumstances where Toni was only a co-owner as to a moiety. Accordingly, she would only have ever been liable to contribute to half of those costs.
13. However, the primary judge found that the claim failed for other reasons. Cec or other members of his family were the sole occupiers of the Property from approximately July 2009 and the improvements were said to have been made during that time. His Honour relied on the principle that, if a co-owner in sole occupation of a property seeks contribution for any improvements made to the property, the co-owner must be prepared to set off against that claim an occupation fee reflecting the benefit of the occupation that the co-owner enjoyed. Cec has made no offer to set off or make any allowance for an occupation fee. His Honour considered that any occupation fee that would be payable by Cec to Toni was likely to be greater than his claim for contribution for improvements. His Honour concluded that the claim for contribution to improvements would be disallowed on the basis that Cec had not attempted to bring to account any occupation fee that would have been payable by him as a condition of recovery.
14. More fundamentally, the primary judge considered that the works in question did not have the quality of improvements or lasting repairs to the Property so as to qualify as improvements at law. Rather, his Honour considered, they were more in the nature of ordinary maintenance, typical for a working farm, to which a co-owner would not be required to contribute. Further, the payment of rates was not an improvement for which a co-owner is liable to contribute but is more like recurrent repairs or insurance premiums, which his Honour characterised as payments towards the maintenance of the Property. Further, his Honour found that Toni had paid Council rates of $7,806.72 and insurance of $8,858.61 and had claimed no contribution of those payments from Cec. His Honour rejected the claim for contribution to outgoings.
15. The primary judge then considered Toni's claim for reimbursement. His Honour considered that his findings in relation to the claims made by Cec and the Sons led to the success of Toni on her claim for reimbursement. Amounts totalling $400,897.34 had been paid out of the proceeds of the sale of Property to meet the liability in respect of the loan from Statewide. That meant, his Honour held, that amounts totalling $200,413.67 had been paid out of the proceeds of sale to which Toni would otherwise have been entitled as a one-half owner as tenant-in-common. When the trustees for sale paid that amount out of the proceeds of sale, the liability of Cec and Inesita to repay Statewide were discharged at Toni's expense, in circumstances where Cec and Inesita were entirely liable for the loan from Statewide.
16. The primary judge found that the borrowers in respect of the loan from Statewide were Cec and Inesita and Bill was merely a guarantor. Bill's granting of the mortgage as co-owner was security for his liability as guarantor. Cec and Inesita, as the borrowers under the loan, were the parties primarily liable to repay the debt. Cec and Inesita had obtained a benefit, and Toni suffered a corresponding detriment, by the repayment of the loan to Statewide out of Toni's share of the proceeds of sale of the Property. It followed, his Honour concluded, that Cec and Inesita when indebted to Toni in the sum of $200,413.67. His Honour concluded that Cec was indebted to Toni by reason of liabilities owed by Cec to Statewide and the Property was appropriated to satisfy Cec's liability to Statewide. It would therefore be unconscientious or unfair for the Property to have been disposed of without Toni's consent or without the liability of Cec and Inesita to Toni being discharged.

The appeal

1. An amended notice of appeal was filed on 11 July 2018. In the course of hearing the appeal, leave was granted to file a further amended notice of appeal. The grounds of the further amended notice of appeal may be summarised as follows:
2. The primary judge erred in not finding that, in 1993, Cec had conversations with Bill in the terms deposed to by Cec, which included the promise or agreement deposed to by Cec; 1A. The primary judge erred in not accepting Cec as an honest and credible witness contrary to compelling inferences supportive of Cec's evidence;
3. The primary judge erred in determining that Cec and Bill did not intend by their conversations in 1993 to create a contractual relationship.
4. The primary judge erred in finding that Cec knew or believed that the promise by Bill or the agreement between them in 1993 was never intended to be binding or was not binding at any time.
5. The primary judge erred in finding that advances made on the security of the Property after 1993 were for the benefit of Cec and Inesita and were not also for the benefit of Bill.
6. The primary judge erred in finding that the sum of $25,000 advanced by Westpac in 1989 was for the benefit of Cec and Inesita and that Cec and Inesita used the remainder of the Westpac facility for their own purposes;
7. The primary judge should have found that, after the conversations in 1993, Cec paid 75% of the payments to Westpac because of the agreement made at that time;
8. The primary judge erred in determining that there was no detrimental reliance by Cec on the promise made to him by Bill in 1993 and should have found that Cec initially made 75% of the repayments secured by the mortgage over the Property in reliance upon the promise made by Bill and should have found that it was reasonable for him to do so.
9. The primary judge erred in not finding that Bill said to Marion Perkins that Cec and Inesita had taken responsibility for Bill's share of the loan secured over the Property.
10. The primary judge erred in determining that, because of want of response to the letter from Bill's solicitors of 5 March 2007, Bill assumed or was entitled to assume that Cec accepted that the debt then secured over the Property was attributable only to the interest of Cec in the Property.
11. The primary judge erred in holding that the delay in making the contract and estoppel claims made it unjust to grant equitable relief. 10A. The primary judge erred in holding that Toni's statutory indefeasibility of title defeated the claims, which were limited to in personam claims. 10B. The primary judge erred in holding that the claims based on equitable estoppel were out of time.
12. The primary judge erred in finding that, because the contract and estoppel claims were only formulated in August 2016, Cec had no genuine belief that his conversations with Bill in 1993 entitled him to advance such claims. 12 The primary judge should have held that Cec and Inesita were entitled to contribution from Toni for principal and interest payments in respect of advances secured by the mortgage of the Property or for outgoings or improvements to the Property.
13. The primary judge erred in failing or declining to consider the claim for a declaration of constructive trust in respect of the Property and in failing to give reasons for so doing.

Alleged conversations in 1993: Grounds 1, 1A, 2, 3 and 11

1. The appellants contend that the weight of evidence supports a conclusion that the conversations alleged by Cec took place in the terms deposed to by him and were intended to give rise to a binding agreement. They contend that the primary judge's reasons for rejecting the evidence as to the making of an agreement in 1993 should not be accepted. They pointed to the evidence given by Cec, Inesita and Marion Perkins.
2. Each of the Sons gave unchallenged evidence that, at one time or another, Bill told him that they would inherit Bill's half of the Property. That, of course, is equivocal in that it simply stated the effect of the will made by Bill in 1993. All of the conversations occurred prior to Bill's marriage to Toni, which revoked that will.
3. The appellants relied on the fact of the will made by Cec in 1993 and the absence of any subsequent will as supporting the existence of the alleged agreement. However, the will is equivocal as corroboration of evidence given by Cec. The evidence given by Cec was that the matter was only discussed once and never subsequently revisited by either Bill or Cec. Cec was unable to be precise as to when the alleged conversation with Bill took place.
4. The appellants contended that Cec initially continued making 75% of the payments secured by the mortgages to Westpac over the Property and subsequently made all payments up to the sale of the Property. Those matters are the subject of other grounds. As will become apparent, those grounds will fail. The evidence points inevitably to the conclusion that Cec or Cec and Inesita made payments secured by the mortgages on the Property because they were primarily liable for the payments and Bill was liable only as surety, except for an earlier loan that was for the benefit of both Cec and Bill. Once that had been repaid, Bill ceased to make payments.
5. The primary judge gave five reasons for rejecting Cec's evidence of the alleged conversation with Bill in 1993. Very significantly, as indicated above, Cec later made claims that were quite inconsistent with the terms of the alleged conversation with Bill. Thus, in the letter dated 1 July 2008, Cec's solicitors asserted that half of the repayments to Statewide were to be paid by Bill. In February 2010, Cec offered, through his solicitors, to purchase Toni's one half share in the Property. In March 2010, Cec's solicitors wrote to Toni saying that only approximately $135,000 of the loan from Statewide was a joint debt rather than the whole of the $400,000 secured on the Property. In July 2015, Cec commenced proceedings for the appointment of trustees for sale, which is not consistent with a claim that he and the Sons were entitled to the whole of the Property. Finally, in August 2016, Cec's solicitors referred to their instructions that Bill had made a will under which the Property was bequeathed to Cec. That was inconsistent with an agreement that the Property or the estate would be left to the Sons.
6. The second reason for the primary judge's rejection of the 1993 conversation is the assertion by Cec that the consideration for the promise by Bill was his promise to continue to do most of the partnership work. By 1993, the partnership was certainly winding down and, more probably, had ceased altogether.
7. The third reason is that the accounts prepared for Cec for the year ended 30 June 1992 showed that Cec owed the sum of $25,497 to Bill. The primary judge considered that that neutralised Cec's explanation of their arrangement, namely, that Bill did not have the funds to continue to make the payments secured on the Property.
8. The fourth reason is that, at no time after 1993, did Cec seek to raise with Bill the so-called contractual promise. The primary judge considered that it would have been likely that Cec would have returned to that matter to seek reassurance from Bill that the agreement was still in place, particularly after Bill's marriage to Toni.
9. Finally, Cec accepted that liability for repaying the loans secured on the Property was not referable to any agreement or promise made by Bill. The primary judge found that the repayment by Cec was more consistent with the mutual acknowledgement in 1992 that Bill was far less responsible than Cec for the debts secured by mortgage over the Property. His Honour found that Bill's contribution to loan repayments in the period from 1992 to May 1997 was probably enough to reduce to nil whatever part of Bill's residual liability associated with the then defunct partnership then remained. His Honour considered that Bill's later conduct in relation to loans secured on the Property by 2007 strongly indicated that Bill thought that his liability had been eliminated.
10. Nevertheless, the primary judge accepted that, having made the will in 1993, Bill may have said something within the family about his proposed testamentary gift to the Sons and that Bill and Cec may have had a conversation on that subject. In that context, Bill also told each of the Sons about the proposed testamentary gift. Nevertheless, his Honour found that none of the conversations contained any promissory element and went no further than Bill simply conveying what he had in fact said in his will.
11. The reasons given by the primary judge for concluding that there was no contract entered into in 1993 between Bill and Cec and that Bill made no promise to Cec at that time are highly cogent and compelling. His Honour made no error in concluding that no contract as alleged by Cec was made between Cec and Bill in 1993.

Indebtedness Secured by Mortgage of the Property: Grounds 4, 5, 6 and 7

1. These grounds are concerned with the financing arrangements secured by the successive mortgages over the Property. The appellants contend that the weight of evidence supports a conclusion that, save for limited personal drawdowns by Cec and Inesita that were not in dispute, the series of transactions between 1993 and the sale of the Property by the trustees for sale consisted of the refinancing of the indebtedness for principal and interest incurred in connection with the partnership between Cec and Bill.
2. The primary judge found that the Property was used by Bill and Cec to conduct a cattle raising partnership from the late 1970s to the early 1990s. His Honour found that the partnership ceased trading in about 1993 or shortly thereafter. The evidence above suggests that it is more likely than not that the partnership ceased before 1 July 1990. In any event, there can be no doubt that, from 1993 onwards, Bill and Cec were not engaged in any partnership business. While his Honour referred to Cec's accounts as "partnership accounts" they clearly were personal accounts for Cec and were not partnership accounts. There is no hint in the figures for the period ended 30 June 1991 and 30 June 1992 in those accounts of any interest of Cec in a partnership or in any cattle raising business.
3. The primary judge examined carefully and closely the evidence as to the indebtedness secured by mortgages over the Property from 1986 to 2008. A mortgage was granted to Westpac in November 1986 to secure indebtedness of $85,000 of Cec and Inesita. A further mortgage was granted to Westpac in November 1987 to secure advances to Cec and Bill. That appears to relate to the partnership. The third mortgage to Westpac in November 1989 appears to have secured advances to Bill and Cec. At that stage, the partnership was still on foot.
4. The indebtedness to Westpac was repaid in May 1997 from the advance made by Interstate. The primary judge found that the fact that both Bill and Cec were recorded as borrowers indicated that, at that time, it was acknowledged that Bill possibly had some responsibility to meet the residual external debts of the partnership, which by that time was defunct. However, when the loan to Interstate was repaid by advances from Wesfarmers, it is clear that the only borrowers were Cec and Inesita. Bill was a party simply as surety. There was no precise evidence as to the destination of the funds and the primary judge inferred that the fact that Bill was not a borrower from Wesfarmers indicated that both Bill and Cec recognised by that time that Bill had no responsibility for any of the remaining indebtedness. The reason advanced by Cec, that Bill was not required as a borrower because he had no income, was nonsense. A commercial lender would prefer to have all the principal debtors rather than some debtors and some guarantors.
5. In March 2007, Cec and Inesita borrowed $400,000 from Statewide. Bill's solicitors made abundantly clear to Cec that Bill was not to be regarded as a borrower and the future obligation to repay the advance from Statewide was to be entirely the responsibility of Cec. That was not disputed. The primary judge found that no funds advanced by Statewide were received by Bill or Toni and none of those funds were used by Keith and Inesita to fund the purchase, maintenance or upgrade of the Property. There is no error in those findings.

Evidence of Ms Marion Perkins: Ground 8

1. The primary judge found that Marion was a reasonably reliable witness but was quite unsympathetic to Toni and would be ready to give an account of events that would prefer Cec over Toni. His Honour rejected that part of Marion's evidence in which Bill, Cec and Inesita would take responsibility for his share of the loan because, by that stage, Bill's share of the indebtedness was minimal or zero. It was inconsistent with Bill's statements made shortly thereafter that he would accept no responsibility for the indebtedness to be secured on the Property. The reasons given by his Honour for rejecting part of Marion's evidence are cogent and compelling. His Honour made no error.

The Letter of 5 March 2007: Ground 9

1. The appellants contend that the letter of 5 March 2007 from Bill's solicitors to Cec's solicitors was not so inconsistent with the agreement alleged by Cec that it required a response. However, Cec's evidence was that it was a term of the alleged agreement that Bill would leave his one half share in the Property to Cec in return for Cec continuing to pay most of the mortgage instalments in respect of the Property. The letter of 5 March 2007 asserted that the indebtedness secured over the Property was for Cec's purpose and was attributable to Cec's interest in the Property. That is quite inconsistent with the terms of the alleged agreement. There was no error on the part of the primary judge.

Laches and Delay: Ground 10

1. The appellants contend that the time from which laches should be considered is Bill's death. They contend that delay from that time is explicable because they did not have all of the information they needed to make the claims in contract and estoppel, because Bill's will did not become available to them until 19 September 2016. However, the appellants did not need a copy of Bill's will in order to make the claims. They could have commenced proceedings on the basis of what Cec alleged he had been told by Bill. The will was only corroborative of the alleged conversation.
2. Further, the appellants did not adduce any evidence of having attempted to obtain a copy of the 1993 will prior to about August 2016, other than bold assertions by Cec that he had attempted to do so without particularising his attempts. In 2008, Toni had sworn and filed an affidavit in connection with her application for letters of administration. She disclosed the existence of the 1993 will. By January 2009, Cec was aware that letters of administration had been granted to Toni but made no claim until August 2016, in response to Toni's cross-claim.
3. Bill's estate had been fully administered several years before the claims of contract and estoppel were first made in October 2016. By that stage, Bill's interest in the Property had been transferred to Toni in 2009. There is no reason to doubt that Toni had in fact ordered her affairs and expended her resources administering Bill's estate in the belief that she was the sole beneficiary on intestacy. The relief claimed in the proceedings includes an account by Toni for all assets or money received or receivable and all money and assets disbursed by her in respect of Bill's estate. By the time the claim was made, it was impossible for Toni to provide such an account. Apart from the half share in the Property, the only assets in the estate were farm equipment and tools, cattle and household furniture. Toni had not lived on the Property since July 2009 and it was reasonable for his Honour to conclude that those assets and long since been sold.
4. The primary judge concluded that it would be impossible for Toni to return the various items of property in specie and for her to be required to account for the funds, after such a gross delay, would be inequitable. There was no error in that conclusion.

Indefeasibility and Equitable Estoppel: Grounds 10A, 10B and 13

1. The appellants contend that the primary judge erred in holding that Toni's statutory indefeasibility of title defeated their claims. They assert that Toni only ever held Bill's interest in the Property as administrator. Further, they say, the claims extended to one of a constructive trust, which would not be defeated by the indefeasibility provisions of the Real Property Act. The claim based on contract or estoppel is that Bill breached a contract or failed to fulfil a promise. There is no allegation that Toni was a party to the promise, except in the capacity as legal personal representative. However, the estate is now fully administered. Toni became a registered proprietor and held a moiety in the fee simple beneficially having acquired the interest on intestacy.
2. This ground arises only if the appellants are successful in the grounds above that have already been rejected. Having regard to the conclusion in relation to the earlier grounds, it is unnecessary to express a concluded view on the question of indefeasibility. The claim of a constructive trust is also defeated by the conclusions on the earlier grounds.

Contribution: Ground 12

1. The conclusions in relation to the grounds concerning the financing arrangements secured on the Property disposed of this ground. The primary judge found, on the basis that should not be disturbed, that, at the time of the sale of the Property by the trustees for sale, the only indebtedness secured by mortgage of the Property was indebtedness of Cec and Inesita and there was no indebtedness of Bill secured by the mortgage. Accordingly, Cec and Inesita were not entitled to any contribution from Toni to any part of the payment made to discharge the mortgage to Statewide.

Conclusion

1. The appellants have failed to make out any of the grounds in their further amended notice of appeal. It follows that the appeal must be dismissed. The appellants should be ordered to pay the respondent's costs of the appeal, including costs of the notice of motion of 22 October 2018 seeking leave to file the further amended notice of appeal.
2. SIMPSON AJA: I agree with Emmett AJA.

Endnote

1. Citing Ashton v Pratt [2015] NSWCA 12 at [224]-[237]. 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: 10 December 2018